President Obama was about as far away from the announcement to delay the employer mandate under Obamacare from 2014 to 2015 as he could be. He was returning from his trip to African nations on July 2 when the decision was posted on a blog by an underling.
The decision was slipped out in a blog posting by a deputy assistant secretary of the Treasury, three steps up from an intern, but the news media was not fooled. The decision made top line in most of the country’s newspapers.
It was big news, since it was the third major setback for the sweeping new law. Long term care and small business access to the new exchanges had already been pushed out.
Republicans jeered, and the president’s supporters, like Robert Reich, blamed the Republicans for the delay.
Mark Mazur, the treasury pol who drew the short straw, cited the law’s “complexity of requirements” for the one-year reprieve for business. He’s got that right. The law is exceedingly complex, especially for the bureaucrats who are trying to write the rules and regulations to implement the new law. They have missed just about every milestone for getting the rules out to citizens and businesses. Little wonder why the country is confused.
The plain truth is that the administration is not ready to roll out the Affordable Care Act. As for its opponents, who still talk repeal, the other plain truth is that it eventually will go into effect. For better or worse, it is the law of the land. It has survived a U.S. Supreme Court test and a presidential reelection campaign.
How the delay will play in this fall’s Congressional elections is the new guessing game for pundits. The reprieve doesn’t really change much for Democratic candidates who support ACA. Their Republican challengers will make the case that the implementation has been amateurish, and they will make noises about repeal. But the mismanagement is small stuff in large political terms.
Besides, the GOP is on weak ground because it has never come up with a viable alternative for providing coverage for the uninsured. Republicans seem unaware that there is there is a stampede of reforms surging ahead in the private sector. Those reforms could be grafted onto ACA to make it truly affordable and therefore accessible.
As for the the “complexities,” they don’t bother big thinkers like Reich, but they are real. For example:
How does an employer calculate the requirement that the health care they must offer costs the employee no more than 9.5% of household income? The employer knows the W2 income paid to an employee, but not the rest of the income of a household.
Further, if an employer wants to go to defined contribution so an employee can buy an individual policy on the new exchanges, how again does the employer compute the 9.5%? No one yet knows what the policies on the exchanges are going to cost.
Finally, the rules on who is an employee are not certain. The 30-hour-per-wek rule is causing major brain damage in every HR shop in America.
The rollout in 2014 of the individual mandate to buy health insurance or pay a small penalty will be roiled by more uncertainty, because it is inextricably linked to the employer mandate to provide coverage.
The employer mandate was supposed to get more people covered, and now that won’t happen in 2014. (It has never been clear whether the employer mandate would add covered lives or reduce them should companies drop the benefit and pay then penalties.) In 2014, with employers not required to provide coverage, more individuals than projected could face the penalties for running without insurance.
That will raise the cost of the subsidies beyond the $23 billion projected for 2014, and the penalties from employers as an offset won’t be there.
In short, ACA is not ready for rollout.
That is just as true for the individual mandate to buy insurance as for the now delayed employer mandate. We are only three months from the Oct. 1 deadline for the 50 state exchanges to go on-line, and the feds just issued a major contract to an British IT shop to figure out who is eligible for subsidies and who isn’t. Can’t be done in three months.
Get ready for the next shoe to drop – a delay on the individual mandate until 2015.
