Rove: Obama Admin Granting Waivers To Health Care Law To “Reward Friends”

Rove: “The Obama Administration Is Using Waivers To Reward Friends.” In a Wall Street Journal op-ed, Rove cited 222 waivers granted by the Department of Health and Human Services (HHS) to companies that provide workers with “mini-med” coverage to claim that the Obama administration is “waiv[ing] allies through the health law's onerous restrictions” and “reward[ing] friends.” From Rove's op-ed:

Aprimary [sic] task for the new Republican House majority is to undo as many of the pernicious effects of ObamaCare that it can. One of these effects is the spectacle of employers going hat-in-hand to the Department of Health and Human Services (HHS) for waivers from some of the law's more onerous provisions.

In September, HHS Secretary Kathleen Sebelius began granting waivers to companies that provided workers “mini-med” coverage--low-cost plans with low annual limits on what the insurance will pay out. This followed announcements by some employers that they would have to drop these plans because they did not meet the new health law's requirement that 85% of premium income be spent on medical expenses.

By early December, HHS had granted 222 such waivers to provide mini-med policies for companies including AMF Bowling and Universal Forest Product, as well as 43 union organizations. According to the department's website, the waivers cover 1,507,418 employees, of which more than a third (525,898) are union members. Yet unionized workers make up only 7% of the private work force. Whatever is going on here, a disproportionately high number of waivers are being granted to administration allies.

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It's not hard to connect the dots. The Obama administration is using waivers to reward friends. On the flip side, business executives will be discouraged from contributing to the president's opponents or from taking any other steps that might upset the White House or its political appointees at HHS. [The Wall Street Journal, 1/6/11]

But Companies From Industries That Opposed Health Reform Have Received Waivers, Which Are Temporary

Companies From Industries That Opposed Health Care Reform Have Been Granted Waivers. Contrary to Rove's claim that the Obama administration is granting waivers to “reward friends” and “waive allies” through restrictions, FactCheck.org noted:

[A]s of Dec. 3, the federal government had approved a total of 222 one-year waivers that allow the insurance plans at companies like McDonald's, Jack in the Box and Ruby Tuesday, and unions, to ignore the requirement on annual limits. Far from being “Obama's buddies,” as the Internet post claimed, the restaurant industry, through the National Restaurant Association, opposed the legislation. [FactCheck.org, 12/7/10]

FactCheck: Waivers “Merely Give Companies A Temporary Delay Before Being Required To Improve The Coverage Of Cheap, Bare-Bones Plans They Currently Offer.” In his op-ed, Rove did not note that the waivers to the health care law's provision regarding limited-benefits plans are temporary. As FactCheck noted, “The companies haven't been granted permission to ignore the entire law ... but many have been given one-year waivers to delay compliance with a key insurance mandate that was put into place this fall.” FactCheck further noted that the waivers are only available until 2014. From FactCheck:

We've received several questions about whether businesses have been able to opt out of the new health care law. The companies haven't been granted permission to ignore the entire law, as the Facebook post quoted by our reader might suggest -- but many have been given one-year waivers to delay compliance with a key insurance mandate that was put into place this fall. The White House says it instituted the waiver process to enable those companies to continue to provide limited-benefits plans -- cheap, bare-bones policies called mini-med plans -- until the law is fully implemented in 2014.

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The new health care law aims to eliminate low annual coverage caps like those over time, and this is where the waiver issue has come in. The law says that annual coverage limits can't be set lower than $750,000 for new policy years starting between Sept. 23, 2010 and Sept. 23, 2011. That cap will be raised each year until 2014, when the law will require companies to have no annual spending limits on most benefits in health care plans.

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The companies that have been approved for the waivers must reapply for them next year. Waivers are available until 2014. [FactCheck.org, 12/7/10]

Obama Official: "[W]aivers Only Apply To One Provision Of The Law" And “Companies And Employers That Receive Waivers Must Comply With All Other Parts” Of The Law. In a blog post titled, “The Truth About Health Care Waivers,” Obama administration official Stephanie Cutter wrote:

To ensure that we protect the coverage that these workers have today until better options are available for them in 2014, the law allows HHS, in extreme cases, to issue temporary waivers from the phase out of annual limits. There are some important facts to remember about these temporary waivers:

• The waivers only apply to one provision of the law - the provisions phasing out annual limits. Insurance companies and employers that receive waivers must comply with all other parts of the Affordable Care Act.

• The waivers last one year. Insurance companies must reapply for the waivers each year between now and 2014 when annual limits on coverage will be completely prohibited and individuals will have more affordable and better private insurance choices in the competitive Exchange markets.

• All employers and insurers that offer mini-med plans may apply for a waiver if they demonstrate that there will be large increases in premiums or a significant decrease in access to coverage without a waiver. You can read a list of employers and insurers that have received waivers here. [White House Blog, 12/10/10]