President Barack Obama is trying to make up for an exceedingly dumb promise with a moderately dumb compromise. For many people who have lost their old insurance policies, his offer may be no help at all.
When Americans first began complaining last month that the Affordable Care Act meant the cancellation of insurance plans that didn’t meet the law’s coverage requirements, Obama responded that the new plans available under the law were better than what they lost. He argued that tough regulations in the individual insurance market were in everybody’s interest.
That response proved to be politically costly, and Obama today reversed himself, saying that insurers will now be able to offer subpar plans until the end of 2014, if state insurance regulators agree. The extension will apply only to those who already have those plans.
The trouble with that compromise is that while Obama’s earlier argument may have been tone-deaf, it was also accurate. If it was bad policy a month ago to let insurers skimp on some essential benefits, such as maternity care or mental health care, it’s still bad policy today. If it was bad policy then to let insurers keep healthy young people away from exchange-based risk pools by selling them low-cost, low-coverage plans, it’s still true now.
So today’s announcement is defensible only on one of two arguments. The first is that it’s better than the alternatives before Congress, which range from letting anyone who wants to buy an unregulated plan do so, exacerbating the problem of participation on the exchanges, to somehow forcing insurers to maintain their current plans.
Of course, if the White House’s goal was only to head off ill-considered congressional action, the president could simply have said he would veto any such bill.
A slightly better defense of today’s announcement would be that it honors the promise Obama made when the law was being debated -- the pledge that anybody who likes their current plan can keep it.
Except that’s not true. Insurers have said they won’t revive many of the plans they have already canceled, especially given the logistical challenges involved so close to the start of the new policy year. Even if they do, state regulators may decide not to let them. So for an undetermined number of people, the president’s promise will remain broken.
That means today’s announcement is marginally harmful for the law’s future and for the public, and does little to make good on the president’s pledge.
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