The real story behind all those Obamacare waivers

Readers have been asking why The Times’ editorial board has been so critical of House Republicans for trying to defund or delay key provisions of the 2010 healthcare law without faulting President Obama for supposedly granting Congress and hundreds of big businesses and politically connected unions waivers and exemptions from the law.

That’s because, with one notable exception, the exemptions aren’t what they’re cracked up to be.

Here’s an example. “Tommythek50,” a regular reader and (let’s be honest) frequent critic, wrote, “Tell us Times, if the [Affordable Care Act] is so good, why do Democrat leaders in the House and Senate not want it for themselves? Why doesn’t Obama want it for himself? Why has Obama given over 1,000 waivers and exemptions to political friends?”

The “over 1,000” figure is cited often by opponents of the law, including House Republicans such as Speaker John A. Boehner of Ohio, who complained on the House floor, “over the last year or so, last couple of years, the president has given his friends in the labor unions some 1,100 waivers to this law.” The dispute that led to the partial government shutdown, Boehner said, is a fight about “fairness.”

What they’re referring to is the number of health insurance plans that the Department of Health and Human Services allowed to set lower annual caps -- temporarily -- on the total amount of medical bills they would pay for each subscriber. These include plans offered by 722 self-insured businesses, 417 groups of small employers joined in collective bargaining agreements, and 34 unions.

The Affordable Care Act requires insurers to phase out by 2014 the annual limits. The rule posed a challenge, however, to employers with “mini-med” plans, which charge extremely low premiums but offer truncated benefits and low annual caps. To keep workers from losing coverage altogether while their employers searched for an alternative, HHS granted waivers that let hundreds of mini-med plans keep lower caps in place until 2014.

In short, the rule enabled employers and their workers to keep until next year the plans they had before the law was passed, even though they didn’t meet the new minimum standards. The move may have saved some employers and unions money, but it also kept workers from losing their coverage abruptly.

Earlier this year, the Internal Revenue Service announced an even broader exemption, delaying until 2015 the requirement that companies with 50 or more full-time workers offer health benefits that met a minimum standard for coverage. The agency did so, it said, because numerous employers complained that they wouldn’t be able to comply yet with the law’s requirement to report which workers had coverage in each month.

That’s a doozy of an exemption. Still, it’s odd to hear Boehner and his fellow Republicans complain about it, given that they opposed the employer mandate to start with.

Finally, some critics of the law have claimed that Congress hypocritically enjoys an exemption from the healthcare law it foisted on the rest of us. That would be egregious if it were true, but reality is somewhat different, as I explained in a post two months ago.

The Affordable Care Act treats lawmakers and their staff in a unique way, forcing them out of the federal government’s group health plan and into the state insurance exchanges. The problem is that the exchanges aren’t prepared to sell coverage to large employers, such as Congress. So without some kind of intervention, congressional employees would have to buy policies directly and pay the full price, rather than having the government cover part of the cost as it does today.

That unintended consequence would have cut congressional employees’ pay significantly, and lawmakers on both sides of the aisle pushed for a fix. The Office of Personnel Management provided it in August by ruling that the government could continue to pay part of the cost of those workers’ coverage.

This approach mimics what a growing number of large employers are doing with private insurance exchanges. Still, it would have been better had Congress changed the Affordable Care Act to explicitly allow the government to cover part of those employees’ premiums, rather than having the administration do it by regulatory fiat.

It’s worth noting that the administration denied organized labor the waiver it desperately wanted for the multi-employer plans unions run for about 20 million members. The unions wanted members to be eligible for the subsidies that the Affordable Care Act offers to Americans who don’t have access to affordable employer-sponsored plans. But the Treasury Department rejected that bid, saying the law forbids workers whose employers provide tax-subsidized insurance benefits to also receive premium subsidies.

Oddly enough, Republicans have been pointing to the unions’ complaints about not getting this waiver as yet another sign of how the Affordable Care Act is failing, while simultaneously accusing the administration of granting hundreds of waivers to its friends in labor.

ALSO:

The GOP’s shutdown sham

Government shutdown: A way out for the GOP

In government shutdown over Obamacare, who’s being stubborn?

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