Arkansas Blue Cross and Blue Shield calls them “lost boys.” The health-insurance carrier has about 35,000 such policyholders in the state.
They came in after March 2010, when the Affordable Care Act was passed, and bought individual health-insurance policies that didn’t meet all the minimum benefits prescribed by Obamacare.
Their purchases were not “grandfathered,” meaning acceptable in existing form under new Obamacare standards. They would have been grandfathered if made for the same policy prior to March 2010.
About this grandfathering:
Most corporate group plans covering most Americans are grandfathered in the Affordable Care Act itself. It’s called good lobbying.
Individual plans not meeting the new minimum benefits are grandfathered as well for persons possessing them before March 2010. That’s unless they were changed in some way by the carrier after March 2010.
That’s what’s happening in many states. Insurance carriers have changed policies to remove the grandfather status and start afresh.
If you bought an individual plan after March 2010 that didn’t meet those benefit minimums, even if the same plan was grandfathered for someone owning it as of March 2010, then your plan was not grandfathered under Obamacare.
You were a lost boy. That is by federal regulation issued June 2010, not law.
Lawmakers and Obama administration regulators are responsible for the inequitable treatment. They could have extended the grandfather date for all policies taken out prior to the opening of the health-care exchanges in October 2013.
Insurance carriers are to blame in some cases because they changed individual plans that otherwise would have been grandfathered. State insurance regulators are to blame in a couple of states because they ordered carriers to bring every individual policy up to Obamacare standards immediately.
Obamacare defenders seem to have settled on a defense against the inequity. It is as follows: These cancellations affect only 3 percent of Americans. Tough for them. Their insurance will be better. You can’t help everybody without hurting the occasional somebody.
Actually, Arkansas Blue Cross and certain other carriers prevailed on the federal government last year to extend to 2013 the grandfathering of any plan in effect at the time of the Affordable Care Act’s passage.
Federal regulators said no.
But they did agree to allow state insurance regulators to extend these existing plans for only one year, through 2014. That would let the affected 35,000 policyholders in Arkansas choose, for a 12-month transitional period, and without federal income-tax penalty, the better deal for their circumstance.
Earlier this year, Blue Cross officials in Little Rock went to state Insurance Commissioner Jay Bradford and told him something big was about to happen unless he issued an order granting the one-year extension. The carrier was going to cancel 35,000 health insurance plans in Arkansas.
So Bradford issued the order. D-Day is January 2015, not January 2014, for the Arkansas lost boys.
And that is why the caliber of furor over canceled plans in other states has been avoided in Arkansas.
Be assured that this was not a purely humanitarian gesture by Arkansas Blue Cross and Blue Shield. By leveraging this one-year favor thatit was extending 35,000 of its clients, it presumably earned an advantage in keeping those customers off the new health-care exchange, where they might find favorable competing plans, and in the Blue fold.
It’s the same reason Blue Cross is on local television with advertisements encouraging people to call its offices-not a government website-to get new insurance.
And QualChoice of Arkansas, which had about 15,000 such “lost boys,” was in on the extension request, too.
Now to the more universal problem: A national healthcare expert was explaining all this the other day to a blogger for the New Yorker. The expert said the controversy now is mainly a political problem for the White House.
But then the expert went further.
If the website stays dysfunctional much longer, the problem gets a little bigger. If we get to February and young people aren’t signing up, but choosing to pay the tax penalty, then the problem gets bigger still. If we get to the March deadline and enrollment remains spotty, then Barack Obama will be forced to delay the individual mandate and the great Democratic reform of a generation will collapse.
The Affordable Care Act would not be … affordable.
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A word about tomorrow’s online-only column at arkansasonline.com/brummett: The prevailing political paradigm in this country-whether we’re a liberal-leaning country or a right-leaning one-hinges on what happens with Obamacare.
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John Brummett’s column appears regularly in the Arkansas Democrat-Gazette. Email him at [email protected]. Read his blog at brummett.arkansasonline.com, or his @johnbrummett Twitter feed.
Editorial, Pages 15 on 11/05/2013