President's Insurance Announcement Keeps Eyes on the Prize

Nov 14, 2013Richard Kirsch

By allowing people to keep their current plans for another year, even if those plans are not compliant with the Affordable Care Act, the President has retained a focus on the most important thing: insuring more Americans.

President Obama’s move today to allow people to keep their current insurance plans for a year, as long as they are told that they may be able to get better coverage at a lower cost from the new exchanges, is smart politics with little likely policy damage. It keeps the eye on the prize: getting people enrolled. That is exactly why Republicans are likely to balk.

For years the GOP has been throwing bombs at the Affordable Care Act (ACA) based on groundless talking points (a government takeover) or pure lies (death panels). I have always had confidence that as the law was actually implemented, and those charges demonstrated to be just hot air, that they would lose any punch beyond the hard-right base. My worries have always been about those who would see themselves as being hurt  (mostly by having to pay more than they can afford for coverage) when the law began to be implemented. Those are real people with real stories. The “if you like it you can keep it” firestorm is the first explosion of that fear.

While the fact is that most people in the individual market will do better under the ACA’s new exchanges – once they are able to get into the enrollment system and apply for subsidies – there will be some people, mostly young, healthy, with good incomes, who would prefer to keep the coverage they have. And, as I wrote last week, since bad news is both more prevalent and more powerful than good news, their stories could threaten to define the law. By discrediting the ACA, it could also suppress enrollment, particularly given the botched rollout of Healthcare.gov.

Democrats on the Hill are a panicky lot, driven to over-react to many issues that Americans outside of the Beltway ignore. But in this case, they were right to be concerned about not responding to what people most fear about health reform, that change will threaten what they now have. It was the power of that fear which led to the “if you like it you can keep it” promise in the first place.

While the President’s credibility has sunk, he will not be on the ballot in 2014, but Democrats in Congress will. One of those Democrats, Senator Mary Landrieu of Louisiana, hit on a solution quickly. Landrieu has always been a consistent supporter of health reform and, despite representing a Red state, was never someone we were very concerned about losing in the legislative fight over the ACA. She deeply believes that people in her state should have health coverage. She stepped up last week with a bill that would allow people who are already covered to keep their insurance, but requires their insurance companies to tell them what ACA guaranteed benefits they won’t get with their current coverage and how to apply for coverage in the exchanges. Her proposal will make up for the misleading cancellation announcements sent out by insurance companies, which often have not told their policy holders that better, subsidized coverage might be available.

Today Obama implemented Sen. Landrieu’s proposal with one major change: his rule would only extend the coverage until the end of 2014, consistent with other delays in implementation, such as the employer mandate. His goal is to get over this current hurdle and then continue to move as many people into the exchanges as possible.

The President’s new rule is likely to be where the policy settles, but it is not likely to end the Congressional debate. The Republicans will seek to keep the issue alive by voting to approve a bill sponsored by House Energy and Commerce Chair Fred Upton, which would not just grandfather existing policies – the President’s promise – but open them up to more people. And that bill would leave out the information about the better, more affordable exchange policies in the Landrieu legislation and Obama rule.

Democrats may decide they need to offer a legislative alternative to the Upton bill, which could be the Landrieu proposal. The policy concern with the Landrieu proposal is that premiums will rise and the exchanges will be harmed, if the healthiest people stay out, which is why Obama wants to limit the extension to one year. While that is certainly better policy, if Democrats go the Landrieu route it won’t be cataclysmic. Fairly quickly, the number of people left with their original policies will shrink as they get older and sicker and their insurance premiums rise. And as the exchanges grow and policies outside the exchanges dwindle, more insurers will drop coverage outside the exchanges all together.

Will Republicans accept this compromise? Of course not. Everything they’ve done for the last five years demonstrates that they would rather try to keep the issue alive politically than address people’s problems.

The President’s move allows him and Democrats to take the high ground. The most important task – to build a solid political foundation for the Affordable Care Act and realize its purpose – is getting people more people enrolled. The experience in Massachusetts demonstrated that low initial enrollment numbers are to be expected. There is every reason to expect a huge acceleration in enrollment as the web problems get fixed and we get closer to the deadlines. Including Medicaid, there are already more than half a million Americans who will be newly-covered next year. There will be millions more by early in 2014.  And as the opponents of Obamacare and government as a positive force in people’s lives know and fear, in the end, those are the people who will count.  

Richard Kirsch is a Senior Fellow at the Roosevelt Institute, a Senior Adviser to USAction, and the author of Fighting for Our Health. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform.

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