The Obama administration will allow some health plans that fall short of Obamacare coverage requirements to continue past the November elections and through most of President Barack Obama’s second term.
The decision, announced Wednesday by federal health officials, extends for two years an earlier decision by the White House to let people keep their existing health plans through 2014, even if those plans fell short of Affordable Care Act requirements. Under the new policy, some people could renew plans in 2016, meaning they’d be covered into 2017.
Without the change, Democrats worried that another wave of canceled health policies would hit just weeks before the November 2014 midterm elections, setting off more recriminations over Obama’s earlier pledge that people can keep their plans if they like them.
The new policy could have a limited practical impact. The extension is optional for both states and the health plans themselves. To date, only about half the states have allowed the older, often skimpier, plans to continue. And some insurers want to scrap them to maximize enrollment in the new health insurance exchanges. And officials predict more Americans will migrate to the new plans, particularly if they qualify for subsidies.
One official said the number of people in plans that have been extended is “falling quite rapidly.”
Republicans quickly lambasted the move as blatant 2014 politics and another sign that the administration just can’t get the law to work.
“The Obama administration’s announcement today that it will continue to allow insurers to sell health care plans that don’t meet Obamacare minimum coverage requirements is not only another reminder of the president’s broken promise that you can keep your plan if you like it but represents a desperate move to protect vulnerable Democrats in national elections later this year,” Senate Minority Leader Mitch McConnell said in a statement.
The Obama administration said the move, revealed in a conference call with senior administration officials, isn’t politics. “The goal is to implement the Affordable Care Act in a common-sense way and to try to provide a smooth transition for consumers and employers,” an official said on the call.
Documents accompanying the announcement reveal that the changes were crafted “in close consultation” with a large contingent of vulnerable Democrats, including Sens. Mark Warner, Mary Landrieu, Jeanne Shaheen and Mark Udall as well as Reps. Tim Bishop, Elizabeth Esty, Carol Shea-Porter, Gary Peters, Scott Peters, Ann McLane Kuster, Kyrsten Sinema, Ann Kirkpatrick and Ron Barber.
The changes, part of new regulations and guidance issued by the Department of Health and Human Services, will give some consumers an extra two years to remain on health plans that would otherwise be canceled for failing to meet Obamacare’s minimum coverage requirements. Many of those plans had already been given a one-year reprieve in November 2013, but now they could be sold through 2016. It also extends the offer to people in small group health insurance plans, where small businesses could also have faced plan cancellations in the coming year.
The insurance industry has worried that the move to “un-cancel” plans could make it harder for the new markets to succeed, and some strong backers of the law also worry. Sen. Tom Harkin (D-Iowa), for instance, said in an interview that he’d rather see people in the newer policies with stronger coverage.
“We’ve been through this before. They made that decision – fine,” Harkin said. “A lot of people say they have policies that they don’t pay very much for but I put it this way: they’re great policies as long as you don’t get sick.”
A new rule also requires that an Obamacare program intended to protect insurers from unexpected costs is fully funded by the insurance industry, rather than by taxpayers. Republicans have said that taxpayers could be on the hook for an insurance industry “bailout” through these provisions.
The rule also outlines the administration’s plan to implement SHOP exchanges for small businesses. The federal one had been delayed a year. The Treasury Department also said it was streamlining some of the paperwork for employers.
Source: Kyle Cheney, Politico Pro