Health official blames cancellations on insurers
By: Brett Norman
November 20, 2013 02:52 PM EST
The Obama administration’s health exchange chief squarely blamed insurers for the millions of cancelled policies that have become a flashpoint about broken promises under Obamacare.
“I believe that the law provided insurance companies an opportunity to have grandfathered plans which would make the president’s promise true,” Gary Cohen, head of the exchange office, told a Senate panel Wednesday.
Cohen is the latest official from President Barack Obama on down to try to explain that people could keep their plans as the president had promised — if the insurance companies had basically frozen these plans in time and decided they still wanted to sell them. Pressed by Sen. Ron Johnson (R-Wisc.) whether he had believed Obama’s promise, Cohen suggested the promise was technically true.
“I’m not surprised or unsurprised,” Cohen said when asked about the number of plans that were cancelled. “I didn’t have an opinion on what the market would or wouldn’t do.”
The appearance before the Senate Small Business committee was the first time Cohen, the director of the Center for Consumer Information and Insurance Oversight, had testified since the disastrous Oct. 1 rollout. He has been on the Hill to brief lawmakers.
Obama and other White House officials have both apologized for — and parsed — the “you can keep your plan” promise, which burst open as the administration was already dealing with the debacle of the HealthCare.gov rollout.
Under the 2010 health law, plans could be “grandfathered” if they didn’t change significantly. That means insurers could keep offering them — if they still thought they were good business — even if they didn’t meet new Obamacare requirements about coverage and benefits.
But when the administration spelled out the rules for “grandfathering,” they were narrowly written. That meant that many of these plans were not expected to continue into 2014. That set the stage for the cancellations which became even more politically explosive because people couldn’t easily find out their options, including possible government subsidies, while the website isn’t working well.
Obama last week announced an administrative fix to let the insurers keep selling the plans after all. But it’s voluntarily and some state insurance commissioners and health plans say that could destabilize the new insurance markets and raise premium costs. Obama has a meeting scheduled for Wednesday afternoon with representatives of the National Association of Insurance Commissioners, and he has also met with health plan CEOs.
The Senate hearing was supposed to focus on small business health coverage and the SHOP exchanges. Like some other aspects of the federal Obamacare portal, the online launch of the SHOP exchange has been delayed. CMS officials have said it’s expected to be available Nov. 30, when the rest of HealthCare.gov is supposed to be running smoothly for most users. But senators did not ask Cohen asked about the timing.
Cohen did say the online experience of HealthCare.gov had been substantially improved. But like other administration officials, he didn’t quantify how much better it would be by Nov. 30. “ I think we’ve moved on significantly from where we were before,” he said.