Politics

Obama’s “fix” for insurance cancellations is not going over well

Obama's "fix" for insurance cancellations is not going over well

While President Obama was making everyone stand around waiting for his characteristically tardy appearance at the White House today, House Speaker John Boehner (R-OH) was giving a pre-buttal to the proposed insurance cancellation “fix.”  Boehner said it’s clear the White House cannot be trusted, ran through the litany of broken ObamaCare promises, mused on the dangers of forcing the American people to use a web system with severe security flaws… and said there was “no way an administrative fix is both legal and effective.”

It’s good to see the Republicans stand up for the rule of law, which seemed like a bit of a dead letter after the last time Obama violated the Constitution to rewrite his “signature achievement” on the fly.

Sarah Kliff at the Washington Post was struck by how quickly the backlash to Obama’s “fix” began:

It took about three hours exactly for states to start pushing back against President Obama’s request that regulators allow insurance plans to offer current products in 2014.

Washington state insurance commissioner Mike Kreidler has announced that he will not allow insurance companies to do so.

“In the interest of keeping the consumer protections we have enacted and ensuring that we keep health insurance costs down for all consumers, we are staying the course,” he said in a statement moments ago. “We will not be allowing insurance companies to extend their policies. I believe this is in the best interest of the health insurance market in Washington.”

According to Kliff, Commissioner Kriedler is “one of the most liberal regulators” in the business… and his rejection of Obama’s “fix” is actually “a full-throated defense of the Affordable Care Act.”  He’s not going to let that weasel Barack Obama undermine the noble and beautiful law the great Barack Obama passed!

Judging by this afternoon’s statement from the National Association of Insurance Commissioners, there will be resistance from coast to coast:

For three years, state insurance regulators have been working to adapt to the Affordable Care Act in a way that best meets the needs of consumers in each state.   We have been particularly concerned about the way the reforms would impact premiums, the solvency of insurance companies, and the overall health of the marketplace.  The NAIC has been clear from the beginning that allowing insurers to have different rules for different policies would be detrimental to the overall market and result in higher premiums.

We have expressed these concerns with the Administration and are concerned by the President’s announcement today that the federal government would use its “enforcement discretion” to delay enforcement of the ACA’s market reforms in 2014 for plans that are currently in effect.  This decision continues different rules for different policies and threatens to undermine the new market, and may lead to higher premiums and market disruptions in 2014 and beyond.

In addition, it is unclear how, as a practical matter, the changes proposed today by the President can be put into effect.  In many states, cancellation notices have already gone out to policyholders and rates and plans have already been approved for 2014. Changing the rules through administrative action at this late date creates uncertainty and may not address the underlying issues. We look forward to learning more details of this policy change and about how the administration proposes that regulators and insurers make this work for all consumers.

The insurance commissioner for Kansas told the Washington Post the situation is “just a big mess right now… I don’t know what to tell people.”  Insurance consultant Robert Lazewski sent this note out to his clients:

This means that the insurance companies have 32 days to reprogram their computer systems for policies, rates, and eligibility, send notices to the policyholders via US Mail, send a very complex letter that describes just what the differences are between specific policies and Obamacare compliant plans, ask the consumer for their decision —  and give them a reasonable time to make that decision —  and then enter those decisions back into their systems without creating massive billing, claim payment, and provider eligibility list mistakes.

All by January 1.

The New Jersey Association of Health Underwriters told David Steinberg of PJ Media, “This is a new insanity.

I do not know how the insurance carriers and federal government are going to be dealing with this. First, many states require a 60-day notice of a change in plan or a cancellation. It’s November 15! How can they comply with this new element of federal law, and with their state laws?

Second, do they really think carriers are going to be willing to recreate the old plans, while also being mandated to offer the new ones that comply with the exchanges? I have a large number of clients, small to medium-sized businesses, who would much rather renew their old policies on 12/1 than sign up with the newly mandated exchange policies. Everyone is going to want the old ones! You really expect the insurance carriers to willingly deal with the financial loss and legal headaches of switching back?

It is going to be very difficult for carriers to honor this.

And it’s going to be very difficult for Obama to keep blaming his failures on them.

 

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