Obamacare waivers…what you haven’t been told

You will be happy to know that we are now, as of the end of February, up to 1040 waivers from Obamacare, covering some 2.62 million people.   And, we have a spiffy new federal agency handling said waivers.  The Center for Consumer Information and Insurance Oversight, recently created by the Department of Health and Human Services, will now be granting dispensations from Obamacare, and you can find its home page here.

But, this is what you may not know, and what does not bode well for any employee who now has group insurance through his or her employer.

The primary reason these waivers have been granted is that a very small piece of Obamacare has driven up group premiums dramatically.  As of September, 2010, all group policies must provide annual benefits of not less than $750,000 per employee.  That figure will rise to $1.25 million in September, 2011, $2 million in September, 2012, and after January, 2014, no annual limits will be permitted.

In order to receive a waiver, an employer must demonstrate that this new requirement will either result in a large premium increase, or that a large number of enrollees would lose access to coverage.  As the waivers are only granted for one year, expect to see more companies apply for waivers each year as the higher limits take effect.

Let’s look at the future.  If a $750,000 annual benefit limit has caused 1040 employers to prove to the government that their premium increase is large, and, perhaps unaffordable, what will no annual limits do?

I doubt we will ever find out the answer to that question as, beginning in January, 2014, there will be no further waivers granted.  Consequently, for most, if not all employers, it will be far less expensive to drop group coverage and simply pay the per employee tax.  This will have the effect of dumping tens of millions of people into the newly formed government subsidized insurance exchanges.  And, this will be expensive.

The former director of the Congressional Budget Office, Douglas Holtz-Eakin, says that the costs of ObamaCare are set to explode when employers opt to drop coverage and send their workers to the new, federally subsidized health exchanges for coverage. He estimates that this will drive up the cost of the law by $1 trillion or more in the first 10 years. [emphasis supplied]

Whether you believe that insurance policies should have no annual limits or not, the fact of the matter remains that unlimited benefits cost money, and, someone has to pay for that.

But, the real losers here are the employees…first, when they find out what even “subsidized” insurance will cost them compared to what they are paying now, and, second, when they get the tax bill for that additional $1 trillion.

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The Sound Off Sister was an Assistant United States Attorney for the Southern District of Florida, and special trial attorney for the Department of Justice, Criminal Division; a partner in the Florida law firm of Shutts & Bowen, and an adjunct professor at the University of Miami, School of Law. The Sound Off Sister offers frequent commentary concerning legislation making its way through Congress, including the health reform legislation passed in early 2010.


  1. NH-Jim on March 7, 2011 at 12:35 pm

    Gives a new meaning to "this will only hurt a little bit" or "you may feel a little pinch"

    let's just use <a title="5 Painful health-care lessons from MA" href="http://money.cnn.com/2010/06/15/news/economy/massachusetts_healthcare_reform.fortune/index.htm&quot; rel="nofollow">Massachusetts' Health Reform as the example of the doom to come.

  2. weregettinghosed on March 7, 2011 at 1:04 pm

    We have a healthcare bill that is unconstitutional, he knows it but does not accept it. He knows well, the Constitutionality of the bill, ignores it, presses onward, even to the extent of giving out waivers and telling states should they not choose the bill, they may present a better plan for approval. It is an example of purposely becoming deaf and blind to opposition or presentation of violation. I believe this only proves he has full intention of pursuing his despotic rule until some has courage to remove him.

  3. JollyRoger on March 7, 2011 at 3:32 pm

    I had free medical in the service; you'd see a corpsman E3, then an E5 or E6, then you might get to see a general practitioner or a pediatrician, then you might get a referral to a larger base, 100 miles or more away, where you might see an actual surgeon or specialist who'd get on the phone and chew out your "baby doctor"…  It took me more than three years to get a hernia diagnosed and repaired. I remember a Navy doc telling me of a young guy who'd been diagnosed with a hernia which turned out to be cancer- by the time they opened him up, it had metastasized and it was too late.  That young man died, the fact that he died due to a mistake was lost in a lot of medical obfuscations, and his family probably never knew the real tragedy of their loss.  Don't trust the government- they don't trust you.

  4. Dimsdale on March 7, 2011 at 4:17 pm

    The need for waivers simply demonstrates the flawed nature of Øbamacare, not to mention the flawed nature of the Socialist/Democrats in general.

  5. winnie888 on March 8, 2011 at 2:00 am

    Hmmmmm….two comments.

    1)  I thought we were going to be able to keep our insurance provider if we wanted to…this is the ONLY site where we were given information all along that employers would ultimately have to opt to pay the $2500 tax or fine or whatever it's being called now because it would be too expensive to continue to provide insurance to employees, and

    2)  I thought Obamacare was deficit neutral?

    Oh, and Sebelius is double counting $500 billion for Obamacare…$500 billion to sustain medicare and the same $500 billion to fund obamacare.  No matter how you count any of this, it's an expensive proposition & the invoice will end up in taxpayers' laps.

  6. Dimsdale on March 8, 2011 at 4:58 am

    But, but, the Today show made me believe that the only important thing going on in the country is the self destruction of Charlie Sheen!

  7. Political Entropy on March 8, 2011 at 5:08 am

    Another brilliant post by the Sound Off Sister!

  8. GdavidH on March 8, 2011 at 5:30 am


    To them Charlie Sheen IS the only important story. What else matters but the importance of Hollywierd?

  9. RJ on March 8, 2011 at 5:57 am

    Has everyone been under a rock ? The entire government health care is about single payer. Trouble is who is going to stop this. The republicans are all talk and no action. I would like to know what kind of tea is rep. Bachman drinking if she is our hope we are in big trouble.

  10. Dimsdale on March 8, 2011 at 4:13 pm

    It is up to us…

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