November 24 2013
By Andrea Billups
The burden for delivering much of the Obamacare health plan has shifted to the states, which now need to sort out how to restore insurance plans that were canceled before the president's recent shift on mandates.
After President Obama's decision last week to allow insurance companies to maintain plans that don't match the requirements in the Affordable Care Act, the hard work falls into the laps of state insurance chiefs, who need to make decisions about the nearly 6 million Americans who already lost coverage.
Some have compared it to putting leaves back on trees or pushing toothpaste back into the tube, as the healthcare law's goal of offering more people insurance coverage will likely do the opposite, especially for those who pay for their own plans and saw them disappear.
When the president says he is going to reverse the regulations that have resulted in plan cancellations, it's not necessarily an easy step to restore those plans "because state-level insurance commissioners get to decide if those plans get reinstated in those states," Hadley Heath, a senior policy analyst at the Independent Women's Forum in Washington, D.C., told Newsmax
Already insurance regulators in Indiana, Massachusetts, Minnesota, Rhode Island, Vermont, Washington, and most recently California said they will not be going along with Obama's "fix," and will not allow insurers to renew plans that don't comply fully with Obamacare mandates.
“Such action would seriously destabilize Indiana's insurance market and create logistical chaos, fueling even more uncertainty for Hoosiers,” Stephen W. Robertson, Indiana’s insurance commissioner, said in a statement on Wednesday.
Heath said the future outlook for Obamacare appears grim as it becomes fully implemented: "It's going to be a slow drip of bad news, I'm afraid."
Heath noted that the president's reversal would extend only to canceled individual plans for a year. Next year, the debate shifts to employer-sponsored insurance plans, impacting a much bigger swatch of the population who risk losing their current plans.
An analysis by the American Enterprise Institute released this week predicted that up to 100 million employees receiving their health insurance from their place of work could have their policies canceled next year, with as many as two-thirds of all small businesses dumping their workers into Obamacare.
"The real fascinating issue here is that the president wants to create the perception that he wants people's canceled plans to be restored, but from a cost perspective, that undermines the Affordable Care Act," Heath said.
The system, Heath observed, only works if there is a sufficient level of participation. But now, "to allow people to stay on their canceled plans, it removes them from the system. So from a policy standpoint, the White House certainly doesn't want to restore their canceled plans."
The frustration generated by Obamacare exploded publicly in the White House's face this week as a single mom once touted by the president as a benefactor of the plan now says her Washington State healthcare plan turned out to be far too expensive for her to afford enrollment.
The current problems stems largely from the vast number of mandates in the new law that many healthcare plans cannot meet, especially on the individual market where consumers often tailor plans for their own needs.
Under Obamacare, the essential health benefits package covers 10 mandatory categories of services, and all items must be covered by all plans starting in 2014 whether consumers want them or would ever use them.
According to the Healthcare.gov website, the 10 essential benefits include 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.
All must be covered not only in the health insurance marketplace but by state Medicaid programs, where many new people are now eligible under the new healthcare law.
Another provision in the law allows states participating in the exchanges to decide the specific benefits to be offered. That is creating huge disparities.
For example, some states, 24 to date, have chosen to cover autism disorders and an expensive and intense form of care called Applied Behavior Analysis. At least four states thus far cover bariatric surgery for weight loss, and 10 states offer coverage for chiropractic services.
Analysts at the Heritage Foundation's Center for Health Policy Studies wrote in a report published in April: "The effect will be disparities among states, as the package of essential benefits will be more generous in some states than in others. Of course, those differences will also be reflected in plan premiums."
This portion of the law likely will also create yet another divisive hitch, noted the report's authors, Heritage Senior Research Fellow Edmund F. Haislmaier and Alyene Senger, a research associate.
"The amount paid by those receiving Obamacare's exchange subsidies will not vary by state – despite individuals in one state receiving more generous (and more costly) coverage than individuals in another state," they said. "The reason is that the Obamacare subsidies are based on the recipient's income, not the cost of the available coverage."
Heath said heightened state flexibility initially sounded like a good idea.
"States can mandate anything they want for inclusion in health insurance but it's not the case that that necessarily improves the quality of health insurance," she pointed out. "In the end, some people will be buying coverage for things they don't want to pay for."
Such coverage differences, purchasing differences, and even website differences that vary from the federal government and state to state all add up to public confusion, with little guidance available for people to find credible and up-to-date information to make decisions.
"Instead of fixing the system, Obamacare creates a new set of losers – people who will be paying more for coverage they don't want and have plans canceled that they liked," Heath added. "I think there is a growing realization among the America public that as laudable as the goals of Affordable Care Act have been, strategically, the law won't get us there."