White House Buckles, Allows Outdated Insurance Plans Through 2014

Obama is rolling out a new Obamacare fix at the White House Thursday.

US President Barack Obama speaks on the Affordable Care Act in the Brady Press Briefing Room of the White House on November 14, 2013 in Washington, DC.
National Journal
Matt Berman, Marina Koren, Brian Resnick, Matt Vasilogambros and Lucia Graves
Matt Berman Marina Koren Brian Resnick Matt Vasilogambros Lucia Graves
Nov. 14, 2013, 7:03 a.m.

{{ BIZOBJ (video: 4571) }}

The pres­id­ent offered an ad­min­is­trat­ive fix to the Af­ford­able Care Act at a White House news con­fer­ence on Thursday, al­low­ing Amer­ic­ans to re­new their cur­rent health care plans through 2014, in ef­fect ex­tend­ing the grand­fath­er clause. “We fumbled the rol­lout on this health care law,” the pres­id­ent said.

“I think it’s fair to say that the rol­lout has been rough so far,” Obama said. “The rol­lout has been fraught with a whole range of prob­lems that I’m deeply con­cerned about.” The pres­id­ent also said that “des­pite all of the prob­lems that we’ve seen with the web­site, more than 500,000 Amer­ic­ans could know the se­cur­ity of health care by Janu­ary 1.” The num­ber was his ori­gin­al goal for Novem­ber.

“I com­pletely get how up­set­ting this can be for a lot of Amer­ic­ans,” he said, “par­tic­u­larly after as­sur­ances they heard from me that if they had a plan that they liked they could keep it. And to those Amer­ic­ans, I hear you loud and clear.”

The pres­id­ent also de­flec­ted cri­ti­cism over the func­tion­ing of Health­Care.gov, say­ing that he wasn’t “in­formed dir­ectly that the web­site would not be work­ing, as the way it was sup­posed to. Had I been in­formed I wouldn’t be go­ing out say­ing, ‘boy, this is go­ing to be great.’ You know, I’m ac­cused of a lot of things but I don’t think I’m stu­pid enough to go around say­ing this is go­ing to be like shop­ping on Amazon or Trave­lo­city a week be­fore the web­site opens if I thought that it wasn’t go­ing to work.”

But he wasn’t try­ing to push the buck off en­tirely. “That’s on me/us” may’ve been the most re­peated line of the con­fer­ence.

Asked about the Novem­ber 30 dead­line to get the health care site work­ing, Obama said that it will “work much bet­ter on Novem­ber 30, Decem­ber 1” then it did in Oc­to­ber. The pres­id­ent ad­mit­ted that that was a “low bar.” He said that “it’s not pos­sible for me to guar­an­tee that 100 per­cent of the people 100 per­cent of the time will have a per­fectly seam­less, smooth ex­per­i­ence” come Decem­ber. And Health­Care.gov will nev­er be Apple: “Buy­ing health in­sur­ance is not go­ing to be like buy­ing a song on iTunes.”

The newly an­nounced plan comes un­der two con­di­tions, seni­or White House of­fi­cials say. First, in­surers must no­ti­fy con­sumers which pro­tec­tions these cur­rent plans do not in­clude. Ad­di­tion­ally, in­surers have to no­ti­fy con­sumers they they will have new op­tions in the mar­ket­place that of­fer bet­ter cov­er­age and pro­tec­tions than these plans.

The De­part­ment of Health and Hu­man Ser­vices will use its en­force­ment dis­cre­tion for this fix, a dis­cre­tion which can be used dur­ing big changes to the health care sys­tem as a means to en­sure im­ple­ment­a­tion runs smoothly.

The policy is de­signed to al­low the sub­set of Amer­ic­ans who don’t meet the sub­sidy threshold un­der Obama­care — people for whom the can­cel­la­tion of their cur­rent policy is per­ceived as a bur­den — to re­new their plan.

Seni­or White House of­fi­cials say this move al­lows for a bet­ter and smooth­er trans­ition for this group of in­di­vidu­als to move from the ex­ist­ing mar­ket to the new mar­ket. In es­sence, they said, the ad­min­is­tra­tion is be­ing re­spons­ive to the con­cerns of Amer­ic­ans.

The can­cel­la­tions, however, aren’t ex­actly an un­fore­seen con­sequence, as the law re­quired in­sur­ance com­pan­ies to cre­ate a baseline stand­ard for plans. Now, however, pub­lic out­cry has trans­formed them in­to something akin to un­in­ten­ded res­ults. Of­fi­cials say the pres­id­ent asked them to “fix this prob­lem,” the prob­lem be­ing can­cel­la­tions, which were, for many in­sur­ance pro­viders, in­ev­it­able. The pres­id­ent also made sure to note on Thursday that “the old in­di­vidu­al mar­ket was not work­ing well.” 

“We can’t lose sight of the fact that the status quo be­fore the Af­ford­able Care Act, wasn’t work­ing at all,” he said.

The fix may have some im­me­di­ate trouble though: at a press con­fer­ence right be­fore Obama’s state­ment, House Speak­er John Boehner said he is “highly skep­tic­al they can do this ad­min­is­trat­ively.” The pres­id­ent ob­vously thinks oth­er­wise. “Re­gard­less of what Con­gress does, ul­ti­mately I’m the pres­id­ent of the United States,” he said Thursday. And Amer­ic­ans “ex­pect me to do something about it.”

Obama’s state­ment today is shrouded in some ugly de­vel­op­ments for the ACA. The mal­func­tion­ing web­site and Obama’s pierced “if you like your plan, you can keep it” claim have helped to bring ap­prov­al for the law down to 40 per­cent, with 55 per­cent dis­ap­prov­ing in a new Gal­lup poll. That is the biggest gap in ap­prov­al in the last year. Just 39 per­cent of self-iden­ti­fied in­de­pend­ents ap­prove of Obama­care.

The slide isn’t just in ap­prov­al for Obama­care. A re­cent Quin­nipi­ac poll pegged Obama’s ap­prov­al at 39 per­cent, the low­est they’ve found since he be­came pres­id­ent.

The pres­id­ent tried to own up to his “if you like your plan” pledge on Thursday, say­ing that “there is no doubt that the way I put that for­ward un­equi­voc­ally ended up not be­ing ac­cur­ate.” When asked dir­ectly about the prom­ise, the pres­id­ent said “my ex­pect­a­tion was that for 98% of the Amer­ic­an people either it genu­inely wouldn’t change, they’d be pleas­antly sur­prised with the op­tions in the mar­ket­place, and that the grand­fath­er clause would cov­er the rest. That proved not to be the case. And that’s on me”

Con­gres­sion­al Demo­crats, wor­ried about in­creas­ing frus­tra­tions from their con­stitu­ents whose cov­er­age could be dropped, have con­sidered changes to the ACA. A vote is sched­uled for Fri­day in the House on a GOP bill that would let Amer­ic­ans keep their ex­ist­ing health plans through 2014 without pen­al­ties. It may wind up with some sig­ni­fic­ant Demo­crat­ic sup­port. The Obama ad­min­is­tra­tion has pre­vi­ously spoken out against the le­gis­la­tion.

Seni­or White House of­fi­cials say the pres­id­ent’s pro­pos­al is dif­fer­ent from the Re­pub­lic­an pro­pos­al since it does not of­fer these older and non-com­pli­ant plans to Amer­ic­ans who did not have these plans pre­vi­ously. The Re­pub­lic­an pro­pos­al, which of­fi­cials say would un­der­mine Obama­care, would al­low any­one to sign up for these out­dated plans.

Obama’s fix jibes with re­cent re­marks from Demo­crats that the ad­min­is­tra­tion ought to dir­ectly ad­dress the can­cel­la­tions. House Minor­ity Lead­er Nancy Pelosi said Thursday that she plans to en­dorse an Obama­care fix from Demo­crat George Miller that would force in­sur­ance com­pan­ies to keep ex­ist­ing health plans un­til the end of the open-en­roll­ment peri­od in March. But Pel­soi said at an At­lantic for­um that she “would prefer an ad­min­is­trat­ive fix be­cause it could be done much more quickly without any ac­com­pa­ny­ing agen­das.” She also called the House GOP plan “dan­ger­ous.”

Sev­er­al Sen­ate Demo­crats, in­clud­ing Sens. Mary Landrieu, D-La, Joe Manchin, D-W.V., and Jeanne Shaheen, D-N.H., have spoken in fa­vor of sim­il­ar pro­pos­als.

Frus­tra­tions hit a new high on Wed­nes­day, as the ad­min­is­tra­tion re­leased less than stel­lar num­bers from the health care roll out (though the topline num­bers alone don’t tell the whole story). In total, just 106,185 people en­rolled in the health in­sur­ance through Health­Care.gov last month. This is far short the 500,000 the ad­min­is­tra­tion hoped to en­rol by the end of Oc­to­ber.

Former Pres­id­ent Bill Clin­ton on Tues­day called on Obama to make good on his cam­paign prom­ise that people would not lose their health care. “I per­son­ally be­lieve,” Clin­ton told OZY, “even if it takes a change to the law, the pres­id­ent should hon­or the com­mit­ment the fed­er­al gov­ern­ment made to those people and let them keep what they got.”

Jay Car­ney, the White House spokes­man, said that Obama would agree with Clin­ton’s state­ment, adding that the pres­id­ent was look­ing in­to range of op­tions to rem­edy the prob­lem.

“I think I said early on when I was run­ning I’m not a per­fect man and I will not be a per­fect pres­id­ent,” Obama said Thursday. “But I’ll wake up every single day work­ing as hard as I can on be­half of Amer­ic­ans out there, every walk of life who are work­ing hard, meet­ing their re­spons­ib­il­it­ies, but some­times they’re strug­gling be­cause the way the sys­tem works isn’t giv­ing them a fair shot. And that pledge I haven’t broken.”

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