June 2010: HHS predicted “most” of 17 million people would have plans change
posted at 2:01 pm on October 29, 2013 by Ed Morrissey
This little tidbit comes to us via our old friend Morgen Richmond, who used the Wayback Machine to peruse the old Healthreform.gov FAQ about ObamaCare from June 2010. After NBC’s scoop last night that the White House knew three years ago that ObamaCare would force the withdrawal of millions of insurance plans, Morgen took a look back at promises made — and found estimates that should have warned people all along that the President’s promise was worthless.
For instance, here’s the first Q&A on the site from June 18, 2010:
Q: What effect will the new rule have on my health coverage?
A: The new rule will allow you to keep your current coverage if you like it and still benefit from many of the new consumer protections in the Affordable Care Act, such as a ban on your insurance being terminated just because you get sick and had made an unintentional mistake on your forms.
If your current plan significantly reduces your benefits or increases your out-of-pocket spending above what it was when the new law was enacted, then your plan will lose its “grandfather” status and you will gain additional new benefits under the Act. In the individual market, people change plans more frequently than those insured through employer plans. As such, most of the 17 million people who purchase in the individual market will likely gain all the new protections in the Affordable Care Act in the near term. [emphasis mine]
“Likely gain all the new protections” means that their plans will change, and that the grandfathering won’t actually protect anyone. Grandfathering, as you’ll read later from an insurance broker, requires plans to remain static, both in coverage and in membership. As Morgen noted, this didn’t just impact the “bare bones” plans, but nearly all of the plans in the individual market, as the HHS site predicted:
Many in the media are propagating the falsehood that only "bare bones" insurance plans are being canceled. Simply not true.
— Morgen (@morgenr) October 29, 2013
Also, the White House would shortly decide to rewrite the grandfathering regulation to make this false. Five days later, the White House itself claimed that it was protecting that feature and keeping Obama’s promise:
Another important step we’ve taken is to fulfill President Obama’s promise that “if you like your health plan, you can keep it.” Last week, Secretary Sebelius and Secretary of Labor Hilda Solis announced a new rule that protects the ability of individuals and businesses to keep their current plan. It outlines conditions under which current plans can be ‘grandfathered’ into the system, minimizing market disruption and putting us all on the path toward the competitive, patient-centered market of the future. By providing the stability and flexibility that families and businesses need, Americans will be able to make the choices that work best for them.
One month later, as NBC reported, the Obama administration acted in exactly the opposite direction:
Buried in Obamacare regulations from July 2010 is an estimate that because of normal turnover in the individual insurance market, “40 to 67 percent” of customers will not be able to keep their policy. And because many policies will have been changed since the key date, “the percentage of individual market policies losing grandfather status in a given year exceeds the 40 to 67 percent range.”
That means the administration knew that more than 40 to 67 percent of those in the individual market would not be able to keep their plans, even if they liked them.
Yet President Obama, who had promised in 2009, “if you like your health plan, you will be able to keep your health plan,” was still saying in 2012, “If [you] already have health insurance, you will keep your health insurance.”
Here’s a bigger whopper from that same FAQ:
Q: Will this new insurance regulation drive up my health insurance costs?
A: No. The grandfather rule is designed to preserve the ability of Americans to keep their current plan if they like it, while providing new benefits. Other provisions of the Affordable Care Act aim to make health insurance premiums more affordable. For example, the Act gives the Secretary of Health and Human Services the authority to publicly post on the Web the proportion of premium dollars that an insurer spends on medical care as opposed to marketing or profits. If an insurer spends too much on salaries and other expenses not directly related to care, it will have to give its customers a rebate. The new law also helps states monitor and crack down on unreasonable premium increases by insurers. The Administration recently announced a new grant program to strengthen states’ ability to spot unreasonable premium increases and take action against them.
Actually, the “grandfathering” protection got negated when the plans changed, which means that most of the plans offered in the individual marketplace wouldn’t be grandfathered at all — which the White House well knew. What went into the “grandfathering” rule? An insurance broker who wishes to remain anonymous explained it to me in an e-mail, along with a description of how the ACA will hammer his personal finances:
To show you how this law ruins availability for both grandfathered and non (my plan is not grandfathered), I have (had) a plan that excludes maternity (had surgery to make sure that was a risk worth taking), excludes coverage for mental health and substance abuse treatment (self-insuring against an unlikely event) , does not provide dental coverage for my kids (again, managed with a savings account because most dental bills are not massive and unforeseen) and has a good network of local and specialty facilities, but it did not include the Mayo Clinic as an in-network facility.
My premium for a family of 5 this month is $743.50 (2 adults, 3 kids under 18). My insurance company chose to modify existing plans to meet the new ACA requirements as opposed to cancelling them, or you have the option to move to another plan that was designed around the ACA. Thanks to this bill, the plan I have now has to include maternity, has to include mental health/substance abuse coverage, and pediatric dental (which covers next to nothing until you meet your huge deductible. I also have to move to a network that includes the Mayo Clinic because my network is being eliminated.
Allowing my plan to continue with modifications is going to add over $421 a month to the premium, which is a 56% rate increase over this year. All because of services I don’t want and networks I can’t use.
So, to make it work, I’m being forced to raise my deductible from $3,000 per person to a shared family deductible of $10,400. Since it’s very unlikely we’ll have two people in the hospital in one year, my exposure is up by roughly double. My current plan also has 3 office visit co-pays and some prescription coverage for generics, which will all now have to go to deductible before coverage applies.
That brings my renewal down from $1,164 to $843, a 13.5% rate hike for a whole lot shittier coverage.
People need to start asking questions about the grandfathered plans too; they are exempt from meeting the new requirements, but they were also quarantined into their own risk pool. That means no new membership to refresh their overall health, and their premium pool just got significantly smaller. So if you like your plan, you can keep it if you’re independently wealthy. The new law will see fit to their rapid extinction.
Listening to everyone talk about the website and how lousy it is would be akin to talking about how this pill that’s going to destroy my internal organs is kind of hard to swallow.
Indeed. The aim all along was to wipe out almost all of the plans on the individual market for the one-size-fits-all approach favored by the central planners, and we’re all going to end up eating the cost for it in higher costs, federal entitlement spending, and reduced access.