Revealed: Obamacare plans will cost MORE ‘in many cases’ even with government subsidies, officials admit for the first time

By  David Martosko, U.s. Political Editor

PUBLISHED: 16:18 EST, 14  November 2013 |  UPDATED: 17:04 EST, 14 November 2013

The Obama administration has directly  conceded for the first time that ‘in many cases,’ health insurance plans offered  through government exchanges are more expensive than plans consumers bought  before the Affordable Care Act became law – even when government subsidies are  figured in.

In a letter to state insurance commissioners,  Center for Consumer Information and Insurance Oversight director Gary Cohen  wrote on Thursday that one reason for the new Obamacare measures the president  announced Thursday is that millions of consumers receiving cancellation letters  from their insurers are learning the Affordable Care Act options are in fact  less affordable.

‘Although affected individuals and small  businesses may access quality health insurance coverage through the new Health  Insurance Marketplaces,’ Cohen wrote, ‘in many cases with federal subsidies,  some of them are finding that such coverage would be more expensive than their  current coverage, and thus they may [be] dissuaded from immediately  transitioning to such coverage.’

His written statement contradicts President  Obama’s campaign promises that the Affordable Care Act would lower costs for  Americans.

In October of that year he said during a  campaign rally in Columbus, Ohio that ‘we are going to work with you to lower  your premiums by $2,500. We will not wait 20 years from now to do it, or 10  years from now to do it. We will do it by the end of my first term as  president.’

While Obama announced changes to his signature health care overhaul law on Thursday, his chief insurance oversight deputy told state officials that Obamacare costs will often by higher than consumers are used to 

While Obama announced changes to his signature health  care overhaul law on Thursday, his chief insurance oversight deputy was telling  state officials that costs on the Obamacare website will often by higher than  consumers are used to

Smoking gun: The Obama administration has admitted that 'in many cases,' insurance policies offered through Obamacare cost more than consumers' previous plans, even when they get federal government subsidies 

Smoking gun: The Obama administration has admitted that  ‘in many cases,’ insurance policies offered through Obamacare cost more than  consumers’ previous plans, even when they get federal government subsidies

Center for Consumer Information and Insurance Oversight director Gary Cohen let the cat out of the bag, writing that for 'many' consumers, Obamacare plans 'would be more expensive than their current coverage' 

Center for Consumer Information and Insurance Oversight  director Gary Cohen let the cat out of the bag, writing that for ‘many’  consumers, Obamacare plans ‘would be more expensive than their current  coverage’

 

 

 

 

Cohen’s letter also goes further than the  words Obama used Thursday to hedge his bets while he outlined a new strategy to  allow Americans to keep policies that their insurers have already  canceled.

‘My working assumption was that the majority  of those folks would find better policies at lower cost or the same cost in the  marketplaces,’ he said.

‘We will continue to make the case, even to  folks who choose to keep their own plans,’ Obama promised minutes later, ‘that  they should shop around in the new marketplace because there’s a good chance  that they’ll be able to buy better insurance at lower cost.’

That ‘good chance’ of cost savings is a  weaker standard than the White House has employed before with messaging that  promised no insurance price hikes to ‘most people.’

 

On Nov. 4 the president told a partisan crowd  of Obamacare supporters in Washington, D.C. that ‘because of the competition  between insurers’ buily into the Affordable Care Act, ‘and the new health care  tax credits, most people will be able to buy better plans for the same price or  even cheaper than what they’ve gotten before.

Cohen’s office is a subagency of the Centers  for Medicare and Medicaid Services,  the Health and Human Services Department  agency in charge of  implementing the failed healthcare.gov website that has  made Obamacare’s rollout a cringe-inducing national embarrassment.

His letter also sets the terms of Obama’s new  policy shifts, outlining a rule that would only apply to insurance policies in  place by October 1.

Savings THIS big: Health and Human Services Secretary Kathleen Sebelius has been Obama's most visible public Obamacare defender, but she will face new questions about consumer choice and insurance price tags 

Savings THIS big: Health and Human Services Secretary  Kathleen Sebelius, a former Kansas governor and insurance commissioner, has been  Obama’s most visible public Obamacare defender, but she will face new questions  about consumer choice and insurance price tags

 

Timeframe: If you like your plan, you can keep it, unless you bought it since October 1, 2013Timeframe: If you like your plan, you can keep it,  unless you bought it since October 1, 2013

 

 

‘The transitional relief afforded in this  document is not applicable to newly obtained health insurance coverage,’ he  wrote.

‘It applies only with respect to individuals  and small businesses with coverage that was in effect on October 1,  2013.’

Insurers may balk at the president’s latest  set of requirements. His new ‘fix’ to Obamacare would require companies to write  to each cancelled policyholder, outlining their options including the new  exchanges.

An insurance industry executive who requested  anonymity told MailOnline that the cost of complying will reach tens of millions  of dollars.

‘If we cancelled a half-million [people],’  the executive said,’ now we have to spent money researching every policy to see  what to do, then send a half-million letters in the mail? Good lord.’

The president of the health insurance  industry’s largest trade group warned Thursday that Obama’s new plan ‘could  destabilize the market and result in higher  premiums for consumers.’

‘Premiums have already been set for next year  based on an assumption of when  consumers will be transitioning to the new  marketplace,” according to  Karen Ignagni, the president of America’s Health  Insurance Plans.

‘If now fewer younger and healthier people  choose to purchase coverage in  the exchange, premiums will increase and there  will be fewer choices for consumers.’

 

CMS  letter on Obamacare Nov-14-2013.pdf

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