Here we go: HHS announces that insurers can keep extending un-canceled health plans — until October 2016
posted at 5:21 pm on March 5, 2014 by Allahpundit
Here’s the new ObamaCare “fix” that The Hill promised a few days ago — although, unless I missed something, no one knew how far the new extension would reach until now. As Ed noted earlier, this is pure politics: Originally, King Barack’s generous allowance for insurers who wanted to resurrect plans canceled under the new ObamaCare rules was set to expire on January 1st of next year. Problem is, that would have required sending out new cancellation notices months earlier, which would have blown up in Democrats’ faces right before the midterms. Today’s fix is designed to deal with that problem by punting the deadline to purge un-canceled plans alllllll the way to October 2016, a month before we choose the next president.
Your problem now, Hillary.
A supposedly temporary “fix” that President Obama announced in November to address the problem of the millions of Americans who lost coverage as a result of his health care law has now been extended through Oct. 1, 2016, the Department of Health and Human Services announced Wednesday.
In an attempt to limit the disruption to the insurance industry that would be caused by the move, HHS also announced that the “risk corridor” program (which has been described as a “bailout” to insurers) would be further modified to funnel more money to insurers in states affected by the change…
Obama and his allies long-defended the outlawing of certain health care plans, arguing that they were substandard. And they argued that depriving people of the ability to purchase such plans was essential to making the health care law work. If young and healthy people can purchase cheap health insurance with fewer benefits, they argue, it would make coverage more expensive for older and sicker Americans.
Now, not only is Obama saying that these legacy plans can remain, but he’s saying they can stay alive for three years longer than intended. If they can be extended for three years, the new rules may never fully go into effect (unless Obama will allow a wave of cancellations in October 2016, just before the presidential election). And maintaining these plans will further drive up the cost of insurance on the exchanges.
It’s crucial to grasp that last point, that extending un-canceled plans hurts ObamaCare financially. There’s no way that Obama would do this without a pressing political reason; just as Phil Klein says, the whole point of making insurers cancel plans in the first place was to force healthy middle-class suckers into more expensive “comprehensive” plans so that their premiums could be redistributed to people with preexisting conditions. Allowing those suckers to stay on their old, cheaper pre-ObamaCare plans means that insurers will have to rely on less revenue than they thought, which means Uncle Sam will be under even more pressure to use the “risk corridor” mechanism as a bailout mechanism to cover unanticipated losses. Healthy people will stick with their old plans, sick people will stick with their new ObamaCare plans (replete with guaranteed issue and community rating), and insurers will tear their hair out wondering how to pay for it without billions of dollars from HHS to help. Quite simply, Obama was forced to choose between doing something that would help his party at the ballot box but hurt his signature health-care law and doing something that would help stabilize the law financially at the risk of generating a nasty backlash to his party from consumers with cancellations. He made the political choice. Which is exactly what O’s critics feared would happen as government insinuated itself further into the health-care industry via O-Care. Decisions on health-care policy are now a species of politics. You’re welcome, America.
Astonished righties on Twitter are wondering as I write this why O would screw Team Clinton this badly, laying the issue squarely in Hillary’s lap in 2016. Simple: Obama will extend the deadline again as the next presidential election draws closer. Why wouldn’t he? He’s a lame duck and his party would be grateful to him for defusing the issue; Republicans will grumble but no one’s going to sue to force the re-cancellation of plans knowing that O, shamelessly, would then turn around and blame the GOP for this mess. He’ll extend the extension again, probably sometime in spring 2016 a la that unilateral amnesty for DREAMers that he announced in the spring before he faced the voters two years ago. And if insurers look at their books before then and decide that they simply can’t afford to continue un-canceled plans, Obama can live with that too. It’ll be the insurance companies who are to blame for their heartlessness in that case, not the administration. Obama’s generously giving them the option to keep the un-canceled plans going. If they don’t avail themselves of it, well, that’s plutocrats for you. The key is simply to not have a rash of re-cancellations all at once right before the midterms. Let insurers do it gradually, over the next two and a half years, to soften the political blow.
By the way, the king’s new budget earmarks a cool $5.5 billion for the “risk corridor” program next year. His team says they expect to pay out to insurers with losses no more than they take in from insurers with profits, but who knows how likely that is after today’s move. Exit question: Anyone out there still believe that the individual mandate’s going to be enforced this year? C’mon.