President Obama’s now-discredited assertion that “if you like your policy, you can keep it” has overshadowed another bogus promise: that his health care reform law would stop health insurers from canceling policies.
The difference between the two failed promises is that the first one was meant to reassure Americans who liked their health coverage that nothing in Obamacare would force them to lose it.
The second failed promise was an anti-health insurer ruse meant to fix something he thought was a huge problem: health insurers canceling policies. Obama wanted to assure you that if your policy was coming to the end of its term and you wanted to keep it the health insurer couldn’t cancel it. Insurers would be required to renew the policy, a provision known as “guaranteed renewability.”
The irony is more health insurance policies have been canceled under Obamacare than ever before.
In September 2009, six months before what we now call Obamacare was rammed through Congress, Obama addressed a joint session of Congress in an effort to revive his faltering health reform effort. That effort had taken a beating during the August congressional recess, as thousands of Americans showed up at rallies and congressional townhall meetings across the country to express their opposition to a government takeover of the health care system.
In the speech Obama highlighted eight consumer protections that his law would include. The last item on the list: guaranteed renewability.
“Insurance companies will be required to renew any policy as long as the policyholder pays their premium in full. Insurance companies won’t be allowed to refuse renewal because someone became sick.”
In General — Except as provided in this section, a health insurance issuer that provides individual health insurance coverage to an individual shall renew or continue in force such coverage at the option of the individual.
And of the small and large group market, HIPAA says:
In General — Except as provided in this section, if a health insurance issuer offers health insurance coverage in the small or large group market in connection with a group health plan, the issuer must renew or continue in force such coverage at the option of the plan sponsor of the plan.
Of course, an insurer can cancel a policy for non-payment of premiums or fraud. And occasionally an insurer will cancel its whole block of business and stop selling in state.
But guaranteed renewability had been federal law for more than a decade prior to the passage of Obamacare.
However, Obamacare imposed new rules about what must be included in a policy, and many (most?) existing policies won’t qualify—meaning they would have to be canceled.
So while trying to stop health insurers from canceling policies that couldn’t be canceled anyway, Obamacare initiated widespread policy cancellations.
Obamacare defenders and the media are pushing the narrative that there aren’t nearly as many cancellations this year as there were last year. Well, duh!
Last fall Obama unilaterally—and I’d argue unconstitutionally—postponed the deadline to have Obamacare-qualified coverage in the small-group and individual markets for one year, and in March he extended individual policies for two years. But only if the states wanted to extend the deadline. About 38 states decided to do so.
But, those states may take a one-year extension, while others are choosing longer periods. In addition, a health insurer in a state may choose to go with the one-year extension, even if the state allows a longer time period. For example, Texas is allowing policyholders to keep their non-qualified policies longer, but Texas Blue Cross Blue Shield has decided to cancel its non-qualified policies this year.
The result is that there will be many more cancellations, but the notices will emerge in drips and drabs and likely won’t get as many headlines as the first round received.
But this whole boondoggle underscores—as if the public needed more proof—that the president and his enablers decided to remake one-sixth of the U.S. economy without having a clue as to what they were doing.