President Obama’s last-minute decision to allow extensions of health insurance policies failing to meet the new standards of the Affordable Care Act left state policymakers across the nation in a tough position.
Giving states the one-year option to continue sales of the old plans, which may be cheaper but offer sketchier coverage, was politically convenient for the president. That’s especially true after the disastrous rollout of the federal insurance marketplaces for states that chose not to build their own.
At the same time, a president who was missing in action during HealthCare.gov’s development failed again to shoulder his responsibility for the success of his signature domestic policy achievement.
The strengthened coverage under ACA is crucial to keep monthly premium prices down and provide new consumer protections for those buying insurance in the new marketplaces, which are a cornerstone of the law. Instead of making the case for the changes, Obama punted the decision to state officials, leaving it up to them to make the responsible but politically difficult decision against extending old, often inadequate individual market plans.
Fortunately, Gov. Mark Dayton’s administration stepped up this week and made the responsible call for Minnesota and for the future of the fledgling health reform law. On Monday, Dayton announced that the state will “continue the implementation of MNsure, as it is presently designed.”
MNsure is the state’s new online health insurance marketplace. The governor’s move means that Minnesotans who are told that their current policies do not comply with the ACA will not be able to continue that insurance for another year despite the president’s decision. About 140,000 Minnesotans who buy insurance on their own have been told they have a non-ACA-compliant plan. Similar notices have gone out across the nation to many who buy health insurance on their own — about 5 to 6 percent of the total health insurance market.
Critics rapidly lobbed shopworn “flip-flopper” accusations because Dayton had previously said he supported giving states the option to grandfather in the old plans. But Dayton instead deserves credit for heeding concerns raised by a leading sector of the state’s business community — its health insurance industry. Respected advocacy organizations such the American Cancer Society and the American Heart Association also supported Dayton’s decision.
In clear and impassioned letters to the Dayton administration, the Minnesota Council of Health Plans made clear that the “president’s announcement comes too late to allow health plans and our regulator to complete filings, rate approvals and communications regarding re-enrollments in time to prevent major market disruptions for Minnesotans in the individual marketplace.’’ Consumers would generally need to sign up by the middle of December to begin coverage in January.
The letters also warn that creating two parallel insurance markets in the state could drive up premium costs across the board next year and beyond, with consequences in particular for the new ACA marketplaces. It’s thought that healthier people would be more likely to extend their old plans, while sicker people would buy coverage on the new marketplaces, where new consumer protections shield them from being charged more or denied coverage due to pre-existing conditions. This could significantly raise the cost of coverage on the new marketplaces, undercutting the ACA mission of broadening coverage.
It’s understandable that those who benefit from the current individual insurance market — those who are young, healthy, or don’t want policies that cover maternity care or the real-world cost of cancer treatment — don’t like the coming changes.
Those complaining, however, should realize that they’re demanding special treatment. Americans who get their coverage through employers generally don’t get to pick and choose what care their plans cover. Nor do younger workers pay less than older workers, even though older workers are likely to incur more costly care. The ACA applies these same standards to the narrow individual market, bringing with it critical consumer protections such as those for preexisting conditions.
A look at Minnesota’s uncompensated care costs is a reminder of why this is needed. Unpaid bills rose 56 percent from 2006 to 2012 at Minnesota hospitals, topping out at $316 million. The uninsured and underinsured don’t go without care. They often get it in emergency rooms at greater expense, with some of these costs passed along to consumers who have insurance.
The ACA coverage mandate and coverage subsidies will help people take responsibility for their care instead of avoiding it. The Dayton decision was a needed step in ensuring that this important new law has a chance to work.