Exemptions undermine act’s purpose, demonstrate burdens on insurers
The Department of Health and Human Services has unwittingly illuminated a key fallacy in the Patient Protection and Affordable Care Act, as noted by The American journal. The granting of waivers by HHS for certain insurance policies confirms the negative implications for health care costs if PPACA is not fully repealed.
Once PPACA is fully implemented in 2014, it will prohibit insurers from imposing annual limits on payments to individuals. HHS representatives say this regulation will improve employer-based “mini-med” plans, which they assert do not adequately cover employee health care. By removing a maximum amount on benefits, individuals ostensibly receive more extensive coverage.
Between 2011 and 2014, however, there is a transitional period when the ceiling on payments rises incrementally. In 2011, the annual limit per enrollee must be at least $750,000. In 2012, this amount increases to $1.25 million, and then to $2 million in 2013. Come 2014, the PPACA abolishes all limits on payouts for an individual’s care.
This transition is meant to assist insurance providers and employers in adjusting to the new stipulations. Despite this grace period, however, the HHS’s granting of 500 waivers for 2011 has exposed foundational flaws of PPACA. HHS granted waivers because the requirement would result in “large” increases in premiums or “significant” declines in access for health care coverage.
By exempting providers from the very regulations that it imposed, the Obama Administration is acknowledging that the regulations will strain the quality and affordability of insurance plans. Hoff and Calfee, in their The American journal article, make an acute realization in this regards.
“If waivers are necessary to keep 733 insurance plans in place now, think of what will be necessary in 2013, when the amount policies must cover in a year will be nearly three times that cost, or in 2014, when full-blown PPACA kicks in and insurers are prohibited from offering a policy without unlimited coverage.”
The unfortunate repercussion of increased costs to insurers will inevitably be higher unemployment.
From 2014, unable to limit contributions to employee health care plans, employers will release employees to meet financial demands. While they may apply for waivers, these only last for a year and only to prevent large premium increases or reductions in access to health coverage. Thus, the existence of waivers is unlikely to reduce the fallout.
The latest estimates, from the Congressional Budget Office, are that Obamacare will reduce employment by 800,000 people in its first ten years.
This may be the first time that the Obama administration have acknowledged PPACA’s pernicious effects, but may they continue to educate themselves on the reality of his bill.