Published: Jul 3, 2013
By David Pittman, Washington Correspondent, MedPage Today
WASHINGTON -- The Obama administration's decision to delay the Affordable Care Act's (ACA) employer-coverage mandate was immediately seized upon as "evidence" of the law's fatal flaws, according to critics.
Late Tuesday in a Treasury Department blog post, the White House said it would delay until 2015 the ACA's requirement that businesses with more than 50 employees offer insurance. Those businesses were to face a $2,000 per worker penalty (minus the first 30 workers) for not doing so starting next year.
The move isn't expected to have a large impact on the number of uninsured individuals as most without coverage will seek care because of the individual mandate to buy insurance. Others stand to gain coverage not through employer-sponsored plans but through expanded Medicaid or tax credits offer to those making between 100% and 400% of federal poverty.
The news did give political conservatives and ACA opponents a chance to sound off.
Rep. Tom Price, MD (R-Ga.), said the announcement is proof the ACA is "too overreaching, too intrusive, too unworkable, and too destructive to the American people."
"If they can't manage to enforce their own law after 3 years of preparation, what does this say about their ability to actually deliver health care?" Price said in a release Tuesday.
Many other Republican leaders on Capitol Hill released statements expressing similar comments.
Conservative economist Douglas Holtz-Eakin -- former economic adviser to President George H.W. Bush and now president of the American Action Forum -- said the news may accelerate employers to drop their insurance plans and move workers into buying their own coverage in the ACA's health insurance exchanges.
Opponents claim the financial penalty will be less than the cost of providing health insurance, and businesses will simply drop their employer-sponsored plans.
"For some, it may well be the case that the new, exchange-based insurance is a better combination of coverage and cost," Holtz-Eakin wrote in a blog post. "But it will come at the cost of even greater churning in insurance coverage -- which translates into switching provider networks and interrupting health care."
The Congressional Budget Office has said it didn't expect the number of people with employer-sponsored coverage to change next year.
In contrast to the Republican outcry, all but a few Democrats were silent Tuesday evening.
The ACA exempts small businesses from having to offer health insurance. Workers of those firms will be able to buy insurance through the ACA's exchanges.
Tuesday's announcement does not impact the individual mandate that all must purchase insurance or face a penalty in 2014.
The delay will allow the Obama administration time to simplify reporting requirements for businesses and allow employers time to adapt to the ACA, senior officials said Tuesday.
"We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively," Mark Mazur, PhD, assistant secretary for tax policy at the Treasure Department, noted in his blog post announcing the move. "We recognize that the vast majority of businesses that will need to do this reporting already provide health insurance to their workers, and we want to make sure it is easy for others to do so."
In a separate blog post Tuesday, senior Obama adviser Valerie Jarrett reiterated much of what Mazur said but added the administration was target to open the ACA's health insurance exchanges in time when open enrollment starts Oct. 1.
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