All legislative Powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives.

As the U.S. Constitution clearly states, it is the Legislative Branch that writes law.  The role of the Executive Branch and the president is to enforce the laws.  But disturbingly, the Obama Administration has changed another provision in Obamacare or the Affordable Care Act (ACA). 

Two articles, one by Robert Pear in the N.Y. Times and another by Avik Roy in Forbes Magazine, provide the details.

Under Obamacare, caps were implemented on out-of-pocket insurance costs, such as co-pays and deductibles, and now the Obama administration has delayed these caps until 2015.  This is how Pear puts it:

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 co-payments, 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 on some costs, in 2014.

Pear reports, “The health law, signed more than three years ago by Mr. 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.”

The bottom line is the president is changing law and has no authority to do so.

Here is what the law says:

1302 (c) REQUIREMENTS RELATING TO COST-SHARING

(1) ANNUAL LIMITATION ON COST-SHARING

(A) 2014.—The cost-sharing incurred under a health plan with respect to self-only coverage or coverage other than self-only coverage for a plan year beginning in 2014 shall not exceed the dollar amounts in effect under section 223(c)(2)(A)(ii) of the Internal Revenue Code of 1986 for self-only and family coverage, respectively, for taxable years beginning in 2014.

Avik Roy points out multiple instances in which the Obama Administration has unilaterally either delayed the implementation of, or flat out changed, the law in order to benefit certain special interests and protect itself and its political allies from the true impact of Obamacare. 

Examples of changes were delaying the cuts to the Medicare Advantage program before the 2012 elections, delaying the employer mandate to provide health insurance coverage from 2014 to 2015, delaying the enforcement of many key eligibility requirements for the health insurance subsidies and instead relying on an “honor system,” and now this new change in the law.  Just last week, we wrote about how the administration is changing the law for Congress and many of their employees so they do not feel the full cost of purchasing health insurance in an Obamacare exchange.

Many patient groups are concerned that delaying the cap will likely cause health insurance premiums to sky-rocket for their patients.  Pear quotes Theodore Thompson, a vice president of the National Multiple Sclerosis Society who said, “The promise of out-of-pocket limits was one of the main reasons we supported health care reform.  So we are disappointed that some plans will be allowed to have multiple out-of-pocket limits in 2014.”

However, Avik Roy correctly points out the real problem with caps when he says, “There is no such thing as a free lunch.”  Just like an inflated balloon, when you push down on one end, the other end expands.  In other words, when lifetime limits are banned and lower deductibles are mandated, the end result is something has to give, premiums will go up.  Somebody has to pay for the care.

Pear also mentions that, “Despite the delay, consumers in 2014 will still have many new protections. They cannot be denied health insurance or charged higher premiums because of pre-existing conditions, and many will qualify for subsidies intended to lower their costs.”  While this may sound good at first glance, that too eventually invites higher costs.  Here is one example:

The exchanges, the insurance market places that are being created in the states, need young, healthy people to participate.  Their financial contribution combined with their minimal use of the healthcare system will help to fund insurance for older, less healthy individuals.  There is an all-out effort by the Obama Administration to get them enrolled in the exchanges.

One of the big concerns of healthcare policy analysts is that the cost of the penalty, or tax, for not purchasing health insurance is relatively inexpensive compared to purchasing a healthcare plan.  The tax will be the larger of $95 per year or 1.0 percent of taxable income in 2014.  It increases to $325 or 2.0 percent of taxable income in 2015, and eventually to $695 or 2.5 percent of taxable income in 2016.  After 2016,  the tax increases yearly by the cost-of-living adjustment.

Because people cannot be denied insurance due to a pre-existing condition, many individuals, particularly young people, who would rather spend their money on something else, will choose to pay the penalty.  If they become sick or get in an accident, they can buy the insurance after the fact.  This is akin to someone buying car insurance after they have an accident.  This action will drive up premium costs for those that have already have insurance.

The delay to implement the caps until 2015 will benefit the big insurance companies, as opposed to consumers, the very people the supporters of Obamacare always claimed they cared about.

But this delay is another example of how unworkable the healthcare law is.  Sadly, there were and still are far better and less expensive ways to reform healthcare.  Some ideas can be found here, here, and here.

However, Americans need to be concerned about the quiet, but ultimately bigger picture that has been unfolding as Obamacare gets implemented, or should I say delayed and changed without congressional approval.  The administration has been blithely changing law and Congress has done little to stop it.  Ignoring this precedent will set us up for far worse problems in the future.