The Obama administration reportedly knew for three years that Obamacare would eliminate up to two-thirds of existing individual health insurance policies, according to an NBC News investigative report.
In efforts to promote the federal healthcare reform legislation that became known as Obamacare, President Obama pledged that existing coverage would be left unaffected by the Affordable Care Act. “Let me be exactly clear about what health care reform means to you. First of all, if you’ve got health insurance, you like your doctors, you like your plan, you can keep your doctor, you can keep your plan. Nobody is talking about taking that away from you,” the president said in one public appearance.
Up to 14 million Americans, many of them self-employed, buy insurance on their own rather than through an employer, and up to a million of them so far may have already received cancellation notices informing them that they are losing their existing plans.
Obamacare requires insurers to cover 10 so-called essential benefits which rules out many higher-deductible or cafeteria/catastrophic plans that many Americans prefer within their budgets and now requires consumers to pay for additional coverage that they neither want nor need or which may be inappropriate for their age or gender. Many consumers are finding that the new plans are far more expensive, although some of them may qualify for federal subsidies depending on their income. The Obama administration claims that the end result will be better coverage. Complicating matters for replacement-insurance seekers is that the healthcare.gov web portal is not fully functional.
The employer mandate has been postponed for one year, but employer-provided coverage will also be required to be Obamacare-compliant by 2015.
In its report, NBC News explained that the federal government would allow existing plans in effect as of March 23, 2010, to be grandfathered, i.e., allowed to continue, even if they weren’t Obamacare-compliant. Except there was a catch. If any incremental part of a plan changed, the grandfathering would be null and void:
“But the Department of Health and Human Services then wrote regulations that narrowed that provision, by saying that if any part of a policy was significantly changed since that date — the deductible, co-pay, or benefits, for example — the policy would not be grandfathered. Buried in Obamacare regulations from July 2010 is an estimate that because of normal turnover in the individual insurance market, ’40 to 67 percent’ of customers will not be able to keep their policy. And because many policies will have been changed since the key date, ‘the percentage of individual market policies losing grandfather status in a given year exceeds the 40 to 67 percent range.’ That means the administration knew that more than 40 to 67 percent of those in the individual market would not be able to keep their plans, even if they liked them.”
Other estimates cited by NBC suggest that up to 75 percent of individual policies will wind up being canceled as a result of the Obamacare standards.
White House advisor Valerie Jarrett tweeted this evening that “FACT: Nothing in Obamcare forces people of out of their health plans. No change is required unless insurance companies change existing plans.”
In response, Mary Katharine Ham of HotAir.com notes that “[Jarrett] leaves out the part where Obamacare legally requires all health insurance plans to include a certain number of benefits that was above and beyond what many more, ahem, affordable plans offered, thereby making certain plans illegal. Many of those plans were plans that people liked and were assured they could keep. Obamacare offered a ‘grandfathering’ clause, which the administration later eviscerated after it had served its political purpose, ensuring even more people would lose their current coverage. So, no change is required by you under Obamacare unless your insurance company goes and changes your existing plan to comply with Obamacare.”