Friday, November 15, 2013

President Obama Check-Mates Health Insurance Lobby

 by Spandan C/The People's View

There are a lot opinions going around about President Obama's press conference this morning on the Affordable Care Act and its implementation. I see it as a singular thing: check mate. Once again, to quote my fellow contributor here at TPV, the president saved the Democrats' bacon, and once again, with his back to the wall, he delivered a masterful stroke of political genius curved out to avoid any interference with policy.

The headlines tell you that Obama will let Americans who are being dropped from their plans keep those plans for another year, and that is absolutely true. But the headlines do not tell the whole story. With the withering assault on health reform from the media, the Republicans and some Democrats, the president took the most blistering attack line against him, and turned it into a weapon against reform opponents. Here is what I believe were the two most important sentence the president spoke in the nearly hourlong presser (transcript).
 We’re also requiring insurers to extend current plans to inform their customers about two things: One, that protections — what protections these renewed plans don’t include.Number two, that the marketplace offers new options with better coverage and tax credits that might help you bring down the cost.
This, my fellow progressives, is how you keep your eyes on the prize. The entire problem of people who are currently in the individual insurance market being dropped resulted not from the president making a disingenuous promise to the contrary but from insurance companies making the conscious decision to drop their insured and blame it on Obamacare. Insurers have had more than 3 years to bring their plans into alignment with the minimum coverage requirements of health reform, and they have chosen not to do so over time, instead choosing this moment to scare their subscribers.

The president just turned the tables on the great villain, the insurance companies. He knows what everyone in Washington and the beltway media also know but won't tell you: insurance companies are dropping their coverage without offering reasonable alternatives to their individual market subscribers for one primary reason: they want a piece of the federal subsidiesavailable to millions of Americans through the health insurance exchanges. They need people buying from the exchanges with the subsidies to help their bottom lines as much as President Obama needs Americans to sign up in order for the Affordable Care Act to succeed. They want a piece of that pot of money, but they want to blame the Obama administration for dragging you there.

And so what the president did was simple, yet brilliant: he told Americans who are distressed that yes, they could keep their insurance plans if they like, instantly making all the cancellation letters blaming the ACA moot and taking away the insurance company's excuses for dropping people. But, with that same brilliant stroke, he forced insurance companies to do something they haven't been familiar with in decades: to tell their subscribers the truth. Insurance companies will now have to tell their subscribers whom they wish to sell junk plans to what essential benefit their plan will not cover: whether it's maternity care, mental health, hospitalization, prescription medication or another crucial essential requirement of the ACA. Oh, and they also have to tell their subscribers that they are likely to find a better plan for a cheaper cost on their state's exchange.

That the insurance industry wants people to move to the exchanges to buy coverage is not mere conjecture on my part. It is patently evident in today's apoplectic press release from AHIP President and CEO Karen Ignani:
 Changing the rules after health plans have already met the requirements of the law could destabilize the market and result in higher premiums for consumers. Premiums have already been set for next year based on an assumption of when consumers will be transitioning to the new marketplace. If due to these changes fewer younger and healthier people choose to purchase coverage in the exchange, premiums will increase in the marketplace and there will be fewer choices for consumers. Additional steps must be taken to stabilize the marketplace and mitigate the adverse impact on consumers.
I'm glad to see Ms. Ignani and AHIP suddenly recognize how important it is for consumers to move to the health insurance exchanges to purchase coverage, and that ACA's coverage requirements are a central catalyst to making that happen. One only imagines how much better it would have been if America's Health Insurance Plans instructed its member companies to convey that importance to their customers in the first place without the dramatic hoopla of trying to create political destruction for the president by omniously blaming the ACA for something insurance companies themselves want.

Because it is a dirty little open secret that the insurance companies want people in the exchanges as much as the administration, there is little risk of an actual negative effect from the president's announcements today on the exchanges. The president called the insurance companies' bluff, and the top lobbyist for insurers was immediate sent scurrying. People will still move to the exchanges, but it will no longer be because the big bad government is forcing one to, but because their insurance companies don't want to cover them outside the exchange.

The insurance industry, throughout the whole process - from the beginning of the health care debates in 2009 till now - have constantly acted like petulant children, and been treated as such by the administration and regulators. They tried to keep overhead high, and the law limited that to no more than 15-20% of premium revenue. They then tried to term insane things like collections as a "medical" expense, and the regulators showed them the door. They tried to jack up rates in retaliation, and in many cases they got shamed into retreating. They tried to protect Medicare Advantage overpayments, and Obamacare even did away with that. At every turn, the president has beaten them.

So this was their last play - to try to retaliate for politics' sake by blaming the Affordable Care Act for canceling people's coverage without telling them just what they didn't cover. For a while, it looked like they were winning. The media was completely on their side, telling trumped up stories about people losing their health insurance. The website issues added some fuel to that fire. Republicans were smelling blood, and some spineless Democrats found themselves ready to capitulate.

All these players though failed to count on one thing: a community organizer turned president named Barack Obama who has consistently turned in his best performances when his back was up against the wall. He nearly single-handedly rescued comprehensive health reform when many in Congress were ready to give up and his advisers were telling him to do it piecemeal. As a candidate in 2008, his best moment came in light of a loss to Hillary Clinton in New Hampshire. And in 2012, just when Chris Matthews was having a heart attack over his performance in the first debate, he came back in the second and leveled Mitt Romney (please proceed, governor.).

And he did it again. Today. With nearly no one having his back, the president struck a huge blow - not just against the intransigent health insurance companies but for reform, for the 40 million people who will be directly helped, and for countless millions who no longer have to fear cancellations or caps in coverage just when they need insurance the most.

Never, ever, EVER bet against this president. You will lose every single time.
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