The Forgotten Men of Obamacare: The Winners and Losers

October 29th, 2013

In my Op-Ed, The Forgotten Men of Obamacare, I note that there are certain winners and losers under Obamacare. The winners are the people patiently signing up in droves on the exchanges. These people have pre-existing conditions, could not afford coverage before, and will benefit from the law. But what about everyone else? The people who, though perhaps not enthused, were generally happy with their plans, and wanted to keep them. Had these people wanted to go onto the markets, they would. But instead, they are being forced there due to the cancellation of their policies, because they do not meet the expanded coverage requirements of Obamacare.

Ezra Klein, in discussing the healthcare trilemma of accountability, comprehensive, and accessibility, agrees that there are winners and losers.

What’s important to understand about this trilemma is that it means, roughly, that every change has winners and losers. Put bluntly, the Affordable Care Act’s changes are raising insurance premiums for some people who did well under the old system and lowering them for many of the people who were locked out or discriminated against.

Klein points out that the subsidies help make the premiums more affordable.

But it’s not all zero sum. The law pumps a trillion dollars of subsidies into the market to help people making less than 400 percent of the poverty line — which is $94,200 for a family of four — afford insurance. So now the actual premiums people are paying exist on a continuum, with some people seeing premiums increases and some people paying literally nothing at all:

Of course, these dollars don’t come out of thin air. They will, eventually, be added to the debt, and we will pay for it sooner or later. There are winners, and there are losers.

So which group is greater? What happens if Obamacare hurts more people than it helps. We won’t be able to quantify this question for some time.

But the early numbers are not looking good. So far 14 million Americans, 5% of the population, have had their policies cancelled. How many of the 14 million people who were supposed to gain coverage in 2014 come from the people whose policies were cancelled? Shouldn’t the correct metric be “not gross enrollment in the exchanges, but the net number of newly insured Americans,” minus of course those who join through the Medicaid expansion (at no cost).

And more troubling, the Administration knew that these people would lose their coverage.

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.”

That means the administration knew that more than 40 to 67 percent of those in the individual market would not be able to keep their plans, even if they liked them.

Yet President Obama, who had promised in 2009, “if you like your health plan, you will be able to keep your health plan,” was still saying in 2012, “If [you] already have health insurance, you will keep your health insurance.”

The White House (shockingly) has already backed off this statement, blaming the insurance companies for canceling the policies.

“Nothing in the Affordable Care Act forces people out of their health plans: The law allows plans that covered people at the time the law was enacted to continue to offer that same coverage to the same enrollees – nothing has changed and that coverage can continue into 2014,” she said.

This is sophistry. The ACA renders the plans people chose to buy ineligible. No insurer will keep an ineligible plan on the books, so they have to cancel it. So now people who wanted cheap plans can no longer have them.

Jay Carney piled on:

“Insurers pulled those plans away from them,” Carney said. “The law [Obamacare] could not order insurers not to cancel that plan.”

Two negatives makes a positive. Obamacare orders insurers to cancel these plans.

For even more confusion, check with the Director of Covered California:

Lee, of Covered California, said he didn’t think the president’s pledge was misleading, though “it was overly broad. The reality of the Affordable Care Act is if you have employer coverage, you keep it. If you have Medicare, you keep it. The individual market is being dramatically reformed and it’s changing for both the uninsured and insured.”

While some people may pay more, they’ll find the added benefits mean its health coverage they can rely on, Lee said.

“Overly broad?” “Dramatically reformed?” This is a lie.

From a hearing today on the Hill, a member of Congress noted that more people have received insurance cancellation notices that have signed up.

The chairman of the Ways and Means Committee, Representative Dave Camp, Republican of Michigan, said that at least 146,000 Michigan residents had recently received notices that their current insurance policies would be canceled because the coverage did not meet requirements of the new health care law.

“In fact,” Mr. Camp said, “based on what little information the administration has disclosed, it turns out that more people have received cancellation notices for their health care plans this month than have enrolled in the exchanges.”

Philip Klein states it plainly:

In September 2009 — the same month Obama made his health care pitch to a special joint session of Congress — a Gallup survey found that 87 percent of Americans with private insurance were satisfied with their medical care.

Obama knew that a lot of people would lose their coverage. Even if there was nothing in the law that explicitly ordered Americans to get rid of their insurance, legislation that made such sweeping changes to the insurance market inevitably was going to create disruption.

Congressional Budget Office report issued on March 20, 2010 (three days before Obama signed the health care bill into law) predicted that 8 million would lose employer or individual market coverage.

But at the time, Obama was more concerned with getting legislation passed than he was in engaging in an honest debate about the tradeoffs involved under his health care program.

Though he knew that his misrepresentation would eventually be exposed, his hope was by the time that happened, Americans would be enjoying all the new benefits from the law and the issue would fly under the radar.