Clinton think's pre-ACA plans should be grandfathered

11/12/2013 01:14:00 PM
Also, Bill Clinton wants to be a grandfather.
Bill Clinton has weighed in on the "if you like your insurance plan, you can keep it" controversy, arguing that Congress should pass a law "grandfathering" all existing insurance plans. Reporting on Clinton's plan, Business Insider's Brett Logiurato says:
"It would "grandfather" in all health insurance plans that existed as of Jan. 1, 2013, not March 23, 2010, meaning that insurers could continue to offer a number of plans that they have been forced to cancel under the Affordable Care Act."
I think this demonstrates a common misconception about the ACA, which I previously wrote about: the ACA does not prohibit any existing plans whatsoever. I repeat: no existing health insurance plan is outlawed by the ACA.

Instead, what's happening is that the ACA requires that each individual carry at least a bronze-level insurance plan, in addition to whatever other kind of insurance they may or may not desire to have, or else pay a penalty. Many existing insurance plans are not bronze-level or better, so insurers have guessed that their customers will not want to keep those existing plans once they buy bronze-level coverage, and have started dropping them.

I assume that what Clinton means is that his plan would specify that any existing insurance plan would exempt people from the ACA's bronze-level insurance mandate, regardless of how crappy that plan is. If you accept his narrative that the plan cancelations have been involuntary, Clinton's plan does not fix it. Not one bit. The reason is that even if their existing insurance exempts them from the mandate, lots of people will still notice that because of community rating, guaranteed issue, minimum plan coverage requirements, no lifetime caps, subsidies, and other regulations on the ACA exchanges, they can now buy cheap comprehensive plans on the exchanges. Thus, we are left with exactly the same problem: insurers will still predict that no one will want to keep their crappy expensive off-exchange plans, and will cancel them anyway for lack of demand.

As before, I'm not totally willing to say that this process is "involuntary" for pedagogical reasons. But I'm pretty confident that Clinton's plan changes nothing.