Chaos - Arbitrary Policy Shift For Some People With Insurance Cancelled By Obamacare

by AF "Tony" Branco

Today in Washington, D.C. - Dec. 20, 2013:
The House was not in session. The Senate reconvened at 9 AM today and resumed post-cloture consideration of the nomination of Alejandro Mayorkas to be Deputy Secretary of Homeland Security.

At 10, the Senate began a series of votes on nominations Senate Majority Leader Harry Reid (D-NV) decided to push through after he used the nuclear option to strip the minority’s ability of filibuster them. The Senate voted 54-41 to confirm the Mayorkas nomination, 56-39 as Deputy Directorof the DHS, and also to invoke cloture on the nomination of John Koskinen to be IRS Commissioner, 59-36 to confirm the Koskinen nomination, 56-36 to invoke cloture on the nomination of Brian Davis to be a district judge for the Middle District of Florida, to 68-26 confirm the Davis nomination, and finally 59-34 to invoke cloture on the nomination of Janet Yellen to be Chairman of the Federal Reserve System.

Yesterday, the Senate voted 84-15 to pass H.R. 3304 and 55-45 ,after using the nuclear option on cloture,  for on the Alejandro Mayorkas nomination. As The Washington Times's Stephen Dinan noted, "Mayorkas is currently the chief of U.S. Citizenship and Immigration Services, one of the immigration branches within the Homeland Security department. As director, he has been accused of overruling career officers in his agency in order to approve visa applications sought by well-connected Democrats, including Mr. Reid."

If an adjournment resolution is approved, the Senate is expected to adjourn until January 6^th. When the Senate reconvenes, the first item on the agenda will be a vote on the confirmation of Janet Yellen.

Reuters reports, “The Obama administration made a major last-minute policy shift on Thursday, saying the change would help Americans meet a looming deadline to replace insurance plans canceled because of new standards under Obamacare reforms. Health and Human Services Secretary Kathleen Sebelius said that this group of people - estimated by the administration to be fewer than 500,000 in number - will be allowed to claim a ‘hardship exemption’ from the requirement in the 2010 Affordable Care Act to buy insurance. Armed with the exemption, they then have the option to buy ‘catastrophic’ insurance plans - cheaper insurance with a minimal coverage level that, under the law, is normally available only to people under the age of 30. . . . In the law, there are 14 categories of ‘hardships’ that can be used to get an exemption from the mandate to buy insurance, such as a recent eviction or bankruptcy. But this is the first exemption prompted by the administration's botched rollout of the law, and comes after months of insistence that there would be no delays in implementing the individual mandate. The rocky rollout of President Barack Obama's signature policy achievement has been embarrassing and politically damaging, helping push Obama's approval ratings to the lowest point of his presidency.”

These latest tweaks, exemptions, and changes, all done without the approval of Congress, leave Avik Roy’s head spinning. He writes, “It’s hard to come up with new ways to describe the Obama administration’s improvisational approach to the Affordable Care Act’s troubled health insurance exchanges. But last night, the White House made its most consequential announcement yet. The administration will grant a ‘hardship exemption’ from the law’s individual mandate, requiring the purchase of health insurance, to anyone who has had their prior coverage canceled and who ‘believes’ that Obamacare’s offerings ‘are unaffordable.’ These exemptions will substantially alter the architecture of the law’s insurance marketplaces. Insurers are at their wits’ end, trying to make sense of what to do next.” Roy notes all the previous exemptions and changes the Obama administration announced after Americans started receiving cancellation notices, but points out, “[F]or all of the seeming flurry of activity, as of yesterday the fundamental problem—people losing their old health plans, and failing to gain new ones—remained. Last night, in a stunning reversal, the Centers for Medicare and Medicaid Services announced that Americans who have had their plans canceled will be exempt from enrolling in the exchanges, ‘because some consumers were finding other coverage options to be more expensive than their cancelled plans or policies.’ For years, these pages have raised the concern that the ‘Affordable Care Act’ will drive up the cost of health insurance. . . . But this most recent announcement from the Obama administration is the first time it has publicly admitted that Obamacare is making health insurance less affordable, not more so, for millions of Americans. . . . This decision by the administration—characterized by HHS Secretary Kathleen Sebelius as an attempt to provide ‘the smoothest possible transition’ into the Obamacare era—has instead thrown the individual insurance market into chaos. . . . ‘This latest rule change could cause significant instability in the marketplace and lead to further confusion and disruption for consumers,’ said Karen Ignagni, president of AHIP, the insurer trade group, last night. . . . ‘Panic mode’ is how insurance executives are describing the administration’s moves—but the insurers themselves are going to have to wonder about the financial viability of their exchange-based plans.”

Politico noticed the arbitrariness of all the administration’s moves. “NBC News chief White House correspondent Chuck Todd says with all the changes the Obama administration has made to the rules of Obamacare, he doubts a ‘single person’ will end up paying a penalty next year when the individual mandate takes effect. ‘If you put together all the different ways that they have delayed or grandfathered certain things in … I’m starting to wonder if anybody is ever going to pay the penalty in the first year,’ Todd said on MSNBC’s ‘Morning Joe’ on Friday. ‘Is there going to be a single person that is going to be responsible for paying that $95? At this point it doesn’t look like it.’ . . . He called the move ‘arbitrary,’ saying the uneven enforcement is upsetting insurance companies trying to keep up. ‘If you didn’t get the [cancellation] notice and you don’t like the prices and you’re not eligible for subsidies, then you can’t apply for this hardship. So it’s really kind of arbitrary here what they did at the last minute,’ Todd said. ‘And what’s why insurance companies are upset, because it is an arbitrary rule, there isn’t even, other than basically to placate people that have been the most upset with these cancellation notices.’”

In a way, the Obama administration is admitting here that Obamacare itself is a hardship. The law resulted in cancelled plans (just as Republicans predicted it would) and higher premiums (as Republicans predicted), but people are required to purchase insurance at these higher prices. So now for some families who lost their insurance plan due to Obamacare and can’t afford the higher premiums caused by Obamacare, they can buy catastrophic coverage plans (which the laws defenders have trashed as junk insurance in the past) and not face the tax imposed by Obamacare next year on those without insurance.  But as Obamacare defender Ezra Klein explains, “[T]his puts the administration on some very difficult-to-defend ground. Normally, the individual mandate applies to anyone who can purchase qualifying insurance for less than 8 percent of their income. Either that threshold is right or it's wrong. But it's hard to argue that it's right for the currently uninsured but wrong for people whose plans were canceled. . . . Put more simply, Republicans will immediately begin calling for the uninsured to get this same exemption. What will the Obama administration say in response? Why are people who plans were canceled more deserving of help than people who couldn't afford a plan in the first place? . . . The same goes for the cheap catastrophic plans sold to customers under age 30 in the exchanges. A 45-year-old whose plan just got canceled can now purchase catastrophic coverage. A 45-year-old who didn't have insurance at all can't. Why don't people who couldn't afford a plan in the first place deserve the same kind of help as people whose plans were canceled?”

Responding to announced delay to the individual mandate for those who have lost their health plans under ObamaCare, House Speaker John Boehner (R-OH) said, “With this latest delay, the Obama administration is once again admitting that the president’s health care law is unworkable and unaffordable.  Millions have lost the plans they liked, only to find themselves priced out of new policies with higher premiums and out-of-pocket costs.  The administration’s action does nothing to address the problems at the center of the president’s health care law, or to help the families suffering its consequences.  All Americans deserve a hardship exemption from this train wreck of a law, and a focus on patient-centered reforms that will help lower costs and protect jobs.”

The real problem is that this whole law has been a catastrophe. As Senate Republican Leader Mitch McConnell said, "For the folks patient enough to successfully navigate through Healthcare.gov, many are finding that Obamacare offers higher premiums, costs, or deductibles – sometimes all three – in exchange for coverage that’s in many cases inferior to what they had before. Fewer choices, restricted hospital networks, losing doctors our constituents know and trust. That’s what many are getting in exchange for higher costs and skyrocketing premiums, even after the President promised that reform would ‘cut costs and make coverage more affordable for families and small businesses.’

". . .  the government’s own studies on this issue now indicate that Obamacare will actually increase the cost of health care in America by more than $620 billion. As one California woman recently put it, Obamacare feels like being ‘forced into a lower coverage plan, for more money.’ . . . So the Administration and its allies in Congress can talk until they’re hoarse about a website, or about nominees, or about whatever else they think they can say to distract Americans from the failures of this law. But it isn’t going to work. And to the millions of Americans suffering under Obamacare, you should know that Republicans are on your side. We’re going to keep fighting for true health reform that lowers costs, for reform that promotes choice and a better quality of care. And we’re going to keep fighting against the idea that government knows better than you do when it comes to your family’s health care."

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