Obamacare’s Strange Twist

22 Nov


By Mike McGee

The current major glitch in Obamacare, the new and comprehensive health insurance program which is expected to cover everyone with basic health insurance protections, is a great tragedy.

After the end of the government shutdown, President Obama was confronted with the basic flaw in the universal health care program. Millions of citizens were having their health insurance policies cancelled because those policies did not comply with the new law. Replacement policies would cost more or were unavailable.

Ever since the 2010 passage of the Affordable Care Act, Obama has repeatedly told people that, if they liked their health plans, they could keep them. Obama made such assurances as recently as this spring.

According to the LA Times, “the law only extends that guarantee to health plans purchased before the law’s enactment. Many individual insurance plans bought since the law was passed in 2010 are being canceled because they don’t meet the law’s minimum requirements for coverage. As many as 4 million people who purchased coverage on the individual market may be forced to switch plans.”

The October cancellation of large numbers of health insurance plans bought since 2010 came across as though it was a complete surprise to everyone, Democrats and Republicans alike.

These cancellations by the insurance companies are exactly in compliance with the new law, and were absolutely not unexpected. With all the brain power in Washington, you’d think someone could have, would have, easily predicted that the new law would require the insurance companies to take the exact action which they did.

This action by the insurers in cancelling large numbers of health policies was not a case of unintended consequences. It’s a case of unintended stupidity, or intended silence, by the entire Washington establishment and all the think tanks everywhere, which should have been paying attention to the actual meaning and effect of the new health care law. This includes Republicans and Democrats, conservatives and liberals.

The insurance companies are complicit to the extent that they failed to announce well in advance, as loudly and as long as they could, that the new law would require the immediate cancellation of large numbers of perfectly good health insurance policies. The insurers were well prepared for the cancellations. They knew they would happen and had fully developed plans in place for the cancellations. So why was it such a surprise to everyone when they did what they knew they were going to have to do? “The answer, my friend, is blowing in the wind; the answer is blowing in the wind.”

We may never know the reasons behind the silence of all concerned, including the Republicans, as to this basic flaw in the health care law. Perhaps all we can do now is try to find an abiding solution to the problem which jumped up like a jack-in-the-box after the effective date of the new legislation.

President Obama stepped in quickly to provide a temporary fix to the problem. He ordered a one year period where existing health insurance policies would not have to comply with the new and more expensive requirements of the health care law. This is a good action, yet it still leaves people hanging, knowing that the axe will fall in a year; and insurance companies may be reluctant to extend existing policies, knowing they’ll just have to do the same thing in a year as they’re doing now.

Again according to the LA Times, “Obama suggested he was open to changes in parts of the law but did not offer specifics. ‘I’ve assigned my team to see what we can do to close some of the holes and gaps in the law — because, you know, my intention is to lift up and make sure the insurance that people buy is effective,’ he said. He also promised to find a solution for those who are losing plans they like and paying a higher premium not offset by government subsidies.”

The congress needs to take bipartisan action to amend the new health care law to provide a permanent fix for the problem which has presented itself so “suddenly.” President Obama needs to get behind the necessary repair and announce that he will sign a bill if presented to him.

The fix is simple and direct. Take what Obama has already done, and amend the law to “grandfather” in all existing policies permanently, provided the policy holder signs a formal agreement consenting to the continuation of his or her existing health insurance policy. When any such existing policy is terminated for any legitimate reason, the policy holder will have to get a new policy which complies with the requirements of the new health care law.

There may well be a need for some actuarial activity on the part of the insurers; yet it is unlikely that the current premium structure will need much change.

This grandfathering (or grandparenting, for the PC) of all existing policies will create two tiers of health insurance policies, in effect a smaller start. Yet it’s likely that most of the old policies will have lapsed or been replaced within the next ten years. Meanwhile, Americans will retain the ability to choose what they want, which is a fundamental principle of our country.

Yes, the new law will eventually take away that choice, but it’s no different than the fact that we don’t have a choice to contribute to or subscribe to Social Security. Almost everyone accepts the necessary consequence of that lack of choice. A glance at history will show that the Social Security program began as a small and “radical” program and grew larger only over time, with the ongoing political consent of the people being vital to that growth. Any congress after 1938 could have repealed Social Security, and yet the utility of the program showed its long-term worth.

I was profoundly affected by one CNN interview during the time of the policy cancellations after the shutdown was over. The reporter was interviewing a man in California who was proprietor of his own small business. The man had recently gotten the notice that his health insurance was being terminated. He was not so much angry as he was deeply disappointed.

“All I want to do,” he said, “is to keep the health insurance policy I already have. It’s a good policy and I don’t really need all those extras.” He went on to explain that the cost of the new policy he’d been offered would cut into the profits from his hard work at his business.

What needs to be done, then, is for a bipartisan group, supported by President Obama, to allow the new health care law to start smaller, and then increase in scope over time. We need to let that small business owner in California, and countless others, keep the perfectly adequate health insurance policies they have now, and give them up only gradually over a period of years. We need to restore some predictability and balance to the health insurance market, and leave our citizens some choices which will last as long as they need or want them.

From http://www.mcgeepost.com Copyright © 2013 by Michael H. McGee. All commercial rights reserved. Non-commercial or news and commentary site re-use or re-posting is encouraged. Please feel free to share all or part, hopefully with attribution.

3 Responses to “Obamacare’s Strange Twist”

  1. 康軒國語 November 24, 2013 at 10:33 am #

    Dear Sirs,I checked your article named “Obamacare’s Strange Twist | mcgeehome” daily. Your humoristic style is spectacular, keep it up! And you can check my website about 康軒國語.

  2. Elaine Oldfield July 22, 2016 at 7:41 am #

    So many of us have grandfathered plans that cover very little mental health care or a new policy that still limits the mental coverage. They don’t have to follow the new laws because no one is enforcing the laws. No mention of these details. So why did the policy cost go up if they are not covering more?


  1. How Much Money is Out there? | mcgeehome - December 18, 2013

    […] The Affordable Health Care Act is another example of how to honestly distribute real benefits to those who are not in the second economy. Sure it may need some fixing, yet the idea and the purposes are certainly sound. See my article at https://mcgeepost.com/2013/11/22/obamacares-strange-twist/ […]

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