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WRAPUP 3-Obama blames 'bad apple' insurers for lost coverage

Roberta Rampton and David Morgan
Wednesday, 30 Oct 2013 | 5:57 PM ET

BOSTON/WASHINGTON, Oct 30 (Reuters) - President Barack Obama said on Wednesday that "bad apple" insurance companies, not his signature healthcare law, are to blame for hundreds of thousands of people losing their coverage in the past few weeks.

As administration officials scrambled to fix technical problems on an online insurance marketplace that is central to the success of the Affordable Care Act, Obama blamed private insurers for a separate problem that has critics questioning his honesty.

The president has repeatedly promised that people who are happy with their health plans would not have to change coverage. But the termination of individual policies has given his Republican opponents scope to criticize the program they have tried to stop since its inception in Obama's first term.

Republicans' assertion that Obama had broken a major promise to the electorate was seen as potentially more damaging than the glitch-ridden website rollout on Oct. 1

The law, known popularly as Obamacare, requires insurers to offer a higher level of coverage. Individuals who do not have policies that meet the new standards may see their policies canceled at the end of the year, or may find that the monthly payments are beyond what they can afford.

Speaking in Boston, Obama said those who are getting dropped will be able to find new options through the online insurance exchanges, or marketplaces, established under the 2010 law.

"Just shop around in the new marketplace," he said. "You're going to get a better deal."

He stressed that the law included a provision that allowed Americans to keep bare-bones plans created before the law was signed as long as insurers did not change or cancel them.

"Remember, before the Affordable Care Act, these bad-apple insurers had free rein every single year to limit the care that you received, or used minor pre-existing conditions to jack up your premiums, or bill you into bankruptcy," Obama said.

The law is the most sweeping new social program since the creation of Medicare and Medicaid in the 1960s.

It is intended to move the United States closer to the goal of universal care by using market-based mechanisms to deliver affordable insurance to less affluent families that have been priced out by decades of rising healthcare costs.

Technical woes, however, have prevented millions of Americans from exploring those options through the government's HealthCare.gov portal since it was unveiled.

On Capitol Hill, Obama's top health official called the debut a "debacle" as she sought to assure skeptical lawmakers at a congressional hearing that the administration would eventually get the portal to work smoothly.

HealthCare.gov was down over the course of the four-hour hearing.

"Hold me accountable for the debacle," Health and Human Services Secretary Kathleen Sebelius told the U.S. House of Representatives Energy and Commerce Committee.

"I told the president that we were ready to go. Clearly I was wrong," she said.

Sebelius has drawn intense criticism from Republicans, who have called for her or other senior officials to resign. She seemed to survive the high-profile hearing without further damage. A White House spokesman said after the hearing that Obama has "complete confidence" in Sebelius.

Republicans have sought to derail the healthcare overhaul since Obama took office in 2009, culminating in a 16-day government shutdown this month that has cost the U.S. economy an estimated $24 billion, according to Standard & Poor's ratings agency. Republicans say the program is an unwarranted expansion of the federal government.

The website's woes and insurance plan terminations have given Republicans more ammunition.

"For those who lose the coverage they like, they may also be losing faith in their government," said Michigan Representative Fred Upton, the Republican who oversaw the hearing.

Opinion polls show that most Americans blame Republicans for that standoff, but Obamacare's woes have allowed them to shift the spotlight since the government reopened two weeks ago.

Despite the drama, the public's assessment of Obamacare has shifted little over the past months. Gallup reported that 36 percent of Americans believe it will make healthcare in the United States better, while 44 percent think it will make things worse - essentially the same as surveys found in August and June.

GROWING CONCERNS

The growing crisis surrounding Obama's signature legislative achievement could diminish his influence in Congress and threaten his ability to get other priorities like immigration reform signed into law in his remaining three years in office.

U.S. presidents have a limited time to enact their agenda in the second term before they start losing influence as lawmakers start worrying about re-election.

Obama's fellow Democrats question how he could have botched the debut of the most ambitious safety-net program since the 1960s.

"Our guys are frustrated by Obama's unforced errors," a Senate Democratic aide said. "How could the president not be ready for the rollout?"

Obama spoke at Boston's historic Faneuil Hall, where in 2006 then-Governor Mitt Romney, a Republican, signed a state law that served as a model for Obama's health reforms.

Like Obamacare, that law had a rocky start as well - state officials delayed some aspects for several months and the White House says only 123 people signed up in the first month it was available. By the end of the year-long enrollment period, 36,000 had signed up.

The Obama administration likewise expects "a very small number" of people to sign up initially for coverage, Sebelius said. Overall, U.S. officials hope 7 million people sign up in the first year, and Americans who don't have health coverage by March 31 face a financial penalty.

The White House has declined to say how many Americans have enrolled so far. It also has asked states that run their own online healthcare exchanges to stop releasing their own data, according to Kevin Counihan, who runs Connecticut's health site.

"The White House is coordinating this stuff and trying to get states to report when they report - once a month," Counihan told reporters. "We'll do it every two weeks."