In an interview with NBC News last week, President Barack Obama apologized to Americans that his “If you like your health plan, you can keep it” pledge had not been kept and people’s health insurance policies were in fact being canceled.
“I am sorry that they are finding themselves in this situation based on assurances they got from me,” Obama said. “We’ve got to work hard to make sure that they know we hear them and we are going to do everything we can to deal with folks who find themselves in a tough position as a consequence of this.”
But that apology came with a few asterisks. For starters, Obama implied that this wasn’t supposed to happen, that these canceled plans were some bug in the implementation of the law that his administration hadn’t intended.
“First of all, I meant what I said. And we worked hard to try to make sure that we implemented it properly. But obviously, we didn’t do a good enough job, and I regret that,” he said. “Obviously, we didn’t do a good enough job in terms of how we crafted the law. That’s something that I regret. That’s something that we’re going to do everything we can to get fixed.”
That struck health policy experts, even those supportive of the law, as an odd thing for the president to say. Obamacare was designed to disrupt the individual market, where medical underwriting had led to discrimination and high prices for a lot of people. The way that the law tried to correct some of those flaws was requiring comprehensive coverage, mandating that insurers cover everybody and effectively combining all of the market’s participants into one big risk pool.
It’s those reforms that have contributed to the cancellations of non-compliant plans and selected examples of higher premiums — but those are features of the law, not bugs.
“I’m mystified myself,” Tim Jost, a health law professor at Washington and Lee University and supporter of Obamacare, told TPM. “I think everybody knew all along that there were going to be winners and losers, that people who have benefited for a long time with favorable rates because other people were closed out of the market were going to have to pay a bit more. So I don’t know why this would have been unexpected.”
“It was definitely always the intent to disrupt this market,” said Gail Wilensky, a former George H.W. Bush administration health adviser. “You certainly knew it if you gave it any thought at all.”
Obama might have had a point that the law could have been written differently, some experts said. For example, it could have made it easier for people to transition from the individual market to the law’s insurance marketplaces by, for example, requiring insurers to offer a policy on the marketplace to any customer whose policy was being terminated or to provide subsidies to ensure nobody ended up paying more for a new plan.
But those should have been considerations in 2009 when the law was being drafted. For the last three years, as the NBC News report that launched the latest firestorm suggested, the administration has known that some people’s policies would be canceled.
“When the law was drafted, it really did not contemplate dropping individual insurance,” Dan Mendelson, a former Clinton administration health official, told TPM. “But a lot of us knew this was going to happen. This was completely predictable because so many of the plans were not compliant with the new law.”
But what can be done now, less than two months before the law’s 2014 reforms go into effect?
It’s not clear. Some members of Congress have proposed allowing people to keep their existing policies as long as they continue paying their premiums. But experts say that that could undermine the law’s reforms by allowing the currently insured to stay out of the new insurance market, which would in turn fill up with sicker people. The law needs the former mixed with the latter for its finances to work.
That’s further evidence that the law’s impact on some of the currently insured, who Obama’s pledge was made to and who would benefit from these proposals, was always part of its design.
“These folks have been allowed to get artificially low prices by a system that discriminates in favor of the healthy. Essentially, the existing market has allowed them to sit at the front of the bus while the sick are relegated to the back,” Jonathan Gruber, an MIT economist who helped craft the law, told TPM. “When that ends, then they may have to move back a bit in the bus. This is not an argument to keep discriminatory practices.”
Obama’s comments to NBC — “We’re going to do everything we can” — suggested that the administration might have a trick up its sleeve. The Huffington Post reported Friday that the White House was considering some kind of expansion of the law’s financial assistance to make sure that people don’t end up paying more for coverage.
But the specifics aren’t clear — and most experts think that if it required any additional spending, Congress would have to approve it. That seems unlikely, considering the House has voted more than 40 times to repeal part or all of Obamacare.
“Unless we amend the Constitution to allow the executive to appropriate funds from the United States Treasury, I don’t see how that could happen,” Jost said. “They’re trying to think of something, but it’s hard for me to think of what it would be.”
“I don’t know what they can do. They can try to make people whole, try some kind of financial patch, though I don’t know where they’re going to get the money for it,” Wilensky said. “I’m not sure what they can do about it at this stage. This is the middle of November.”
The administration certainly shouldn’t be counting on help from congressional Republicans.
“I don’t think there’s going to be meaningful legislative change in this environment,” Mendelson said. “The Republican strategy is: Watch them squirm and don’t help them fix it.”