Monday on The Daily Show, comedian Jon Stewart interviewed Health and Human Services (HHS) Secretary Kathleen Sebelius. The Secretary didn’t escape the hot seat in what turned out to be an interesting discussion regarding the implementation of Obamacare.
One notable topic covered during the interview was the surprise proposal by HHS to let states determine their own definitions of “essential health benefits.” Obamacare explicitly instructs HHS to fill in the details of the legislation’s mandatory minimum benefit package, but as the Galen Institute’s John Hoff previously noted in a Heritage writing, “Although HHS can, of course, produce a piece of paper (or, more likely, hundreds of pages of regulation) purporting to define the term, in reality this will not provide the real-world uniformity of coverage contemplated by [Obamacare]. HHS has an impossible task.”
It seems HHS agrees that it has an impossible task and is now looking for a way to stick somebody else with the problem. Sebelius claims that letting states define benefits will give them flexibility. But in reality, all that would do is intensify the existing special-interest lobbying in state capitols for more mandated health insurance coverage—driving the cost of coverage under Obamacare even higher.
In a second installment, Stewart questioned Sebelius about whether or not employers would be inclined to “dump” their employees in the new health care exchanges and pay the new penalty instead. “Is the penalty more than the [cost of] insurance?” Stewart asked. Sebelius responded, “The penalty will help pay for the tax credit that the employee will get in the insurance.” Extensive research does a better job of answering the question. The cost of the new Obamacare subsidies will not be covered by the fines collected from employer penalties. The facts show that some employers will be able to come out ahead even after paying the penalty and increasing workers’ cash compensation to make up for the lost health benefits.
Stewart then posed this question:
Do you think ultimately this is, a bunch of people dump to the exchange, and it becomes sort of a back door, of government, not a takeover necessarily, but of a government responsibility for the health care, employees, and it decouples it—I’m not saying that’s a bad thing—but decouples it from employment, and people will get it through the government—through tax credits, rather than through their employers—and then suddenly, obviously then, we’re Sweden. Do you think that’s the case?
Well, Jon, America may not be Sweden yet, but it’s getting a lot closer under Obamacare.