Losing health insurance has long been a terrifying possibility for Americans who buy coverage on the open market. Historically, it meant taking on all kinds of risks, from forgoing needed medical care to financial ruin in the event of a serious illness or injury. Perhaps the greatest worry for those thrown off insurance policies was that they could not find good replacement coverage. According a study by the Commonwealth Fund, 57% of all Americans shopping for coverage in the individual insurance market in 2009 said they found it “very difficult or impossible” to find affordable insurance plans.
The fear of just such a dead end is no doubt part of what’s fueling a wave of panic among those opening their mailboxes this fall to find letters from insurers explaining that their plans are ending thanks to the Affordable Care Act. In news story after news story, consumers who purchased policies in the individual insurance market have expressed confusion as their lives are seemingly upended by Obamacare.
There have also been more than a few flashes of anger, mainly at the fact that President Obama promised repeatedly before the Affordable Care Act become law, “If you like your health care plan, you can keep your health care plan.” This pledge has not turned out to be true. The law outlaws all but a small percentage of “grandfathered” individual insurance policies and requires carriers to instead offer coverage that’s more comprehensive.
When the very people a law is supposed to help become angry, something has gone wrong along the way. In hindsight, Obama made a promise he could not keep, even if he wanted to. Liking one’s insurance policy was never enough to ensure it would continue indefinitely. Insurers, especially in the individual market, cancel and change policies regularly year to year.
Part of what’s being lost in the tumult over the President’s dishonest statement to the American people is the context in which he uttered it. In the months leading up to the March 2010 passage of the Affordable Care Act, a firestorm of misleading criticism and outright lies swirled around the effort. Republican critics told the public that the law would destroy Medicare, even though it cut only about 10% of the program’s funding. They also said it would allow the federal government to withhold life-saving medical care for seniors, a deception made up basically out of thin air. Obamacare was labeled a “government takeover of health care,” even though the law preserved both the private insurance system and the private health care system, albeit with greater regulation.
In short, there was a lot of confusion and panic back then too. And it was fueled by charges that Obamacare would hurt all Americans directly and profoundly. When Obama told the public, “If you like your health care plan, you can keep your health care plan,” he was trying to counter this narrative, especially for the 80% of Americans who get coverage through their jobs, Medicare or Medicaid and who were concerned about the coming changes. Insurance for these people will continue largely unaffected by Obamacare, although not completely. (In 2018, an Obamacare tax on high-cost insurance plans could cause upheaval in that part of the market as well.)
But Obama never really qualified or narrowed his “keep it” statement. He explained that the law would improve options for those buying coverage in the independent market, but his pledge made it seem like these people could choose to participate in the new system or stay in the old one, when the law was designed to gradually eliminate the old system altogether. Some plans that haven’t changed since 2010 are grandfathered and free of new Obamacare regulations, but, says former president of the National Association of Insurance Commissioners Sandy Praeger, “I think eventually all of them will change.” So far, the reforms that the law sought to bring—whether Obama was honest about their implications or not—are falling into place exactly as planned. Many insurers are ending policies that do not comply with the law, and pitching new policies that don’t discriminate based on health status, cover a comprehensive list of benefits and limit how much consumers will have to spend out of pocket. In some cases, these new plans will cost consumers more. For others, the better coverage will cost the same or less.
Yet, the specter of suddenly becoming uninsured and forced into an unstable and unpredictable situation remains. And it is likely to remain for a while. “Some of this brouhaha is based on this old paradigm where if you got dropped you couldn’t find something else,” says Praeger.
This lingering fear is understandable. The Affordable Care Act’s new system of subsidies and competition between carriers through online insurance marketplaces is new and untested. Complicating this is the fact that many of the web sites operating these marketplaces, including a federal one responsible for individual market enrollment in 36 states, are not functioning well or at all. If you lose something you depended on, and “liked,” and you don’t have access to anything better to replace it, what is there to do besides worry—or even panic?