- The Washington Times - Sunday, March 23, 2014

Republicans this month seized on a new hardship exemption to Obamacare, saying it punches a hole in President Obama’s health law — but analysts said they expect relatively few people to actually use it.

The exemption, added in December but only noticed in the last few weeks by Republicans, excuses Americans from the individual mandate requiring them to have health coverage if they “experienced another hardship in obtaining health insurance.” It asks those trying to claim the exemption to “submit documentation if possible.”

Health analysts said that despite the catch-all wording, the exemption isn’t as open-ended as it sounds. But like so much else in the health law, it depends on how federal and state health officials choose to enforce it.


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Jon Gruber, a professor at the Massachusetts Institute of Technology, said he believes it will be used only for “extreme hardships” and is unlikely to apply to many people.

“This is not an imminent threat to the individual mandate,” said Mr. Gruber, who helped shape health-care reform both in Massachusetts and nationwide.

The newest exemption joins a list of other ways people can get out of paying a penalty for not having health insurance in the months surrounding a personal setback, including homelessness, a death in the family or filing for bankruptcy.

But it was the way it was added — quietly tacked on as the 14th and final exemption in December — that unsettled Republicans.

In the days after the GOP spotted the new exemption earlier this month, House Majority Leader Eric Cantor, Virginia Republican, said the loose wording essentially excludes everyone from the individual mandate.

And despite analysts’ assurances that the exemption would be limited, Mr. Cantor stood by his claim it could apply to almost everyone.

“There isn’t a lot of nuance here. Name generic hardship, no need for documentation. If the administration is using discretion to give out hardships, how can they do so without documentation?” said Rory Cooper, a spokesman for Mr. Cantor.

Mr. Obama has described the individual mandate as essential to making the economics of Obamacare work. It is a way of forcing younger, healthier people to pay into the system in order to cover costs of older, sicker Americans.

Analysts were hard-pressed to come up with examples that would need the new exemption. But they said there’s no reason to suspect it will be abused, and said it was likely added as a way for the administration to accommodate special cases they didn’t anticipate in the original list of 13 exemptions.

“My understanding is they included that provision to leave the door open if someone came up with a personal hardship of a sort they hadn’t considered,” said Timothy Jost, a professor at Washington and Lee University School of Law. “It was not their intent to leave the door wide open.”

Mr. Jost said it will be up to the federal Health and Human Services Department to decide which cases qualify as true hardships.

“It’s kind of a catch-all exemption, but my understanding is you can’t just write in and say, ‘I can’t find an insurance policy I like, please don’t subject me to the penalty,’” he said. “You’d have to have a better explanation than that. It’s of course up to HHS to determine if someone’s explanation is adequate or not.”

Though the exemption is part of federal law under the Affordable Care Act, states that run their own exchanges could be responsible for interpreting the law and deciding what is an acceptable hardship, said Matthew Lawrence, a fellow at the Harvard Law School Center for Health Law and Policy Innovation.

The federal government will make determinations for states that participate in the federal exchange and for many states that have deferred that authority to the government the first year of the program. But in the future, those states with their own exchanges who don’t support the law could use the exemption to provide a lot of leeway.

“When you have a very vague term like this exemption 14, the devil could be in the details on how it is implemented,” Mr. Lawrence said. “But that is one place where a different administration or state with a more- or less-favorable view might take a different approach to implementing it.”

Mr. Lawrence also said there’s a precedent from Massachusetts, which enacted a universal health reform in the last decade. Very few people claimed a similarly loosely-worded exemption.

While the state approved a large percentage of those who applied for a hardship exemption, few went through the trouble of applying, Mr. Lawrence said.

But that was in Massachusetts, where most people approved of those health reforms. Nationally, where Obamacare is less popular, more people might apply for exemptions in an effort to avoid compliance, he said.

Joanne Peters, a spokeswoman from HHS, said the exemptions are meant to benefit a limited number of people who experience real hardships that make it difficult to get insurance.

“The Affordable Care Act requires people who can afford insurance to buy it, so that their medical bills are not passed onto the rest of us, which drives up health care costs for everyone,” she said. “This form, which was published last December, allows a limited number of individuals who are facing hardship to apply for an exception.”