President Obama repeatedly assured Americans that after the
Affordable Care Act became law, people who liked their health insurance
would be able to keep it. But millions of Americans are getting or are
about to get cancellation letters for their health insurance under
Obamacare, say experts, and the Obama administration has known that for
at least three years.
Four sources deeply involved in the Affordable Care Act tell
NBC NEWS that 50 to 75 percent of the 14 million consumers who buy their
insurance individually can expect to receive a “cancellation” letter or
the equivalent over the next year because their existing policies don’t
meet the standards mandated by the new health care law. One expert
predicts that number could reach as high as 80 percent. And all say that
many of those forced to buy pricier new policies will experience
“sticker shock.”
None of this should come as a shock to the Obama administration. The
law states that policies in effect as of March 23, 2010 will be
“grandfathered,” meaning consumers can keep those policies even though
they don’t meet requirements of the new health care law. But the
Department of Health and Human Services then wrote regulations that
narrowed that provision, by saying that if any part of a policy was
significantly changed since that date -- the deductible, co-pay, or
benefits, for example -- the policy would not be grandfathered.
Buried
in Obamacare regulations from July 2010 is an estimate that because of
normal turnover in the individual insurance market, “40 to 67 percent”
of customers will not be able to keep their policy. And because many
policies will have been changed since the key date, “the percentage of
individual market policies losing grandfather status in a given year
exceeds the 40 to 67 percent range.”
That means the
administration knew that more than 40 to 67 percent of those in the
individual market would not be able to keep their plans, even if they
liked them.
Yet President Obama, who had promised in 2009, “if
you like your health plan, you will be able to keep your health plan,”
was still saying in 2012, “If [you] already have health insurance, you
will keep your health insurance.”
“This says that when they made the promise, they knew half the people
in this market outright couldn’t keep what they had and then they wrote
the rules so that others couldn’t make it either,” said Robert
Laszewski, of Health Policy and Strategy Associates, a consultant who
works for health industry firms. Laszewski estimates that 80 percent of
those in the individual market will not be able to keep their current
policies and will have to buy insurance that meets requirements of the
new law, which generally requires a richer package of benefits than most
policies today.
The White House does not dispute that many in
the individual market will lose their current coverage, but argues they
will be offered better coverage in its place, and that many will get
tax subsidies that would offset any increased costs. “One of the main
goals of the law is to ensure that people have insurance they can rely
on – that doesn’t discriminate or charge more based on pre-existing
conditions. The consumers who are getting notices are in plans that do
not provide all these protections – but in the vast majority of cases,
those same insurers will automatically shift their enrollees to a plan
that provides new consumer protections and, for nearly half of
individual market enrollees, discounts through premium tax credits,”
said White House spokesperson Jessica Santillo
