President Barack Obama's decision to grandfather individual insurance plans that do not comply with the Patient Protection and Affordable Care Act's coverage standards may not even keep wobbly Democrats in line. It certainly won't persuade Republican opponents on Capitol Hill, who remain staunchly opposed to national regulation of the individual insurance market, the new subsidy program and the individual mandate.
Up next: Postponing the individual mandate
In all likelihood, the president's mea culpa news conference last week only marks a turn to the next battlefield in the ongoing war against healthcare reform. Look for a major push by opponents to cancel the individual mandate.
Delivering a smoothly functioning individual insurance market has always depended on getting a high proportion of relatively healthy individuals who do not have employer-sponsored plans to sign up for coverage on the exchanges. The goal remains 7 million in the first year. Only that level of sign-ups will allow coverage for sicker and more costly individuals and families to remain affordable.
But now, the focus has shifted to “keeping what you have.” The political opening came when insurers began sending notices to hundreds of thousands of individual policyholders saying this year's plans couldn't be renewed because they no longer met the minimum coverage standards in the law.
Had a well-functioning insurance exchange been in place, it is likely that a large number of those people would have found comparable or even better coverage at more affordable prices. As the president stated, more than a third of people in the individual market had their policies canceled every year, and most routinely experienced double-digit premium increases.
And even if some people protested, the Republicans had established an ideal playing field for the administration to explain why his campaign pledge and subsequent statements about “keeping what you have” didn't apply to this narrow subset of individual plans. Appreciation for those plans by their relatively healthy beneficiaries is inversely proportional to the extent they get used. In the wake of a government shutdown and the fear-inducing threat of default on the national debt, those realities might have been easily explained.
Or, had the political furor taken place, the president could have done what he did last week—admit the original grandfather clause in the ACA for these plans had been poorly drafted—and moved on. Since individual plans are renewed every year and often undergo dramatic changes in coverage, a well-functioning online exchange would have allowed the insurance industry to demonstrate the availability of comparably priced products.
But the botched rollout of the federal exchange eliminated the possibility of rational discourse. “These are two fumbles in a big game,” the president said. “But the game isn't over.”
No it isn't. The president made no mention of the individual mandate during his news conference. But the demand to postpone it as well is likely to grow over the next few weeks, especially if the enrollment numbers continue to creep up slowly. Even if the administration meets its Nov. 30 goal of having the website fully functional, political opponents of reform will undoubtedly say people, especially the young, don't have enough time to make good choices.
Then there is the equity argument. The administration postponed the penalty on employers that didn't purchase plans for their employees. The administration grandfathered noncompliant plans for individuals who like what they have. Why can't it postpone the penalty on individuals who don't want to buy coverage?
To forestall the next uproar, President Obama might want to channel candidate Obama, who was against the individual mandate before he was for it (it was candidate Hillary Clinton who supported the individual mandate, not the eventual winner). At this point, the botched rollout probably scared away as many people as the individual mandate might have dragged in.
There's probably a better way to hold down 2015 rates than insisting on the mandate, which will fuel political fires throughout the sign-up period. What the administration and reform supporters need now more than anything else is a smoothly functioning federal exchange and a national campaign to encourage people to sign up, neither of which has yet to put in an appearance.
Follow Merrill Goozner on Twitter: @MHgoozner
Send us a letter
Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.