Should Americans really be allowed to keep their health plans? - The Week Magazine

Bill Clinton says so, Republicans are proposing a law to do it, and Obama may not object. That doesn't mean it's a good idea.

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ormer President Bill Clinton made some waves Tuesday by saying that President Obama should "honor the commitment" he made to let Americans keep their health insurance plans if they like it, "even if it takes a change" to the Affordable Care Act. As it turns out, Republicans are pushing a similar idea, as are some Democrats facing tough re-election fights in 2014.

In the House, Rep. Fred Upton (R-Mich.) has put forward the "Keep Your Health Plan Act," which would allow (but not require) insurers to sell existing insurance plans next year outside of the new exchange markets, even if they fall short of ObamaCare's more stringent requirements. In the Senate, Mary Landrieu (D-La.) and Joe Manchin (D-W.Va.) introduced the "Keeping the Affordable Care Act Promise Act," which would essentially force insurers to keep offering current plans or exit the individual insurance market.

The Senate bill's prospects got a boost when Sen. Dianne Feinstein (D-Calif.) signed on as a co-sponsor. Landrieu said Tuesday night that Obama hasn't said no to her plan, but hadn't said yes either. White House press secretary Jay Carney appeared to agree with Clinton's critique on Tuesday, adding that Obama is looking for some changes that would keep people from losing their plan without being able to pay for a better one:

But Upton's bill is a nonstarter with the White House. And with good reason, says Ross Kaminsky at The American Spectator. It only lasts a year, so imagine the "Democratic panic going into the 2014 elections if what is happening now with millions of people losing health insurance coverage were happening all over again." For that reason, the GOP shouldn't be so quick to "ease the burden of ObamaCare," at least without demanding more in return.

When you have a hostage as valuable as President Obama, or at least his legacy, even the Upton bill seems like too small a ransom demand. Obama's plummeting popularity and Clinton's public thinly-veiled criticism of Obama will encourage many Democrats to vote for a Republican bill in order to save their own skins. Republicans should exact a painfully high price, not just because it's good policy, but because revenge against these bullies and tyrants would be too sweet not to savor. [American Spectator]

Even if Upton's plan or one like it were to pass, however, most insurers would probably opt out of reinstating the dropped plans. "It took the insurance companies many months to get rid of these policies," health industry consultant Bob Laszewski tells The Weekly Standard. To offer them now "they'd have to go through a process of redoing their computer systems," then get state insurance commissioners to reauthorize the defunct plans. "You're not going to do that in six weeks," he adds.

Insurers wouldn't be too keen on the Democrats' plan, either. "House Republican legislative trolling aside, a law that actually prevented insurance companies from ever withdrawing an insurance product from the market would be extreme regulatory overreach," says Matthew Yglesias at Slate. Without leverage in negotiations with health care providers, insurers would pretty quickly go bankrupt.

Obama's "irresponsible promise" about keeping your health care never made sense," Yglesias adds, but "the idea of actually trying to make it a policy goal is insane."

Rather than (foolishly) try to ensure that nobody could ever lose their insurance, the actual Affordable Care Act accelerated the demise of a certain class of plan. Politically, that's now an embarrassment for the White House. Substantively, it's a huge achievement....

In the individual market the standard practice was to earn a profit selling peace of mind to healthy people, only to pivot as quickly as possible toward cancellation of the plan as soon as major bills started coming in.... New regulations will only lead to policy cancellation if they make the policy unprofitable to offer. And in the majority of cases, that'll mean the policy is being canceled because it never made financial sense for the insurer to actually pay up in the case of major illness. [Slate]

Andrew Sullivan at The Dish isn't convinced. "I don't know what the full policy implications would be" of making sure everyone who wanted to keep their plan is able to, he says, but "if you made a promise, and it turns out to be empty, you have two options": Apologize and take the loss of credibility, or "fix the law so that your promise remains intact." Only five percent of Americans will be affected, so if "the issue can be compartmentalized, the politics could help the law, not hurt it."

The small percentage (but large raw number) of people who will have to pay more for individual insurance "are right to feel burned, since Obama did not make clear his promise might not apply to them," says Jonathan Cohn at The New Republic. But you can't fix America's health insurance without making changes, and by design "ObamaCare actually disrupts very little relative to what it accomplishes."

Maybe there's some muddled, half-solution that will ease the transition without causing real damage. Or maybe there's some brilliant administrative or legislative fix the experts can't see. But absent an infusion of extra money — say, to create some kind of transitional assistance fund — any effort to slow changes to the non-group market might not just stop the bad things from happening. It might also stop the good. The latter might outweigh the former, by quite a lot. [New Republic]

Clinton's interview may have given Obama "yet another political headache," Cohn says, "but maybe it's also an opportunity to have a serious conversation about the law's tradeoffs — the one that should have happened a while ago."