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The United States Constitution details a separation of powers, the House of Representatives and Senate legislate, and the President is supposed to execute the bills the congress passes. However this president keeps trying to cross the line by legislating by executive fiat.

Pressure from Democrats especially those who are facing reelection in 2014 have motivated the administration to ignore the constitution by adding exemptions that ignore the statutes of the original Obamacare law.  The latest provides that people who lost their existing health plans because of Obamacare’s requirements will be eligible for an exemption that lets them purchase a catastrophic plan.

Kathleen Sebilius sent a letter to six Democratic Party senators who raised the latest set of complaints to the Administration (Jeanne Shaheen of New Hampshire, Angus King of Maine, Mary Landrieu of
Louisiana, Heidi Heitkamp of North Dakota, and Mark Warner and Tim Kaine
of Virginia).

“I agree with you that these consumers should qualify for this temporary hardship exemption, and I can assure you that the exemption will be available to them,”

Although it is unclear how the mechanics of the exemption will work, the response to the Democrats’ concerns addressed fears that people who lost coverage due to Obamacare will go without coverage if they do not find an alternative on state-based markets by Monday — the deadline to have coverage by the new year.

Obamacare’s requirements that all health plans had to provide a range of services contributed to many of these policy cancellations. But for weeks, the administration and the law’s outside defenders have derided such plans as sub-par junk and said consumers would be better off with their Obamacare-compliant policies.

According to Huffpo this is how they plan to negotiate around the law:

  • The individual mandate includes a “hardship exemption.” People who qualify can either ignore the individual mandate altogether or purchase a cheap, bare-bones catastrophic insurance plan that’s typically only available to people under 30.
  • According to HHS, the exemption covers people who “experienced financial or domestic circumstances, including an unexpected natural or human-caused event, such that he or she had a significant, unexpected increase in essential expenses that prevented him or her from obtaining coverage under a qualified health plan.”
  • Today, the administration agreed with a group of senators, led by Mark Warner of Virginia, who argued that having your insurance plan canceled counted as “an unexpected natural or human-caused event.” For these people, in other words, Obamacare itself is the hardship. [actually it is for the entire country] You can read HHS Secretary Kathleen Sebelius’ full letter here. HHS’s formal guidance is here.
  • How may people does this affect? No one quite knows. Most estimate that about 5 million people have seen their plans canceled. The Obama administration believes the number, at this point, is actually ten percent of that (another presidential lie?)
  • The Obama administration argues that there’s little reason to fear that these people won’t purchase health insurance if they could otherwise afford to. After all, they were already buying health insurance on the individual market before there was any penalty at all. They clearly want health insurance. This just smooths their transition and, in the cases where there really is financial strain, gives them time to figure out a solution. But this puts the administration on some very difficult-to-defend ground. Normally, the individual mandate applies to anyone who can purchase qualifying insurance for less than 8 percent of their income. Either that threshold is right or it’s wrong. But it’s hard to argue that it’s right for the currently uninsured but wrong for people whose plans were canceled.  Put more simply, Republicans will immediately begin calling for the uninsured to get this same exemption. What will the Obama administration say in response? Why are people who plans were canceled more deserving of help than people who couldn’t afford a plan in the first place? The same goes for the cheap catastrophic plans sold to customers under age 30 in the exchanges. A 45-year-old whose plan just got canceled can now purchase catastrophic coverage. A 45-year-old who didn’t have insurance at all can’t. Why don’t people who couldn’t afford a plan in the first place deserve the same kind of help as people whose plans were canceled?

The insurers are very upset about this latest rule change,

“This latest rule change could cause significant instability in the marketplace and lead to further confusion and disruption for consumers,” says Karen Ignani, head of the trade group America’s Health Insurance Plans. 

Insurance companies worry the White House is underestimating the number of people whose plans have been canceled and who will opt to either remain uninsured or buy catastrophic insurance rather than more comprehensive coverage.

This is the first real change in the individual mandate, but it might not be the last.  It also gives the GOP more talking points such as, this is another indication Obamacare doesn’t work or, the President shut down the government refusing to delay the individual mandate for a year, now he is doing it anyway slowly but surely.

The latest legislation by the executive does not change the fact that there are estimates that next year when the employer mandate kicks in another 80-100 million are expected to lose their plans.

In related news, the rumor that Obama is going to create a new cabinet position to administer his signature program called The Ministry of Silly Laws is untrue.

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