Those lost health plans
President Barack Obama famously claimed that Americans who liked their insurance plans would be able to keep them under health care reform. Well, that’s not completely true, nor is it the only example of the Obama administration failing to prepare the public for the Affordable Care Act’s phase-in. And it was one of the only things Republicans at a House Ways and Means Committee Hearing on Tuesday wanted to talk about.
Some Americans are starting to get ominous-sounding letters about their health care coverage. Insurance provider Florida Blue, for example, is canceling 300,000 bare-bones insurance plans that aren’t up to the Affordable Care Act’s standards. Customers can transition onto better quality — but more expensive — plans. Unsurprisingly, reporters have found some unhappy customers. Conservatives, meanwhile, have charged that this is just another example of why the law is a lemon, forcing people onto plans they don’t want.
But, despite what the president may have said, this news should not have come as a shock, and it is not evidence the law is a failure.
The reform underway is rooted in the notion that there is a certain catalog of health care benefits to which all Americans should have access, and that they should not have to pay outrageous amounts of money to get that coverage. It means to accomplish that goal by mandating that everyone not on government-run programs such as Medicaid pay into the private insurance system, and by setting certain standards on what health care insurance must cover. Plans must include prescription drug, mental health, maternity, preventative care and other basic benefits, and they must take care of at least 60 percent of patients’ health expenses. The vast majority of Americans, most of whom get health insurance from their employers, won’t see much change. But a significant number — a study looking at 2010 figures said half — of customers currently buying insurance on their own don’t have plans of that quality.
Some of their plans won’t be touched, regardless, because the law grandfathers some old plans into the system. Some of the people who must transition onto different benefit packages might actually pay little extra, or even less, than they do now because the law will place new limits on how much insurance companies can mark up plans for the old and the sick and because the government will help a majority of people in the individual market pay for coverage. But there are some people — no one seems to know how many, exactly — who will end up paying more for insurance next year because they make too much to qualify for government subsidies, because they are young, because their previous coverage was shoddy, or, probably, a combination of the above.
Though some people might pay more than they did before, they and many others will also get more. Among other things, they will be less financially vulnerable when they get sick — in some cases dramatically less. Their new plans will also put taxpayers at less risk of having to cover big medical bills when underinsured patients unexpectedly fall very ill. That goes, too, for people who currently decline to buy insurance but who will have to next year.
Reform still might not sound like a great deal to people who are young, feel healthy and don’t want to pay for coverage. Yet having lots of healthy people paying into the new system on its terms will not only limit their financial risk, but also their participation will allow others who have been priced out of the health-insurance market — those with serious pre-existing conditions, for example — to obtain good coverage. They deserve compassion, too.
None of this is an outrage. It’s the predictable result of a defensible policy choice embedded in the reform.