Senator Mary Landrieu, a Louisiana Democrat who’s up for reelection in 2014, is introducing a plan to address one of the most prominent problems with the Affordable Care Act: the inability of millions of Americans to keep their health-care plans, as the president promised.
“The promise was made,” Politico reports Landrieu said on Wednesday, ”and it should be kept. And it was our understanding when we voted for that bill that people when they have insurance could keep with what they had. So I’m going to be working on that fix.”
Republican senator Ron Johnson of Wisconsin said on Friday he would be introducing a plan intended to do the same thing; the plans would “grandfather in” existing plans that are going to be cancelled. The problems with federal and state exchanges mean that many Americans could be unable to sign up for a new, compliant plan by January 1 (the individual mandate would kick in if they haven’t signed up for a plan by March 31), and NR’s editors have endorsed Landrieu’s and Johnson’s idea.
Landrieu’s claim that those voting for the ACA had an “understanding” that people could keep insurance has more truth to it than one might think: While the law’s new mandates would ultimately doom most existing plans, including most catastrophic insurance, the law was supposed to grandfather plans that had been written as of 2010 and exempt them from the mandates.
But, as I explained yesterday, the Obama administration then chose, in effect, to regulate these grandfathered plans out of existence, by declaring in the rules-writing process that they lose their status if there is a “material change” in coverage. They didn’t have to apply this rule at all, and they certainly didn’t have to define “material change” as widely as they did. The administration backed off on some of more ridiculous definitions — changing the third-party plan manager, for instance – but still made it impossible to change benefits or increase cost-sharing (deductibles, co-pays, etc.) in any significant way. And since the ACA imposes a number of costly mandates even on grandfathered plans and will raise costs in other ways, it’s incredibly hard to maintain grandfathered status come January 1.