December 18, 2014
It’s easy to say: Obamacare, heal thyself.
Actually doing it? That’s another matter.
The Affordable Care Act has run into its first huge structural problem as millions of people have been told their individual health insurance policies won’t be renewed because the policies are considered substandard under the new law. On its face, that’s not a problem — a key goal of Obamacare is better coverage. But if they try signing up for a replacement? That’s where the Catch-22 steps in. Pervasive technical glitches and much-higher premiums in some cases either make it impossible to sign up or so much more expensive that people don’t want to.
To fix that — and it must be fixed — President Barack Obama on Thursday said insurance companies would be allowed the option of continuing to offer for at least one year the policies the companies had said would be canceled. Now, Obama has to hope his fix works politically — by forestalling much-worse tinkering that could sink Obamacare — and practically, by helping people with expiring health insurance plans but not starting a chain-reaction that causes the whole program to implode.
On the practical front, changing the rules in the middle of the game creates a huge headache for insurance companies that have been working for years to design new policies and premiums. America’s Health Insurance Plans, an industry group, says Obama’s fix comes too late in the process and could make premiums rise because rates were set under the assumption that many people with individual insurance would switch to Obamacare. If rates rise too much, they could drive more people out of Obamacare, forcing rates to go up even more.
The political front also is tricky. Republicans would like to deep-six Obamacare, and the Democrats don’t want it to be used against them in next year’s elections. Sen. Mary Landrieu, D-La., and five other Democrats have been pushing a bill similar to Obama’s fix except that it would require — instead of allow — insurance companies to continue to offer policies that otherwise would be canceled because they don’t offer sufficient coverage. Also, the House is scheduled to vote Friday on a bill by Fred Upton, R-Mich., that would not only allow people to renew policies that otherwise would be canceled but also allow new customers to sign up for them. The risk of these changes to Obamacare is that cheaper, substandard insurance will lure healthier people who don’t expect to need health care and want lower premium prices. People who are sicker will stick with Obamacare, driving up costs and rates. Landrieu’s and Upton’s bills would exacerbate that problem far more than Obama’s plan would .
The president was correct Thursday when he said successful parts of Obamacare are getting little attention. Many people are grateful for the rule that allows young people up to age 25 to remain on their parents’ health insurance, and 396,000 people have qualified for expanded Medicaid coverage. Obama also was correct when he said we don’t want to return to a system in which people pay health insurance premiums all their lives and then are booted out just as they need care, leaving them bankrupt after a lifetime of work or without medical care altogether. It’s worth keeping in mind that’s what House Speaker John Boehner is calling for when he advocates scrapping Obamacare.
The 106,000 enrollments in October are a fraction of what Obamacare was expected to attract. Obama himself admitted his administration “fumbled” the rollout. And even as he promised to keep making fixes until the job is done, he will have to ensure those fixes don’t turn into so many more fumbles that the ballgame is lost.