Nice insurance company you
have there. Be a shame if something happened to it.
Late last week, the Obama administration made a series of
“requests” to insurance companies that are participating in the new
exchanges, federal or state, as well as those companies processing renewal
requests for individual insurance policies that were initially cancelled and
may now be renewed in those states where the state insurance commissioner has
given the OK.
These “requests” follow a series of retreats from deadlines
established at the time the Affordable Care Act was passed in 2010. These
include:
- delaying the
employer mandate for a year;
- delaying the
end of the sign-up period for coverage beginning January 1;
- delaying the
introduction of the Spanish language website;
- delaying small
business online enrollment for a year;
- delaying the
beginning of the enrollment period for 2015 until mid-November so that it
follows the 2014 midterms (a delay selected so that voters do not get to
see the large premium increases that almost certainly will be coming in
the second year); and
- allowing
insurance companies to reinstate cancelled policies that had been judged
non-compliant with Obamacare mandates or “grandfathering corridors.”
The latest “requests” may seem in some way to be more of the same
and, if anything, less burdensome since they are requests rather than official
delays or changes in policies, and are described as nothing more than a few
suggestions to ease the transition to the new coverage.
There is another way, however, to see the latest “fixes” that the
Obama administration is requesting from the insurance companies, and that is to
view them as something far removed from business
as usual. The purpose of the requests, as with all of the delays and
policy changes to date, is a fairly obvious attempt to shift blame away from
the law itself and the president and members of the Democratic Party who drafted
the law, promoted it, voted for it, and defended it every step of the way.
The obvious fall guys for the Obama administration are the
insurance companies. These firms have never been popular, but they bought into
supporting the new law because it promised them 20 million new enrollees on the
exchanges, with a public utility model that ensured a certain level of profit
for the new policies. The companies are now learning that they are not
independent players anymore, free to set prices and conditions for coverage
that are consistent with the law that was passed and for which they, unlike the
administration, had planned. They are, it seems, now at the whim and mercy of a
politically deflated president who needs the insurance companies to change
their way of doing business from month to month — this time to prevent a
January rollout fiasco when coverage is scheduled to begin for those who have
supposedly signed up.
In essence, the Obama administration is now demanding that
insurance companies provide free care to those who have not paid for their
policies or to those who think they have paid but whose payment or enrollment
information never made it to the insurance company. The insurers are being
“asked” to backdate the coverage date for new policies to the beginning of the
month for those who pay sometime during the month, even if only a partial
payment is made.
Tales of people showing up at the doctor’s office or hospital or
filling prescriptions thinking they are insured, and instead finding out that
they are uninsured, would simply compound the negativism about the new law
that hardened after the calamitous website failure in October and
November. The Obama administration wants to turn the corner on the public image
of Obamacare, and if many design flaws remain, then they can try to make
believe that problems no longer exist by having insurance companies behave as
if those who have not paid or enrolled are in fact fully on board with the
program.
The changes that are incorporated in the latest requests are
described as a one-month corrective due to the problems getting the
Healthcare.gov site to function and amidst stories of very high rates of
misinformation (25%) being transmitted to insurers. But in fact, the insurers
may well be asked to continue such policies in future months, and the request
is hardly voluntary, since the companies are warned that they may be barred
from participation
in the exchanges if they do not comply!
HHS says the new rules are only suggestions to ensure “a more
seamless transition,” but there’s nothing voluntary here. The regulatory fine
print reveals that HHS intends to kick insurers off the exchanges if they don’t
obey. Having destroyed the old individual market, HHS will only certify the new
“qualified health plans” if insurers “adopt policies to prevent disruptions in
treatment of episodes of care.”
The Wall Street Journal article notes that the requests not
only include providing coverage to those who have not paid or who have only
partially paid, but to treat out-of-network providers as in-network during the
transition. Many of those who have navigated the exchanges have
discovered that the lower-cost plans routinely require large deductibles and
include narrow networks of providers — generally without teaching and specialty
hospitals, and the physicians who work with them. Many plans provide no payment
for out-of-network providers.
The broader PPO-type networks are far more expensive options and
they also include high deductibles. Among the 6 million who were told their
policies were cancelled, some will be able to have one more year with these
plans, though insurers have yet to price the renewals, preventing people from
comparing exchange plans with their current plans. For those who are buying
insurance for the first time or after a lapse in coverage, the initial website
problems and now the combination of high deductibles, high premiums, and narrow
networks may well be an excuse to continue as uninsured for one more year,
given how modest the penalties are for failure to enroll.
The press continues to report that the young are being asked to
subsidize the older, sicker patients in the new exchanges. But if this is so,
you would not know it in Illinois, where 50-year-old women will need to pay at
least $4,000 a year in premiums for the lowest-cost bronze plan ($6,000
in annual deductibles) with a very narrow network of providers. Plans with
lower deductibles or broader networks cost thousands more per year in premiums.
In other words, an enrollee will be out $10,000 a year before seeing a dollar
in coverage (annualizing the premium). This is, again, the low-cost plan that
is presumably being subsidized by younger enrollees!
Roughly 350,000 people have completed enrollment online for the
exchanges in the 50 states in October and November (a pace far below the first
twelve-month estimate of 7 million), and insurers estimate that half of this
number are among the pool of six million who had their policies cancelled and
who needed to find new coverage. Many of those who had policies cancelled
are in states where renewal of those plans has been denied by the state
insurance commissioner. It is likely that even with an estimate of 800,000 new
Medicaid recipients in October and November, and a few hundred thousand more
signups for both the exchanges and Medicaid in December, on January 1 there
will be fewer Americans with insurance coverage than was the case on October 1,
2013. This is where we will be three months after the implementation of
the president’s signature achievement, for which the Obama team had three and a
half years to prepare.
The left, which has been demanding universal coverage for decades,
is now forced to defend the indefensible, since to admit failure or acknowledge
widespread government incompetence would be to abandon not only their leader
but his and their “achievement.” So we will continue to have a government which
lawlessly makes it up as they go along and hopes the country can be distracted.
Meanwhile, the left and its mouthpieces will proclaim that all is well.
Richard A. Baehr is the co-founder and chief political
correspondent for the American Thinker. For his day job, he has been a health
care consultant for many years doing planning and financial analyses for
providers.
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