Tuesday, November 19, 2013

Obama lied, my health plan died?

(Actual headline from an hysterical Michelle Malkin op-ed).

I exposed this lie recently, but here's a much better explanation. All of you accusing President Obama of "lying" should read this.

It is much more the other way around: insurers are lying about Obama "forcing" them to "cancel" private health insurance plans for individuals.

It's very easy for insurers and their enablers in the media to get away with this lie, because as Semro notes, 149 million Americans have health insurance through their employer. They have never had to purchase individual insurance like 19 million other Americans. Most Americans don't know that these plans typically last one year, then they must be renewed -- or "cancelled" in current parlance -- with higher premiums, deductibles, lower coverage -- whatever the insurer offers instead. There has NEVER been a guarantee in the market of keeping ANY kind of health plan, because we have an economic system of free enterprise. 

Meanwhile, many people in the private insurance market don't know they can get cheaper plans through an ACA exchange, and/or qualify for subsidies. 

"But Obama still lied, he said we could keep our plans no matter what!" you still complain. Yes, it was a stupid thing of him to say, but he obviously meant that if the insurer wanted to comply with the grandfathering rules, then people could keep their plans. Many insurers chose not to comply with the grandfathering rules, which were well-known years ago:

A grandfathered plan is any policy in existence before March 23, 2010, when the ACA became law. Grandfathered plans must eliminate lifetime benefit caps, offer coverage to dependent children over age 26 and eliminate pre-existing condition exclusions in 2014, but they are exempt from most other ACA reforms.

The idea was to limit the impact of the ACA on those plans so that insurance companies would continue to offer them and employers and individual consumers could continue to enroll in them.

Under the ACA, a grandfathered plan can lose its status if out-of-pocket costs increase above the rate of medical inflation plus 15 percent, co-insurance rates increase, annual benefit limits decrease, employer contributions decrease by more than 5 percent, or the plan eliminates coverage for a previously covered condition.

So why are some people with ACA-compliant plans going to pay more? First, because Obamacare was a great excuse for insurers to raise their prices, let's be real. Secondly [emphasis mine]:

Should a grandfathered plan end, any new plan is subject to all of the ACA's reforms, including a minimum level of covered benefits. The 10 "essential benefits" required by the ACA include coverage for prescription drugs, preventative care, maternity care and mental health treatment. These new policies will offer consumers better coverage, but the expanded benefits may lead to higher premium prices for some. For others, this coverage may be comparable to or even more affordable than in the past. According to MIT economist Jonathan Gruber, approximately one-half of Americans in the individual market will likely have to purchase a new policy that may cost more.

By Bob Semro
November 16, 2013 | Huffington Post

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