It was one of the bedrock sales pitches for the Affordable Care Act: "If you like your health care plan, you will be able to keep your health care plan. Period." President Obama made variations of this pledge to Congress, a leading medical organization and town hall audiences across the country as he sought to reassure Americans that the largest overhaul of the health care system in 50 years would not force them to give up their existing insurance.
So much for guarantees. More than three years after Obamacare became law, little is working as planned. The federal website where people can shop for private coverage and register for subsidies has been a glitch-prone disaster since its Oct. 1 launch. Health and Human Services Secretary Kathleen Sebelius, the official in charge of its rollout, apologized before Congress on Oct. 30 for what she called "this debacle." As for the President's claim about keeping your old insurance under Obamacare--well, there is some fine print.
This fall, millions of Americans who buy health coverage independently are opening their mailboxes to find letters canceling their insurance policies because the plans don't comply with the health law's new coverage rules. While the cancellations may be a shock to those who took Obama's promise at face value, they are also exactly what the law intended.
The reason is that Obama didn't just want to make health-insurance plans more widely available. He wanted to make them better too. Many policies previously bought and sold in the individual insurance market lacked coverage for basic medical services, including hospitalization and maternity care. Some limited how much insurers would pay out every year, leaving people one illness away from financial ruin. (Three-quarters of Americans who declared bankruptcy due to medical bills in 2007 had health insurance.) Other plans wouldn't accept anyone with a pre-existing condition. But about 15 million Americans without government- or employer-sponsored insurance bought those policies anyway, partly on the belief that some coverage is better than none at all.
Obamacare effectively eliminated those skimpy plans, forcing insurers to cover many more essential services, without caps on costs or disqualifications for existing ailments. To deal with the increased cost of better coverage, the new law provides federal subsidies to help offset higher prices.
So why did Obama tell the country that his new law would never force anyone to change their health plan? His advisers point to a clear grandfather clause that said any health insurance available at the time of the law's passage would be exempted from the new rules, as long as insurers didn't alter the terms of their coverage. As recently as Oct. 28, Obama adviser Valerie Jarrett was still trumpeting this fact. "No change is required unless insurance companies change existing plans," she said on Twitter.
The problem, of course, is that insurance companies change their policies all the time. And millions were kicked off their plans every year even before the Affordable Care Act. Obama Administration officials knew that normal turnover in the individual market would mean that most old plans would end under the new law. But they never made this clear at the time, a conspicuous failure for an Administration that promised transparency and candor would be paramount.