Obama under fire as Americans lose prior health plans

Reuters

* Obama pledge on existing plans called misleading

* Clamor over cancelled plans joins website problems

* Older health plans often fail to meet new standards

* Health Secretary Sebelius to testify Wednesday

* Obama to promote healthcare law at Romneycare site

By Roberta Rampton

WASHINGTON, Oct 29 (Reuters) - President Barack Obama isfacing fresh attacks for his pledge that Americans who liketheir current healthcare plans can keep them under Obamacare, asreports pile up of thousands of Americans facing cancellationnotices.

Accusations that the pledge was misleading are potentially adeeper threat to Obama than the website glitches that haveplagued Healthcare.gov since its Oct. 1 launch and allowed onlya trickle of people to sign up on new federal insuranceexchanges.

Obama has downplayed the problems with the website, sayingit's like a cash register not working, and has stressed that theunderlying product of the 2010 Affordable Care Act is "actuallyreally good".

But critics of Obamacare have seized on the hundreds ofthousands of Americans due to lose their current plans becausethey fail to include essential benefits required by the law, andare asking whether Obama misrepresented the law.

"Can you understand the level of frustration and concernabout what many Americans perceive to be a false claim from theadministration?" asked Representative Peter Roskam, an IllinoisRepublican, during a House oversight hearing on Tuesdayfeaturing Marilyn Tavenner, a top U.S. official overseeing thelaw's rollout.

Tavenner, the administrator of the U.S. Centers for Medicareand Medicaid Services (CMS), apologized for problems withHealthcare.gov, but quickly came under fire about the Americanslosing their current coverage plans.

Health and Human Services Secretary Kathleen Sebelius, whohas faced Republican calls for her resignation, is scheduled totestify before another House panel on Wednesday and will likelyconfront similar questions about whether the administrationmisled the public about the benefits of Obamacare.

Obama is heading to Boston, Massachusetts, on Wednesday topromote Obamacare at the same spot where Mitt Romney signedMassachusetts' own healthcare law in 2006 as governor. Obama isexpected to highlight how Massachusetts' health overhaul, whichrelied on similar insurance exchanges, also got off to a slowstart.

The people at risk for policy cancellations are a portion ofthose in the pool of 15 million consumers, often self-employed,who do not get coverage through their employers or thegovernment, and have individual policies.

The dropped policies are also reviving debate on a corepremise of the healthcare law - that all Americans should haveadequate coverage so that the costs of healthcare are spreadacross the population.

Democrats are also saying Obama could have phrased his planretention pledge more accurately. "I think preciseness wouldhave been better," House Minority Whip Steny Hoyer, thesecond-ranking Democrat in the House, told reporters.

Obama in 2009, while building support for the bill thatwould become the Affordable Care Act, or Obamacare, repeatedlysaid that Americans who liked their doctors or currenthealthcare plans could keep them. He reiterated the promise asrecently as March.

'ESSENTIAL' BENEFITS

Now that the law is fully coming into effect, Americans arereceiving notifications from their insurers that their currentplans cannot continue because they do not cover certain"essential" benefits such as preventive care and mental healthservices as required by the law.

The idea was to phase out bare-bones plans that do not covercatastrophic events, sometimes to the surprise of the consumer,and also have the effect of increasing costs across thehealthcare system.

When asked by a reporter on Tuesday whether Obama misled thepublic, White House spokesman Jay Carney redirected theconversation to state that it was not fair for taxpayers toabsorb costs of the uninsured or under-insured.

"There was a debate about this and I'm sure there willcontinue to be a debate that a fundamental premise of theAffordable Care Act is that there ought to be minimum standardsfor insurance coverage for everybody," Carney said.

But some Americans are reporting sticker shock about the newplans their insurers are offering.

Kevin DeLashmutt, 53, who is self-employed in real estate inSeattle, Washington, said that over the summer he received aletter from his insurance company saying the plan he now has isno longer available.

The cheapest plan he could buy would cost $411, about twicehis current premium, while the plan most like the one he haswould cost about 150 percent more - $542.59.

"You used to be able to choose what to get based on what youneed and what you can afford, including a high deductible,"DeLashmutt said. "Let me manage my own risk. Those people inWashington, D.C., shouldn't get to make that decision for me."

MULTIPLE HEADACHES

Besides the rocky Obamacare rollout, Obama is facingprotests from allies, including German Chancellor Angela Merkel,after it was revealed that the United States for years has spiedon foreign heads of state.

The issues are distracting him from other policy goals,including comprehensive immigration reform.

It is unclear exactly how many Americans may lose theircurrent coverage and whether they truly will be forced into moreexpensive plans.

The law does protect plans that were created before theMarch 2010 law and have not changed since then, but it is commonindustry practice for insurers to tweak plans year to year,leading to a flood of cancellations.

These people can either seek new "off exchange" policiesfrom insurers, or try to find cheaper plans through theexchanges that come with a federal tax subsidy if their incomeis low enough.

If the glitches in the online marketplaces fail to beresolved, the government might have to reinforce low-techalternatives such as call centers and paper applications, oneexpert said.

"If they can't enroll before the end of this year ... it's aserious burden on those people," said Joel Cantor, a publicpolicy professor at Rutgers University who advises New Jersey onissues with the healthcare law.

Republicans have been able to harness the frustration toenergize their latest attack on Obamacare.

"The problems don't stop at the technical failures of awebsite," said Representative Sam Johnson, a Republican fromTexas, at the oversight hearing on Tuesday. "The real problemstems from the colossal failure to deliver what this lawpromised the American people."

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