So here's the thing about news. It's supposed to be NEW. In fact, it's part of the word. So why in the world are media outlets just now reporting about something we've known for three-and-a-half years? And, more importantly, why are lawmakers acting shocked by the story?
In a Tuesday, Oct. 29, NBC News Investigations piece titled "Obama administration knew millions could not keep their health insurance," for example, Lisa Myers and Hannah Rappleye report that "50 to 75 percent of the 14 million consumers who buy their insurance individually" will be receiving a cancellation letter from their insurance companies, telling them they will need to buy more comprehensive plans that comply with the new law. And they say, almost in an accusatory way, that the "Obama administration has known that for at least three years."
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But here's the thing: so has everyone else. Or at least everyone who's studied the law in any detail at all. This was public knowledge. HHS issued the regulations on grandfathered plans shortly after the law was passed – in June 2010 – and brokers nationwide sat down with their clients and explained the pros and cons of staying grandfathered at the time. BenefitsPro.com reported on the regulations the day they were issued, and I even wrote a follow-up article a couple months later. Here's an excerpt from that article:
"PPACA makes a number of plan changes in both the group and individual markets. In order to stay grandfathered and avoid some of the new changes, a health plan that was in effect on March 23 CANNOT:
- Significantly cut or reduce benefits
- Raise coinsurance charges (at all)
- Significantly raise copayment charges (by significant they mean more than $5)
- Significantly raise deductibles (anything more than about 20 percent)
- Significantly lower employer contributions (more than 5 percent)
- Add or tighten an annual limit on what the insurer pays
- Change insurance companies (even if you're going with an identical plan)"
And the article noted that, because the regulations were issued after March 23, 2010, "Employers who made a plan change between March 23 and June 14 can return to their previous plan and remain grandfathered."
Five months later, HHS issued an amendment to the grandfathered regulations, saying group health plans may "switch insurance companies and shop for the same coverage at a lower cost while maintaining their grandfathered status, so long as the structure of the coverage doesn't violate one of the other rules for maintaining grandfathered plan status." This allowed employers to stay grandfathered even if their carrier decided to discontinue the plan. Individuals who change plans, according to the amendment, would still lose their grandfathered status.
Whether the regulations are good or bad really isn't the point. The point is that none of this is new. At all. But that didn't stop the "investigators" at NBC from talking with "sources deeply involved in the Affordable Care Act" and reporting the three-and-a-half-year-old breaking news or prevent other media outlets from picking up the story and running with it.
And the fact that we've known this was going to happen since shortly after the law was passed didn't stop lawmakers from wasting a huge amount of time during the Oct. 30 hearing about the individual marketplace by asking HHS Secretary Kathleen Sebelius – in-between their multiple Wizard of Oz comments of course – about the big lie they say the administration told the American people. Again, this is something they could have been talking about for the past three years, but the fact they didn't and that they're acting surprised by the "news" tells me they never bothered to read the law or the regulations or talk with a broker to find out what the impact would be.
For a political party that has been dead-set against the law since before it was passed, you'd think they would've actually figured out what was wrong with it. This should have been on their radar. The grandfathering decision was one of the very first things we discussed after the law was passed – so how did so many reporters and lawmakers miss it? And if they're that uninformed and putting out that much bad information, what hope do the American people have of ever figuring this thing out?
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