NYT: Obama letting big corporations off the hook with ObamaCare waivers

posted at 9:30 am on October 7, 2010 by Ed Morrissey

Actually, that’s closer to the headline on MSNBC’s reprint (“White House allows big firms to dodge health reforms”) of this New York Times article than the one in the Times itself (“Waivers Address Talk of Dropping Coverage”), but the meaning is plain either way.  Instead of enforcing the ballyhooed standards and mandates for insurers that Congress passed in ObamaCare, Kathleen Sebelius and the White House blinked in the face of bad press and exempted dozens of companies from the law.  If the marketplace had uncertainty before, the administration has made the situation much, much worse:

As Obama administration officials put into place the first major wave of changes under the health care legislation, they have tried to defuse stiffening resistance — from companies like McDonald’s and some insurers — by granting dozens of waivers to maintain even minimal coverage far below the new law’s standards.

The waivers have been issued in the last several weeks as part of a broader strategic effort to stave off threats by some health insurers to abandon markets, drop out of the business altogether or refuse to sell certain policies.

Among those that administration officials hoped to mollify with waivers were some big insurers, some smaller employers and McDonald’s, which went so far as to warn that the regulations could force it to strip workers of existing coverage. ….

To date, the administration has given about 30 insurers, employers and union plans, responsible for covering about one million people, one-year waivers on the new rules that phase out annual limits on coverage for limited-benefit plans, also known as “mini-meds.” Applicants said their premiums would increase significantly, in some cases doubling or more.

These early exemptions offer the first signs of how the administration may tackle an even more difficult hurdle: the resistance from insurers and others against proposed regulations that will determine how much insurers spend on consumers’ health care versus administrative overhead, a major cornerstone of the law.

First, let’s point out that the law turned out to be unworkable, almost before it even got started.  Dictating percentages for administration costs in insurance plans isn’t the job of the federal government anyway, but more to the point, that issue is obviously not determinative in value to the consumer — as these waivers proved.  This shows what happens when people with no experience in an industry decide that they can construct it better than the market has structured itself.

The proper action would have been to repeal at least this portion of the law in order to give a level playing field to everyone.  By granting a few dozen waivers at the outset, though, the White House has amplified the uncertainty and arbitrariness in ObamaCare even further.  At least insurers and employers had a figure that they could use for planning.  Now there is no standard at all, except for whatever Kathleen Sebelius decides she likes — and whom she wants to favor.

The Rule of Law depends on an environment with clear regulation and unbiased enforcement.  From the start, ObamaCare lacked any clarity in regulation.  Congress filled the bill with the phrase “The Secretary shall determine” in place of establishing rules and regulations for the massive regulatory regime Congress created.  Now, the White House has added arbitrary enforcement to uncertain regulation and opaque processes.  This is not the Rule of Law, but the Whim of Autocracy.


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