President Barack Obama on Thursday asked health insurance companies to allow individuals whose current plans have been canceled due to the Affordable Care Act to renew them for a year.
Obama gave a speech in the White House briefing room as a small but growing number of restive congressional Democrats join the Republican chorus that legislation is needed to preserve the policies being eliminated. The House of Representatives is scheduled to vote Friday on a bill sponsored by Energy and Commerce Committee Chairman Fred Upton (R-Mich.) that would permit health insurers to extend these health plans. In the Senate, Sen. Mary Landrieu (D-La.) and others are backing similar bills to address the canceled plans.
"Insurers can extend current plans that otherwise would be canceled into 2014 and Americans whose plans have been canceled can choose to re-enroll in the same kind of plan," Obama said. "This fix won't solve every problem for every person, but it's going to help a lot of people. Doing more would require work with Congress."
Obama's health care reform law has been under siege since its faulty rollout on Oct. 1. HealthCare.gov, the online portal for health insurance shopping in more than 30 states, hasn't reliably worked during the first month and early enrollment figures came in well below expectations. In the meantime, between hundreds of thousands and millions of consumers have been notified that their insurance policies don't meet the health care law's standards and will be discontinued next year, in violation of Obama's vow that his law would allow people to keep their current coverage.
"That's on me," Obama said. "We fumbled the rollout on this health care law."
Obama vowed to press ahead with implementing his law, and reiterated that the health insurance market needs reforming to guarantee stable health insurance coverage. "I make no apologies for us taking this on," he said. "Because somebody sooner or later had to do it."
"It took a hundred years for us to even get to the point where we could start talking about and implementing a law to make sure everybody's got health insurance, and my pledge to the American people is, is that we're going to solve the problems that are there, we're going to get it right, and the Affordable Care Act is going to work for the American people," Obama said.
Under the policy Obama announced Thursday, health insurance companies will be permitted to extend current policies, even though they don't comply with Affordable Care Act standards for benefits and financial protections, for their customers into next year. Insurers won't be allowed to enroll new customers into these extended policies, Obama said.
Consumers should still examine the health insurance available on the exchanges to determine whether the new plans are better or less expensive than their current plans, or whether they qualify for financial assistance, Obama said. "If you received one of these letters I'd encourage you to take a look at the marketplace," he said.
Insurers will be required to disclose to customers that these new plans won't include the new consumer protections in the law and explain that alternatives are available on Obamacare's health insurance exchanges, and that tax credits to cut the cost of private insurance are only available on the exchanges. Insurance companies will also have to tell consumers that they may qualify for Medicaid, the federal-state health program for low-income people. State health insurance regulators are being asked to permit the administration's new policy.
Health insurance companies ultimately will be responsible for deciding whether to carry out Obama's new policy, which puts the onus on them. "The Affordable Care Act is not going to be the reason why insurers have to cancel your plan," Obama said.
The White House acknowledged this new policy could have a limited reach. "It may not be taken by all insurance companies and by all state insurance commissioners," a senior White House official said during a conference call with reporters prior to Obama's remarks.
This proposed solution would be problematic for health insurance companies that have already eliminated the current plans from their books of business and would have to recreate them. In addition, enabling a portion of the health insurance market to stay outside of the health insurance exchanges could cause future premiums to rise for those using the new marketplaces. If healthier people with lower medical expenses avoid the exchanges and purchase policies with less generous benefits, the exchanges would attract a relatively older and sicker population, the health insurance industry has warned.
“Changing the rules after health plans have already met the requirements of the law could destabilize the market and result in higher premiums for consumers," Karen Ignagni, CEO of the trade group America's Health Insurance Plans, said in a statement.
State regulators were also cool to Obama's proposal. "This decision continues different rules for different policies and threatens to undermine the new market, and may lead to higher premiums and market disruptions in 2014 and beyond," Jim Donelon, Louisiana's insurance commissioner and president of the National Association of Insurance Commissioners, said in a press release. "It is unclear how, as a practical matter, the changes proposed today by the president can be put into effect."
Health insurance plans are being canceled next year because the Affordable Care Act includes a slew of benefit mandates and consumer protections at the heart of Obama's reform platform.
Plans sold on the exchanges can't exclude people with pre-existing conditions, charge women higher rates than men, must cover at least 60 percent of a person's annual medical expenses, and can't impose annual or lifetime caps on coverage. In addition, exchange plans must cover a basic set of benefits that includes hospitalizations, prescription drugs and maternity care. Health insurance extended via Obama's new policy would not include those guarantees.
"The old individual market was not working well. And it's important that we don't pretend that somehow that's a place worth going back to," Obama said. "Too often it works fine as long as you stay healthy. It doesn't work well when you're sick."
Obama rejected legislative proposals akin to Upton's bill. "I will not accept proposals that are just another brazen attempt to undermine or repeal the overall law and drag us back into a broken system."
White House officials visited Capitol Hill Thursday to meet with House and Senate Democrats to assure them that Obama is addressing issues with canceled policies and the broken website, and to urge them not to back legislative changes to the president's signature domestic policy achievement.
Obama again addressed his oft-stated pledge that individuals would be able to keep their current insurance plans when his law was implemented, noting that the Affordable Care Act leaves in place the employer-sponsored health plans and government programs that cover more than 90 percent of insured Americans. But he acknowledged underestimating the law's effects on the remaining consumers.
"We chose a path that was the least disruptive to try to finally make sure that health care is treated in this country like it is in every other advanced country, that it's not some privilege that just a certain portion of people can have," he said. "There is no doubt that the way I put that forward unequivocally ended up not being accurate."
Only about 27,000 people chose a new health insurance plan using HealthCare.gov between Oct. 1 and Nov. 2, according to a report issued by the Department of Health and Human Services Wednesday. About 79,000 people did so via the health insurance exchanges being operated by 15 states and the District of Columbia. Almost 400,000 individuals have been deemed newly eligible for Medicaid or the Children's Health Insurance Program.
"In just one month, despite all the problems that we've seen with the website, more than 500,000 Americans could know the security of health care by Jan. 1, many of them for the first time in their lives," Obama said. "Is that as high a number as we'd like? Absolutely not. But it does mean that people want affordable health care."
The White House maintains that HealthCare.gov will be functioning better by the end of this month and that enrollment via the exchanges will have substantially increased by the end of the sign-up period on March 31. The Congressional Budget Office has projected that 7 million people would use the exchanges to buy health insurance for 2014.
"We should have done a better job getting that right on day one, not on day 28 or on day 40," Obama said.
Obama restated his administration's aim to improve the website by the end of November, but stopped short of guaranteeing it would work perfectly. "The website will work much better on Nov. 30, Dec. 1, than it worked certainly on Oct. 1. That's a pretty low bar," Obama said. "It is not possible for me to guarantee that a hundred percent of the people a hundred percent of the time going on this website will have a perfectly seamless, smooth experience."
House Speaker John Boehner (R-Ohio) expressed skepticism that the Affordable Care Act permits Obama to carry out the policy he unveiled Thursday. "I'm highly skeptical they can do this administratively. I just don't see within the law their ability to do it," Boehner said during a press briefing.
A senior White House official said the Department of Health and Human Services has the authority to allow health insurance plan extensions via the law's "grandfathering" provisions, which already enabled some plans to be continued if they hadn't been substantially changed since 2010, and via administrative discretion.
Sabrina Siddiqui contributed reporting.
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