“Too many Americans have substandard health plans.”
That was just one of many arguments made by President Obama and his allies to justify why America needed the heavy government regulation included in Obamacare. Obamacare, they assured us, would rein in all those “bad-apple insurers” and protect consumers from the false security of “junk” health care plans.
Last year, however, millions of Americans who liked their health care coverage found out that the administration regarded their health plans as “substandard.” They learned of this the hard way — when Obamacare regulations forced their insurers to discontinue their policies.
While it was evident that the president’s key promise — “If you like your plan, you can keep you plan” — was no longer operative, Obamacare advocates dismissed the loss of coverage as insignificant because the federal law would replace their plans with “better” insurance. After all, who knows better — the consumer or an “expert” in Washington?
But as the sheer number of cancellations rose — reportedly 4.7 million across just 31 states and the District of Columbia — so did the political pressure. In November, the administration announced a temporary “fix”: It would allow insurers to offer “noncompliant” plans through 2014.
Last week, the administration extended this “fix” for an additional two years. Though the impact on coverage is still uncertain because states and insurers have the option to take it up, the extension conveniently provides political cover for Obamacare supporters. Now, at least, the next round of insurance cancellation notices going out just one month before the midterm elections can’t be blamed on Obamacare.
But Mr. Obama isn’t giving up the arrogant notion that government knows best. In defending the latest “fix,” he still insisted:
“There are some people who have very bad insurance, but they don’t know it because they don’t understand the fine print. We said, ‘You know what, you’re right. You should be able to keep the health insurance you have, even if it’s not very good. Even if you could get insurance on HealthCare.gov, you should be able to keep it.’”
Obviously, Mr. Obama feels that millions of Americans are clueless about their health insurance — that they should be thanking him for yanking their “bad” insurance and giving them the opportunity to buy “good” coverage on the government exchanges.
But maybe, just maybe, these Americans aren’t dolts after all. Maybe their coverage was based on their health care needs, their provider preferences and their ability to afford the premiums.
Obamacare aims to replace the plans it cancels with what the government deems “better” insurance. In reality, the law’s mandates and regulations create homogenous health care plans that leave consumers with little choice in terms of benefit levels and dramatic price increases for most people.
For instance, Heritage Foundation calculations show that the average deductible for a “bronze plan” among the 34 states with a federally facilitated insurance exchange carries an average individual annual deductible of $5,095. In addition, average premium costs for individuals purchasing though the exchanges are also sharply higher than they would have been without Obamacare — in many cases, more than 100 percent.
Certainly, many aspects of the pre-Obamacare individual market needed reform. However, those problems were much smaller than portrayed and did not require the overzealous regulation of Obamacare to fix them. For example, the limited-benefit plans often alluded to by the president as “substandard” accounted for only about 11 percent of individual market plans in 2012.
There are also common-sense ways to provide access to coverage for uninsured people with pre-existing medical conditions — reforms that wouldn’t cause the massive disruption of coverage for millions of people like Obamacare did.
Even with the extended delay, no administrative “fix” can make up for the 4.7 million plans that were discontinued in 2013. Worse, the temporarily unenforced insurance rules that caused the cancellations remain core elements of the law. At some point, the administration will fully implement them — convinced that standardization of health insurance in the individual insurance market is best for all, no matter how many people it hurts.
Originally published in The Washington Times.