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U.S. Senator Mary Landrieu (D-LA) (L) speaks to the press alongside Democratic Minority Leader, Senator Harry Reid (D-NV) (R) and Senator John Kerry (D-MA) (C) September 8, 2005 at the Capitol Building in Washington. REUTERS/Jason Reed
House Republicans are outraged, outraged! over the fact that some people with health insurance are getting cancellation notices from their insurers. They have a "fix," a bill from Rep. Fred Upton, chair of the Energy and Commerce Committee that's really just another repeal bill in sheep's clothing. Upton's bill would allow insurance companies to continue to offer the existing, crappy policies that were in effect as of January 1, 2013. Upton's bill also allows insurance companies to cancel those policies at will, and try to push people into more expensive ones. A big win for insurance companies, maybe not so much for the people Republicans say they want to protect.

Senate Democrat Mary Landrieu has a similar, but at the same time completely different idea, her "Keeping the Affordable Care Act Promise Act." Landrieu's bill would let people who have policies in the individual market keep their current policy as long as they keep paying their premiums. The bill applies both to the plans fail to meet the law's standard, and to the good policies that fail to meet the law's standard for "grandfathered" policies. This second part gets at the practice we've seen from insurance companies taking advantage the confusion the law has created to cancel people's policies and automatically enroll them in much more expensive policies. Companies are canceling plans that were grandfathered and were perfectly acceptable under the law to try to force people into more expensive plans.

What Landrieu's bill would do would be to force insurance companies to annually (at renewal time) inform customers: the reason their policy is substandard—why it doesn't meet the requirements of the new law; the enrollee's right to keep this policy; and that "the enrollee has the right to enroll in a qualified health plan offered through an Exchange and instruction on how to access such Exchange." Additionally, if the insurance company is canceling a policy, they have to provide an explanation as to why it's being canceled, including "a reference to any provision of this Act (or an amendment made by this Act) that such issuer relied upon in making the determination to cancel such coverage." In other words, they can't just say "because Obamacare."

There are policy problems that both the Upton and Landrieu approaches cause: primarily they undercut the key market reforms the law created: community rating (insurers cannot charge sick people more) and guaranteed issue (insurers cannot deny coverage to anyone). They allow those practices to continue, at least for a relatively small subset of the population. But what they also do is keep this subset of the population—generally a much healthier group—out of the exchanges. That means the exchange would have more sick people. That would drive up premium costs for the next year. It would create confusion for the companies on the exchanges, upsetting the actuarial models and range of policy options and premiums based on the assumption that this group of people would be participating in the new marketplaces.

There are far more complicated policy fixes than just saying "keep your health insurance" can address, largely because a primary intent of the law was to get people who had crappy insurance policies out of them and into better ones, so that everyone who didn't have insurance could also finally benefit. But there's a simple genius (possibly unintended) in Landrieu's approach that would make insurers own up to their customers with the fact that they've been selling them a crappy product that would leave them basically uninsured if catastrophe were to strike. And it lets people who have insurance now keep their plans. Something Republicans insist is their goal, even while they're keeping the insurance companies in the driver's seat.

Originally posted to Joan McCarter on Wed Nov 13, 2013 at 08:29 AM PST.

Also republished by Daily Kos and Louisiana Kossacks.

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