Health policy cancellations: New blow for White House

  • By Ricardo Alonso-Zaldivar and Stephen Ohlemacher Associated Press
  • Tuesday, October 29, 2013 8:07pm
  • Local NewsNation / world

WASHINGTON — Move over, website woes. Lawmakers confronted the Obama administration Tuesday with a difficult new health care problem — a wave of cancellation notices hitting individuals and small businesses who buy their own insurance.

At the same time, the federal official closest to the website apologized for its dysfunction in new sign-ups and asserted things are getting better by the day.

Medicare chief Marilyn Tavenner said it’s not the administration but insurers who are responsible for cancellation letters now reaching many of the estimated 14 million people who buy individual policies. And, officials said, people who get cancellation notices will be able to find better replacement plans, in some cases for less.

The Associated Press, citing the National Association of Insurance Commissioners, reported in May that many carriers would opt to cancel policies this fall and issue new ones. Administratively that was seen as easier than changing existing plans to comply with the new law, which mandates coverage of more services and provides better financial protection against catastrophic illnesses.

While the administration had ample warning of the cancellations, they could become another public relations debacle for President Barack Obama’s signature legislation. This problem goes to the credibility of one of the president’s earliest promises about the health care overhaul: You can keep your plan if you like it.

In the spring, state insurance commissioners started giving insurers the option of canceling existing individual plans for 2014, since the coverage required under Obama’s law is more robust. Some states directed insurers to issue cancellations. Large employer plans that cover most workers and their families are unlikely to be affected.

The cancellation notices are now reaching policyholders, and they’ve been complaining to their lawmakers — who were grilling Tavenner on Tuesday.

“Based on what little information the administration has disclosed, it turns out that more people have received cancellation notices for their health care plans this month than have enrolled in the (health care website),” said Ways and Means Chairman Dave Camp, R-Mich. He cited a news report of 146,000 cancellations in his state alone.

Up and down the dais, lawmakers chimed in with stories of constituents who had received similar notices. Republicans offered examples of people being asked to pay more.

Democrats countered by citing constituents who had been able to find lower-cost coverage than they have now. Ranking Democrat Sander Levin of Michigan said one of his constituents has been paying $800 a month for a BlueCrossBlueShield plan and managed to find comparable coverage for $77, after tax credits that lower the premiums.

Still, Levin added, “This has become a matter of legitimate discussion.”

It could take months to sort out the balance of individual winners and losers. There’s not a central source of statistics on how many people have gotten cancellations. Even the number of people who buy insurance individually is disputed.

It isn’t the administration’s fault, said Tavenner. “In fact the issuer has decided to change the plan; (they) didn’t have to.”

Obama’s promise dates back to June of 2009, when Congress was starting to grapple with overhauling the health care system to cover uninsured Americans.

“If you like your health care plan, you’ll be able to keep your health care plan, period,” the president said in remarks to the American Medical Association. “No one will take it away, no matter what.”

Some immediately saw the promise as too broad to deliver on, given that health plans are constantly being changed by the employers that sponsor them or by insurers directly.

Nonetheless, Democrats in Congress devised a complicated scheme called “grandfathering” to try to make good on Obama’s pledge. It shields plans from the law’s requirements, provided the plans themselves change very little. Insurers say it has proven impractical.

The White House weighed in Tuesday, with spokesman Jay Carney saying the changes are part of a transition to better coverage. “The good news,” he said, “is that for every one of these individuals who might have a plan that is almost by definition providing less than minimal benefits … you are now being offered a variety of options, including options by the very insurer that covers you already, for new coverage.”

Critics say that’s like an airline forcibly upgrading you from economy to business class, and exposing you to a higher ticket price.

Tavenner delivered the most direct mea culpa yet from the administration for the technical problems that have kept many Americans from signing up through HealthCare.gov.

“I want to apologize to you that the website has not worked as well as it should,” she told the committee.

The first senior official to publicly answer questions from lawmakers, Tavenner was pressed not only on what went wrong with the website, but also whether lawmakers can trust recent promises that things will be running efficiently by the end of November.

She declined to provide enrollment numbers, repeating nearly 20 times they will not be available until mid-November. But she did try to lower expectations of a strong initial sign-up. “We expect the initial number to be small,” Tavenner said.

An internal memo obtained by The Associated Press showed that the administration expected nearly 500,000 uninsured people to sign up for coverage in October, the program’s first month. Committee chairman Camp told Tavenner that by his math, the administration appears headed for less than a fourth of that.

Outside contractors testified last week that there wasn’t sufficient time to test the complex online enrollment system, which froze the day it was launched, Oct. 1.

The website is supposed to be the online portal to coverage for people who don’t have health plans on the job. Its audience is not only uninsured Americans but those who already purchase coverage individually.

Under the law, middle-class people can qualify for tax credits to make private health insurance more affordable, while low-income people will be steered to Medicaid in states agreeing to expand that safety net program.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Local News

Trader Joe’s customers walk in and out of the store on Monday, Nov. 20, 2023 in Everett, Washington. (Olivia Vanni / The Herald)
New Trader Joe’s opens this week at Everett Mall

It’s a short move from a longtime location, essentially across the street, where parking was often an adventure.

Ian Bramel-Allen enters a guilty plea to second-degree murder during a plea and sentencing hearing on Wednesday, March 6, 2024, at Snohomish County Superior Court in Everett, Washington. (Ryan Berry / The Herald)
‘Deep remorse’: Man gets 17 years for friend’s fatal stabbing in Edmonds

Ian Bramel-Allen, 44, pleaded guilty Wednesday to second-degree murder for killing Bret Northcutt last year at a WinCo.

Firefighters respond to a small RV and a motorhome fire on Tuesday afternoon in Marysville. (Provided by Snohomish County Fire Distrct 22)
1 injured after RV fire, explosion near Marysville

The cause of the fire in the 11600 block of 81st Avenue NE had not been determined, fire officials said.

Ashton Dedmon appears in court during his sentencing hearing on Tuesday, March 5, 2024, at Snohomish County Superior Court in Everett, Washington. (Ryan Berry / The Herald)
Everett Navy sailor sentenced to 90 days for fatal hit and run

Ashton Dedmon crashed into Joshua Kollman and drove away. Dedmon, a petty officer on the USS Kidd, reported he had a panic attack.

A kindergarten student works on a computer at Emerson Elementary School on Wednesday, Feb. 28, 2024, in Everett, Washington. (Ryan Berry / The Herald)
‘¡Una erupción!’: Dual language programs expanding to 10 local schools

A new bill aims to support 10 new programs each year statewide. In Snohomish County, most follow a 90-10 model of Spanish and English.

Cassie Franklin, Mayor of Everett, delivers the annual state of the city address Thursday morning in the Edward D. Hansen Conference Center in Everett, Washington on March 31, 2022.  (Kevin Clark / The Herald)
At Everett mayor’s keynote speech: $35 entry, Boeing sponsorship

The city won’t make any money from the event, city spokesperson Simone Tarver said. Still, it’s part of a trend making open government advocates wary.

Logo for news use featuring the Tulalip Indian Reservation in Snohomish County, Washington. 220118
Woman drives off cliff, dies on Tulalip Reservation

The woman fell 70 to 80 feet after driving off Priest Point Drive NW on Sunday afternoon.

Everett
Boy, 4, survives fall from Everett fourth-story apartment window

The child was being treated at Seattle Children’s. The city has a limited supply of window stops for low-income residents.

People head out to the water at low tide during an unseasonably warm day on Saturday, March 16, 2024, at Lighthouse Park in Mukilteo, Washington. (Ryan Berry / The Herald)
Everett shatters record high temperature by 11 degrees

On Saturday, it hit 73 degrees, breaking the previous record of 62 set in 2007.

Snohomish County Fire District #4 and Snohomish Regional Fire & Rescue respond to a motor vehicle collision for a car and pole. The driver was pronounced dead at the scene, near Triangle Bait & Tackle in Snohomish. (Snohomish County Sheriff’s Office)
Police: Troopers tried to stop driver before deadly crash in Snohomish

The man, 31, was driving at “a high rate of speed” when he crashed into a traffic light pole and died, investigators said.

Alan Dean, who is accused of the 1993 strangulation murder of 15-year-old Bothell girl Melissa Lee, appears in court during opening statements of his trial on Monday, March 18, 2024, at Snohomish County Superior Court in Everett, Washington. (Ryan Berry / The Herald)
31 years later, trial opens in Bothell teen’s brutal killing

In April 1993, Melissa Lee’s body was found below Edgewater Creek Bridge. It would take 27 years to arrest Alan Dean in her death.

Logo for news use featuring the municipality of Snohomish in Snohomish County, Washington. 220118
Man dies after crashing into pole in Snohomish

Just before 1 a.m., the driver crashed into a traffic light pole at the intersection of 2nd Street and Maple Avenue.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.