Admitting that "the roll-out has been rough so far," President Obama on Thursday morning announced that his administration is giving insurance companies a one-year grace period on cancelling policies. As for Healthcare.gov? It won't be perfect on December 1, either. "Buying health insurance is never going to be like buying a song on iTunes."
The president started by painting a picture of a system that was slowly starting to work. Including those people who gained health coverage under an expansion of Medicaid, "more than 500,000 Americans could know the security of health insurance for the first time in their lives." Only about 100,000 people signed up for coverage using state and federal exchanges, but some one million signed up for accounts, apparently intending to do so. He acknowledged problems, arguing that Obamacare was still an important change.
I'm willing to work with Democrats and Republicans to fix problems as they arise. This is an example of what I was talking about. We can always make the law work better. It's important to understand, though, that the old individual market was not working well. And it's important that we don't pretend somehow that's a place worth going back to.
"There are still 40 million americans who don't have health insurance at all," he said. "I'm not going to walk away from 40 million people who have a chance to get health insurance for the first time."
The change that the president announced is a modest one. Insurers already have the ability to preserve plans that don't meet baseline coverage and costs mandated by the Affordable Care Act, unless those plans expire at Obamacare's January 1 launch date. The shift from the administration — a shift that will be enforced through the Department of Health and Human Services — allows companies to hold off on forcing an upgrade of expiring plans for 12 months. At the same time, the president will demand that insurers explain both why the existing, extended plans don't meet the baselines set by Obamacare and offer more information about alternatives.
More from insurance industry source on WH O-care fix: "This is a joke - doesn't change anything but allow WH to blame insurance companies"— John Harwood (@JohnJHarwood) November 14, 2013
In other words, as the insurance companies point out, this allows the administration to shift some of the onus of the cancellations onto insurers, some of whom have prematurely sought to cancel policies. In addition, it gives the administration 12 months to work out some of the law's other problems, revisiting the issue of cancellations, it hopes, without the website problems hanging over its head.
Ahead of Obama's remarks, House Speaker John Boehner said, "It's become clear that the American people simply can't trust this White House." He said he was "highly skeptical" that the president could use an administrative response to delaying cancellations — in part, because he wants to promote Rep. Fred Upton's measure that will come up for a vote tomorrow. That bill would let people keep existing plans for two years.
As we noted earlier, the original ACA roll-out did not include this specific grace period. But support for the ACA has steadily eroded over the past few weeks as complaints have increased about cancellations. Earlier this week, former president Bill Clinton undermined that position by advocating that people be allowed to keep their plans.
The insurers are at least to some extent correct: this is in large part an attempt to shift political blame. At the Washington Post, Ezra Klein has a good analysis of the various fixes to the "keep your own plan" problem — and also explains why insurance companies are angry.
They've been working with the White House to get HealthCare.Gov up and running and they've been devoting countless man hours to dealing with the problems and they've been taking the heat from their customers over canceled plans, and now the Obama administration wants to make them into a scapegoat.
Asked about his dropping poll numbers, Obama indicated that he understood why Americans' views of him have changed. "I think it's legitimate for them to expect me to win back some credibility on the health care law in particular," he said. "And you know: That's on me." Regardless, he insisted that he didn't know that the roll-out of Healthcare.gov would be as flawed as it was.
Had I been informed [about the site's flaws], 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 opened if I thought that it wasn't going to work.
The president was then asked if the website would be working for everyone on November 30, as the administration has repeatedly suggested. "It's fair to say the improvement will be marked and noticeable," he replied. "The majority of people who use it" will find that he works, he said. In other words: No, not for everyone.
Via Talking Points Memo, here's the letter the administration sent insurance commissioners.