President Obama’s announcement last week that insurance companies can continue to issue non-compliant plans in 2014, despite the prohibition on such plans under ObamaCare, was an attempt to pass responsibility for millions of cancelled plans onto insurance companies and state insurance commissioners, and take the heat off those who foisted this ill-conceived plan on our nation.
“What we want to do is to be able to say to these folks, you know what, the Affordable Care Act is not going to be the reason why insurers have to cancel your plan,” the president said during remarks last Thursday.
But the Affordable Care Act is precisely the reason insurance companies are canceling plans that do not comply with the law’s benefit requirements. Rather than own up to this intended consequence of ObamaCare, the administration is proposing simply not to enforce that part of the law, and telling state insurance commissioners that they should urge insurers to continue offering non-compliant plans next year.
That might actually be a good thing, if insurers are willing to risk violating federal law. By allowing non-compliant plans to persist through 2014, the Obama administration faces the growing threat of a “death spiral” in the exchanges. If young, healthy individuals can keep their low-cost, low-coverage plans for another year, they won’t buy more expensive coverage on the ObamaCare exchanges. Older and sicker people will constitute the bulk of the participants on the exchanges, forcing insurance companies to drive up premiums.
But here in Texas, the administration’s “un-cancellation” policy won’t prompt the Texas Department of Insurance to do anything one way or another. As a TDI spokesperson told The Washington Post, “Whether a company offers or withdraws a policy is a business decision for that company.”
In other words, TDI is not enforcing ObamaCare in Texas-nor should it. Texas’ individual health insurance market has always been lightly regulated, which is why you could buy catastrophic coverage for as little as about $55 a month prior to ObamaCare. Maybe some carriers in Texas will decide to keep offering low-cost, non-compliant plans in 2014. If they do, it might help hasten the collapse of the exchanges.
But maybe they won’t, since the rules of ObamaCare seem to change every week by administrative decree. If there’s one thing businesses need, it’s certainty-and that’s just what they don’t have with ObamaCare.
If Washington wants a way out of this mess, maybe it should take a hint from TDI and let insurance companies decide what plans to offer or not offer-and trust Americans to decide for themselves what kind of coverage to buy or not to buy.
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