The Washington Post is troubled by President Obama’s “keep your plan” fix, but for the wrong reason.
Insurers who decided to act would try to hold onto their healthiest customers — those who don’t make many claims, if any. But the Obamacare marketplaces need those relatively healthy customers.
The threat of “adverse selection” in health insurance is over-rated and always has been.
The problems with implementation are under-rated and always have been. The Obama Administration has spent 3 years bulldozing the individual market in health insurance. Now, they expect the health insurance companies to rebuild it in 30 days.
The folks who have to implement the new Presidential edict are not pleased. From the state health insurance regulators:
The National Association of Insurance Commissioners (NAIC) suggested Thursday that the plan to allow insurance companies to offer non-compliant health plans into 2014 is not logistically feasible.
From the health insurance companies:
They have warned legislation in both chambers of Congress would provoke an administrative fiasco and could have serious implications for the new marketplace’s risk pool, premium prices and the cost of the law to the federal government.
From a WaPo blog story:
Here’s how Robert Laszewksi, an insurance consultant, put it in a note to clients earlier this morning:
“This means that the insurance companies have 32 days to reprogram their computer systems for policies, rates, and eligibility, send notices to the policyholders via US Mail, send a very complex letter that describes just what the differences are between specific policies and Obamacare compliant plans, ask the consumer for their decision — and give them a reasonable time to make that decision — and then enter those decisions back into their systems without creating massive billing, claim payment, and provider eligibility list mistakes.”
If I were the CEO of a health insurance company, I would engage in civil disobedience. I would design policies that are attractive to consumers, regardless of whether I offered those policies before and regardless of whether they satisfy regulatory mandates. I would then sell those policies to any customers who want them and defy the regulators to come in and take them away. I think in today’s environment, I could get away with that.
With the best will in the world I cannot see how an insurance company can offer a policy that does not comply with the letter of the law – even if the President says it’s OK.
A consumer that signs up for a cheaper insurance plan would have a sort of put option that would allow him to sue the insurer if he finds that he does, in fact, need the extra coverage of Obamacare.
I cannot see a Court finding against such a consumer; after all the law is the law.
This is a terrible mess, and I see no easy way out.
Politically, maybe, but in a court of law, the insurer would be seeking enforcement of an illegal policy. The insured might go to court to obtain ACA compliant coverage on the non-compliant policy. A bit of a concern on how someone concerned with legalities might rule.
Plus, Obama has claimed to have no influence over the IRS, so why should anyone expect the IRS to violate the law and not collect the Obamacare tax on the non-compliant policies? I do not believe the President has the authority to order the IRS to selectively collect taxes.