Actually, the delay happened in February, but the public is just finding out about it now. Robert Pear reports:
In another setback for President Obama’s health care initiative, the administration has delayed until 2015 a significant consumer protection in the law that limits how much people may have to spend on their own health care.
The limit on out-of-pocket costs, including deductibles and co-payments, was not supposed to exceed $6,350 for an individual and $12,700 for a family. But under a little-noticed ruling, federal officials have granted a one-year grace period to some insurers, allowing them to set higher limits, or no limit at all on some costs, in 2014.
The grace period has been outlined on the Labor Department’s Web site since February, but was obscured in a maze of legal and bureaucratic language that went largely unnoticed. When asked in recent days about the language — which appeared as an answer to one of 137 “frequently asked questions about Affordable Care Act implementation” — department officials confirmed the policy.
Apparently, lawmakers set unrealistic deadlines:
The health law, signed more than three years ago by Mr. Obama, clearly established a single overall limit on out-of-pocket costs for each individual or family. But federal officials said that many insurers and employers needed more time to comply because they used separate companies to help administer major medical coverage and drug benefits, with separate limits on out-of-pocket costs.
In many cases, the companies have separate computer systems that cannot communicate with one another. [New York Times, August 12]
The bigger problem with the limits is that you get what you pay for. In order to have a plan with lower deductibles and no lifetime limits, you have to pay higher premiums. “These mandates,” writes Avik Roy, “have already had drastic effects on a number of colleges and universities, which offer inexpensive, defined-cap plans to their healthy, youthful students.”
Premiums at Lenoir-Rhyne University in Hickory, N.C., for example, rose from $245 per student in 2011-2012 to between $2,507 in 2012-2013. The University of Puget Sound paid $165 per student in 2011-2012; their rates rose to between $1,500 and $2,000 for 2012-2013. Other schools have been forced to drop coverage because they could no longer afford it. [Forbes, August 13]
As Roy notes, the limits also increase the cross-subsidies from the broader base of premium payers to those with chronic conditions. That’s one more reason for a healthy person to drop out of the insurance market entirely.