November 14, 2013
Obama announces he will allow subpar or junk policies to be sold by bad apple insurance companies
President Obama's press conference on Obamacare "fixes" today started more than half an hour after its announced time, a good indicator of last minute panic over wording. That's because appearances, not substance, are the essence of this "plan."
For one thing, state insurance commissioners must approve any new plans. In California, health insurers have been required to sign contracts promising to end old policies, and the federal government lacks the authority to change lawful contracts. The idea that 50 state insurance commissions could and would quickly approve new plans yet to be created by insurance companies is ludicrous.
As Richard Baehr put it:
Since policies on exchanges assumed (at least in insurance company minds) that their policyholders would shift, they now have to re-price both the old policies which they had abandoned and the new ones. In the time frame involved -- by December 15 -- this is IMPOSSIBLE!
This fix is designed to fix nothing, but just look like a fix. Insurance companies can decide to stick with their cancellations and they become the bad guys. In essence, this is design of the fix: shift blame. If the insurance companies decide to reoffer old policies, which could be very costly at this point, insurance commissioners in Democratic states, who understand the impact of fewer enrollees on the exchanges, can override the administration fix, and force people to move to exchanges.
My guess is few if any insurance companies will reoffer old policies. I like the Landrieu bill better than Upton, since it is mandatory, and effectively guarantees first year failure of Obamacare. Of course it is financially harmful to insurance companies, but they at least are not bad guys for refusing Obama's fix. The people in the White House are not real brainy, if this is the best they can do.
Ed Lasky adds:
They are tying themselves into knots. Why can't uninsured people get the presumably better deals being offered by private insurance companies to old customers?
The mess is only getting messier. Maybe Obama can persuade the low information crowd that it will all be the fault of the insurance companies, but according the recent Quinnipiac poll, at least half the country believes he is a liar on health insurance.