by Timothy P. Carney
President Obama’s signature legislative achievement was simply a bad bit of legislating. The administration’s decision to postpone the employer health insurance mandate is just the latest evidence that this law was poorly built.
An analogy: You may think Frank Lloyd Wright’s buildings are beautiful or ugly. But that’s a matter of taste, and it’s a different question from whether they are built soundly.
Analogously, you may share Obama’s views of government or reject it, but that’s a separate issue from whether this law was well made. With Obamacare, the architects used nails where screws were needed, and the angles aren’t quite right. This structure can’t bear its own weight.
The employer mandate was always a bad idea, and not only from the perspective of economic liberty. Liberal health-care wonks knew that the employer-based health-insurance system was a big part of our problem. If people get their insurance from work, then they lose their insurance when they switch jobs, exacerbating the problem that insurers typically don’t cover preexisting conditions. Also, when the HR director is doing the insurance shopping for all employees, insurers don’t face real competitive pressure.
But Obama had run in 2008 bashing John McCain for trying to “unravel” the employer-based health-care system. Also, he found key allies supporting the mandate, such as Wal-Mart, whose lobbyists presumably knew the retail giant could afford any new mandates, unlike smaller competitors.
This provision, born of political posturing and special-interest dealing, was repealed last week in a fittingly slippery way. The administration doesn’t really have permission to postpone the mandate, and so the Department of Health & Human Services instead declared it couldn’t create the system by which companies would report the benefits they are providing. Without the reporting information, HHS can’t enforce the mandate.
Similarly, the Obama administration last year declared it wouldn’t implement the law’s program for long-term care insurance. Written by former executives from nursing homes and the long-term-care industry, the CLASS Act was a pet provision of the late Sen. Ted Kennedy. It was also allegedly a revenue raiser. Government would sell insurance to cover the costs of getting very old. HHS soon realized it would face a horrible price spiral: Only sick seniors would sign up, driving up premiums, and thus driving out slightly less sick seniors, and so on.
After HHS suspended the CLASS Act, Congress fully repealed it.
Congress also repealed, on a bipartisan basis, another supposed revenue raiser in Obamacare: the dreaded 1099 provision. The provision would require independent contractors to file an IRS 1099 form for nearly every transaction. Buy a digital camera from another photographer? File a 1099 with the IRS and with the seller. Hire someone to install a phone system in your new office? File 1099s. It was just about the most burdensome way to raise more revenue that Congress could have conceived.
Other revenue raisers in Obamacare threaten to implode, too. Democratic senators who backed Obamacare are now pushing to repeal its medical device tax. Lobbyists who helped pass Obamacare, such as former House Democratic Leader Dick Gephardt, are now lobbying to weaken the Independent Payment Advisory Board, which could cut payments to hospitals, doctors, and drugmakers. Obamacare’s price tag didn’t include the “Doc Fix,” which wards off scheduled Medicare cuts to doctors, but Democrats got the American Medical Association onboard by promising to separately pass the Doc Fix, according to contemperaneous reporting.
Speaking of illusory Medicare cuts: Obamacare was supposed to save money by cutting Medicare Advantage spending – cuts would have become apparent in last autumn. But the law also allowed HHS to run “demonstration programs” in Medicare, experiments to find new ways to improve care and reduce costs. So, Obama used most of that “demonstration program” money to postpone Medicare Advantage cuts until after the 2012 elections. That’s not good government.
There are plenty of other structural problems with Obamacare. The law provides for subsidies for insurance purchased from state-run insurance exchanges, but not for insurance purchased on exchanges established by the federal government – an incentive for states to build their own exchanges. But the IRS is now asserting the power to give out subsidies under both types of exchanges, legislative text be damned.
Of course conservatives were never going to like Obamacare’s big-government approach. But the biggest problem is not that Obamacare was made by liberals – but that it feels like it was made by amateurs.
. . . . . . . . . . . .
Timothy P. Carney is the Washington Examiner’s senior political columnist.