Blog on the Run: Reloaded

Tuesday, November 12, 2013 7:17 pm

Facts matter, so does context, ACA Part CCXXII!Q*%.

It is factually accurate to state that Obama’s claim that “most people” would be able to keep their existing health insurance coverage under Obamacare was inaccurate if you’re looking at people with individual policies. (Most people insured through their employers will, in fact, continue to be.) It is even factually accurate to say that Obama kept claiming that even after he should have known better — i.e., he lied on that point, at least for a while.

But economist Dean Baker adds some relevant context that, while not getting Obama off the hook for saying stuff he should have known to be false, also makes clear that insurers also played a role and that policy holders shouldn’t have been totally surprised:

[The Washington Post’s “Fact Checker” columnist, Glenn Kessler] presents evidence showing that 48.2 percent of individual plans are in effect less than 6 months and 64.5 percent are in effect less than year. Extrapolating from this evidence on the rate at which individuals leave plans, Kessler calculates that less than 4.8 percent of the people in the individual market have a plan that would be protected by this grandfather provision. …

… while Kessler is correct that the grandfathering protects relatively few people because policies tend to be short-lived, this data also raises an issue about the pain caused by earlier than expected cancellations. Kessler’s data show that almost half of the plans will be held by people for less than six months and almost two-thirds will be held for less than a year. This means that most of the people being told that their plans are being cancelled probably would have left their plans in the first half of 2014 anyhow. While no one wants to buy insurance more than necessary, it hardly seems like a calamity if someone expected to leave their policy in March and will now have to arrange insurance through the exchange for two months.

Furthermore one has to ask about the role of insurers in this process. Kessler’s data imply that more than three quarters of the people in the individual market signed up for their policies for the first time in the last year. Didn’t insurers tell people at the time they sold the policies that these plans would only be in effect through the end of December because they did not comply with provisions in the ACA? If the insurers did inform their clients at the time they purchased their policies then they would not be surprised to find out now that they will need new insurance. If the insurance companies did not inform clients that their plans would soon be terminated then it seems that the insurers are the main culprits in this story, not the Obama administration.

UPDATE, 11/13/13: Just a thought: Insurance companies have known for three years what the standards for policies would be under the ACA. They had plenty of time to prepare. In many cases, however, they chose to screw consumers and blame it on Obama.

1 Comment

  1. Vulnerable Senate Democrats backed rule responsible for insurance cancellations

    What’s more, Landrieu and other vulnerable Senate Democrats — including Sens. Mark Pryor (D-AR), Mark Begich (D-AK), Kay Hagan (D-NC) — have another very big problem. It turns out that they all backed the rule that led to the wave of insurance cancellations, as CNN reported late last week:

    ” Senate Democrats voted unanimously three years ago to support the Obamacare rule that is largely responsible for some of the health insurance cancellation letters that are going out.

    In September 2010, Senate Republicans brought a resolution to the floor to block implementation of the grandfather rule, warning that it would result in canceled policies and violate President Barack Obama’s promise that people could keep their insurance if they liked it.
    Senate Democrats like Mary Landrieu, Jeanne Shaheen, Mark Pryor, Kay Hagan and Mark Begich – all of whom voted against stopping the rule from going into effect and have since supported delaying parts of Obamacare.

    The rule set up the criteria for what insurance plans would be grandfathered, or exempted, from the new Obamacare requirements. Democrats argued then that the rule was necessary to insure that insurance companies weren’t able to drastically change their plans and still remain exempt from Obamacare.”

    Sen. Mike Enzi (R-WY) offered the resolution, S.J. Res. 39, that would have rejected the rule submitted by the Centers for Medicare and Medicaid Services (CMS) and the Department of Health and Human Services (HHS). The rule made it virtually impossible for insurance companies to maintain a plan’s “grandfathered” status, which refers to any plans in effect before March 23, 2010.

    The reason the rule was written so strictly was because the goal of the administration was to ensure that all health insurance plans would eventually be subject to the requirements and mandates, meaning that every American would have coverage that meets the approval of government bureaucrats and regulators.

    “At least 47 separate times, President Obama promised ‘If you like what you have you can keep it.’ Unfortunately, the Obama Administration has already broken that promise,” said Enzi from the Senate floor in September 2010. “Earlier this year, the Administration published the regulation, which will fundamentally change the health insurance plans of millions of Americans.”

    “Although the regulation was supposed to help existing health plans, and the businesses that provide them, avoid the most onerous new rules and red tape included in the new health care law, between 39 percent and 69 percent of businesses will lose their status as members of grandfathered health plans,” he noted. “The picture is even worse for small businesses – the Department of Health and Human Services estimates that by 2013, up to 80 percent of small businesses will lose their grandfathered status.”

    As CNN noted, the resolution failed in a party-line vote, 41 to 59. And again, Landrieu, Begich, Pryor, and Hagan voted in support of the rule that is causing Americans to lose their health insurance coverage, even if they were happy with it.

    Comment by Fred Gregory — Wednesday, November 13, 2013 7:48 pm @ 7:48 pm

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