Jamie Dupree recently reported for the Atlanta Journal-Constitution that the number of waivers granted by the Obama Administration for a certain provision in the new health care law has now reached 222. That’s double the amount of just three weeks ago.
The waivers apply to a provision of Obamacare prohibiting annual limits on health plans. For employers that currently provide their low-wage employees with so called “mini-med” health plans—which offer a limited benefit capped at a certain dollar amount—that provision presents a clear problem.
Since the new law doesn’t specify whether those plans count as major medical insurance or supplemental coverage, businesses have applied for waivers to ensure that the benefit limits on their mini-med plans aren’t increased or eliminated. Otherwise, employers would no longer be allowed to offer those plans, resulting in more than a million low-wage workers losing their current coverage. Without the option of a mini-med plan, most of those workers would likely go uninsured until 2014, when they would then be able to obtain a health plan paid for by new federal subsidies through the new state health exchanges.
The need to grant waivers highlights the irresponsible and careless way with which Congress drafted Obamacare. Authors of the legislation should have foreseen the dilemma presented by mini-med plans—if they had, it would have been easy to address within the language of the bill itself.
Heritage health insurance expert Ed Haislmaier writes that lawmakers could have delayed the implementation date of this provision to coincide with the creation of the exchanges and the availability of subsidies for low- and middle-income Americans. Alternatively, Obamacare’s authors could have statutorily defined mini-med plans as supplemental coverage (as, for example, dental-only plans are), which would have clearly exempted them from the new regulations on insurance policies.
The intent of the health law was to increase the number of insured and the quality of available coverage, but instead its supporters created a lose-lose situation for some workers. Absent waivers from the new law’s requirements, the number of uninsured Americans would instead increase between now and 2014. This is the result of bad legislation, plain and simple.
The decision by the Department of Health and Human Services (HHS) to exercise its discretionary authority by issuing waivers to compensate for the defects of Obamacare raises a larger governance issue. In order to preserve the “rule of law,” when executive branch agencies exercise discretionary authority they should do so by setting clear, easily understood rules that apply equally to all affected parties—not by putting in place a waiver process that allows unelected bureaucrats to arbitrarily decide on a case-by-case basis who gets favorable treatment. This policy undermines the rule of law and favors larger firms and better-connected individuals over small businesses and average Americans.
The incoming Congress should exercise its oversight responsibility by instructing HHS to replace this waiver program with new, clear regulations that any business, no matter how small, can refer to and easily determine whether it needs to change its plan. That sort of clarity, certainty, and uniformity is what is meant by the phrase “the rule of law.” Without it, the exercise of government power instead becomes arbitrary and inequitable, and it invites abuse and corruption.