WASHINGTON — President Obama's broken promise about people being able to keep their existing health insurance is much larger than we've been led to
Until now, attention has focused on the individual insurance market: people buying coverage for themselves and their families from insurance companies.
Policies have been canceled because they don't comply with the Affordable Care Act (ACA). But the individual market is small, representing about 5 percent of the non-elderly population, according to the Kaiser Family Foundation.
What's unappreciated is that cancellations, under today's law, will ultimately spread to the largest insurance market: employer-provided coverage.
So Chapter Two of the broken promise looms. In 2012, 171 million Americans received health insurance from their employers, reports the Census Bureau. This dwarfs Medicaid (51 million) and Medicare (49 million), the next largest sources.
Given the ACA's complexity, it's hard to know how many Americans with employer coverage might be hit by policy cancellations. But plausible assumptions suggest between 25 million and 50 million, mostly at small firms.
Just because policies are canceled, of course, doesn't mean people lose insurance. Gary Claxton of Kaiser says that modest modifications — presumably at some extra cost — might bring many plans into ACA compliance. Still, it seems increasingly clear that the ACA was sold on a premise that simply isn't true.
The debate's tenor was that the coverage mandated by the law would be an add-on to the status quo. As the president said, "If you like your plan, you can keep your plan." The pledge was not a one-time exaggeration but a regular part of the administration's pitch. (For confirmation, see this video montage of 23 separate Obama sound bites: http://nym.ag/1dOLC6z.)
The White House faced a dilemma. On the one hand, it didn't want to scare people satisfied with their insurance; they had to be reassured.
On the other, it wanted to define some basic level of "essential benefits" provided by insurance; otherwise, individuals and firms could buy flimsy policies to comply with the law's insurance mandates.
So, for example, the ACA imposes an upper limit on patient deductibles: $2,000 for single coverage, $4,000 for a family. Policies with higher deductibles generally would not comply with the ACA.
But the goals collide: The stricter the standards for mandated coverage, the harder it becomes for existing policies to comply — and the more likely they'll be canceled. That's now happening in the individual market. For legal reasons, most potential cancellations in the employer market are probably at least a year away.