Wednesday, July 10, 2013

What, Me Worry?

. . . could pretty much characterize how Obamacare supporters are reacting to the news that the administration is delaying or modifying the implementation of some of its requirements.  Like Mad magazine’s Alfred E. Neuman, they are expressing a public confidence that there is no reason to worry,  everything is fine, the announced delays aren’t really that important, and Obamacare will be up and running and ready to start enrolling people on October 1.  No worries.

The Sky is Falling
…could pretty much characterize how Obamacare opponents are reacting to the same news.  Every decision that the administration makes to delay any part of the law’s implementation is used by opponents to argue that the whole thing is falling apart and the only solution is to repeal the entire law.  The sad reality is that Obamacare supporters and critics are worlds apart in their reaction to the delays, just as they have been on just about everything having to do with this law.

So what is really going on with the delays? 
The administration postponed for one year a requirement that larger employers (those with 50 or more full-time employees) provide their employees with health insurance or pay a fine.  The White House characterized the delay is being responsive to businesses' concerns by giving them an additional 12 months to comply with the requirement but insisted that, “We are full steam ahead for the Marketplaces [health exchanges] opening on October 1.”

Whether you think delaying the employer mandate was a good idea or not, and no matter what you may think it bodes for the rest of the law being ready on October 1, the fact is that the delay will have a very small impact on how many people will get coverage under Obamacare.

Timothy Jost writes  in the Health Affairs blog that, “As a practical matter, most employers subject to the mandate already offer insurance.  The mandate only covers employers with more than 50 full-time or full-time-equivalent employees.  Ninety-eight percent of employers with more than 200 employees offer health insurance, as do 94 percent of employers with 50 to 199 employees.  The vast majority offer insurance that is both affordable and adequate, as those terms are defined in the ACA.  All of the reasons employers now have for offering coverage to their employees — significant tax subsidies, recruitment and retention of employees, and increased productivity and decreased absenteeism when employees are healthy — will continue to exist without the mandate penalty.”

In addition to the employer mandate delay, the Washington Post’s Sarah Kliff writes about “three Obamacare delays you haven’t heard about relating to verification of consumers’ claims that they do not have health insurance coverage, scaling back federal oversight of what people say they earn, and requiring state Medicaid programs to send out electronic notices on benefits and subsidies to beneficiaries and applicants.  Kliff writes that the “upshot of this delay is that you could see some people who shouldn’t qualify for tax subsidies, because of their employer-sponsored insurance, getting them anyway. This wouldn’t be unprecedented: During the initial roll out of Medicare Part D, some seniors who should not have received low-income subsidies got them anyway.”   And, finally, the administration announced last week that smokers will get a one-year reprieve from an ACA provision that allows insurers to charge smokers more than non-smokers because of a “computer system glitch.”   The result, the CBS news report continues, is that “Older smokers are more likely to benefit from the glitch, experts say. But depending on how insurers respond to it, it's also possible that younger smokers could wind up facing higher penalties than they otherwise would have.”

Each of these delays—and there likely will be more—do not fundamentally affect the big changes that Obamacare will bring later this year and next; the health exchanges (marketplaces), community-rated health plans, tax credit subsidies, individual insurance requirements, prohibiting annual and lifetime limits on coverage, requiring insurers to accept all applicants without regard to their health status (pre-existing conditions) and limiting how much more they can charge them, all of these appear to be on track to be implemented on time. 

So, an accurate, non-political, non-partisan, non-ideological take-away from the Obamacare delays announced to date is that most people who were expected to  benefit from the Affordable Care Act will still benefit, including the uninsured and under-insured and people with pre-existing conditions.
The administration is putting off the requirements that are less important, so they can focus on, and devote the limited resources that Congress has given them, to ensure that the changes that are most critical to expanding coverage—the exchanges, the subsidies, the Medicaid expansion, the consumer protections against insurance practices that limit coverage—are implemented on time, and effectively.   This may or may not be good politics on the administration’s part, but triaging the requirements was probably their only practical recourse.

Are there delays that would pose a big problem for Obamacare?  Yes, any delay relating to the following would be a big reason to worry:

If the federal exchanges and state exchanges and information hubs are not open for business on October 1 and ready to enroll people on 1/1/14

If navigators and call centers are not ready to assist consumers

If the Treasury department isn’t ready to administer the subsidies

The administration insists all of the above will be ready, but no one can be sure until they actually are up and running.

Then, of course, there is the one big delay that already is in effect, one that is outside of the administration’s control, which is the Supreme Court ruling that the Medicaid expansion is optional. The decision by some states to delay or reject the Medicaid expansion will result in 2/3 of low-income persons who were supposed to get Medicaid under Obamacare being left out in 2014, according to an Associated Press analysis.  Now that is something to worry about!

So the sky isn’t falling on Obamacare, no matter how the critics try to parlay the decisions to delay some parts into an admission that the whole law is unworkable and should be repealed.  Yet I wouldn’t exactly say that there is no reason to worry, either, since it is apparent that the administration is struggling to get the big pieces implemented on time and as effectively as possible, given the funding limits imposed by Congress, conservative state resistance/non-cooperation, and the unrelenting efforts by critics to do everything possible to make it fail. 

Today’s question: What do you think the delays announced to date bode for Obamacare?

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