Within hours of its public debut, the Obama administration’s attempted ‘fix‘ to help people whose health plans have been canceled under Obamacare had encountered an enormous roadblock: skepticism from the two groups, insurance companies and state regulators, responsible for putting it into action.
On top of that, it wasn’t readily clear that the fix would do anything to alleviate the political pressure that spawned it in the first place. If the fix can’t achieve its policy or political goals, what good is it?
The administration seems to have tried to thread the needle: Introduce a policy that will ostensibly honor the ‘keep your health plan’ promise without undermining the Affordable Care Act’s actuarial structure.
“They made the best of a bad situation,” Jonathan Gruber, an MIT economist who helped draft the law, told TPM. “The key point that this debate missed is that the ACA is the least disruptive way to fix insurance markets. But folks wanted a ‘free lunch’. This is trying to hear those demands while minimizing the harm to the fundamental goals of the law.”
As pure policy, the fix has an uncertain tangible impact. The administration is giving insurers a choice about whether to offer their customers an additional year of their existing coverage — not a mandate. In addition, it’s up to state regulators, who oversee the insurance industry, whether they will adopt the administration’s new guidance.
And almost as soon as Obama announced his plan, both of those groups voiced their skepticism and warned that it could disrupt the insurance market.
“Changing the rules after health plans have already met the requirements of the law could destabilize the market and result in higher premiums for consumers,” America’s Health Insurance Plans president and CEO Karen Ignagni said in a statement.
“It is unclear how, as a practical matter, the changes proposed today by the President can be put into effect,” National Association of Insurance Commissioners President and Louisiana Insurance Commissioner Jim Donelon said in a statement. “Changing the rules through administrative action at this late date creates uncertainty and may not address the underlying issues.”
But aside from its policy merits, the fix had obvious political aims: stop the bleeding as approval ratings for Obama and the signature achievement of his presidency were plummeting and provide some relief for congressional Democrats who were also suffering the backlash, forced to either considering siding with Republicans or propose their own plans for dealing with the president’s broken “if you like your health plan, you can keep it” promise.
The announcement was timed to undercut a Friday vote in the House on a Republican proposal that would attempt to address the same problem. But after Obama issued his new plan, some Democrats on the Hill indicated that they still might see a need to act on their own — so, even in the political realm, it’s hard to see exactly what the fix accomplished.
Liberal Sen. Jeff Merkley (D-OR) told TPM that Obama’s move “doesn’t go as far as I’d like it to go but it’s a step in the right direction.” Sen. Mark Begich (D-AK) said on CNN: “I think we have to move forward on the legislative plan.” Of Obama’s plan, he said: “It’s not enough, but it’s a step.”