Once again, Obamacare shows that, when it comes to health care reform, the saying “Hey, it’s the thought that counts” just doesn’t cut it.

Proponents of the new law argue that its stringent insurance regulations will help consumers, but these new regulations also threaten some existing employer-sponsored plan arrangements. To avoid a flood of workers losing their health care, two-and-a-half million people have been exempted from the new rules through waivers granted to employers. A hearing held by the House Energy and Commerce Subcommittee on Oversight and Investigation last week took a further look into the process by which waivers are awarded and why they’re needed in the first place.

In 2010, Obamacare forbade insurers from placing annual or lifetime limits on benefits as part of its “consumer protections reforms.” Unfortunately for those employers who offer their workers “mini-med”  health plans—which cap benefits at a certain dollar amount—abiding by these new regulations would render coverage unaffordable. As a result, these employers would no longer be able to offer mini-med plans, and their employees would lose their current coverage years ahead of Obamacare’s creation of an alternative option. Consequently, the number of uninsured would increase due to this careless oversight in Obamacare.

To fix the problem, the Center for Consumer Information and Insurance Oversight (CCIIO)—a government entity created under the new law to oversee the changes made by Obamacare to the private insurance market—stepped in. The Department of Health and Human Services (HHS) issued regulations giving CCIIO the power to waive that requirement, thus arbitrarily determining winners and losers under the new law and resulting in a system where some must abide by new regulations while others are given a “get out of jail free” card by bureaucrats at CCIIO.

John Larson, Deputy Administrator and Director of CCIIO, stated in the hearing that waivers allow “employers and insurers to continue offering limited coverage if they can show that complying with the regulation would cause their enrollees to experience a significant increase in premiums or decrease in access to benefits.”

Back in December, Heritage noted that the number of waivers granted by the Obama Administration was 222. In just two months, the number has skyrocketed to 915. These waivers don’t solve the real and permanent issues in the United States’ health insurance market and instead highlight the carelessness with which Obamacare was crafted. Rather than instill positive reform, they signal an attempt to plug one of the many holes under the new law.

Representative Fred Upton (R–MI), chairman of the House Energy and Commerce Committee, said that waivers are necessary because “complying with the PPACA would have forced hundreds of businesses to drop the health insurance plans they provide to their workers because the plans that Obamacare would have forced them to have would have been too expensive, and would have bankrupted those business.”

Heritage health insurance expert Ed Haislmaier writes that Congress could have fixed this problem by “simply delay[ing] the effective date of the prohibition on annual coverage limits until after 2014, when the legislation’s new subsidies for more comprehensive coverage become available to workers losing their current mini-med coverage.” Another route Congress could have taken was exempting mini-med plans from the coverage requirement and calling them supplemental coverage.

The message resonating from the subcommittee hearing is that the growing number of waivers approved by the CCIIO bureaucracy wouldn’t be needed if Congress took the time to write solid health care reform rather than slapping together ineffective changes with unintended consequences that, in fact, do the opposite of what the Administration promised the American people.

In the meantime, Congress should tell HHS to rewrite its regulation implementing this section of Obamacare to give employers a simple, uniform exemption instead of its current arbitrary and unseemly process of issuing waivers on a case-by-case basis.

This post was co-authored by Amanda Rae Kronquist.