Key consumer protection in Obamacare delayed
Updated at 6 p.m. ET
The Obama administration has quietly delayed another key element of the Affordable Care Act, the New York Times reported Tuesday, exempting some insurers for a year from the new limit on out-of-pocket expenses.
The Affordable Care Act, signed into law in 2010, explicitly set annual limits -- $6,350 for individuals and $12,700 for a family -- on out-of-pocket expenses. Mr. Obama touted the reform as one of the many consumer protections his sweeping health care law would include to make insurance more affordable.
Now, however, some insurers won't have to follow the limit until 2015. Rather than imposing a $6,350 limit on all out-of-pocket expenses, some insurers will have to impose a $6,350 limit on medical expenses, plus a separate $6,350 limit on prescription drug expenses. Other insurers, meanwhile, won't have to apply a limit at all to prescription drug costs.
The one-year delay was granted because some insurers use different administrators to process their medical and prescription coverage and said they needed more time to adjust their processing systems.
The Times notes that the exemption has been posted on the Labor Department's website since February "in a maze of legal and bureaucratic language that went largely unnoticed." Indeed, the Labor Department site acknowledges that some health "plans may utilize multiple service providers to help administer benefits," suggesting they need more time to comply.
The limit on out-of-pocket expenses was a huge selling point for patients suffering from conditions with costly treatments, including cancer or Multiple Sclerosis.
"The promise of out-of-pocket limits was one of the main reasons we supported health care reform," Theodore M. Thompson, a vice president of the National Multiple Sclerosis Society, told the Times. "So we are disappointed that some plans will be allowed to have multiple out-of-pocket limits in 2014."
However, the Obama administration notes that many plans will still be required to impose the new $6,350 limit. In fact, every plan that will be offered on the state-based exchanges -- online marketplaces where consumers can purchase private plans -- will be subject to the $6,350 limit on all out-of-pocket expenses, covering both medical and prescription drug costs.
Furthermore, a series of other significant consumer protections also go into effect next year: Insurers will no longer be able to discriminate against people with pre-existing conditions, they can no longer impose annual dollar limits on total coverage, and they must offer certain baseline health benefits.
"For the first time, new historic consumer protections under the Affordable Care Act will protect consumers from the worst insurance company abuses," Health and Human Services spokesperson Erin Shields Britt said in a statement. "The February guidance builds on these landmark consumer protections by requiring that health plans limit out-of-pocket spending for major medical coverage for the first time, in 2014, on time. This single limit will apply to additional benefits in 2015."
Nevertheless, the delay is another setback in the health care law's implementation. Earlier this year, the administration announced it is delaying the mandate requiring businesses with more than 50 employees to offer their workers insurance.
The delays have fueled conservatives' complaints about the law's design, and Republicans have become more vocal about stopping the law's implementation before some of the biggest parts of the law go into effect next year.
Senate Minority Leader Mitch McConnell, R-Ky., on Monday sent a letter to the Centers for Medicare and Medicaid Services (CMS), arguing that the government should delay the opening of the exchanges, which are supposed to be ready for open enrollment this October. McConnell's letter was in response to a Health and Human Services (HHS) Inspector General's report produced last week, which indicated that HHS has not proven that the online exchanges will be able to secure consumers' personal data.
"While I have grave concerns about this law under any circumstance, Americans should not be forced into the exchanges, and certainly not without these assurances" McConnell wrote. "If you rush to go forward without adequate safeguards in place, any theft of personal information from constituents will be the result of your rush to implement a law to meet the agency's political needs and not the operational needs of the people it is supposed to serve."
