Obama announced Thursday that insurance companies could continue to sell formerly cancelled insurance policies for one more year, providing political cover for red-state Democrats midterm elections in 2014 and thereby punting the blame for policy cancelations to the insurance companies.
But insurance companies are saying not so fast to the president’s politically convenient fix.
“Premiums have already been set for next year based on an assumption of when consumers will be transitioning to the new marketplace,” America’s Health Insurance Plans’ President and CEO Karen Ignagni said in a statement Thursday. “If now fewer younger and healthier people choose to purchase coverage in the exchange, premiums will increase and there will be fewer choices for consumers. Additional steps must be taken to stabilize the marketplace and mitigate the adverse impact on consumers.”
Millions of Americans insured in the individual health insurance market received cancellations notices from their insurance companies because their existing plans did not make the regulatory cut under Obamacare. Obama’s new plan will not require that insurance companies nix these policies in the immediate year, as originally written in the law.
Many of these policies had things like lifetime limits and denied insurance for pre-existing conditions. With these conditions illegal under Obamacare, many insurers cancelled these policies with the policy alternatives being much more expensive. Obama’s swift order to allow insurance companies to continue providing individual insurance policies that did not get grandfathered in does nothing to account for the increase in cost of these policies.
“The President’s plan would just shift political blame from Obamacare — where it belongs — to insurance companies, who Obama could paint as the bad guys for cancelling policies, despite the fact that his own law is causing the cancellations,” Rare wrote earlier.