President Obama, under fire for breaking his promise that Americans would be allowed to keep their health care plans if they liked them, today announced what has been described as an "administrative fix" meant to allow individuals to maintain their current coverage.
But it won't actually solve the problem for millions of Americans who are losing their current coverage as Obamacare deadlines loom.
Instead, Obama’s announcement is a desperate attempt to solve his own political problems by shifting blame.
Obama all but admitted this much when asked during a White House news conference if his announcement would translate into people being able to keep their coverage.
He said it would now be up to insurers and state regulators.
“There’s going to be some state-by-state evaluation on how this is handled,” Obama said. “But the key point is it allows us to be able to say to folks who receive these notices that I, as the president of the United States and the insurance model of the Affordable Care Act, are not getting in the way of you shopping in the individual market that you used to have.”
In other words: Don’t blame me.
But his gambit isn't going to work. The reality is that one of the core aims of Obama's health care law was to expand the number of Americans with comprehensive health insurance policies.
This meant forcing insurers to cover people with pre-existing conditions and dictating the minimum benefits that all policies had to offer.
It also meant mandating that all individuals purchase insurance that met these minimum requirements in an attempt to lure more young and healthy Americans into the insurance market to offset the costs of covering older and sicker Americans.
This is why the law that Obama signed in March 2010 was fundamentally incompatible with his promise that Americans who liked their health care could keep it.
Though there was a clause in the law that allowed individuals to keep plans that they had the day the law was signed, it didn’t apply to anybody who renewed between March 2010 and 2014, when all the new requirements are supposed to go into effect.
In addition, the Department of Health and Human Services issued regulations saying that even if Americans had enrolled in plans they liked as of March 2010, those plans would lose their “grandfathered” status if minor modifications were made.
Those regulations were issued on June 17, 2010. So, for three years and five months, insurers have been making business plans, designing their insurance offerings, and setting rates based on rules that were in put in place by Obama with the cooperation of Democrats in Congress.
Put another way, insurers began canceling plans because Obamacare made those plans illegal. Now, just six weeks before the start of the new insurance year, Obama is telling insurers that the policies they were told would be illegal are no longer illegal. At least as far as the executive branch of the U.S. government is concerned.
But, after 41 months of planning for one scenario, how do insurers put toothpaste back into the tube in the next six weeks?
Asking them, at the 11th hour, to reverse-engineer business decisions that were years in the making, and then trying to say they’re to blame if they can’t make the changes, is beyond unreasonable.
This is compounded by the fact that insurers are already being asked to swallow a broken insurance exchange system that is leaving them with a smaller than expected (and likely sicker) risk pool than they bargained for.
Furthermore, in each year in every state, plans must go through a rigorous approval process in which state regulators have to sign off on plans and premiums.
Insurers have already designed new plans for 2014 and set rates based on an assumption about what rules would be in place and what the risk pool would look like.
How do they re-open plans that have already been cancelled? And how are state regulators going to sort this all out?
“Premiums have already been set for next year based on an assumption of when consumers will be transitioning to the new marketplace,” said Karen Ignagni, president of the insurance industry group America’s Health Insurance Plans.
“If now fewer younger and healthier people choose to purchase coverage in the exchange, premiums will increase and there will be fewer choices for consumers. Additional steps must be taken to stabilize the marketplace and mitigate the adverse impact on consumers,” Ignagni said.
Jim Donelon, president of the National Association of Insurance Commissioners and Louisiana Insurance Commissioner, also expressed skepticism.
“It is unclear how, as a practical matter, the changes proposed today by the president can be put into effect,” Donelon said through a spokesman.
“In many states, cancellation notices have already gone out to policyholders and rates and plans have already been approved for 2014.
"Changing the rules through administrative action at this late date creates uncertainty and may not address the underlying issues.
"We look forward to learning more details of this policy change and about how the administration proposes that regulators and insurers make this work for all consumers.”
Some could argue that this is a savvy strategy by Obama to attempt to wash his hands of the mess created by his inability to deliver on his promise that Americans can keep their health insurance if they like it and the inability to create a functioning website for individuals to purchase insurance through his health care program. After all, is there a better political foil than the insurance industry?
Beyond the fact that it isn’t fair to blame the problem on insurers who were abiding by Obama's law, there are multiple flaws in this approach.
To start, Obama needs insurers' participation to make the law a success. As technology flaws with the healthcare.gov website continue, HHS Secretary Kathleen Sebelius has started emphasizing that Americans who don't qualify for government subsidies can sign up for coverage directly through the insurers.
In addition, if insurers begin to pull out of the Obamacare exchanges in 2015, the law will completely crumble.
But the bigger problem is that this isn’t 2008, 2009, or even early 2013. Recent polls have consistently shown public trust in Obama eroding.
He assured the American people repeatedly and unequivocally over a period of more than five years that they could keep their health care plan if they liked it. Last week, he went on NBC and said he'd find a way to remedy the problem.
Furthermore, he told Americans that an easy to use health care website would be up and running on Oct. 1.
In his news conference today, he backed off pledges made after the website suffered repeated failures after its launch that it would be fixed by Dec. 1, two months after the original launch date.
If Americans’ who received coverage cancellations are still facing cancellations after this announcement, they aren’t going to blame the insurance companies.
They are going to blame the president who said this in 2009:
“No matter how we reform health care, we will keep this promise: If you like your doctor, you will be able to keep your doctor. Period. If you like your health care plan, you will be able to keep your health care plan. Period. No one will take it away. No matter what.”