Manchin urges yearlong delay of health insurance penalties
CHARLESTON, W.Va. -- Sen. Joe Manchin, D-W.Va., continued to express opposition to implementing a federal mandate requiring all Americans to get health insurance coverage under the Affordable Care Act -- even though advocates of the health-care law say removing the "individual mandate" would be catastrophic for health-care reform efforts.
As part of the effort to enforce the "individual mandate" -- which requires people to purchase health insurance, whether it's through their employers, Medicare, state-run health-care exchanges or somewhere else -- the ACA penalizes people who don't have insurance. People who don't have health coverage will be required to pay a penalty of $95 a year or 1 percent of their annual income, whichever is higher.
Manchin said Thursday that he wants to delay those penalties for a year, which would allow people to not have health insurance for another year.
"The only thing I am saying is that we don't believe there should be any penalties or fines," Manchin said. "It should be a transition year for us to see all the problems rolling out of this. People shouldn't be facing fines."
Obama administration officials said Wednesday that March 31, which had been the deadline to have insurance, would now be the deadline to apply for it.
Some people, Manchin said, might also "have to buy [health coverage] that is not of the same quality and at a higher price" than coverage they have now.
"All these things have to be worked out . . . at the end of the day -- a year from now," Manchin said. "Whatever survives between now and then will be the law of the land."
Fred Earley, president of Highmark Blue Cross Blue Shield West Virginia, said Thursday that the failure to require everyone to buy insurance coverage "would have very significant impacts on health insurance premiums. The model [the ACA] put in place has very significant reforms, particularly on individual and small group markets."
The new law guarantees individuals insurance "without any medical screening" and with only some small differences in costs "based on age and geographical location. It was a tradeoff to get everyone into the system."
The ACA, Earley said, also has key "subsidies to help the affordability" of new health insurance.
Brandon Merritt of the West Virginia Center on Budget & Policy wrote, "Delaying the individual mandate would undermine the goal of health reform, which is to allow uninsured Americans the opportunity to find affordable coverage."
Such a delay would see a much higher percentage of sick patients signing up for new coverage, he stated, causing major problems for hospitals and insurance providers.
"Hospitals would see a significant increase in uncompensated care, placing them at serious financial risk, especially the smaller, more rural hospitals like we have here in West Virginia," Merritt wrote.
"While I applaud Senator Manchin for trying to take a moderate approach that he believes is a compromise, it's of utmost importance that he realizes his position will cost West Virginians and hospitals dearly."
Perry Bryant, executive director of West Virginians for Affordable Health Care, said a delay would mean "health plans in our marketplace would get fewer younger, healthier people and more older, sicker people.
"This would have a very damaging effect on Highmark Blue Cross Blue Shield -- the one insurance company that stepped up to the plate and entered the marketplace," Bryant said. "Other insurance companies didn't have the fortitude to try this and make this work. Sen. Manchin's proposal would hurt the one entity that stepped up to the plate."
Earley said, "If you defer the mandate and eliminate the tax [for those who don't enroll], you eliminate one of the key motivators for people to buy policies.
"The Congressional Budget Office estimated it would cause an increase in insurance premiums by 15 percent to 20 percent next year. It would spiral in the future.
"I think that is conservative. We will release our own analysis in two or three weeks. We are still confident they [Congress] will get this fixed by early November. And the deadline for people to sign up is not until December 15."
Earley also stressed that people who make up to 400 percent of federal poverty levels can be eligible for subsidies to make their health insurance more affordable. People are eligible for Medicaid if they earn up to 133 percent of the federal poverty level.
(Federal poverty levels for 2013 are $11,490 for individuals and $23,550 for a family of four.)
Manchin said, "What we are saying is to remove the penalties for the first year. Then the penalties kick in."
Insurance companies pushed Congress to make everyone get insurance coverage, Manchin said.
"If you want us to insure people with pre-existing conditions, they told us, you have to get people who are healthier. I think everyone wants insurance that is affordable. On the other hand, you have to have a marketable product. That is what we are working on right now.
"You can't put a family in [financial] jeopardy by forcing them to buy insurance," Manchin said. "All these things have to be worked through. It is a mammoth undertaking."
Reach Paul J. Nyden at firstname.lastname@example.org or 304-348-5164.