First, the Washington Post fact-checker gives Obama four (4) Pinocchios (it's worst rating) for telling people that they could keep their own insurance plans.
As we have noted, a key part of the law is forcing insurers to offer an “essential health benefits” package, providing coverage in 10 categories. The list includes: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care.
For some plans, this would be a big change. In 2011, the Department of Health and Human Services noted: “62 percent of enrollees do not have coverage for maternity services; 34 percent of enrollees do not have coverage for substance abuse services; 18 percent of enrollees do not have coverage for mental health services; 9 percent of enrollees do not have coverage for prescription drugs.”
The law did allow “grandfathered” plans — for people who had obtained their insurance before the law was signed on March 23, 2010 — to escape this requirement and some other aspects of the law. But the regulations written by HHS while implementing the law set some tough guidelines, so that if an insurance company makes changes to a plan’s benefits or how much members pay through premiums, copays or deductibles, then a person’s plan likely loses that status.
If you dig into the regulations (go to page 34560), you will see that HHS wrote them extremely tight. One provision says that if copayment increases by more than $5, plus medical cost of inflation, then the plan can no longer be grandfathered. (With last year’s inflation rate of 4 percent, that means the copay could not increase by more than $5.20.) Another provision says the coinsurance rate could not be increased at all above the level it was on March 23, 2010.
While one might applaud an effort to rid the country of inadequate insurance, the net effect is that over time, the plans would no longer meet the many tests for staying grandfathered. Already, the percentage of people who get coverage from their job via a grandfathered plan has dropped from 56 percent in 2011 to 36 percent in 2013.
In the individual insurance market, few plans were expected to meet the “grandfathered” requirements, which is why many people are now receiving notices that their old plan is terminated and they need to sign up for different coverage. Again, this should be no surprise. As HHS noted in a footnote of a report earlier this year: “We note that, as the Affordable Care Act is implemented, we expect grandfathered coverage to diminish, particularly in the individual market.”
Indeed, at least six states — Virginia, Idaho, Kentucky, Louisiana, Wyoming and Kansas — require insurance companies to cancel existing policies, rather than amend them, if the grandfathered coverage lapses.
Now, it’s important to note that many people — perhaps a large majority — are receiving notices that they have lost their insurance plan because they were never grandfathered in the first place. In other words, they got a plan after the bill was signed into law back in 2010. If that’s the case, they have no option but to accept the more fulsome insurance mandated by the law.Also, a list of 13 Democrats running for reelection in 2014 who knew Americans would lose their current health insurance plan, but, nevertheless, continued to lie about it.
(H/t Weasel Zippers for both).