Obama Gives Health Plans Added Two-Year Reprieve - Plans That Don't Meet ACA Rules Could Stay in Place Through 2016

From The Wall Street Journal:

The Obama administration further postponed a provision of the Affordable Care Act on Wednesday, the latest in a series of changes that have delayed or pared back the health overhaul so much that many of its ambitious goals won't be achieved during its first years in full effect.

Democrats sought to create a new health-care landscape when they passed the law in 2010, with millions of uninsured Americans gaining coverage, employers facing fines if they didn't insure workers and skimpy health plans disappearing.

But a series of delays by the administration—and decisions by states on implementing the law—have taken a toll. The latest delay came Wednesday, when federal officials said insurance companies could continue selling plans that don't meet the law's more rigorous standards until 2016 in some instances. It was the second time the administration delayed that requirement after the law's tougher standards prompted insurers to cancel millions of people's health plans last year. The latest delay averts another raft of cancellations before this year's midterm elections.

 

Employers are largely sitting on the sidelines after the Obama administration twice delayed the law's requirement that larger firms provide coverage or pay a fee. The rule was supposed to take full effect this year, but was first delayed until 2015 and now won't kick in until 2016 for many firms.

 

Fewer Americans are expected to gain coverage under the law thanks to its troubled rollout, legal challenges and Republican opposition in many states. Problems with the HealthCare.gov insurance enrollment site initially discouraged consumers from signing up. About half of states have opted not to expand Medicaid eligibility under the law after the Supreme Court ruled they weren't required to do so, leaving millions of low-income Americans with no subsidized options for gaining coverage.

 

"The Affordable Care Act has fundamentally improved the health-care marketplace, as it set out to do when the law passed," said Obama adviser Phil Schiliro, who cited statistics about a recent surge in enrollments on the HealthCare.gov site, coverage extended to people under 26 years old and seniors saving money on prescription drugs.

 

In the Carolinas, "the notion of some kind of universal coverage, which I think was the essence of the act, just isn't manifesting itself," said Joseph Piemont, chief operating officer of the Carolinas HealthCare System, which includes 900 physician offices, hospitals and other care centers across North and South Carolina. Both states have chosen not to expand their Medicaid programs under the law.

 

Still, big parts of the law are already in place this year. Insurance companies are no longer denying policies to people who have a black mark on their health history, or charging them more. Many policies are more robust, and include coverage of preventive services without out-of-pocket costs. And lower-income earners can get tax credits toward the cost of premiums, and some are paying less for coverage as a result.

 

Millions of younger Americans have stayed on their parents' health plans until their 26th birthdays—a provision so popular that some GOP lawmakers opposed to the law as a whole want to keep it.

 

But the law will only make a dent in the ranks of the roughly 50 million uninsured people in the U.S. in 2014. By 2020, there will still be 30 million people without coverage, according to projections by the nonpartisan Congressional Budget Office.

 

In 2014, some six million people will be using the exchanges to get private coverage, the CBO said. Many of those people already had coverage and switched to new plans, rather than gaining coverage. To date, around four million people have picked a plan through the exchanges. Most people have until March 31 to sign up.

 

Some eight million additional people are expected to be in Medicaid, down from an estimate of 13 million people in 2014 that was made a few months before the Supreme Court ruling. Both the exchanges and Medicaid projections were also revised downward recently by one million to take into account the rough start of the online insurance portals.

 

Republican lawmakers have criticized each administration announcement of delays in the program. "If Obamacare is as great as Democrats say it is, why are they constantly having to delay parts of it?" Sen. John Thune (R., S.D.) said Wednesday. "Each and every delay of Obamacare is an admission that the Democrats' signature law is hurting Americans and an obvious attempt to try to save the jobs of vulnerable congressional Democrats come November."

 

The changes in the law haven't always been well-received by the businesses intended to benefit from them. Jeff Wesley, chief financial officer of Two Men and a Truck, a moving franchise, said that the constant changing of the rules had made it "almost impossible to react."

 

"We did our homework because we care about our franchise system…We had options ready if we had to execute them," he said. "It's very difficult with the unpredictability and uncertainty to adapt to something."

 

Other specific provisions of the Affordable Care Act have fallen by the wayside. The Independent Payment Advisory Board, described by backers as a way to improve Medicare and lower costs, is nonexistent, because the White House hasn't nominated anyone for the board, and Republicans have explicitly refused to make recommendations.

 

Under the law, the board's members could have begun writing advisory reports as early as this Jan. 15. But it only has to recommend spending cuts if Medicare's cost growth exceeds certain targets.

 

Administration officials have said there was currently no need for it because that spending growth is within the limits.

 

The administration said in October 2011 that it wouldn't implement a long-term-care insurance program that was a significant provision in the 2010 overhaul, in what was its first major policy reversal. The program, known as the Class Act, was shelved after the Department of Health and Human Services said its actuaries couldn't design a voluntary program that still met the requirements of the law that it remained fiscally solvent.

 

For some individual Americans who have benefited from the law's new insurance rules, 2014 has brought changes that are real and welcome.

 

Jed Weiner, a communications consultant in Chicago, said he would have paid $834 a month this year to continue buying his insurance through the Illinois high-risk pool for a plan that had a $5,000 deductible. The 59-year-old had been unable to buy commercial insurance after he left his previous job, because of a heart bypass 14 years ago.

 

The law's guaranteed-issue requirements mean that he is instead paying $780 a month for a medical plan bought in the individual market that has a $1,000 deductible. "I'm paying less money for a substantially better plan," he said.

 

Democrats who voted for the law say they consider the sheer fact of its survival to be a success and are taking a longer view on how it is implemented.

 

"I guess all I would say is, given the tremendous obstruction that Obama has been facing on the implementation of this program, it's a miracle that it's off the ground at all," said David Obey, who retired from Congress in 2011. "People are not going to remember 10 years from now whether [a certain section] went into effect in 2014, 2015 or 2016."