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November 27, 2013

Americans were told that they would be able to keep their private health insurance, if they chose to, once the Affordable Care Act took effect.  Reports of millions of cancellation letters made it clear that this was not the case.  Initially, the White House tried to deflect blame to the insurance companies, essentially saying that they could not control the actions of the insurance companies.  Yet, the ACA contains thousands of rules and regulations regarding the insurance plans to be offered under the new insurance exchanges which insurers are required to comply with.

On November 14, 2013, the pressure became too much so the President announced a “fix” meant to address this issue.  There are several interesting aspects to this announcement.

The first thing to note is why the President is free to make this sort of unilateral change through Executive Order.  This is only the most recent of many such changes to the ACA made by the President through Executive Order.  However, when Democratic leaders have been asked to consider delaying or deferring certain aspects of the ACA, they always reply that such a change is not possible because “it’s the law”.  Meaning that the rules and requirements embodied by the ACA have been passed and approved into law.  Which is true, until the President sees the need to make a change.  Certainly President Obama isn’t the first President to use the Executive Order in such a manner but that does not excuse it.  We need to insist upon accountability for these actions.

Secondly, while I understand that this announcement was primarily politically motivated, can we really expect that this “fix” can have any real benefit?  If you have received a cancellation from your health insurance company, as I have, then you are just days away from the deadline for acquiring new insurance in order for it be effective on January 1, 2014.  If not, then you will be without insurance.  Can insurance companies reverse course, determine if they can continue to offer millions of policies that they have no plan to continue, determine how to price those policies and then notify policyholders so that they can then have enough time to decide to stay or go to a new policy?  Ridiculous.

Certainly, if there are insurance companies that choose to continue to offer these policies they will almost certainly carry higher premiums.  Higher because they now have to modify their internal systems to extend the use of these policies and they can not be sure about the population of policyholders and therefore will have difficulty rating them.  And by the way, this is only to be for an additional year.

Within a few days of the announced fix, the board overseeing the California insurance exchange made it clear that they will not support the extension of existing policies.  No surprise there.  This will set a precedent for other states to follow.  Frankly, you have to believe that the President and his advisors knew that this fix wouldn’t change anything.  They simply hoped that it would make them appear to be trying to help resolve a problem that they created.  Now they can put the blame back on the insurance companies and state insurance commissions for not allowing these policies to be continued.

Finally, the President and other ACA supporters continue to deride these cancelled policies as sub-par and imply that they are being offered by possibly unscrupulous insurers.  If sub-par means that the policy does not include maternity benefits or pediatric dental coverage or mental health benefits, then, yes, my policy is sub-par and it suits me quite well.  It does provide an annual preventive care checkup that is not subject to a deductible or co-pay and it does include prescription drug coverage.  My policy was issued by Anthem Blue Cross, hardly a fly by night operator.  Yet the President is telling me that this policy is unsuitable.  Puzzling.


From → Government

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