The latest delay of Obamacare displays its political seams

Mark Wilson/Getty Images

Mark Wilson/Getty Images

In a July, 2, 2013 blog, written by the Assistant Secretary for Tax Policy at the Treasury Department, Mark J. Mazur, titled, “Continuing to Implement the Affordable Care Act (ACA) in a Careful, Thoughtful Manner”, the announcement was made that the White House would be directing the Internal Revenue Service (IRS) to refrain from enforcing the penalties on affected employers failing to sign employees up for health care until the year 2015.{1}

Some have said any legislation this large is inevitably going to experience some delays, and that the ACA is no different.  The question is if this is nothing more than a normal procedural delay, why was it announced on an obscure blog that few outside “political wonkville” will read?  It’s probably too much to ask that such a delay be announced by President Obama in the Rose Garden, but it could have been mentioned by Secretary of Health and Human Service Kathleen Sibelius at a press conference, or on a high profile Sunday show. This would’ve allowed for some further clarification through questions and answers.  Even those symbolic, leading questions, from fawning, Sunday talk show hosts, could’ve provided much needed clarification. Instead, the announcement was made on a relatively obscure assistant secretary’s blog.  Was this good politics, or was it the most transparent administration in the history of the nation’s attempt to avoid answering embarrassing questions on the subject?

The employers that were to face this penalty in 2014, were those that employed fifty, or more, full-time workers.  This “number of workers” provision was chosen based on the fact that employers preferred it to the House’s original “payroll provision” that was based on the percentage of payroll employer’s spent on health care.

That failed payroll provision, says director of health-care policy at the Center for American Progress Topher Spiro, “Was far better constructed, from a policy point of view, but it didn’t have the political support to pass.”

The reason it didn’t have the political support to pass, writes Washington Post reporter Ezra Klein, is that employers pushed for the worker-based provision that would affect far fewer employers:

““You’ve got 5.7 million firms in the U.S.,” says Wharton’s Mark Duggan, who served as the top health economist at White House’s Council of Economic Advisers from 2009 to 2010. “Only 210,000 have more than 50 employees.  So 96 percent of firms aren’t affected.  Then if you look among those firms with 50 or more employees, something on the order of 95 percent offer health insurance.  So it’s basically 10,000 or so employers who have more than 50 employees and don’t offer coverage.”  Those companies probably employ around one percent of American workers.

“But that’s still a lot of employers, and a lot of workers, and so the health-care law has gotten a stream of bad press as one employer or another threatens to cut hours or fire workers in order to dodge the penalty.”

This, most recent delay, was not an act of Congress.  It was what some are calling an “end run” around Congress.  It was a notification that the White House would be directing the IRS not to enforce the worker-based penalty on the employers until 2015.  So, technically, the provision is still in place, but the IRS will not be enforcing the penalty against those not following it until 2015.  Participation, until then, will be considered voluntary.

This temporary, “voluntary” phase could provide ACA’s legislators an excellent opportunity to test market the ACA’s viability.  If the ACA legislators are at all concerned with the market, this would provide them an excellent opportunity to shape, restructure, or repeal this piece of legislation according to those most affected by it.  If the legislators were concerned with the market’s concerns, they could ask those employers not signing up for the ACA, during this voluntary period, how they would like the ACA reshaped to suit their business needs. If they were concerned with the market, the ACA legislators could learn some invaluable data, during this period, that would allow them perfect this “barely operational jalopy“{2} in a more comprehensive manner. They’re not concerned with the market, or those most affected by this piece of legislation, and this will only be further illuminated during this “voluntary” period.

As to the manner in which this particular delay reflects on the ACA legislation, Klein writes:

“(It) reflects the fact that the legislative process around the health-care law is completely broken.  Republicans won’t pass any legislation that makes the law work better.  Improving the law, they fear, will weaken the arguments for repeal.  But Democrats, of course, won’t permit repeal.  So Congress is at a standstill, with no viable process for reforming or repairing the Affordable Care Act as problems arise.  And so the White House is acting on its own.

“As written, the employer mandate probably shouldn’t go into effect in 2014, or 2015, or ever.  It should be reworked in Congress and then the replacement should be signed into law by the president.  The White House’s delay might be better policy, but the way the delay was passed is part of a deeply broken process.”{3}

The delay also perpetuates the notion that the ACA is all political.  It perpetuates the idea that the 2008 Democrat-controlled Washington passed this piece of legislation—legislation Democrats have wanted to pass for sixty years—to procure future electoral victories for Democrat.  Those that believe this view is too cynical, would have to admit, at the very least, that Democrats hoped that their victories would, at least, be a happy byproduct of the ACA.  If either one of these ideas are true, an onlooker must now look at the ACA as a failure at this point, as Democrats are now further delaying their “biggest legislative achievement’s” implementation schedule to presumably avoid electoral defeats in the 2014 midterms.

Even the greatest proponent of ACA would have to admit that the delays involved in the ACA’s rollout suggest an embarrassing amount of confusion, ineptitude, or at stated earlier, that any legislation this large is inevitably going to experience some delays.  Regardless, former Obama advisors are saying that this particular delay is a painfully embarrassing admission.

“You trade off one set of painful stories for another set of painful stories,” Bob Kocher, a former Obama health policy advisor, said. “I would think that, if I’m an administration official today, it’s a way more troublesome news story for people to say that we’re not ready to launch.”{4}

If this piece of legislation were as great as we were led to believe when it was passed, and that it only needs some minor tweaks before full implementation, one would think that Democrats would be fully prepared to roll this thing out and deal with the minor complaints on a case by case basis. If those complaints reached a certain pitch, Democrats could adopt the line of thought of NBC’s Andrea Mitchell: “These people may not know what’s good for them.”{5}  Democrats could then further this line of thought ‘Now that we’ve passed Obamacare, and everyone knows what’s in it, let’s fully implement it now to allow consumers enough time to know what’s good for them, so they will vote those Republicans that voted against it out of office in 2014.’

If this Affordable Care Act were anything other than a shell game with no pea, “The pea being cost reduction,” as American Thinker blogger Deane Waldman points out,{6} Democrats would be begging and pleading for the Obama White House to roll Obamacare out.  If it were such a great bill, and Democrats were just aching to prove to us that they knew what was best for us, they would want its full implementation on their party’s platform for the 2014 midterm. What these Democrats are asking for, instead, are waivers for their donors, delays, restructuring, and some are even calling it an inevitable train wreck.  It’s all political.





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