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Democrats Knew Millions Couldn’t Keep Insurance Plan

October 31, 2013

Back on September 10, 2009, President Obama spoke about his health care reform plan – a plan that would later be signed into law. During his speech, President Obama promised: “Nothing in this plan will require you, or your employer, to change the coverage or the doctor you have. Nothing will change for you if you have insurance. Nothing in the plan will require any changes.”

Senate Democrat leaders reaffirmed the President’s promise.

  • Senate Majority Leader Harry Reid said on the Senate floor: “It not only means making sure you can keep your family’s doctor or keep your healthcare plan if you like it, but also that you can afford to do so.”
  • Senate Assistant Majority Leader Dick Durbin said: “Many people say: ‘I like my health insurance right now. I don’t want to change. I don’t want to go into Medicare or Medicaid. I like what I have. Would you please leave people alone?’ The answer is yes. In fact, we guarantee it. We are going to put in any legislation considered by the House and Senate the protection that you, as an individual, keep the insurance you have, if that is what you want.”

With those words, the President and Senate Democrats made a pact with the American people. If you liked the insurance you had, then rest assured – Obamacare will let you keep it.

Today millions of Americans who buy health insurance in the individual market are getting plan cancellation letters. The letters say people’s coverage is being terminated because it doesn’t meet all of Obamacare’s new rules and benefit mandates. Those affected feel betrayed. They should.

On Monday, one top White House aide tried defending the President, tweeting: “FACT: Nothing in #Obamacare forces people out of their health plans. No change is required unless insurance companies change existing plans.” Even the Washington Post’s fact checker called out the Administration, saying: “The President’s promise apparently came with a very large caveat: ‘If you like your health care plan, you’ll be able to keep your health care plan – if we deem it to be adequate.’”

The issue has to do with Section 1251 of the health care law, which provides that if you had an insurance policy on March 23, 2010 – and continued to renew it – then you could keep it even after Obamacare’s exchanges launched. Less than three months after President Obama signed his health care bill into law, the Administration issued a regulation on these “grandfathered health plans” that unilaterally dismantled Section 1251 of the health care law. It says that determining what changes to a plan are substantial enough that it is no longer grandfathered will be “addressed by regulatory guidance.” The Obama Administration decided – all on its own – that any routine change made to a grandfathered insurance plan would invalidate the promise that you can keep what you had.

Based on normal policy turnover, the Administration predicted in 2010 that 40 to 67 percent of customers buying in the individual market would not be able to keep their policy, and that 39 to 69 percent of all businesses would lose their grandfathered health plan status. By 2013, the Administration figured, up to 80 percent of small business health plans would no longer be grandfathered.

This should come as no surprise. The Administration’s regulation placed unreasonably tight restrictions, saying that plans:

  • Cannot significantly cut or reduce benefits;
  • Cannot raise co-insurance charges;
  • Cannot significantly raise co-payment charges;
  • Cannot significantly raise deductibles;
  • Cannot add to or restrict annual limits;
  • Cannot completely change insurance companies.

Republicans saw this train wreck coming long ago and tried to stop it. On September 29, 2010, Senator Mike Enzi, then the Ranking Member of the Health, Education, Labor, and Pensions Committee, brought to the floor Senate Joint Resolution 39, which would have immediately overturned the Administration’s grandfather regulation – but Senate Democrats voted in lockstep to keep this regulation on the books. Now that as many as 16 million people who buy their own health insurance may lose the plan they have today, Washington Democrats are in panic mode – making excuses, pointing fingers, and shifting blame.

Health Care Headlines

Minnesota StarTribune: “At least 140,000 Minnesotans will lose current health policies” At least 140,000 Minnesotans who buy health insurance on their own are being notified that their plans will no longer be available under the new federal health care law. Unlike many states, Minnesota guarantees renewability of health insurance plans, meaning that technically, no policies are being canceled. Some who are being offered different plans, however, say that’s a distinction without a difference.

New York Times: “Cancellation of Health Care Plans Replaces Website Problems as Prime Target” After focusing for weeks on the technical failures of President Obama’s health insurance website, Republicans on Tuesday broadened their criticism of the health care law, pointing to Americans whose health plans have been terminated because they do not meet the law’s new coverage requirements.

CNN Money: “Security Hole Found in Obamacare Website” The Obamacare website has more than annoying bugs. A cybersecurity expert found a way to hack into users’ accounts. Until the security hole was fixed last week, anyone could easily reset your password without your knowledge and hijack your account.

Washington Post: “This is why Obamacare is canceling some people’s insurance plans” So these insurance cancellation notices. I hear a lot about them. What’s the deal?

Bloomberg: “California Coverage Cancellations Show Obamacare Price Increases” San Francisco writer Lisa Buchanan said she and her husband got notices that they’ll have to pay almost twice as much for health insurance because their current coverage doesn’t comply with Obamacare. In Mill Valley, California, retiree Diane Shore got a letter saying her plan is being eliminated and she’ll be moved to a new one with higher premiums.