Obama administration to end monthly healthcare law waiver approvals

The Obama administration announced Friday it is changing the way it approves waivers to part of the healthcare reform law.

Instead of approving a new batch of year-long waivers every month, the Centers for Medicare and Medicaid Services (CMS) announced that plans have until Sept. 22 to apply for a waiver that will carry through 2013. Starting in 2014, all plans will have to comply with the provisions of the law and the waivers will be moot.

CMS has been updating the waiver totals every month — and every month, critics of the healthcare law have seized the fresh opportunity to argue that the healthcare law is unworkable. That cycle of bad press could have repeated itself every month for the next three years without the changes announced Friday.

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Steve Larsen, the director of the office overseeing implementation of the new law, said the new waiver process isn't a response to the barrage of criticism the administration has faced.

“This was the course that we mapped out a year ago,” he said on a conference call with reporters.

The waivers are for a single provision of the healthcare reform law: its restrictions on annual benefit limits. Some plans, often called “mini-meds,” place tight caps on how much they'll pay out in a year. The new law gradually increases those benefit caps each year until 2014, when it bans them altogether. But many employers are more likely to quit offering coverage than to comply immediately with the new requirements.

The administration to date has granted 1,433 waivers, covering 3.2 million people. It granted 62 new waivers in May.

Larsen said CMS began granting one-year waivers so that it could gather data on how to approach the policy in 2012 and 2013.

Employers that don't have a waiver have until September to seek one. Those that have already received a waiver must ask for an extension through 2013. Larsen said requesting an extension will be “a very simple process; it's not filling out a whole new application.”

This year, health plans can't impose benefit caps lower than $750,000. The maximum allowable limit increases to $1.2 million in September, and then to $2 million in September 2012. The $750,000 standard was the hardest one for mini-med plans to meet, Larsen said.

“By the time we reach September, people that felt they needed a waiver would have had the opportunity to apply,” he said.

Also on Friday, the administration released the names of applicants who were denied a waiver. Republican lawmakers had been clamoring for the release of that information.

A recent Government Accountability Office report found nothing suspicious about the way the waivers have been awarded, but each batch of new approvals provoked accusations of favoritism and cronyism among conservative foes of the new law.

In a typical statement last month when the latest batch of waivers was announced, Republicans on the Energy and Commerce Committee lambasted the administration.

“Despite the president's promise,” the statement said, “the new reality seems to be this: If you like your plan, you need a waiver to keep it — and only until 2014, when the waivers disappear and the government takes over the market.”

This story was updated at 4:47 p.m.