Is the Obama administration waving the white flag on canceled plans?
Posted By Sarah Hurtubise On 12:52 AM 02/08/2014 In | No Comments
The Obama administration’s admission that it may extend the exemption for health insurance plans canceled due to Obamacare regulations could signal an end to the war on “junk plans.”
Conservative estimates from the Associated Press put the total of canceled plans at 4.7 million; in contrast, Obamacare exchanges across the country can only claim that 3 million Americans have selected private plans via online exchanges (actual enrollment could reportedly be even lower).
In response to growing outcry over the cancellations, the Obama administration issued an “administrative fix” in November to extend the plans — a move that was rejected by at least 22 states and several private insurance companies as well.
Obama’s original fix was slammed by some states and industry leaders as a last-minute attempt to mitigate the political repercussions of canceling plans, not a practical fix to help those without coverage. Obama’s order came just over a month before Obamacare went live; insurers had already canceled the plans, told customers they’d need new coverage and informed regulators of the changes. Widespread rejection of the plan fixated on it as a political move, not a practical solution.
Avalere CEO Dan Mendelson said Thursday that he’d had casual conservations with administration officials about a potential extension, soon to be seconded by Aetna CEO Mark Bertolini.
Department of Health and Human Services (HHS) spokeswoman Joanne Peters confirmed the reports, saying the Obama administration hasn’t yet made a decision about the millions of Americans whose preferred plans are not Affordable Care Act-compliant.
But cancelling plans deemed to be subpar by federal officials wasn’t a side-effect of Obamacare, Brenda Gleason, president of Washington, D.C.-based advisory firm M2 Health Care Consulting, told The Daily Caller News Foundation.
“One of the core goals of the ACA was to stop these kinds of plans,” Gleason said. “The problem became, okay, you say that you have to get rid of those kinds of plans, but what do you choose instead?”
As the Obama administration continues to struggle to build HealthCare.gov and fix its ongoing glitches, consumers whose insurance coverage has been canceled are still having trouble finding a way to get new coverage at all.
In many cases, Americans’ whose coverage was ended due to Obamacare’s minimum required benefits could choose from another private plan with their insurance company — but the boosted benefits often raise the price significantly. With HealthCare.gov malfunctioning, along with many state exchanges as well, there aren’t many options to replace the plans, Gleason told TheDCNF.
Potentially extending the plans indicates that the administration could be “giving up on the philosophical issue,” Gleason said. “What they’re tacitly admitting is while the policy goal of getting rid of these bare-bones plans is important, the operational goal didn’t get met.”
The administration is rushing to finish building HealthCare.gov by March 31 or risk severe industry to the health care industry, according to HHS memos regarding new contractor Accenture’s quick hire. Faith in the administration’s fixes could be falling if officials are backing off the scrubbing of non-compliant plans from the market.
“When it comes down to when the rubber meets the road,” Gleason said, “we’re moving too fast.” Since Obamacare just isn’t ready to take on millions of new customers, it’s possible some consumers might get to keep their plans for a little while longer.
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