When the Patient Protection and Affordable Care Act was first announced, one of the things President Barack Obama promised was that "If you like your plan, you can keep it." However, the federal government tried to walk that back by canceling the insurance policies for millions of Americans which did not meet the minimum standards set by the law, and it has once again reversed on that plan as well.
As a result, some 33,000 people in the state of Iowa alone will be able to keep plans they had prior to the ACA's coverage mandate being implemented, even though they do not meet the standards set by the law, according to a report from the Iowa Insurance Division. The Obama administration recommended to all states that they allow residents to keep these sub-par plans until Oct. 1, 2016, before requiring that people find more comprehensive coverage that fits under the strictures of the law itself.
What's the reason?
It seems that many consumers preferred to keep their old plans simply because they were not as expensive as those they would have been required to obtain if their old policies were cancelled, the report said. Moreover, the Obama administration was, in the eyes of many critics of the move, a little slow to announce that the previous plans were being canceled, and might therefore have left millions whose coverage was affected scrambling to find new policies in relatively short periods of time.
The reason these favored but controversial plans were so inexpensive, however, is that they typically came with extremely high deductibles, or were otherwise deficient in providing what the Obama administration considered to be affordable access to crucial types of care. Many younger Americans, in particular, as well as those with lower incomes, might have valued having some amount of health insurance for catastrophic situations while still not needing it for everyday care needs.
The challenge for many insurance companies these days is having the ability to bridge the gap between what people want (or at least want to pay for) versus what the federal government now mandates must be part of any new health plan. Keeping things affordable while also meeting those minimum requirements will likely spell the different between attracting new customers as more people buy health insurance, and seeing them go to competitors instead.