Articles

Steaming Toward the ObamaCare 'Train Wreck'

April 17, 2013

In congressional testimony last week, Health and Human Services Secretary Kathleen Sebelius blamed Republican governors for her department's failure to create a "model exchange" where consumers could shop for health-insurance coverage in states that don't set up their own exchange.

Nice try, but GOP governors aren't the problem. Team Obama's tendency to blame someone else for its shortcomings is tiresome. The Affordable Care Act requires HHS to operate exchanges in states that won't operate their own. Since the act became law in March 2010, it has been abundantly clear that the agency would have to deploy a model exchange. It is Ms. Sebelius's fault there isn't one.

There is more to this failure. Even exchanges organized by Democratic and Republican governors may not be functioning by the health-law's Oct. 1 deadline, because HHS has been slow with guidance and approvals.

Last month Gary Cohen, an official with the Centers for Medicare and Medicaid Services who oversees technology for the exchanges, told members of America's Health Insurance Plans (a trade association) that he was "pretty nervous" about implementation. He hoped enrollment is "not a third world experience."

Part of this problem stems from the way the law is crafted. For example, a subsidy to help small businesses provide insurance coverage while ObamaCare ramped up was so complicated and difficult to use that only 1% of its $40 billion budget was spent.

Other provisions have been poorly executed or needlessly delayed. Ms. Sebelius's HHS has missed dozens of deadlines for major rule-making or program start dates required by the law.

For example, ObamaCare created the Small Business Health Options Programs, where small businesses could select insurance plans beginning in October with coverage starting in January. The program has been set up, but employees are offered only one plan, not a choice among many. HHS announced a full range of plans would be delayed until 2015.

Then there is President Obama's promise that no American would be denied coverage because of a pre-existing condition. The Affordable Care Act set aside $5 billion to subsidize, through 2014, coverage for an estimated 270,000 to 350,000 people with pre-existing conditions and no insurance. So far 135,000 have been covered but the $5 billion is nearly exhausted. HHS stopped signing up people in February.

A long-term care entitlement, the so-called Class Act, turned out to be so fiscally untenable that Democratic support evaporated before its 2012 start date. The entitlement program was repealed in the December fiscal cliff deal.

Then there is the Independent Payment Advisory Board, the 15-person committee charged with reducing Medicare spending to a "target level" by 2015. Its recommendations take effect automatically unless overruled by a congressional supermajority.

By law, the board cannot "raise revenues or Medicare beneficiary premiums . . . deductibles, coinsurance, and copayments, or otherwise restrict benefits or modify eligibility criteria." This means that the board would likely have to cut reimbursements to health providers who already receive roughly 80% of what private insurers pay for the same procedures for non-Medicare patients. This will discourage doctors from taking on Medicare patients.

The IPAB's first recommendations are due Jan. 1, 2014 and are supposed to take effect a year after that. The president hasn't appointed anyone to the board, and it's unlikely he can come up with 15 nominees, get them confirmed, and have them in place to deliver recommendations in time. Maybe he plans to leave the recommendations up to the secretary of HHS, which is allowed under the health law, but that ought to concern anyone who's seen Ms. Sebelius in action.

Or maybe the president will just let the deadline for IPAB recommendations slide. An ugly battle in 2014 over Medicare cuts proposed by a committee he appointed might rile up seniors in the midterm elections, leading to the defeat of House and Senate Democrats who voted for the law.

Still, the administration is eager to get one health-care program under way. ObamaCare provides $54 million to hire individuals and groups to facilitate enrollment when the exchanges begin this October.

There are rumblings in Washington that HHS believes more money is needed for these "navigators" or "helpers." The House Energy and Commerce Committee wrote Ms. Sebelius this week asking what kind of groups are eligible, how they'll be selected, what standards must they meet, how they will be trained and supervised, and what the success measures will be. This program could turn into patronage for Mr. Obama's liberal allies such as unions and community activists.

The Affordable Care Act may be unworkable in the aggregate, but it is also dogged by incompetent implementation. Even Democrats are increasingly concerned. At a hearing on Wednesday, Sen. Max Baucus expressed his frustration about a variety of problems, including whether the health-insurance exchanges will be established on time. "I just see a huge train wreck coming down," he told Ms. Sebelius.

A version of this article appeared April 18, 2013, on page A13 in the U.S. edition of The Wall Street Journal, with the headline: Steaming Toward the ObamaCare 'Train Wreck' and online at WSJ.com.

Related Article

60429d4cbe08e2d87aee52c15d503cf3
July 19, 2018 |
Article
More than half a century ago, former California Treasurer Jesse Unruh said, “Money is the mother’s milk of politics.” While better-funded candidates aren’t guaranteed victory, money still signals strength. ...
A1eb03afa4db981038938af32c4c3286
July 12, 2018 |
Article
It didn’t take long for the political blowtorches to start flaming after President Trump introduced his newest Supreme Court nominee. At 9:03 p.m. Monday, the president entered the East Room of the White House. ...
2512165508b8523a6bd9e652a853c595
July 05, 2018 |
Article
On Independence Day across the Atlantic, doubts over America’s global leadership. ...
7090d2fcdc121725c4e28a9592bcc450
June 28, 2018 |
Article
President Trump is justifiably proud of passing tax reform last December, telling audiences “because of our tax cuts, you can keep more of your hard-earned money.”  ...
Button karlsbooks
Button readinglist
Button nextapperance