The Labor Department's decision to offer a "grace period" for out-of-pocket limitations in some group health plans has been dubbed the "third health reform delay," but it may have been the first.
Among the five most read stories on The New York Times Wednesday morning was an article titled: "A Limit on Consumer Costs Is Delayed in Health Care Law."
The Obama Administration, the Times reported, "delayed until 2015 a significant consumer protection in the law that limits how much people may have to spend on their own healthcare" -- a one-year waiver for out-of-pocket costs in some group health plans granted by the Labor Department in an FAQ published in February, "obscured in a maze of legal and bureaucratic language that went largely unnoticed."
Some insurance and legal analysts thought the Times story was slightly misleading, although it did explain that the grace period applies strictly to group health plans currently using more than one benefits administration contractor, with separate out-of-pocket costs for each of them, and that that the Affordable Care Act's medical cost limits -- excluding drug benefits (until 2015) remain intact.
Some lack of nuances aside, the Times story stoked interest in the complicated and uber-important federal rulemaking process, and dozens of media outlets ran with the delay theme.
"Looks like Republicans in the House of Representatives might not need to keep voting to repeal Obamacare. The White House is doing a fine job delaying the thing all by itself," American Public Media's Marketplace told listeners.
"Last month, the administration pushed back a major provision that larger employers offer insurance to full-time workers. This month officials have delayed a measure that would limit consumer out-of-pocket spending."
Marketplace's story took the opportunity of the news to note that some 60 percent of personal bankruptcies are attributed to medical bills. IT also importantly noted, via MIT's Jonathan Gruber, that "a small number of people" covered in group health plans with separate out-of-pocket maximum plans will be affected.
Fox Business News wrote that "The Obama Administration has confirmed a third delay in the Affordable Care Act's rocky road to implementation." Technically it may have been the first -- published in February, before a delay to the federal exchange's SHOP Choice program was disclosed in March, and before the Treasury Department announced the employer mandate delay in a blog on July 3.
Nonetheless, the story went on to explain the details of policies fairly well, though not always being clear until the end of the story that the separate limits "grace period" applies only to group plans:
The delay means some group plans will still be able to maintain separate out-of-pocket limits for different benefits. For example, right now a consumer can face $6,350 in deductibles from doctors visits and $6,350 from pharmaceutical deductibles. Under the new health reform, those two separate services will both have to stay under the $6,350 cap if under the same insurance company, making the total deductible less for certain consumers.
Fox Business went on to quote Timothy Jost, a Washington and Lee University law professor:
"This is the administration bending over backward to accommodate the concerns of businesses and employers. I feel sometimes they have gone further than they should have. This is one instance where that is probably the case…The vast majority of consumers won't be impacted at all. For people with individual health plans, it has no effect at all, and for those with employment coverage where out-of-pocket payments are coordinated, there is no effect."
Other news outlets ran with the story, from consumer or political angles, and some "may have sown confusion," wrote Sarah Lueck, a policy analyst at the Center for Budget and Policy Priorities. "The bottom line: for many plans, the protections will take effect as scheduled in 2014. Some plans will be able to wait an extra year to fully comply."
The news of the grace period is also not all that new, as Jost, the law professor, noted on Health Affairs.
In April, Kaiser Health News published a story titled: "Consumer Groups Fear Patients Could Be Hit With Large Out-Of-Pocket Costs":
Some consumers may continue to face out-of-pocket health costs of $12,500 or more next year -- double the amount allowed by the health law -- because the Obama administration won't enforce that provision for some plans for another year…
...The delay "will disproportionately harm people with chronic diseases and disabilities," including those with AIDS, lupus, cancer, epilepsy," said a letter of protest sent to the administration from a coalition of 40 patient groups, said Nancy Hughes, vice president of communications for the National Health Council, an association of patient advocacy organizations.
Kaiser may have noticed the Labor Department's FAQ a few days after CMS's Center for Consumer Information and Insurance Oversight mentioned the grace period (since it may affect some small group plans in the federal SHOP exchange) in an April 5th letter to insurers.
Jost covered the February FAQ in Health Affairs shortly after it was released -- as he has done throughout the ACA's implementation for guidances, proposed rules, final rules, interim final rules and the like. An attorney who's sat on a consumer representative board at the National Association of Insurance Commissioners, Jost also argued that the out-of-pocket limit grace period was largely unnecessary: "It is also hard to understand why it was needed, as employers have had to offer high-deductible health plans with total capped out-of-pocket maximums for a decade now to provide tax-subsidized health savings accounts, and this has not stopped employers from offering HSAs."