Whitehouse.govWhitehouse.govThis president’s announcement today that the White House will allow health insurance companies to continue selling plans that do not meet the Affordable Care Act’s minimum criteria—millions of which have already been subject to cancellation notices—is likely to be a pivotal moment in the political fight over the 2010 health law. It’s the moment in which President Obama, prodded by his own party, is making his first, tacit admission that Obamacare is unworkable.

It may not seem that way at first, because the most immediate impact of the move is to stave off political pressure. The announcement comes in response to growing urgings from congressional Democrats to take action in response to health plan cancellations that have occurred, and are expected to continue occurring, as a result of Obamacare. Sen. Mary Landrieu (D-La.) and five other Senate Democrats said this week that they backed a bill that would require insurers to continue offering plans into 2014. A separate bill offered by Rep. Fred Upton (R-Mich.) would have simply allowed insurers to keep offering plans that do not meet Obamacare’s requirements.

Today’s announcements gives Democrats a response to complaints about plan cancellations. The White House has heard their complaints, they can say, and is doing something about it.

What the administration is really doing, though, is attempting to shift the blame. Insurers have spent months if not years preparing for the changes and requirements enacted under Obamacare. They will have a difficult time turning on a dime and extending cancelled policies. They may not be able to in some or many cases. And state insurance regulators will have to sign off on reinstatements, creating an additional layer of insulation between plan upsets and the administration. 

Now when asked about people losing their plans, the White House and its Democratic allies in Congress will be able to argue that this isn’t a result of their law. It’s the insurers fault. As one insurance industry source tells Buzzfeed, “This doesn’t change anything other than force insurers to be the political flack jackets for the administration. So now when we don’t offer these policies the White House can say it’s the insurers doing this and not being flexible.”

Yet this isn’t just a political fix. It’s also a major policy concession—and a potentially serious problem for the law’s operating scheme. Allowing healthy people to stay on their current low-cost health plans will mean that the pool of people who get insurance through Obamacare’s exchanges will be sicker and more expensive. This year’s premiums were set on the expectation that noncompliant plans would be cancelled, and that the cancellations, in combination with the mandate to purchase coverage, would create a market for plans sold in the exchanges.

So Obama is creating a long-term policy problem in order to solve a short-term political problem. Even if this temporarily reduces some of today’s political pressure, those long-term policy problems will rebound to create additional political problems as time goes by. Premiums will rise, and if consumer demand turns out to be lower than expected as a result, plans may withdraw from the market. At the same time, insurers, who have been targeted by the administration for blame and had their assurances about the state of the law (and thus their business plan) upended, will be less likely to cooperate with the administration. They are already frustrated with the administration, and this will hasten the break between them. The opposition of insurers will add a new layer of opposition that the administration must contend with in order to make the law—which is built around the goal of making insurance coverage accessible—work.

The White House is making this fix unilaterally, as an “administrative fix” without Congressional approval, and probably without clear legal authority. Even ignoring legal questions, it’s an admission that the health law cannot work as designed, especially in light of the now-lengthy history of administrative tweaks of dubious legality.

But more than that, the tweak highlights the fundamental tension between the law’s politics and its policies.

The law was sold on the repeated presidential assurance that anyone who wanted to keep his or her existing health plan could do so. That promise was made so often and so forcefully because it was necessary to build enough support to pass the law, and—as we’ve seen in this week’s Democratic defections—to maintain sufficient political support for the law after it passed. Administration political aides rejected more nuanced, accurate language because they believed it wouldn’t help sell the law.

But the result of keeping that promise is the destabilization of the law’s fundamental policy scheme, which requires healthy people on low-cost insurance to purchase more expansive, more expensive coverage in order to balance out the costs of sicker individuals.

In other words, the law can’t work if it does live up to its presidential promises. But it can’t maintain political support if it doesn’t. The two are incompatible. Obama’s announcement today is an implicit acknowledgment of that incompatibility—an admission not only that the law doesn’t work, but that it can’t and won’t.

This post has been updated for clarity.