A Health Care Fix

President Obama has come up with a modest fix for a self-inflicted political wound: his repeated — and wrong — assertions that Americans would be able to keep their health insurance plans if they wanted to under the health care reform law.

The fix, which deals with the cancellations of individual policies, is far preferable to a destructive Republican bill that is expected to come up for a vote in the House on Friday and to a Senate bill sponsored by some Democrats. But it raises a few troubling questions, most of which cannot be answered quickly.

The political danger Mr. Obama is trying to head off is widespread defection from the reform law by Democrats worried about their re-election chances in states where Mr. Obama is unpopular. The fix he offers gives them an alternative that we hope keeps Democrats united in defense of reforms that will be of immense benefit to tens of millions of uninsured or poorly insured Americans.

“There is no doubt that the way I put that forward unequivocally ended up not being accurate,” Mr. Obama said on Thursday of his earlier erroneous statements. He said he was thinking of the 95 percent of insured Americans who are covered by group insurance provided by employers, unions, Medicare or Medicaid. And he said he believed the remaining 5 percent covered by plans bought in the individual market would be able to keep their current policies under a “grandfather clause” in the law (the clause applied only to policies obtained before the law was signed in March 2010), even if those policies were not as good as what is available on the health insurance exchanges.

That explanation is not likely to satisfy his critics or even his supporters, who are dismayed by the administration’s failures in rolling out health care reform. He has damaged his credibility, and it is uncertain how he can earn back the public’s confidence.

The temporary fix allows insurers — if they so choose — to reinstate canceled individual policies for a year or two instead of having them expire at the end of 2013. They can extend the policies only if they first take two crucial steps — inform the policyholders of all the consumer protections their current policies lack (like yearly limits on a patient’s out-of-pocket expenses), and make them aware of their options to buy better policies in the exchanges, often with the help of federal subsidies. This option would apply only to people who have had their current policies canceled. It does not apply to others who might want to buy similar plans.

The House Republican bill, sponsored by Representative Fred Upton, the chairman of the Energy and Commerce Committee would cripple health insurance reform. It would allow individuals to keep their canceled plans and allow new customers to buy the same plans, which are deemed inadequate under the health reform law. The point of opening the floodgates — allowing large numbers of people to have substandard plans and remain out of risk pools designed to keep premiums low in the health care exchanges — is to destroy the program. As the House speaker, John Boehner, told reporters on Thursday, “The only way to fully protect the American people is to scrap this law once and for all.”

A Senate bill sponsored by Mary Landrieu, a Democrat who is facing a stiff battle to hold her seat in Louisiana, and supported by some half-dozen Democrats, would allow people to keep their current insurance plans permanently, instead of temporarily as Mr. Obama proposes, thus posing a permanent threat to the risk pools.

It is not clear at this point how many insurers might be willing to reinstate the plans they have just canceled or how many state insurance commissioners might be willing to approve such reinstatements, or how many Congressional Democrats might consider the president’s proposal adequate to placating angry constituents and stifle Republican attacks.

The Senate majority leader, Harry Reid, praised Mr. Obama’s move as an important step toward addressing the problem and pledged to do more, if needed.

The White House had no estimates on how many consumers whose policies were canceled might want reinstatement as opposed to buying something better, often with the help of subsidies. It is also unclear how the temporary fix might affect the overall goal of upgrading the benefits covered and keeping premiums affordable.

If a relatively small population of people get extensions, as some experts think likely, the effect on premiums in the overall health insurance market may be minimal. Even so, this disturbing reversal is caused by the incompetence of the administration in ushering in reforms that millions have been waiting for.


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