Obamacare creates a host of new federal requirements billed as consumer protections. But enacting these policies falls not on the feds, but on the states.
Some of these provisions were among the more popular components of Obamacare: guaranteed issue for children; letting individuals remain on their parents’ health plan up to age 26; requiring insurers to cover federally-defined preventive services, etc.
The goals behind these mandates are worthy. But they could be achieved in better ways. The approach taken here is virtually guaranteed to accelerate insurance costs. Ironically, Obamacare also requires states to review “unreasonable” rate increases.
What authors of the health care takeover failed to consider was whether states actually have the authority to enforce these standards. Robert Pear and Kevin Sack report in a recent New York Times article:
Insurance commissioners in about half the states say they do not have clear authority to enforce consumer protection standards that take effect next month. Federal and state officials are searching for ways to plug the gap. Otherwise, they say, the ability of consumers to secure the benefits of the new law could vary widely, depending on where they live.
Several states don’t have authority to enforce the federal standards. How will regulators in these states respond to the new law? Pear and Sack write, “Some state regulators said they would ask state legislators to expand their authority by putting the federal standards into state law next year. Others said they would rely on their powers of persuasion, the good will of insurers or general state laws that ban unfair or deceptive trade practices.”
Good will? This isn’t the first time Obamacare has had to rely on the industry’s “good will” to cover up the legislation’s many flubs.
In Arizona, the likelihood of passing legislation to enforce federal standards is low, due to the state’s lawsuit against Obamacare’s individual mandate. In Florida, if insurers fail to revise their contracts, the state claims no “has no legal authority to do so.”
These headaches are the inevitable result of jamming Obamacare through Congress without sufficient thought. Moreover, they are the expected natural byproducts of central planning. The states are an after thought here, but the situation reveals Obamacare to be yet another example of federal encroachment into state authority. If states can’t find a way to enforce the new standards, Washington will do it for them. Yet implementing these policies will needlessly drive up premiums, putting states in a very awkward position.