November 01, 2013
Glenn Kessler, the Washington Post’s fact checker, gave President Obama four Pinocchios for telling people that under the Affordable Care Act (ACA) they would be able to keep their insurance plan, if they liked it. Kessler points out that many plans are being terminated because they do not comply with the minimum standards laid out by the ACA. The people on these plans are not able to keep their insurance.
Kessler notes that the plans in existence as of the time the ACA was passed would be grand-fathered, which would mean that the plans in effect at the time that President Obama was pushing the bill could still be offered even if they did not meet all the standards laid out in the ACA. The plans being terminated because they don’t meet the minimal standards were all plans that insurers introduced after the passage of the ACA, knowing that they would not meet the standards that would be put into law in 2014.
However Kessler points out that the ACA sharply restricts the ability of insurers to alter the grandfathered plans and still maintain their status. For example, they can only raise their premiums or deductibles by a small amount above the rate of medical inflation.
Kessler interprets this as a narrow restriction that would cause many plans to lose their grandfathered status. However, the price increases charged by insurers are not events outside of the control of insurers. If an insurer offers a plan which has many committed buyers, then presumably it would be able to structure its changes in ways that are consistent with the ACA. If it decides not to do so, this is presumably because the insurer has decided that it is not interested in continuing to offer the plan.
Whether such a decision can be blamed on the ACA and interpreted as a violation of President Obama’s pledge depends on how people think about the commitment. Insurers change and drop their plans all the time. (As the co-director of a small business, I can give personal testimony on that one.) If people thought that Obama’s pledge meant that he would freeze the insurance market — in effect have the government take over the industry and prohibit any changes to existing policies — then Kessler is absolutely right, Obama broke the pledge. Under the ACA insurers still can change and eliminate plans.
However, if people interpreted the pledge as meaning that the ACA would not directly eliminate the insurance plans that people had at the time, then Obama was being honest. The ACA did not end plans that were in effect at the time the plan was being passed.
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