Why the White House Kept the Opt-Out Exemption to the Individual Mandate Quiet

An exemption is only an exemption if people know about it. That’s why the White House kept a broad hardship exemption to Obamacare’s individual mandate quiet, including leaving it off the official exemption page on for nearly three months.

In case you missed the story this week, there are 14 hardship exemptions from the individual mandate, the portion of Obamacare which says you must buy health insurance or pay a tax. The last of these 14 exemptions is extremely broad. It just says you can claim “another hardship” that prevented you from getting insurance and requires no documentation to back it up.

Exemption 14 was quietly slipped in by the White House back in December. At the time, the New York Times and most other outlets were focused on another exemption created at the same time for people with cancelled policies. In fact, the Times warned Republicans would use the cancellation exemption to push for an even broader exemption, not realizing a broader exemption already existed.

And while the media mostly missed it, the administration never mentioned it. Exemption 14 was never added to the “exemptions” page on It only appeared there sometime yesterday after a story in the Wall Street Journal made it an issue.

Today Brian Beutler (no ones idea of a conservative) has a piece at Salon that I believe accurately explains why this happened. These exemptions are so broad that the only way to avoid a potential mass exodus was to keep them quiet:

The exemptions are clearly very broad — “much broader than I would
consider reasonable,” emails healthcare reform expert and Obamacare
supporter Timothy Jost. Not only do they create a loophole for anyone
who claims, rightly or wrongly, that they were unable to find a workable
plan. But, they seem to apply to anyone who wasn’t able to obtain
insurance in any market. “It seems to me that people could
argue that employer coverage was unavailable and therefore they should
get an exemption, even though they hadn’t checked on exchange coverage.”

But an exemption is only useful to exempt individuals if they know it
exists. Its effect on people’s behavior is linked to public awareness.
If a tree falls in the forest it probably makes an incredibly loud
crashing noise, even if no one’s around to hear it. But if the D.C.
government suspends parking rules for a day, and doesn’t tell anyone,
everyone will still obey the posted signs (except maybe a bunch of
people who live in Northern Virginia).

This probably explains why the administration didn’t broadcast the fact that just about anything
counts as a hardship to the public. They don’t want a bunch of motivated
beneficiaries to drop out and claim an exemption. In that sense he mandate can’t be secretly undone — if it’s undone in secret, then it’s not actually undone.

I think that’s exactly right. The White House created a huge catch-all exemption to the mandate on paper, but knew it would have minimal effect on enrollment so long as no one knew about it. Anyone looking at the list of exemptions on in the past 3 months literally would not know this catch-all category existed. It wasn’t there. And if the government website created to explain these exemptions won’t tell you about the broad 14th category, who will?

Beutler says the corollary is that conservatives are making a big deal of this now for just the opposite reason, i.e. they want a mass exodus because it will undercut and destabilize the law. I think there’s some genuine surprise this week that is driving most of this. It’s no secret Republicans wanted the individual mandate delayed. Now we suddenly realize the White House, in a flurry of rule and deadline changes, created an opt-out to the mandate months ago. The GOP doesn’t have to get a bill through the Senate or get it signed by President Obama. We just have to tell people they can opt-out of the mandate themselves.

Of course, any hardship exemption that the administration added willy-nilly in December can be removed willy-nilly in March. If the White House hears (or fears) this will be used to escape the mandate by a lot of people, they can simply withdraw it. And with only two weeks left to go in the enrollment period, it’s probably too late to make much of a difference anyway. But that could certainly change by next year when the tax for not buying insurance goes up.