The End of Obamacare As We Never Knew It

The president's "fix" might be the beginning of the end for his signature program

President Barack Obama finally decided last week to honor his promise of letting people who like their

“junk” insurance policies, keep them. “Period.” In a rambling, hour-long press conference he said insurers would now be allowed to restore the plans that he himself had forced them to cancel because they did not comply with the minimum benefits of the Affordable Care Act.

Obamacare Debacle Derails President’s Credibility

Whether this will save Democrats from a shellacking next November remains to be seen. But this might well be the beginning of the end of Obamacare as we never knew it.

The president’s announcement was calculated to head off mass defections by panicked Democrats to the Republican “Keep Your Health Plan Act” proposed by Rep. Fred Upton. Upton’s bill passed the House anyway with 39 Democrats voting for it on Friday. Had the administration not acted, more than 100 House Democrats would have switched sides—never to return to the Obamacare fold.

Like Upton, the administration will allow insurers to reverse their cancellations for existing customers. Unlike Upton, however, the administration won’t allow insurers to extend these “junk” policies to new customers. Also, the administration’s plan will grandfather these policies for only one year whereas the Upton plan would allow Congress to reauthorize them every year.

The Upton plan would basically gut Obamacare because the program’s viability depends on its ability to herd the 15 million or so Americans getting “junk” coverage from the individual market onto the Obamacare exchanges where they’d be forced to pay more for benefits they don’t need. This would spread premiums across a bigger population and keep coverage affordable. (At least in theory.)

But Upton's bill would not only allow these people to keep their existing coverage—possibly into perpetuity, it would over time expand this population, depriving Obamacare of the sacrificial lambs it needs.

The smart money is that the Upton plan ain’t going anywhere. But it doesn’t have to. Its very existence might have forced the president to gut his signature initiative.