Will Voters Remember Policy Cancellations by the 2014 Election?

Obama_healthcare_signatureThe focus of the House of Representative’s Ways and Means Committee Tuesday hearing was the status of the Obama administration’s implementation of the Affordable Care Act. In particular, Committee Chairman Dave Camp (D-Mich.) explained that “after spending over $600 million, the American people want answers to some very basic questions about the launch” of the cornerstone provision of the health care reform — the online market places. “Why doesn’t the website work? Why were the American people told everything would be ready, when it was clear that was not the case? How deep are the problems and how long will it take to get those problems fixed? And most importantly, if people can’t navigate such a dysfunctional and overly complex system, is it fair for the IRS to impose tax penalties?”

But given the opportunity to ask Marilyn Tavenner, the administrator for the Centers for Medicare and Medicaid Services, or CMS, about the implementation of the individual insurance exchanges and the $267-million computer system that facilitates the marketplaces, lawmakers’ questions focused on a wide range of issues relating to the rollout — from the partisanship of congressional politics to premium prices to the ongoing cancellation of private-market insurance policies. The glitches plaguing the federally-facilitated marketplaces have been a particular rallying point for those that oppose the Affordable Care Act.

While the technical problems illustrate to many an unacceptable level of incompetence, and IT problems mean enrollment problems for the Obama administration, theoretically the website will be working smoothly by November. After his appointment as director of the National Economic Council last week by President Barack Obama, Jeff Zients — a health-care entrepreneur who has served as the acting director of the Office of Management and Budget — said the problems were fixable. A long-time Obama adviser and expert management consultant, he will collaborate with the Department of Health and Human Services, HHS, to address the problems.

What is apparently less fixable, and garnering much attention from lawmakers, are the thousands of policyholders who have received cancellation notices from their insurance providers. “They are now being forced out of a health-care plan that they like,” Kevin Brady, a Texas Republican, told Tavenner at the hearing. “The clock is ticking on a website that’s broken.” But “their health care isn’t a glitch. It’s what they depend upon.”

When campaigning for the Affordable Care Act, the president pledged: “If you like your doctor, you can keep your doctor. If you like your current health insurance plan you can keep it. Period.” That promise served to calm many Americans who worried they would be lose their policies and be shuttled on to the insurance exchanges as part of Obama’s vision to extend coverage to many of the nation’s 48 million uninsured. Democratic pollster Geoff Garin, who advocated for the health law during congressional debate, told Bloomberg that Obama’s repeated reassurances were directed at swing voters whose support was necessary for the law to be passed.

But insurance companies across the country have sent cancellation notices to hundreds of thousands of people with private plans, informing them their coverage would be terminated at the end of the year. As originally written, the health care reform law stated that policies in effect as of March 23, 2010 will be “grandfathered,” meaning consumers will be allowed to keep those policies even if they do not provide the ten mandatory benefits that all health insurance plans are required by the Affordable Care Act to provide.

But then, the Department of Health and Human Services wrote regulations that narrowed that provision; now, if any part of a policy was significantly changed since that date — including, the deductible, co-pay, or benefits — the policy would not be grandfathered. Plans that do not offer the added benefits cannot be sold any longer, even if they are cheaper. As White House spokesman Jay Carney described the change, the Affordable Care Act eliminates “substandard policies that don’t provide minimum services.” He then noted that the 80 percent of Americans with employer-sponsored insurance will not be affected.

In response to lawmakers questions regarding policy cancellations, Travenner skirted the real issue. She explained that “some insurance companies have decided that they want to offer new plans and if they offer new plans they have to come under the requirements of the Affordable Care Act.” The requirements to which she referred were the ten “essential benefits” that policies must provide, including free cancer screenings and maternity care. “You can’t be denied, you can’t be kicked off a policy,” Tavenner added, detailing the positive changes the health care reform has wrought on the insurance industry.

For now, it is unclear how many Americans will be affected by the policy cancellations. Florida’s Blue Cross and Blue Shield alone sent notices to 300,000 people, while California’s Blue Shield and Oakland-based Kaiser Permanente will withdraw policies for a combined 280,000. Highmark Health Services of Pittsburgh said the policies of 40,000 customers will be canceled, and CareFirst Blue Cross Blue Shield sent notices to more than 70,000 customers in Maryland, Washington, D.C., and Virginia.

However, on NBC’s “Meet the Press,” Florida Blue Cross Blue Shield chief executive Patrick J. Geraghty argued against the characterization that insurance plans are being canceled. Rather, he said, the move is more like upgrading. “We’re not cutting people — we’re transitioning these people,” he said. “What we’ve been doing is informing people that their plan doesn’t meet the test of the essential health benefits. Therefore, they have a choice of many options we make available through the exchange, and in fact, with subsidy, many people will be getting better plans at a lesser cost.” But that has not prevented many families and individuals who are seeing their policies “transitioned” from panicking. Gerald Kominski, director of the UCLA Center for Health Policy Research, told the Washington Post that many suspected the transition was a “back-door” avenue for insurers to dump high-cost patients into the insurance exchanges.

The cancellations affect “a distinct minority of voters,” Garin told Bloomberg, suggesting that the cancellations will have a minimal effect on the political debate. By the time of the 2014 congressional elections, those whose policies were canceled this year will evaluate Obamacare based on their satisfaction with the new coverage, he said. “At the end of the day, different is not the important unit of analysis,” he said. “Better or worse is the important unit of analysis and people will figure that out in the next year or so.”

Follow Meghan on Twitter @MFoley_WSCS

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