Throughout the debate over healthcare reform, President Obama insisted that individuals would be able to maintain their current healthcare plan: “If you like it, you can keep it.” It was a refrain that was used as Congress was writing the bill, as the bill struggled to pass, and now the president continues to claim that the law will allow individuals to keep their coverage.
The talking point may be consistent, but talking points aren’t law. Right now, the Department of Health and Human Services, administered by Secretary Kathleen Sebelius, is implementing the law in ways that radically transform the coverage of many Americans.
Over the next few years, millions of American families, individuals and retired seniors will see their health coverage transformed by new regulations and decisions made by the Secretary and her successors. The bill uses the phrase, “The Secretary shall,” or one of its variants, more than 1,000 times. This means that Congress has left many of the important decisions regarding implementation up to the Secretary and the bureaucracy.
If you like it, you can keep it; but only if the Secretary agrees.
Just recently, the Secretary granted a one-year waiver to 30 companies and organizations that offer plans known as “mini-meds.” Many employers with large part-time workforces, such as McDonald’s, offer these plans. Without the waiver, these employers would have been forced to discontinue coverage. The biggest waiver was granted to a New York teachers’ union with 351,000 members.
At this time, it’s uncertain what will happen when the waiver expires. These plans don’t comply with the law as it is currently written. Ultimately, many companies offering these plans may drop them entirely.
Because of the new law, some insurers are getting out of certain sectors of the healthcare industry. Medicare Advantage plans will be cut by billions of dollars in the coming years. Already, some companies are getting out of the market. The Boston Globe reported in September that Harvard Pilgrim Health Care will drop its program, forcing 22,000 seniors in New England to look for new coverage.
Medica Insurance Company in Minnesota will no longer sell child-only health insurance plans. The new law allows parents to wait until a child is sick before they buy health insurance, making it impossible for Medica to calculate the costs of coverage. Medica was the only provider of child-only plans left in Minnesota.
Changes are coming to those with employer-sponsored plans also. Just this week, Boeing sent a letter to 90,000 non-union employees informing them that they will pay significantly more for their health plan next year. New taxes on so-called “Cadillac Plans” are forcing companies to make changes years before the taxes go into effect.
Earlier in the month, 3M informed employees that by 2015 the company will no longer offer group coverage to retirees not old enough for Medicare. This is because the federal government is eliminating tax breaks for companies who currently pay for retirees’ prescription drug plans.
Ultimately, working Americans in all industries and at companies of all sizes could be looking for new healthcare plans. Writing this week in the Wall Street Journal, the Democratic Governor of Tennessee, Phil Bredesen, speculated that the vast majority of companies could stop offering health insurance to their employees.
Taking a look at the tax benefits and penalties, Gov. Bredesen found that an employer would actually profit by forcing employees into the federally approved and subsidized insurance exchanges. The authors of the law may have vastly underestimated the number of Americans who will receive subsidies, costing the federal government billions more than anticipated.
Two-thousand pages of legislative text are in the process of being translated into tens of thousands of pages of new regulations. Millions of Americans are already seeing their healthcare change underneath them, and every American will see some amount of change in the coming years.
I truly believe that we need to reform healthcare, but we have to focus on covering the uninsured and reducing costs through competition and transparency. Instead, we are undergoing a vast disruption, affecting every American — even those who like their plan. The best alternative is to repeal the law, and replace it with real free-market solutions like medical malpractice reform, purchasing across state lines, pooling across state lines and giving businesses and individuals the same tax treatment.
Rep. Joe Pitts represents Pennsylvania’s Sixteenth Congressional District.