The PJ Tatler

Will the GOP's 'Keep Your Plan Act' Save Obamacare?

What began as an attempt by House Republicans to embarrass President Obama and the Democrats may end up backfiring on the GOP by saving Obamacare from extinction.

The “Keep Your Plan Act,” introduced by Rep. Fred Upton, is headed for a vote next week. The bill authorizes insurance companies to keep offering plans for another year that they have said need to be canceled because of ObamaCare’s new insurance standards. The bill mirrors efforts in the Senate by vulnerable Democrats — Mary Landrieu, Joe Manchin, Mark Pryor, and Kay Hagan — that would accomplish the same goal.

Essentially, the bills grandfather in everyone’s policy if they choose to keep it if the policy was in effect on December 31, 2013. The GOP plan goes a little farther by allowing the addition of family members to the plan, while also permitting employers to add employees to their group plans. Upton’s bill requires an annual reauthorization.

Before his apology for lying about people being able to keep their health insurance plans if they liked them, President Obama constantly touted the notion that his administration was actually doing people a favor by having their plans cancelled because the new Obamacare plans offered more coverage and carried more protections. At that point, it seemed improbable that the president, or Democrats in the Senate, would support a measure that redeemed that promise. Indeed, allowing millions of people to keep their plans endangers the economics of Obamacare because most of the grandfathered plans are far less expensive and don’t offer the extensive — and unnecessary for many people — coverages than the plans being offered via the exchanges do.

But the stink of panic is emanating from vulnerable Democrats in both chambers. The narrow victory of Terry McAuliffe in the Virginia governor’s race after leading by double digits in mid-October is being widely attributed to blowback from the Obamacare fiasco — both the website malfunctions and the obvious lie told by the president about Americans being able to keep their health insurance plans if they liked them. The entire dynamic has changed on the Hill and bi-partisan support appears to be building to pass some kind of fix for the cancelled plans.

The Daily Mail is reporting that Senator Landrieu believes President Obama may be open to changing the requirements for grandfathered policies:

Landrieu accompanied the president on his trip to New Orleans on Friday, and White House Deputy Press Secretary Joshua Earnest told reporters aboard Air Force One that he’s open to legislative fixes like hers that address what he called a ‘gap’ in the law.

‘The president has said for years now that he is open to working with members of Congress that have a genuine interest in trying to strengthen the Affordable Care Act,’ Earnest said. ‘That’s been true for years now, and it’s true today.’

Earnest also tried to downplay the epidemic of cancellation letters, saying that ‘about a million of them’ have gone to Americans ‘who otherwise would qualify for Medicaid.’

There’s a wealth of differences between private health insurance coverage and the publicly funded Medicaid system, however: Many hospitals and doctors won’t treat Medicaid patients, citing low reimbursement rates and administrative red tape involved with processing claims.

Landrieu introduced her bill on Monday, reading a dramatic insurance cancellation letter on the floor of the Senate.

‘This is a letter that thousands of people are getting,’ she said. ‘and this letter never should have gone out – because we said to people if you had insurance that you like, you could keep it.’

‘We didn’t say if you had insurance that you like that … didn’t meet the minimum standards, you could keep it. We just said, and the president said over and over, if you have insurance and you like the insurance you have, you can keep it. … That’s the single focus of my bill.

Passing a bill that allows all Americans to keep their plans if they like them could save Obamacare from the death spiral — the upside down pyramid of having too many old and sick people enrolled and not enough young, healthy Americans paying for them. While the grandfathered plans don’t have the coverages that the Obamacare plans have, the balance toward healthier consumers paying into the system would be far better than it would be under Obamacare, where few “young invincibles” have signed up and most may prefer to pay the fine rather than buy expensive, unneeded insurance. A healthier pool of participants might mitigate premium increases next year, which would keep more people in the program.

And while their constituents may be pleased that they can keep their plans, passage of the bill would blunt a huge political issue for Republicans going into the 2014 mid terms. By drawing the anger out of voters for taking away their insurance, Democrats remove a potentially game changing issue from their campaigns.

So what started as a means to tweak the president for making a promise he knew he couldn’t keep, Republicans may end up saving a law they have voted 40 times to alter or repeal while handing their opponents a gift-wrapped “Get out of jail free card.”