Obama officials said as much on Tuesday, when they announced plans to “revamp and simplify” the process of reporting the status of employee coverage and calculating appropriate penalties. “We will convene employers, insurers and experts to propose a smarter system and, in the interim, suspend reporting for 2014,” said White House special adviser Valerie Jarrett.
But Roger Feldman, the Blue Cross professor in health insurance at the University of Minnesota, disagrees.
“The regulations were quite complicated and it certainly was difficult to calculate the number of full-time employees and how employers were going to be penalized, but I don’t see that as the real reason. I see this as just caving in to a demand from industry,” Feldman said of the move. “I think the computer problems are just a way to explain it. The real reason is you got strong pushback.”
The result, Feldman predicted, will be fewer employers offering coverage, more federal funding to help people get coverage through the exchanges, and more people without coverage. “This is counterproductive,” Feldman said.
Gruber of MIT said he doesn’t expect the move to spur a huge bump in federal spending for premium subsidies, which will go to working-class people who buy coverage on the exchanges. Nor does he expect large numbers of employers to drop employee coverage during the one-year amnesty.
“I just don’t think it’s going to have a huge effect on employer behavior. It just means they’re not going to raise as much money,” Gruber said
On Wednesday, Rich Umbdenstock, president of the American Hospital Association, called the delay “troubling” for people who will lose employer coverage because of the delay.
“We are concerned that the delay further erodes the coverage that was envisioned as part of the ACA,” Umbdenstock said in a statement. Because the mandate won’t be enforced, he called on the Obama administration to issue a two-year delay on funding cuts to hospitals that serve high numbers of uninsured people.
But Judy Solomon, of the left-leaning Center on Budget and Policy Priorities, said the delay shouldn’t severely impact coverage because the people it causes to lose job-based care will still be eligible for subsidies to help buy coverage in the exchanges.
“The goal of health reform is to provide coverage for all Americans – whether through Medicaid, private plans in the marketplace, or employer coverage. Nothing in yesterday’s announcement puts a roadblock in these pathways,” Solomon said.
The delay came as good news for Grady Payne, CEO of Conner Industries in Fort Worth, Texas. Conner employs about 550 people making wooden crates and packing materials. Payne had been working on three health care benefit options to meet the law’s mandates.
“The law is so complex, we still don’t know exactly what all this will cost and what coverage the company will offer,” said Payne, who currently provides health benefits to about 100 administrative workers. He said it has been difficult to receive firm quotes from health insurers because there are so many unknowns, like how many of his now-uncovered workers will opt for coverage.
“They’re not going to pay the $30 a week or so that would represent their share of the premium payments on a policy that has a sizable deductible before coverage kicks in,” Payne said. Especially when they know federal law requires a hospital to treat them if they have a serious accident.
Payne sounded a familiar Republican narrative in summarizing his feelings about the ACA: “I’d like to see it repealed,” he said.
Jim Fuquay of the Fort Worth Star-Telegram contributed.