Crossroads GPS Misleads Viewers On Health Care Waivers

May 19, 2011 2:48 pm ET

The Karl Rove-backed group, Crossroads GPS, is out with a new misleading ad attacking unions and the Affordable Care Act. This time Crossroads GPS is claiming political cronyism is why the administration has granted unions waivers for the health care law. The ad makes it seem that unions are the only employers that have received waivers and that they received the waivers because of their ties to the White House. This could not be further from the truth. Waivers have been granted to all types of employers — including small and large businesses, health insurance companies, and city and state governments — not just unions. There are clear standards set up by the Department of Health and Human Services for reviewing waiver applications, and administrators have testified that the waiver process is administered fairly regardless of what organization is applying. Additionally, the waivers only temporarily exempt companies from just one provision of the health care law. This is done as a stop-gap measure so that individuals will not lose their health coverage while the Affordable Care Act is being fully implemented.

Crossroads GPS: Waivers

[On-screen text:] They demanded Obamacare. [SEIU PRES. ANDY STERN:] Isn't it time? Isn't it time? [UFCW PRES. JOSEPH HANSEN:] We demand Congress to bring about health care reform [On-screen text:] The Union Bosses. They shoved health care down our throats. [STERN:] We proudly join our Canadian brothers and sisters. [SEIU HEALTH CARE CHAIR DENNIS RIVERA:] We want universal health care. [STERN:] Isn't it time we did that? [VOICEOVER:] The power. S-E-I-U. [PRES. OBAMA:] I'm signing this bill for all the leaders who took up this cause. [FMR. SEIU TREAS. ANNA BURGER:] We have health care. We won. [UNIDENTIFIED MAN:] The result of the hard work of SEIU. [On-screen text:] Powerful unions spent almost $120 million to back liberals like Obama, Pelosi, & Reid. One year later... [FOX NEWS HOST MEGYN KELLY:] Is the Obama administration exempting some from complying with the new health care law as a political favor? Unions who are getting waivers not to comply with the health care law. [On-screen text:] Why are the same unions that forced Obamacare on us now getting exempted from it? [UNIDENTIFIED MAN:] Why have there been over a thousand waiver requests? [On-screen text:] Obama won't say why [FOX BUSINESS HOST STUART VARNEY:] It pays to be friends with the White House. [AFL-CIO PRES. RICHARD TRUMKA:] I'm at the White House a couple times a week. I have conversations every day. [FOX NEWS ANALYST ANDREA TANTAROS:] We are forced to pay higher costs. They get a special sweetheart deal. [On-screen text:] Why? [PRES. OBAMA:] Because we have fought together. We have worked together. They walked doors for me. They made phone calls for me. They turned out the vote for me. [On-screen text:] Almost $120 Million. Over 185 union waivers. All exempt from Obamacare mandate. [PRES. OBAMA:] We worked together over these last few years and I'm proud of what we've done. [On-screen text:] If unions don't have to comply with Obamacare...why should we? Call the White House 202-452-111. Tell Obama to come clean.

No Union Favoritism: There Is No Evidence Of Inconsistency Or Partisan Bias In Granting Waivers

All Different Types Of Employers Received Waivers.  According to, various types of employers received the waivers, including small and large businesses, city, county and state governments, unions, and health insurance companies. [, accessed 5/19/11]

HHS Granted 1372 Waivers, Denied Less Than 100 Applications. White House press secretary Jay Carney told, "There have been 1,372 waivers granted, and fewer than 100 waiver applications have been denied." [, 5/17/11]

Groups That Did Not Support Health Care Reform Have Used The Waiver System To Their Benefit. noted: "As of Dec. 3, the federal government had approved a total of 222 one-year waivers that allow the insurance plans at companies like McDonald's, Jack in the Box and Ruby Tuesday, and unions, to ignore the requirement on annual limits. Far from being 'Obama's buddies,' as the Internet post claimed, the restaurant industry, through the National Restaurant Association, opposed the legislation." [, 12/7/10]

Even Groups With Republican Party Ties Are Able To Get Waivers. A. Duda & Sons, Inc.'s Senior Vice President of Real Estate and General Counsel, Tracy Duda Chapman, was on the transition team of Adam Putnam, a former chairman of the House Republican Conference now serving as Florida's agriculture commissioner. A. Duda & Sons, Inc. was granted a waiver. [, accessed 1/19/10;, 11/5/10;, accessed 1/21/11;, Waiver List, 12/03/10]

Standards For Acquiring A Waiver Are Published Online. The U.S. Department of Health & Human Services published guidance on their "annual limit waivers" and the established standards they use to review waiver applications. [, accessed 3/21/11]

HHS: Waiver Applicants Must Certify That Waiver Is Necessary To Prevent Reduced Access To Coverage Or Large Premium Increases. From the Department of Health and Human Services website:

The Affordable Care Act is designed to provide Americans with affordable, high-quality coverage options — while ensuring that those who like their current coverage can keep it. Unfortunately, today, limited benefit plans, or "mini-med" plans are often the only type of insurance offered to some workers. In 2014, the Affordable Care Act will end mini-med plans when Americans will have better access to affordable, comprehensive health insurance plans that cannot use high deductibles or annual limits to limit benefits. In the meantime, the law requires insurers to phase out the use of annual dollar limits on benefits. In 2011, most plans can impose an annual limit of no less than $750,000.

Mini-med plans have lower limits than allowed under the Affordable Care Act. While mini-med plans do not provide security in the event of serious illness or accident, they are unfortunately the only option that some employers offer. In order to protect coverage for these workers, the Affordable Care Act allows these plans to apply for temporary waivers from rules restricting the size of annual limits to some group health plans and health insurance issuers.

Waivers only last for one year and are only available if the plan certifies that a waiver is necessary to prevent either a large increase in premiums or a significant decrease in access to coverage. In addition, enrollees must be informed that their plan does not meet the requirements of the Affordable Care Act. No other provision of the Affordable Care Act is affected by these waivers: they only apply to the annual limit policy. [, accessed 3/21/11]

Administration Says The Waiver Process Is "Administered Fairly Without Regard To The Type Of Applicant Or Size Of Business." At a House Oversight subcommittee hearing, Steve Larsen, the Deputy Administrator and Director of the Centers for Medicare and Medicaid Services' Center for Consumer Information and Insurance Oversight, said of the administration of waiver requests:

LARSEN: All employers and insurers that offer limited benefit plans may apply for a waiver if they demonstrate that there will be a significant increase in premiums or a significant decrease in access to coverage without a waiver. Applying for a waiver is simple, basic, with only five elements that CCIO has clearly published on our Web site. It's important to note that more than 30 percent of applicants have fewer than 100 enrollees. Small businesses are able to take advantage of this as well as large ones.

We administer the process fairly, without regard to the type of applicant or size of business. We published our standards for reviewing the applications in the regulations implementing the law, and again in the bulletins implementing the regulations. [Hearing of the Health Care, District of Columbia, Census and the National Archives Subcommittee of the House Oversight and Government Reform Committee, 3/15/11, via Nexis]

Waivers Exempt Companies From Only One Provision Of Health Care Law

Waivers Only Exempt Companies From One PPACA Provision, Only For One Year, And Only If They Can Prove Coverage Will Be Disrupted. According to a post on the White House Blog:

  • The waivers only apply to one provision of the law — the provisions phasing out annual limits. Insurance companies and employers that receive waivers must comply with all other parts of the Affordable Care Act.
  • The waivers last one year. Insurance companies must reapply for the waivers each year between now and 2014 when annual limits on coverage will be completely prohibitedand individuals will have more affordable and better private insurance choices in the competitive Exchange markets.
  • All employers and insurers that offer mini-med plans may apply for a waiver if they demonstrate that there will be large increases in premiums or a significant decrease in access to coverage without a waiver. You can read a list of employers and insurers that have received waivers here. [, 12/10/10]

Waivers Are Granted "To Firms that Cannot Meet New Annual Coverage Limits." According to The Hill: "In order to avoid disruption in the insurance market, the healthcare overhaul gives HHS the power to grant waivers to firms that cannot meet new annual coverage limits in 2011. The waivers have typically been granted to so-called "mini-med" plans that offer limited annual coverage — as low as $2,000 — that would fall short of meeting the new annual coverage floor of $750,000 in 2011." [The Hill, 3/6/11]

  • Mini-Med Plans Are Low-Cost Health Care Coverage Options For People With Part-Time Or Hourly Employment. According to the BLR Human Resource Network: "'A mini-med plan is a low-cost healthcare plan for somebody who cannot afford traditional insurance or who is not eligible for major medical insurance, like a part-time or hourly employee,' explains Jonathan S. Edelheit, vice president at OptiMed/United Group Programs, Inc. ( 'It's not meant to replace a traditional major medical plan; rather it's more of a basic policy. It provides access to day-to-day health care such as going to the doctor or getting a prescription drug. It does provide benefits for hospitalization and surgical, but they're limited. It is not meant to be there for catastrophic events.'" [, 05/09/07, parentheses original]

In First Year, Only Approximately 1.6 Million Workers Fall Into The Annual Limit Bracket Requiring Waivers. According to a GPO Report from various agencies: "In the first year of implementation (beginning September 23, 2010), it is estimated that less than 0.08 percent (less than one tenth of one percent) of large employer plans, approximately 2.6 percent of small employer plans, and 2.3 percent of individual plans would have to raise their annual limit to $750,000. This first-year increase in annual limits would potentially affect an estimated 1,670,000 persons across the three markets." [, 6/28/10, parentheses original]

Waivers Are Temporary And Act As A Stop-gap Until The Health Care Law Is Fully Implemented Waivers "Merely Give Companies A Temporary Delay Before Being Required To Improve The Coverage Of Cheap, Bare-Bones Plans They Currently Offer." From

The government has granted more than 200 waivers, but these merely give companies a temporary delay before being required to improve the coverage of cheap, bare-bones plans they currently offer. [...]

The companies haven't been granted permission to ignore the entire law, as the Facebook post quoted by our reader might suggest — but many have been given one-year waivers to delay compliance with a key insurance mandate that was put into place this fall. The White House says it instituted the waiver process to enable those companies to continue to provide limited-benefits plans  — cheap, bare-bones policies called mini-med plans  — until the law is fully implemented in 2014. [...]

The new health care law aims to eliminate low annual coverage caps like those over time, and this is where the waiver issue has come in. The law says that annual coverage limits can't be set lower than $750,000 for new policy years starting between Sept. 23, 2010 and Sept. 23, 2011. That cap will be raised each year until 2014, when the law will require companies to have no annual spending limits on most benefits in health care plans. [...]

The companies that have been approved for the waivers must reapply for them next year. Waivers are available until 2014.

[, 12/7/10]

Mini-Med Policies Enforce An Annual Limit On Care And Are Banned Under PPACA Due To Their Inability To Provide Comprehensive Health Coverage. According to a December 9, 2010, Health and Human Services fact sheet: "The Affordable Care Act will end 'mini-med' plans in 2014 and provide Americans with affordable, high-quality coverage options. Unfortunately, today, mini-med plans are often the only type of private insurance offered to some workers. In order to protect coverage for these workers, HHS has issued temporary waivers from rules restricting the size of annual limits to some group health plans and health insurance issuers. Waivers only last for one year and are only available if the plan certifies that a waiver is necessary to prevent either a large increase in premiums or a significant decrease in access to coverage." [, Fact Sheet, 12/09/10, emphasis added]

Mini-Meds — The Reason Waivers Are Necessary — Will Be Eliminated By 2014, And Have Already Begun To Be 'Phased Out.' According to the December 10, 2010, White House Blog post: "The good news is that mini-meds will be eliminated in 2014, thanks to provisions that phase out insurance companies' use of annual limits between now and 2014.   The 'phase out' has already begun to kick in, and in 2014 when annual limits are completely eliminated, consumers be able to purchase health insurance in state-based Exchanges -- new competitive marketplaces - where consumers and small businesses can shop for private coverage and will have the market power similar to large employers." [, 12/10/10]

The Waiver Program Will Allow Companies To Keep Their Current Insurance Without Incurring A Penalty Or Having To Drop Coverage. According a White House Blog post: "Because mini-meds are built around annual limits, estimates from employers and insurers indicate that beginning the phase out of annual limits this year would cause mini-med premiums to rise by more than 200 percent, forcing employers to drop coverage and sending many low-wage workers to purchase insurance on the more expensive individual insurance market, where they would get an even worse deal than what they have today." [, 12/10/2010]

National Retail Federation VP: Waivers Are Temporary And "Safeguard Existing Coverage" Until 2014. According to Kaiser Health News, Neil Trautwein, vice president of the National Retail Federation, stated:

What we're dealing with is an imperfect world between 2010 and 2014, and how you best safeguard existing coverage in this transition. For this limited-benefits coverage, also known as "mini-meds," nobody is going to pretend that this is the best coverage around, but having that coverage beats not having any coverage. And for a lot of people, if that coverage disappears, they'll have no other affordable alternative to turn to. So our point, which I think the administration shares, is that for the 1.4 million covered by these policies today, you want to make sure that you don't disrupt that before 2014, when there will be more and more affordable alternatives available.

The administration has been very careful to, on the waivers from the restrictions on annual benefit limits, make them year-by-year waivers. So these are not blanket waivers, these are not eternal waivers.

[Kaiser Health News, 10/8/10]