WASHINGTON — In another setback for President Obama's health care initiative, the administration has delayed until 2015 a significant consumer protection in the law that limits how much people may have to spend on their own health care.
The limit on out-of-pocket costs, including deductibles and copayments, was not supposed to exceed $6,350 for an individual and $12,700 for a family. But under a little-noticed ruling, federal officials have granted a one-year grace period to some insurers, allowing them to set higher limits, or no limit at all, in 2014.
The grace period has been outlined on the Labor Department's website since February but was obscured in a maze of legal and bureaucratic language that went largely unnoticed. When asked in recent days about the language — which appeared as an answer to one of 137 "frequently asked questions about Affordable Care Act implementation" — department officials confirmed the policy.
The discovery is likely to fuel continuing Republican efforts this fall to discredit the president's health care law.
Under the policy, many group health plans will be able to maintain separate out-of-pocket limits for benefits in 2014. As a result, a consumer may be required to pay $6,350 for doctors' services and hospital care, and an additional $6,350 for prescription drugs under a plan administered by a pharmacy benefit manager.
Some consumers may have to pay even more, as some group health plans will not be required to impose any limit on out-of-pocket costs for drugs next year. If a drug plan does not currently have a limit on out-of-pocket costs, it will not have to impose one for 2014, officials said Monday.
The health law, signed more than three years ago by Obama, clearly established a single overall limit on out-of-pocket costs for each individual or family. But federal officials said that many insurers and employers needed more time to comply because they used separate companies to help administer major medical coverage and drug benefits, with separate limits on out-of-pocket costs. In many cases, the companies have separate computer systems that cannot communicate with one another.
A senior administration official, speaking on condition of anonymity to discuss internal deliberations, said: "We knew this was an important issue. We had to balance the interests of consumers with the concerns of health plan sponsors and carriers, which told us that their computer systems were not set up to aggregate all of a person's out-of-pocket costs. They asked for more time to comply."
Health plans are free to set out-of-pocket limits lower than the levels allowed by the administration. But many employers and health plans sought the grace period, saying they needed time to upgrade their computer systems. Benefit managers using different computer systems "often cannot keep track of all the out-of-pocket costs incurred by a particular individual," said Kathryn Wilber, a lawyer at the American Benefits Council, which represents many Fortune 500 companies that provide coverage to employees.
Last month the White House announced a one-year delay in enforcement of another major provision of the law, which requires larger employers to offer health coverage to full-time employees. Valerie Jarrett, Obama's senior adviser, said that the delay of that mandate showed "we are listening" to businesses, which had complained about the complexity of reporting requirements.