[Reprinted with kind permission of Doug Badger]
Valerie Jarrett last night sent the following tweet: “FACT: Nothing in #Obamacare forces people out of their health plans. No change is required unless insurance companies change existing plans.”
Jarrett’s tweet signals that the White House is now blaming insurers for cancelling coverage for hundreds of thousands – and perhaps millions — of Americans. This is utterly mendacious. The text of Obamacare, as Jarrett suggests, explicitly gives people the right to keep their existing coverage. But in an inexplicable action, the Administration in 2010 issued a regulation that stripped people of that right and made it illegal for many insurers to renew coverage for next year.
The Administration is entirely and solely responsible for this loss of coverage. Congress should intervene.
Section 1251 of PPACA is entitled, “Preservation of Right to Maintain Existing Coverage.” It states:
“Nothing in this Act (or an amendment made by this Act) shall be construed to require that an individual terminate coverage under a group health plan or health insurance coverage in which such individual was enrolled on the date of enactment of this Act.”
If you had an insurance policy on March 23, 2010 (the day that Obamacare was signed into law), and you continued to renew it, then you had the right to keep it even after the exchanges were established. That is the plain meaning of the words. The bill’s supporters repeatedly pointed to this section as delivering on the President’s promise that “if you like what you have, you can keep it.”
But in one of the first of what became many regulatory improvisations, the Administration deprived people of a right that Obamacare had explicitly preserved. They feared that the millions of people who had bought their own coverage really did like it and would prefer it to plans sold through the exchanges. That would keep these people out of the exchange pools, making it harder for insurers that agreed to sell through the exchanges to turn a profit.
Their interim final rule – written on June 17, 2010, less than three months after the President signed the law – provided this rationale for undoing section 1251:
“The statute does not, however, address at what point changes to a group health plan or health insurance coverage in which an individual was enrolled on March 23, 2010 are significant enough to cause the plan or health insurance coverage to cease to be a grandfathered health plan, leaving that question to be addressed by regulatory guidance.”
With that sentence, the Administration granted itself the power to deny Americans their “right to maintain [their] existing coverage.” The statute is not silent on this point; it is definitive. It unambiguously states that if a policy was in effect on March 23, 2010, it could be renewed indefinitely. The Administration simply conjured the idea that routine changes to insurance policies would nullify the right of policyholders to maintain existing coverage, a right that Obamacare guaranteed.
The rule went on to say that if plans, for example, changed their deductibles or cost-sharing requirements after 2010, their enrollees would forfeit their right to renew their coverage for 2014 (45 CFR 147.138(g)).
This regulation, not PPACA and certainly not the insurance companies themselves as Jarrett suggests, required the cancellation notices. This action by the Administration, which not only was not required by the Obamacare statute but is completely inconsistent with its plain text, is why people are being told that they can’t renew their coverage.
Why did the White House do it? As I wrote yesterday, they are desperate to make the new health care exchanges work. To do that, they have to help insurers who agree to sell through the exchanges make a profit. Allowing people who buy their own coverage to stay out of the exchanges would conflict with this agenda. So they wrote a regulation that, in effect, says that people who liked what they had could not keep it, but would instead have to obtain insurance through the exchanges.
Congress should enact a law that nullifies this regulation and restores to millions of Americans a right that the Obamacare statute itself explicitly preserves.
Blaming Insurers: Why Valerie Jarrett is Wrong
October 29, 2013