Throughout the health care debate, President Obama has insisted that Americans who liked their health insurance could keep it.
“If you like your health care plan, you’ll be able to keep your health care plan, period,” he declared in a speech to the American Medical Association last June. “No one will take it away, no matter what.”
While a number of provisions in the existing House and Senate health care bills would undermine that pledge, the proposal Obama unveiled today takes a sledgehammer to it.
The Senate bill has a measure to protect so-called “grandfathered plans,” which would allow policy holders to maintain coverage in plans that may not abide by all of the requirements imposed on new individual plans offered on the government-run exchanges.
But Obama’s new proposal changes all of that. Here’s how the White House explains the new provisions:
The Senate bill includes a “grandfather” policy that allows people who like their current coverage, to keep it. The President’s Proposal adds certain important consumer protections to these “grandfathered” plans. Within months of legislation being enacted, it requires plans to cover adult dependents up to age 26, prohibits rescissions, mandates that plans have a stronger appeals process, and requires State insurance authorities to conduct annual rate review, backed up by the oversight of the HHS Secretary. When the exchanges begin in 2014, the President’s Proposal adds new protections that prohibit all annual and lifetime limits, ban pre-existing condition exclusions, and prohibit discrimination in favor of highly compensated individuals. Beginning in 2018, the President’s Proposal requires “grandfathered” plans to cover proven preventive services with no cost sharing.
All of the new requirements proposed by Obama would increase premiums, and by definition, alter the composition of those insurance plans. The White House would argue that it is changing the policies for the better. But the entire point of having “grandfathered plans” was to protect a class of policies from changes imposed by the new legislation. Put another way, the provision to allow people to keep their “grandfathered plans” is rendered meaningless when the federal government is dictating what is in them.