WASHINGTON BUREAU — The Obama administration has used objective guidelines when granting waivers to limited benefit health plans affected by the new Affordable Care Act benefits limit restrictions, according to officials at the U.S. Government Accountability Office (GAO).
GAO officials who looked into the matter found that the Center for Consumer Information and Insurance Oversight (CCIIO), the agency at the U.S. Department of Health and Human Services (HHS) that handles waiver applications, has granted waivers mostly for applicants that projected the annual limit restrictions would lead to premium increase of more than 10%, in addition to a significant decrease in access to benefits, John Dicken, a GAO directors, writes in a report summarizing the GAO’s annual benefits limit waiver program review.
Conversely, the GAO says, most of the applicants that were denied projected premium increases of 6% or less.
PPACA is supposed to ban lifetime benefits limits in major medical coverage immediately, and it is supposed to phase in a ban on annual benefits limits. CCIIO officials designed the annual benefits limit waiver program to help employers maintain the limited benefit plans they already have through 2014.
In 2014, PPACA is supposed to provide tax credits that millions of people can use to help pay their premiums. Health insurers will be barred from turning away applicants in poor health or basing rates on health status, many employers will have to help pay for workers’ coverage, and individuals and small groups will be able to buy coverage through health insurance exchange programs, if all goes as PPACA supporters hope.
If the CCIIO applies the annual benefits limit rules to limited benefit plans today, before the 2014 changes take effect, the enrollees in those plans may have no way to buy any form of health coverage, waiver program supporters say.
Republican critics of the waiver program say the Obama administration has been using its authority to help its political allies, mostly unions, while imposing burdensome requirements on everyone else.
Several unions have gotten waivers, but most waivers are going to employer plans, according to HHS data.
As of April 25, the CCIIO had received 1,415 annual limit waiver applications and approved most of the applications, the GAO says.
For 1,347 of the applications, or about 95%, CCIIO approved waivers covering all plans in the applications. For another 25 applications, CCIIO approved waivers for some plans and denied waivers for others within the same application.
CCIIO denied waivers covering all plans listed in 40 applications. Three applications were pending at the time of our review.
GAO says in the report that about 3 million people were covered in approved plans and about 153,000 people were covered in denied plans. The total number of people covered in the approved plans represents about 2% of the people covered by private health insurance plans in 2009.
Paul Keckley, executive director of the Deloitte Center for Health Solutions, Washington, says most of the waivers have helped mini-med plan and limited benefit health plans aimed at seasonal workers, part-time workers and low-wage workers.
The waivers last only for one year, Keckley says.
“Without waivers, companies would have dropped all coverage for people with severe limits on how much they can spend,” Keckley says.
The waiver program “gives them one year to think further about what they are going to do going forward,” Keckley says. “Employers are thinking in the near-term, ‘How do we comply with the law, but reduce our cost for health care benefits?’”
Employers also are watching to see how the states go about setting up and operating the new health insurance exchanges, Keckley says.
“The potential exists for employers to drop employee-sponsored benefits, lose the tax benefits, and pay a penalty,” Keckley says. “But that is cheaper than continuing to provide the benefits.”