The Obama Administration’s delay of the individual mandate came as a surprise to health insurers participating in the state and federal Obamacare exchanges, according to an industry consult.
The Centers for Medicare and Medicaid Services (CMS), an agency under the Department of Health and Human Services (HHS), made the decision after a handful of Senate Democrats, including vulnerable incumbents up for reelection next year, expressed concern about insurance cancellations. The millions of canceled health plans have created a political firestorm, in addition to the poor rollout of the federal exchange website.
Robert Laszewski, an insurance industry consult, offered some insight in a blog post on Friday in which he noted that the administration officials didn’t discuss the delay with insurers. He also wondered what other politically motivated changes insurers can expect.
“The change was made without consulting the health insurance industry and it was a surprise to them,” wrote Laszewski at his blog, Health Care Policy and Marketplace Review. “It is another Obamacare change months after their 2014 rates were set under the presumption all of these cancelled policyholders would be paying a lot more premium into the pool than they pay today.”
“One has to believe this will not be the last concession to Democrats under reelection pressure,” he wondered, adding, “With all of the Democrats whose reelection is threatened, how many more of these should we expect?”
Well, possibly a delay of the individual mandate for all Americans. Douglas Holtz-Eakin, a former director of the Congressional Budget Office (CBO), explained that the delay for some “opens the door to deferring the mandate entirely.” Ezra Klein, a leftist policy analyst, wrote that “it’s hard to argue that [the individual mandate is] right for the currently uninsured but wrong for people whose plans were canceled.”
There are legal implications as well. Consider the person who saw their insurance policy canceled and were forced to buy a more expensive, Obamacare-approved health plan on an exchange before this unilateral change in the law. Sure, such a lawsuit may not move forward quickly enough or be shot down, but such it could create a headache for the administration.
Remember, insurers have worked closely with the administration on Obamacare’s implementation. They’ve been tossed under the bus before by the administration, but still have relented to requests — including the “administrative fix” for canceled plans, extending the enrollment deadline for coverage to go into effect at the beginning of the year and accepting premiums payments after coverage has begun.
If the second half of the open enrollment period doesn’t show improvement and more cooperation from the administration, many insurers may opt to bail on Obamacare.