ObamaCare’s consumer cost caps delayed until 2015

ObamaCare Trainwreck

The Obama Administration has delayed yet another key part of ObamaCare. The New York Times reports this morning that the limit on out-of-pocket healthcare costs for consumers has been pushed back for a year to allow insurers more time to get their computer systems ready to comply with the policy.

“The limit on out-of-pocket costs, including deductibles and co-payments, was not supposed to exceed $6,350 for an individual and $12,700 for a family,” notes The New York Times. “But under a little-noticed ruling, federal officials have granted a one-year grace period to some insurers, allowing them to set higher limits, or no limit at all on some costs, in 2014.”

The Times explains that the delay has been policy since February, but it was “obscured in a maze of legal and bureaucratic language that went largely unnoticed” on the Labor Department’s website.

“Under the policy, many group health plans will be able to maintain separate out-of-pocket limits for benefits in 2014. As a result, a consumer may be required to pay $6,350 for doctors’ services and hospital care, and an additional $6,350 for prescription drugs under a plan administered by a pharmacy benefit manager,” reports The Times. “Some consumers may have to pay even more, as some group health plans will not be required to impose any limit on a patient’s out-of-pocket costs for drugs next year. If a drug plan does not currently have a limit on out-of-pocket costs, it will not have to impose one for 2014, federal officials said Monday.”

“The health law, signed more than three years ago by Mr. Obama, clearly established a single overall limit on out-of-pocket costs for each individual or family,” they added. “But federal officials said that many insurers and employers needed more time to comply because they used separate companies to help administer major medical coverage and drug benefits, with separate limits on out-of-pocket costs.”

From a policy perspective, cost caps are a bad idea. Though touted as a consumer protection, this provision of ObamaCare, as Avik Roy explains, will drive up healthcare costs as insurers will get around the caps with premiums hikes.

“These mandates have already had drastic effects on a number of colleges and universities, which offer inexpensive, defined-cap plans to their healthy, youthful students. Premiums at Lenoir-Rhyne University in Hickory, N.C., for example, rose from $245 per student in 2011-2012 to between $2,507 in 2012-2013,” wrote Roy. “The University of Puget Sound paid $165 per student in 2011-2012; their rates rose to between $1,500 and $2,000 for 2012-2013. Other schools have been forced to drop coverage because they could no longer afford it.”

From political perspective, delay of the cost caps gives Republicans another opportunity to slam the Obama Administration for kowtowing to the demands of big business by giving them a temporary pass on part of the law while leaving hardworking Americans out in the cold.

Early last month, the Treasury Department announced via a blog post that it was delaying ObamaCare’s employer mandate for one year to help ease concerns from businesses about the provision’s impact on them. At least that was the official rationale. In reality, it was a politically motivated effort to save Democrats up for re-election in 2014.

The Republican-controlled House of Representatives passed legislation to codify the employer mandate and also passed a one-year delay of the individual mandate, which they said was a matter of fairness to American families.

“Listen, is it fair for the President to give American businesses an exemption from the health law’s mandates, without giving the same break to individuals and families across the country? Hell no it isn’t,” Speaker John Boehner told the media when announcing the vote on the mandate delays. “I believe it’s unfair to protect big businesses from ObamaCare, but not individuals and families.”

It’s not at all unreasonable to suggest that we can expect a similar refrain on news of this latest ObamaCare delay.

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