Perspective on the Obamacare Health Insurance Cancellation Horror Stories

The part of the law causing people to lose their former health care plans is only a small slice of the overall program.

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Health and Human Services Secretary Kathleen Sebelius testifies before the House Energy and Commerce Committee about the difficulties plaguing the implementation of the Affordable Care Act on Capitol Hill on Wednesday, Oct. 30, 2013 in Washington.

During yesterday's House Energy and Commerce Committee hearing regarding the less-than-stellar rollout of the health insurance exchanges created by the Affordable Care Act, Secretary of Health and Human Services Kathleen Sebelius faced plenty of scrutiny regarding those Americans who are seeing their insurance plans canceled under the new law. (This, when lawmakers were not discussing red solo cups, tricycles or the Wizard of Oz.)

That some people are seeing their individual health insurance plans canceled during the rollout of Obamacare, as it's known, has become a conservative cause célèbre. And the outrage was amplified after NBC News dropped what it pegged as a bombshell report about the Obama administration supposedly covering up that it knew these cancellations were on the way. In fact, according to NBC, the administration was aware that "47 to 60 percent" of people insured in the individual marketplace would see their plans evaporate, but barreled ahead with Obamacare anyway.

With all the numbers being tossed around and the deafening hue and cry from the right, though, it's worth adding some perspective to the discussion.

[See a collection of political cartoons on Obamacare.]

For starters, remember that the individual insurance marketplace is the smallest slice of the American health care system, currently serving some 15 million people (or 5 percent of the population) according to the Kaiser Family Foundation. Everyone else is either covered via their employer or a public program (Medicare, Medicaid or the Veterans Health Administration, for instance) or remains uninsured. Here's what that looks like in chart form:

http://www.usnews.com/dbimages/master/49150/GR_131030_garofalo.jpg

Fifteen million Americans is a lot, to be sure, but it's just a small fraction of those interacting with the health insurance industry.

[See a collection of political cartoons on the economy.]

And what does it mean that those affected saw their plans canceled? To hear conservative favorite Michelle Malkin or our own Peter Roff tell it, their health care is dead, gone, kaput, no more. But the reason plans are being canceled is because they don't meet new standards under the Affordable Care Act and the insurance company running them either doesn't want to grandfather them into the system or the plans don't qualify for grandfathering because they're too new.

Those who lose their current plans don't lose their health care coverage; they just need to purchase a new plan. Having shopped for an individual plan before, I know it's no picnic, but it's also not a national tragedy, and it doesn't mean that those losing their coverage must resign themselves to being uninsured.

But shopping for a new plan may require using the much-maligned Obamacare website, you say? Yes, and the Healthcare.gov website has not worked as it should. But again, the numbers matter. The federal exchange is operating in 36 states where the government opted against running its own state-based exchange. By most accounts, the states that chose to run their own exchanges are having few problems. Kentucky's exchange, for example, is running swimmingly.

[Vote: Who's to Blame for the Obamacare Glitches?]

So the horror story to which conservative commentators and Republicans in Congress are pointing applies to the fraction of the population that 1) shops in the individual marketplace 2) has a plan that, for whatever reason, didn't meet some Obamacare standard and 3) lives in a state where the federal exchange operates.

Again, this is not to say that having to shop for a new health care plan is easy. And it's entirely possible that some of the people who do so will wind up having to pay more to get covered (though some will also pay far less). The president did, indeed, speak far too broadly when he promised that anyone, anywhere who liked his or her health insurance plan could undoubtedly keep it. The formulation he used in a 2009 speech to Congress – "If you are among the hundreds of millions of Americans who already have health insurance through your job, or Medicare, or Medicaid, or the VA, nothing in this plan will require you or your employer to change the coverage or the doctor you have" – was much more accurate.

But to hear conservative commentators and Republicans tell it – aided by very lazy reporting in major media outlets – some people seeing their insurance companies cancel their plans renders the entirety of Obamacare a catastrophe. But the part of the law causing those cancellations is only a small slice of the overall program. Chances are, the glitches will be ironed out, those who lost their current plans will enroll in new ones and in no time at all this whole episode will be nothing but a memory.

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