Freeing companies from a U.S. government mandate to offeremployees health care is setting off a chain of events that mayenlarge the pool of uninsured Americans. That may be good forPresident Barack Obama's health-care overhaul.

The success of the 2010 Affordable Care Act is largely dependenton how many people are willing to buy subsidized health plansthrough government exchanges. Most of the people affected byObama's decision this month to delay the employer mandate toprovide health care will now be eligible to use the exchanges whenthey open Oct. 1.

The law's creation of state-by-state marketplaces had targetedabout 26 million of the more than 50 million uninsured Americansfor coverage. “A few million” more may now be made eligible by thedelay, said Larry Levitt, senior vice president at the nonprofitKaiser Family Foundation research group.

“This administration needs people to enroll in health insurance,and they want them to enroll in health insurance through theexchanges,” said Chris Condeluci, a lawyer at Venable LLP inWashington who helped write the Affordable Care Act while workingas a Senate Finance Committee aide.

Obama, a Democrat, has been stymied by Republicans in his effortto implement the law. The employer-mandate delay has emboldenedRepublicans, who have three House committee hearings scheduled thisweek on the Affordable Care Act, and have set plans to vote onlegislation to scale back two major provisions.

“Each provision you delay continues to demonstrate that theentire law is unworkable,” U.S. House Speaker John Boehner, aRepublican from Ohio, said in a July 9 letter to Obama.

Boehner demanded additional information about theemployer-mandate delay, including estimates on “the change in thenumber of individuals receiving subsidies through” theexchanges.

The July 2 announcement by the Obama administration letsemployers with 50 or more workers wait until 2015 to comply with amandate to provide full-time workers with health insurance. FormerDemocratic Party Chairman Howard Dean said increased enrollment inthe exchanges will be “an unintended effect” of theemployer-coverage delay.

“What this means is that if you don't have insurance, theexchange is your default position, not the employer,” Dean, who isa medical doctor and served as Vermont's governor from 1991 to2003, said in a phone interview. “This will drive more people intothe exchanges, and that's good.”

If the exchanges are to benefit, it will be as a result of manyseparate decisions by large employers affecting small numbers ofworkers. For athletic apparel retailer Foot Locker Inc., the delaymay affect “a few hundred” people out of its 38,000-personworkforce, said Ken Hicks, the New York-based company's chairmanand chief executive officer.

“For larger companies, it's not that big a deal,” he said in aphone interview.

In 2012, 95 percent of companies with at least 50 workersoffered health benefits to at least some of their workers,according to Menlo Park, California-based Kaiser, which has beentracking implementation of the health law.

That leaves a thin margin for exchange enrollment beyond whatwas already projected, said Kevin Counihan, the executive directorof Connecticut's exchange. The effect of the employer-mandate delayis probably “more symbolic than substantive,” and it's up to theexchanges to get word out that the programs are available, hesaid.

The affected Foot Locker employees work 30 to 40 hours a week.Instead of immediately reducing their hours to less than 30 — thethreshold that triggers the health law's requirement for employersto offer health care — companies will see the delay as somethingthat “allows you time to get them situated properly,” Hickssaid.

“We now have time to get them to the 30 hours or make adetermination whether we want to make them full time,” he said.

Wegmans Food Markets Inc., a supermarket chain based inRochester, New York, said in a statement that the health law means“eligibility requirements will change” for part-time employees,though it didn't say if anyone would lose their company-sponsoredcoverage and be eligible for the exchanges.

At least 14 states are building their own exchanges, and thefederal government is setting up the rest for the remainder of the50 U.S. states.

About 7 million people are expected to get coverage throughtheir state exchanges in 2014, according to the CongressionalBudget Office, and the Obama administration has said at least 2.6million of them would need to be young and healthy to hold downcosts for insurers and in turn keep premiums affordable.

Young People

Any increase in enrollment, particularly by young people such asrestaurant workers, will help the exchanges by making their pool ofcustomers less risky to cover. That could lead to lower premiumsstarting in 2015, said Jay Angoff, a Mehri & Skalet law partnerwho had been director of insurance oversight at the U.S. Departmentof Health and Human Services under Obama.

“The insurance industry obviously has a huge economic interestin the exchanges working and getting people into the exchanges,” hesaid in a phone interview. “I think you'll see the industrymarketing aggressively and creatively to get young healthy peopleinto the exchanges.”

About 25 million people are expected to gain coverage from theAffordable Care Act by 2016, which includes the state exchanges, anexpansion of Medicaid and reduced employer coverage, theCongressional Budget Office said in a May report. The CBO hadprojected when the law was signed in 2010 that 32 million uninsuredpeople would be on a health plan within a decade, and a year laterraised its estimate to 34 million.

Expectations for the $1.3 trillion health-care system overhaulare being pulled back as the expansion initially relied ongovernors to build the network of insurance marketplaces and expandMedicaid, the joint federal-state insurance program for the poor.At least 22 Republican governors have said they'll refuse toparticipate in the health exchanges and a Supreme Court decisionlets them also opt out of the Medicaid expansion.

The Republican-controlled House of Representatives has voted 37times to repeal or defund all or part of the Affordable Care Act,which was enacted with only Democratic votes. Two legislative votesplanned for this week include a delay of the employer mandate,which Obama is already doing, and a delay in the so-calledindividual mandate that requires most Americans to have healthinsurance by 2014 or pay a fine.

Two of the hearings, by the Ways and Means Committee on July 17and the Energy and Commerce Committee on July 18, examine theadministration's delay of the employer requirement. The third, bythe Oversight and Government Reform Committee, will explore privacyconcerns related to a computer system the government is building tosupport enrollment in new insurance programs.

“For the last three years, the Affordable Care Act — commonlyknown as Obamacare — has been plagued by broken promises, projectedcost increases, delays, and missed deadlines,” Energy and CommerceCommittee Chairman Fred Upton, a Michigan Republican, said in aJuly 11 statement. “It's clear we have no idea of the full scope ofdelays and disarray that may be coming.”

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