Bad Health Care Bill Puts Administration in No-Win Situation

Oct 14, 2010

by James Gelfand

This morning's "Newsweak" story by Joel Schectman berates limited benefit health plans (which offer very limited coverage for a very small cost to workers), while also beating up on the Administration. Here is a short excerpt:

"This puts the administration in an awkward position as Republicans and trade groups push for the repeal of many of the health-care act's key provisions. The administration had promised that no one would lose the health care he had. But it also had said these minimum standards would go into effect this year. "Did the administration make itself an easy target by cutting off these plans before the exchange started? The answer is yes." says James Gelfand, director of health policy for the U.S. Chamber of Commerce, a business lobbying group that opposed the health-care-reform bill. "They have given ammunition to people who want to overturn all of the bill, even the pieces that people would like."

I don't think this tells the whole story. The Administration is thrust into this no-win situation because of the politicized, haphazard manner in which Congress clobbered 1/6th of the economy. The Patient Protection and Affordable Care Act (PPACA) was designed to create a new market in which people could purchase health insurance in 2014. But politicians wanted results before the 2010 midterm election, so they pushed up a number of provisions to take effect this year. What they didn't realize is that this would cause much hardship.

You've seen this hardship regarding parents who can no longer purchase child-only plans, small businesses who are experiencing 20-30 percent premium increases, and now also low-wage workers with limited plans that may be banned under the new rules.

The Administration has moved quickly to try and protect these workers' coverage; the problem is, this continues to be a difficult situation, complicated by timing struggles. Plans and employers need to know sooner rather than later if these plans can be offered in 2011 and the regulatory process will take some time. To preserve coverage for 1.4 million workers enrolled in limited benefit plans until 2014, the Administration created a waiver program. But opponents have painted this as playing favorites, waivers for some and not for others (and stimulus for lobbyists). Now the Administration must wrestle with another provision (Medical Loss Ratio) which would also destroy these plans. This is complicated by the PPACA's construct; it is possible that the Administration's hands may be tied and that they are unable to even determine the rules for this provision until state regulators issue a draft regulation.

The Administration is trying to strike a balance - maintain control and consolidate its new powers granted under the health care law, while preventing people from losing their coverage. This is a serious challenge, and one complicated by the flaws of the PPACA.

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