Denis Healey, a former
Too bad no one in the
Critics of the 2010
But that wasn't true then, and it isn't true now. The standards in the law were designed to eliminate policies that either provided too little protection against financial ruin or divided policyholders into narrow risk pools to the detriment of people with greater risks or more expensive medical needs. The goal was to make the market for individual policies function like the one for large groups, where coverage tends to be cheaper and premiums less volatile.
On Monday night, Obama revised his pledge, changing the "period" into an "asterisk." Speaking to a gathering of Affordable Care Act supporters, he talked about the shortcomings in the individual market up to now -- the policies with numerous exclusions hidden in the fine print, the annual cancellations and double-digit premium increases, the frequent denials of coverage based on preexisting conditions.
"Now, if you have or had one of these plans before the Affordable Care Act came into law and you really like that plan, what we said was you could keep it if it hasn't changed since the law was passed. So we wrote into the Affordable Care Act you're grandfathered in on that plan," Obama said. "But if the insurance company changes it, then what we're saying is they've got to change it to a higher standard. They've got to make it better. They've got to improve the quality of the plan that they're selling. That's part of the promise that we made too.
"That's why we went out of our way to make sure that the law allowed for grandfathering, but if we had allowed these old plans to be downgraded or sold to new enrollees once the law had already passed, then we would have broken an even more important promise -- making sure that Americans gain access to healthcare that doesn't leave them one illness away from financial ruin."
Funny, but Obama never mentioned the grandfathered-policy rule when making his "you can keep it" pledge. Nor did insurers work hard to keep the same policies available; instead, as Obama himself noted, they quickly whittled the supply of grandfathered plans by canceling some of them and changing others enough to disqualify them. And besides, even grandfathered policies have to comply with the law's ban on annual and lifetime benefit limits by Jan. 1. That ban rules out many cheaper plans that capped their payouts.
Beyond that, Obama's explanation oversimplifies the point of the standards. Many perfectly good insurance policies are being eliminated because they fall short on one or more of the law's 10 essential benefit requirements. For example, more than 60% of the individual policies sold in 2011 did not include coverage for maternity care. If the policyholder is a man or a woman beyond childbearing age, that coverage gap poses no financial risk whatsoever.
So why eliminate such policies? Because, as The Times' editorial board argued last week, they perpetuate the industry's practice of cherry-picking customers and avoiding risk. The law's insurance reforms are designed to spread risk and costs more broadly across the individual market, as they are in the policies offered by large employers. Those with no reason to worry about pregnancy subsidize those with no fear of
(And just in case anyone's wondering, Denis Healey and I do not share bloodlines.)