March 11, 2014
By Alyene Senger
That was just one of many arguments made by President Obama and his allies to justify why America needed the heavy government regulation included in Obamacare. Obamacare, they assured us, would rein in all those “bad-apple insurers” and protect consumers from the false security of “junk” health care plans.
Last year, however, millions of Americans who liked their health care coverage found out that the administration regarded their health plans as “substandard.” They learned of this the hard way — when Obamacare regulations forced their insurers to discontinue their policies.
While it was evident that the president’s key promise — “If you like your plan, you can keep you plan” — was no longer operative, Obamacare advocates dismissed the loss of coverage as insignificant because the federal law would replace their plans with “better” insurance. After all, who knows better — the consumer or an “expert” in Washington?
But as the sheer number of cancellations rose — reportedly 4.7 million across just 31 states and the District of Columbia — so did the political pressure. In November, the administration announced a temporary “fix”: It would allow insurers to offer“noncompliant” plans through 2014.
Last week, the administration extended this “fix” for an additional two years. Though the impact on coverage is still uncertain because states and insurers have the option to take it up, the extension conveniently provides political cover for Obamacare supporters. Now, at least, the next round of insurance cancellation notices going out just one month before the midterm elections can’t be blamed on Obamacare.
But Mr. Obama isn’t giving up the arrogant notion that government knows best. In defending the latest “fix,” he still insisted:
“There are some people who have very bad insurance, but they don’t know it because they don’t understand the fine print. We said, ‘You know what, you’re right. You should be able to keep the health insurance you have, even if it’s not very good. Even if you could get insurance on HealthCare.gov, you should be able to keep it.’”
Obviously, Mr. Obama feels that millions of Americans are clueless about their health insurance — that they should be thanking him for yanking their “bad” insurance and giving them the opportunity to buy “good” coverage on the government exchanges.
But maybe, just maybe, these Americans aren’t dolts after all. Maybe their coverage was based on their health care needs, their provider preferences and their ability to afford the premiums.
Obamacare aims to replace the plans it cancels with what the government deems “better” insurance. In reality, the law’s mandates and regulations create homogenous health care plans that leave consumers with little choice in terms of benefit levels and dramatic price increases for most people.
For instance, Heritage Foundation calculations show that the average deductible for a “bronze plan” among the 34 states with a federally facilitated insurance exchange carries an average individual annual deductible of $5,095. In addition, average premium costs for individuals purchasing though the exchanges are also sharply higher than they would have been without Obamacare — in many cases, more than 100 percent.
Certainly, many aspects of the pre-Obamacare individual market needed reform. However, those problems were much smaller than portrayed and did not require the overzealous regulation of Obamacare to fix them. For example, the limited-benefit plans often alluded to by the president as “substandard” accounted for only about 11 percent of individual market plans in 2012.
There are also common-sense ways to provide access to coverage for uninsured people with pre-existing medical conditions — reforms that wouldn’t cause the massive disruption of coverage for millions of people like Obamacare did.
Even with the extended delay, no administrative “fix” can make up for the 4.7 million plans that were discontinued in 2013. Worse, the temporarily unenforced insurance rules that caused the cancellations remain core elements of the law. At some point, the administration will fully implement them — convinced that standardization of health insurance in the individual insurance market is best for all, no matter how many people it hurts.
- Alyene Senger is a research associate in the Heritage Foundation’s Center for Health Policy Studies.
Originally appeared in the Washington Times
Read More >>
Request an interview >>
Please complete the following form to request an interview with a Heritage expert.
Please note that all fields must be completed.
Heritage's daily Morning Bell e-mail keeps you updated on the ongoing policy battles in Washington and around the country.
The subscription is free and delivers you the latest conservative policy perspectives on the news each weekday--straight from Heritage experts.
The Morning Bell is your daily wake-up call offering a fresh, conservative analysis of the news.
More than 450,000 Americans rely on Heritage's Morning Bell to stay up to date on the policy battles that affect them.
Rush Limbaugh says "The Heritage Foundation's Morning Bell is just terrific!"
Rep. Peter Roskam (R-IL) says it's "a great way to start the day for any conservative who wants to get America back on track."
Sign up to start your free subscription today!
The Heritage Foundation is the nation’s most broadly supported public policy research institute, with hundreds of thousands of individual, foundation and corporate donors. Heritage, founded in February 1973, has a staff of 275 and an annual expense budget of $82.4 million.
Our mission is to formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defense. Read More
© 2014, The Heritage Foundation Conservative policy research since 1973