Can you hear it coming.....? This is what happens when you don't read the bill before passing it. Can we say Clusterfuck! Raises costs, will inhibit choice, delay service...all in the name of a Federal Government power grab.
Forbes 8/13/13
Yet Another White House Obamacare Delay: Out-Of-Pocket Caps Waived Until 2015
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.
Out-of-pocket caps drive premiums upward
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
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 .
“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.
Source:
http://www.forbes.com/sites/theapothecary/2013/08/13/yet-another-white-house-obamacare-delay-out-of-pocket-caps-waived-until-2015/
And more:
HHS IG fears Obamacare co-ops will run out of money before enrolling first customers
http://washingtonexaminer.com/hhs-ig-fears-obamacare-co-ops-will-run-out-of-money-before-enrolling-first-customers/article/2534006?utm_source=Washington%20Examiner:%20Watchdog%20-%2008/13/2013&utm_medium=email&utm_campaign=Washington%20Examiner:%20Watchdog%20Newsletter
