Why You Can’t Keep The Exact Coverage You Have, Even If You Like It

This morning, Rep. Dave Reichert (R-WA) aggressively pressed Health and Human Services Secretary Kathleen Sebelius on whether the Affordable Care Act would allow individuals to keep the coverage they have if they like it and argued that HHS regulations would lead Americans to lose their current plans:

REICHERT: Do you still believe that statement? In this bill you’re able to keep your health care plan and your doctor if you like it. Is that an accurate statement? Just a yes or no?

SEBELIUS: Congressman, it’s accurate to the point that we are not tampering with the existing system. Employers make choices of plan changes and doctor changes that right now, employers don’t control.

REICHERT: Madam Secretary, please. My time is limited. Here is the problem, people in America just want to know. […]

SEBELIUS: Employers choose care for 180 million Americans…

REICHERT: Madam Secretary, please. If the President said there is language in the bill that runs contrary to that promise…will you work to change the language in the bill to insure that the American people can keep their doctor and keep their health plan.

SEBELIUS: Congressman, I would be happy to work with you on that. But as you know, we don’t order doctors to take Medicare patients…or take Medicaid patients. We don’t order employers to keep the same the same plan with the same network. That has never been part of the promise.

Watch it:

The problem with President Obama’s statement that “if you like the coverage you have you can keep it” is that it lends itself to a very literal interpretation — the suggestion that health care plans won’t change, rather than the correct interpretation that health reform won’t force you to enroll in a new plan (so long as your existing plan offers comprehensive benefits).

The administration hopes to allow consumers to keep their existing plan, while also ensuring that there are some basic patient protections built into these plans. Last year, HHS unveiled regulations to exempt health insurance plans in existence before March 23, 2010 — the day the Affordable Care Act became law — from many of the new regulations, benefits standards and consumer protections that new plans now have to abide by. But the exclusion comes with conditions. If the plans or employers make changes that undermine the spirit of the health law and significantly burden enrollees with lower benefits and increased costs, they have to come into compliance with all the consumer protections. (In November of last year, HHS loosened the regulations to help employers hang on to their grandfather protections longer.)

HHS estimates that a good percentage of small business plans and policies in the individual market will lose their grandfather status and look for cheaper coverage that already meets the new requirements. And that’s a good thing. The grandfather regulations serve as a bridge to gradually move everyone into plans that have the kind of consumer protections that Americans say they want. By 2014 almost all plans will be in full compliance.

In the same way that the government requires automakers to meet certain safety standards and design specifications, insurance issuers and employers will have to abide by new benefit and consumer protection minimums. They shield consumers from drastic benefit cuts or cost shifts. And by discouraging insurers and employers from making these changes, the regulations in the law help you like what you have rather than just being stuck with your existing plan.