Obama's ACA "Fix" Rests With Insurers, Regulators

Obama's ACA "Fix" Rests With Insurers, Regulators

By Alexis Simendinger - November 14, 2013

President Obama on Thursday turned to the private health insurance industry for a lifeline, and to the mercies of what he hopes will be a forgiving public.

It was an about-face of humbling proportions, the sort rarely seen from Obama, and an acknowledgement that the administration’s bungled implementation of the Affordable Care Act created political problems severe enough to transform insurers -- once the bad guys in the administration’s teleplay -- into potential rescuers.

Obama said consumers who found cancellation notices in their mailboxes telling them their plans don’t comply with the new law could now extend existing coverage next year -- if state regulators and insurance companies agree.

In trying to climb out of quicksand after assuring Americans they could keep health plans they liked, Obama remained vague about the fate of pending measures on Capitol Hill that would amend the health law to permit consumers to keep their canceled plans. The White House is on record opposing a House Republican bill scheduled for a vote Friday, and has been tap-dancing around the impact of a bipartisan Senate measure sponsored by Sen. Mary Landrieu, who faces a difficult re-election next year.

“This fix won't solve every problem for every person, but it's going to help a lot of people,” Obama said in the White House briefing room. “Doing more will require work with Congress. And I've said from the beginning that I'm willing to work with Democrats and Republicans to fix problems as they arise. This is an example of what I was talking about. We can always make this law work better.”

Obama’s policy fix -- the hunt for which had been a stated presidential goal for less than a week -- could give millions of Americans an extra year to keep their voided health plans, if state regulators go along. Next year, those consumers could decide to enroll in policies that provide basic benefits mandated under the law, or they might get another extension of their less-expansive policies into 2015. That possibility, which was raised by Obama aides who called the enforcement fix “a bridge” during a transition, highlighted the political pressures.

A second extension next October of non-ACA-compliant individual plans could serve to quell lingering animus among voters, letting a phase-in for many middle-class, individual policyholders leap over the 2014 midterm elections.

“We are suspending enforcement,” one White House official explained, noting that Obama’s fix applied to those 2013 policyholders who bought insurance on their own and weren’t already shielded by the law’s grandfather provisions. An estimated 5 percent of all Americans are in that category, and facing notifications to buy new coverage by Jan. 1, either directly from insurers or through the new state-based insurance marketplaces. Some had already purchased new coverage before Obama’s announcement.

Neither the president nor his White House advisers could cite commitments from state regulators or private insurers to demonstrate how many Americans might get the option to stick with the plans they have now. Senior White House officials warned that insurers may agree to extend existing plans, but many may do so at higher premiums, if approved by the states.

The American Academy of Actuaries, an influential trade group, didn’t warm to the president’s plan, saying that it “could lead to negative consequences for consumers, health insurers and the federal government.”

Cori Uccello, a senior health fellow for the organization, said in a statement that changing the ACA provisions “could alter the dynamics of the insurance market, creating two parallel markets operating under different rules, thereby threatening the viability of insurance markets operating under the new rules.” This would result in higher premiums going forward. 

It was unclear whether the president’s announcement would be enough to quiet complaints from millions of Americans who objected to the loss of their 2013 coverage, as well as higher premiums for next year’s coverage if they earn too much to qualify for federal tax subsidies.

During a remarkable 52-minute demonstration of crow-eating, buck-stopping for embattled Democratic candidates, and vows to regain Americans’ trust, Obama sought to catch the flak, even as he ducked some of the responsibility.

“That’s on me,” he said of the need to reassure the public about the law, its effectiveness and its future.

But when asked if his governance style was too “insular” -- and how, exactly, he could have been in the dark about the website troubles before Oct. 1 -- Obama pushed back, albeit gently. He denied he governs in a bubble, citing his daily interactions with experts and authorities from all walks of life. He blamed federal procurement requirements for IT troubles experienced throughout the executive branch, not just at the Health and Human Services Department. And he said he “did not have enough awareness” that would prove so crippled.

“I was not informed directly that the website would not be working the way it was supposed to,” he said. “Had I been informed, I wouldn't be going out saying, 'Boy, this is going to be great!’ You know, I'm accused of a lot of things, but I don't think I'm stupid enough to go around saying, ‘This is going to be like shopping on Amazon or Travelocity’ a week before the website opens, if I thought that it wasn't going to work.”

The president acknowledged the political hazards associated with his administration’s health care miscalculations, mistaken assumptions and technical failures. His job approval numbers and the public’s ratings of him as honest and trustworthy, and as a strong and decisive leader have fallen in the last six weeks, according to various polls. And Democratic lawmakers, who had hoped to use the government shutdown and default crisis against Republicans, now find that incumbents in both parties are in jeopardy.

“There is no doubt that our failure to roll out the ACA smoothly has put a burden on Democrats, whether they're running or not, because they stood up and supported this effort through thick and thin,” Obama conceded. “I feel deeply responsible for making it harder for them rather than easier for them to continue to promote the core values that I think led them to support this thing in the first place, which is, in this country, as wealthy as we are, everybody should be able to have the security of affordable health care. And that's why I feel so strongly about fixing it.”

Obama said the mix of the rocky website and the sting of some of the law’s mandates damaged trust in government and in his leadership, raised the stakes for Democrats facing voters next year, and stalled momentum for his remaining second-term priorities.

“I am confident that by the time we look back on this next year, that people are going to say this is working well, and it's helping a lot of people,” Obama said, before flying to Cleveland to try to pump some air under his pending middle-class agenda at an innovative Ohio manufacturing plant.

“My intention in terms of winning back the confidence of the American people is just to work as hard as I can, identify the problems that we've got, make sure that we're fixing them, whether it's a website, whether it is making sure that folks who got these cancellation notices get help. We're just going to keep on chipping away at this until the job is done,” he told reporters.

Alexis Simendinger covers the White House for RealClearPolitics. She can be reached at Follow her on Twitter @ASimendinger.

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