Politics

Obama Will Announce Support for 1-Year Grace Period on Health Care Plans

According to CNN's Dana Bash, President Obama will announce at a news conference this morning that he supports a plan allowing people to keep their existing healthcare plans for a period of one year.

By Philip Bump
This article is from the archive of our partner .

President Obama will announce at a news conference on Thursday morning that he supports a plan allowing people to keep their existing healthcare plans for a period of one year, according to senior White House officials and multiple reports. It will not be a legislative change; rather, it would be enforced under the Department of Health and Human Services' existing power.

The predicted announcement is a response to complaints that Obama had broken his frequently-repeated campaign promise that people could keep their existing healthcare plans if they liked them. As Obamacare began to roll out last month, a number of people received notices from their insurers that their policies would have to change. This was largely because their existing plans didn't meet the baseline standard mandated under the Affordable Care Act. That baseline includes policy components meant to ensure that, on the whole, participants can afford plans and not be burdened with excessive deductibles in the event that they need to get treatment.

According to The Wall Street Journal, the Obama plan will include an effort to help the future transition:

The policy also would require insurance companies, if they extend such policies, to notify customers that alternative policies might be available under the government exchange and to tell them what benefits they wouldn't be getting if they remained with their current plans.

The president's reported proposal is more limited than the proposal from Michigan Rep. Fred Upton, who proposes a two-year period during which people could keep their plans. The president's ability to hold to his original plan, which would not have included this grace period, has steadily eroded over the past few weeks as complaints have increased about cancellations. Earlier this week, former president Bill Clinton undermined that position by advocating that people be allowed to keep their plans.

For good analysis of some of the components of the Upton bill and its effect on the health of Obamacare overall, see this piece in The New Republic.

[E]ven people holding onto grandfathered policies—the intended beneficiaries of Upton’s bill—might not be better off if his measure became law. Sure, they might have low premiums right now. But in the famously dysfunctional non-group market, insurers have been known to jack up rates when a particular group of policyholders ages, so that they are no longer profitable to insure. People who had these policies might also discover, upon getting sick, the premiums were low for reason: Weak coverage leaves them to tens of thousands of dollars in bills.

The Washington Post's Ezra Klein is skeptical.

This article is from the archive of our partner The Wire.