The politics of Obamacare delays
By: David Nather
February 21, 2014 06:12 PM EST
By now, the pattern is pretty clear: Obamacare deadlines don’t stick. And they probably never will.
The unanswered question is, does the extra time create more hassles than benefits for those affected - and is the goalpost-moving worth the political headaches it creates for the Obama administration?
Because undeniably, every time the Obama administration bends a deadline for the Affordable Care Act — delaying the employer mandate for the second time, putting off parts of the enrollment launch, or giving customers just a little more time to sign up — it fuels the perception that the administration is just winging it, and gives Republicans new fodder to accuse the White House of rewriting laws too casually.
That doesn’t mean the busted deadlines always matter in the real world, though. Some matter more than others. Insurers have been genuinely put out by all the rules that have been changed along the way, which has dumped more work in their laps. That raises the risks of enrollment errors and other problems down the road, like price increases because insurers didn’t get the mix of customers they expected.
Business groups, however, don’t seem bothered by the latest delay in the employer mandate. In fact, they’re saying the employers who are getting the extra time will be happy to have it.
“I see the politics of it, but the reality of this is very different,” said Bruce Elliott, manager of compensation and benefits at the Society for Human Resource Management. “As a practitioner, I don’t see how this can be a bad thing.”
And vulnerable red-state Democrats — the ones who have the most incentive to protect themselves from the clunky Obamacare rollout — aren’t piling on the White House over the employer mandate extension.
“Overall, I’m hearing that it’s good and the extra time is appreciated,” Sen. Mark Pryor (D-Ark.), who’s in one of the closest Senate races in the country and has been critical of the rollout, told POLITICO. He says business owners in his state haven’t suggested it will hurt the administration’s credibility: “I hear that stuff inside the Beltway, but out in Arkansas, I’m not hearing it.”
The biggest impact the delays will have, then, is political — as they help Republicans revive the image of an Obama administration that just never had its act together as it launched its signature health care initiative.
They’ll keep firing up the base by accusing President Barack Obama of ignoring the law, even though it’s not a law they support in the first place. And every time Democrats point to the signs that things are going better — especially the surging enrollment numbers that were announced earlier this month — Republicans will use the busted deadlines to try to revive the image of incompetence.
“Every delay is just another reminder of how badly the law’s implementation has gone,” said Republican strategist Kevin Madden. They also raise suspicions that the Obama administration is trying to push off any consequences of policies like the employer mandate, Madden said: “They keep trying to push the political ramifications further and further back on the calendar.”
Democrats insist it’s just part of the messiness of launching a major new social program and making sure it works — and that it’s natural for Republicans to take advantage, but that task will become harder as the implementation gets back on track.
“The fact of the matter is that not one program like this has worked from the get-go — not Medicare, not Medicare Part D, not Social Security,” said Democratic strategist Joe Trippi. The Obama administration “oversold how easy this was going to be,” said Trippi, but “now Republicans are in danger of overselling the disaster.”
The latest employer mandate delay is just the latest in a long string of moving deadlines. In December, the administration gave people an extra week to sign up for January coverage — and then bent that deadline by another day — cutting health insurers’ processing time from two weeks to one. It gave customers until Dec. 31 to pay their premiums, and convinced insurers to accept payments even later (and even then, a lot of customers still haven’t paid up).
The administration also gave insurers permission to extend people’s pre-Obamacare plans, which were supposed to be replaced this year by ones that met the new law’s standards, to reduce the backlash over Obama’s broken “you can keep your plan” promise. It delayed the online enrollment for the federal health insurance exchanges for small businesses, and pushed next year’s enrollment period back until after the November elections.
About the only deadline it didn’t delay is the one it probably should have pushed back: the launch of HealthCare.gov. And, of course, the individual mandate is still on track to begin this year.
The one delay that has given the most fodder to Republicans, though, is the postponing of the employer mandate — because the law clearly stated that it was supposed to begin in 2014.
Instead, the Obama administration first announced last year that the mandate — which will require all businesses with 50 or more full-time workers to provide health coverage or pay a fine — wouldn’t be enforced until 2015. Then, on Feb. 10, it gave yet another extension to businesses with between 50 and 100 workers, so won’t have to worry about it until 2016. And it will be phased in for employers with more than 100 workers.
Cue the Republican talking points about “unilateral delays” — rewriting the law without Congress. Sen. Mike Lee (R-Utah) argued on Fox News that “if the companies need flexibility, then the solution there is not to ignore the law, to pretend that the law allows this sort of thing to happen. The solution is for the president to come to Congress and make the case to Congress on the policy merits of this question that Congress needs to act. And then it’s up to Congress to act at that point.”
The Obama administration insists it has the authority to move the deadlines on its own, arguing that a section of the Internal Revenue Code — the part that allows the Treasury Department to write regulations to implement tax laws — has traditionally been used to allow “transition relief” when tax laws are changed.
The reality, though, is that even if Republicans try to challenge the administration’s authority to move the deadlines, it will have a hard time proving that the delays are actually harming businesses.
They insist that kind of “transition relief” is just causing more anxiety for the employers in their states. “Obviously they’d love to have it keep extending, but they’re just saying, ‘What in the world is going on?’” said Sen. Jeff Flake (R-Ariz.). “It’s very tough for them. There’s no certainty.”
But that’s not what other business groups are saying. In their view, it’s better to have more time to plan ahead.
“For whatever reason, they’ve gotten to the point where they can offer more flexibility, and that is to be celebrated,” said Neil Trautwein of the National Retail Federation.
“I can see where people would think we’d be pulling our hair out, because the timeline keeps slipping, but no, not really,” said Elliott of the Society for Human Resource Management. For the midsized businesses between 50 and 100 workers, “they’re saying, ‘that’s an expense I can continue to plan for. It’s still coming, but I’ve got more time now.”
Insurers, however, say they have had bigger problems because of the delays that affect them.
They’re still waiting for the Obama administration to finish building the automatic payment systems, for one thing. They’ve also had to scramble to keep up when the administration has moved deadlines, like giving people until the last week of December to sign up for January coverage.
And even now, insurance industry officials say there are changes they’ll probably have to make manually, thanks to other deadline changes, to avoid errors in customers’ coverage.
In most months, customers have to sign up by the 15th for their coverage to start next month. This month, though, the administration announced that people would have extra time, because some online systems would be unavailable on Feb. 15 thanks to weekend maintenance. So health insurers will likely have to reprogram their computer systems to make sure those late enrollees don’t have to wait until April for their coverage to start.
“It really adds up, and it’s a tremendous amount of extra work, because you have systems not working, rules changing, and having to do manual workarounds,” said Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, the main trade group for health insurance companies.
There’s also a risk that the administration’s decision to let people stay in their pre-Obamacare plans could throw off the insurers’ mix of healthy and sick people, since most analysts believe the people most likely to keep their old plans would be healthy customers.
Democrats, however, say the actual signups for Affordable Care Act coverage, and the actual mix of customers, will be all that matters. If the numbers are good, they don’t believe people will worry about all the busted deadlines. If the numbers aren’t good, that will become the issue anyway.
“The signups are what will determine if the ACA succeeds as a policy,” said Democratic strategist Chris Lehane. “Everything else, including the start-and-stop nature of some of the aspects of the act plays into short-term perceptions — but they are just that: short term.”