Health plan cancellations create White House's next set of challenges

Oct 30 2013

News coverage is focusing on the notion that a large percentage of people who currently have individual health coverage are receiving cancellation notices because their plans don't meet the standards created by the health law. Many of these people, according to reports, will face "sticker shock" with their new insurance. A critical emerging question is whether the Obama administration expected this scenario.

NBC News: Obama Administration Knew Millions Could Not Keep Their Health Insurance
President Obama repeatedly assured Americans that after the Affordable Care Act became law, people who liked their health insurance would be able to keep it. But millions of Americans are getting or are about to get cancellation letters for their health insurance under Obamacare, say experts, and the Obama administration has known that for at least three years. Four sources deeply involved in the Affordable Care Act tell NBC News that 50 to 75 percent of the 14 million consumers who buy their insurance individually can expect to receive a "cancellation" letter or the equivalent over the next year because their existing policies don't meet the standards mandated by the new health care law. One expert predicts that number could reach as high as 80 percent. And all say that many of those forced to buy pricier new policies will experience "sticker shock" (Lisa Myers and Hannah Rappleye, 10/29).

Bloomberg: Health Policies Canceled In Latest Hurdle For Obamacare
The rollout of Obamacare is leading to the cancellation of hundreds of thousands of health insurance plans nationwide, contradicting President Barack Obama's repeated pledge that people who like their coverage can keep it. The cancellation notices started to arrive in recent weeks, compounding the political headaches for the White House from the troubled start of its health insurance exchange, the federal website created to give millions of people access to new plans by Jan. 1 (Bloomberg, 10/29).

The Hill: Report: Millions Will Lose Health Plans As Obamacare Takes Hold
More than 7 million people will lose their healthcare coverage as a result of Obamacare's new standards and normal turnover in the insurance market, according to a new report from NBC News. Sources told the network that 50 to 75 percent of people who buy health plans individually will receive a cancellation letter in the next year (Sink and Viebeck, 10/28).

USA Today: Report: W.H. Knew Plans Would Be Cancelled Under ACA
Millions of Americans are getting their health insurance cancelled under the Affordable Care Act and the Obama administration has known for about three years that this would happen, NBC News is reporting. Between half and three quarters of 14 million consumers who buy health insurance individually will receive a cancellation letter or its equivalent in the next year because their current policies don't meet the standards laid out by the new law, the news organization reports (Eversley, 10/29).

Politico: White House Rejects NBC Obamacare Report
The Obama administration is strongly pushing back Monday night on an NBC News report that the White House has known for years that millions of consumers would lose their insurance under Obamacare. "NBC 'scoop' cites 'normal turnover in the indiv insurance market'. That's a) not new b) not caused by #ACA c) the problem #ACA will solve," White House principal deputy press secretary Josh Earnest said in a tweet (Haberkorn, 10/28).

CBS News: Policy Cancellations, Higher Premiums Add To Frustration Over Obamacare
For many, their introduction to the Affordable Care Act has been negative: a broken website, and now cancellation notices from insurance companies followed by sticker shock over higher prices for the new plans. It's directly at odds with repeated assurances from the president, who has said "if you like your insurance plan, you will keep it. No one will be able to take that away from you." But people across the country are finding out they're losing their existing insurance plans under Obamacare because requirements in the law, such as prenatal and prescription drug coverage, mean their old plans aren't comprehensive enough (10/28).

The Washington Post: Carney Admits Some Americans Will Lose Existing Plans Under Health-Care Law
Back in 2009, President Obama assured Americans that even under the health-care law he was pressing Congress to adopt, nothing in their insurance would change if they were satisfied with their current plan. On Monday, White House press secretary Jay Carney acknowledged that some consumers would lose their "substandard plans" and have to pay higher premiums because of the new health-care law (Eilperin, 10/28).

The Fiscal Times: Obama Breaks Promise As Many Lose Health Coverage
Over the weekend, Florida Blue's chief executive, Patrick J. Geraghty, defended his company's action, noting that people being dropped from coverage will be able to enroll in a better plan under Obamacare – and that in many cases they'll qualify for a federal tax subsidy that will bring their costs down further. "We're not cutting people – we're transitioning these people," Geraghty told David Gregory, host of NBC's "Meet the Press." But what about Obama's oft-stated pledge: "If you like your insurance plan, you will keep it. No one will be able to take that away from you"? That seemed a bedrock promise to Americans as the president sought to counter stiff Republican opposition to his health reform measure (Pianin, 10/28).

Related KHN coverage: Thousands Of Consumers Get Insurance Cancellation Notices Due To Health Law Changes (Gorman and Appleby, 10/21).

The Hill: GOP Floats 'Keep Your Health Plan' Bill
A key Republican lawmaker is floating a bill that would allow some consumers to retain healthcare plans that do not meet new coverage standards under ObamaCare. House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) will introduce legislation that expands the Affordable Care Act's "grandfather" clause to include plans sold on the individual market in January 2013 (Viebeck, 10/28).

In addition, news outlets are offering more localized takes on this develoment -

The Associated Press: Many Insured SC Residents Must Buy New Health Plan
Nearly a month into the health care rollout, at least one group tasked with helping South Carolina's uninsured sign up for coverage in 2014 hasn't been able to assist anyone through the problem-riddled federal website. However, several thousand residents have sought Medicaid coverage through the state's new online application (Adcox, 10/28).

The Associated Press: Middle Class Family Braces For Higher Premiums
As many as nine in 10 Texans buying health insurance on the new federally run exchange will get a break on costs, according to federal health officials. Steve and Maegan Wolf won't be among them. The Wolfs, who live in an upscale area outside Austin, make too much money to qualify for tax credits that will help other people afford coverage. That leaves them wondering how much they'll wind up paying (Johnson, 10/28).