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6 Reasons Democrats Shouldn’t Join The Push To Let Americans Keep Their Individual Insurance Plans

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"6 Reasons Democrats Shouldn’t Join The Push To Let Americans Keep Their Individual Insurance Plans"

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A growing number of Democrats in the House are expected to vote for legislation introduced by Rep. Fred Upton (R-MI) on Friday that would allow health insurers that issued individual market plans as of Jan. 1, 2013 to continue selling their policies through 2014 to current and new enrollees.

Democrats concede that the measure is far from perfect, but argue that they must support legislation upholding their promise about allowing Americans to maintain their current coverage, if they’re to survive politically. Several Senate Democrats up for re-election in 2014 have also signed on to similar measures.

“On Friday, there is a bill on the floor which isn’t by any means a good bill in my opinion, but it’s a bill on the floor that says will you allow people that like their insurance to keep it,” Rep. Mike Doyle (D-PA) explained during an appearance on MSNBC’s Morning Joe on Thursday. “What we said is if [the White House doesn't] give us something else before Friday, I think you’ll see many Democrats as a wave sending a message to the American people and the White House that we believe that needs to be fixed and it needs to be fixed now.”

But the proposed legislation doesn’t fix the problem and sends a confused message to voters. Lawmakers who voted for Obamacare would now be supporting a bill that undermines Obamacare in order to keep a promise they made about how terrific Obamacare would be. Here are six reasons to oppose the legislation:

1. Premiums will increase for millions of Americans. Allowing younger and healthier individuals to remain in their existing plans and permitting companies to market these policies to new enrollees at cheaper rates would keep this critical population out of the exchanges. The new marketplaces, will consequently attract sicker enrollees who need to use the coverage they purchase, significantly increasing premiums. As MIT’s Jon Gruber told the Washington Post, “I don’t know how much higher premiums go,” he sighs. “I really don’t.” Federal spending on subsidies would also increase to keep pace with the cost of coverage. Ultimately, the people who have waited for years to buy insurance could experience huge cost spikes.

2. Insurers can still drop your coverage, even if you like it. While the bill would exempt insurers from the new minimum benefits established by health care reform, it doesn’t prevent companies from changing their policies voluntarily or dropping coverage — as individual plans have done for years. Here is the relevant portion of Upton’s legislation:

Fred Upton bill

3. Insurers could leave the exchanges, causing chaos. Since insurers anticipated that this younger and healthier population would have joined the risk pool when establishing their rates, many companies may be moved to reassess their premiums for 2014 — and will likely raise costs for 2015, if not leave the exchanges altogether. Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, told the New York Times that the industry has “significant concerns on how it would work operationally.”

4. It would undermine the law’s consumer protections. The policies would not have to meet health care reform’s new consumer protections, meaning that the issuer will still be free to deny coverage to people with pre-existing conditions and offer skimpy policies that lack essential health benefits. In other words, Americans would continue to enroll in plans that won’t cover them if they actually fall ill.

5. Republicans see this as a path towards repealing Obamacare. Some conservatives have argued that the measure “represents a metaphorical bullet to the gut of Obamacare. It may not kill it immediately, but it will kill it eventually.” The GOP leadership agrees. In a meeting with his conference on Wednesday, Boehner argued that the bill is part of a larger strategy to “stop this law.

6. It establishes a dangerous precedent. “[W]hile the Upton bill would extend the availability of non-ACA-compliant plans only through 2014, there would be pressure next summer and fall to then extend the availability of these plans through 2015 or (more likely) permanently,” Sarah Lueck observes in a new analysis for the Center for Budget and Policy Priorities. “That would permanently raise premiums in marketplace plans, further discouraging healthy people from enrolling and threatening the marketplaces’ long-term viability.”

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