Many conservatives are exulting over an exchange between Major Garrett of CBS and President Obama during today’s press conference. Garrett called Obama on his “if you like your health care plan, you can keep it” lie, and asked whether the American people aren’t owed greater accountability. He also asked about Obama’s apparent ignorance of the problems with the Obamacare web site. Obama’s answers were weak, to say the least. But what I want to focus on here is the fact that that Obama answered the question about “if you like your health care plan, you can keep it” by repeating the lie that the issue of policy cancellations relates only to the individual insurance market, which serves around 5% of the population. Obama makes this claim very clearly; there is no ambiguity in his answer.
Yet Garrett’s question referred specifically to the Obama administration’s acknowledgement in the Federal Register that millions would lose their current coverage within the first year of Obamacare because their policies would not be grandfathered under the administration’s regulations. This chart comes from the Federal Register of June 17, 2010; Republicans should put it on billboards everywhere. It clearly shows that the administration intended for its own regulations to result in 51% of all “employer plans” being cancelled. That is the middle estimate, with 69% of all employer-sponsored plans the high estimate:
The regulations do have a couple of paragraphs on individual plans; they say a majority of them will be cancelled, too, under the administration’s regulations. But the overwhelming emphasis is on the employer-sponsored plans that serve most Americans. The only reason why tens of millions of Americans have not yet lost their employer-sponsored plans is that the administration pushed back the application of Obamacare to employers for one year.
With that background in mind, watch this exchange. Barack Obama lies shamelessly:
Unfortunately, Garrett allowed Obama to get away with the 5% lie, even though he apparently is aware of the June 17 Federal Register. I’m not sure why that happened.
So now the administration will allow non-conforming individual plans (and, as noted below, small business plans) to be sold for one more year. This is essentially what was done some months ago with respect to employer-sponsored plans, and it is something that Republicans have been urging for a while: why, they ask, is the administration treating individuals worse than companies? But the administration’s move obviously doesn’t solve the problem. At most, it pushes the cancellations back by one year (although for many, it is likely already too late). Presumably the Democrats are just trying to quiet the furor over Obamacare until they get past the next election.
Is Obama’s action illegal, as many critics are charging? It certainly could have been done legally. The Obamacare statute just says that pre-existing plans will be grandfathered, and that the details of the grandfathering will be left to regulation. It is the regulations promulgated by Obama’s Departments of the Treasury, Health and Human Services and Labor that have caused the cancelled plans to be illegal. Those same departments presumably could revise their regulations to give individuals another year of grandfathered status regardless of the policy’s terms.
But that isn’t quite the way Obama did it. Instead, HHS announced a “transitional policy” in a letter to state insurance commissioners. The letter makes clear something that I haven’t seen in news reports, i.e., the change relates not just to individual policies but to small business group plans as well. The letter then says, “State agencies responsible for enforcing the specified market reforms are encouraged to adopt the same transitional policy with respect to this coverage.” I have no idea why this remains discretionary with the state insurance commissions. It isn’t the states whose regulations banned non-conforming individual plans, it is the federal regulations promulgated by the Obama administration that did so.
In any event, I doubt that the administration paid much attention to legal niceties. This action appears to be the result of sheer panic on the part of Democrats who are up for re-election next year and who threatened to take matters into their own hands if the administration didn’t take them off the hook.
UPDATE: Having re-read the letter to state insurance commissioners, I am not confident that this last discussion is correct. It will take more thought to figure out exactly what the administration is up to, and whether it is legal.