Political climate influences story line about delay in out-of-pocket limits under ACA

About Joanne Kenen

Contributing editor to Politico Magazine and former health care editor-at-large, Politico, Commonwealth Fund journalist in residence and assistant lecturer at Johns Hopkins Bloomberg School of Public Health.

The New York Times had a big story about another Obamacare delay – the out-of-pocket limits will be put off for a year. It set off another round of GOP statements about train wrecks, giving business unfair breaks, and so forth. (Here’s just one sample; Google and you can find plenty more.)

Actually, the decision was made in February and made public by the Department of Labor. It may have gone somewhat unnoticed because most of us health reporters pay more attention to the Department of Health and Human Services. The decision basically means some individuals could face high drug costs (or very high drug costs) for another year. Think about drugs to treat multiple sclerosis, certain chemo drugs, etc.

The decision got press coverage in April, when the American Cancer Society Cancer Action Network and other groups wrote a letter criticizing the decision. The letter was covered by a number of news outlets, including my colleagues at Politico who did a short item with links to the advocacy letter and the Labor FAQ. Julie Appleby of Kaiser Health News did a good story, too. I found quite a few references in the trade press as well.

The difference (other than the reach of the NYT’s front page on an otherwise slowish news day) is the political context. Call it BEMD and AEMD – before and after the employer mandate delay. Those stories came out in April when the House of Representatives was not doing multiple repeal votes and when governors were talking about expanding Medicaid. The health wars hadn’t gone away, but they had subsided.

But then the employer mandate was delayed in July – a move by the White House that reignited a lot of the politics we’re seeing this summer and will continue to see into the fall. And it’s why a one-day story – one among many glitches and not one that threatened to topple the whole law – was a one-day story in April, but a political thunderstorm in August.

The delay does not affect all health plans. Sarah Lueck, a former Wall Street Journal reporter now at the Center for Budget Policy and Priorities, explains which plans are affected and which are not. (Grandfathered plans are and remain exempt). Health plans in the exchanges are not affected and some employer-sponsored plans are not affected. Those that are affected are mostly those that have two benefit administrators. For example, your health plan has two components: one insurer does the doctors’ visits, labs, etc., and the other does the prescription drugs. In those cases, there can be higher out-of-pocket limits for one year or, in some cases, no limits on the drug portion. (I’m oversimplifying – here is Lueck’s post but it’s a bit technical.

By the way – out-of-pocket expense isn’t the same as a deductible. If someone has, say, a separate $6,000 out-of-pocket limit on drugs, it doesn’t mean they don’t get any coverage until they hit $6,000. It means they don’t get coverage until their co-pays, cost-sharing, etc., hit $6,000. For someone who has a few routine prescriptions or a common generic, the cap delay won’t be noticeable. For people with serious illness and costly drugs it is a one-year delay in a protection that the Affordable Care Act’s backers had initially promised and it could make a huge difference to them. That’s why the advocates were upset.

But, in the hyperpartisan climate we’re in 50 days before enrollment in the exchanges begins, it’s suddenly become, for the GOP, another reason to scrap or put off health reform completely.

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