As you know, a day before Rep. Fred Upton’s (R-MI) “Keep Your Plan” bill, designed to allow existing, soon-to-be-outlawed individual health insurance plans to be offered through the end of 2014, passed the House, President Barack Obama administratively said that those plans that were in effect as of October 1, 2013, would not be deemed as outlawed, “substandard” plans through 2014. Unfortunately, the method Obama chose has several points of failure that essentially ensures the scheme won’t work.
The first problem is common to all of the “keep your plan” schemes out there, including Sen. Ron Johnson’s (R-WI) plan to extend the “grandfathering” to all plans in existence as of the end of this year and even Sen. Mary Landrieu’s (D-LA) heavy-hand-of-federal-government mandate that insurance companies continue those plans for another year. It requires the insurance commissions of the 50 states plus the District of Columbia to allow the insurance companies to “un-cancel” the policies. As of Friday night, Yahoo News reported that while three states (Florida, Ohio and Kentucky) would allow insurance companies to “un-cancel” the policies they already sent cancellation notices out on, three states (Washington, Arkansas and Vermont) said they would refuse that request.
That leads to the second problem – even if the states allow the “un-cancellations”, insurance companies might not have enough time to recreate the old policies as the entire process, from policy creation to enrollment, would need to be complete in a month’s time. Already, the underwriters necessary to properly price those policies are being laid off. Still, some insurance companies, like Florida Blue, are going to at least try to re-issue their cancelled policies.
The biggest problem, in my opinion, is that it is an administrative rewrite of the law. That leaves the delay wide open to a legal challenge and eventual retroactive reversal, which I expect the new-to-the-market community organizers/”insurance” companies to pursue as they fail to get enough people signed up for their versions of ObamaCare. Other parts of the administration, specifically the EPA, have shown an incredible ability to use lawsuits filed by liberal comrades-in-arms to get via out-of-court settlement what they couldn’t get through the normal regulatory process.