President Barack Obama’s temporary fix to his health care law doesn’t really fix much at all. In fact, it will certainly lead to more chaos and may very well result in higher premiums for all consumers.
Obama declared Thursday that millions of Americans who received cancellation notices because of provisions in his health care law will now be allowed to renew those policies, provided their insurance companies and state insurance regulators agree.
Insurers and some regulators, who according to The New York Times were not consulted in advance of Obama’s announcement, immediately reacted with dire warnings.
“This decision continues different rules for different policies and threatens to undermine the new market and may lead to higher premiums and market disruption in 2014 and beyond,” said Jim Donelon, Louisiana’s insurance regulator.
His frustration is understandable. The industry has been preparing for the law for years and has been implementing new plans that comply with its provisions.
But this is what happens when a president with an exclusionary management style boxes himself into a corner with flawed legislation and empty promises.
Obama was right to honor his promise to let all Americans keep their existing policies. In fact, he had no choice politically as insurgents within his own party were threatening to support Republican legislation that undermines the entire health care law.
However tempting the law’s collapse may sound, that’s not what is needed now, as indicated by the insurance industry’s reaction to this temporary fix. The law’s implementation is too far down the road to pull the plug entirely, as Republicans are so eager to do.
Instead, the industry, the administration and the country are left to hope that enough people who are young and healthy, and who were either uninsured or satisfied with cheaper policies that offered substandard coverage, will participate in the new insurance marketplace and provide insurers with the premiums needed to cover the more robust policies Obamacare dictates.
After all, the problem isn’t that some people lost their policies. Discarding substandard policies that don’t provide adequate coverage is not necessarily a bad thing, considering many of the millions getting cancellations can find better coverage at better prices on the exchanges.
No, the problem was that Obama sold his plan on a false promise that they would not lose their policies.
This fix may restore some of those policies, but it won’t restore the country’s confidence in the law. And if it leads to higher premiums, that will be yet another argument for its demise, along with the adverse effect on employers and part-time workers and the woeful website.
Obamacare has at its core a noble premise: affordable and good health care for all Americans. Its requirements that pre-existing conditions be covered, and its provision that parents be allowed to keep their children on their plans until their mid-20s, are proving beneficial and popular. The subsidized policies it offers can help the poor and keep them from seeking more costly emergency room treatment.
Once the full rollout has occurred next year, and the full consequences are known, the public will have a better sense of where fixes are needed, or whether the entire law needs to be jettisoned. After that, Congress can act accordingly.