HHS Official Defends Waiver Process for Annual Benefit Limit Requirements

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A Department of Health and Human Services official March 15 defended as clear and fair the process for awarding waivers to certain limited benefit health insurance plans under the health reform law, in response to Republican criticism.

Steven B. Larsen, director of the Center for Consumer Information and Insurance Oversight, told the House Oversight and Government Reform Committee's health care subcommittee that CCIIO has provided appropriate guidance about the waiver process and that no group has been given preferential treatment.

The health reform law prohibits the use of annual benefit limits in insurance policies beginning in 2014 and phases in restricted annual limits in the years leading up to then, when the bulk of the law will be in place. However, to avoid disrupting the health insurance market, CCIIO has set up a process under which limited benefit plans unable to meet the initial $750,000 threshold--often referred to as “mini-med” policies--can apply for a one-year waiver.

Larsen also said that while mini-med plans can prove inadequate, they often are the only option available--and CCIIO does not want to restrict them until a more robust insurance market is in place. The waivers for such plans are “a bridge to 2014 when fuller and more comprehensive coverage will be available,” he said.

Republicans Allege Preferential Treatment.

Republicans have questioned whether HHS even has the authority to waive the restrictions on annual benefit limits set forth under the Patient Protection and Affordable Care Act--and charged that the process allows for preferential treatment, particularly for traditionally Democratic constituencies such as unions.

At the hearing, Larsen said that while CCIIO collects information about what type of organization applies for a waiver to properly evaluate it, that designation does not dictate whether or not the request is granted. Furthermore, he told reporters that unions have not fared as well as some other groups in applying for waivers. Unions make up 2 percent of waiver recipients but 5 percent of those that have applied, according to Larsen.

At the hearing, Republicans also said the process for applying for the waivers is unfair to small business, which lack the resources to navigate the process.

“Aren't we disenfranchising smaller businesses by granting waivers, which are inherently [requested] by those who are smart enough and can afford to come and do it?” Rep. Darrell E. Issa (R-Calif.), chairman of the full committee, said.

Larsen said CCIIO has aimed to make the process as simple and streamlined as possible and that small business have successfully applied for the waivers.

Democrats also came to the defense of the waiver process, saying it is needed to protect the insurance market until 2014 and that CCIIO had implemented it in a fair and transparent way.

“It's a completely bogus charge to allege there was no transparency,” Del. Eleanor Holmes Norton (D-D.C.) said.

As of late February, CCIIO has approved 1,040 one-year waivers, which represent 94 percent of applicants. All told, the approved waivers cover about 2.6 million people, out of 160 million people with employer-sponsored health insurance.

The House Energy and Commerce Committee Feb. 16 also held a hearing on the waivers.

By Sarah Barr

More information about the hearing is available at http://tinyurl.com/4623rx2.

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