Consumer Cost Protection in Obama Health Plan Is Delayed
Federal regulators have delayed a consumer protection in President Barack Obama’s signature health law that limits the out-of-pocket costs of people with insurance.
The one-year postponement of the annual limit on costs that patients must pay above what their insurance covers is another setback for a health-care law that has met resistance from Republicans and faced delays in enforcement of other key provisions.
The White House announced on July 3 that it would postpone, also for one year, the so-called employer mandate, which requires companies with 50 or more workers to provide health insurance to employees.
The limit on out-of-pocket costs, such as deductibles and co-payments, was supposed to be $6,350 for an individual and $12,700 for a family beginning in 2014. Federal officials now will allow some insurers to wait until 2015 to comply with the consumer protection.
The one-year postponement applies only to group health plans such as those offered by employers and unions and only to plans which use independent managers to handle pharmaceutical or other benefits, said an administration official who asked not to be identified speaking about internal deliberations.
Individual policies sold in the new marketplaces created by the health care law still must comply on schedule with the overall limits on out-of-pocket costs included in the health care law, the official said.
Regulators decided to give the group plans an extra year so they would have more time to connect computer systems used by independent benefit managers that handle separate categories of expenses, said the officials. Many group health plans, for example, use an independent manager to handle prescription drug coverage and their computer systems do not coordinate on annual out-of-pocket maximums.
Notification of the delay in enforcing the provision was made in a list of “frequently asked questions” posted on the Department of Labor’s Employee Benefits Security Administration website in February and first widely reported today by the New York Times.
According to the website, at least for next year, insurers can maintain separate out-of-pocket maximums for different types of benefits, up to the legal maximum for each category.
Consequently, an individual may have to pay $6,350 for doctors’ services and hospital care and another $6,350 for prescription drugs under a plan administered by a pharmacy benefit manager.
The administration also confronts a Republican campaign to disrupt the start of the insurance marketplaces that are at the core of the law.
Republican-run legislatures and governors in at least 21 states have refused funding to expand Medicaid coverage for the poor and 27 have declined to set up the insurance exchanges, leaving that job to the federal government, according to the Kaiser Family Foundation. Since it was signed into law by Obama in 2010, House Republicans have voted 40 times to repeal or deny funding for all or parts of the Patient Protection and Affordable Care Act and have denied additional money to start the marketplaces.
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