Over the past few weeks, insurers have been sending out hundreds of thousands of notices alerting customers that their current plans won't comply with the ACA as of January 1 and that the owners of these plans need to find alternatives. Republicans and conservatives pointed to the development as evidence that Obama lied. Several prominent right-wingers who were covered under these plans, including Fox News contributor Mic e Malkin, have helped fuel this outcry. When Malkin got her cancelation notice, she went on the Twitter warpath. She later wrote a piece for the National Review slugged, "Obama lied. My health plan died." Malkin had a high-deductible plan from Anthem Blue Cross that doesn't meet the minimum coverage requirements created by the ACA. So she has to get a new plan on the state health exchange. Malkin blamed Obamacare for destroying the individual insurance market.
The media have covered these complaints with gusto, as if the cancelations are a genuine crisis and indication of a failure of Obama's health care law.
The ACA was designed specifically to prevent insurance companies from peddling lousy insurance plans and to force these firms to replace these subpar products with affordable plans providing better and effective coverage. The plans being canceled are ending because they offered insufficient coverage—and only a few years ago both Rs and Ds were upset about these kinds of plans. But there's been collective amnesia about the shoddy plans that GOPers have happily exploited in recent days. Perhaps Obama should have said, "Those of you who obtain insurance on the individual market can keep your plans unless it’s the sort of rip-off plan the ACA will forbid. Otherwise, you will be offered new options that actually give you decent coverage at a decent price."
Here's what led to the current situation: In the early aughts, the number of people with employer-based coverage declined dramatically. That left an increasing number of Americans uninsured and about 30 million adults underinsured and at serious financial risk. The Commonwealth Fund estimates that between 2003 and 2010, the number of underinsured Americans nearly doubled.
The fastest growing group of underinsured was people in households around the national median income, the $40,000 to $50,000 annual income range—folks who make too much to qualify for Medicaid but who don't have employer-sponsored plans or who can't afford the ones they're offered. Insurance companies jumped into the void with a lot of products Consumer Reports dubbed "junk insurance." These were plans that barely qualified as insurance because they had very low caps on coverage or weren't even really insurance at all. Many were merely medical discount programs that didn't protect against health-related financial calamity. Insurance companies, including many of the biggest, marketed these products aggressively and often misleadingly—which was made easier by the lack of disclosure requirements in the sale of health insurance. Regulators struggled to protect consumers because so many of the junk plans were perfectly legal.
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the hits keep on coming
