Administration Will Delay The Obamacare Consumer Protection That Limits Americans’ Health Costs

The Obama administration will delay one of the health law’s key consumer protections that seeks to limit the amount of money Americans spend on their insurance, the New York Times reports. The cap on out-of-pocket costs was supposed to take effect in 2014, but a little-publicized rule change in February will put it off until 2015 for some insurers.

The Obamacare provision places a limit on the out-of-pocket costs — which includes both deductibles and co-payments — that insurance companies may charge Americans. Under the rule, individuals won’t spend more than $6,350 and families won’t spend more than $12,700 on their health insurance. “We will place a limit on how much you can be charged for out-of-pocket expenses, because in the United States of America, no one should go broke because they get sick,” President Obama explained back in 2009.


Earlier this year, the Labor Department published an update to the provision to give some insurance companies an additional grace period before they will be required to start following the rule. Employer-sponsored health plans that currently separate their medical costs and their prescription drug costs will have a year of transition time to link up their cost systems. That move largely went unnoticed until recently, when administration officials confirmed that the policy had been changed.

A senior administration official told the New York Times that the decision was an attempt to compromise between Americans’ interests and insurers’ needs. “We knew this was an important issue. We had to balance the interests of consumers with the concerns of health plan sponsors and carriers, which told us that their computer systems were not set up to aggregate all of a person’s out-of-pocket costs,” he said, speaking on the condition of anonymity. “They asked for more time to comply.”

Advocates for patients are expressing disappointment that one of the law’s consumer protections will be deferred, pointing out that treatments for chronic conditions, like cancer drugs, are often prohibitively expensive. But insurers maintain that they need more time. “Benefit managers using different computer systems often cannot keep track of all the out-of-pocket costs incurred by a particular individual,” Kathryn Wilber, a lawyer at the American Benefits Council, said.

This isn’t the first computer glitch to delay the implementation of some aspect of the health reform law. Another Obamacare rule allows insurers to charge people more based on their age or tobacco use — but, since the federal computer code won’t be able to calculate some of those increased rates until 2015, the provision may not actually take effect until that point.


It’s also not the first time that administration officials have attempted to accommodate outside concerns about the law’s implementation. At the beginning of July, the Obama administration announced that it would give businesses more time to adapt to health reform by delaying the law’s employer responsibility requirement, which places a fine on large employers that don’t provide adequate health coverage to their workers. That decision led Republicans to declare the law isn’t working — and over the past month, GOP lawmakers have simultaneously pressured the administration to implement health reform more quickly while working to delay the law further.