It’s one thing for embattled red state Democrats to support legislation that significantly disrupts Obamacare. It’s a very different thing for bright-blue state Democrats to support such a bill.
That’s what’s happening. Sens. Jeff Merkley (D-OR) and Dianne Feinstein (D-CA) have signed on to legislation introduced by Sen. Mary Landrieu (D-LA) — and supported by Sens. Kay Hagan (D-NC), Mark Pryor (D-AR) and Joe Manchin (D-WV) — that weakens a core Obamacare reform to the insurance market. Merkley, Landrieu, Hagan and Pryor are up for re-election in 2014; Manchin and Feinstein won’t face re-election until 2018.
The Keeping the Affordable Care Act Promise Act mandates that insurers continue individual market policies in effect as of Dec. 31, 2013 for as long as the carrier is operating in the market and the policyholder is paying premiums and meeting eligibility requirements. In short, insurers would not be permitted to cancel policies that failed to meet Obamacare’s minimum standard for essential health benefits.
“The Affordable Care Act is a good law, but it is not perfect,” Feinstein said. “I believe the Landrieu bill is a commonsense fix that will protect individuals in the private insurance market from being forced to change their insurance plan. I hope Congress moves quickly to enact it.”
A Merkley spokesman didn’t immediately comment on Wednesday after Landrieu announced his co-sponsorship of the bill on Twitter.
— Senator Landrieu (@SenLandrieu) November 13, 2013
Health policy experts said the bill would substantially disrupt a core goal of Obamacare, which is to establish a basic standard of coverage and spread the risk.
“This basically repeals the market reforms,” Tim Jost, a professor of health law at Washington and Lee University who supports Obamacare, told TPM earlier this month. “You’re continuing to allow people to buy a defective product. Mechanically it’s very difficult and it denies people the community rating advantages that were the whole reason — or one of the reasons — for the law in the first place. … So I think it would be significantly disruptive to the law’s goals.”
The bill would also disrupt actuarial models by insurance companies because people on the individual market (who don’t already have grandfathered plans) could end up keeping their policies rather than participate in the market exchanges. Insurers had based their menu of policies and premiums on the expectation that most of these people would be buying new insurance on the exchanges.
Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, said a disruption of enrollment incentives may lead to higher costs because many healthy people won’t be buying on the exchanges. “[T]he premiums health plans filed for next year would have to increase to account for fewer young and healthy people signing up for coverage,” he said in an email.
The bill also requires insurers to inform consumers of their benefits and options under the Obamacare and explain why the policy doesn’t meet the law’s minimum standards, while giving them the option to continue it.
Landrieu’s office made clear that the senator’s intention is not to damage Obamacare. “Sen. Landrieu supports the Affordable Care Act and wants to see it work. To write or suggest that she is undermining it is not correct,” her spokesman Matthew Lehner said in an email. On Tuesday, her office touted the fact that Bill Clinton backed the “concept” of the bill.
Notably, the Landrieu legislation goes farther than a House Republican bill aimed at achieving the same goal, which is up for a vote on Friday. The bill, offered by House Energy & Commerce Chairman Fred Upton, would simply allow insurers to continue existing policies through 2014. The Landrieu bill would require them to — and indefinitely, unless policy holders fail to meet eligibility requirements (like paying their premiums) or the insurer “cancels all coverage offered in such market and ceases operations as a health insurance issuer.” One key difference is that Landrieu’s bill only allows current policies to continue for existing policy holders, while Upton’s bill would allow them to be sold to new customers.
The White House and Democratic leaders are steering clear of these sorts of bills, for now. But if the problems with signing up for Obamacare aren’t fixed by the end of the month, as the White House has promised, more Democrats are likely to start defecting and the pressure will mount to enact a fix to the health care law. In a sign of trouble, the Washington Post reported on Wednesday that the HealthCare.gov website, through which most people sign up for Obamacare, is unlikely to be fully fixed by the end of November.
“Since the beginning of September,” Feinstein said, “I have received 30,842 calls, emails and letters from Californians, many of whom are very distressed by cancelations of their insurance policies and who are facing increased out-of-pocket costs.”