The Waivers Keep Coming

Published 12/08/10

More and more companies and unions are applying for and obtaining waivers for some of ObamaCare’s requirements.  Now the total is up to 222 – and counting.  From FoxNews.com:

Employers like McDonald’s, Waffle House and Universal Orlando are among the companies that have received a one-year waiver, allowing them to maintain minimal coverage below the new law’s standards.

The list has grown significantly since October, when 30 companies had waivers, and has doubled since early November. Taken together, the companies cover more than 1.5 million people, including 34 unions with more than 140,000 members.

Read more: http://www.foxnews.com/politics/2010/12/08/big-companies-unions-win-health-care-waivers/#ixzz17YPcRTId

The frequency with which companies and unions are applying for these waivers indicates a flaw in the law’s policy approach.  ObamaCare restricted the types of insurance policies that could be bought or sold, putting pressure on many employers to change plans or pay a penalty:

The problem centers around a section of the new health-reform law that says a percentage ofinsurance premiums must now be spent on actual benefits. The new law says beginning next year, at least 80% to 85% of premium revenue must be spent on medical care coverage.

Democrats had fought for this new provision to stop insurers from purportedly doing things like using premium revenue to pad their wallets with executive salaries, or wasting those revenues on marketing and other administrative costs that elected officials argued don’t do much to directly helppatients.

Instead this provision backfired, creating a difficult situation for employers who offer “mini-med” plans and for policymakers who overlooked this unintended consequence.  We can expect to continue to see more groups filing for waivers, unless the legislation is repealed or otherwise amended.

 

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