Administration Extends Obamacare Grandfathering for 2 More Years
Posted at 4:26 p.m. on March 5
If people like their old health care plans, they can keep them for another two years, the administration said late Wednesday.
In a move that was pre-emptively attacked by House Republican leaders, the administration said plans that were grandfathered for one year after millions received cancellation notices in the individual market will now be able to continue, but will not be able to be renewed after Oct. 1, 2016. The announcement means an estimated 500,000 people in those plans won’t get cancellation notices right before the midterm elections, but does set up a situation where some could get cut off right before the next presidential election.
“This reeks of politics,” said Brendan Buck, a spokesman for Speaker John A. Boehner, R-Ohio. “Instead of working with Congress to prevent Americans from losing the plans they like and can afford, the president is unilaterally re-writing laws around the election calendar. You have to wonder if he’s more interested in keeping his promise or keeping seats in the Senate.”
House Majority Leader Eric Cantor, R-Va., ripped reports of this and other delays by the administration as the House voted to delay the individual mandate Wednesday.
“Time and again, the Obama Administration has shown its true colors by putting politics first and unilaterally delaying parts of the law to avoid political repercussions,” Cantor said. “This has become most evident by the Administration’s delay in the employee mandate for big businesses and its refusal to delay the individual mandate for working Americans.”
The grandfathering extension is only the latest, Cantor noted. “Doesn’t it say something that the authors of this legislation are worried that it’s implemented before they face voters again? And I ask, will future presidents be able to simply delay or cancel all or part of ObamaCare? Will my colleagues on the other side of the aisle withhold complaint then? There is no greater indictment of this law, or proof of its failure than the fear that full implementation invokes in its authors.”
But senior administration officials denied a political motive and said that very few people would still be in the plans in 2016 anyway because of the natural churn in the individual market.
Once someone leaves a non-compliant plan, they lose their grandfather status and can’t return to it.
The changes — including budget neutral adjustments to the risk corridors reinsurance program and reporting requirements — are intended to bring more certainty and ease the transition into full implementation of the law, officials said.
And as they put in their memo, the changes recognize that “in many cases a one-size-fits-all approach doesn’t work best.”
Here’s the initial announcement from the administration:
Today the Administration is releasing comprehensive guidance for 2015 on key health law policies under the Affordable Care Act.
This comprehensive release of regulations and policies responds to the concerns we’ve heard from families, states, businesses, health professionals, Congress, insurance commissioners, and insurers who want certainty on what’s coming as early as possible so that they can plan ahead.
These policies, from the U.S. Department of Health and Human Services and the Treasury Department, implement the health care law in a common-sense way by continuing to smooth the transition for consumers and employers, recognizing that in many cases a one-size-fits-all approach doesn’t work best.
Recognizing that consumers, employers, and insurers want to know how to plan and what to expect, the agencies are getting ahead by providing stakeholders with early information and the certainty that they need to plan for next year and, in some cases, beyond. This approach incorporates the flexibility that exists under the law and best practices at every opportunity.
Key provisions announced today include:
Simplifying and streamlining reporting requirements for employers (Treasury Department): While 96 percent of employers are not subject to ACA reporting requirements or the employer responsibility provision because they have fewer than 50 employees, the requirements – to offer qualify, affordable coverage to employees or make a payment –begin to phase in for the remaining four percent of employers in 2015. The final regulations released today will substantially streamline and simplify reporting requirements for employers, especially those that offer highly affordable coverage to their full-time employees and provide guidance to insurers for reporting the coverage they provide individuals.
Improving choices for individuals and small businesses (Department of Health and Human Services): In November 2013, HHS announced that States could allow insurers to offer current enrollees the option to renew their 2013 health plans in 2014, without change, allowing them to keep their plans. HHS indicated that it would consider extending this transitional policy beyond 2014. Taking account the experience to date, today, HHS extended this transition policy for two years: to policy years beginning on or before October 1, 2016, giving states and issuers the option of allowing consumers to renew 2013 plans for two more years. This gives individuals and small businesses the choice of staying in their plan or joining a new Marketplace plan. Additionally, the final rules expand the choices in small business Marketplaces, called SHOPs, detailing its implementation in 2015.
Adjusting the premium stabilization programs to keep premiums affordable (Department of Health and Human Services): The Affordable Care Act includes several provisions to help ensure that premiums remain stable and affordable in the Health Insurance Marketplaces. One program, the transitional reinsurance program, helps with high-cost patients. The final rules improve the ability of this program to keep premiums affordable. The reinsurance program is budget neutral. Additionally, the temporary risk corridors program helps stabilize premiums when enrollees are much sicker – or much healthier – than expected. To account for the transitional policy, HHS is making an adjustment to the risk corridors program. The Administration intends to operate the risk corridors program in a budget neutral manner, with payments in equaling payments out, while helping to ensure that prices remain affordable in 2015 and beyond.