As expected, the Obama administration officially granted a six-week extension for Americans to sign up for health insurance through the exchanges. Effectively, Americans can now sign up for health insurance up until the end of open enrollment on March 31st, without facing a penalty. Before the change, those seeking insurance needed to get in their applications by February 15th to avoid new tax penalties. The extension follows widespread problems with the Healthcare.gov website.
The one-time extension will apply to 2014 only, and is being framed by the administration as a resolution to an existing "disconnect," rather than as an extension. Others, as the AP noted, are calling for a longer delay of up to a year for the tax penalties in the wake of high-profile issues with the exchange sites and enrollment process. According to the Department of Health and Human Services, the six-week extension will function more like a grace period for Americans who don't enroll by February 15th. Practically speaking, anyone applying after that date won't get coverage until April 1st. But as written, the tax penalty goes into effect for all Americans not covered by March 31st, or the end of open enrollment. The AP explains:
The administration "has determined that it would be unfair to require individuals in this situation to make a (penalty) payment," the Health and Human Services department said in guidance issued Monday evening. As a result, the department is creating a special one-time hardship exemption for people who get covered by March 31. And they won't have to file additional paperwork to apply for the exemption.
But a provocative NBC report out on Monday will surely attract more attention than the change of deadline. Based on interviews with health insurance experts, the report promotes a conjecture that the Obama administration must have known that a high percentage of Americans would have to buy new health insurance plans despite assurances otherwise years ago. Here's, in part, why:
The law states that policies in effect as of March 23, 2010 will be “grandfathered,” meaning consumers can keep those policies even though they don’t meet requirements of the new health care law. But the Department of Health and Human Services then wrote regulations that narrowed that provision, by saying that if any part of a policy was significantly changed since that date -- the deductible, co-pay, or benefits, for example -- the policy would not be grandfathered.
ThinkProgress, it should be noted, pointed out on Monday that the "grandfathering" problem reported by NBC is 3 years old at least, and was reported widely when the regulations were issued in 2010. In any case, the White House argues that many of the Americans receiving "cancellation" notices in the mail will be able to buy comparable, Obamacare-compliant plans on the exchanges, with any increased costs offset by subsidies. As we explained in some depth earlier today, those subsidies are still a variable for a lot of Americans seeing higher premiums in their future, as Healthcare.gov site continues to put up road blocks for those who are trying to enroll.