Insurance Companies Stab Obama In The Back

There’s an old saying:  ‘When you lie down with snakes, expect to be bitten.’ That’s something President Obama should have kept in mind way back in 2009 when he cut a sweetheart deal with the health insurance industry in an effort to insure passage of health care reform. Remember? In exchange for a windfall of new customers, the industry agreed not to lobby or run ads against the proposal. The deal got the job done, the insurance industry sat out the debate, and the ACA was passed.

Now that the plan is being implemented and insurance companies can look forward to millions of new enrollments, many in the lucrative young and low-risk category, how is the industry paying Obama back? If you guessed by engaging in deceptive business practices, lying to consumers, and trying to undermine the insurance exchanges, you’re exactly right!

Aside from the technological issues with the Healthcare.gov website, the single biggest issue getting traction right now is that of cancelled policies. You’ve certainly heard the breathless stories of “Obamacare disasters” wherein people perfectly happy with their current insurance plans are finding their policies canceled because they don’t comply with ACA requirements. As if that’s not bad enough, the new policies their carriers offer as replacements are as high as 60 to 100 percent more expensive. Ouch, right?

But didn’t Obama and the Democrats promise that people who liked their policies could keep their policies? The fact is that the law does provide for plans purchased prior to the law being passed to be ‘grandfathered’ as acceptable regardless of whether they are entirely ACA-compliant. Those policies are not being canceled. The problem of canceled policies comes from two places: 1) policies purchased after the ACA became law, and 2) policies which were changed following the ACA’s passage.

In other words, insurance carriers, fully aware that changes made to policies or new non-compliant policies would become ineligible when the law took full effect, went ahead and knowingly sold those policies and made those changes without notifying consumers of the issue. After all, no one thought to write this kind of disclosure into the law. So while what they’ve done over the last four years is not against the law, it’s not exactly stand-up business practice, is it? Then again, the insurance industry is rarely accused of being overly ethical.

To make matters worse, when sending cancellation notices, emphasizing that this is due to Obamacare, by-the-way, insurers are offering replacement plans at exorbitant price increases, and without directing consumers to ACA exchanges where they more-than-likely could find more affordable plans and may even qualify for subsidies. In fact, most of those “disaster” stories you’re seeing are people who would actually fare better under an exchange plan — not just receiving better or comparable coverage, but at a better price, as well. In other words, insurers are trying to rip-off customers and make Obamacare take the blame.

None of this is to say that Obama should get a pass on poor messaging and communication. Surely it was easier in the run up to elections to just keep repeating “if you  like your plan you can keep it” without getting into the weeds with caveats about grandfathered plans without changes purchased prior to the law’s passage. Still, the upshot is that people came to have certain expectations, regardless of what the law actually says.

With the troubled website hampering consumers’ ability to compare exchange plans to the “sticker shock” inducing prices being quoted by carriers, the situation is ripe for Republican crowing and media hyperventilation. Don’t hold your breath waiting for the media to suddenly start taking a critical view of insurance company actions. The media is not going to altruistically help Obama and the Democrats out of this.

Unfortunately, Democrats seem uninclined to help themselves. Instead of calling out insurance company shenanigans, they’re busy running for cover in the form of proposals to grandfather-in any half-baked, woefully-inadequate policy insurance companies have seen fit to sell over the last four years. Instead of looking for solutions for the small number of people who actually will suffer price increases or reduced coverage benefits, Democrats are cow-towing to those nostalgic for the good ol’ days of policies that don’t actually cover anything and leave people bankrupt.

But most egregious is the messaging in which some on the left are indulging: if you liked your policy, you’re an idiot. The fact is that while more expensive ACA-compliant policies do indeed provide far better coverage, there’s a reason people bought those junk policies in the first place: it’s what they could afford. In this economy, with people struggling as much as they are with low wages and insecure jobs, it’s hard for a lot of folks to see the benefit in paying more. Democrats need an effective answer to that, and it’s not “hush, you’ll pay more and you’ll thank us.”

Disastrous launches of government technology are nothing new and should not have been unexpected. But then again, never has a government site launched with so much political baggage. Hopefully, as the site’s problems are ironed out, the vast majority of visitors will have positive experiences, including those there to replace a recently canceled plan. With that difficulty fixed, Democrats had better begin a full-throttle calling-out of insurance company dirty tricks. (All the better to remind people why we need a public option at the very least.) Let us hope Obama has finally learned a lesson about lying with snakes.

By: Sandi Behrns

Sandi Behrns is a noted policy nerd, new media & web developer, and consultant to progressive organizations and campaigns. She is a senior contributor to Liberaland, and the Executive Editor of Progressive Congress News.