Obamacare's Mandate Won't Be Delayed, but It Won't Really Be Enforced Either



Obamacare's individual mandate—the law's requirement to purchase health insurance—won't be delayed.

Following growing chatter that the administration might put a hold on the mandate, which remains one of the health law's least popular provisions, Health and Human Services Secretary Kathleen Sebelius said in congressional testimony yesterday that the administration would under no circumstances delay the requirement. Nor would federal officials be extending this year's open enrollment period for buying coverage under the law, which is currently set to end on March 31. 

But here's the thing: The mandate is already essentially moot for just about anyone who wants it to be. That's because the law allows for a "hardship exemption"—an exemption that the administration has extended and expanded in the wake of the disastrous rollout of the exchanges.

Last December, the administration clarified the hardship exemption to include people whose plans had been canceled thanks to the health law, and were "having difficulty finding an acceptable replacement." To translate: You could get a waiver if new plans available under Obamacare were either too skimpy or too expensive. Exempted individuals would be allowed to buy into cheaper "catastrophic" plans that had been limited to individuals under 30, or to carry no coverage at all.

That weakened the mandate. An update to the exemption rendered it nearly useless. Earlier this week, The Wall Street Journal's editorial page noted that the hardship exemption had quietly been extended through 2016, and that the verification required to obtain the exemption was less than strict:

But amid the post-rollout political backlash, last week the agency created a new category: Now all you need to do is fill out a form attesting that your plan was cancelled and that you "believe that the plan options available in the [ObamaCare] Marketplace in your area are more expensive than your cancelled health insurance policy" or "you consider other available policies unaffordable."

This lax standard—no formula or hard test beyond a person's belief—at least ostensibly requires proof such as an insurer termination notice. But people can also qualify for hardships for the unspecified nonreason that "you experienced another hardship in obtaining health insurance," which only requires "documentation if possible." And yet another waiver is available to those who say they are merely unable to afford coverage, regardless of their prior insurance. In a word, these shifting legal benchmarks offer an exemption to everyone who conceivably wants one.

So, the White House isn't officially delaying the mandate. Instead, the administration is declining to enforce it on anyone who asks to be exempt.

In some sense, it's like used car pricing, or cable company discounts. Officially, the price is what's on the sticker. But if you make even a token effort to bargain, or half-heartedly threaten to cancel service, you can get the price lowered.

Mostly, it's a mechanism that allows the administration to have it both ways: Of course the mandate is absolutely essential to the law, and of course practically anyone who wants out of it can get an exemption on a hardship basis. But that approach also reveals the tough spot administration officials are in with regards to the mandate: They don't want to remove the requirement, but they don't really want to enforce it either.