5 Big Questions About President Obama's Health Law Tweak

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Whitehouse.gov

Earlier today, President Obama announced a plan to tweak Obamacare by allowing state insurance commissioners to let health insurers continue to offer plans that do not pass muster under Obamacare's health insurance regulations. The announcement came following mounting public outrage about the millions of individual market health plans being terminated as a result of the health law's regulations—in direct contradiction to the president's repeated promise that people who liked their health plans could keep them. Congressional Democrats had been circling around plans to address plan cancellations all week; the announcement was in large part a response to growing pressure from within the president's own party to respond.

But the president's plan doesn't resolve the mess. Indeed, it may have just compounded the law's existing political and policy troubles. Big questions remain about how it will work, and how other parties will respond.

1. Will congressional Democrats be satisfied? The president's tweak was designed to help congressional Democrats under fire for supporting a law that caused people to lose their health plans despite many absolute promises to the contrary. But while some Democrats appear to be happy with the change, which allows them to blame insurers for cancelling plans, it's not clear that this will placate all of them. Sen. Mary Landrieu (D-La.), who sponsored a bill to require insurers to continue existing plans, said in a press conference this afternoon that the president's proposal was a "step in the right direction," but also suggested that a further legislative fix might be needed.

2. How will the insurance industry react? This is potentially a big deal. Right now, the insurance industry is working closely with the administration, and despite frustrations with the rocky rollout of the exchanges, has largely avoided direct confrontation with the administration. Not so here. The head of America's Health Insurance Plans (AHIP), issued a statement warning that the president's plan could upend the insurance market. "Changing the rules after health plans have already met the requirements of the law," said AHIP CEO Karen Iganagni, "could destabilize the market and result in higher premiums for consumers." That, in turn, could have political consequences, as next year's insurance rates will be revealed in the months leading up to the 2014 election.

3. How will the new policy be implemented? A letter sent to state insurance commissioners says that the Obama administration will allow health insurers to "choose to continue coverage that would otherwise be terminated or cancelled" next year under a "transitional" policy. But that still depends on the say-so of state insurance regulators, who are merely "encouraged to adopt the same transitional policy" regarding specific types of terminated coverage. Yet insurance regulators aren't sure how to do that. "It is unclear how, as a practical matter, the changes proposed today… can be put into effect," said the head of an insurance commissioner's group, according to a Wall Street Journal health reporter. So there's a significant operational question about how—and whether—this would work.

4. Will state insurance commissioners actually pursue the Obama administration's encouraged change? Maybe not. At least one has already said no thanks: Washington state Insurance Commissioner Mike Kreidler, one of the most liberal insurance regulators in the nation, has already indicated that his state won't participate, citing "serious concerns" about implementation and insurance market stability. Washington state, notably, has had direct experience with insurance market meltdowns in the past: In the 1990s, it passed a slew of health insurance market reforms that eventually resulted in the large majority of individual market insurance carriers exiting the market.

5. Is it legal? Right now the administration is citing "transitional" authority to implement the change. But it's all pretty vague. The idea, as with the delay of the employer mandate, is that transitional authority gives the administration the power to do what is necessary in order to put the law in place. But the power to take the steps necessary to implement a law doesn't obviously apply here. What the administration is doing is using its authority to not implement a part of the law.

NEXT: Obama Attempting to Reverse Insurance Cancellations, Student Debt Passes $1 Trillion, Another City Considers Bankruptcy: P.M. Links

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  1. “Is it legal?”

    HAHAHA. Like anyone really cares about that.

    1. Oh, and “FIST!”

      1. “Does it recognize ‘fisting'”?

  2. Is it legal?

    They are not changing the law – they are simply not enforcing part of it much like not enforcing federal MJ laws.

    (I saw that the Peanut Gallery was confused about this.)

    1. It’s going to be the Doc Fix of all Doc Fixes. The ACA needs low-risk people to subsidize the high-risk insured by having the former pay higher prices. If this year’s premium spike is enough to frighten politicians into not enforcing ACA requirements, then there’s going to be even more outrage next year, after going without mandating the ACA-compliant plans for a whole year has pushed up premium prices in the individual market to even higher levels.

      1. Depends on how many sign up.

        With the pitifully low sign up numbers (106,000 to date) not many of the young/healthy need to sign on to compensate.

        This is a case where the ineffectiveness of the law will save it.

        1. NEEDZ MOAR KOMPLIANZEFAG!

        2. But it’s a matter of avoiding the death spiral in the first place. If they don’t get enough younglings to make up for the sudden infusion of sick customers, that will necessitate premium spikes.

          1. Wouldn’t massive non-participation avoid the so-called death spiral?

            Of course the Medicaid freeloaders won’t cost the insurers. Now you’re left with a low-participation nothingburger.

            As I predicted long ago, Obamacare will be a big “So What?” when the dust clears.

            1. Adding any significant amount of very sick people will add up to a huge expense on insurance companies. That expense will be recouped through increased premiums.

              1. Sure, but 106,000 is not significant in a country with 260 million insured.

                1. Not significant….? Not Significant….?!?!?!

                  Shreeky, your God Emperor, Barack the First, Crusher of Republicans and sneerer at libertarians (Blessed be his name) has through his program of Supreme Health Insurance beneficence has managed to address the healthcare funding needs of almost exactly 1/2 the population of Boise, Idaho!

                  His works are legendary!

                  1. Make up your mind, you wingnuts!

                    Obamacare is either a complete failure with no one signing up or it is a “fundamental transformation” of America!

                    1. Itz both u worthlezz shitstain!

                    2. It can’t be both, you fucking greasy haired redneck!

                    3. Dude your fearless leader makes your arch nemesis BOOOOOOOOSH look as calm, collected, and competent as Churchill during the blitz……now tell me how badly you beat the market today you useless douchenozzle!

                    4. “Obamacare is either…blah blah stupdity”

                      You’re stupid, so I get why you don’t understand how it’s both.

                    5. It can be a massive failure in both enrollment and cost if the only people who enroll are incredibly expensive.

                      Of course, thanks to the “risk corridor” provision of the law, the government may end up being on the hook for HUGE amounts of insurance company losses for the first three years of the law.

                    6. Re: Palin’s Buttwipe,

                      Obamacare is either a complete failure with no one signing up

                      How sweet. The Idiot here thinks that ObamaCare is only about signing people up. The mandates don’t exist in his puny little 4K (with Level 1 BASIC) mind.

    2. NEEDZ MOAR REGULASHUNFAG!

    3. ‘he shall take Care that the Laws be faithfully executed’

    4. So when the next R President decides not to enforce the civil rights laws, that will be totally okay?

      God you are fucking retard. Did you make that talking point up yourself? Are your handlers really that desperate?

      1. Are your handlers really that desperate?

        SHRIKEBOT RULZES!

      2. Yes, it’s obviously not that simple of a question. The law itself has to either give the administration the power he’s exercising or, at worst, it has to be inherent in the powers they do give it.

        Of course, it’s an open question about whether any delegation is appropriate if it, in fact, constitutes the delegation of inherent congressional authority. Congress can’t legally do that, even in a duly passed law.

        1. The irony is that Congress was tyring to do pretty much exactly this by cutting off funding for enforcing the act. Cutting off funding is one way to make a law effectively a dead letter.

          But NOOOOOO Obama couldn’t give in to the demands of the terrorist hostage takers and put this thing off.

          1. Get over your failed shutdown, Red Tony. It matters none at all now.

            1. Get over your failed shutdown, Red Tony. It matters none at all now.

              Especially with the Obamacare fiasco blowing up in the Dems’ face. No one gives a shit about the shutdown anymore.

              I swear, watching you and the other Blue-tards try to polish this turd is the best early Christmas present we could have recieved. You and your Messiah are so far outside the OODA loop that Neptune has a closer orbit to the sun by comparison.

                1. Shit SF’d the link….but it’s on Zero Hedge!~

    5. They are not changing the law – they are simply not enforcing part of it

      So Obama is signalling that insurance companies should break the law cuz he plans on not enforcing it….with the plan to blame insurance companies after they refuse to take the bait. All so he can stop taking the political heat from his lie.

    6. Palin’s Buttplug|11.14.13 @ 4:36PM|#
      “They are not changing the law – they are simply not enforcing part of it much like not enforcing federal MJ laws.”

      Which is no more legal than this; repeal it!

    7. More grist SHREEKYFAG!

      From occasional reason.com contributor (and Armstrong and Getty radio show legal eagle) Tim Sandefur!

      http://tinyurl.com/what-this-morning-meant

      Eat it fuckwit!

    8. Given how many Fed drug raids continue to happen in MJ-permissive states, that’s not very reassuring.

      Even if the current administration had a reputation for telling the truth.

      1. THis is exactly the problem. You worry about the MJ laws when the problem was the massive government in the first place. Get rid of that massive load on the free market and the free people, then you can have your cake, I mean MJ and eat it too. DO you really think the government that gave you ten dollar packs of cigarettes, three strikes and mandatory minimums is going to let you get away with smoking MJ without paying a price?

    9. Re: Palin’s Buttwipe,

      They are not changing the law – they are simply not enforcing part of it much like not enforcing federal MJ laws.

      Us mere mortals get our asses thrown in jail if we fail to obey a particular law, so what makes you think – oh, stupid one – that not enforcing a law is lawful?

      Not that I don’t agree with nullification, but these idiots wrote and voted for that law themselves!

      I saw that the Peanut Gallery was confused about this

      Must’ve been the peanut gallery at Gawker. Those guys are pretty confused on just about everything there is.

    10. Paraphrasing from the Voloch Conspriracy: The fix includes specific limits and conditions to which the insurance companies must adhere for the continuance of a form to be compliant with Obama’s intent. As for instance, sending letters to policy holders by certain dates, providing policy holders certain specific information about Obamacare, etc. None of the limits and conditions is part of ACA law, nor does the ACA allow for the administration authority to set such conditions. Obama is not simply failing to enforce the law, Obama is fabricating law. In other words, Obama is legislating. Otherwise refered to as changing the law.

  3. You misspelled it, he is twerking the health care law right in the publics face.

    1. And even Miley Cyrus made twerking more appealing…

  4. At this point congressional Dems want Obamacare repealed more than the GOP does. Obama’s bullshit here won’t mean jack to the kinds of voters who vote in mid-term elections.

    All insurers have to do is remind everyone that regardless what Obama promises, it’s still illegal under the law to sell those plans. And Obama’s promises are shit.

    1. All insurers have to do is remind everyone that regardless what Obama promises, it’s still illegal under the law to sell those plans.

      All the tree falling in the woods that is being intentionally ignored by every news outlet on the planet has to do to be heard is…..

      Never mind no one is around to hear it.

      1. Normally I would agree with you, but I go back to the kinds of voters who come out for lowly mid-terms are usually the ones with a chip on their shoulder about something and more likely paying attention.

  5. the administration is citing “transitional” authority to implement the change.

    Well, at least it’s not “Divine” authority.

    Yet.

    1. Rich|11.14.13 @ 4:44PM|#
      “the administration is citing “transitional” authority to implement the change.
      Well, at least it’s not “Divine” authority.”

      Well, they are ‘transitioning’ to divine authority…
      Oh, and the claim of ‘transitional’ authority is bullshit worthy of shreek.

  6. As a matter of state law, can a State Insurance Commisioner approve an insurance plan which is de jure illegal under Federal law? All Obama can do is promise not to enforce the consequences of not following the legal requirements. He can’t make these plans “legal” under Federal law.

    1. “As a matter of state law, can a State Insurance Commissioner approve an insurance plan which is de jure illegal under Federal law?”

      Were I their counsel, I would strongly urge them to follow the law – or get hit with litigation, maybe even a good old fashioned writ of mandamus.

      1. This.

        But I’d add, “Remember, if you do get sued or indicted, you’re counting on the President of the United States to have your back.”

      2. I thought I recalled a court case where an individual/small business owner was assessed fine/penalties/interest for making an error on his taxes – but he went to court claiming he only put the “illegal deduction” in after calling the IRS and asking them directly.

        From what I recall – he lost (though he may not have been able to prove it or whatever)…

        Either way – while trying to find it – I found this disturbing fact…

        In 1995, the federal tax register had 17K pages.

        In 2013 it has 74K

        Land of the free right?

  7. How will the new policy be implemented?

    Rainbow sprinkle faerie dust.

    duh

  8. Ummmmm the insurance companies can still sell whatever plans they like. But for the individual mandate, a person must buy an Obama-stamped plan. Basically telling the state insures they can do this without absolving individuals of the requirement is pointless…. These idiots would’ve been better off doing nothing. Now they jus look extra stoooopid.

    1. That seems to be their MO.

    2. Yes, don’t see how the mandate can stand for anything to change.

  9. All I can say is what a fucking mess.

    1. Once we successfully create the first Controlled Schadenfreude Reactor, we’ll be able to power America for centuries!

  10. Sen. Mary Landrieu (D-La.), who sponsored a bill to require insurers to continue existing plans, said in a press conference this afternoon that the president’s proposal was a “step in the right direction,” but also suggested that a further legislative fix might be needed.

    That right there tells you all you need to know about how our Lords and Masters think things ought to work. They wave their hands and command it to be so and their fantasies are made reality. The law of supply and demand certainly isn’t anything they voted on, how hard can it be to legislate out of existence?

  11. 5. Is it legal? Right now the administration is citing “transitional” authority to implement the change. But it’s all pretty vague. The idea, as with the delay of the employer mandate, is that transitional authority gives the administration the power to do what is necessary in order to put the law in place. But the power to take the steps necessary to implement a law doesn’t apply here. What the administration is doing is using its authority to not implement a part of the law.

    No worries Feeney will just write an article saying Rand Paul is inaccurate for claiming that a coup in Egypt is a not coup coup.

  12. Suderman, I haven’t agreed with everything you’ve written about ObamaCare over the years, especially when you were trying to deemphasize the problem of providers having to gouge private pay patients to make up for all the money they lose on Medicare and Medicaid patients, but you’re in a position where you could easily write an excellent history of ObamaCare from a libertarian perspective.

    I don’t know, maybe that doesn’t sound especially marketable–like a bio of McCain during the presidential campaign or a book about Burning Man or far out conspiracy theories, but if you wrote one, I bet you would get invited to talk about it on various talk shows, and given your day by day posts here in the archives at Hit & Run, the material for the book and all its references are probably pretty close to already being in place.

    Anyway, I’d buy a book like that.

    Cheers.

    1. That is actually a good idea, Ken.

      (if I may break H&R tradition and say something complimentary about another’s idea)

    2. Agreed.

      There will no doubt be books from the left talking about Obama’s noble experiment being thwarted by RethugliKKKans, KOCKsuckers, Faux News and an all powerful John BONER.

      There will be vague, chest beating books from the right calling this communism/socialist without any real substance.

      A real, libertarian/free-market perspective must be heard.

      1. And it’s going to be an important issue for a long time.

        It may be the deciding issue in the upcoming mid-terms, but even more important than that, I think the completely unworkable nature of ObamaCare’s problems is still yet to completely surface.

        And if that’s true, then it’s going to be an even bigger story as ObamaCare completely implodes. Why wait around for some presidential candidate to tell people the libertarian truth of how that happened when we’ve got Suderman!

        1. To paraphrase Jefferson:

          Were we directed from Washington when to insure and when not to insure, we would soon want for insurance.

        2. I would throw in a chapter comparing it to California’s failed energy deregulation.

          In both cases, what we see is the government attempting to set up an artificial “exchange” type market with artificial rules that break the natural price mechanisms.

          In California’s power exchange, utilities were forbidden from entering long-term contracts with power plants, and compelled to buy all power in a day-ahead market. That left them vulnerable to price spikes on hot days. In ObamaCare, insurers are forbidden from pricing plans according to risk. Which leaves them vulnerable to healthy people making the rational choice not to purchase insurance at those prices.

          In case A, the dysfunction that resulted caused brokers on the power exchange to manipulate the market to force utilities to buy power at exorbitant rates. Similarly, we can see how insurers may be cancelling policies because people are compelled to buy more expensive plans they don’t need on the exchange. Different mechanism, but both examples of how the artificial restrictions in an artificial market place introduced perverse incentives.

          Also, the outcome in California was effectively the state taking over the utilities when they went bankrupt, which may be the end result of ObamaCare as well.

          The lesson here is that Democrats idea of “market-based” reforms are anything but. You cannot “design” a market to do what you want. You must let it evolve naturally.

          1. Well, many leftists seem to equate, or at least conflate, market and government.

    3. Hey, I haven’t read The United States of Paranoia, but it sounds like the least bad book option from a Reason author since Radical for Capitalism.

      I do agree that Suderman could do a pretty good history of Obamacare. Although, when should he decide to sit down and write it? We won’t know where this is going to go until at least the 2016 presidential election.

      1. It’s in the real world now. It’s already failing!

        We don’t have to wait for elections to see something that defies the laws of economics fail. Just like we wouldn’t have to wait for an election to see how an airplane design that defies the laws of aerodynamics would fail.

        Besides, you want that book out there before the next election–not after. Hopefully, you’d like to influence the way people talk about the issue during the next election.

        1. Meh. I’m more interested in getting a comprehensive, incisive history of the Obamacare than rushing it out before the next election.

          The thing hasn’t even reached full implementation and they’re already making changes on the fly. Let’s wait just a few more years before we starting chronicling the “history” of the ACA.

      2. There ought to be a bot that could just compile all the related articles on a topic, strip out the redundant information, publish it, and add the receipts to my bank account.

    4. I gave a talk last night using articles from this site saved over the last few years to tell the Obamcare story. There’s a ton of material and references.

      1. I hope you added some footnotes and used lots of air quotes.

    5. So, if Peter Suderman goes on hiatus to write an Obamacare history, can we get Joe Bob Briggs to do the movie reviews during the interim?

    6. It would be especially good if he could track down some White House and insurance industry insider info .

    7. Thanks Ken. Appreciate the interest, and vote of confidence.

  13. Is it legal?

    The law?! I am the law!

  14. Ummmmm the only guy that can deliver the amount of twerking required is this guy: (NSFW)

    http://vimeo.com/m/27736851

  15. It seems he’s in the position of “allowing” something to exist which he’s already outlawed and thereby caused to not exist; very kind of the piece of shit.

  16. What the administration is doing is using its authority to not implement a part of the law.

    Which would be fine, I suppose, except they had already informed insurers what the requirements were, and many of them were complying by canceling the now-illegal policies.

    So it’s not really “transitional” authority, since the transition was already made. It’s more like “arbitrary” authority, something the founders of this nation rebelled against.

    1. So it’s not really “transitional” authority, since the transition was already made. It’s more like “arbitrary” authority, something the founders of this nation rebelled against.

      The Founders are extinct, their fire has gone out of the universe. You, my friend, are all that’s left of their religion.

  17. 6. How long must we wait for these rock-hard schaudenboners to stay this way before seeking medical attention?

    1. at least four election cycles!

  18. The problem with this is that all these new bloated, more expensive plans are what is needed to pay for Obamacare.

    The insurance companies need to charge healthy people more to pay for people who have insurance with pre-existing conditions. Yeah, yeah, the new health plans have more crap added to them, but nowhere close to the value of the price increase.

    So if people are allowed to keep their cheaper plans, insurance companies will likely be after the government for a bailout

    1. Or just go out of business. How much would it cost for them to liquidate? It’s not like they’ve got factories to disassemble.

  19. OK wow that makes a lot of sense dude.

    http://www.Privacy-Web.tk

  20. It’s settled law!

    Or something.

  21. So if they do this and I retain a Non-ACA “bad apple” insurance policy does that satisfy my ACA obligation to be insured in 2014?

    “Keeping your existing policy” and “ACA compliant” are contradictory concepts.

  22. So the Republicans obviously fucked up by coming our with an “extend your health plan” fix instead of going straight for a general reduction in the mandatory minimum.

    Now Obama is threatening to veto it because it allows insurers to sell “substandard” policies to new subscribers. That’s because he already knows they will settle for the extension.

    However, there’s still a whole year in which the Republicans can maneuver to reduce the mandatory minimum. We’re going to have a whole year of stick shock and anxiety by millions of people who are worried they are going to lose their health plans. And all those people are going to be saying things like “Pediatric dental care? WTF????”

    The fact is, the current list of “essential benefits” is unsustainable if it’s combined with community rating.
    People simply aren’t going to stand for paying double for services they don’t need. If they caved on this today, there is no indication that a year from now the outrage by 60 year old women being asked to pay hundreds of dollars a month for other people’s maternity care is going to be any less.

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