House GOP getting its say on cancellations

[November 15, 2013]  WASHINGTON (AP) — First, President Barack Obama had his say on reversing millions of insurance cancellations issued under the health care program known by his name. Now House Republicans are taking their turn.

Neither maneuver is likely to be the last, with insurance companies and state commissioners alike warning that premiums will rise if changes are made this close to the new year.

The issue of cost aside, both the president and House Republicans are responding to public anger resulting from cancellation notices sent out by insurers selling policies deemed substandard under "Obamacare." An AP survey shows at least 4.2 million have gone out.

At the White House, the president said he would change course and permit companies to continue to sell the plans — to existing customers only — for at least one more year.

The result was to shift responsibility for cancellations from the administration to state insurance regulators and the industry itself.

"What we want to do is to be able to say to these folks, you know what, the Affordable Care Act is not going to be the reason why insurers have to cancel your plan," he said of the millions who have received cancellation notices.

The president's shift also was designed to redeem his long-ago pledge that people who liked their coverage could keep it.

Republicans said they intended to push ahead with their plan to permit companies to continue to sell the plans to new customers as well as existing ones, and challenged Obama to work with them.

"If the president were sincere in his apology and serious about keeping his promise to the American people, he would work with Congress on bipartisan proposals," said Rep. Fred Upton, R-Mich., the main supporter of the GOP measure. The House was expected to vote on the bill Friday.

While passage was expected in the GOP-controlled chamber, a combination of the president's announcement and an as-yet-undisclosed Democratic alternative measure seemed likely to make the vote a clearly partisan one. The White House said late Thursday the president would veto the GOP legislation.

The maneuvering came on an issue that has been a constant cause of controversy since Obama called for sweeping health care legislation in his first inaugural address nearly five years ago on the steps outside the Capitol.

His remarks on Wednesday marked a reversal with his personal and political credibility on the line, even though the impact on consumers is unclear.

Obama's approval ratings in polls are also ebbing, and he readily conceded that after recent events the public can legitimately "expect me to have to win back some credibility on this health care law in particular and on a whole range of these issues in general."

Shortly after Obama spoke, the major industry trade group, America's Health Insurance Plans, warned in a statement that prices might rise as a result of his new policy. "Changing the rules after health plans have already met the requirements of the law could destabilize the market and result in higher premiums for consumers," it said.

A few hours later, the head of the National Association of Insurance Commissioners added a fresh word of caution. Louisiana Insurance Commissioner Jim Donelon, president of the group, said Obama's proposal could lead to higher premiums and market disruptions next year and beyond.

"In addition, it is unclear how, as a practical matter, the changes proposed today by the president can be put into effect. In many states, cancellation notices have already gone out to policyholders, and rates and plans have already been approved for 2014," he added.

In California, where more than 900,000 cancellations have been sent out, Insurance Commissioner Dave Jones called on insurers to extend the policies being scrapped.

But in Washington state, his counterpart, Mike Kreidler, said he won't allow that to happen. "I have serious concerns about how President Obama's proposal would be implemented and more significantly, its potential impact on the overall stability of our health insurance market," he said in a statement.

Until the president made his announcement, the administration had been assuming that individuals currently covered by plans marked for cancellation would switch to alternatives offered in government-established exchanges. If so, they would be joining millions of others who have lacked insurance in the past.

The people with current individual coverage are a known risk to insurers. But those without generally have had less access to medical services and are most costly to care for. The theory has been that moving people with current coverage into the new markets would help stabilize premiums.

Only last week, Health and Human Services Secretary Kathleen Sebelius told a Senate panel she doubted that retroactively permitting insurers to sell canceled policies after all "can work very well since companies are now in the market with an array of new plans. Many have actually added consumer protections in the last 3 1/2 years."

[Associated Press; DAVID ESPO, AP Special Correspondent]

Associated Press writers Ricardo Alonso-Zaldivar, Donna Cassata, Julie Pace and Alan Fram contributed to this report.

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