President Didn’t Think Anyone Would Want to Keep Their Health Plans
Obamacare's problems are bigger than a broken website, and fixing them go beyond a functional Healthcare.gov.
At a press conference announcing that his administration would allow insurance companies to continue selling health insurance policies that are being cancelled by Obamacare regulations, President Obama responded to a question about the millions of Americans who have received cancellation notices:
My expectation was that for 98 percent of the American people, either it genuinely wouldn’t change at all or they’d be pleasantly surprised with the options they find in the marketplace and that the grandfather clause would cover the rest. That proved not to be the case, and that’s on me.
Yes, the Patient Protection and Affordable Care Act has a grandfather provision in it to allow people to keep their plans, but the administration significantly restricted through regulations which plans and under what circumstances people could keep their plans. What they couldn't do legislatively they did with regulations.
The President's 98% expectation was wishful thinking. In 2010, the Departments of Treasury, Labor, and Health and Human Services estimated that 34%-80% of employer health insurance plans would lose their grandfathered status in 2013 and be replaced with plans that conform to Obamacare’s regulations and mandates.
No one bothered to tell the President about this?
Prior to the departments’ estimate, the U.S. Chamber noted that the administration’s stringent rules regarding grandfathered plans would “ensure that all plans will lose grandfathered status within a couple of years” [emphasis mine]. According to the Kaiser Family Foundation, we’re on our way. In 2013, only 36% of workers with employer-sponsored insurance have a grandfathered plan, down from 56% in 2011.
Since, according to the Kaiser Family Foundation, 93% of firms of 50 or more workers offer health benefits, a large proportion of Americans are being affected.
The only one surprised by this disruption is apparently the President, who expected people to flock to Healthcare.gov and appreciate the choices available with a few clicks of a mouse. Instead, he is seeing the real-world effects of this misguided law.
The President can't clean up this mess at the eleventh hour without causing more confusion and disruption. America’s Health Insurance Plans' President and CEO Karen Ignagni in a statement said, "The only reason consumers are getting notices about their current coverage changing is because the ACA requires all policies to cover a broad range of benefits that go beyond what many people choose to purchase today" [emphasis mine]. She went on to explain,
Changing the rules after health plans have already met the requirements of the law could destabilize the market and result in higher premiums for consumers. Premiums have already been set for next year based on an assumption of when consumers will be transitioning to the new marketplace.
If due to these changes fewer younger and healthier people choose to purchase coverage in the exchange, premiums will increase in the marketplace and there will be fewer choices for consumers. Additional steps must be taken to stabilize the marketplace and mitigate the adverse impact on consumers.
Now more than ever, we need health care reforms that will expand choices for employers and employees and empower consumers to make better quality and cost decisions.