Obama Considering Three Year Extension To Obamacare

Tyler Durden's picture

While Washington debates over what is the proper explanation of the CBO's report which explicitly states that millions of workers will drop out of the labor force over the next decade thanks to Obamacare, Obama himself may have finally thrown in the towel, realizing that the longer the full implementation of Obamacare is delayed, the longer the myth that it is a viable Ponzi scheme - as opposed to non-viable - can persist. Perhaps this explains why AP reports that the White House is now considering an extension of the president's decision to let people keep their individual insurance policies even if they are not compliant with the health care overhaul, according to two top industry officials.

From AP:

Avalere Health CEO Dan Mendelson said Thursday that the administration may let policyholders keep that coverage for an additional three years, stressing that no decision has been made. Policymakers are waiting to see what rate hikes health insurers plan for the insurance exchanges that are key to the overhaul's coverage expansions.

 

"The administration is entertaining a range of options to ensure that this individual market has stability to it and that would be one thing that they could do," he said.

 

Avalere Health is a market analysis firm, but Mendelson said his company was not advising the administration on exchange policy. He said he has had informal discussions with administration officials about the extension, but he didn't identify them.

 

A spokeswoman for the Department of Health and Human Services, Joanne Peters, said "We are continuing to examine all sorts of ways to provide consumers with more choices and to smooth the transition as we implement the law."

Earlier, Mark Bertolini, Chairman and CEO of Aetna and the nation's third largest insurer, told analysts during his earnings call that he had heard the plans may be extended. Perhaps a more important thing Bertolini said is that his company may pull out of markets if the Medicare cuts are too high, adding that 2015 may be challenging due to medicare cuts. This may have been the final straw that pushed the administration into action.

However, even a longer extension than was rumored previously will hardly help reinstate the policies of all those millions who lost coverage in the lead up to the Obamacare enactment as insurance companies know that terms will once again change eventually, so why go through the headache of temporary reinstatement just to cut all those "non-compliant" individuals once again?

Individual policyholders were hit with a wave of cancellation notices last year because their coverage was less robust than what is required under the law, and many states allowed insurance companies to simply cancel them.

 

The wave of cancellation notices — at least 4.7 million of them — hit just when the new HealthCare.gov website was experiencing some of its worst technical problems, and it undercut the president's well-publicized promise that if you liked your plan you could keep it.

You couldn't.

At first the White House went into damage-control mode, arguing that many of the cancelled plans were "junk" insurance and consumers would be better off with the broader coverage available through the health care law's new insurance markets.

 

But soon Obama was forced to reverse course, urging insurers and state regulators to allow policyholders to keep their existing plans for an additional year. Most states complied with the request.

 

Now the administration is considering adding more years to this extension to avoid another wave of problems if rates on the exchange climb too high and people are left without an affordable coverage option. Health insurers are supposed to submit by May the rates they want to charge on the exchanges next year.

Actually, the only reason why Obama is suddenly willing to compromise over every aspect of his "crowning achievement" is that finally its tactical, and strategic failure has become clear for all to see. So it would be best to enact it piecemeal, and claim success for whatever legacy aspects of the system are working, while blasting everything that his unprecedentedly complicated, centrally-planned contraption has unleashed.

Finally, why three years? Because by then Obama will be gone (absent some very radical changes to presidential term rules), and Obamacare will be someone else's problem.