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A Project of The Annenberg Public Policy Center

Reality Confronts Obama’s False Promise

We’ve been saying for years that President Obama was over-simplifying and over-promising when he kept saying, “if you like your health care plan, you can keep your health care plan” under the new health care law. Now reality is catching up with his political spin.

  • NBC News reports today that “millions of Americans are getting or are about to get cancellation letters for their health insurance” — and that the White House has known this “for at least three years.”
  • Similarly, CBS News reported the day before that “some Americans are being surprised, not only that they are being booted off their current plans, but at how much they’re being asked to pay for new ones.”
  • And the Los Angeles Times said in an Oct. 26 report that thousands of middle-class California residents with individual health plans are facing “hefty increases on their insurance bills” and are surprised to learn they must buy policies that cover more — and cost more — than their current plans.

None of this should be a surprise to our readers. We’ve been writing about these issues as far back as 2009, when the Affordable Care Act (also known as Obamacare) was being debated. In an Aug. 18, 2009, item — headlined “Keep Your Own Insurance? Not Everyone” — we cited a Congressional Budget Office projection that 3 million people covered by employer-provided insurance plans under current law would not be offered coverage.

The issue now getting attention is that the new law sets minimum standards for health insurance coverage, requiring, for example, that all health plans carry mental health benefits, prescription drug coverage, vaccinations, dental and vision care for children, maternity care for women, and more. Coverage also must be available to all regardless of preexisting medical conditions. In effect, this outlaws many existing “bare bones” plans that were cheap, but didn’t cover all (or any) of the required benefits and were available to mainly healthy persons. Those plans are now outlawed, and not all who had them welcome better insurance at greater cost.

The large majority of Americans are not affected by these changes, since they get their coverage through comprehensive employer plans or Medicare or other government programs. But about 15 million Americans, or 5 percent of the population, currently purchase coverage on their own, according to the Kaiser Family Foundation. An insurance industry-sponsored analysis pointed out that the law — starting in 2014 — will push premiums in the individual market up for some, down for others.

The winners include older, less healthy persons. Those who were denied coverage before will now be able to obtain it. And those who had coverage, the industry analysis said, may see premiums go down. But young, currently healthy persons are now seeing premiums go up, and experiencing the “sticker shock” that recent news reports highlight. And they are the focus of recent reporting.

The nonpartisan Congressional Budget Office estimated as far back as November 2009 that — on average — rates would go up significantly in the individual market, by 10 percent to 13 percent. We reported on that any number of times.

Furthermore, millions more who are under employer-sponsored plans are also expected to lose their current coverage and need to shift to buying coverage for themselves on the new exchanges. That’s why we listed Obama’s “you can keep your plan” refrain as one of the health care “whoppers” in 2010, one of the “Whoppers of 2012” and — just last month — one of several “Obamacare Myths.” In that last report, we noted that the grocery-store chain Trader Joe’s had already announced that it would drop health coverage for part-time workers and leave them to shop for their own policies on the new exchanges. (It will also provide them with $500 to help purchase it, as of Jan. 1, 2014.)

This was another example of reality catching up to the president’s unfulfillable blanket promise that “you can keep your plan.” Not everybody can. That’s been widely expected for years, and now it’s becoming obvious.

— Brooks Jackson