Obama Administration in June 2010: 93 Million Americans May Not Be Able To Keep Their Plans

October 31st, 2013

Avik Roy drops the bomb. Turn to page 34,552 of an entry of the June 17, 2010 Federal Register, titled, “Interim Final Rules for Group Health Plans and Health Insurance Coverage Relating to Status as a Grandfathered Health Plan Under the Patient Protection and Affordable Care Act.” This section estimates how many plans will remain grandfathered under the Affordable Care Act:

Estimates are provided above for the percentage of employers that will retain grandfather status in 2011. These estimates are extended through 2013 by assuming that the identical percentage of plan sponsors will relinquish grandfathering in each year. Again, to the extent that the 2008–2009 data reflect plans that are more likely to make frequent changes in cost sharing, this assumption will overestimate the number of plans relinquishing grandfather status in 2012 and 2013. Under this assumption, the Departments’ mid-range estimate is that 66 percent of small employer plans and 45 percent of large employer plans will relinquish their grandfather status by the end of 2013. The low-end estimates are for 49 percent and 34 percent of small and large employer plans, respectively, to have relinquished grandfather status, and the high-end estimates are 80 percent and 64 percent, respectively.

As Avik explains, the Administration predicted that nearly HALF of all health insurance plans would lose grandfather status. How much is this. Avik calculates it at 93 million!

How many people are exposed to these problems? 60 percent of Americans have private-sector health insurance—precisely the number that Jay Carney dismissed. As to the number of people facing cancellations, 51 percent of the employer-based market plus 53.5 percent of the non-group market (the middle of the administration’s range) amounts to 93 million Americans.

Even worse, here are the estimates for the individual market:

Using these turnover estimates, a reasonable range for the percentage of individual policies that would terminate, and therefore relinquish their grandfather status, is 40 percent to 67 percent. These estimates assume that the policies that terminate are replaced by new individual policies, and that these new policies are not, by definition, grandfathered


We should wait for a response from Ezra Klein about how it’s not really 90 million. But then again, watch this video of Ezra from 2008. He basically says it’s necessary for people to lose their policies in order to change our health care system.

There are serious winners and losers of Obamacare. As I wrote in The Forgotten Man of Obamacare:

Maybe our collective empathy for the plight of those helped by the law should reduce our concerns for the middle-class. Perhaps that would have been an important national debate to have had in 2010, or during the 2008 election. But Americans never had the conversation that would sanction such a radical transformation of our society. Arguably, we had the conversation in the early 1990s with HillaryCare, and the American people spoke decisively against it.

Obamacare was sold to the American people with the promise of helping both groups. In addition to promising that the poor and sick would be helped, everyone else was promised that they could keep their doctors. They were promised that health care costs would go down. They were promised that there would be no new taxes (the administration reversed this position as soon as the litigation began to defend Obamacare’s constitutionality). None of these things proved to be true.

Had the full picture of this law been understood back in 2010 — the impact on both the winners and losers — rather than the sugarcoated version rammed through Congress on a straight party-line vote, it is doubtful the law would have ever been passed.