The courts continue to debate the validity and constitutionality of the intrusive Patient Protection and Affordable Care Act (Obamacare). Some states are busy setting up unnecessary health benefits exchanges while others hold their breath for the US Supreme Court to ultimately make a decision about Obamacare’s constitutionality.
Individual organizations, however, are taking matters into their own hands in order to avoid the crushing results of Obamacare. Under one provision of the federal healthcare law, insurers are prohibited from capping annual costs at less than $750,000 as well as placing lifetime limits on health plans.
Such “consumer protections” have endangered the health insurance offered under some employer-based plans. As a result, employers will be forced to drop coverage completely and dump their employees into the health exchange market. In order to continue their employees’ coverage, employers are seeking time-limited waivers from Obamacare provisions from the Department of Health and Human Services (HHS).
So far, over 1,400 annual limit waivers have been issued. with an HHS approval rating of over 90 percent. The waivers cover nearly 3.1 million individuals, or 2 percent of those with private insurance. Of the plans seeking waivers, more than half are union plans, covering 1.55 million people.
Another Obamacare provision requires insurance companies to spend at least 80 percent of the premiums they collect on medical care and quality. In response, a different waiver would allow the HHS Secretary to adjust the Medical Loss Ratio (MLR) if it is determined the 80 percent MLR standard would destabilize the state insurance market, resulting in less choice for consumers. A MLR is essentially the percentage of revenue from a plan’s premiums that pays for actual medical services as opposed to expenses to cover administrative expenses, taxes and profits. So far, three states – Maine, New Hampshire and Nevada – have received “adjustments” (another fancy word for waiver) to the 80 percent MLR threshold. Insurers in these states will be held to a lower requirement to prevent insurers from fleeing the state. In all three applications, HHS has admitted that without the waiver, there is “a reasonable likelihood” that Obamacare would result in “market destabilization” and harm consumers. Several other states including Kentucky, Florida, Georgia, North Dakota, Iowa, Louisiana, Kansas, Delaware, Indiana and even Guam are in the middle of the waiver application process.
To date, North Carolina has not requested a waiver to the MLR 80 percent standard. However, at least 56 North Carolina-affiliated entities — have requested and received — waivers to the annual limit on their employer-sponsored health plans.
HHS has argued that the waivers are intended to act merely as a bridge from now until 2014, when Obamacare is fully implemented. However, if Congress intended to implement a waiver process, one would assume it would have included a provision in the thousands of pages of the Obamacare legislation. But Congress never intended to award waivers.
Issuing waivers could lead to favoritism. Large corporations and unions can afford the time and money to file a waiver application, whereas small businesses may not have these resources. Curiously, the very people who supported Obamacare, such as unions, are the organizations with the greatest amount of issued waivers. U.S. Minority Leader Nancy Pelosi’s district alone received 20 percent of this past quarter’s accepted waivers. In addition, U.S. Majority Leader Harry Reid’s state of Nevada is also one of the three states which has already completed the waiver process.
These developments are unsettling. They also make you wonder: if Obamacare was the panacea of all of our healthcare issues, then why are states and organizations represented by some of the most liberal lawmakers requesting waivers from the most oppressive provisions of the intrusive federal law? If the imbedded “consumer protections” are so beneficial, then one would think exemptions would be unnecessary.
Perhaps North Carolina can skip the state waiver process and instead, take the lead in filing a national waiver from Obamacare altogether?