Why Obamacare Isn’t So Easily Fixed

HIALEAH, FL - NOVEMBER 14: Venita Mendez works with Gisselle Rubio, an insurance agent with Sunshine Life and Health Advisors, as she looks to purchase an insurance policy under the Affordable Care Act at the store setup in the Westland Mall on November 14, 2013 in Hialeah, Florida. As the insurance agents continue to help people purchase and understand the policies offered under the Affordable Care Act, U.S. President Barack Obama announced that Americans who have had their health insurance plans canceled because of the Affordable Care Act can keep those plans for another year if they wish to. 
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Sam Baker
Nov. 21, 2013, 4 p.m.

Demo­crats are clearly look­ing for ways to dis­tance them­selves from Obama­care. But there are only so many threads they can pull without un­rav­el­ing the law’s com­plic­ated, in­ter­woven struc­ture.

Law­makers have pro­posed a raft of changes to the Af­ford­able Care Act as they grapple with the botched rol­lout of Health­Care.gov and the up­roar over can­celed in­sur­ance policies. There are a few areas left where Con­gress could find polit­ic­al cov­er without af­fect­ing oth­er pro­vi­sions of the law, but many of the ideas cir­cu­lat­ing on Cap­it­ol Hill would up­set the com­plex web of policies that make Obama­care work.

Here’s a quick look at some of the lead­ing pro­pos­als, and how far Demo­crats could go without in­vit­ing un­in­ten­ded con­sequences.

Let more people keep their ex­ist­ing plans. Pres­id­ent Obama has already put many policy-minded Demo­crats on edge with his plan to let in­sur­ance com­pan­ies un­cancel cer­tain plans and sell them for an­oth­er year. Sen. Mary Landrieu, D-La., wants to go even fur­ther. Her bill would let cus­tom­ers keep their ex­ist­ing plans and re­quire in­sur­ance com­pan­ies to keep selling them — ba­sic­ally the op­pos­ite of for­cing in­surers to can­cel or change those plans, as the Af­ford­able Care Act did. And 39 Demo­crats voted for a House bill that would let any­one buy in­to pre­vi­ously can­celed plans, even if they hadn’t had them be­fore.

All of this — in­clud­ing Obama’s ver­sion — threatens the law’s new in­sur­ance mar­kets. Their suc­cess de­pends on achiev­ing a mix of sick and healthy con­sumers, and let­ting healthy people keep their old plans also means keep­ing those cus­tom­ers out of the new mar­ket­places. That means a high­er per­cent­age of sick­er en­rollees, which could lead to high­er premi­ums next year. Obama’s pro­pos­al might not make much of a dif­fer­ence, if states and in­surers don’t sign on, but any­thing more ag­gress­ive would carry big­ger risks.

Ex­tend the win­dow to buy cov­er­age. Sen. Jeanne Shaheen, D-N.H., has led the charge to ex­tend the six-month win­dow to buy in­sur­ance. On its face, it’s an easy solu­tion to the fact that Health­Care.gov‘s prob­lems ef­fect­ively shaved a month off the en­roll­ment win­dow. But it’s not that simple. A defined open-en­roll­ment peri­od is what keeps healthy people from tak­ing their chances without in­sur­ance and then sign­ing up when they need med­ic­al at­ten­tion. It’s an­oth­er tool to get young, healthy con­sumers in­to the sys­tem. A short delay might not cause big prob­lems, but just the idea of fid­dling with the en­roll­ment win­dow makes in­surers nervous.

Delay the in­di­vidu­al man­date. For­get about it. The man­date, which re­quires most tax­pay­ers to buy in­sur­ance or pay a pen­alty, is the least pop­u­lar part of Obama­care. It’s also the most widely un­der­stood tool to coax young, healthy people to en­roll. Giv­ing up on the man­date would be an enorm­ous cave by the White House, no mat­ter how polit­ic­ally ap­peal­ing it might sound.

Re­peal the law’s “risk cor­ridors.” Sen. Marco Ru­bio, R-Fla., has floated a pro­pos­al in re­sponse to Obama’s “fix” for can­celed plans. Ru­bio’s bill would re­peal the health care law’s risk cor­ridors — a pro­gram de­signed to sta­bil­ize the in­sur­ance mar­ket if the people who sign up for cov­er­age are, on av­er­age, sick­er and more ex­pens­ive than ex­pec­ted. Ru­bio has framed risk cor­ridors as a “bail­out” for in­sur­ance com­pan­ies, and who wants to be pro-bail­out for in­sur­ance com­pan­ies? But in­surers also pay in­to the risk-cor­ridors pro­gram if they en­roll large num­bers of healthy people. And without it, there’s a high­er risk of big premi­um spikes next year. The fact that Ru­bio’s bill is a re­sponse to Obama’s “fix,” though, says a lot about just how hard it is to change one policy in isol­a­tion.

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