Under heavy pressure by congressional Democrats to fix Obamacare, President Barack Obama announced Thursday that the administration will allow insurance companies to keep individual customers on their existing plans for an additional year, even if the plans don't meet the law's standards.
The president's plan does not require the insurance companies to take back the Americans they kicked off, but does give them the option of taking the customers back if they want. The government will inform state insurance commissioners that they have permission to allow insurers to offer the out-of-date private plans for an additional year. It's up to them whether to allow them to continue or not.
Obama has been caught between two problems of his administration’s own making: millions of cancellations of individual health care coverage despite his pledge that “if you like your plan, you can keep it” and a botched federal website that was supposed to allow Americans to buy new insurance.
"I completely get how upsetting this can be for a lot of Americans," a contrite Obama told reporters Thursday afternoon. "Americans whose plans have been cancelled can choose to enroll in the same kind of plan."
The cancellations, estimated to affect up to 7 million Americans, are due to new standards in Obamacare that insurance companies are required to meet. Those who received cancellations were expected to go onto the new federal insurance marketplace — which has been plagued by tech problems since its Oct. 1 rollout — and purchase coverage there. About 5 percent of insured Americans get their insurance on the individual market.
But it remains unclear whether insurance companies will rescind the cancellations they’ve already handed out, since the Obama administration is not requiring them to do so. And the extension is only for one year, so the fix only delays the fact that many Americans will not be able to keep their current insurance under Obamacare.
The administration argues that many of the cancelled plans were sub par and that many people can buy better insurance for cheaper on the federal marketplace. The law significantly overhauled the individual insurance market, prohibiting plans that kick people off if they become sick or hiking premiums due to illness, among other reforms.
Obama said he believes the Affordable Care Act will work, but admitted the rollout of the exchanges has been bad. "We fumbled the rollout of this health care law," he said. The president added that he was not informed that the glitches in healthcare.gov were so extensive and crippling — he believed they were minor and not systemic before Oct. 1. With his second term — and his legacy — in the balance, Obama frequently seemed deflated, almost defeated, light-years away from his soaring “audacity of hope” or the “fierce urgency of now” that powered his eager first term.
Things will get better, he promised, “if we can just get the darn website working and smooth this thing out.”
“I make no apologies for us taking this on because somebody, sooner or later, had to do it,” the president said. “I do make apologies for not having executed better over the last several months.”
And he offered worried and angry congressional Democrats — many of whom fear Obamacare will prove a potent Republican weapon in the 2014 mid-term elections — a kind of “I feel your pain” moment.
“There is no doubt that our failure to roll out the ACA smoothly has put a burden on Democrats, whether they're running or not, because they stood up and supported this effort through thick and thin, and, you know, I feel deeply responsible for making it harder for them rather than easier for them,” he said. “We’re letting them down.”
But he took more personal responsibility for the botched rollout than he has before in public.
“There have been times where I thought we, you know, got slapped around a little bit unjustly. This one's deserved, all right? It's on us,” he said.
After promising on Oct.1 that buying insurance on the federal website would work “the same way you’d shop for a plane ticket on Kayak or a TV on Amazon,” a more chastened Obama acknowledged that “buying health insurance is never going to be like buying a song on iTunes.”
He denied any deliberate attempt to mislead the public or that he was hasty in rolling out the website even as internal tests showed it would fail.
“I'm accused of a lot of things, but I don't think I'm stupid enough to go around saying, ‘this is going to be like shopping on Amazon or Travelocity,’ a week before the website opens, if I thought that it wasn't going to work,” he said.
As he closed the press conference, Obama dug for a more upbeat, combative message.
“Part of this job is, the things that go right, you guys aren't going to write about. The things that go wrong get prominent attention; that's how it's always been. That's not unique to me as president, and I'm up to the challenge,” he said.
Democrats crafted a bill that would require insurance companies to keep on the millions of customers, pressuring Obama to fix it. Sen. Mary Landrieu, the bill's sponsor, said in a statement she appreciated the president's announcement and would continue to "support legislation to fix this problem."
Republicans, meanwhile, have pounded away at Obama’s false promise and failed website to hammer home their message that the president is neither honest nor a competent manager.
"There is no way to fix this," Republican House Speaker John Boehner said. "I am highly skeptical that they can do this administratively."
Obama's statement is part of an all-out push to rescue the law. The White House was to host Senate Democrats later in the day, while chief of staff Denis McDonough was expected on Capitol Hill to reassure House Democrats.
Earlier this week, former President Bill Clinton advised President Obama to "honor the commitment" he made and to allow Americans to keep their health care plans, if they like them. That was a central promise Obama made when he sold Obamacare, but one that turned out not to be true when Obamacare began to be implemented last month.
"So I personally believe, even if it takes a change to the law, the president should honor the commitment the federal government made to those people and let them keep what they got," Clinton in an interview released Tuesday.
Now President Obama is taking Clinton's advice and trying to honor that commitment. In remarks today at the White House today, Obama said, "I completely get how upsetting this can be" lose insurance plans that I promised Americans would be able to keep. "To those Americans, I hear you loud and clear."
But there's a catch with president's proposed solution. The president is not proposing that the law be changed to allow all health insurance plans grandfathered into Obamacare's eligibility requirements.
No, instead the White House is saying that it will use "enforcement discretion" to allow illegal health insurance plans to be able to still be sold. That is, the Obama administration will not enforce the penalty on individuals for not having eligible health insurance plans and they'll allow the insurance companies to still sell so-called bad plans -- plans they technically can't sell under Obamacare.
"Under the White House’s approach, the Department of Health and Human Services will notify the nation’s state insurance commissioners that they have federal permission to allow consumers who already have such insurance policies to keep them through 2014," reports the Washington Post.
He'll also be forcing insurance companies to help advertise for Obamacare by letting customers know that there's an Obamacare marketplace where they can purchase (or get subsidized) health care coverage.
Obama's proposal is an extra-legal solution to a big problem for millions of Americans around the country.
"I don't see within the law how they can do this administratively," said Speaker John Boehner in a press conference on Capitol Hill. "No one can identify anything the president could do administratively to keep his pledge that would be both legal and effective."
The proposed White House fix so that Obama can honor his commitment is also likely to create more problems and to further distrust the American people have for this administration, which makes law based on what it chooses to enforce while sidestepping the constitutional process that is in place.
Indeed, there's another problem. As Texas senator Ted Cruz says, the president cannot fix an unfixable law. "We cannot 'fix' Obamacare. The damage has been done, as millions of Americans have already been made to pay higher premiums and lose their jobs, wages, and health care plans," Cruz said today.
President Clinton famously dismissed Obama's candidacy for president of the United States by saying, "Give me a break. This whole thing is the biggest fairy tale I have ever seen."
With Obama's reliance on "enforcement discretion," it would now seem that Clinton had a point -- and that the "fairy tale" continues.