If Obama Keeps His Promise, Premiums Could Go Sky High

The Fiscal Times

Republicans and Democrats agree on at least one thing: Obama should keep his promise and let people keep their insurance if they like it. That requires a major fix to the Affordable Care Act, which has forced some 4.2 million Americans off their insurance policies—so far. That's 3,855 percent greater than those who have signed up for health insurance under the new exchanges.

The outrage over Obama’s broken promise has prompted Democrats and Republicans to offer bills that reinstate peoples’ cancelled insurance—at least for one year. The GOP bill goes further and allows bare-bones insurance plans to be offered in the future, effectively undercutting the core mandate of Obamacare. The President’s proposal tosses the ball back to insurers—a plan that his own party says has no teeth.

That’s not the only hitch.

America’s Health Insurance Plans (AHIP) President and CEO Karen Ignagni said the new rule would create chaos. “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,” she told The Hill.

Related: 4 Obamacare Questions That Still Need to Be Answered

She told CNN’s Wolf Blitzer that any change in rules at this point would be like changing the game in the 9th inning.

The District of Columbia’s health insurance commissioner William White said in a statement that the move “undercuts the purpose of DC’s health exchange.” Similarly, Washington State’s health commissioner Mike Kreidler said he doesn’t “believe the proposal is a good deal” and said the state would reject the president’s rule.

The Senate Bill- Legislation introduced by Sen. Mary Landrieu (D-LA), would require insurers to continue offering insurance plans that existed this year, even if it means reinstating plans that were canceled because they didn’t meet Obamacare requirements.

The bill would only include policies purchased before Dec. 31, 2013. It would also require insurers to annually provide policyholders with information reminding them that their current plans do not meet the new minimum coverage standards as well as information on how they can find better value coverage on the exchanges.

Similar to the president’s plan, insurers say this bill is problematic because it’s already too late to retract the cancellations that have gone out. Others caution the bill would cause premiums to rise, since healthy people would be able to stay on the old plans, denying to the exchanges the people needed to balance out the costs to cover sick Americans.

Related: Obamacare’s October Scoreboard: 106,185 Signups

The House bill.  A rival GOP bill, scheduled to be voted on Friday, sponsored by Rep. Fred Upton (R-MI) would allow insurance companies to indefinitely continue to offer the types of policies they recently canceled. Unlike the Senate bill, this measure would allow plans to be available to new enrollees as well as to current ones. The White House says the measure severely undercuts new coverage standards required under the new law. White House Press Secretary Jay Carney likened it to “throwing the baby out with the bathwater.”

The measure could also raise the price of marketplace premiums for coverage in 2015 and beyond, according to a recent analysis by the liberal Center on Budget and Policy Priorities, since it would encourage healthier people to remain in individual market plans outside the new insurance exchanges. Consequently, those people who enroll in Obamacare-style plans would be sicker and older, on average, than under current law. 

“The higher premiums would, in turn, threaten the long-term viability of the marketplaces, potentially placing coverage at risk for millions of uninsured people who stand to gain coverage under the Affordable Care Act (ACA),” according to the CBPP analysis.

On MSNBC’s Morning Joe Thursday, economic news analyst Steve Rattner reminded everyone that Obamacare was a complicated plan with many moving parts. He said if you one string you risk unraveling the entire thing.

Follow Brianna Ehley on Twitter @BriannaEhley

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