White House Exempts Millions From ACA Mandate
By Dr. James Palermo // December 20, 2013
NEW HARDSHIP EXEMPTIONS MAY CREATE MORE ACA MARKETPLACE INSTABILITY
In a surprise move ahead of the Dec. 23 deadline to sign up for coverage taking effect Jan. 1, another implementation change to the Affordable Care Act (ACA, aka Obamacare) was announced yesterday by Health and Human Services (HHS) Secretary Kathleen Sebelius.
The Obama Administration decided unilaterally to allow some people with plans that have been canceled because of provisions and requirements in the ACA to purchase catastrophic health insurance plans in 2014. Ironically, these plans would normally not meet the standards for insurance set by Obamacare that triggered the cancellation of millions of policies in the first place.
OBAMA ADMINISTRATION REDEFINES ACA ‘HARDSHIP EXEMPTION’
This adjustment to the landmark health law allows an unclear number of people with canceled plans to have what has been labeled as a “hardship exemption” to the individual mandate.
In a related statement, Sebelius wrote that some people with canceled plans may have trouble paying premiums for new coverage, and, “As a result, in addition to their existing options these individuals will also be able to buy a catastrophic plan.”
The Obama administration, which has been manipulating different implementation aspects of and made at least 5 major adjustments to the law since November of 2011, broadly defines those who qualify for a “hardship exemption” and are eligible for catastrophic coverage as a consumer who can show proof of a canceled policy and believes that the plan options available in the marketplace in their area are more expensive than their canceled health insurance policy.
Those receiving such an exemption will be able to satisfy the ACA’s individual insurance mandate with a catastrophic policy.
ONGOING ATTEMPT TO APPEASE THOSE WHO LOST COVERAGE UNDER ACA REGULATIONS
Like President Obama’s mid-November non-legislative proposal that allowed consumers who purchased non-ACA-compliant policies in the individual insurance market to keep them through 2014 as an appeasement for his deceptive comments about keeping your policy and doctor, this new “hardship exemption” raises insurance industry concern that it could create new complicating problems for implementation of the administration’s health care law.
Robert Zirkelbach, spokeman for the trade group American’s Health Insurance Plans, warned about the potential impact: “This type of last-minute change will cause tremendous instability in the marketplace and lead to further confusion and disruption for consumers.”
WHITE HOUSE PROPOSAL SUGGESTS INSURANCE ‘UNAFFORDABLE’ ON ACA EXCHANGE
The large-scale impact of the decision is not immediately clear. However, Republicans criticized the change, saying it is yet another sign that the policy is failing, and are appropriately asking why uninsured people should be forced to buy unaffordable coverage, but not the previously insured.
Sen. Marco Rubio, (R-Fla.), said, “The administration is recognizing the grim reality that more Americans have lost health insurance than gained it under Obamacare. Holding a fire sale of cheap insurance is not a responsible fix for a broken program. This is a slap in the face to the thousands of Americans who have already purchased expensive insurance through the Obamacare exchanges.”
With this new broadened exemption, Obamacare opponents are certain to repeat their calls to exempt everyone from the individual mandate.
CONGRESSIONAL DEMOCRATS URGE IMPROVISATION TO ADDRESS ACA CREDIBILITY
Joanne Peters, a spokeswoman for the Department of Health and Human Services, defended the move, and told the Washington Post that it was “a common sense clarification of the law, and added, “For the limited number of consumers whose plans have been canceled and are seeking coverage, this is one more option.”
Democrats praised the administration for the move. In fact, in an effort to repair the severe political damage to the administration following the mismanaged rollout of the ACA in October, and control the political blowback from the cancellation conflagration, senators in Republican-leaning states who are concerned about elections in 2014 and 2016 urged Secretary Sebelius to improvise and expand the hardship exemption.
Sen. Mark Warner (D-Va.) received a letter from the Secretary yesterday thanking him for his “constructive leadership on this issue.” (Radnofsky, Wall Street Journal 12/20; Pear, New York Times 12/20; Goldstein, Washington Post 12/20)