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Obama under attack as Americans losing prior health plans

Roberta Rampton
Tuesday, 29 Oct 2013 | 4:19 PM ET

WASHINGTON, Oct 29 (Reuters) - President Barack Obama is facing fresh attacks for his pledge that Americans who like their current healthcare plans can keep them under Obamacare, as reports pile up of thousands of Americans facing cancellation notices.

Accusations that the pledge was misleading are potentially a deeper threat to Obama than the website glitches that have plagued Healthcare.gov since its Oct. 1 launch and allowed only a trickle of people to sign up on new federal insurance exchanges.

Obama has downplayed the problems with the website, saying it's like a cash register not working, and has stressed that the underlying product of the 2010 Affordable Care Act is "actually really good".

But critics of Obamacare have seized on the hundreds of thousands of Americans due to lose their current plans because they fail to include essential benefits required by the law, and are asking whether Obama misrepresented the law.

"Can you understand the level of frustration and concern about what many Americans perceive to be a false claim from the administration?" asked Representative Peter Roskam, an Illinois Republican, during an oversight hearing on Tuesday featuring Marilyn Tavenner, a top U.S. official overseeing the law's rollout.

The people at risk for policy cancellations are those in the pool of 15 million consumers, often self-employed, who do not get coverage through their employers or the government, and have individual policies.

The dropped policies are also reviving debate on a core premise of the healthcare law - that all Americans should have adequate coverage so that the costs of healthcare are spread across the population.

Democrats are also saying Obama could have phrased his plan retention pledge more accurately. "I think preciseness would have been better," House Minority Whip Steny Hoyer, the second-ranking Democrat in the House, told reporters.

Obama in 2009, while building support for the bill that would become the Affordable Care Act, or Obamacare, repeatedly said that Americans who liked their doctors or current healthcare plans could keep them. He reiterated the promise as recently as March.

Now that the law is fully coming into effect, Americans are receiving notifications from their insurers that their current plans cannot continue because they do not cover certain "essential" benefits such as preventive care and mental health services as required by the law.

The idea was to phase out bare-bones plans that do not cover catastrophic events, sometimes to the surprise of the consumer, and also have the effect of increasing costs across the healthcare system.

When asked by a reporter on Tuesday whether Obama misled the public, White House spokesman Jay Carney redirected the conversation to state that it was not fair for taxpayers to absorb costs of the uninsured or under-insured.

"There was a debate about this and I'm sure there will continue to be a debate that a fundamental premise of the Affordable Care Act is that there ought to be minimum standards for insurance coverage for everybody," Carney said.

But some Americans are reporting sticker shock about the new plans their insurers are offering.

Kevin DeLashmutt, 53, who is self-employed in real estate in Seattle, Washington, said that over the summer he received a letter from his insurance company saying the plan he now has is no longer available.

The cheapest plan he could buy would cost $411, about twice his current premium, while the plan most like the one he has would cost about 150 percent more - $542.59.

"You used to be able to choose what to get based on what you need and what you can afford, including a high deductible," DeLashmutt said. "Let me manage my own risk. Those people in Washington, D.C., shouldn't get to make that decision for me."

It is unclear exactly how many Americans may lose their current coverage and whether they truly will be forced into more expensive plans.

The law does protect plans that were created before the March 2010 law and have not changed since then, but it is common industry practice for insurers to tweak plans year to year, leading to a flood of cancellations.

These people can either seek new "off exchange" policies from insurers, or try to find cheaper plans through the exchanges that come with a federal tax subsidy if their income is low enough.

With glitches plaguing the website, Americans are having difficulty exploring their other options and are left frustrated. And Republicans have been able to harness this frustration to energize their latest attack on Obamacare.

"The problems don't stop at the technical failures of a website," said Representative Sam Johnson, a Republican from Texas, at the oversight hearing on Tuesday. "The real problem stems from the colossal failure to deliver what this law promised the American people."