No, Obama didn't lie

Dean Baker, ALTERNET

Terminated policies were introduced after ACA's passing -- often with insurers' knowledge they'd be scrapped.

President Obama has been getting a lot of grief in the last few weeks over his pledge that with the Affordable Care Act (ACA) in place, people would be able to keep their insurance if they like it. The media have been filled with stories about people across the country who are having their insurance policies terminated, ostensibly because they did not meet the requirements of the ACA. While this has led many to say that Obama was lying, there is much less here than meets the eye.

First, it is important to note that the ACA grand-fathered all the individual policies that were in place at the time the law was enacted. This means that the plans in effect at the time that President Obama was pushing the bill could still be offered even if they did not meet all the standards laid out in the ACA.

The plans being terminated because they don’t meet the minimal standards were all plans that insurers introduced after the passage of the ACA. Insurers introduced these plans knowing that they would not meet the standards that would come into effect in 2014. Insurers may not have informed their clients at the time they sold these plans that they would not be available after 2014 because they had designed a plan that did not comply with the ACA.

However if the insurers didn’t tell their clients that the new plans would only be available for a short period of time, the blame would seem to rest with the insurance companies, not the ACA. After all, President Obama did not promise people that he would keep insurers from developing new plans that will not comply with the provisions of the ACA.

In addition to the new plans that were created that did not comply with the terms of the ACA, there have been complaints that the grandfathering was too strict. For example, insurers can only raise their premiums or deductibles by a small amount above the rate of medical inflation. As a result, many of the plans in existence at the time of the ACA are losing their grandfathered status.

In this case also it is wrong to view the insurers as passive actors who are being forced to stop offering plans because of the ACA. The price increases charged by insurers are not events outside of the control of insurers. If an insurer offers a plan which has many committed buyers, then presumably it would be able to structure its changes in ways that are consistent with the ACA. If it decides not to do so, this is presumably because the insurer has decided that it is not interested in continuing to offer the plan.

As a practical matter, there are many plans that insurers will opt to drop for market reasons that may or may not have anything to do with the ACA. It’s hard to see how this could be viewed as a violation of President Obama’s pledge. After all, insurers change and drop plans all the time. Did people who heard Obama’s pledge understand it to mean that insurers would no longer have this option once the ACA passed?

If Obama’s pledge was understood as ensuring that every plan that was in existence in 2010 would remain in existence, then it would imply a complete federal takeover of the insurance industry. This would require the government to tell insurers that they must continue to offer plans even if they are losing money on them and even if the plans had lost most of their customers. This would at the least be a strange policy. It would be surprising if many people thought this was the meaning of President Obama’s pledge.

Finally, there will be many plans that insurers will stop offering in large part because of the changed market conditions created by the ACA. For example, last week the Washington Post highlighted a plan for the “hardest to insure” that was being cancelled by Pathmark Blue Cross of Pennsylvania.

This plan is likely being cancelled because it is unable to compete with the insurance being offered through the exchanges. The exchanges charge everyone the same rate regardless of their pre-existing health conditions. A plan that is especially designed for people who have serious health conditions would almost certainly charge a far higher rate. If these high-priced plans no longer exist because they cannot compete with the exchanges would this mean that President Obama had broken his pledge?

On closer inspection, the claim that President Obama lied in saying that people could keep their insurance looks like another Fox News special. In the only way that the pledge could be interpreted as being meaningful, the pledge is true. The ACA does not eliminate plans that were in existence at the time the bill was approved.

If we want to play Fox News, President Obama also promised people they could keep their doctor. Since 2010 tens of thousands of doctors have retired or even died. Guess the pledge that people could keep their doctor was yet another lie from the Obama administration

What Now?

Republicans seem to have given up hope of blackmailing the Obama Administration into repealing the Patient Protection and Affordable Care Act (ACA). They're still muddling around trying to figure out what they can wrangle out of the Administration for ending the government shutdown. So, what now?

Well, given that the Republican tactic for repealing/de-funding the ACA have so far failed, they are moving ahead with their parallel effort of undermining it, by stripping out provisions that would save money or bring in revenue (including taxes on high-cost health insurance plans, medical devices, tanning salons, and capital gains and dividends). They will then point to studies that show health care costs rising, and demand repeal all over again. Fanatics don't give up.

The fact is, health care costs in the U.S. are bound to increase initially as millions of people (some 44 million Americans have no health insurance) gain access to health care by virtue of obtaining affordable insurance. This has been born out by the experience in Massachusetts, where near universal health care was instituted in 2006, and the state's costs rose to 15% more per person than the national average (although there's no way to know how much costs might have risen anyway).

It will be difficult to assess the benefits to the economy of a healthy workforce, and fewer visits to the emergency room -- the most expensive way to obtain care. In addition, assessing the cost savings from fewer people having to be hospitalized because they now have routine care will only be possible in the aggregate and then only over the longer term.

Facets of the ACA that attempt to control costs, such as "accountable care organizations" (a system that gives doctors more incentive to better manage their patients' care) and the Independent Payment Review Board (an organization formed to review ways to reduce Medicare costs), were targets of Republican hyperbole, including the infamous reference to "death panels."

In fact, Republicans made all sorts of outlandish, patently false claims about "Obamacare" in their attempts to move the public to act against their own self-interests. They were quite successful in doing this. A recent pole showed that 43% of Americans oppose the law. Interestingly, more oppose "Obamacare," than oppose the Affordable Care Act. Further, more people support provisions of the ACA, such as preventing insurance companies from denying coverage for pre-existing conditions, when they aren't told the provision is part of Obamacare. People are funny about the idea of a black president, especially the people who aren't black.

It is unlikely that a reasoned debate will ever take place in the halls of congress -- not a natural state of affairs in American politics. If it did, one of the questions that might be asked is, "What's a life worth?" How much are we as a society willing to spend to improve a fellow citizen's quality and/or length of life? Take HIV as an example. Antiretroviral (ARV) treatment has transformed HIV from a death sentence to a chronic condition, allowing people with HIV to live longer and healthier lives (Linnemayr, et al, RAND 2012). But highly active ARV drugs are expensive, about $15,000 per year per patient (an examination of why ARV drugs are so expensive is beyond the scope of this essay, but suffice it to say, "free market economics" is not part of the equation). Before the development of ARV drugs (the first was developed in 1987), treating HIV was cheap -- you got HIV, then AIDS, then you died.

Washington policy makers aren't thrilled by the relatively inexpensive cost of saving the life of an HIV patient, they're outraged by the cost of Antiretroviral Therapy (ART). Thus, the debate centers on whether ART should be covered under Medicare, or Medicaid, or Social Security for people on disability (SSI / SSDI). Currently, fewer than one in five (17%) people living with HIV has private insurance and nearly 30% do not have any coverage. This will change dramatically under the Affordable Care Act, and many on the right (especially the religious right) see this as another reason to oppose ACA.

A critic of the Affordable Care Act, who worked on George W. Bush's health care proposals, Phillip Swagel, wrote recently that, "The goals of the Affordable Care Act are laudable. But achieving them will require an honest assessment of both successes and problems, and a willingness to make adjustments going forward." Swagel does not see President Obama as willing to make such an assessment.

I think Swagel is right on the first count, adjustments going forward, and wrong on the second. It's the TEA Party coalition in the Republican Party, and by extension, the party itself, that won't be willing to make an honest assessment of the ACA and will instead do everything in their power to either kill it or cause it to fail. Why? Because they prize their ideology over the health of millions of Americans.

Law of the Land; Holding the Government Hostage

Robert Reich

"The Affordable Care Act ('Obamacare') is the law of the land. A majority of the House and Senate voted for it, the President signed it into law, its constitutionality has been upheld by the Supreme Court, and a majority of Americans reelected the President after an election battle in which the Affordable Care Act was a central issue... We don’t repeal laws in this country by holding hostage the entire government of the United States."

"The Act is hardly perfect, but neither was Social Security or Medicare when first enacted. The Constitution allows Congress to amend or delay laws that don’t work as well as they were intended, or even to repeal them. But to do any of this requires new legislation – including a majority of both houses of Congress and a president’s signature (or else a vote to override a president’s veto)."

A Path Forward

House Republicans voted down a proposal to pass a "clean" continuing resolution (CR), i.e., one that doesn't call for delaying/defunding the Affordable Care Act, i.e., "Obamacare." The shutdown continues. Some Congressional Republicans claim the shutdown is no big deal, and have started calling it a government "slim down," a phrase being parroted by conservative news outlets and talk radio. It's far from that. It degrades important government functions, damages the economy, and hurts the government workers who have been sent home.

But rather than talk about why this shutdown is such a terrible thing, let's talk about what can be done about it.

Republicans have painted themselves into a corner. They've bragged to their TEA Party base about standing on principle, and pissed off a lot of other people by shutting down the government. Now they feel they can't just back away from the shutdown (which was, after all, a bargaining chip) without getting something for their efforts (misguided as they may have been).

"We're not going to be disrespected. We have to get something out of this. And I don't know what that even is."

Rep. Marlin Stutzman (R-Ind.)

Republicans have been pushing for a delay in the implementation of Obamacare, they've tried passing a CR defunding Obamacare, and they've tried piece-mealing reopening some facets/functions of government like National Parks and the VA (an obvious ploy to make Democrats look bad).

None of this has worked.

What might work?

Back room negotiations in which the Democrats agree to formation of a bipartisan panel to review implementation of Obamacare and make recommendations for changes, in exchange for a clean CR from the Republican-led House, plus an agreement to raise the debt ceiling.

Republicans could attach other requirements to future legislation that helps ensure Democrats and the President will seriously consider the panel's recommendations, and not just let them stagnate until 2016.

Right now, Republicans aren't offering anything that Democrats could agree to, and sitting at a table across from empty seats where non-negotiating Democrats aren't sitting, ain't gonna cut it.