A news service for the people of Michigan from the Mackinac Center for Public Policy

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Michigan Insurance Companies: It's Too Late To Reinstate Old Health Care Plans

President forced to admit his promise couldn't be kept, but insurance companies had already adjusted

President Barack Obama said Americans can keep their health insurance plans another year, but Michigan insurance companies say it's too late.

Recently, the Obama administration announced it was delaying open enrollment in the Affordable Care Act (Obamacare) until after the 2014 elections. That announcement meant that health insurers could extend 2013 plans through 2014. However, after having converted their policies to fit Obamacare's significant rules and requirements, Blue Cross Blue Shield of Michigan and other major insurance companies in the state are saying "no" to such extensions.

With the imminent approach of Obamacare, health insurers began cancelling 2013 health plans and offering Obamacare-compliant policies for 2014. According to reports, the switch to Obamacare-compliant plans was generally resulting in major cost increases. With few exceptions, if insurance purchasers could keep their 2013 plans, they’d be getting a better deal.

But extending the 2013 health plans at this late date is apparently easier said than done.

Michael Harp, of the East Lansing-based health insurance agency, Michigan Group Benefits, said it is unrealistic to expect health insurance companies to switch back to the pre-Obamacare plans.

"I think the state insurance commissioner would have done us all a favor by just telling the insurance companies they wouldn't be allowed to go back to the terminated plans," Harp said. "It's just ridiculous to ask them to quickly undo the three years of work they did to put the Obamacare changes in place. Now they'd have to look back at those terminated policies, pull claims, get the actuarials (statistical calculations), submit them and roll them out. ... They’d have to do it all in a few weeks — and just for a temporary situation. It just doesn't make sense."

President Obama was forced to admit that he broke his promise that people who liked their health insurance plans could "keep it." But he left it to state insurance regulators to determine if they would allow that to take place. Most health insurance companies were ready for the fundamental changes to the health care system mandated by Obamacare, though the federal government was not ready.

Charles Owens, state director of the National Federation of Independent Business, said that suggesting insurers could make a fast U-turn shows a lack of appreciation for the complexities involved.

"I think the president is unfamiliar and out of touch with the real world of business and health care," Owens said.

Owens said it is possible President Obama decided on the last minute delay to shift blame from Obamacare to the insurance companies for the higher cost health care plans. 

"He's either ignorant or intentionally trying to deflect the blame," Owens said. "Rightfully, however, the insurance companies aren't at fault for not reverting to the cancelled plans."

Harp said that in the majority of cases he's dealt with, health care coverage under the Obamacare plans have been examples of having to pay a lot more for a less desirable product.

"Under Obamacare you don't have the ability to do things like manipulate co-pays the way you used to," Harp said. "It takes away the tools we could use. There are mandatory areas of coverage, such as always having maternity coverage."

The mandates are so strict that even couples who are older than 60 are required to have maternity coverage, he said.

"When you have to cram maternity coverage and everything else in these plans, of course the cost is going to go up," Harp said. "I recently had to explain to a dentist that his plan had to include dental coverage. It was mandatory.

"I had to tell a nonprofit business in Lansing that it would be seeing a 38 percent increase," Harp continued. "They used to pay $500 a month. The replacement plan is $900 a month and the benefits aren't as good. People are now starting to get angry."

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See also:

CapCon Obamacare Coverage

The Michigan Education Association says members may leave only in the month of August. The Mackinac Center for Public Policy has set up www.AugustOptOut.org to help inform MEA members of their rights.


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