Six Democratic senators have sent a letter to Kathleen Sebelius asking her to expand the definition of who is able to purchase catastrophic health insurance plans due to “hardship” so that this category will include people who have lost their 2013 plans and who not been able to purchase another plan. I am told the administration is on the verge of releasing guidance on this. The ACA allows people to purchase these catastrophic plans only if they are younger than 30 or if it would be a financial hardship for them to purchase ACA-compliant coverage. The senators’ letter is here. A few initial observations:
1. This is a sign the administration is desperate to avert the very real likelihood that millions more people will be uninsured next year than before.
2. It also blows out of the water the administration’s claim that people must have Bronze-Silver-Gold-Platinum coverage in order to have quality coverage.
3. It will mean that an even greater number of healthy people will have an incentive to not participate in the standard exchange plans, further eroding the risk pools.
4. It shows that the products designed in the ACA were not selling well; so, at the last minute, the administration is going to offer a very different product. Basically, the president is holding a fire sale on a failed launch.
5. And it suggests that conservatives were right all along in saying that the most important thing is for people to have catastrophic coverage.
Insurers also have no idea how to price these products. They priced for the metal plans based on one risk pool; now, with the wave of their hand, they are changing the pool and expecting these products to be available the next day? I think one thing is clear, whether one agrees with the policy or not: This is about politics over policy.
This also is a “temporary” exemption — presumably one year — so what happens after that? We get these folks into coverage they presumably want and then we kick them out of it a year later so they can buy products on the exchange that will be even more expensive next year because we messed with the risk pool?
This, I believe, is a game changer and an admission that the law is failing. And just think how you must feel if you were one of the people who spent the last two months fighting their way through HealthCare.gov to buy a policy that will be thousands of dollars more expensive than this catastrophic insurance!