"Keep your plan" bites back: The ACA fix that could cause new headaches for Obama

Cynical Republicans are ready to bash Obama for letting people hang on to their crappy health plans

Published August 14, 2014 7:18PM (EDT)

                          (AP/J. Scott Applewhite/Salon)
(AP/J. Scott Applewhite/Salon)

Writing about the Affordable Care Act is, I’ve found, a great way to fill your inbox with emails from readers who have helpful suggestions for how to give your analysis more of a holistic feel. Oftentimes, I’m not able to touch on every aspect of an issue in one column, and so concerned readers will chime in and point out something that I may have missed. A typical email will be something like “WHAT ABOUT WHEN OBOZO SAID IF I LIKED MY PLAN I COULD KEEP IT? WHY DON’T YOU WRITE ABOUT THAT YOU [sundry profanities].” In an effort to be more responsive to the concerns of my audience, I will act on their suggestions.

It is indeed true that President Obama and his top subordinates said many times, over and over, that if you liked your health plan then you’d be able to keep it under the Affordable Care Act. That was not accurate, and for a few punishing news cycles, all anyone could talk about were the cancelation notices insurers were sending out for plans that did not meet the ACA’s minimum coverage standards. A lot of those plans were expensive and terrible, and a number of insurers tried to capitalize on the situation by herding people into plans that were far more expensive than what could be found on the exchanges. But a promise was a promise, and intense political pressure mounted on Obama to do something to fix the situation.

And Obama buckled. He tweaked the ACA to allow insurers (contingent upon state approval) to temporarily allow people to remain on their substandard plans. Problem solved, right? Not really. Obama made that move to head off attacks from Republicans and make the law a little less politically burdensome. But neither of those things happened, and by making the fix he actually traded off one political problem for another.

One of the big questions surrounding the ACA is how it would affect insurance premiums heading into 2015. The initial data show that the impact will be nowhere near the dire predictions of skyrocketing rates that so many conservatives and Republicans made earlier this year. Some states, however, are facing double-digit average rate increases. That’s partly because Republicans like Florida governor Rick Scott made it their mission to hamstring the ACA as much as they possibly could. But it also could be because of Obama’s move to allow people to hang on to their terrible health plans.

Politico reported yesterday that “many younger, healthier Americans – the category companies had counted on enrolling when they set their initial prices – stuck with their existing coverage. In states with the biggest numbers of these ‘transitional’ policyholders, their absence from the Obamacare market is pushing premiums higher.”

The reasoning is fairly straightforward. The success of the ACA’s insurance exchanges depended largely on convincing younger, healthier people to sign up for coverage and help defray the costs insurers would incur by covering older and sicker patients. Allowing people to hold on to their existing plans meant that they didn’t have to obtain coverage through the exchanges. A lot of the plans that would have been canceled were of the catastrophic-coverage sort that a young invincible who expects to remain healthy would choose.

Now insurers are saying that the absence of those younger people from the marketplace is what’s helping to drive up rates in certain key midterm states, like Florida, North Carolina, and Iowa. Politico quoted insurance executives from all three states saying as much, including one from Iowa who said his company’s rate increase request “is about double what it would have sought had the tens of thousands of people sticking with their pre-Obamacare plans come into the market.”

This means that Republicans, who were the loudest critics of the plan cancelations late last year, are now going to loudly criticize the rate hikes that are an indirect consequence of the policy change they insisted upon. And they’ll do it while criticizing Obama for saying “if you like your plan, you can keep it.” It’s wildly cynical, but it’s pretty much what we’ve come to expect from the Republicans when it comes to the Affordable Care Act.

As for Obama, he just can’t catch a break. He got caught overselling the ACA, and it burned him. So he implemented a fix, and now that fix is threatening to cause him new political headaches heading into the midterms. Meanwhile, Obamacare is actually having its intended effect and helping to save the lives of people who otherwise wouldn’t have access to medical care, but people still hate it. Though, to be fair, there doesn’t really seem to be anything he or anyone can do that will shift public opinion of the law appreciably in any direction.

By Simon Maloy

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