If you're a policy wonk, politically obsessed, or otherwise fascinated by health-care news during the troubled rollout of Obamacare, you may be either worried or gleeful that President Obama has offered a temporary reprieve to people whose policies have been canceled because they don't meet the standards of 2010's Affordable Care Act. The president's fix: They can keep the policies - whether they're decent insurance or junk - for one more year.
Experts on both sides have warned that such a change raises the risks of "adverse selection": If only the oldest and least-healthy people buy coverage via the new exchanges, such as the glitchy federal marketplace at HealthCare.gov, then rates for those policies could rise - perhaps even into the fearsome "death spiral." The whole concept of the ACA, as I reminded readers in Sunday's column, is based on pooling risks as widely in the individual market as they are for those covered through work. Today's news raises the question: By extending the reach of the ACA's grandfather clause, does Obama's fix - like some clearly damaging measures proposed in Congress - threaten to undermine the whole law?
Well, at least one major insurer, Philadelphia's Independence Blue Cross, apparently doesn't share that worry. Although it canceled about 24,000 policyholders covered by so-called "guaranteed-issue" plans - Pennsylvania's pre-Obamacare answer to covering the uninsurable - IBC took another tack with policies aimed at the young, healthy market, such as its Keystone HMO plans: It set them to expire on Dec. 31, 2013, and has been inviting policyholders to renew them for a year even though they don't meet the law's new standards.
Why didn't IBC do the same with its guaranteed-issue plans? The answer I got recently from the company is that those plans, such as Personal Choice Basic and Special Care, are sold on a month-to-month basis, and thus could not be renewed past Jan. 1.