Affordable Care Act regulations have forced health insurers to cancel the policies of an estimated five million Americans. The final number of people who receive cancellation notices could reach seven to 12 million.
These victims of Obamacare are being forced into the new health-insurance exchanges. But the exchanges dont work. The federal exchange is such a disaster that the administration announced a tech surge to get it rightas if the bureaucracy were launching a foreign war.
Despite this, only 106,185 people had selected plans in the exchanges through the end of October. And even this number may be optimistic. These people had not yet paid any premiums, so they could pull out of the plans they selected.
The presidents characteristic waffling isnt helping. On Nov. 14, he threw the entire sign-up campaign into chaos with an announcement that the administration would ignore the rules that forced insurers to cancel certain 2013 policies. A few minutes at the presidential podium overturned three years of regulatory rule-making and business planning. As recently as Oct. 30, President Obama was still browbeating the insurance industry, attacking them for selling bad apple policies.
Now he wants them to roll over and comply with his presidential edict.
Its highly unlikely that policy holders will be able to rescue their existing policies as a result of the presidents announcement.
Americas Health Insurance Plans, the industrys trade association, responded as follows: 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. Premiums have already been set for next year based on an assumption of when consumers will be transitioning to the new marketplace.
The National Association of Insurance Commissioners said, This decision continues different rules for different policies and threatens to undermine the new market, and may lead to higher premiums and market disruptions in 2014 and beyond.
And the American Academy of Actuaries added: Changing the ACA provisions could alter the dynamics of the insurance market, creating two parallel markets operating under different rules, thereby threatening the viability of insurance markets operating under the new rules.
Washington State Insurance Commissioner Mike Kreidler, an enthusiastic Obamacare supporter, re-iterated his commitment to outlaw the older policies.
Until Nov. 14, a majority of the states resisted the President by declining to implement Obamacare exchanges. Now theyre being joined by other states that are resisting the president by insisting on implementing Obamacare.
The old system, whatever its many flaws, had at least one benefit: State insurance laws were written in stone, regulated by insurance commissioners, and enforcedwhen necessaryby judges and juries in state courts.
Today: Who knows exactly what prevails? State insurance laws, the Affordable Care Act, or the presidents press conference command?
The bottom line is that the president has created a sort of Wild West for health insurance, where an increasing number of Americans dont know whether theyll be covered in 2014 or not. These millions were not supposed to be the victims of Obamacare. The law was meant to punish those who choose not to buy health insurance, not those who have taken responsibility for paying their medical costs.
Edie Sundby of San Diego is one of the potential victims: Obamacare requirements forced her health insurer, which already had spent some $1.2 million on her treatment for a rare cancer, to cancel her policy. She, and thousands like her, now see their health being threatened by the very law intended to fix the health-care system.
Alternative reform exists: As John C. Goodman suggests in his recent book, Priceless: Curing the Healthcare Crisis, instead of increasing the complexity and fragmentation of health insurance, the alternative is to give every American a refundable tax credit to purchase the health insurance policy that best suits his or her needsnot that of his employer, his union, or the politicians.
It may be too late to avert a crisis in 2014. But in years to come, politicians have a duty to consider this alternativeand ensure the crisis is never repeated.
|John R. Graham is Senior Fellow at the Independent Institute.|