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Why the Obamacare 'fix' might be messy

Published: Monday, Nov. 18 2013 6:20 p.m. MST

President Obama's announcement that Americans will be able to keep their plans that don't meet the Affordable Care Act's requirements may create turmoil for states and insurance companies and may mean an increase in prices for some consumers.

Jacquelyn Martin, AP

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President Barack Obama's announcement that Americans will be able to keep their plans that don't meet the Affordable Care Act's requirements for a year is akin to "an attempt to unscramble an omelet," according to John Tozzi at Bloomberg. And it may mean a whole new round of sticker shock for some American consumers.

Tozzi said that state insurance commissions and insurance companies have been planning for the phase-out of plans that don't meet the law's standards since the legislation was passed. They are now finding themselves suddenly in the position of undoing that work in a very short period of time.

“The complexity of trying to un-cancel millions of canceled individual policies with only six weeks left in the year is staggering,” Carl McDonald, a health care analyst at Citigroup, told Bloomberg.

Robert Laszewksi, an insurance consultant, put it this way in a note to clients published in the Washington Post:

"This means that the insurance companies have 32 days to reprogram their computer systems for policies, rates, and eligibility, send notices to the policyholders via US Mail, send a very complex letter that describes just what the differences are between specific policies and Obamacare compliant plans, ask the consumer for their decision — and give them a reasonable time to make that decision — and then enter those decisions back into their systems without creating massive billing, claim payment, and provider eligibility list mistakes. All by January 1."

In addition to the logistical issues, Reed Abelson and Abby Goodnough at the New York Times said that the changes could result in price increases for consumers who are signing up for new plans. That's because insurance companies "priced their policies for 2014 based on the assumption that everybody would have to be in the new market, and they and regulators worry that their costs will be much higher if only older and sicker people enroll in the new plans."

And the result of suddenly allowing young, healthy consumers to keep their old plans, health insurance companies told the Times, might be much higher prices for Americans trying to find insurance on the exchanges.

“Changing the rules after health plans have already met the requirements of the law could destabilize the market and result in higher premiums for consumers,” said Karen Ignagni, the president of America’s Health Insurance Plans, a trade group in Washington, to Abelson and Goodnough.

Sarah Kliff at the Washington Post said the upshot is that, "A short-term fix … could become a longer-term problem for the president's health-care law."

Email: dmerling@deseretnews.com

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