Another Obamacare fix potentially in the works
As the Obama administration attempts to allay concerns over the flawed Obamacare website, it may make some changes to make it a little easier for consumers to comply with the so-called individual mandate -- the requirement for all Americans to have health insurance.
The Affordable Care Act requires most Americans to acquire health insurance or pay a penalty to the IRS starting in 2014. The law also gives consumers a grace period of less than three months to go without insurance. That means individuals must have insurance by March 31 if they want to avoid paying any penalty -- which for the full year of 2014 is a mere $95 (the penalty will increase in the years to come).
Since private insurers start new policies on the first day of the month, an individual would need to be enrolled in a plan by March 1 -- meaning he or she would need to sign up by Feb. 15.
While Feb. 15 is not technically a deadline, it is practically speaking the last day individuals can sign up without paying a portion of the fine. However, consumers may not realize that since open enrollment on the new health insurance exchanges -- the state-based websites where people can shop for private insurance -- lasts through March 31.
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"There's no question that there's a disconnect between open enrollment and the individual responsibility timeframes -- in the first year only -- and those are going to be addressed," White House spokesman Jay Carney told reporters Monday. Health and Human Services, he said, is "working on aligning those policies."
HHS confirmed to CBSNews.com that the department is "exploring options" to align the open enrollment period and the timeframe for avoiding the individual mandate penalty.
Carney stressed that this does "not at all" mean the administration is considering delaying the individual mandate.
"We're three weeks into a six month enrollment period," he said. "The law itself as written makes clear that Americans with access to affordable insurance would need to have insurance by March 31st."
The misaligned deadlines may be a headache for consumers who are inclined to wait until the last minute to enroll in a plan, but it is a relatively minor one. For one thing, this misalignment will only be an issue in 2014. In the coming years, the open enrollment period will last just two months -- not six.
Additionally, the IRS penalty for failing to acquire health insurance is imposed on a monthly basis. So if a consumer signed up for insurance on, say, Feb. 16, he would only have to pay one month's worth of the $95 fine -- $8.
The fine this year is supposed to convey to citizens that they have an obligation to acquire insurance, but it's not really supposed to serve as an economic deterrent, explained Joel Ario, a managing director at Manatt Health Solutions who previously served as HHS director of the Office of Health Insurance Exchanges.
"The deterrent is what happens if I don't buy insurance," he said.
HHS hasn't said how they could go about "align" the two dates in question. If there were any changes, HHS could rely on its discretion to issue "hardship" exemptions to the individual mandate penalty. Carney pointed out Monday that HHS is already exempting low-income individuals in states that have chosen not to expand Medicaid. The department has granted certain other exemptions, such as an exemption for some Native American tribes.
"They've interpreted the hardship exemption quite broadly, and I think they could take care of it that way," Tim Jost, a consumer advocate and professor of health law at Washington and Lee University, told CBSNews.com.
If the administration does make more adjustments to its Obamacare deadlines, it's likely to be skewered by Republicans on the offense for the significant problems the federal website HealthCare.gov has seen. Even so, Jost argued, the health care law could easily survive these setbacks. He pointed out that the online Plan Finder for Medicare Part D launched a month behind schedule in 2005.
"When people talk about Medicare Part D, they don't talk about how the website was a month late," he said.
