Building the Bridge to 2014

When President Obama signed the Affordable Care Act into law, he made it clear that his Administration would move quickly and responsibly to implement the new law between now and 2014 when all Americans would have more affordable private insurance options and the worst insurance industry abuses are ended.   Fixing a broken health care system won’t happen overnight.   It will take time to implement new reforms in a way that protects consumers because, as the President said when he signed the Affordable Care Act into law, “We need to get this right.”

Part of getting it right is ensuring a smooth transition in the market place between now and 2014, when the law is fully implemented, so that consumers don’t become worse off along the way.  Last month, we implemented a new Patient’s Bill of Rights that helps put doctors and patients, not insurance companies, in control of their health care.  Thanks to the Affordable Care Act, insurance companies can no longer drop your coverage when you get sick.  If you join a new plan, you will get preventive services, like mammograms and colonoscopies, at no out-of-pocket costs.  Young adults can stay on their parents’ plan until they turn 26.  And it is illegal for insurance companies to place a lifetime limit on the dollar amount of care you can receive.

We have also implemented new rules that phase out by 2014 restrictive annual limits that cap the dollar amount health plans will pay for your care each year.  In extreme cases, when this new policy will cause market disruption and decrease access to health care, the law allows the Department of Health & Human Services (HHS) to issue waivers from the ban on restrictive annual limits for “mini-med” policies – insurance plans that often come with high deductibles and strict annual limits.  

The good news is that in 2014 “mini-med” policies will be a thing of the past.   The bad news is that today they are the only option for many Americans who can’t afford coverage on the individual market.  They provide minimal protection in the case of an illness or accident, with some plans providing as little as $2,000 worth of care each year. And in many cases, employees are paying the full cost of the insurance policy, with no help from their employer.  Sadly, these are often the only insurance options that low-wage hourly workers have today.

But between now and 2014, we want to ensure that these workers are able to maintain their best available coverage option.  And estimates from employers and insurers indicated that complying with the new rules could cause mini-med premiums to rise by more than 200 percent, force employers to drop coverage and send many Americans to purchase insurance on the individual insurance market, where they would get an even worse deal than what they have today.  Many would simply go without insurance because the cost would be too high.

So, to ensure that we’re not creating a whole new population of uninsured Americans and causing significant disruption in the marketplace, HHS created a process to provide temporary waivers from complying with the new annual limit rules. These waivers are only granted if insurers and employers show that such rules would lead to significantly higher premiums or a significant decrease in access to care.  In addition, these waivers are temporary.  Insurance companies must reapply for the waivers each year, and they will not be available beginning in 2014 when annual limits are completely banned. This policy isn’t about mollifying insurers, it’s about protecting consumers.

Our work to implement the Affordable Care Act has been guided by a single principle: protect consumers and put their needs first. That’s why we took action to protect even the most modest coverage Americans have today. It’s why we quickly and responsibly implemented the Patient’s Bill of Rights, and it’s why we are working with states to hold insurance companies accountable and prevent unreasonable premium increases.   Between now and 2014, we will work “to get this right,” which means that consumers, not insurance companies, come first. 

 Stephanie Cutter is Assistant to the President for Special Projects