You CAN’T Keep It: A Feature, Not a Bug



In recent weeks, millions of Americans have been notified that they will not be able to keep their current health insurance plans. This despite the promise of President Obama that, as he said over and over again, “if you like your health-care plan, you will be able to keep your health-care plan. Period.” This was a claim that the president knew to be untrue when he made it. As the Wall Street Journal reported last week (pay-walled): “[S]ome White House policy advisers objected to the breadth of Mr. Obama’s ‘keep your plan’ promise. They were overruled by political aides.” The President knew that Obamacare would force some people out of coverage but made the political choice to claim the opposite.

Faced with increasing political blow-back the administration’s first defense was an attempt to explain away the awkward fact that President Obama sold America his legacy legislation under false pretenses. There was a brief attempt to blame the insurance companies—after all the policy cancellations came from insurance companies, not HHS. But of course, the reason the Big Bad Insurance companies cancelled millions of people’s old policies was that Obamacare made it illegal for the Big Bad Insurance companies to continue offering them.

Let me be clear, people losing their old individual insurance plans isn’t a bug of Obamacare, it’s a feature. People in the individual market tend to be comparatively healthy. Moving them, by hook or by crook, into the exchanges will help offset the cost of insuring those who are less healthy.

What’s made this particular feature less palatable than it was always going to be is the fact that the folks who got dumped from their individual plans were supposed to have a viable alternative waiting for them in the Obamacare exchanges. Unfortunately for them, three-and-a-half years and hundreds of millions of dollars later, the Obama administration still hasn’t built a working alternative. So millions of Americans face the prospect, not only of being forced out of insurance plans they wanted to keep, but of having their insurance lapse altogether. In the near term, Obamacare might actually increase the number of Americans without health insurance. Just in time for Christmas, too!

While the administration is finally admitting that millions of Americans won’t be able to keep their health insurance, the administration is also insisting that those same Americans should be grateful.  “Keep in mind,” President Obama said last week, “that most of the folks who got these cancellation letters, they’ll be able to get better care at the same cost or cheaper in these new marketplaces.”

According to the White House, those individual plans that Obamacare made illegal were mostly “junk” anyway, since they didn’t meet essential minimum benefit requirements—essentials like maternity care for a single male . While it’s true that some folks stand to gain from the exchanges—better coverage, less cost—that’s little consolation to the millions of Americans who will be getting less while spending more. As David Freddoso asked in the Washington Examiner last week, “If these millions of cancelled plans are ‘junk,’ then why are so many of the Obamacare substitutes so vastly inferior and more expensive?”

What can be done to fix all these problems? That seems pretty straightforward. Senate Democrats have suggested that Congress pass a law to widen the “grandfather clause” for existing plans so people can keep their insurance, just like the President promised. Others have suggested delaying the individual mandate—and its infamous “tax”—at least until the exchanges are up and running. Without such a delay, and unless makes a radical recovery, the President (and Democrats who are up for reelection in 2014) will have to explain why his signature law deprives people of insurance, offers not replacement, and yet taxes them, up to 1% of household income, for failing to have insurance. Pressure on the administration to implement some of these fixes is growing rapidly.

So why is the White House so resistant? Because the President knows that delaying the individual mandate or increasing the number of individual plans people are allowed to keep would place even greater pressure on the already failing exchanges. Such delays would pose a threat to the law even if the website was up and running; that it’s not only makes the danger more acute.

Unless relatively healthy people enter (or are forced into) the Obamacare exchanges—because they lost their individual coverage, or simply because they are mandate by the law to do so—the exchanges will face the possibility of an unsustainable price spiral. So far, the administration fears that outcome, and what it might mean for the survival of Obamacare, more than the growing displeasure of the American public.

So far.





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About Author

Stephen P. White is a fellow in the Catholic Studies program at the Ethics and Public Policy Center in Washington, D.C. His work focuses on the application of Catholic social teaching to a broad spectrum of contemporary political and cultural issues. Since 2005, Mr. White has been coordinator of the Tertio Millennio Seminar on the Free Society: a three week seminar on Catholic social teaching, with an emphasis on the thought of Blessed John Paul II, which takes place every summer in Kraków, Poland. He studied politics at the University of Dallas and philosophy at the Catholic University of America. He is a graduate of the St. Patrick's Evangelisation School in London, England.

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