While the Obama administration has admitted these insurance cancellations are taking place, the administration has attempted to shift the blame away from the Affordable Care Act. In a press conference on Tuesday, Press Secretary Jay Carney stated to those receiving health insurance cancellation notices, “Your insurer basically threw you off that plan.” On Wednesday, the President himself attributed these changes to “bad apple insurers” who are attempting to “downgrade or cancel these substandard plans.”
In reality, these insurance cancellations are the result of insurance companies simply complying with the regulations put in place by the Affordable Care Act. According to Peter Suderman, Senior Editor of Reason Magazine, the Affordable Care Act “institute[s] a slew of new requirements that [are] certain to result in health insurers dropping current plans for millions of people.” Many existing plans in the individual market, which were targeted to meet consumer demand, did not fit these mandates. Health insurance companies have had to cancel many of their existing plans to create new, more costly plans which do comply with these new mandates.
While this may be news to those who followed President Obama’s rhetoric over the past few years, the large number of health insurance cancellations were actually expected by the Obama administration. NBC News recently took a look at regulations issued in July 2010, finding that the Obama Administration “knew that more than 40 to 67 percent of those in the individual market would not be able to keep their plans, even if they liked them.”
The success of the Affordable Care Act rests upon a large number of so-called “young invincibles” enrolling in health care. In order to make the law work, “The White House has said it needs 2.7 million young adults to buy insurance through the government-run marketplaces,” according to Businessweek. But as Cathy Reisenwitz recently noted on Forbes, the law “hoses young, relatively poor people like [her] right when we least need high bills for services they’re not using.” In the face of mounting evidence that President Obama’s claims about the Affordable Care Act were misleading, young people are wise to remain skeptical of the law’s supposed benefits.