The President's Fix and How Insurance Companies Will Still Be Able to Screw People

In an attempt to mitigate the fallout from a series of high profile insurance policy cancellations, President Obama announced an administrative fix to the Affordable Care Act that will allow Americans with individual health insurance policies to keep their plans if they like them. The fix will involve re-configuring the "grandfathering" rule in the ACA that allows substandard, existing policies to remain in place even though the plans don't comply with new ACA consumer protections and minimum standards for coverage.
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In an attempt to mitigate the fallout from a series of high profile insurance policy cancellations, President Obama announced an administrative fix to the Affordable Care Act that will allow Americans with individual health insurance policies to keep their plans if they like them. The fix will involve re-configuring the "grandfathering" rule in the ACA that allows substandard, existing policies to remain in place even though the plans don't comply with new ACA consumer protections and minimum standards for coverage.
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In an attempt to mitigate the fallout from a series of high profile insurance policy cancellations, President Obama announced an administrative fix to the Affordable Care Act that will allow Americans with individual health insurance policies to keep their plans if they like them. The fix will involve re-configuring the "grandfathering" rule in the ACA that allowed substandard, existing policies to remain in place beyond January 1, 2014 even though the plans don't comply with new ACA consumer protections and minimum standards for coverage.

Put another way, if you like your plan, your health insurance provider can't cancel it because of the Affordable Care Act. Insurance customers who bought plans before March, 2010 won't face cancellations because of regulations in the law -- regulations designed to end abusive insurance practices. Additionally, the president announced that customers whose policies changed after March, 2010, won't see their policies canceled because of the ACA. Plus, any policies purchased after March, 2010 can't be canceled because of the ACA. In effect, the grandfather clause in the law has returned to where it was when the law was passed, and, according to the president, extended.

Of course, in the meantime, insurance providers can cancel plans for a variety of other reasons, oftentimes as soon as a policyholder is sick or injured. Providers can likewise continue to jack up premiums, deductibles and co-pays. Basically, all of the same nefarious activities that occurred prior to the passage of the ACA. Likewise, insurance companies like UnitedHealthcare, which canceled all individual policies because it's abandoning the individual marketplace, can continue to cancel those policies because the cancellations had nothing to do with ACA rules and regulations. So, no free preventative or maternity care. No caps on out of pocket expenses. No end to annual and lifetime limits. Nothing, plus all the craptastical things from the pre-ACA system.

Yes, if you keep your old, pre-ACA policy, you can be utterly screwed and bankrupted by your insurer as if the ACA never happened. The only difference is that your insurer can't scapegoat the ACA any more.

Or, shorter President Obama: Okay. Fine. If you like running with scissors, you can keep running with scissors.

Indeed, policyholders like TV's Dylan Ratigan can go back to $170-per-month catastrophic policies that contain none of the ACA's protections against abuse, gouging and rescission. What if Ratigan is, heaven forbid, stricken with a terrible illness? While he might be enjoying his $170 premium (as any millionaire would), his deductible for hospitalization and surgeries is probably enormous. But he's rich, so he can probably swing those costs. But what if, while he's in the hospital, his insurance company discovers that he didn't disclose a pre-existing condition -- a condition he wasn't aware that he had. As we witnessed over and over again in the old system, his policy could be canceled and he'd have to buy an ACA policy anyway -- that is, if it's during the narrow annual open enrollment period, October 15 to December 7. If not, he's screwed.

And he's one of the lucky ones. Millions of others have less expensive, but much worse "junk insurance" policies.

As for the rest of us, we'll enjoy our excellent ACA policies, while sleeping through the night knowing we're protected from crap like that.

On second thought, our ACA policies might not be entirely safe -- specifically because of idiots who like and keep their old, horseshit policies. The insurance companies participating in the exchanges were counting on the cancellation of those policies and for customers to move over to ACA policies, thus adding healthier people to the pool. Without those healthier people, the ACA exchanges, they say, will be loaded with sick people. Sarah Kliff called it "a really big high-risk pool." This might force providers to raise premiums on ACA coverage.

So the people who are screwing themselves with junk policies might also be screwing the rest of us, too.

All of this because of a Republican-created news media narrative about the president lying. Meanwhile, prepare for the next news media narrative to go something like this: Here's a lineup of angry yokels who lost their old policies because [fill in reason unrelated to Obamacare but blame it on Obamacare anyway].

And finally, remember when the news media forced President Bush to apologize for the Medicare Part-D donut hole, which left thousands of seniors without prescription drugs for months on end? And remember when Bush enacted a fix for the hole?

I don't either.

Bob Cesca is the managing editor for The Daily Banter, the editor of BobCesca.com, the host of the Bubble Genius Bob & Chez Show podcast and a Huffington Post contributor.