Tuesday, October 29, 2013

A word from one of the 5%

The President's spokesperson today tried to explain why the President's statement--"If you like your health plan, you can keep it."--was true.

Listen from minute 3:00.

"As the law says, and as the President made clear . . . if you had insurance coverage on the individual market when the Affordable Care Act was passed into law and you liked that plan and you wanted to stay on it . . . you can keep that coverage. You are grandfathered in . . . in perpetuity."

Here in Massachusetts, I am not allowed to keep the individual plan I have had. I am required to buy a new plan effective March 2014. And, as I have discussed in my two previous posts, that new plan is not the same. I guess the fine point is that I bought my plan after March 2010, when the health care law was enacted.

Maybe this is all a distinction that doesn't make a difference. After all, I like some changes in the plan and don't like some others. But the answer given today doesn't square with many people's perception of the President's promise. As indicated in press reports, like this one from the Los Angeles Times, others of us who are in the 5% covered by individual plans are similarly confused.

For example, quoting the reporter's question, "Can you explain in just really plain and clear terms" how the spokesperson's comments jibe with this report:

Nearly 2 million Californians have individual insurance, and several hundred thousand of them are losing their health plans in a matter of weeks.

Blue Shield of California sent termination letters to 119,000 customers last month whose plans don't meet the new federal requirements. About two-thirds of those people will experience a rate increase from switching to a new health plan, according to the company.

I have been listening to actuaries for many months who made it clear that the new plans would have to be more expensive to cover the law's guaranteed issue and other insurance requirements. Those requirements are extremely desirable in providing insurability and financial security to millions of Americans and are, in fact, key attributes of the ACA. If the costs and benefits of these requirements had been addressed honestly by the administration, perhaps it would not feel the need to parse the President's promise as finely as his spokesperson did today.


Barry Carol said...

More honesty about the costs certainly would have been desirable but it might also have reduced political support for the program. I think it also would have been better if people also had the option to buy a catastrophic coverage plan if that would work better form them. However, they should probably be required to keep it for at least several years before they could switch to the more comprehensive plan if they get sick and incur significant medical claims costs.

My understanding is that people 30 years old and under are allowed to buy a catastrophic coverage plan but I believe they would have to pay its costs without subsidies. With a young person’s age rating and an income that makes them eligible for a significant subsidy, the comprehensive plan may turn out to be cheaper or only slightly more expensive for them.

Anonymous said...

Here's the difference, Paul, which is huge.

You say you can't keep the same plan that you liked before.

The reason is not the ACA. The ACA lets someone keep a grandfathered plan for as long as its offered. Forever.

The issue for you is that the INSURER is not offering that plan anymore. That's a decision by a private insurer. The government is not forcing them to not offer it.

The insurer is certainly not offering the old plan for good business reasons. One of them is that they can't sell those plans to new people after 2011, so over time the number of people in the plan will go down. The only people left in the plan would be those who renew year after year. At some point that particular plan gets so small it's not worth the effort to keep it alive.

But the President is right that the ACA allows one to keep a plan, even a plan like yours with no out-of-pocket limit, for as long as it offered. The President just can't force an insurer to keep offering it forever.

Ryan E. said...

Obama sold a plan based on lies, bottom line. The plan is a poor one, he knowingly lied to get it passed. Young people have to sign up to make the ACA a success, when they don't sign up it will fail. Republicans should have just let this move forward to begin with as it is going to fail regardless of any government shutdown.

Paul Levy said...

Dear Anon 19:38,

I've read what you have said a couple of times. The best I can characterize it is this way: "I, the President, can't force companies not to do something, but I promise you they won't do it." Who on earth would ever make such a statement?

But, I think your description is wrong in any event, in that the specific plans that existed upon the passage of the ACA cannot be withdrawn by insurers--ever. It is the plans that existed just after the law passed that are being withdrawn.

So, he told the truth about a very specific number of plans, but the public cannot be expected to understand the legalistic distinction he made. This was intentionally misleading marketing on his part.

Barry makes the point that "More honesty about the costs certainly would have been desirable but it might also have reduced political support for the program." I'm not sure that it is true that it would have reduced political support--given the substantial benefits in personal security for individuals; but that clearly was the calculus employed at the time of the Congressional debates.

Eventually, such misstatements come home to roost. Whether the press or the political opposition spreads the stories, they are made more compelling by the President's promises.

Paul Levy said...

Ryan E,

I disagree that the plan is a poor one, in terms of an undeniable (in my mind) need to provide insurance to many more Americans. It had been a disgrace the the US had not had this in place before.

Also, the protections in the plan--in terms of guaranteed issue of insurance--are essential as long as private insurers are part of the mix. This, in turn, requires the law to have the individual mandate provisions. The alternative--not politically feasible at the time--would be to have government issued plans with required participation (i.e., "Medicare for all.")

The opposition has overstated the flaws in this plan more so than the President has oversold its virtues. Their nihilistic approach to the issue is despicable in my mind. As I have pointed out before, actions by several Republican governors to exclude lower income people from the Medicaid expansion is, in a word, cruel.

Barry Carol said...

Paul –

I’ve read that the way the final regulations governing pre-ACA health plans were written requires that there can be no changes whatsoever in the plan if it is to retain its grandfathered status. This means that there can’t be any change in deductibles, copays, out-of-pocket maximum amounts, limits on PT or mental health visits, etc. Just increasing the deductible to keep pace with medical inflation which Medicare Part B does would apparently disqualify it.

Anonymous said...

You misunderstand the exigencies of politics today, which result in such things as George Bush telling us Hussein had weapons of mass destruction to start a war in Iraq. The people don't trust the government and the government doesn't trust the people, nor its other branches. What constructive goal do you hope to accomplish by widening the divide? My insurance company cancelled my policy, and I am getting on with life.

nonlocal MD

Paul Levy said...

Where we disagree is that such "are the exigencies of politics today." They are not, in my mind, the exigencies: They are the path that people have chosen.

There have been presidents over the years who have strategically and carefully laid out a path to negotiate with both their opponents and supporters to accomplish great things.

When you as a leader engage in shortcuts to that process, you might have short-term success, but eventually things come home to roost. At that point, your effectiveness as a leader diminishes. Bush and Obama, with all their philosophical differences about government, have that in common.

I'm not suggesting an idealistic and naive approach to government. I'm actually suggesting a more sophisticated and thoughtful approach.

Anonymous said...

Our governments of recent years have reflected the people's increasing divide, thus I doubt we can compare years past to what has been going on recently. My point is that we as the "American people" need to lead our government to learn how to cooperate, or our children are doomed. Pointing fingers and yelling "He lied!", especially well after the fact, does not accomplish this goal IMO.


clsmt said...

"So, he told the truth about a very specific number of plans, but the public cannot be expected to understand the legalistic distinction he made."

The public must be expected to understand this difference. They are the ones voting after all.

If Obama had really been "honest" with people, he would have told them something like "you who are healthy and responsible with great plans either individually or through work are going to have to pay more because right now, there's a whole bunch of people who are parasitizing you by not having coverage or by paying for coverage that is merely a sham. They will be better off under this plan although it won't feel like it to them because they will be buying insurance when they weren't before and you will be paying more because insurers are finally covering things like birth control and not excluding women who are of child bearing age."

No one would have voted for this. Covering more costs more. There will be a great deal of volitility in the near future because of this - two years from now, you may have access to a plan that costs the same or less than the one you have now. The insurers are only guessing at this point as to what their real costs are. I would anticipate that towards the end of next year, many of them will have double digit increases in their profits because of the increase in premiums. I hope people scream and holler about that!

The point of ACA wasn't to give you the plan you want or to make things cheaper. It was to get millions of people covered by insurance. That's happening. In the long run, we all win.

Anonymous said...

Yes, clsmt, it occurred to me today that if the mandated mental health coverage is any good, it may help those families of all these mass shooters get help for them. The stories of their futile efforts are legion. That alone, if it happens, will save hundreds of lives in one year.
And, as a physician who not infrequently was asked to donate my services to a cancer patient without insurance by a compassionate advocate (I always agreed), I hope that won't happen again either. Let's think about the positives, or at the very least constructive ways to tweak the law in the future.

nonlocal MD

Anonymous said...

All this was raised by groups like factcheck.org at the time. They pointed out that the law as written did not match the claims of "keep your old insurance." They pointed out a variety of exaggerations and lies.

You had to look hard to find this kind of information. The Republicans and Democrats were into extreme political posturing with no interest in having an informed debate. They were playing every political trick they could, and using every possible legislative trick available. You probably recall the dying Ted Kennedy holding on to ensure that the Democrats had enough votes in the Senate.

My hope had been that healthcare reform would follow the gay marriage model, with MA trying one approach, NY watching and adjusting, then other states following one by one. That would have been slower but it would have given the laws time to adjust to reality and the country time to shift with much less disruption and harm. Instead of one try to get an incredibly complex system perfect, there could be many variations that learn and adjust to reality.

Bob said...

This is part of the gross incompetence, to put it more mildly than warranted, of the Obama Administration's communications on health. Obama himself is health-illiterate, and the incompetents surrounding him haven't educated him properly. They have mis-communicated and non-communicated for years now, allowing the Republicans to tar the program without credible opposition.

They have defended and not explained; they have not laid out the problems that will have to be faced, so they come as a surprise. People in the middle who have no health problems and are above the income level where they get premium support will suffer, and were always known to be victims. But now it comes as a big public surprise.