As millions of people are learning that Obamacare is resulting in their insurance policies being canceled, the President’s “answer” and the legislative solutions being voted on by Congress are to issue a possible and limited one-year delay of the benefit mandates. Somehow, it is supposed to be reassuring to people that they could get to wait one more year, and then lose the coverage they like and want to keep.
There are at least three shortcomings to a one-year delay.
1. It’s Temporary
With both the President’s “fix” and the House-passed “Keep Your Health Plan Act,” the millions of individuals who were going to lose their coverage will still lose it—just later.
2. It’s Not A Sure Bet
In both the President’s plan and the legislative options being considered in the House, there is absolutely no guarantee that plans would be un-canceled. Two players must agree to make it happen: the state insurance commissioner and the insurer.
State insurance commissioners must allow the companies operating in their states to continue coverage that does not meet all of the Obamacare mandates. Already, Washington State Insurance Commissioner Mike Kreidler has said no. Even if the state says yes, the insurance company has the choice of whether or not to re-offer coverage. But changing the rules now—again—could have other consequences. Yesterday, America’s Health Insurance Plans (AHIP), the trade association representing insurance companies, reacted to the President’s proposal by saying it could “result in higher premiums…and fewer choices for consumers.” As Heritage health policy analyst Chris Jacobs notes, it looks like the Administration is angling for a taxpayer-funded bailout of this “keep your plan” mess.
3. A “Fix” Wouldn’t Be for Everyone
Finally, the third problem is that the President’s “fix” offers a one-year delay for, at most, a fraction of those impacted by Obamacare’s mandates. It would do nothing for the 80 percent of Americans with employer-sponsored coverage. For a variety of reasons, the so-called “grandfather clause” to allow companies to continue the coverage they offered when the law passed is not proving a safe harbor. Only 36 percent—down from 56 percent—of covered workers in small and larger companies are currently in grandfathered plans.
Even IF every state and insurer adopted the President’s solution—and already we know this is not the case—the President’s option applies to only 20 percent of Americans, those with private coverage in the individual and small group markets.
The President wants people to believe that the cancellations, changes in coverage, and higher prices affect only a sliver of the currently insured population and that once this is “fixed,” there will be no further disruptions in the coverage enjoyed by millions of Americans. This is false.
The coming extinction of existing coverage is by design. The President’s law is designed to move everyone into insurance designed by Washington and priced by Washington. These “private” plans are private in name only due to Washington’s dictates.
People receiving cancellations are shocked, angry, and worried; they need and deserve help. Yet, they are the first wave in a tsunami of government mandates that will inflict negative consequences on most Americans. Everyone deserves an “out” from Obamacare.