Friday, December 20, 2013

Obama Administration Announces Another ACA Waiver for Some Individuals

Late last night or early this morning, depending on where you live, the Obama Administration announced another change to implementation of the Affordable Care Act for some individuals. This time the Centers for Medicare and Medicaid Services announced that individuals whose policies will be cancelled as of January 1 (because they would not be compliant with the ACA) will be able to seek a hardship exemption. Such an exemption will allow them to purchase catastrophic plans that are normally available only to individuals under age 30. Here is the announcement letter that CMS issued.

This latest change in enforcement or implementation comes on the heels of a number of other recent pronouncements by the Administration. After insurers began announcing that they would have to cancel millions of policies for noncompliance with the required coverage for what are called "essential health benefits" in the ACA, millions of people were left with the prospect of being uninsured. These cancellations ignited a firestorm and launched a public relations nightmare for the Obama Administration in light of the Presidents repeated insistence over the last five years that "if you like your health insurance you can keep it." The cancellations proved that assertion to be patently false.
In an attempt to fix the problem that the cancellations created, President Obama announced in mid November that insurance companies would be allowed to renew for one more year coverage that did not meet ACA standards. The problem with that attempt at a resolution was that it falls to the states running their own health care marketplace websites to make the actual determination as to which plans can stay in force or not. And two states with the largest populations--New York and California--were among the 22 states that have said that they will not allow plans to be renewed if they do not mee the requirments of the ACA.
The Administration also extended the deadline by which individuals have to enroll in order to be eligible for coverage on January 1, 2014, from the original date of December 15 to December 23, 2013. This one-week extension was meant to compensate for the delay caused by the error-plagued rollout of the website on October 1. In addition, the Administration recently asked insurers to extend the date by which individuals can make their first payment to January 10, 2014, while making the coverage retroactive to January 1. This pronouncement two days ago got little notice in the media since it came in the middle of a week of last-minute Christmas shopping. The 10-day extension is likely to affect only a handful of people who take advantage of it while confusing others who think it means they can wait until January 10 to enroll.
So, this latest pronouncement of a hardship exemption for cancellees seems to be yet another attempt to convince individuals whose policies have been cancelled to enroll in the marketplace. However, it could create even more logistical nighmares across the board -- for those who run the exchanges, for insurers who have fewer people paying for coverage, for consumers who do not understand their options, and for those with serious health problems who get a hardship waiver. What these purchasers of catastrophic plans are likely to discover is that these plans cover very little when they go for medical treatment, and they require high up-front costs before coverage kicks in for essential health benefits.
If you are interested in catastrophic coverage and want to see a list of catastrophic plans available in your area, go to

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