Health care law turns a year old

Pills on money symbolizes costs of U.S. health care

Kai Ryssdal: The health care reform law turns a year old this week. The White House has a whole slate of events planned to celebrate. People for whom there's nothing in the law to celebrate have some plans of their own -- like reminding voters that hundreds of companies have gotten waivers to avoid one of the law's key provisions.

From the Marketplace Health Desk at WHYY in Philadelphia, Gregory Warner reports.


Gregory Warner: Remember last year after the Affordable Care Act passed and the president promised us a list of changes that would take affect our insurance coverage this year -- like free preventive care and coverage for adult children and no dollar caps on how much treatment your insurance has to pay for?

Barack Obama: There will no longer be lifetime limits or restrictive annual limits on the amount of care you receive.

So, about that last rule. This posed a problem for some small businesses.

Luke Urban: We cannot offer this to our employees if it's not capped! Uh, my name is Luke Urban, I'm the director of corporate human resources for the Philadelphia Macaroni Company.

Warner: You also have a family connection to the company, right?

Urban: It was actually founded by my great great grandfather in 1914.

WARNER: That little noodle shop now has four nationwide factories. Crack open a Campbell's Chicken Noodle Soup...

Urban: That's our pasta!

Warner: Every can?

Urban: Yup.

Anyway, the company provides a few of its workers with something called a Health Reimbursement Account. It's got an annual dollar cap.

Urban: I believe it's a thousand dollars.

Warner: One thousand? So that's not even really health insurance?

Urban: Correct.

It's just a reimbursement program to help workers pay for medical expenses tax free, and maybe give them doctor discounts. It's similar to policies called mini-meds, where there's a very tight cap on how much treatment the policy will pay for. And those limits became illegal under the health law. So, the Philadelphia Macaroni Company applied for a waiver from the government. And the government said:

Urban: Yes.

To the Philadelphia Macaroni Company. They also said...

Urban: Yes.

To a waiver request by Denny's and Jack in the Box and...

Urban: Yes.

To the city of Olatha, Kan., and the Avon Central School District and...

Urban: Yes.

To the Teamsters Union and to McDonald's, which has some 30,000 workers on mini-med plans. All of these employers and unions gave the government a kind of ultimatum.

Randy Bovbjerg: What they're saying is, look, if we have to go to this right away, we're going to have to raise premiums a lot or drop coverage.

Randy Bovbjerg is a senior fellow for the Urban Institute. He says the Obama administration granted those wavers rather than risk two million workers being dropped from coverage before subsidies and exchanges kicked in in 2014.

Bovbjerg: That's right and what will happen in 2012 and 2013 is still up for grabs. These are one-year waivers. In 2014, the typical thing that is said is that these plans won't be necessary.

Warner: You mean the mini-med plans?

Bovbjerg: Yeah. That the exchanges will offer much better coverage at an affordable level and people who can't afford it would get subsidies.

Warner: So these businesses aren't saying, "We want out forever," but rather, "Give us more time."

Bovbjerg: Yes.

This is not how the waivers were interpreted by the gentlemen on Capitol Hill.

House Representative Phil Roe (R, TN): Businesses opted out including McDonalds...

House Representative Joe Walsh (R, IL): ...Waivers, Why??

House Representative Tim Huelskamp (R, KS): ...Regarding the secretive details of these waiver requests...

House Representative Cliff Stearns (R, FL): ...Why is the Obama administration giving a pass...

Representative Huelskamp: ...Selective waivers for the politically connected...

Warner: How politically connected is Philadelphia Macaroni Company?

Urban: Not very politically connected.

Warner: Not.

Urban: No. We make pasta!

In a way, says Randy Bovbjerg, the administration left itself open to attack -- by promising to raise the standards on health insurance and let people hold onto the coverage they have.

Bovbjerg: And the waiver process tries to reconcile that. And it comes out as an uneasy compromise. You know? That's life!

And that's pasta.

In Philadelphia, I'm Gregory Warner for Marketplace.

About the author

Gregory Warner is a senior reporter covering the economics and business of healthcare for the entire Marketplace portfolio.

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