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A No Good, Very Bad Day for the ACA

This piece does a masterful job of concisely showing, through video evidence, of why the ACA has had a no good, very bad day. 

As an advocate for the ACA, I too am guilty of repeating the phrase, “if you like your plan, you can keep it.”  However, as several journalists wrote about yesterday, turns out that ignored the reality that many health insurance plans individuals purchased on the open market prior to the ACA would not exist after implementation of the ACA.  

Data existed in 2010 showing that health insurance policies bought by individuals prior to enactment of the ACA would not comply with the minimum benefits standards of the ACA.  That data led experts to predict that anywhere from 50-75% of those policies - purchased by individuals - would not comply with the ACA.  Prior to the ACA, roughly 14 million Americans bought their own insurance representing 4.5% of the population.  Using worst case scenario numbers, as many as 10 million Americans may get a cancellation notice from their insurer prior to January 1, when their insurers will then need to comply with the minimum benefits packages.  Turns out the slogan, “If you like your plan, you can keep it,” applied to those on Medicare, Medicaid, Tricare, the Veterans Administration, Department of Defense, Employer based insurance and of course, the uninsured - roughly 95% of the American people – but not the small percentage of Americans that already purchased an individual policy.  

This has caused a great deal of anger and a great deal of fodder for opponents of the ACA.  Some reasonable conservative writers are taking a more measured approach. As an advocate of the ACA, I must admit, these are not the Americans I was fighting for to get the ACA passed.  The general impression of the individual market, all true, was that policies were too expensive, inaccessible to those with pre-existing conditions, and flimsy to the point of barely covering medical expenses incurred.  Many in health policy circles refer to the prior policies purchased on the individual market appropriately as “junk insurance.”  Deductibles in those policies were climbing, prescriptions may not have been covered, and one medical catastrophe would lead to bankruptcy despite having “health insurance.”  

I was fighting for those I care for in the Free Clinics of Virginia.  The 30 million people who have the potential of gaining access to health insurance if the ACA is completely implemented as designed (I’m looking at you, Governors unwilling to expand Medicaid).  I was, and still fight, for those who were denied insurance due to pre-existing conditions or reached their annual or lifetime coverage caps only be told they are on their own with their medical bills.  

But the fact remains that change is jarring.  Kitchen table economics are very different from Washington, DC economics.  Those 10 million people who may see their policy cancelled are looking at the sticker price of the new proposed policy and see often that it is higher.  They remember those words, “if you like your plan you can keep it” and feel betrayed.  

There is reason to hope, though.   Those same individuals, in large numbers, will qualify for tax subsidies to afford their insurance.  All of those individuals will be protected by more robust insurance, free from the threat of rescission, free from annual or lifetime caps, making preventive care free from out of pocket cost and ensuring that for-profit health insurers spend 80% of your premiums dollars on your health care.   Looking at one of the most prominent media stories about this controversy is a Florida woman who will lose her $50 a month insurance policy.  However, there is ample evidence she will be better off.  You don’t have to take my word for it, just look at individuals who have done their own math.

But the media narrative will be focused on those who understandably feel betrayed who are receiving cancellation notices.  Many will qualify for subsidies.  All will be protected from bankruptcy if a serious illness occurs.  All will have preventive care without out-of-pocket costs which saves lives. But there is going to be a population who will experience the broken promise of “if you like your plan you can keep it.”  Those individuals will be middle class, making more than 400% of the federal poverty limit ($46K for an individual, $94K for a family of four) thereby missing the cut off for federal income tax subsidies.  They will be among the 10 million Americans with a cancellation notice for their previous individual policy that does not comply with the minimum benefits standard of the ACA.  I do not know how many Americans will fall into this trap of losing their prior policy and making too much money for a subsidy.  Maybe some health economists can figure this out, but I suspect those calculations will be very difficult.  We, as the advocacy community for the ACA, need to acknowledge this population and make an appeal akin to this pitch perfect piece from my favorite health care journalist Jonathan Cohn. The big picture is that our country’s health care system will be much more stable and much better off in the long run, but how much a consolation this is for those who make too much for a subsidy and lose their prior coverage is hard to predict.  The most direct benefit may not be felt by those who remain healthy – they will never face the specter of financial ruin for a catastrophic illness.  

With all sincerity, I apologize to those who have heard over and over again, including from me, that “if you like your plan, you can keep it” if you are among those that experiences a different reality.  It remains my belief that we will be better off as a nation with the Affordable Care Act and even those who do not qualify for subsidies will directly and indirectly benefit in the years to come. 

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