The extended timeframe for scheduled implementation of key provisions in President Obama’s health care overhaul could function as a two-edged sword, delaying negative effects but also allowing time for political opposition to solidify.
The timeline for the application of the demands of the national health care reform stretches over several years. Before the end of 2010, insurers will have to cover patients regardless of preexisting conditions or lifetime cost, and young adults must be allowed to stay on their parents’ plans.
New limits and taxes on Health Savings Accounts (HSAs) go into place in 2011, and in 2014 the major individual and employer mandates, health insurance exchanges, and other regulations kick in.
Practical and Political Purposes
Robert Moffit, director of the Center for Health Policy Studies at the Heritage Foundation, said the extended timeline is an attempt to minimize the apparent budgetary effects and give agencies time to deal with the sheer size of the reform project.
“To meet the president’s budgetary target of $900 billion, they crafted the bill in such a way that the bulk of the benefits would not come in until the last four or five years, a political and practical decision,” Moffitt said. “There is no way to do this reform without this kind of timeline. As an administrative task, this is the biggest thing I’ve ever seen the government do. The Office of Personnel Management is going to have a huge job ahead of it.”
These factors push implementation well past the 2010, 2012, and 2014 elections. Additional steps are scheduled for even later. In 2015, for example, Medicare Advisory Board cuts will require legislation to be overridden, and in 2018 high-cost plans will be taxed at a 40 percent rate.
Negative Consequences on Way
John R. Graham, director of Health Care Studies at the Pacific Research Institute, says the intention of the extended timeframe is “to delay the negative consequences of the law as long as possible,” but it may not succeed at that.
Graham notes on September 23 of this year young adults up until their twenty-sixth birthday will have access to their parents’ employers’ plans. He predicts a selection bias regarding who will take advantage of it, because the employer mandates don’t take effect until 2014, and he expects this to push up insurance premiums soon.
“What is going to happen on or shortly after September 23 is that very sick young people will present themselves to their parents’ employers demanding coverage, and healthy young adults, who do not care about having health coverage, will not,” said Graham. “While insurance rates are normally adjusted yearly, you’re probably going to see a midyear rate increase because of this, and that is going to shock people.”
Loren Heal ([email protected]) writes from Neoga, Illinois.