Right-wing media are newly outraged over the Affordable Care Act's “hardship” exemption, a provision of the original law that pardons qualifying persons from the individual mandate to purchase health insurance coverage.
One conspiracy theory, favored by the editorial board of The Wall Street Journal and conservative blogs like The Daily Caller, is that the Obama administration 'secretly' changed the ACA last week by “quietly” adding a hardship exemption. Others like FoxNews.com suggested that the administration added the hardship exemption -- “a mega-exemption” -- to the law just three months ago. But the one thing all right-wing media agree on is that the hardship exemption “might be the death knell” for the individual mandate, as Fox put it. According to the Journal:
[L]ast week the Administration quietly excused millions of people from the requirement to purchase health insurance or else pay a tax penalty.
This latest political reconstruction has received zero media notice, and the Health and Human Services Department didn't think the details were worth discussing in a conference call, press materials or fact sheet. Instead, the mandate suspension was buried in an unrelated rule that was meant to preserve some health plans that don't comply with ObamaCare benefit and redistribution mandates. Our sources only noticed the change this week.
That seven-page technical bulletin includes a paragraph and footnote that casually mention that a rule in a separate December 2013 bulletin would be extended for two more years, until 2016. Lo and behold, it turns out this second rule, which was supposed to last for only a year, allows Americans whose coverage was cancelled to opt out of the mandate altogether.
But what right-wing media are missing in their most recent set of attacks against the ACA is that the hardship exemption has been a part of the ACA from the law's inception, and their attacks against the law's “new,” “mega-exemption” guidelines are actually based on three-month old HHS guidance that was laid out under routine rule-making authority. As Jason Linkis of Huffington Post and Brian Beutler of Salon detailed, not only is the original provision old news, so too is the new hardship category that right-wing media like the WSJ editorial board suddenly discovered even though multiple outlets covered the change in December.
The hardship exemption was written into the ACA at the law's outset, with the intention of exempting certain individuals from the shared responsibility payment -- the “individual mandate.” As the law was written, exemptions and exclusions from this penalty would be granted to a range of groups in addition to those experiencing hardship and an inability to find an affordable plan, including undocumented immigrants, members of health care sharing ministries, and Native Americans. A 2010 report from the Urban Institute examining the impact of the main provisions of the Affordable Care Act noted at the time that the ACA allows “financial hardship exemptions to be granted. The requirements for these are left to the discretion of the Secretary of the Department of Health and Human Services.” A Congressional Research Service report called the ACA a “particularly noteworthy example of congressional delegation of rulemaking authority to federal agencies,” and “indicates that PPACA gives federal agencies substantial responsibility and authority to 'fill in the details' of the legislation through subsequent regulations.”
Accordingly, on March 5, as a part of its' Insurance Standards Bulletin Series, HHS continued its routine rulemaking of defining the undefined and sent a bulletin to announce it would further extend its transitional policies for policyholders, including the guidelines for qualifying for the hardship exemption that it had outlined in the much-reported December rule. Expanding the definition of “hardship” to take account of those who have had their old policies cancelled as health insurance companies upgraded their plans in compliance with the ACA, this December guidance offered these consumers the option of bare bones plans. As explained by the actual reporters at the WSJ three months ago and reiterated on March 13:
The health law has always included an exemption to the so-called individual mandate for people who “have suffered a hardship with respect to the capability to obtain coverage under a qualified health plan.” A list of those hardships, as we've noted, includes more than a dozen ways that Americans could qualify, including homelessness, having utilities shut off, and having a very low income in a state that did not expand its Medicaid program.
But late last year, Health and Human Services Secretary Kathleen Sebelius expanded the hardship list to include people whose insurance plans were canceled and who could not find other coverage. That meant people whose insurance plans had been rescinded because they did not meet new standards in the law wouldn't be penalized if they chose not to buy coverage at all in 2014. Then last week, as it announced other changes in the law, federal officials said that having had a plan canceled would also continue to qualify someone for an exemption through 2016.
HHS says that each exemption request is manually processed and that the agency has some discretion over them, so simply filling out a form won't guarantee that someone gets the opt-out.
Right-wing media have also focused in on the Health Insurance Marketplace's application for exemption, particularly the application's categories that qualify individuals for exemption if their plans have been cancelled and they consider other available plans to be too expensive, and if they have experienced another hardship in obtaining health insurance. Right-wing media have declared the standards in these two categories as “so lax ... [they] offer an exemption to everyone who conceivably wants one.”
However, as HHS has repeatedly warned and the non-editorial side of the WSJ reported, an application with a declaration of hardship does not necessarily guarantee an exemption. It must be reviewed and approved before an exemption certificate is issued. Like other government attestations, this exemption application form requires a signature under threat of penalty of perjury and the various categories of hardship have differing documentation requirements.
In addition to the prospect of an audit, health policy expert Timothy Jost accurately observed in December that it's counterintuitive to expect a wave of dishonest exemption seekers as right-wing media is warning. As reported by NPR's Julie Rovner, “Jost also wrote it's unlikely that many of those with cancelled policies will simply opt out of the market altogether. 'These are people who already purchased insurance without the mandate,' he points out. And without any subsidies.”