Fox News falsely claimed the Obama administration hid the fact that some individuals would experience changes to their insurance coverage under the Affordable Care Act (ACA), when in fact Fox itself reported on the administration's announcement of the underlying “grandfathering” policy in 2010.
On October 28, NBC News reported that some Americans would change insurance policies over the next year as a result of the new health care law, and noted that this was unsurprising to the Obama administration. The law required that policies that were already in effect prior to March 23, 2010 to be “grandfathered” in, but not if those policies were significantly changed by the insurance company in a way that increases costs for consumers or reduces benefits between 2010 and 2014. Furthermore, language in the 2010 regulations acknowledged that “40 to 67 percent” of customers would likely not keep their policies during this period, based on normal turnover in the individual insurance market.
Fox & Friends latched on to this report on October 29 to claim the administration misled Americans, with co-host Steve Doocy falsely claiming that “back in 2010, they knew millions would lose it and they didn't say a word” :
DOOCY: How many times did we hear the president promise ... that if you liked your health insurance, you would be able to keep it? Well now it has been revealed, in fact Jay Carney pretty much revealed yesterday, that there would be millions of Americans whose current policies do not meet the standards of the Affordable Care Act ... You know when the administration knew that millions would lose it? July of 2010. So you've seen the president and a number of Democrats, high ranking officials say, if you like your insurance, you can keep it -- back in 2010, they knew millions would lose it, and they didn't say a word.
Co-host Elisabeth Hasselbeck further claimed this information was “buried in Obamacare,” asking earlier in the show “Where was that information up at the top? Where was that in 2009, 2010, 2011, 2012? Where was that information?”
The information was on Fox News and in press announcements issued by Health and Human Services Secretary Kathleen Sebelius. Back in June 2010, Fox News' Molly Henneberg reported on Special Report that “the Obama administration's own estimates say that up to 80 percent of small businesses and 64 percent of large businesses may have to give up the plans they had today within three years,” as some plans would not be grandfathered in. The report included video of Sebelius making the announcement about the administration's grandfathering regulations on June 14, 2010.
It was known before the ACA's enactment that policyholders in the individual health insurance market that many of these policies would be changed, despite the grandfathering. A letter from the Congressional Budget Office (CBO) to former Senator Evan Bayh, dated November 30, 2009, explained that “because of relatively high turnover in that market (as well as the incentives for many enrollees to purchase a new policy in order to obtain subsidies), CBO and [the Joint Committee On Taxation] estimate that relatively few nongroup policies would remain grandfathered by 2016.”
Fox was not the only one to report the administration's announcement, as ThinkProgress noted. The New York Times reported in June 2010 that the rules on grandfathering in plans were expected to encourage employers to keep existing health plans intact, which would help accomplish the goal of allowing people to keep their current coverage. However, the administration always acknowledged that some “might face significant changes in the terms of their coverage” (emphasis added):
In issuing the rules, the administration said this was just one goal of the legislation, allowing people to “keep their current coverage if they like it.” It acknowledged that some people, especially those who work at smaller businesses, might face significant changes in the terms of their coverage, and it said they should be able to “reap the benefits of additional consumer protections.”
Additionally, a June 2010 press release from Health and Human Services explicitly stated that some individuals would face changes to their plans, stating “roughly 42 million people insured through small businesses will likely transition from their current plan to one with the new Affordable Care Act protections over the next few years” and that the 17 million “who are covered in the individual health insurance market, where switching of plans and substantial changes in coverage are common, will receive the new protections of the Affordable Care Act.” The release further noted that when a plan is not grandfathered in, individuals would still be eligible for the same basic health insurance minimums:
Roughly 40 percent to two-thirds of people in individual market policies normally change plans within a year. In the short run, individuals whose plan changes and is no longer grandfathered will gain access to free preventive services, protections against restricted annual limits, and patient protections such as improved access to emergency rooms.
The interim final rule published in the Federal Register in June 2010 about the grandfathering rules cited research that showed the individual insurance market regularly saw heavy turnover each year, and that the administration's estimate of the amount of plans that would not be grandfathered was based on the regular turnover rate:
The market for individual insurance is significantly different than that for group coverage. This affects estimates of the proportion of plans that will remain grandfathered until 2014. As mentioned previously, the individual market is a residual market for those who need insurance but do not have group coverage available and do not qualify for public coverage. For many, the market is transitional, providing a bridge between other types of coverage. One study found a high percentage of individual insurance policies began and ended with employer-sponsored coverage. More importantly, coverage on particular policies tends to be for short periods of time. Reliable data are scant, but a variety of studies indicate that between 40 percent and 67 percent of policies are in effect for less than one year. Although data on changes in benefit packages comparable to that for the group market is not readily available, the high turnover rates described here would dominate benefit changes as the chief source of changes in grandfather status. While a substantial fraction of individual policies are in force for less than one year, a small group of individuals maintain their policies over longer time periods. One study found that 17 percent of individuals maintained their policies for more than two years, while another found that nearly 30 percent maintained policies for more than three years. Using these turnover estimates, a reasonable range for the percentage of individual policies that would terminate, and therefore relinquish their grandfather status, is 40 percent to 67 percent. These estimates assume that the policies that terminate are replaced by new individual policies, and that these new policies are not, by definition, grandfathered.
Moreover, contrary to Doocy's scare tactics, most individuals will not “lose” insurance coverage, even if their plan is altered or ended. As Kaiser Health News reported, while some insurance companies have decided to end policies for individuals who currently buy their own health insurance, these individuals will simply receive new, and in many cases better, coverage:
By all accounts, the new policies will offer consumers better coverage, in some cases, for comparable cost -- especially after the inclusion of federal subsidies for those who qualify. The law requires policies sold in the individual market to cover 10 “essential” benefits, such as prescription drugs, mental health treatment and maternity care. In addition, insurers cannot reject people with medical problems or charge them higher prices. The policies must also cap consumers' annual expenses at levels lower than many plans sold before the new rules.
Kaiser Health News also reported that most of the insurers currently annoucing changes “are ending policies sold after the law passed,” so they were never eligible to be grandfathered.