The Affordable Care Act, like a chameleon, is capable of changing its color or otherwise morphing to fit the pragmatic motives of its creator.
As I have said before, the Patient Protection Affordable Care Act (PPACA) (or ACA for short) is law. Therefore, of late, I have attempted to focus on the reality of it and its ramifications for all of us whether we are currently uninsured, covered by our employer’s plan or have our own individual or family health insurance plan. The primary purpose of this blog is to educate and inform– not to editorialize. If the latter were my objective, I would establish a separate blog where I would rant and rave ad infinitum about all I see wrong with the Act and big government in general. But it is not, so writing for The MedPlus Messenger, I try to remain objective and minimize expression of my feelings. But it is difficult. Increasingly so. Each day I try to put more lipstick on this pig but each day I awaken to more news the White House has selectively chosen another segment of the ACA not to implement in 2014 pursuant to the law.
Yesterday’s headlines broke news that the caps on insured’s out-of-pocket (OOP) maximums–set to go in effect in 2014–have been delayed until 2015. This potentially doubles (or worse) the liability of an insured and benefits the insurance company by allowing it to avoid covering expenses above the current OOP’s. Do you believe that is the objective of the White House? To benefit the insurance companies? And I thought the whole reason for the ACA was to better protect the patient, consumer, insured member. After all, it is the Patient Protection … … … Act is it not?
So what was the motive behind the White House’s reprieve for insurance companies? “General Math” provides the answer. I.e.:
Lower patient out-of-pockets = higher insurance premiums
Higher insurance premiums = less participation in coverage and greater backlash against the ACA
Greater backlash = trouble for the Democrats in the 2014 mid-term elections
Conclusion = this reprieve was politically motivated
Reader and followers – if you can argue this to a different conclusion – please feel free to do so here for my erudition and that of the rest of us.
Admin – Kenton Henry
By Tom Howell Jr.
Tuesday, August 13, 2013
President Obama has granted yet another part of his health care law a delay, quietly announcing a one-year grace period before imposing a strict limit on consumers’ out-of-pocket medical expenses.
The delay means some health care plans in the group market will have until 2015 to begin paying for all expenses exceeding $6,350 for an individual’s out-of-pocket spending, or $12,700 for a family.
SPECIAL COVERAGE: Health Care Reform
Language on the delay has been posted on the Labor Department’s website since February, but it did not surface in the political arena until The New York Times reported on it Tuesday.
Mr. Obama used the limits as a key selling point when he pushed the Affordable Care Act through Congress in 2010. Now, Republicans are using the delay as part of last-ditch bids to dismantle the law before key implementation dates this fall.
“Burying this announcement online in a ‘maze of legal and bureaucratic language’ shows little concern for the promises with which this law was sold,” said House Speaker John A. Boehner, Ohio Republican, borrowing language from the Times article. “What else in the law isn’t working that we don’t yet know about?”
The Obama administration also announced in a pre-July Fourth blog posting that it was delaying the mandate that requires employers with at least 50 full-time employees to provide them with health care coverage.
For the Obama administration, the setbacks are ill-timed and leave officials trying to convince consumers that the delays don’t signal an inability to carry out other parts of the law.
Erin Shields Britt, spokeswoman for the Department of Health and Human Services, said the health care law is still implementing historic consumer protections from “the worst insurance company abuses, by banning discrimination based on pre-existing health conditions, ending lifetime and annual limits on what an insurance company will cover, and capping out-of pocket spending to protect Americans and their families.”
“The February guidance builds on these landmark consumer protections by requiring that health plans limit out-of-pocket spending for major medical coverage for the first time, in 2014, on time,” she said. “This single limit will apply to additional benefits in 2015.”
The newly reported delay arose because some employers and insurers use separate companies to administer major-medical coverage and drug benefits, resulting in separate out-of-pocket limits.
Because of this fractured landscape, parties needed time to streamline their data systems . The rule says that, for the first plan year after Jan. 1, 2014, the annual limit on out-of-pocket expenses will be satisfied if a group health plan that uses more than one service provider complies with the cap on major medical coverage and maintains a similar cap on the non-major medical coverage.
Even as it delays some parts, the administration has said the individual mandate requiring most Americans to have coverage remains in effect. Officials also are working feverishly to implement by Oct. 1 state-by-state health care exchanges where those without employer-based coverage can buy insurance with the help of tax credits.
A recent inspector general report suggested that Health and Human Services is months behind in setting up the federal data hub that will allow federal and state agencies to synchronize information about consumers on the exchanges.
Senate Minority Leader Mitch McConnell, Kentucky Republican, wrote to the Obama administration Monday to suggest that it delay the rollout of the exchanges.
Conservative lawmakers are waging a rhetorical war against Obamacare ahead of a spending showdown on Capitol Hill in September.
Yet Another White House Obamacare Delay: Out-Of-Pocket Caps Waived Until 2015
WASHINGTON, DC – MARCH 18: U.S. President Barack Obama (L) speaks as Assistant Attorney General of Justice Department’s civil rights division Thomas Perez (R) listens during a personnel announcement March 18, 2013 at the East Room of the White House in Washington, DC. Perez has succeeded Hilda Solis as the U.S. Secretary of Labor. (Image credit: Getty Images via @daylife)
First, there was the delay of Obamacare’s Medicare cuts until after the election. Then there was the delay of the law’s employer mandate. Then there was the announcement, buried in the Federal Register, that the administration would delay enforcement of a number of key eligibility requirements for the law’s health insurance subsidies, relying on the “honor system” instead. Now comes word that another costly provision of the health law—its caps on out-of-pocket insurance costs—will be delayed for one more year.
According to the Congressional Research Service, as of November 2011, the Obama administration had missed as many as one-third of the deadlines, specified by law, under the Affordable Care Act. Here are the details on the latest one.
Obamacare contains a blizzard of mandates and regulations that will make health insurance more costly. One of the most significant is its caps on out-of-pocket insurance costs, such as co-pays and deductibles. Section 2707(b) of the Public Health Service Act, as added by Obamacare, requires that “a group health plan and a health insurance issuer offering group or individual health insurance coverage may not establish lifetime limits on the dollar value of benefits for the any participant or beneficiary.” Annual limits on cost-sharing are specified by Section 1302(c) of the Affordable Care Act; in addition, starting in 2014, deductibles are limited to $2,000 per year for individual plans, and $4,000 per year for family plans.
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There’s no such thing as a free lunch. If you ban lifetime limits, and mandate lower deductibles, and cap out-of-pocket costs, premiums have to go up to reflect these changes. And unlike a lot of the “rate shock” problems we’ve been discussing, these limits apply not only to individually-purchased health insurance, but also to employer-sponsored coverage. (Self-insured employers are exempted.)
These mandates have already had drastic effects on a number of colleges and universities, which offer inexpensive, defined-cap plans to their healthy, youthful students. Premiums at Lenoir-Rhyne University in Hickory, N.C., for example, rose from $245 per student in 2011-2012 to between $2,507 in 2012-2013. The University of Puget Sound paid $165 per student in 2011-2012; their rates rose to between $1,500 and $2,000 for 2012-2013. Other schools have been forced to drop coverage because they could no longer afford it.
According to the law, the limits on out-of-pocket costs for 2014 were $6,350 for individual policies and $12,700 for family ones. But in February, the Department of Labor published a little-noticed rule delaying the cap until 2015. The delay was described yesterday by Robert Pear in the New York Times.
Delay needed to align ‘separate computer systems’
Notes Pear, “Under the [one-year delay], many group health plans will be able to maintain separate out-of-pocket limits for benefits in 2014. As a result, a consumer may be required to pay $6,350 for doctors’ services and hospital care, and an additional $6,350 for prescription drugs under a plan administered by a pharmacy benefit manager.”
The reason for the delay? “Federal officials said that many insurers and employers needed more time to comply because they used separate companies to help administer major medical coverage and drug benefits, with separate limits on out-of-pocket costs. In many cases, the companies have separate computer systems that cannot communicate with one another.”
The best part in Pear’s story is when a “senior administration official” said that “we had to balance the interests of consumers with the concerns of health plan sponsors and carriers…They asked for more time to comply.” Exactly how is it in consumers’ interests to pay far more for health insurance than they do already?
It’s not. Unless you have a serious, chronic condition, in which case you may benefit from the fact that law forces healthy people to subsidize your care. To progressives, this is the holy grail. But for economically rational individuals, it’s yet another reason to drop out of the insurance market altogether. For economically rational businesses, it’s a reason to self-insure, in order to get out from under these costly mandates. Patient groups upset
While insurers and premium-payers will be happy with the delay—whose legal justification is dubious once again—there are groups that grumbled. Specifically, groups representing those with chronic diseases, and the pharmaceutical companies whose costly drugs they will use. “The American Cancer Society American Cancer Society shares the concern” about the delay, says Pear, “and noted that some new cancer drugs cost $100,000 a year or more.” But a big part of the reason those drugs cost so much is because manufacturers know that government-run insurers will pay up.
“The promise of out-of-pocket limits was one of the main reasons we supported health reform,” says Theodore M. Thompson of the National Multiple Sclerosis Society National Multiple Sclerosis Society. “We have wonderful new drugs, the biologics, to treat rheumatoid arthritis,” said Patience H. White of the Arthritis Foundation. “But they are extremely expensive.”
The progressive solution to expensive problems? More subsidies. But subsidies don’t reduce the underlying cost of care. They only excuse the high prices that manufacturers and service providers already charge.
It’s one of the many aspects of Obamacare that should be repealed, if we are to combat the rate shock that the health law imposes on tens of millions of Americans. But that will require Republicans to come up with a smarter strategy than shutting down the government.