Another Obamacare Tweak

Feb 11 2014 @ 3:20pm

Yesterday the Obama administration announced that the employer mandate – the requirement that larger employers provide health insurance to all their full-time staff or pay a penalty – will be delayed for another year for companies with 50-99 employees. Cohn ponders what motivated the decision:

What’s the primary rationale? It’s impossible to say. The official explanation is the same as before—the move will give companies a little extra time and flexibility, easing the transition to the newly reformed health care system. That makes perfect sense. On the other hand, administration officials might also have other goals in mind. For example, they might be anxious about employers taking certain actions—like limiting the hours of workers, in order to avoid giving those workers health insurance. Administration economists have said they don’t see evidence this is happening on a large scale and the Congressional Budget Office just last week came to the exact same conclusion. But anecdotes of such decisions have been all over the media. (Jed Graham of Investor’s Business Daily has been tracking them.) Whether or not the problem is real, it might appear real.

Kate Pickert points out that the employer mandate “is not considered a central tenet of the law’s plan to expand health coverage”:

The vast majority of large employers already offer insurance and the mandate was mostly meant to shore up this system into the future. Still, every time more employers are exempted from the mandate for another year, the cost of the reform law increases. Before the mandate was originally delayed, budget experts had predicted the requirement would generate some $10 billion in revenue in 2014, in part, from penalties paid by employers opting not to provider insurance to workers. In addition, some workers who may have received health insurance through work in 2014 and 2015 will now instead be eligible for federal subsidies to buy coverage independently through the the law’s state-based insurance exchanges.

Kliff looks at Massachusetts’s example:

Massachusetts’ universal coverage law has an employer mandate–and, since it passed seven years ago, employer-sponsored coverage has been pretty much stagnant. Delays to the employer mandate can matter politically. But as for what they mean for who Obamacare covers, this delay will likely amount to a relatively small, if non-existent, change.

Avik Roy says “we should simply repeal the employer mandate”:

It’s a huge drag on hiring, because the mandate increases the cost of hiring someone (because on top of wages, you now have to pay for his costly, government-approved insurance plan). The House of Representatives has already proposed a bill to repeal the provision, and it would be quite easy for the Senate to do so as well.

But the Obama administration doesn’t want to do things the old-fashioned way, by actually passing a law through Congress. The President fears that by opening the Affordable Care Act to legislative changes, many more aspects of the law could get repealed or changed by Congress. So, instead he simply chooses to ignore the law. It’s up to the public to hold him accountable.

The way the administration is going about making these changes also bothers Philip Klein:

If Obama believes the employer mandate is a bad idea that needs to be repealed or severely changed, he should propose permanent changes rather than erratic piecemeal fixes. But for Obama, it isn’t acceptable for opponents of the health care law to seek changes through the constitutional legislative process. That’s sabotage. The only way to make changes to Obamacare is for him to do so unilaterally, no matter what the text of the law actually says.

Bob Laszewski argues that the piecemeal approach affects the law’s functionality:

No one has been more critical of the various requirements in Obamacare that I have. But to make an insurance system work you have to have a set of consistent and consistently applied rules. You can’t have some people choosing to be out today and in tomorrow. You can’t have a system where insurers price products based upon one set of conditions and then you keep backing off on the conditions consumers and employers have to follow.

Yuval Levin sees this as an outrageously expansive interpretation of executive powers:

We have here a written statute that levies a fine on large employers who fail to provide insurance coverage as a benefit to their employees. It defines a large employer as “an employer who employed an average of at least 50 full-time employees on business days during the preceding calendar year,” provides a relatively detailed set of criteria for applying that definition, and states that the provision “shall apply to months beginning after December 31, 2013.” We have already seen that latter date pushed back by a year without obvious legal authority, and now we see it pushed back by another year for some affected employers while the requirement is loosened for others. If this kind of selective enforcement of a public law is legitimate, then how exactly would the president describe the limits of his ability to engage in such selection? Is he bound in some definable way to the particulars of statutes as written and passed by Congress, or does he merely take them as suggestions for how he might proceed?

Gobry warns Obama’s supporters that if they are OK with this type of executive legislation now, they’ll have no standing to cry foul when a Republican president does it:

What’s striking here is that liberals have gone along with these moves from the White House. And it makes intuitive sense: they have so much invested in Obamacare’s success that, just like the Administration, they’re pretty much willing to do anything to get the law to work, no matter how far-fetched or, well, illegal.

The problem with this is that, of course, if it becomes accepted American Constitutional tradition that the President can apply whatever laws she wants, well, that tradition applies to Republicans as well as Democrats.