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Obamacare delays spending caps

By Jay MacDonald · Bankrate.com
Tuesday, August 13, 2013
Posted: 11 am ET

The administrators of President Barack Obama's landmark health insurance reform have agreed to give some insurers until 2015 to comply with a consumer protection in the Affordable Care Act that limits how much individuals will have to spend out of pocket on their health insurance.

The New York Times, which broke the story Tuesday, quoted a senior administration official as saying some plan sponsors and insurers had requested the one-year extension because their computer systems weren't ready to aggregate each applicant's out-of-pocket costs by the 2014 deadline.

How the caps are supposed to work

Under the affordability provisions of Obamacare, annual out-of-pocket costs, including deductibles and copayments, are to be capped at $6,350 for individuals and $12,700 per family. Insurers who were granted the one-year extension have the option to set higher or no limits on policies written in 2014, just as they do today.

The government apparently agreed last February to allow certain insurers the one-year grace period, but made only a passing mention of it on the Department of Labor's website. The Times uncovered the concession buried in one of 137 frequently asked questions about Obamacare on the DOL site.

A string of delay announcements

The delay follows back-to-back announcements in July that the feds had agreed to similar requests from large employers and states setting up their own health marketplaces, or exchanges. Those camps also wanted an additional year to work out the computer challenges of the historic health reforms.

On July 2, the feds granted companies with 50 or more workers until 2015 to comply with the "employer mandate" clause that requires them to offer their workforces affordable, qualified health insurance or face up to $3,000 in fines per employee.

Three days later, the feds gave the 16 states and the District of Columbia that are setting up their own online health marketplaces until 2015 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.

More ammo for Obamacare opponents?

News of the third extension of a health reform provision this year will doubtless be cited by political opponents as yet another foreshadowing of an impending Obamacare "train wreck" they've been predicting for months.

My take? Newborns crawl before they walk. Graduations are a beginning, not an end. And any train that doesn't make course corrections along the way will never reach its destination.

But I'm open to ideas.

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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