Democrats’ Political Fix Amounts to Less than it Seems

Democrats famously lied to the American people when they promised some version of, “If you like your health care plan, you can keep it.” When more than five million people learned last year that Obamacare actually caused their insurance company to cancel their plan because it didn’t meet the law’s new rules and mandates, the President reluctantly announced he would allow some people to keep their soon-to-be cancelled plan. Last week the President – under extreme political pressure from vulnerable Democrats – extended that decision again, until after the 2106 elections.

The Democrats’ political fix amounts to less than it seems. Millions of Americans across the country will still be forced to buy an Obamacare mandated and approved insurance plan anyway.

Obama’s Unilateral Change Doesn’t Solve the Problem

On November 14, 2013, the Centers for Medicare and Medicaid Services gave state insurance commissioners the option of letting insurers continue to offer certain health care plans that do not meet Obamacare’s rules and mandates. Rather than admit its law fails to work the way Democrats promised, the Administration simply passed the buck to states and insurers.

For more than three years, insurance companies implemented plans to move customers into policies that comply with Obamacare’s new rules. Insurers expected – because the Administration demanded – that any policy failing to meet the health care law’s strict requirements would be phased out of the market in 2014. If a state or an insurer decides it cannot allow the cancelled policy to be renewed, then people are still forced to buy Obamacare-approved insurance anyway. President Obama will say it’s not his fault, but that is exactly where the blame lies.

Democrats Knew Millions Couldn’t Keep Their Plan

The issue has to do with Section 1251 of the health care law. It provides that anyone who had an insurance policy on March 23, 2010 – and continued to renew it – 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 that unilaterally dismantled Section 1251 of the health care law. It set very specific criteria that health plans had to meet in order to be “grandfathered,” or protected from Obamacare’s insurance market changes and benefit mandates.

The Administration decided – all on its own – that any routine change made to a grandfathered plan would invalidate the promise that you can keep what you had. The regulation placed unreasonably tight restrictions on grandfathered policies, saying they:

• 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; and
• Cannot completely change insurance companies.

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

Many consumers want the freedom to increase their plan deductible or co-payments rather than pay a higher monthly premium. The Administration’s grandfather regulation took that choice away and Senate Democrats supported it. Now employers and consumers have only one option: change absolutely nothing in their insurance policy and take whatever price increase comes with it.

Another Political Band-Aid for a Political Problem

Democrats quickly realized the Obama Administration’s one-year canceled plan delay caused yet another political problem. Another round of painful cancellation notices were set to hit the American people’s mailboxes in the fall – right before the congressional midterm elections. President Obama didn’t want to face the political fallout, so last Wednesday the Administration extended its transitional cancelled-plan policy an extra two years. This means some people, who would have had their health insurance plan cancelled this year due to the law’s new mandates, may now be able to renew that policy all the way through the 2016 elections.

President Obama’s maneuver is a desperate attempt at misdirection. These calculated rewrites are designed for one purpose: to mask Obamacare’s harmful effects and protect endangered congressional Democrats. For once, the Administration was forced to admit the truth. In a ‘fact sheet’ provided to the press, HHS touted that the cancelled plan renewal policy was “developed in close consultation with members of Congress.” The document specifically praised Senators Landrieu, Shaheen, Udall, and Warner – all Senators running for re-election this year.

Speaking at a town hall last week, the President said he is “very proud” of the law and that “it is working the way it should.” President Obama can keep up the charade, but his own executive delays and unilateral changes prove the health care law doesn’t work. The American people understand that President Obama’s desperate “fixes” are all about politics, not about serving their best interests. They see a President changing his health care law on a whim – or ignoring it altogether – because it is politically inconvenient. It is long past time to scrap Obamacare and start over.