Did Obama Just Secretly Cancel the Individual Mandate For Two Years If Your Plan Was Cancelled by Obamacare?

March 11th, 2014

The WSJ reports that the Administration has quietly buried in a PDF (rule by blog post you know) a rule that extends for two years a waiver from the individual mandate for those claiming a hardship exemption (basically health insurance is too expensive because of Obamacare). Is this right?’

ObamaCare’s implementers continue to roam the battlefield and shoot their own wounded, and the latest casualty is the core of the Affordable Care Act—the individual mandate. To wit, last week the Administration quietly excused millions of people from the requirement to purchase health insurance or else pay a tax penalty.

This latest political reconstruction has received zero media notice, and the Health and Human Services Department didn’t think the details were worth discussing in a conference call, press materials or fact sheet. Instead, the mandate suspension was buried in an unrelated rule that was meant to preserve some health plans that don’t comply with ObamaCare benefit and redistribution mandates. Our sources only noticed the change this week.

That seven-page technical bulletin includes a paragraph and footnote that casually mention that a rule in a separate December 2013 bulletin would be extended for two more years, until 2016. Lo and behold, it turns out this second rule, which was supposed to last for only a year, allows Americans whose coverage was cancelled to opt out of the mandate altogether.

In 2013, HHS decided that ObamaCare’s wave of policy terminations qualified as a “hardship” that entitled people to a special type of coverage designed for people under age 30 or a mandate exemption. HHS originally defined and reserved hardship exemptions for the truly down and out such as battered women, the evicted and bankrupts.

But amid the post-rollout political backlash, last week the agency created a new category: Now all you need to do is fill out a form attesting that your plan was cancelled and that you “believe that the plan options available in the [ObamaCare] Marketplace in your area are more expensive than your cancelled health insurance policy” or “you consider other available policies unaffordable.”

This lax standard—no formula or hard test beyond a person’s belief—at least ostensibly requires proof such as an insurer termination notice. But people can also qualify for hardships for the unspecified nonreason that “you experienced another hardship in obtaining health insurance,” which only requires “documentation if possible.” And yet another waiver is available to those who say they are merely unable to afford coverage, regardless of their prior insurance. In a word, these shifting legal benchmarks offer an exemption to everyone who conceivably wants one.

I was waiting for the individual mandate to be delayed. And this looks like it is it.

There is one silver lining that I have mentioned several times during recent book talks. The fewer people who are required to buy Obamacare, and who will not be subject to the mandate, the fewer people who will object if this is repealed. No president will ever be able to enforce it, making a repeal more likely. The President is sabotaging Obamacare in ways that Ted Cruz couldn’t even dream of (that got a good laugh line in a recent talk).

The WSJ alludes to this fact:

Our sources in the insurance industry are worried the regulatory loophole sets a mandate non-enforcement precedent, and they’re probably right. The longer it is not enforced, the less likely any President will enforce it.

Obamacare continues to unravel…

Update: If the GOP were smart, they would send to all of their constituents the appropriate form to Opt Out of the Obamacare mandate due to higher prices. The net result of this is that very few, if any people, will be paying the mandate/penalty/tax. No wonder the insurance companies are freaking out. This can destabilize the entire market for two years. And lets not pass over the schadenfreude. These plans were cancelled because of Obamacare, and now Obamacare is exempting them from the reason why their plans were cancelled.

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