Yesterday, I asked if the President was magic. On his political abilities to usurp legislative powers the question is still an open one. He’s not in jail yet. That means his magic is working.
But on the economic and political attempt to deal with people upset over losing their insurance, Obama did nothing good for anyone. Saying that insurance companies “can” or “may” offer the old plans for one more year is to throw those companies into an area without time to develop a business model. The business environment was already made risky and unpredictable by the Affordable Care Act. This would just make it worse:
“Changing the rules after health plans have already met the requirements of the law could destabilize the market and result in higher premiums for consumers,” Karen Ignagni, president and CEO of America’s Health Insurance Plans, the industry’s trade group, said in a Thursday.
State insurance regulators are of a similar mind.
“This decision continues different rules for different policies and threatens to undermine the new market,” Louisiana Insurance Commissioner Jim Donelon, who is also president of the National Association of Insurance Commissioners, said in a statement.
“In addition, it is unclear how, as a practical matter, the changes proposed today by the president can be put into effect,” the statement continued. “In many states, cancellation notices have already gone out to policyholders and rates and plans have already been approved for 2014. Changing the rules through administrative action at this late date creates uncertainty and may not address the underlying issues.”…
Letting people keep existing plans means they won’t be part of the new risk pool that was designed to make coverage under the Affordable Care Act more cost-effective…
But the real worry remains that in order to make the entire effort a success, there has to be a balance of sick and healthy people in the health plans in the exchanges. And the more people who aren’t in the exchanges, the harder that will be — which makes this a case where politics is fighting policy.
The audio of the story goes into more detail. “Uncancelling” the plans is logistically unfeasible, asking companies to reverse in days what took them months to do. It also adds to the incredible economic risk that Obamacare already imposes. Many of the cancelled plans were high-deductible plans that only helped with real medical emergencies. By definition, people who get sick more often will be more likely to try to get Obamacare coverage while those who rarely go to the doctor will want to get their cheap insurance back. So, once again, we have the problem of even fewer healthy people allowing themselves to be robbed for the sake of sick people.
Washington State’s Insurance Commissioner has already ruled out allowing the state’s insurance industry to offer these plans. Politico.com reports that Obama and the insurance companies are going through “a messy breakup.”
But the most amazing story is not really being considered. Yesterday, Obama promised to prevent a potential Democratic meltdown by taking action. He held a special meeting and announced… nothing. His “fix” had no chance of working.
He had to know that. Or his handlers did. So what was the point?