Monday, February 10, 2014

More Obamacare Unravelling

On Friday, I asked if Obamacare was unraveling.

The Obama administration announced today that they are delaying the employer mandate again.

In the announcement, they said that large employers, those with at least 100 workers, will only have to cover 70% of their otherwise eligible workforce in 2015 and 95% in 2016 and beyond.

The administration also said that employers with 50 to 100 workers will have their mandate to provide affordable health insurance to their workers delayed until 2016––one more year's reprieve.

Employers with less than 50 workers, not required to provide coverage by the Affordable Care Act, will be exempt from the original reporting requirements in 2015 and every year thereafter.

Democrats have been under increasing political pressure from employers back home because of the reporting requirements as well as the mandate that employers with more than 50 workers offer coverage. No doubt Congressional Democrats have been pressuring the administration to back off on the requirements with an election approaching in the fall.

But it is hard to figure out just where the Obama administration is going with all of this.

For employers with more than 50 workers this is a delay not a fix. Employers will only now up the pressure to change the law completely, knowing they have the administration on the political run over these issues. And, small employers will still have to comply with the very costly minimum benefit mandates––really the biggest complaint they have had. Just exactly what is the Obama administration accomplishing with a delay?

What will the administration back off on next? Given the very small exchange enrollment so far coming from the ranks of the uninsured, will they next postpone or eliminate the individual mandate?

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.

The administration really has three options:
  1. Full speed ahead––enforce all of the original rules. Just take the political heat believing you have crafted a system that will work. This is what they have been telling us for almost four years now!
  2. Do a comprehensive and rational fix that provides for a modified system for everyone learning from the mistakes that were made.
  3. Let it unravel one step at a time caving in to every constituency that threatens a vulnerable Democratic Senator and end up with a worse mess.
Looks to me like they are on track for number three. Ironically, I don't think these delays will do the Democrats one bit of good for their vulnerable Senators. These aren't permanent fixes and these concessions will just reinvigorate the people complaining that their cause is justified.

Either make it work or fix it!


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