ObamaCare’s Unraveling Begins

U.S. District Judge Henry Hudson’s ruling last month that Obamacare’s individual mandate is unconstitutional was a huge rebuke of the president’s health law – but it was just the beginning.

And in another federal courtroom in Florida the same week, U.S. District Judge Roger Vinson also was skeptical about the federal government’s authority to require everyone to purchase government-approved health insurance.

Judge Vinson heard arguments in a case brought by 20 states and the National Federation of Independent Businesses against Obamacare. The judge said he paid cash for the delivery of his first child, when he was uninsured, and he was unconvinced of the need for the federal government to require everyone to purchase health insurance in order to get medical care.

But the reach of federal power seems to know no bounds in the eyes of the Obama administration. The judge asked whether the government’s theory would allow regulation of any behavior with an economic impact. “They can decide how much broccoli everyone should eat each week?” Vinson asked. “Certainly,” replied David Rivkin, an attorney representing the states. “The act would leave more constitutional damage in its wake than any other statute in our history,” he said.

Meanwhile, other components of the law are beginning to unravel.

The Obama administration has granted hundreds of waivers to companies and unions – including McDonald’s, Jack in the Box, and the United Federation of Teachers – exempting them from some of the early requirements of Obamacare. The firms received a one-year delay in complying with the law’s new definition of health insurance.

Employers often offer “mini-med” plans, especially to lower-wage, part-time and seasonal workers. The policies cover basic services, such as routine doctor’s visits, preventative care and prescription-drug coverage. These mini-med plans typically have limits of a few thousand dollars and are like starter insurance. They’re better than nothing for people who can’t afford a comprehensive policy.

McDonald’s reports that 85 percent of its employees with a mini-med plan have under $5,000 in annual medical expenses, and employees value the inexpensive coverage.

Obamacare basically makes mini-med plans illegal. It forces employers to radically expand the policies, making them much more expensive.

What administrators didn’t anticipate, though, is that many employers would have to either push the added cost on to workers or drop the policies altogether. Instead of getting more robust insurance coverage, workers would get stuck with a smaller paycheck and no insurance at all.

To prevent millions of workers from losing the coverage they have now, federal officials have granted more than 200 companies a temporary exemption.

But no one can tell why some companies are getting waivers from the rule and not others. Decisions are arbitrary and political. People who can afford expensive lawyers to figure out how to weave through the bureaucracy can get special treatment. Everyone else is out of luck.

But this is only the beginning of the federal government’s micromanagement of health care. Obamacare imposes a battery of new rules on insurance plans, dictating that they must spend a certain percentage of premium payments on medical care vs. administrative costs. But many firms simply can’t meet the test, for a number of reasons.

Some companies are just getting out of the health insurance business altogether. Principal Financial Group, an Iowa-based company, recently announced it would stop selling health insurance, so its 840,000 customers will have to get policies elsewhere. They, too, aren’t able to keep the coverage they have, as the president promised.

Other insurers are sure to follow – especially the smaller, regional firms that don’t have economies of scale. That means less competition for the big insurers – and, as a result, higher premiums.

The administration has demonstrated that it is willing to consider adjusting the health overhaul to avoid millions of people losing coverage. But as Obamacare unfolds, the only way to avert real catastrophe is to repeal it and start over with real reform that puts doctors and patients, not Washington bureaucrats, in charge of health care decisions.

Published in The Orange County Register, December 30, 2010.

SHARE THIS ARTICLE

About the author