Unwilling and Unable! Washington State Rejects Obama’s Proposal to Extend Canceled Policies

It did not take long for Obama's proposal as detailed in Obama Changes His Mind (But Only For a Year); You Can Keep Your Plan IF Insurers Reinstate Them to blow sky high.

Two hours, to be precise.

Washington State Rejects Obama’s Proposal

The Seattle Times reports State insurance commissioner rejects Obama’s proposal to extend canceled policies.

State Insurance Commissioner Mike Kreidler has rejected President Obama’s proposal to allow insurance companies to extend health insurance policies for people who have received notices that their policies will be cancelled at the end of the year.

Within two hours of President Obama’s news conference announcing the proposed administrative fix for Americans upset by their policy cancellations, Kreidler issued a statement rejecting the proposal.

“I understand that many people are upset by the notices they have recently received from their health plans and they may not need the new benefits [in the Affordable Care Act] today,” he said. “But I have serious concerns about how President Obama’s proposal would be implemented and more significantly, its potential impact on the overall stability of our health insurance market.”

“I do not believe his proposal is a good deal for the state of Washington,” Kreidler’s statement continued. “We will not be allowing insurance companies to extend their policies.”

Unwilling and Unable!

I found out about the above rejection from a Washington State Actuary who writes ...

Hello Mish

My dad introduced me to your blog a few years ago and I enjoy all your posts. In all the crazy nonsense that gets said today, I know I can come to your blog and find some common-sense thinking. Thank you.

I am an actuary at a health insurance company and the economic impact Obamacare will have on healthcare/health insurance is far from "Affordable". If anything, the Republicans should have asked for a name change on the bill.

I have experience in pricing policies on the individual market and for regulatory risk pools. When my company entered the individual market years ago, the best-selling plans were, by far, the higher deductible plans with the lowest premiums.  It was what consumers could afford to buy.  The government should not have been surprised at the feedback.

Obama today has relented to pressures by "allowing" insurers to bring the plans back for a year. He truly doesn't mean it. He wants to assuage the public without undermining his signature legislation.

Regardless, it is not uncommon for states to require a 60-day notice for filing prior to a plan launch. It's November 14th. Insurers have already passed the 60 day notification period to the states. I will be surprised if the insurers are even ABLE to re-instate plans;

Premiums would need to be developed, approved by the state, letters sent out, premiums collected, coordination with health providers, letters to the consumers. Unlike HHS, our IT teams have to go through UAT testing before any changes become live. These things take time.  Obama may even be counting on it. Why? Because if the medically underwritten population stay on their "cancelled" policies, that means less traffic to the exchanges Obama wants to promote, and less cost-subsidization which will wreak havoc on exchange premiums in 2015.

Washington state has already declared they will not allow Obama's "fix" to go through. Rising premiums are only a symptom of the disease.

WSA

Yesterday's Recap

Sens. Mary Landrieu (D-La.) and Mark Udall (D-Colo.) introduced plans that would let people keep their plans even IF insurers cancel them.
My first set of questions are simple: How the hell is that going to work? Is government going to take over every existing plan that was dropped?

Still More Questions

While pondering the above questions, I have a few more to throw at you, this time assuming Obama gets his fix and "you can keep your plan" but only for a year, and only if the insurer reinstates it.

Will insurers bother?
For a year?
Why?
What incentives do they have?

Bonus Questions

Has anyone (on either side of the aisle) thought about how their alleged fix was going to work in real life?

What constitutional right does Obama have to unilaterally change the law of the land, even if it's "only" for a year?

An Answer and a New Question

It appears we have some answers. Even IF insurers want to extend their plans (which most won't for reasons stated by WSA), they may be unable due to time constraints, state regulations, or state mandates.

This raises another question: Shouldn't Obama or his team have known this?

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com