Obamacare’s Next Threat: A September Surprise

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Obamacare open enrollment closed March 31. The White House’s Obamacare war room did not.

Most state health insurance rates for 2015 are scheduled to be approved by early fall, and most are likely to rise, timing that couldn’t be worse for Democrats already on defense in the midterms.

The White House and its allies know they’ve been beaten in every previous round of Obamacare messaging, never more devastatingly than in 2010. And they know the results this November could hinge in large part on whether that happens again.

So they’re trying to avoid — or at least, get ahead of — any September surprise.

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Aware that state insurance rate hikes could give Republicans a chance to resurrect Obamacare as a political liability just weeks before the midterms, the White House’s internal health care enrollment outreach apparatus immediately redirected into a rapid-response, blocking-and-tackling research and press operation geared toward preempting GOP attacks on the issue.

In what aides say is a sign of a changed approach within the White House — but also heightened concerns around the midterms — they’re even coordinating with Hill Democrats, funneling localized background analysis and talking points to each state’s delegation through Senate Majority Leader Harry Reid (D-Nev.), House Minority Leader Nancy Pelosi (D-Calif.) and New York Sen. Chuck Schumer’s Senate Democratic Policy and Communications Committee. They’ve also relied on California Rep. Henry Waxman’s staff at the Energy and Commerce Committee to produce rebuttal reports, often in advance, on GOP claims about insurance.

“One of the lessons we’ve learned in implementing health care is to stay on it,” said Tara McGuinness, the White House senior communications adviser who has been spearheading the effort for the West Wing, reflecting on previous run-ins. “We are not going to let anyone distort the debate.”

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They’ve got plenty to respond to already. “Empty Promises,” reads a heading on a recent fact sheet from Wyoming Republican Sen. John Barrasso’s Republican Policy Committee, citing President Barack Obama’s repeated promises that premiums wouldn’t rise. “When Washington Democrats were trying to win elections and push their health care plan into law, they repeatedly said their bill would drive down premiums and health care costs.”

With Democrats looking to hang on to Senate seats in many Republican-leaning states, they’ll be hoping that the final numbers don’t come in anywhere near the 24.6 percent hike that report from the anti-Obamacare Heritage Foundation projected for a family of four in Arkansas, or even the 13.1 percent increase in Alaska or 12.4 percent in Louisiana.

So far, although no state has finalized its rate, 21 have posted bids for 2015. Average preliminary premiums went up in all 21, though only a few by double digits.

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Every preliminary rate will be reviewed and negotiated by state and federal insurance authorities, and based on past years, many will end up cut significantly. But the White House and its allies recognize that “rates have gone up under Obamacare” will always make an easier headline than their response — the initial bids won’t necessarily be the final rate; the announced averages are misleading because they give equal weight to larger and smaller insurers; rates have gone up at a lower rate than would likely have happened otherwise; and subsidies are built into the law to compensate for some of those increases as well as potential end-of-year rebates for inordinate hikes.

They also recognize that, even if months from now the facts bear out their argument, they’d never be able to take back a first round of negative stories and resulting anxiety — or keep that material out of Republican campaign ads.

“Nobody out there knows anything about the medical-loss ratio,” said Sen. Chris Murphy (D-Conn.), who’s become the Senate point man for Obamacare rapid response, leading efforts to get Democrats to match Republicans in floor speeches and social media campaigns with supportive efforts of their own. But “if the premium increase is too high, you get your money back. That’s a pretty easy thing to explain.”

That’s where the six-person White House team, with backup from staffers at the Department of Health and Human Services, comes in. “Chance favors the prepared mind” goes the Louis Pasteur quotation that defines their ethos.

For months, the half-dozen White House communications and policy aides have been assembling state-by-state histories of health insurance rates before the Affordable Care Act was implemented, the drop-offs between initial rate proposals and final rates, and an analysis of the law’s effects and projections for 2015 — all condensed to fit on a two-page background and talking points document tailored for each state.

Then they wait, closely tracking developments in the states in order to be ready to pounce when rates are announced.

When they see a state preparing to announce premium proposals, McGuinness emails Reid’s and Pelosi’s offices, who then connect her team with the chiefs of staff and press aides for every Democrat in the state’s congressional delegation. They put together policy and communications briefings for the members’ staffs, and occasionally the members themselves.

“The amount of misinformation out there can be overwhelming, so you have to make sure that members have the historical trends, they have the new information in a straightforward way,” said Drew Hammill, Pelosi’s communications director and one of the White House’s primary points of contact on the effort, who said lawmakers had often been confused and overwhelmed by the state data in the past. “It’s setting the proper context that’s so crucial here.”

Often, White House officials leave wrangling the local press to the offices that know state reporters best. But occasionally — in Ohio, for example, where there’s a major market, and a major opponent in Republican Lt. Gov. Mary Taylor — they will step in directly to help.

“Regardless of what they want to say or the rhetoric they want to use, in Ohio, consumers are paying more,” said Taylor, who oversees her state’s insurance department. “The facts are what the facts are. And the facts are that Obamacare is making things more expensive in Ohio.”

Taylor’s been leading the charge against Obamacare for years and hasn’t let up, still citing a predictive study from the consulting firm Milliman done last year because she says it has continued to track with the actual increases in rates to date. There are two more companies offering insurance in Ohio for 2015 than there were for 2014, but she says that this doesn’t account for an overall drop in competition and costs going up as a result of mandates.

The first bullet on the White House Obamacare strike team’s fact sheet for Ohio points out that rates on individuals went up in the state by double digits every year before Obamacare, too.

Taylor said she doesn’t buy the White House’s prediction that rates will drop significantly from the preliminary ones, which currently project an average 13 percent increase, though that’s an average that includes large market share insurers with rates that are now lower and small market share insurers with rates that have spiked.

As for the idea that final rates won’t match the preliminary ones, Taylor said, “It sounds like a political talking point to me,” explaining that she’s still in the process of reviewing the rates. “Are they expecting those rates are going to be cut in half? I don’t think so.”

Page 2 of the White House’s Ohio fact sheet is all about attempts to answer this question, citing drops in past years elsewhere around the country and larger trends in bringing down costs.

“Before the health law, Ohioans faced double-digit increases in premium costs each year,” said Sen. Sherrod Brown (D-Ohio), who was enlisted in the response once the preliminary rates came in. “Now, 85 percent of Ohioans purchasing plans on the exchange receive credits to make their health coverage more affordable.”

Sorting out who’s closer to reality will take data from all 50 states — and for any true statistical evaluation, several years’ worth.

“There is no clean and tidy story on rates,” said Brendan Buck, a spokesman for the national trade association America’s Health Insurance Plans, who until recently was at the forefront of public opposition to Obamacare as a spokesman for House Speaker John Boehner (R-Ohio). “They are going to vary state by state, market by market, and even within a market.”

Iowa’s seen one of the biggest spikes among the states that have come in so far — an average premium increase of 11.5 percent, though rates aren’t expected to be finalized until October. Even there, where Insurance Commissioner Nick Gerhart is an appointee of Gov. Terry Branstad, a Republican running for reelection, they’re holding off on drawing any conclusions.

“It’s a little early to name a trend when we’ve only had a few months of experience to make projections on,” said Gerhart spokesman Tom Alger.

But the White House and Democrats believe that if they can keep the storyline pointing toward decreases, or even just a muddle for now — and as far away from the doomsday, rates-through-the-ceiling stories that dominated coverage last year, they’ll neutralize Republican attacks.

“Everybody’s looking around the next corner, but I think there’s a growing confidence that we’ve figured out how to explain and message this bill,” Murphy said. “Some of these rate increases are going to look scary, but not compared to rate increases prior to the Affordable Care Act.”