Both aimed at silencing growing outrage at the millions of policy cancellations insurers sent out at the end of October, the announcement made by the White House Thursday and legislation passed by the House of Representatives Friday seem to be a case of over-legislation — at least from afar. But, given closer inspection, it is obvious that the House bill would go much further than the change announced by President Barack Obama.
In a press conference conducted from the press briefing room of the White House, President Barack Obama rephrased his oft-repeated “if you like your current health insurance plan you can keep it” pledge to address the outrage that has grown since insurance companies began issuing policy cancellation notices en masse. During the years that separated the passage of the Affordable Care Act in 2010 and the implementation of its cornerstone provision — the online insurance marketplaces — many health care experts cautioned that promise could not be upheld for everyone who already had insurance policies bought in the private insurance market. After all, the Affordable Care Act does not include any provisions to prevent insurance companies from deciding not to offer certain insurance products.
Now that millions of individuals have been informed that their policies will be terminated at the end of the year, Obamacare detractors have evidence that the president over-simplified and over-generalized when he made that promise.
“Already, people who have plans that predate the Affordable Care Act can keep those plans if they haven’t changed,” the president said during the press conference. “That was already in the law. That’s what’s called a grandfather clause. It was included in the law. Today, we’re going to extend that principle both to people whose plans have changed since the law took effect, and to people who bought plans since the law took effect.”
As originally written, the health care reform law stated that policies in effect as of March 23, 2010 — the day the Affordable Care Act was signed into law — would be “grandfathered,” meaning consumers would be allowed to keep those policies even if they do not offer the ten mandatory benefits that all health insurance plans are required by the Affordable Care Act to provide. However, regulations later written by the Department of Health and Human Services narrowed that provision; 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. The reasoning being that the Affordable Care Act was designed to eliminate “substandard policies that don’t provide minimum services,” as White House Press Secretary Jay Carney explained after the policy cancellations began to make news.
For a time, the administration expressed a glass-half-full take on the cancellations. During her testimony before the House of Representative’s Energy and Commerce Committee earlier this month, Kathleen Sebelius, secretary of Health and Human Services, maintained that the cancellation of policies was a justifiable side-effect of the health care reform because the new policies will give Americans better benefits and more consumer protections. But now, “the bottom line,” according to President Obama, is that “insurers can extend current plans that would otherwise be canceled into 2014, and Americans whose plans have been canceled can choose to re-enroll in the same kind of plan.
Comparatively, the house legislation will not only allow insurance companies to renew individual policies but also sell similar policies to new customers next year, even if the coverage does not provide all the consumer protections required by the Affordable Care Act. That second part of the legislation — which will allow new customers to buy “substandard policies” — does not sit well with the Obama administration; the White House has said that the president would veto the bill if the Senate approves the legislation and it reaches his desk. Meanwhile, Senate Democrats have said they are waiting to see if the additional legislation is necessary. Adding to matters, some Senate Democrats — like their House counterparts — are facing re-election in 2014 and have to answer to constituents facing the loss of insurance.
Democratic Senator Mary Landrieu of Louisiana was the first of her party to offer a fix to the policy cancellation — a plan that would allow people to keep their current plans indefinitely.
Thirty-nine Democrats voted across party lines, joining 222 Republicans in passing the bill. The 261 affirmative votes defeated four Republicans and 153 Democrats who voted against it. It may seem surprising that so many Democrats crossed the aisle, given the extremely partisan nature that generally characterizes Obamacare-related debates. What has changed is that the insurance exchanges are no longer in the theoretical phase.
As The New York Times reported, the House Democrats used a procedural maneuver — known as the “Landrieu lite” — that built upon the president’s rephrasing of his initial pledge and was designed to offer members of the party additional political cover. Their idea was for individuals who liked their current plan to retain them for an additional year, but insurers would not be allowed to sell similar plans to new customers. Yet Majority Leader Eric Cantor of Virginia argued that insurers should be allowed to sell those policies because of how difficult it has been for consumers to obtain coverage via the federal insurance exchanges. Republican Representative Fred Upton of Michigan, offered that option.
As Upton told the publication, the House bill, of which Upton was the chief sponsor, fulfills a promise that the president made to the American people and later broke. “In the last three years,” he said, “the president personally promised that if people liked their current health care plan, they could keep it ‘no matter what.’ But, cancellation notices are now arriving in millions of mailboxes across the country. It’s cancellation today, sticker shock tomorrow.” As for Obama’s proposal, he said it was a last minute offer made “as the administration’s allies in Congress panicked.”
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