answer to the millions of recent health-plan cancellations. But such
fixes may also do damage to Obamacare.
loaded SUV known as Obamacare. On Thursday, President Obama offered
his fix. On Friday, members of the House — including 39 Democrats —
approved theirs, and other lawmakers have their own ideas. But all
these busy mechanics could end up doing more damage to Obamacare.
Well, start with the general aim of the various repairs. They differ
in detail, but basically, they would allow — for varying times —
millions of Americans whose health insurance is being canceled under
Obamacare to keep their plans and their doctors if they like them.
Just like Mr. Obama originally promised.
So far, at least 4.2 million Americans have been sent cancellation
notices by their insurers, according to an Associated Press survey.
The important thing to remember about this group is that it tends to
be healthier than the uninsured, who will be most attracted to
Obamacare. If you allow these healthier individuals to remain outside
the Obamacare pool, you are spelling actuarial trouble. It’s like
removing a piston from an engine and still expecting it to run
No one is sure exactly how big this problem could become, but the fear
is that the Obamacare exchanges “will be attracting a disproportionate
share of the higher-cost, sicker people,” says Cori Uccello, senior
health fellow at the American Academy of Actuaries. That translates
into higher premiums and, potentially, an insurance system that can’t
adequately support itself.
From insurers’ point of view, it’s just too late to reverse course and
implement the change. Some state insurance commissioners say that
bringing back these canceled policies will actually violate new state
laws that now forbid such “substandard” plans. Two biggies in this
group are California and New York.
A reversal could just add to the confusion and lack of confidence
already swirling around Obamacare. A crisis of confidence in the new
health-care system could be debilitating. Take it from Larry Kocot, a
visiting fellow at the Brookings Institution who helped roll out
Medicare Part D, the prescription drug benefit, during the George W.
Back then, they called Part D’s stumbles “glitches,” but the rollout
of Obamacare has “surpassed glitches,” he says. “It’s very, very hard
to address confusion.”
So why make such repairs, when their downsides are so numerous? For
one, the blowback from those unhappy with the cancellations has
reached the force of a “Category 5 political hurricane,” as Rep. Greg
Walden (R) of Oregon put it at a Monitor breakfast Friday. Real
people, kicked off plans they liked, are now facing higher premiums
and deductibles — and they’re telling their members of Congress about
Obama’s approval rating, too, has sunk to 39 percent. On Thursday, he
tried to shield Democrats in Congress, some of whom face tough races
in the midterm elections of 2014, by announcing an executive fix that
leaves it up to insurers and states to allow people to return to their
old health plans if they want to.
But the politics of Obamacare has become so damaging to Democratic
lawmakers, who “own” Obamacare as much as the president does, that
nearly 40 House Democrats peeled from their caucus to support Friday’s
bill, backed by Rep. Fred Upton (R) of Michigan.
Most Democrats don’t like this bill, and Obama promises to veto it,
because it allows new customers to sign on to canceled plans —
enlarging the pool of people who could be attracted to the plans and
worsening the outlook for Obamacare’s sustainability.
Instead, Democrats such as Sen. Mary Landrieu of Louisiana, who has
been criticized at home for her support of Obamacare and who faces a
tough race next year, are working on their own legislation.
Where all this is headed is tough to say. But the rollout is producing
problems beyond a broken website. Fixing them is like pulling on a
loose thread. Give it a tug, and things start to unravel.