President Barack Obama, who vowed to do “everything we can” to help Americans whose health insurance has been canceled, may have little authority to do so without going to Congress for changes in the law.
Policy experts say that while the president has broad power to exempt plans that were in effect before his health-care law was passed in March 2010, he doesn’t have that flexibility for policies started after that date, and that includes most individual policies in effect today.
The administration yesterday indicated it was willing to consider Democratic legislation to halt some of the hundreds of thousands of insurance cancellations that have raised alarm among voters and lawmakers. Previously, Obama and his aides stressed that they were searching for solutions that wouldn’t require congressional action.
Obama’s chief of staff, Denis McDonough, will meet today with Senate Democrats who have been lobbying for action. Some House Democrats say they’ll back a Republican bill scheduled for a vote tomorrow unless Obama comes up with a remedy.
The debut of the insurance marketplace at the core of the law, Obama’s signature achievement, has been marred by troubles with the federal online exchange and by the insurance cancellation letters. In the debate over the law, Obama had repeatedly promised that Americans who liked their existing insurance plans would be able to keep them.
The “vast majority” of Americans who have received cancellation letters began their coverage after the passage of the law, said Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, an industry trade group. A notice in the Federal Register in 2010 estimated that as many as 67 percent of people who buy individual policies leave their plans every year.
Even so, the White House may have other regulatory avenues available to permit some Americans whose insurance plans don’t comply with the new law’s requirements to retain their coverage.
One potential option would be to take steps to ease early renewal of health-insurance plans, since Obamacare’s new requirements for policies only apply to those issued after Dec. 31. Some states already authorize early renewals.
Obama has clear authority to help those who have continuously maintained coverage through the same policy at least as far back as March 23, 2010, said Alden Bianchi, a Boston attorney and former outside counsel to then-Massachusetts Governor Mitt Romney’s administration on his state’s health-insurance revamp.
The president can alter “stringent” regulations the administration issued to enforce the grandfather clause in the health law, known as the Patient Protection and Affordable Care Act, and make it easier for their policies to gain exemptions, said Bianchi.
Ezekiel Emanuel, who worked on the Obama health-care law when he was an official in the White House budget office, agreed that the law gives Obama authority to determine which plans are covered by the grandfather rule. He can alter its interpretation of what constitutes a major change in the policy, said Emanuel, a University of Pennsylvania professor.
The administration’s current regulations, for example, don’t allow insurers to retain their plans’ grandfather status if they raise their co-pays by more than the amount of the medical inflation rate plus $5 or plus 15 percent, whichever is greater, said Bianchi. It is within the administration’s discretion to revise such regulations, said Bianchi, author of Bloomberg BNA’s “Health Care Reform Adviser.”
While the administration’s regulations leave it up to insurance companies to decide whether they will assert grandfather status for their policies, the administration could make a regulatory change that allows individual policyholders to force the status for plans they wish to retain, Bianchi said.
Zirkelbach, the trade industry spokesman, said practical considerations would complicate attempts to reverse policy cancellations that are under way. Health insurance is regulated by states, and in many cases insurers already notified state regulators and customers that they’re ending plans.
“There are many questions about how you would go back and undo what’s been done this late in the process,” he said.
A proposal by Louisiana Senator Mary Landrieu and other Democrats to let individuals keep their health-care policies as long as they’re current on payments “shares the goal” of Obama for fixing the health-care law, White House press secretary Jay Carney said in his daily briefing yesterday.
“We’re going to work with her and we’re going to work with others,” Carney said. “We’re open to, as I said, both legislative and administrative solutions.”
The administration is working to address the latest hurdle for the health-care law after meetings between Obama and his advisers with congressional Democrats and remarks by former President Bill Clinton, who said Obama should keep his pledge that Americans wouldn’t lose coverage they liked.
“Even if it takes a change to the law, the president should honor the commitment the federal government made to those people and let them keep what they’ve got,” Clinton said in an interview with the online magazine Ozy.
Obama last week offered a public apology over the cancellations and met at the White House with Senate Democrats who face voters in 2014 to ask for patience as the administration works to remedy the troubled rollout of the law.
House Democrats yesterday confronted David Simas, the deputy senior adviser to the president, and Mike Hash, the director of the Office of Health Reform at the Department of Health and Human Services, during a closed-door meeting.
“A lot of Democrats are very upset that this happened, No. 1, and urging for there to be an immediate fix for it,” Representative Patrick Murphy, a Florida Democrat, told reporters after the meeting.
“The panic has set in on the other side,” Senate Minority Leader Mitch McConnell, a Kentucky Republican, told reporters.
The administration is seeking to calm Democrats in advance of a vote expected in the House tomorrow on a proposal from Michigan Republican Representative Fred Upton to let individuals keep existing policies through next year.
The White House opposes Upton’s measure because it would undermine the law by letting insurers “sell new policies that were substandard,” Carney said.
At issue are insurance plans purchased by individuals. The law says policies that fail to offer benefits such as free preventive care and prescription drug coverage can’t be sold after this year even if they’re cheaper.
In 2012, 15.8 million Americans, 5 percent of the population, purchased health insurance through individual policies rather than the more common route to coverage through employer-based group plans, Medicare, Medicaid, or veteran’s benefits, according to a Kaiser Family Foundation analysis of U.S. Census data.
Obama plans to announce a course of action “sooner rather than later,” Carney said, without being specific.
The rollout of the law has been beset by computer flaws hampering consumers’ ability to sign up on the federal healthcare.gov website, questions about the security of private information, and complaints by individuals who are losing their insurance plans and face premium increases for new policies.
The administration said yesterday that about 106,000 people in the U.S. signed up for private health insurance through Obamacare last month, far less than its enrollment goals.