You Can Keep Your Old Health Plan (Until After the Midterm Elections)

The Obama administration’s next health-care fix may be an attempt to cure anxiety—among Democrats running for re-election, at least.

The White House is planning to let insurers keep selling health plans that don’t meet the Affordable Care Act’s standards for an additional year, according to a report last night in the Hill, citing unnamed sources.

Recall last October, when millions of Americans who had bought health plans on the individual market started getting word from their insurance companies that those plans would be discontinued. The plans didn’t meet the new requirements of Obamacare, which calls for coverage of 10 core benefits—including prescription drug coverage, mental health care, and maternity care—as well as payment for at least 60 percent of medical costs.

Under the old rules, people buying health plans on their own could get lower premiums by purchasing skimpier policies or forgoing certain benefits. Men and older women, for example, could buy policies that didn’t cover maternity. Obamacare intended to dismantle that system, which benefited those who needed less care but hurt sick people who often couldn’t get coverage, replacing it with one that shared the costs of medical care more broadly.

The change undermined President Obama’s oft-repeated soundbite, “If you like your health care plan, you’ll be able to keep your health care plan, period.” That was true for most Americans who get coverage through employers or Medicare—whose policies are hardly touched by the new law. But the White House failed to communicate what actuaries could see coming: Expanding insurance to people who were locked out of the old marketplace would mean that some who had benefited from the old rules would have to pay more.

Instead, those people learned of the changes in letters from insurance companies, sparking a maelstrom of bad press just as was melting down. To quell the furor, the White House in November told state insurance regulators (PDF) that they could let insurers extend those old, non-compliant plans for a year.

A one-year fix would have cued up the whole drama to replay this fall, with break-up letters from insurers landing weeks before Election Day. The Obama administration hinted that it might push the day of reckoning later: “We will consider the impact of this transitional policy in assessing whether to extend it beyond the specified timeframe,” the letter to insurance commissioners noted.

A spokeswoman from the Department of Health and Human Services had no comment on the Hill report. The paper’s sources didn’t indicate how long the extension might last, although “one source believed it could last to the end of Obama’s second term, and perhaps beyond.”

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