If You’re Going to Force People to Buy Insurance, You Have to Make It Affordable

Inattention and incompetence have been the hallmarks of President Barack Obama’s introduction of Obamacare. But he has a chance to fix it and restore consumer confidence. He can lead a campaign to halt or limit fast-rising health insurance premiums and amend the Affordable Care Act so it’s not a gift to the insurance companies.

Obamacare is probably here to stay. A total of 3.3 million have signed up for private insurance through the exchanges and 6 million more for expanded Medicaid, Sarah Kliff wrote in The Washington Post. Although that’s fewer than the government had hoped for, the total is approaching projections. Only the election of a Republican president in 2016, along with a GOP Senate and House, could dismantle the program. But by then, it will be very difficult for the Republicans to take away benefits from millions of voters.

The trouble now is that Obamacare badly needs fixing to stop insurance companies from hitting policyholders with exorbitant rate increases. This means strengthening the health insurance program instead of continually weakening it, as the Obama administration has done by extending various deadlines.

The matter of rate increases should be at the top of the Obama agenda. Reports of such hikes are surfacing around the country.

In January, Reed Abelson of The New York Times wrote, “Health insurance companies across the country are seeking and winning double-digit increases in premiums for some customers, even though one of the biggest objectives of the Obama administration’s health care law was to stem the rapid rise in insurance costs for consumers.”

Mike Oliver wrote on AL.com about Doug Hoffman, an Affordable Care Act recruiter in Alabama. “I was paying Blue Cross $675 a month for two adults and a 22-year-old dependent,” he said. “Now I have a comparable plan for $1,360 with a $3,000 deductible. It appears as though Blue Cross is taking advantage of the ACA by hiking rates big time.”

In Lincoln, Neb., the Journal Star said that when old insurance plans not meeting Obamacare standards were tossed out, they were replaced by new ones with cost increases ranging from 21 percent to 143 percent.

A San Francisco Bay Area couple saw their premium double when they replaced a canceled Kaiser Permanente plan, Charles Ornstein of ProPublica reported.

The center of the fight against such rate increases is located in a suite of offices in the California coastal city of Santa Monica. It’s the home of Consumer Watchdog, an organization well described by its name. High among Consumer Watchdog’s interests are insurance companies and their rate boosts. Founder Harvey Rosenfield wrote a successful California ballot measure, Proposition 103, which has sharply limited rises in auto insurance costs and given an elected state insurance commissioner power to stop or reduce such increases.

I talked to Jamie Court, Consumer Watchdog’s president, who is leading a campaign for a Proposition 103-like measure on the November California ballot that would restrict health insurance premium hikes. He is also supporting legislation by Sen. Dianne Feinstein that would give the federal government power to stop or limit the Obamacare rate increases nationally.

“It’s unconscionable that government would require people to have health insurance and not make it affordable,” he said. “What is responsible for the rates being high is that insurance companies are gouging.”

Rosenfield said, “The law places no limits on the price insurance companies can charge for the coverage we are required to buy. This was no drafting error. … Neither Congress nor the White House wanted to risk the opposition of the powerful insurance industry.

“Thus it’s no surprise that the insurers are now jacking up premiums and co-pays while limiting prescription drug benefits and dumping doctors and hospitals from their networks.”

Rosenfield said the Proposition 103 California ballot measure he wrote has yielded big savings for consumers. He cited a Consumer Federation of America report declaring that California motorists have saved more than $100 billion in insurance premium costs since Proposition 103 took effect in 1989, an average annual savings of more than $8,000 for every household in the state.

California, the federation said, is the only state where the average auto insurance premium is lower than it was in 1989. The state, where premiums were once the second most expensive in the nation, now ranks 30th.

The new measure backed by Consumer Watchdog would give the state insurance commissioner power to approve health insurance premium increases and veto or scale back those he finds excessive. In addition, the commissioner would be able to roll back rate hikes imposed before the ballot measure becomes law and order refunds to policyholders. And policyholders, themselves, could intervene to force state action against rate increases.

California is one of 17 states without authority to veto or scale back excessive rate boosts. Insurance commissioners in the others have that power. Feinstein’s bill in Congress would give the secretary of health and human services power to do that anywhere in the country, although presumably it would not be required in states with health insurance regulatory systems.

Such power was once part of the Obamacare bill, but the Obama administration gave it up, caving in to the insurance industry.

If Californians approve the Consumer Watchdog rate increase limit proposition, they won’t need the Feinstein federal fix. In addition, the very size of the populous state, and its tradition of giving birth to national trends, will make the campaign important to the shape of Obamacare nationally as it evolves over the years.

That is why Anthem Blue Cross, which raised its rates by 25 percent, has given $12.9 million to the campaign against the proposition. Four other health insurers — Blue Shield of California, Health Net, Kaiser and UnitedHealthcare — and their associations have joined Anthem by giving an additional $958,672 to the anti-regulatory campaign, Consumer Watchdog reported. More, no doubt, is on the way.

“It is going to be a huge national movement and Obama would do well to spur it and ride it,” Consumer Watchdog’s Court said.

The Affordable Care Act should be a blessing for consumers, not a present to insurers.