President Obama says he's looking for a "fix" to address cancelled insurance plans. That doesn't mean he'll find one.
Obama has directed his health care advisers to look for a way to deal with the wave of cancellation notices hitting some policyholders. But health policy experts have no idea what the White House could actually do to alleviate the sticker shock some consumers are facing.
"I can't imagine what they're thinking about," said Tim Jost, a Washington & Lee University law professor and an expert on the Affordable Care Act.
Policy wonks on both sides of the health care debate held open the possibility that the administration will come up with something—there have been too many surprises already in the implementation process to rule anything out. But it's hard to see what the White House could do, on its own and specifically without Congress, that would make much of a difference.
That's partly because these plan cancellations are not a side effect of the Affordable Care Act. The administration knew they were coming, and they were an inevitable part of the reforms the law makes to the market for individual insurance policies.
Weakening the regulations that led to plan cancellations might not make any difference at all, or might undermine the basic structure of the law. And trying to simply offer more assistance to people losing their plans would require congressional approval—which, of course, Obama wouldn't get.
An administration official confirmed that the White House is looking for administrative fixes, not legislative ones. That would appear to rule out higher subsidies to help people pay for coverage, an idea floated to The Huffington Post after Obama's interview.
Obama himself acknowledged in last week's NBC News interview that he doesn't think the cancellations themselves are a problem. He apologized for the confusion and disruption the notices have caused, but maintained that most people would get a better deal by purchasing coverage through the health care law's new marketplaces.
"We really believe that ultimately they're going to be better off," Obama said.
The people hurt most by plan cancellations are healthy consumers who were able to get cheap policies with decent coverage, and who are too wealthy to qualify for Obamacare's insurance subsidies. They are "losers" now because they were "winners" under the old system, in which insurers set premiums for each individual plan based on the health of the individual buying it.
That system put people with preexisting conditions at a huge disadvantage—and that's the imbalance the Affordable Care Act tries to correct by moving healthy people into the same risk pool as sick people.
So, leaving those healthy customers on their old plans just to solve a political headache might only help prop up the two-tiered system Obamacare was designed to end.
Even if the administration could find a middle ground, weakening or delaying certain regulations might not make much difference.
Insurance companies have already set their premiums for 2014, so the higher prices some consumers are experiencing aren't going to change this year. And insurers' business models already account for moving people into the health care law's new insurance marketplaces.
"In short, I'm flummoxed," University of Michigan law professor Nicholas Bagley wrote at the Incidental Economist blog. "Maybe the administration has something creative up its sleeve, and it's certainly prudent to reserve any kind of final judgment until we learn more. For now, though, color me skeptical."
This article appears in the November 12, 2013 edition of NJ Daily.
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