Obama offers to let insurers extend existing policies

WASHINGTON – President Barack Obama reversed course Thursday and offered to let insurance companies sell existing plans even if they don’t meet the minimum standards set by his health care law.

But Obama’s attempt to make good on his promise that people could keep their insurance plans if they liked them faces strong opposition from insurance companies, which warn that rates might rise sharply, and it risks undermining the basic premise of his law, which requires quality, affordable insurance.

“We fumbled the rollout on this health care law,” Obama said in an hourlong news conference Thursday at the White House. “We should have done a better job getting that right on Day One, not on Day 28 or on Day 40.”

The president took responsibility for the many problems that have bedeviled his signature domestic achievement, including an error-filled website, and said he would restore confidence in him by fixing this month and making good on his promise to allow Americans to keep their current health care plans. “We’re just gonna keep on chipping away at this,” he said.

The debacle threatens to swamp Obama’s entire second-term agenda. Polls released this week show the president’s job-approval rating at a historic low and a majority of voters saying, for the first time, that he isn’t trustworthy.

“A White House interested in stabilizing this presidency would want to leave no stone unturned in the effort to deal with both those problems,” said William Galston, a former policy adviser to President Bill Clinton and a senior fellow at the Brookings Institution, a center-left policy research center.

On Thursday, Obama announced that he would allow – but not require – insurance companies to extend existing policies for a year as long as they notified customers that their benefits might be diminished with their current plans and that alternative policies might be available to them.

Insurance companies already have devised plans for next year, received the necessary approval from states and begun to sell policies. They aren’t required to continue to offer their existing policies and state insurance commissioners aren’t required to approve those 2013 plans.

“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,” said Karen Ignagni, president and chief executive of America’s Health Insurance Plans, the industry trade group.

Washington state’s insurance commissioner, Mike Kreidler, announced Thursday that he will not allow insurers to extend their policies, saying Washington’s state-based exchange was “up and running and successfully enrolling thousands of consumers.”

California Insurance Commissioner Dave Jones said he would allow more than 1 million residents with terminating insurance plans to keep them.

Companies based their rates for 2014 on certain assumptions, including that consumers who bought plans after 2010 or had their previous plans substantially change wouldn’t be able to keep them. If more customers are allowed to keep their plans, insurance companies probably will have to raise premiums and offer fewer choices.

“The point of the law was to provide health care insurance that was affordable and comprehensive and that protected people from catastrophic, out-of-pocket costs, so going back and allowing people to keep plans that are substandard seems not to fit the goal of the law,” said Sara Collins, vice president for health care coverage and access at the Commonwealth Fund, a private foundation that promotes access to health care and has supported the Affordable Care Act.

The White House says it will try to keep prices down through an existing program that could provide companies financial assistance. But Obama, who was limited in what he could do without approval from an often unfriendly, inactive Congress, acknowledged that his administrative fix might not solve the problem and that lawmakers may still have to act.

Nicholas Bagley, a health policy expert and assistant law professor at the University of Michigan, said Obama’s fix raised more questions than answers, from the effect on premiums to the ability of insurance commissioners to swiftly approve previously canceled plans. And, he said, it remains to be seen whether the effort is legal.

“The administration hasn’t offered a legal justification, so it’s difficult to deliver a thumbs up or thumbs down,” he said. “There’s at least a big question mark whether the president can do this.”


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