The Obama administration on Friday said it would stop granting new waivers to the health-care overhaul in September following sharp opposition from Republicans who cited the waivers in their bid to undermine the law.As of the end of May, the administration had granted 1,433 waivers to a part of the 2010 law that prevents employers and other health-plan providers from capping annual benefit payouts below $750,000 a year. Those entities, and any others that secure a waiver by Sept. 22, will be able to keep their one-year waivers, and apply for extensions through 2013.
But the Department of Health and Human Services said it would stop accepting new applications for the program after Sept. 22. The waivers largely went to low-wage employers who offer "mini-med" plans with limited benefits, including McDonald's Corp. and the Foot Locker Inc. athletic chain.
By cutting off applications, the administration will avoid the bursts of attention each time it granted a new batch. Opponents of the law contended that the administration had shown favoritism in granting the waivers, prompting federal health officials to disclose the names of recipients and the application process for granting them.
Steve Larsen, a Health and Human Services official responsible for insurance oversight, said the department is cutting off new applications because "the vast majority of plans that would need a waiver…are the ones that would have applied and did apply this year." He said waivers were granted to plans covering about 2% of privately insured Americans.
Critics of the health-care overhaul seized on the administration's move as a sign that the law is flawed. "They are shutting it down because it's become clear that the only way to keep what you have and like is to be exempted from the very law they said would lower costs," Sen. Orrin Hatch (R., Utah) and House Ways and Means Committee Chairman Dave Camp (R., Mich.) said in a joint statement.
A Government Accountability Office report this past week found that the administration mostly granted waivers for those who said they would have to raise premiums by more than 10% and cut benefits if they didn't get a waiver. It largely denied applications that projected a premium increase of 6% or less.
The Obama administration described the waivers as a bridge until 2014, when new health-insurance exchanges are expected to largely eliminate such limited-benefit plans and give consumers a chance to shop for better coverage. In the meantime, health plans with waivers must tell consumers their coverage is subject to an annual dollar limit lower than usually allowed under the law, according to new disclosure requirements the administration released Friday.
Beginning in September, that allowable annual limit increases to $1.25 million. For plan years beginning September 2012, it rises to $2 million.
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