OPINION: James Capretta in the Weekly Standard "The Upton Bill Is No Small Matter"

November 14, 2013

White House Press Secretary Jay Carney has spent the week "ripping" House Energy and Commerce Committee Chairman Fred Upton’s Keep Your Health Plan Act, scheduled for a vote on Friday, but the health care exchange’s dismal enrollment figures spark new urgency for the president to support this commonsense measure. Nearly 50 times as many Americans have received cancellation notices because of Obamacare than have even “selected” a plan. Just yesterday, the White House sent officials to the House to ease Democrats’ concerns about the president’s broken promise. But reports indicate that the administration failed to provide any reason to oppose the Keep Your Health Plan Act. Senate Democratic leaders have summoned White House Chief of Staff Denis McDonough for a meeting today. As James Capretta explains in The Weekly Standard, “The defenders of Obamacare know full well that the Upton legislation represents a serious threat to the viability of the law. It would provide a lifeline for a viable insurance market outside of Obamacare’s rules and suffocating structure.” 

November 13, 2013

The Upton Bill Is No Small Matter

By James C. Capretta

The full reality of what Obamacare will mean for average Americans is only now becoming clear as the crisis over cancelled insurance plans in the individual market has steadily unfolded in recent days. Some 3 to 4 million people have already received notices from their insurers that their policies have been terminated, effective January 1, 2014, due to the provisions of Obamacare. These cancellations make it absolutely clear that the president’s signature Obamacare pledge – that no one will be forced out of insurance plans they like – is not true. The broken pledge has been made worse by the utter mismanagement of the Obamacare enrollment system. People with cancelled plans can’t even find out what their options are under the new law.

To their credit, House Republicans – led by Energy and Commerce Committee chairman Fred Upton – are planning to pass a bill this week that has the potential to help millions of people who are now in the impossible position of holding soon-to-expire insurance with no good options for replacement coverage. And it would do so by providing an escape from Obamacare, not a fix for the fatally flawed legislation.

The concept of the Upton bill is straightforward: it removes the impediments in Obamacare that have forced insurers to issue the cancellations in the first place.  Specifically, it would allow insurers to continue offering individual insurance market policies under the state insurance rules that are in effect in 2013. As a practical matter, that means these insurance plans will be able to offer coverage at far lower premiums than the Obamacare-compliant plans will charge because the plans made viable by the Upton bill will not be forced to subsidize the less healthy risk pool that is likely to show up in the Obamacare exchanges.  Further, the Upton bill would allow individuals to stay in these reopened insurance plans without fear of being penalized for not enrolling in Obamacare-compliant products. 

There has been a lot of commentary recently that the Upton proposal won’t really do much because insurers do not have the capacity to reopen plans in time to get people coverage by January 1. And it is certainly true that reversing the cancellations will entail significant expense and trouble for the insurance industry.

But that does not mean it is impossible. It’s worth noting the California insurance commissioner is forcing two insurers to reverse cancellations for hundreds of thousands of individual market plan enrollees, and the insurers are reluctantly complying to keep people in their plans beyond January 1. In that case, operational issues were not impossible to overcome. …

Read the complete piece online here.

###