Though the Obama administration has been promoting the benefits of Obamacare for several years now, one perk of coverage through the exchanges that has gone largely unnoticed is a mandated three-month grace period for unpaid premiums. The rule, however, only applies to those receiving subsidies via tax credits advanced to the insurers by the government (§155.430 and §156.270 of the Code of Federal Regulations).
Perhaps most notable about the rule is that, as long as a consumer has paid at least one full month's premium during the year, the insurer must continue to pay claims for services rendered during the first month of the grace period after a premium goes unpaid. Further, even if coverage is eventually terminated, the effective date must be the last day of the first month of the grace period. The consumer thus receives a free month of coverage for which no direct premium was paid. The insurer is compensated only to the extent of the advance payment of the tax credit for that month. The tax credits for the second and third months of the grace period, which the insurer is mandated to continue to collect from the government, must be returned to the government if coverage is ultimately cut off.
Other burdens relative to delinquencies are placed on the insurers as well. The insurer must notify not only the consumer of past due status, but HHS as well. Also, while any claims submitted during the second and third month of the aforementioned grace period may be held by the insurer pending payment from the consumer, the insurer is required to notify providers that claims may be ultimately denied if the grace period expires.
The regulations do not specify a minimum subsidy required for this regulation to take effect, so even a consumer whose subsidy represents only a small portion of the monthly premium may benefit from the extended grace period. Also not spelled out in the rules is whether the insurer has any legal recourse for the unpaid premium for the month during which coverage was extended. Nor is it clear if HHS has recourse against the consumer for the tax credit paid to the insurer for that same month.
The implementation of the advance payments of tax credits to insurers on behalf of consumers is one of the tasks of Obamacare's financial management system, which is still under development as Deputy Chief Information Officer Henry Chao for the Centers for Medicare and Medicaid Services (CMS) told Congress on Tuesday. Chao testified the system was approximately 60 percent complete. However, as we reported on Thursday, the contract for the financial management system was just awarded this past August on a no-bid, emergency basis. At the time of the award, CMS admitted that its acquisition of "contractor financial services to assist CMS in developing and testing its Marketplace financial activity implementation solution is already minimally two months overdue[.]" It is not clear if the 60 percent figure Chao used on Tuesday includes the testing of the system or simply the development phase.
Less than six weeks remain before the system will need to go live and, among a multitude of other financial tasks, begin remitting funds to insurers on behalf of consumer who purchase coverage through the exchanges. CMS does not appear to have an alternative if the system is not ready. In CMS's own words from the August contract award notification, the consequences, "financial and other," of such a failure would be "severe."
Last week in these pages, Ike Brannon noted that Europe is outstripping the United States in reducing the role of government in the economy (“Europe Leads the Way?” October 14). Now it seems that our European brethren are also taking a more sensible view of the regulatory state. The European parliament surprised observers by refusing to regulate electronic cigarettes as medical devices, which would have subjected them to onerous regulations.
The Supreme Court closed shop weeks ago, not to return until October. And for the third summer in a row, no Supreme Court confirmation fight occupies headlines. But in its absence, President Obama has thrust another court—often called the “second-highest” court in the land—into the spotlight.
Every spring the Office of Management and Budget releases the president’s proposed budget for the upcoming fiscal year. While Congress invites senior administration figures to testify before various committees, and the media pore through the document to elucidate the administration’s priorities, by the end of a week everyone agrees that most of what’s in the budget has little chance of becoming enacted. Afterwards, Congress goes through the motions of passing a budget of its own, with scant regard to what the White House has proposed.
Corporate governance is a much-discussed topic, and the operation of corporations has proven a fertile field for investigative journalism. But even though many colleges and universities are multibillion-dollar-a-year operations, the subject of university governance has been largely neglected. This is unfortunate because university governance raises fascinating questions of great public interest involving the complex intersection of law, morals, and education. Nasar v. Columbia is a case in point.
President Obama, take note. Small business owners think Washington has become increasingly hostile in recent years to free enterprise and thus to job creation, a survey conducted last week found. And his policies are part of the problem.
Democratic Senate candidate Elizabeth Warren has been hammering her Republican opponent, incumbent Scott Brown of Massachusetts, for "undermining" the Dodd-Frank financial reform bill Brown helped pass, even though Warren expressed agreement with Brown's proposed changes to the bill during the debate in 2010.
In a campaign statement Monday, Warren blasted Brown for his behind-the-scenes maneuvering to loosen the banking regulations in Dodd-Frank, after the financial regulatory bill passed.
As Ronald Reagan famously quipped, “The nine most terrifying words in the English language are: ‘I’m from the government and I'm here to help.’” Portland, Oregon, though, really is here to help. The problem is that the city hasn’t created laws to benefit Portlanders—it’s created them to benefit one specific industry, at the expense of every consumer in the area.