The Obama administration issued yet another waiver to get out of Obamacare — for all the U.S. territories.
The exemption, posted Thursday on a Department of Health and Human Services website, frees U.S. territories from a host of Obamacare regulations on health insurance markets. The territories already weren’t subject to much of the health care law — the individual mandate doesn’t apply to the territories and premium subsidies aren’t available.
What did apply were a host of regulations on the health insurance markets operating in the territories. Obamacare’s rules for insurance companies — providing mandated health benefits to all customers, limits on insurer profits, and guaranteed coverage for those with pre-existing conditions — all force insurers to take a hit, but in the territories, the sweeteners that make Obamacare a great deal for insurance companies in the states don’t apply.
The individual mandate and premium subsidies were supposed to bring healthy and young customers into the insurance market. Even in the states, that’s not working nearly as well as the Obama administration had hoped. But without either provisions, the insurance markets in the territories were tanking due to the influx of sick patients and the new benefits insurers were required to provide.
The U.S. territories have been pleading with the Obama administration to exempt them from the regulations, but HHS officials had refused until now.
“HHS is not authorized to choose which provisions…might apply to the territories,” top HHS official Gary Cohen wrote last year, The Washington Post reported.
Now HHS believes it has the authority after all. The Public Health Service Act’s definition of the term “state” has led HHS to belatedly determine that most of Obamacare’s regulations don’t apply to the territories.
The territories will be exempted from guaranteed coverage, community rating, single risk pools, rate review, the medical loss ratio, and essential health benefits.
The evolved interpretation of the Public Health Service Act’s application to the territories came after representatives continued to protest that Obamacare was “undermining the stability” of the insurance markets in the territories.
A spokesman for Obamacare administrator the Centers for Medicare and Medicaid Services said the territories were a special circumstance, the Post reports.
“We are providing additional flexibility to the territories in order to implement the law in a way that recognizes their unique situations.”