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More delays in Obamacare rollout

By Jay MacDonald · Bankrate.com
Tuesday, July 16, 2013
Posted: 6 am ET

For the second time this month, the Obama administration has granted a one-year extension to a key provision of health care reform, giving opponents of the Affordable Care Act additional ammo to petition Congress to scrap the historic legislation.

On July 2, Health and Human Services, or HHS, Secretary Kathleen Sebelius granted companies with 50 or more workers a one-year extension, until 2015, to comply with the "employer mandate" clause that requires them to offer their workforce affordable, qualified health insurance or face fines of up to $3,000 per employee.

Three days later, the feds granted another one-year extension to give the 16 states and the District of Columbia that are setting up their own health insurance exchanges, or online marketplaces, extra time to put systems in place to verify the income and employer health coverage status of applicants who apply for federal subsidies to make their health insurance affordable.

Under the act, applicants with incomes between 100 percent and 400 percent of the federal poverty level who do not have access to affordable employer-sponsored health insurance can receive financial assistance from the federal government.

An 'honor system' for the first year

The feds had planned to require the state marketplaces to routinely verify an applicant's income and employer insurance status when the online portals open for business on Oct. 1. With the announcement, the marketplaces will be allowed to do random, rather than comprehensive, verification of income and employer insurance status until 2015. Marketplaces operated by the federal government either completely or in partnerships in 34 other states also will make random checks to verify income in 2014, the feds announced.

The extension, included in HHS' 606-page final rule, reads: "For income verification, for the first year of operations, we are providing (state and federal) exchanges with temporarily expanded discretion to accept an attestation of projected annual household income without further verification." It also allows the state-run marketplaces to accept "attestation regarding enrollment in an eligible employer-sponsored plan."

Loosely translated: The state-run marketplaces are authorized to take your word for it during their first 15 months of operation.

Move along, no 'train wreck' here

Big deal? Not really. Insurers for years have routinely protected themselves with a fraud clause that shuts off all benefits if  applicants misrepresent themselves on the contract. Presumably, the government is going to be equally harsh with regard to would-be subsidy abusers.

While opponents of health care reform insist the delays are warning signs of an impending "train wreck," they appear to me to be well-reasoned course adjustments to keep the train on track.

Follow me on Twitter: @omnisaurus.

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Jay MacDonald is a Bankrate contributing editor and co-author of "Future Millionaires' Guidebook," an e-book by Bankrate editors and reporters.

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