New Obamacare Fix Is Bad News for Democrats
Policy + Politics

New Obamacare Fix Is Bad News for Democrats

REUTERS/Jessica Rinaldi

A little-known proposed change to the president’s health care law could result in a new political nightmare for Democrats who are vulnerable in the 2014 midterm elections. says the Centers for Medicare and Medicaid Services (CMS) issued a proposal in March that would prohibit insurers from selling fixed-benefit insurance plans as stand-alone policies.

Related: Obama’s Falling Ratings Hurt Dems in Midterms

Fixed-benefit plans are so bare bones they don’t even qualify as actual health insurance under the Affordable Care Act’s individual mandate – so people who are covered by these plans only are still subject to the penalty unless they qualify for an exemption.

The policies are most likely used by people buying them to supplement a plan they already have or by people who are using them as their only source of coverage if they can’t afford another policy.

If the rule is approved, consumers will no longer have the option to buy this coverage without also buying a more comprehensive plan.

Related: Americans Want to Fix, Not Repeal Obamacare

“We’re going to have another public outcry about, ‘If you like your health plan, you can keep it,’” Pat O’Neill, general counsel at US Health Group told Vox. “Not as long as its fixed benefit, you can't.”

The rule change is likely to get attention from Republicans who are aggressively campaigning against Obamacare this election season.

“Obamacare is a gift that keeps on giving for the GOP,” Republican strategist John Feehery said. He added that Republicans should (and likely will) “do everything they can to talk about the flaws in the law specifically. Keep the focus on Obamacare.”

The administration’s intentions behind the rule change are to do away with low-level plans that don’t provide more robust coverage. However, insurance experts are concerned that the proposal eliminates plans important to people who need more options.

Related: Why Insurers Are Canceling Millions Under Obamacare

“This type of coverage may fill a need for certain consumers,” The National Association of Insurance Commissioners said in a letter to the administration. “It can provide a bridge for those individuals who did not purchase coverage during the open enrollment period and are not eligible for a special enrollment period, or a bridge between coverage when changing jobs.”

Though it is unclear how many people use these policies, more cancellation notices will likely not bode well for Democrats.

Last fall, when the first wave of cancellation notices hit, President Obama was harshly criticized for breaking his promise, “If you like your plan, you can keep it.” Politifact even deemed it the “lie of the year.” Political pressure was so intense that the administration issued a rule change allowing insurers to issue non-compliant ACA plans until 2016.

Another round of cancellation notices is sure to revive those criticisms –especially from the GOP.

Related: Why Obamacare Remains a Burden for Democrats

Democratic strategists say candidates should avoid talking about Obamacare and instead turn the focus onto other subjects. “They should be talking about other things that matter most to voters – like the economy. That’s what they want to hear – not this political infighting,” said Tad Devine, a Democratic consultant for Purple Strategies.

Still, the administration has encouraged Democrats to embrace the law and tout the more than 8 million people who have signed up for coverage on the new exchanges through April 15.

The problem is, according to a slew of new polls, the law is still largely unpopular across the country.

A new Washington Post-ABC poll released Tuesday found that 48 percent say they oppose the law, compared to 44 percent that say they support it. A separate poll from the Kaiser Family Foundation also found that 58 percent say they think the law’s implementation fell short of their expectations.

Related: Obamacare’s Next Challenge: IRS Verification

Some 47 percent said the law is making the cost of their health insurance go up, compared to 7 percent who say it has gone down and 41 percent who stay it has remained the same.

The results did have some good news for President Obama and Democrats, about 58 percent said they would prefer that Congress works to improve the law, instead of repealing and replacing it.

Republicans seem to get the message: House Speaker John Boehner (R-OH) last week told a crowd in Ohio that “repealing isn’t the answer …the answer is repeal and replace. The challenge is that Obamacare is the law of the land.”

The party leaders seem to be slowly drifting away from the same repeal and replace language, which is increasingly unpopular with voters. Whether they will still offer an alternative to the law, as House Majority Leader Eric Cantor (R-VA) has been working on for months, is still unclear.

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