Unions, Health Insurance Companies Biggest Beneficiaries of Obamacare Waivers

By Fred Lucas | April 4, 2011 | 3:19 AM EDT

Then House Minority Leader (now Speaker) John Boehner appears with a copy of the Democrats’ version of the health care bill duri

(CNSNews.com) – After labor unions, health insurance companies are the largest beneficiaries of waivers to the health care overhaul law, when measured by the number of workers affected, according to the most recent numbers released by the Department of Health and Human Services.

As of March 4, the number of health care waivers granted to various companies, unions and non-profit organizations stood at 1,040, up from 222 in December. A total of 2,624,720 people are covered by the 1,040 waivers.

The waivers fall into seven categories. Two are for union plans, with 237 “multi-employer plans” and 23 “non-Taft Hartley union plans.” Combined, these two categories cover 1,193,394 workers. The waivers included chapters of the Service Employees International Union, the United Food and Commercial Workers, and the International Teamsters.

The number of employees covered by all the non-union categories combined is 1,431,326.

But out of 29 companies getting waivers in the category of “health insurance issuers” – including companies such as Cigna and Aetna – 831,473 employees are covered.

The single entity with the largest number of employees covered is the United Federation of Teachers’ health care plan, which covers 351,000 people. The UFT is the union representing New York City school teachers. Health insurers Cigna and Aetna follow with health plan enrollees of 265,000 and 209,000 respectively.

Cigna CEO David M. Cordani said last November that he opposed the repeal of Obamacare.

“I don’t think it’s in our society’s best interest to expend energy in repealing the law,” Cordani said at the Reuters Health Summit. “Our country expended over a year of sweat equity around the formation of it.”

Apart from unions and insurance companies, a total of 599,853 workers are exempt from the health care rules. They fall under 423 “self-insured employers,” 322 “health reimbursement arrangements,” four “state-mandated policies” and two “association plans.”

The Patient Protection and Affordable Care Act, widely known as Obamacare, eliminates annual caps – limits on how much an insurance plan will pay in benefits for an enrollee in any given year – by 2014.

Under Department of Health and Human Services regulations, annual limits can be no less than $750,000 for 2011, no less than $1.25 million in 2012, and no less than $2 million in 2013, before total phase out in 2014.

The HHS waivers, however, allow health insurance plans to continue to cap how much they will spend on a policy holder’s medical coverage for a given year.

House Republicans have led investigations in the Energy and Commerce Committee and the Oversight and Government Reform Committee into whether the waivers may have been issued because of political favoritism, specifically pointing to unions that benefited. Republicans have also argued that the need for waivers indicates the law does not work.

The Obama administration contends that unions have actually done worse under the waiver system, however.

Last month, Steve Larsen, director of the Center for Consumer Information and Insurance Oversight in the HHS, said that other entities have been approved for waivers at a greater rate than union organizations.

“Unions have actually fared worse than the other applicants,” he told CNSNews.com after testifying to the House oversight panel. “For example, unions are about two percent of the approved applicants, and they are five percent of the denied applicants. So I think when you look at the facts there is no basis whatsoever that unions are somehow – I’m just saying we review the applications based on criteria.”

Larsen was referring to the number of entities covered by waivers, rather than the number of employees.

“Multi-employer” plans make up 22 percent of the entities getting waivers, but 25 percent of all enrollees covered by the waivers for health insurance plans.

The “non-Taft Hartley union” plans make up a mere two percent of all entities getting waivers, but account for 19 percent of all employees covered.

The breakdown in the other categories are:

Health insurance plans – two percent of entities covered; 31 percent of all enrollees affected by a waiver.

“Self insured” plans – 40 percent of entities covered; 14 percent of total affected enrollees.

“Health reimbursement agreements” – 31 percent of entities covered; three percent of enrollees

“State mandated” plans – 0.3 percent of entities covered; three percent of enrollees

“Association” plans – 0.1 percent of entities covered; 0.8 percent of enrollees.