During the handful of semesters I taught college composition, the first assignment always separated the serious from the slackers. Those whose grandparents conveniently passed away the night before it was due became a reliable barometer.
As the initial phase of the Affordable Care Act kicked in late last month, there was a fair share of those trying to get out of that first assignment. But since businesses and health plans use lobbyists to do their grandfathering for them, their excuses came in the request of waivers from the Department of Health and Human Services.
The HHS was fairly lenient, and last week granted 30 waivers that allowed an opt-out from the infinite lifetime benefit for one year. Those grantees would have the chance to reapply for those waivers each year until 2014, until the exchanges' health plan enrollees could use tax subsidies to purchase coverage.
"Applications for waivers from annual limit requirements are reviewed on a case by case basis by department officials who look at a series of factors including whether or not a premium increase significantly exceeds medical inflation or if a significant number of enrollees would lose access to their current plan because the coverage would not be offered in the absence of a waiver," the HHS said in a statement.
Most of the applicants represented large businesses, including 115,000 enrollees of BCS Insurance, which sells coverage to McDonald's workers, and Jack-in-the-Box, which got a waiver for more than 1,100 employees. Some large labor unions that provide benefits to its membership were also included.
But there were also some surprises: the Massachusetts Health Connector, which served as a template for national reform, received a waiver for about 3,500 enrollees. Aetna and Cigna received waivers for nearly 475,000 enrollees.
Cigna spokeswoman Gloria Barone told me last week the waiver was required to keep premiums down for its plan, which primarily covers part-time and seasonal workers.
Those waiver recipients aren't getting off easy: the cap is $750,000 for 2011, and climbs to $2 million by 2013. That's likely far higher than the caps initially in place for these plans, most of which are "mini-med" plans that offer minimal coverage. And the recipients are barred from seeking lifetime cap waivers in 2014 and after.
It is unlikely that more than a handful of catastrophically ill or injured people would be affected, and it's likely someone in such a state of health would qualify for Medicare via a permanent disability before their coverage ran out.
But what is troubling is that HHS could just have easily dug in its heels rather than grant what is likely going to be only the first in a ceaseless wave of waiver applications, whether it is over lifetime caps, medical loss ratios, providing maternity care, or some other aspect of coverage. There has been a loud chorus from conservative circles--indeed, the entire Republican Party--about repealing reform entirely. Every waiver that is parceled out will be used as ammunition for that argument.
I discussed this with Anthony Wright. He's executive director of Health Access, an advocacy group in California. Wright's group has made a name for itself in recent years as being a voice of reason. He isn't wringing his hands over a single waiver for a single year. It's their potential continuation that has him concerned.
"It's one thing to give them a year to figure out a game plan. It's another to allow them to ignore the healthcare reform law," Wright observed.
It's too early to tell where this first wave of waivers is eventually headed. However, if too many waivers are granted, the consequences will be palpable: providers burdened with higher levels of uncompensated and charity care, and financially strapped patients who thought they had appropriate insurance coverage forced into bankruptcy. In other words, everyone pays except for the payers.
I quickly learned how to nip this in the bud in a classroom. Hopefully, HHS will also find its voice on this issue, and learn that saying "no" is not so tough after all. - Ron