Andrew Mangione – With Congress back in session after the 4th of July holiday recess, Capitol Hill is buzzing over the news of another ObamaCare setback. In a House Ways and Means Health Subcommittee hearing on July 10, the Obama administration’s decision to temporarily delay implementation of the Affordable Care Act’s (ACA or “ObamaCare”) employer mandate sparked serious concerns about the administration’s ability to manage the major changes that will be made in the coming months and years to the health care system.
Chairman of the subcommittee, Kevin Brady (R-TX), noted that the most recent delay follows a pattern of postponements and repeals of several provisions of the ACA. Among them, the repeal of the ACA’s long-term insurance plan known as the CLASS Act, the repeal of the 1099 small business tax reporting provision, and the decision by 34 states not to establish state health insurance exchanges. “The Treasury Department’s announcement confirms our concerns – ObamaCare is simply not ready,” stated Chairman Brady. In contrast, Ranking Member Jim McDermott (D-WA) insisted that this delay was not necessarily a signal of the failure of the ACA. “There’s been a lot of noise on both sides of the aisle over what this shift means,” the Ranking Member stated, “but nobody really knows.” However, Sean Falk, owner of WolFTeaM LLC and President of Nachogang LLC, testified that the ACA and its various modifications were already preventing him from growing his business. “Navigating the constant changes, waivers, extensions, regulations, and clarifications of an already cumbersome law has diverted my focus from developing my business and creating new jobs,” Falk asserted.
The ACA’s employer mandate – which will not be enacted until January 1, 2015 – applies to businesses with 50 or more employees and requires that employers provide health insurance to full-time workers, defined in the law as those working 30-hours-per-week or more. Expert witnesses raised concerns that the employer mandate, once enacted, would drive small businesses to hire fewer workers and offer less full-time positions. “The substantive issues really haven’t changed. They’re the same, they’ve just moved back a year,” stated William Dennis Jr., Senior Research Fellow at the National Federation of Independent Business. Avik Roy, Senior Fellow at the Manhattan Institute, argued that “the ACA’s employer mandate perversely incentivizes employers to avoid hiring low-income workers, precisely the type of workers who tend to be uninsured.” Witnesses went on to say that the delay of the reporting requirements of the employer mandate would complicate the verification of an individual’s eligibility for subsidized coverage, leaving the Center for Medicare and Medicare Services (CMS) to – at times – rely on individual attestation, which witnesses referred to as an “honor system.”
During the hearing, the subcommittee also tackled whether the individual mandate, which is slated to take effect on January 1, 2014, should still be enacted in light of the delay of the employer mandate. Roy stated that the exchanges provided by the ACA will cause prices for health insurance to rise, citing that the state of California’s health insurance costs will increase on average by 70 percent for unsubsidized individuals. In fact, the Congressional Budget Office reports that the ACA will raise individual health insurance premiums by $2,100 per year. “For patients, families, and their children, though, you have to wonder,” Chairman Brady inquired, “if ObamaCare isn’t ready for businesses, is it ready for my family?”
The legality of the administration’s actions was also called into question by members of the subcommittee. The Treasury Department – which declined to testify before the committee on this issue – cited its general rulemaking authority in the decision to delay the implementation of the mandate. Though the Obama administration has faced inquiries by members of Congress as to the legality of its decision, the White House has yet to formally respond.
Chairman Brady announced that the subcommittee will revisit this important topic next Wednesday, July 17th, when Treasury officials are expected to testify at a second hearing regarding the delay of the employer mandate. AMAC continues to closely monitor the public’s reaction to the Obama administration’s most recent announcement as well as how legislators are responding to information derived from these hearings. As the fastest growing alternative organization representing seniors in Washington, you can trust AMAC to bring you the latest news that pertains to your health care.