"This bill provides a simple fix to a complex problem," Feinstein said in a statement, but "fix" isn't the right word. Whether you like Obamacare or not, the health insurance industry is too invested in introducing new plans to keep the old ones. As Danny Vinik noted this week on Business Insider, allowing people to keep their plans would lead to young people keeping their bare bones, "bad apple" plans (to use the president's terms), while old and sick people would flock to Obamacare, leading to a death spiral and higher premiums in 2015. That would be bad.
Of course, that assumes insurers would even be willing or able to keep those old plans. The House's "Keep Your Plan Act" would only allow insurers to keep offering non-compliant plans, not force them. Meanwhile, Landrieu's bill would force the industry to keep those plans, which is easier said than done. The insurance industry has been working for the last three years to create and input their new bronze, silver, gold and platinum plans, Bob Laszewski, president of Health Policy and Strategy Associates, noted this week. He wrote (emphasis added):
Cancellation letters have been sent. Their computer systems took months to program in order to be able to send the letters out and set up the terminations on their systems. Even post-Obamacare, the states regulate the insurance market. The old products are no longer filed for sale and rates are not approved. I suppose it might be possible to get insurance commissioners to waive their requirements but even if they did how could the insurance industry reprogram systems in less than a month that took months to program in the first place, contact the millions impacted, explain their new options (they could still try to get one of the new policies with a subsidy), and get their approval?
It's an insincere move that undermines health care reform
So, insurance companies probably aren't going to turn around and let people keep their plans in the blink of an eye, which means Feinstein and Landrieu's bill would have accomplished... nothing, other than to make some people happy until they realized how silly this stunt is. This isn't about letting people keep their plans—Democrats knew that possibly millions of plans would not be grandfathered, but assumed the website would work, alleviating the problem. It's because the website doesn't work that all this politicking is necessary, but even from that angle this doesn't work.
Before the Affordable Care Act, insurers were able to cancel plans much more freely. "Since insurance companies now won’t be allowed to collect premiums while you’re healthy only to yank coverage when you get sick, they have no choice but to pre-emptively cancel plans that wouldn’t be financially beneficial to actually pay out," Matt Yglesias argued Tuesday night at Slate. "Clearing the landscape of this kind of mirage insurance and making sure that everyone has proper coverage—which, yes, may be more expensive—is a feature of the Affordable Care Act, not a bug."