The Obama administration has repeatedly tried to downplay the importance of its decision to delay the employer mandate for a year, but it is actually one of the most significant unilateral actions taken by this president. It will have substantial policy and financial implications next year.
According to the CBO, the move will cost the government $12 billion next year and will increase the projected number of people without insurance by roughly half a million. From the CBO:
As a result of the Administration’s announcement and recently issued final rules, the net cost is now estimated to be $1,375 billion—$12 billion more than previously estimated. The largest change is a $10 billion reduction in penalty payments by employers that would have been collected in 2015. (Penalties assessed for 2014 would have been collected in 2015.) Costs for exchange subsidies are expected to increase by $3 billion. Other small changes, including an increase in taxable compensation resulting from fewer people enrolling in employment-based coverage, will offset those increases by about $1 billion, CBO and JCT estimate. […]
All told, as a result of the announced changes and new final rules, roughly 1 million fewer people are expected to be enrolled in employment-based coverage in 2014 than the number projected in CBO’s May 2013 baseline, primarily because of the one-year delay in penalties on employers. Of those who would otherwise have obtained employment-based coverage, roughly half will be uninsured and the others will obtain coverage through the exchanges or will enroll in Medicaid or the Children’s Health Insurance Program, CBO and JCT estimate. In particular, fewer than half a million additional people are expected to be uninsured in 2014 than the number projected in the May baseline.
The administration defends the move by claiming the employer mandate will only affect a small percentage of the population, but that is a disingenuous. By that same logic nothing in the ACA is really important because its major provision only really directly affects a small segment of the population. If you are going to claim adding 14 million people to the insurance rolls next year is a historic accomplishment, then you also have to admit a policy change which increases the number of uninsured by half a million is at least significant.
A one year loss of $12 billion and a change in the health insurance status for a million people is a big deal. Most regular laws passed by Congress tend to have smaller financial and policy implications than this unilateral action by the administration.
Photo by TimmyGUNZ under Creative Commons license.