Published September 12, 2013
Despite being held up by the highest court in the land, and countless roadblocks and delays along the way, there are just weeks until open enrollment under President Obama’s landmark health-care reform bill takes effect.
After a drawn-out legislative process, debate in the country’s highest court and numerous implementation, there are less than three weeks until open enrollment under President Obama’s landmark health-care reform takes effect…maybe.
Oct. 1 is the date that state and federal health-insurance exchanges must be implemented, and starting Jan. 1, 2014, every American is required to have health coverage or face a penalty of an annual $95 fee. But these upcoming deadlines haven’t stopped the reform’s opposition from working to stop the law from become reality.
On Thursday, the Republican-controlled House of Representatives passed a bill to ban subsidies to help people buy insurance until the administration creates a new system to verify that benefits go to only those who are eligible. There is also a vote later this month to defund health-care reform.
On Wednesday night, Senate Minority Leader Mitch McConnell,(R-KY), filed an amendment to the energy efficiency bill, which is currently under consideration, to delay the individual mandate until 2014.
While it’s unclear whether these efforts will be successful, here’s a look at what they could mean for the future of the legislation and consumers.
Marketplace Impacts of Mandate Delay
S. Lawrence Kocot, visiting fellow at the Brookings Institution, says a delay in the individual mandate would disrupt the logistics of the law—even if just a year.
“Without an individual mandate, the market may be skewed,” he says. “You may just get the sicker population into the market.” If there is no mandate, he says
The young and/or healthy would skimp on coverage, leaving only those who need health care in the insurance pool. Costs as calculated wouldn’t stand.
“The insurance rates were calculated based on the assumption of the [implementation] of the individual mandate. This would really change the calculus for insurers who were depending on this for the actuarial rate values.”
Insurers would have to resubmit their bids, and there isn’t enough time for this to happen, he says.
Could an Individual Mandate Delay Happen?
Yevgeniy Feyman, research associate at the Manhattan Institute, says the chances of defunding the law entirely or pushing back the individual mandate are both unlikely.
“Delaying the individual mandate—that is the core of the law, and needed to make it work,” says Feyman. “It wouldn’t happen. The Democrats put so much political capital into this and there is so much to lose. It’s also likely Republicans would be blamed, the same way they took a lot of heat for the sequester.”
And despite a delay of the implementation of the employer mandate portion of the law and a holdup on the out of pocket maximum for consumer costs to 2015, Feyman says the individual mandate is key to have people in the marketplace.
“Without it, the law won’t work,” he says. “Too few people will buy insurance, and then you would have a death spiral.”
But Keith McMurdy, partner and benefits attorney at Fox Rothschild, says the Obama is already inclined to sign off on a delay of the individual mandate.
“Each month, something comes out from [the Administration] with a statement that it won’t require a [portion of the bill] until 2015,” he says. “In September, it would be logical for them to turn around and say, ‘We don’t have to do the individual mandate’ [in 2014]. It’s a progression of them saying this whole thing is screwed up.”
The Obama Administration needs to save face, says McMurdy, and delaying the individual mandate may be the key to doing so.
“Public sentiment is that we are all really confused, and I think that at this stage, it’s all about saving face,” he says. “If the uproar is, ‘why are you enforcing the individual mandate when the employer mandate gets an extension?’ There is still so much confusion.”
Kocot isn’t sold, and says there are arguments on either side for going forward with the individual mandate as planned and holding it back for a year.
“I don’t see any indication that the Obama administration will step back,” he says.