October 25, 2013
Consumers could end up with another Obamacare surprise, Heritage Foundation health care expert Chris Jacobs points out in today’s Wall Street Journal.
He explains why:
Some have claimed that the sequester “exempts” ObamaCare’s subsidies from spending reductions. That is only half true. The Budget Control Act does exempt from sequestration the premium subsidies for households with incomes up to 400% of the federal poverty level ($94,200 for a family of four) and that meet other eligibility criteria.
But other ObamaCare subsidies, paid directly to insurance providers on behalf of eligible beneficiaries, are subject to the sequester—namely “cost-sharing subsidies.” These include subsidies for households with incomes below 250% of the federal poverty level ($58,875 for a family of four) to reduce copayments and deductibles. They also include subsidies to reduce out-of-pocket expenses for households with incomes up to 400% of the poverty level.
The administration hasn’t yet come up with a way to enforce these sequester cuts. Either consumers will end up with a higher tab, or insurance companies will be stuck with the bill, potentially forcing them to drop out of offering Obamacare plans.
The administration has no excuse for not having a plan. The cuts aren’t exactly a surprise, Jacobs points out. After all, the sequester is, to use the administration’s refrain, “the law of the land.”
What do you think the administration will do to enforce the sequester?