GOP Distorts HHS Waiver Program During Repeal Debate

January 21, 2011 4:18 pm ET

During the health care repeal debate on the House floor, several congressmen cited the HHS waiver program as a reason to repeal the Patient Protection and Affordable Care Act (PPACA). Many of the congressmen claimed that it only protects the "politically connected" and President Obama's friends. This unsubstantiated claim distorts the real truth: that many small businesses will benefit from the temporary waiver program and that the program is open to more than just the "politically connected." In addition, the waiver program is a temporary fix until 2014, when the expansion of PPACA will provide coverage to those who would have trouble receiving health care coverage due to their type of employment. If Republicans successfully repeal PPACA, they would put over 1 million people who would have received waivers at risk of losing their health insurance.

Congressmen Make Distorted Claims During Repeal Debate

Rep. Tom Cole (R-OK): 

The fact that hundreds of companies have already asked for waivers under the legislation. [House Floor Speech, 1/18/11]

Rep. Tim Huelskamp (R-KS):

Additionally, business and labor unions alike have realized Obamacare is a bad deal. At least 222 have sought waivers from having to comply with the law. HHS Secretary Kathleen Sebelius has approved special privilege exemptions for dozens of labor unions and the half a million union members they cover ... with selective waivers for the politically connected. [House Floor Speech, 1/18/11]

Rep. Joe Walsh (R-IL):

To date there are 222 organizations, including some of Obamacare's biggest union supporters, who have received waivers. Why? Why, if the law was so worthy, would there be a need for waivers? [House Floor Speech, 1/18/11]

Rep. Tom Graves (R-GA):

And yes, 222 corporations already exempt and waivered from this policy. [House Floor Speech, 1/19/11]

Rep. Phil Roe (R-TN): 

Businesses get it also.  If this is such a good plan, why did — why have to date 222 businesses opted out, including McDonalds and of all people the SEIU, the government employees union who fought for this, then opted themselves out? [House Floor Speech, 1/19/11]

Rep. Cliff Stearns (R-FL):

Now if this bill is so good, why is the Obama administration giving a pass to over a hundred — 220 organizations and corporations that have received an exemption from this law including many, many unions? [House Floor Speech, 1/19/11]

Rep. Steven Palazzo (R-MS):

Don't take my word for it, but look at the some of the most ardent backers have been quietly working to obtain special waivers so they will not be held to the same standards most small businesses face. Mr. Speaker, its time we give all Americans the same relief the President's political friends worked so hard to get. [House Floor Speech, 1/19/11]

The Truth About Waivers

Waivers Only Exempt Companies From One PPACA Provision, And Only If They Meet Strict Requirements. According to a December 10, 2010, blog post by Stephanie Cutter 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 prohibited and 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.

[Whitehouse.gov, 12/10/10]

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. (www.ugpinc.com). '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.'" [HR.BLR.com, 05/09/07, parentheses original]

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. [Healthcare.gov, Fact Sheet, 12/09/10, emphasis added]

There Are Many Small Businesses On The Waiver List. According to HHS.gov, the businesses on the waiver list include A. Duda & Sons, Inc., which has 62 employee waivers, and The Wilks Group, Inc., which has 8 employee waivers, among a number of other businesses with fewer than 100 enrollees. [HHS.gov, Waiver List, 12/03/10]

  • 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, is on the transition team of Adam Putnam, a former chairman of the House Republican Conference now serving as Florida's agriculture commissioner. [Duda.com, accessed 1/19/10; SunshineStateNews.com, 11/5/10; AdamPutnam.com, accessed 1/21/11]

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." [Whitehouse.gov, 12/10/10]

  • The Waiver Program Is To Allow Companies To Keep Their Current Insurance Without Incurring A Penalty Or Having To Drop Coverage. According to the December 10, 2010, 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." [Whitehouse.gov, 12/10/2010]
  • 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." [GPO.gov, 6/28/10, parentheses original]

Groups That Did Not Support Health Care Reform Have Used The Waiver System To Their Benefit. According to a March 19, 2010, National Restaurant Association press release: "The National Restaurant Association today issued a statement declaring its opposition to the latest version of health care legislation based on a unanimous vote of members of the Executive Committee of its Board of Directors." [National Restaurant Association, 3/19/10]

  • More than one National Restaurant Association member has signed up for the waiver program, including Waffle House Corp. and Carlson Restaurants. [National Restaurant Association, accessed 1/21/11; HHS.gov, 12/03/10]
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