Update, 12:54 p.m., Nov. 13: On Thursday afternoon, President Obama announced an administrative change to the implementation of the health care law, along the lines of what's described below:
Already people who have plans that pre-date the Affordable Care Act can keep those plans if they haven't changed. Today we're going to extend that principle both to people whose plans have changed since the law too effect and to people who bought plans since the law took effect. So state insurance commissioners still have the power to decide what plans can and can't be sold in their states, but the bottom line is insurers can extend current plans that would otherwise be cancelled into 2014. And Americans whose plans have been cancelled can choose to re-enroll in the same kind of plan. We're also requiring insurers to extend current plans to inform their customers about two things: One, that protections—what protections these renewed plans don't include. Number two, that the marketplace offers new options with better coverage and tax credits that might help you bring down the cost.
Watching Congress panic and scramble for a way to restore individual insurance plans shredded by Obamacare is like watching otherwise intelligent people try to mend a broken sink with a flamethrower. The current mania, which will peak when White House spinners hold lunch today with Senate Democrats, consists of legislators trying to grandfather in some of the millions of plans that have been canceled. If they asked insurers, they’d quickly figure out why, for most people, that won’t work.
On Wednesday, as Democrats on the Hill latched on to one of five “fixes” to the crisis (more about each fix shortly), I checked in with some of the insurers who have already informed customers that their current coverage did not comply with the Affordable Care Act.
Were they taking the current congressional panic seriously? Yes. As one spokesman put it, the quest for a “if you like your plan, you can keep your plan” fix was not like one of those doomed “repeal Obamacare” votes that scripted a campaign ad but didn’t actually pass.
Would a rule change, one that grandfathered in old individual plans, save those plans right away? Not really. This month’s victims would probably get a new letter, informing them of a possible change. But getting new plans scrutinized again by regulators would take up to six months.
Would the people now furious about “sticker shock” be rescued by the return of their old plans? Maybe, for a while, but come September 2014, they’d be informed of the new costs of premiums going into the next enrollment period. If Democrats are trying to shield themselves from voter anger, that might not be the ticket.
But they’re going to try something. Democrats can be cleaved into three categories: those who have always opposed the Affordable Care Act, those who want to bail out the individual plan holders, and those who think doing so would undermine the entire law. The first group consists of a few lonely congressmen from deep red districts, like Georgia Rep. John Barrow. The second and third groups both want to keep the law. Their options—and the Republicans’ far simpler, schadenfreude-laden options—are limited to four bills and one possible White House gimmick.
The Upton bill. Two pages long, the Keep Your Health Plan Act of 2013 was the first weapon forged to save the individual plans. That’s how Republicans describe it, anyway, as they plan to give it an overwhelming “aye” vote on Friday. But it’s all gums and no teeth. Upton requires only that “a health insurance issuer that has in effect health insurance coverage in the individual market as of January 1, 2013, may continue after such date to offer such coverage for sale during 2014 in such market outside of an Exchange.” Which isn’t a requirement at all. This puts the onus for cancellation on the government, then theoretically allows the plans canceled for lack of comportment with the ACA to be offered in years to come. It doesn’t guarantee that the companies would do so.
“That bill guts the Affordable Care Act,” Lousiana Sen. Mary Landrieu said on Wednesday, speaking up for her own bill. “I would urge the Democrats in the House not to support it. What that bill does is allow, through the whole year of 2014, new people to sign up, which would undermine the Affordable Care Act.”
The Johnson bill. Officially titled the “If You Like Your Health Plan, You Can Keep It” Act, Wisconsin Sen. Ron Johnson’s legislation is more narrowly tailored than Upton’s. Its beneficiaries would be those who enrolled in plans “beginning on the date of enactment of this Act and ending on December 31, 2013.” It’s written like that, as Johnson told the National Review, because “I’m trying to actually attract Democrats’ support and make sure that they have no excuse to say, ‘That doesn’t just honor that promise, that goes beyond that promise.’ ” But there are only 45 Republican senators, and a different Senate bill has more traction.
The Landrieu bill. It took a while, but some conservatives have turned against the Keeping the Affordable Care Act Promise Act. (Yes, the word act appears twice in the official name.) The sticking point comes with Section (c)(1), which mandates that a plan restored by the law “will remain in effect at the option of the enrollee.” The goal, as Landrieu is happy to tell anyone, is to keep the pressure off the people who just lost their individual insurance, with the expectation that they will one day buy into the far superior exchanges. Instead of ripping off the Band-Aid, it offers long-term physical therapy.
The Udall bill. Introduced on Tuesday by a Colorado Democrat who’s up for re-election next year, the Continuous Coverage Act reads just like Landrieu’s, requiring that “a health insurance insurer shall offer an individual the opportunity to renew enrollment in health insurance coverage offered in the individual market if such individual was enrolled in such coverage on September 30, 2013, and such individual continues to meet the requirements of eligibility for such coverage (such as timely payment of premiums).” The difference: This safety net is rigged up only until December 31, 2015.
The Obama rule. This plan doesn’t actually exist yet, and may never exist, but Democrats are trying everything short of transcendental meditation to will it into being. When Bill Clinton told an obscure website that the president needed to “honor the commitment” to those poor slobs with individual plans, he was implying that the White House or Department of Health and Human Services needed to rewrite the grandfathering rule. House Democrats, most of whom are fairly safe bets for re-election, are annoyed about being jammed with the Upton bill. “I think it's appropriate for the White House to fix it, because he's the one that created the problem,” said Congressional Black Caucus chair Rep. Marcia Fudge to RealClearPolitics. The White House delayed the employer mandate, so why can’t it delay this?
There are quieter Democrats, people who want to wait out the mania. “You have to understand, we’re changing a value system,” said Iowa Sen. Tom Harkin, a five-termer who’s retiring next year. The losses of individual plans hurt, and the political damage of the president and Democrats repeating the “if you keep your plan” mantra will haunt the party in countless campaign ads. But you can’t panic, according to Harkin, and to delay means a delay in moving to the new system, a sort of dishonesty about what health care’s going to look like.
“Human nature being what it is, people will wait to the last minute,” said Harkin. “People have asked me if I’m upset by the lack of people signing up—I say, no, it doesn’t bother me a bit … but if I know the door closes on March 31, I might wait until February. They’re gonna make some changes? Oh, I might wait a bit more. You move that date back, people will just keep moving their own dates back.” And the insurers, who can’t be voted out of office, can’t be expected to play along.