How to fix this mess

Amid the finger pointing and political theatre surrounding the so far inauspicious debut of Obamacare lurks this startling possibility:  Come February, fewer Americans could be enrolled in private health insurance than were covered on December 1, 2013.

Call it a perfect storm of unintended consequences.  Health plans are being cancelled.  Exchanges are not dispensing subsidies.  Consumers are reeling from sticker shock.  Yet at least some of this upheaval is avoidable.  Here are five things Congress and the President should do to provide stability and health security for people losing their coverage.

{mosads}First, all insurance companies should be allowed to extend their current plans through the end of 2014. This would require a joint effort of Congress and the Administration, state insurance departments and the regulators at Health & Human Services (HHS). Many insurance companies have already given their customers the state-by-state required six-month notice of termination.  

If this fix is made, millions of people might not need to lose coverage at the end of 2013, granting them extra time to make an orderly transition to new plans. The plans in place for 2013 should be given a special ‘grandfathered’ status for calendar year 2014, such as under the Upton bill that the House passed with bipartisan support.  Unfortunately, the administration has threatened a veto, even though the president’s “fix” is unclear and likely won’t work.

Second, Congress should fund, and support states that fund, high risk pools—which directly subsidize coverage for the hardest to ensure Americans.  In theory, the Affordable Care Act makes high-risk pools unnecessary by prohibiting insurers from charging more to patients with expensive pre-existing conditions, such as cancer or hemophilia.  In practice, forcing these people into exchange pools will drive up costs for healthier populations, which then discourage some from signing up, all while needlessly shifting costs to taxpayers.   Two ways to limit this sticker shock would be to reopen the Federal Pre-existing Conditions Insurance Program and resume funding for state-based pools.  This change may not affect 2014 rates, but it could make a big difference for 2015 and beyond.

Third, short term medical plans should be temporarily reclassified as meeting the requirements of ‘minimal essential coverage’ under the ACA.  This adjustment, which the administration could probably do on its own, would accommodate the many consumers who today are buying short term medical plans as a temporary stop-gap in the face of plan cancellations.  There are now an estimated two million Americans covered by short term medical plans—nearly twice as many as a year ago.  Many of these consumers may not be able to buy permanent health insurance in the non-open enrollment periods during 2014 when their short term medical plans expire.  

A short term medical plan, which typically features low copayments and provides up to $2 million in lifetime benefits, is accepted by nearly all doctors, yet it does not meet the ACA regulatory standard of “minimum essential coverage”, meaning policy holders would be subject to the individual mandate penalties even though they have coverage.  Temporarily expanding the definition of insurance to include such plans would both ensure broader coverage and remove the possibility that those responding to plan cancellations by purchasing a short term plan have to pay the individual mandate tax.

Fourth, HHS should waive the exchange certification requirements for all licensed health insurance agents through calendar year 2014.  Agents can’t help customers enroll in exchanges unless they complete new certification requirements by the exchanges.  Participation has been stymied by delays and confusions.  To be an insurance broker or advisor you must pass rigorous state licensing exams and you must meet continuing education requirements in each jurisdiction.

Agents and brokers should not need to be re-certified by the exchanges. Backlogs at the exchanges, confusion and delay, have resulted in fewer consumers getting the help they need from their personal health insurance advisors.  Health insurance is not like buying an airline ticket or booking a hotel room.  Nearly every American has done that countless times, and the online tools they use are time-tested and proven to work. Health insurance is difficult to purchase — even without medical underwriting.  Consumers need qualified help and agents/brokers should be granted a fast-track to help them.

Fifth, all consumers should be allowed to purchase an affordable health plan.  Under Obamacare, only those aged 30 or under and who cannot obtain affordable coverage can purchase a catastrophic health policy.  If a 45 year old is in the same situation, why discriminate based on age?  Congress should expand the most affordable option to all Americans, regardless of age.  In addition, Congress should create a lower cost option on exchanges that cover at least half of all out of pocket expenses by allowing a new “Copper” plan.

Health insurance is being reformed, as it should be. America needs more people with coverage, but they also need more options and choices.  Congress and the President should take modest steps to change the ACA to ensure Americans don’t lose their plans or face penalties for buying coverage that isn’t “good enough”.