The entire of Obama press conference today played out like some Hayekian cautionary tale where a befuddled central planner complains about the complexity of real life. As the president put it: “What we’re also discovering is that insurance is complicated to buy.”
Yup, reality is more complicated on the ground than from 30,000 feet or from White House meeting rooms. But Obama’s discovery has led to no humility. In theory, insurers might be able to extend health insurance policies — ones that might otherwise be canceled — next year for current policyholders, thanks to Obama’s administrative decision today. But maybe only in theory. Here is Jim Donelon, president of the National Association of Insurance Commissioners:
In addition, it is unclear how, as a practical matter, the changes proposed today by the President can be put into effect. In many states, cancellation notices have already gone out to policyholders and rates and plans have already been approved for 2014. Changing the rules through administrative action at this late date creates uncertainty and may not address the underlying issues. We look forward to learning more details of this policy change and about how the administration proposes that regulators and insurers make this work for all consumers.
This means that the insurance companies have 32 days to reprogram their computer systems for policies, rates, and eligibility, send notices to the policyholders via US Mail, send a very complex letter that describes just what the differences are between specific policies and Obamacare compliant plans, ask the consumer for their decision — and give them a reasonable time to make that decision — and then enter those decisions back into their systems without creating massive billing, claim payment, and provider eligibility list mistakes.
But those are hardly the only issues:
2. The federal online exchange fiasco probably already means the exchanges are too full of the older sick rather than the younger healthy. This move would seem to worsen that problem plus drive up premiums inside the marketplace. As Peter Suderman explains, the result of this ad hoc effort to keep the now infamous “If you like your insurance…” 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.”
3. And as AEI’s Joe Antos explains: “There is no question that many people will find themselves in a worse situation next year—paying much higher costs, less access to physicians and hospitals, and, in too many cases, without health insurance at all. The White House remembered there is an election coming up and put the next day of reckoning in 2015.”
What a mess.