The Corner

Haste Made Waste: Obamacare’s Rushed Regulations

Speaker Pelosi did warn us that we would find out what was in the Affordable Care Act only after it passed — and so the rush began, and continued with the eight major regulations issued by federal agencies to implement the act. New research papers (three of them) by my Mercatus Center colleagues Jerry Ellig and Chris Conover find that the rules contain top-driven, low-quality regulatory analysis that reads more like an attempt to justify decisions than to inform them.

Their work shows that the low-quality regulatory analysis for the health-care law reflects a systemic failing of the federal regulatory process. The Obama administration’s “early interim final” health-care regulations score about the same as the Bush administration’s regulations for homeland security — on the Mercatus Center’s Regulatory Report Card, both would receive an average grade of F.

You can read all three papers here; for a good overview of the issue, you can read this Q&A with Ellig over at CNBC. Brace yourself, because it is painful to read (at least for me):

LL: What is the key finding from your year-long study?

JE: In this study, we looked at the federal government’s analysis for the 8 major “interim final” regulations issued in 2010 to implement key components of the Patient Protection and Affordable Care Act (ACA). The intent of regulatory analysis is to inform decisions by identifying the problem the regulation is supposed to solve, and assessing the pros and cons of alternative solutions. But we found these key ACA analyses to be rushed, seriously incomplete, and rarely used to inform decisions.

These analyses also regularly under-estimated costs, over-estimated benefits, and ignored alternatives that would have had lower costs or greater benefits. Scored according to the Mercatus Center’s Regulatory Report Card criteria, the best analysis received just 25 out of 60 possible points—the equivalent of an ‘F’.

LL: An F? So bottom line, based on your research, the government rushed to implement these regulations and now we citizens are stuck with the results?

JE: The regulations we evaluated were all issued as “interim final” regulations, meaning the agencies wrote them without taking public comments on a proposed rule first. In theory, the agencies could go back and revise the regulations before they produce the final version.

In practice, a lot of interim final regulations never get revised. So yes, we’re stuck with them unless the administration revisits them.

[. . .]

LL: Are these problems with the regulatory analysis a failing of the Obama administration, or has this kind of thing happened before?

JE: This problem is systemic. The deficiencies in the analysis are a failure of the federal regulatory process, not of any particular administration or party. The quality of analysis for the ACA’s interim final health care regulations is about the same as the quality of analysis for the Bush administration’s interim final homeland security regulations issued in the years  following 9/11. In both cases, administrations rushed to enact regulations they hoped would reflect their legacy in the face of tight legislative deadlines.This fast-track rulemaking meant decisions often got made at high levels before the regulatory analysis even got done. It was “Ready, Fire, Aim!”

To prevent this problem, we need to require agencies to analyze regulatory options before they decide whether or how to regulate.

The whole thing is here.


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