When Congress wrote 2,700 pages of legislation to create ObamaCare, that was only the starting point in the government’s re-engineering of our health sector. Tens of thousands of pages of regulation – or more – are needed to provide detailed guidance dictating exactly how its maze of new programs must operate.
But deadlines are looming for ObamaCare for programs that are required to begin in 2014. And the administration is significantly behind schedule, with insiders speculating the White House is waiting until after the election to issue an avalanche of rules, many of which are sure to be controversial.
Government re-engineering of the private marketplace is a complex task. So far, more than 13,000 pages of federal ObamaCare regulations have been issued, but employers, states, and health companies say they need much more.
One recent rule took 18 pages to define a “full time employee.” That’s needed because a company employing 50 or more full-time workers must provide health insurance or pay a fine. But part-time employees working fewer than 30 hours a week are exempt. How the government defines a full-time employee has huge financial implications for a company. The rule describes the difference between “variable hour employees” and “ongoing employees,” for example, and how to determine what time period to measure with definitions of “standard measurement periods” and “look-back measurements.”
Employers are hiring battalions of lawyers to help them decipher the bureaucratese, and some companies already have announced they plan to cut the hours of many of their workers so they fit within the part-time threshold, arguing even the $2,000 to $3,000 per-employee fines would more than wipe out their profit margins.
States also are in a quandary. HHS claims it is giving states “significant flexibility” in implementing ObamaCare, including the controversial health insurance exchanges, but even those supporting the law are increasingly alarmed because they say they simply don’t have enough information to proceed.
The law requires exchanges to be created as a funnel for hundreds of billions of dollars in new health insurance subsidies and also as a vehicle to implement significant new regulations of the health insurance market.
The exchanges are required by law to begin enrolling members on October 1stof next year, and a huge amount of work needs to be done to meet that deadline.
But first, states need information. For example, the law says that if states don’t set up an exchange, the federal government will swoop in and set up its own, and they want to know what a federal exchange would look like before they decide whether to set up their own exchanges.
The Republican Governors Association wrote a letter to President Obama in July saying, “As the exchange issue is currently interpreted, states are essentially being tasked with shouldering all the responsibility without any authority.”
The governors listed 17 critical questions just on the exchanges that they must have answered before they can determine best how to proceed so they can “have full and complete knowledge of all the implications of our decision.” They are still waiting for a reply.
Health plans also are in a dilemma. Health insurers that plan to offer policies through the exchanges need to know what benefits must be covered and at what price so they can design and price their offerings. And they must get state approval for the new plans before they can be offered in the exchanges, a process which can take up to a year – or more in some states – to complete. They also need time to contract with providers, develop marketing materials that meet as-yet-to-be-announced government specifications, and figure out how to navigate the complex web of subsidies, risk adjustment, and calculations for cost-sharing – for starters. They have hundreds of other critical questions.
Dan Durham of America’s Health Insurance Plans said in recent testimony before the House Ways and Means Health Subcommittee, “There is an urgent need for more regulatory clarity with respect to exchanges and insurance market reforms,” adding “there is a tremendous amount of work that needs to be done” if the law is to get up and running.
“Unless such guidance is forthcoming, it will be difficult for health plans to complete product development, fulfill network adequacy requirements, obtain necessary state approvals and reviews, and ensure that their operations, materials, training and customer service teams are fully prepared for the initial open enrollment period that begins on Oct. 1, 2013,” Durham said.
Administration officials are mum on when the regulations will be issued. A Health and Human Services official repeated that prediction in an email to reporters in October. “HHS has worked to give states maximum flexibility in implementing the law and consumers in all fifty states will have access to an exchange” by next October, the official said.
There is some speculation that the regs are being held back because of the elections, since the deeper one dives into the details, the more problems and conflicts are created. But Neil Trautwein of the National Retail Federation says it’s also an extraordinarily complex task.
“We know that many of the regs have been delayed,” says Trautwein. “Part of it I’m sure is the political calendar, but a large part of this, and I can say with some confidence because we’ve worked well with the administration on a lot of these questions, is that the subject matter is so infernally complex. They’ve got a lot of tough questions to answer.”
The fate of ObamaCare is, of course, predicated on who wins the election on November 6. If Gov. Mitt Romney wins, he has vowed to begin immediately the process of working with Congress to repeal the law. And Congress will surely begin actively blocking any new rules that come out and working to unwind those already on the books.
But even if President Obama were to be reelected, his Rube Goldberg health law may well implode from the nearly impossible task of re-engineering one-sixth of our economy to fit his centrally-controlled archetype.
Posted on Forbes: Health Matters, October 28, 2012.