What Just Happened To Obamacare?

The ACA’s employer mandate is being delayed by a year. Ezra advocates repealing the mandate entirely:

It’s a bad bit of policy. In fact, when it first emerged during the Senate’s negotiations, I called it “one of the worst ideas in recent memory.” … By tying the penalties to how many full-time workers an employer has, and how many of them qualify for subsidies, the mandate gives employers a reason to have fewer full-time workers, and fewer low-income workers.

Cowen thinks that the administration wants to kill the mandate outright:

My view is you don’t serve up a delay and PR disaster like this, on such a sensitive political issue, unless you really wish to derail the entire provision.

Evan Soltas adds:

[T]here is a strong case for getting rid of the employer mandate. Employers shouldn’t sponsor insurance in the first place, as it masks the true cost of care to employees and creates incentives for over-insurance. It also increases the cost of hiring, locks employees into their jobs, and splits the market for insurance into one for individuals and one for employers, which impedes risk-sharing in the individual market.

If that’s where this heads, I’m all for it. Breaking the employer-healthcare connection would help generate competition and make consumers more aware of costs. Beutler notes that the employer mandate was expected to lower the deficit:

Back in 2012, CBO estimated that the employer penalty would reduce the deficit by about $4 billion in fiscal year 2014. But by zeroing out the penalty, the administration will not only forfeit the revenue it would have collected, but it will have removed an incentive for employers to provide coverage themselves. That probably means more workers than expected will land in the exchanges, many of whom will receive subsidies to purchase insurance themselves, which will increase spending under the law and diminish its deficit reducing potential.

Josh Barro also focuses on the budgetary consequences:

One of his key selling points for the law was that it would cut the deficit. Now that the law has passed, his administration is freer to pursue changes that will raise Obamacare’s cost to taxpayers but improve its effects on the economy. Delaying the employer mandate, perhaps indefinitely, is one way to do that. It’s a better reason than “we couldn’t figure out how to do the reporting.” But it’s not one you can say out loud.

Jeffrey Anderson claims that the delay is “a naked display of lawlessness”:

By law, Obamacare’s employer mandate — its requirement that businesses with 50 or more workers provide federally sanctioned health insurance — should go into effect next year.  By executive fiat, it won’t go into effect until 2015.

Chait counters such accusations:

It is true that the law calls for the mandate to take effect in January. On the other hand, administrative delays push back deadlines like this all the time. The Supreme Court ordered the Environmental Protection Agency to regulate carbon emissions in 2007, and the Bush White House evaded that order by refusing to open an e-mail from the agency. Obama’s EPA has delayed its carbon regulation for years now, and no conservatives have demanded that Obama act faster.

The question becomes what happens after the delay is up. Ideally, we could just repeal the employer mandate. Major laws are routinely followed by legislative corrections to smooth out their glitches. But conservatives have steadfastly followed a strategy of the worse, the better, refusing to accept any changes to Obamacare short of repeal. The employer mandate was one of the few aspects of the law that seemed likely to produce real, rather than imagined, economic damage, and thus conservatives invested a lot of their train-wreck hopes in this aspect of it.

And Cohn expects Republicans to use the news to pummel other aspects of healthcare reform:

Employers might quiet down a bit, but the law’s doubters will use this as proof the administration doesn’t know what it’s doing. As Sarah Kliff puts it, it’s trading one headache for another. Or maybe two. Already, conservatives like Erick Erickson are saying it’s unfair to delay the mandate on employers without also delaying the mandate on individuals. Erickson won’t be the last to make this argument, just as he already has plenty of company citing this news as proof that Obamacare is a disaster.