More Bad News on the Obamacare Implementation Front

Last week, the Obama administration moved to delay the implementation of Obamacare’s employer mandate. (For more on this, read Yuval Levin’s excellent piece here.) According to the administration, the reason for the delay was to give businesses more time to get ready for the mandate. However, this morning the Wall Street Journal notes that the decison was also driven by the fact that “the federal government hadn’t written key rules guiding employers, according to current and former administration officials, and computer systems that were supposed to run the program weren’t operational.” The Journal explains:

To comply with the law, companies needed rules for reporting data to the government each month, including the names and Social Security numbers of anyone who worked full-time for at least one month during the year, plus information on the insurance offered and its price.

They have to calculate and report, based on individual worker incomes, whether the premiums offered are affordable.

Among the questions the administration hadn’t answered in time: Should companies be required to report month-by-month details about who they employed? Should employers who already offer insurance be subject to the same rules? What happens if workers say they weren’t offered adequate insurance but employers say they were? 

To make it all work, businesses and the Internal Revenue Service, which is in charge of handling this element of the law, needed new computer systems, which couldn’t be built before the rules were written.

The IRS has promised to issue regulations answering these questions.

The Treasury Department said last week the regulations would arrive this summer. 

In February, the administration told officials at the U.S. Chamber of Commerce, the business lobby group, that draft rules detailing the reporting requirements for employers were coming out “any day.” They have yet to see them, said Katie Mahoney, the executive director for health policy at the chamber.

The delay made it difficult for business to develop the computer programs needed to comply, said Catherine Livingston, a former health care counsel at the IRS, who is now in private practice.

“They were so late putting out regulations, and even as of today they have not produced proposed regulations, they knew it was not realistic to expect employers and insurers to implement their system changes,” she said. 

This does not bode well for the implementation of the central piece of the law, the government-run exchanges, which, as the Journal explains, is ”a bigger logistical and technological challenge.”

The whole thing is bad news for taxpayers, since there is now a chance that for at least a year (but likely for longer) more workers will claim government subsidies, adding to the cost of the health care law. But as the Cato Institute’s Michael Cannon noted yesterday, it gets worse. After postponing the employer mandate, the administration unilaterally repeal the law’s requirement that the federal government verify the incomes and insurance options of people applying for the law’s new subsidies, and eliminate the law’s anti-fraud protections. He writes:

Rescinding anti-fraud protections is nothing new (or defensible). There is a very powerful fraud lobby in Washington, D.C. Normally, such steps just mean an increase in fraudulent and improper payments from the federal treasury, and a few more ignored reports from the Government Accountability Office and HHS Inspector General. Obama’s move, however, is so sweeping that he effectively expanded the eligibility criteria for ObamaCare’s new entitlements without so much as consulting Congress. Indeed, the law Obama is implementing did not and could not have passed Congress.

Barack Obama wasn’t always part of the health-care fraud lobby. Oh, no: time was, he railed against health care fraud. When he pleaded for his health care plan before a joint session of Congress in 2009, he promised that with his plan:

’We will root out the waste and fraud and abuse in our Medicare program that doesn’t make our seniors any healthier…I’ve appointed a proven and aggressive inspector general to ferret out any and all cases of waste and fraud.’

Any and all cases! So inspiring. And in his final push for ObamaCare’s passage, he promised the law would reduce fraud and improper payments. […]

Barack Obama used to oppose health care fraud—up until the moment that opposing fraud conflicted with his goal of preserving ObamaCare.

And why not? It’s just other people’s money.

The whole thing is here. Cannon has also some excellent pieces on the employer mandate delay here, here, here, and here

Now we can only hope hope that some in Congress will cease on this opportunity to implement serious reforms, such as repealing the individual mandate and taking the exchanges into a more free-market direction.




Veronique de Rugy — Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.

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