ObamaCare Train Wreck Partially Rescheduled

Despite Presidential assurances that all is well, Democrats now openly fear that Obamacare is “an approaching train wreck.”  These were the words of Sen. Max Baucus, one of the principle authors of the legislation, who has decided to quit the Senate and go home to Montana to live in rural seclusion. Out of sight and, he hopes, out of mind. 

Last week while most of us were indulging in hot dogs and fireworks, the Obama Administration surreptitiously acknowledged that train wreck fears are not unfounded.ObamaCare-betting-your-life

In the late afternoon of July 2, as Americans were easing into a long weekend, the media began reporting that the Administration had “announced” a delay in the ObamaCare employer mandate.  The law’s requirement that all employers with more than 50 full time employees begin providing high-priced, government approved health plans, on 1/1/2014  will be delayed until 1/1/2015.

The word “announced” suggests that the President or at least the Secretary of the Department of HHS stepped up to the cameras and…well…announced what appears to be a direct violation of the health care law, which in turn would be a violation of the Constitution that does not permit the President to change a law enacted by Congress.

But “announced” exaggerates what happened. This bombshell was revealed in the fifth paragraph of a rambling, Treasury Department blog post by Mark Mazur, whose title places him four rungs below the Secretary of the Treasury.  One wonders how America would have learned of this stunning development if some wonky reporter had not postponed the start of his holiday to browse the tedious notices on Treasury’s website.

Over the past year thousands of employers have taken steps to avoid or adapt to the autocratic mandate including:

  • Reducing or freezing their full time work force at 49 or less
  • Cutting employee hours to less than 30 per week, the law’s definition of full time employee
  • Scraping expansion plans in order conserve resources to meet expected health insurance cost increases

The first paragraph of Mr Mazur’s post assures us that the Administration is in dialogue with and hears the concerns of employers about “reporting requirements” in ObamaCare. The second paragraph reveals that those requirements will be postponed from 2014 to 2015.   Then, scrolling down to paragraph five, we find the big news, expressed as an afterthought:

We recognize that this [reporting requirement] relief will make it impractical to determine which employers owe shared responsibility payments (under section 4980H) for 2014.  Accordingly, we are extending this relief to the employer shared responsibility payments.  These payments will not apply for 2014.  Any employer shared responsibility payments will not apply until 2015.

Those who are familiar with Ayn Rand’s Atlas Shrugged felt an ominous sense of deja vu as they read “shared responsibility payments,” the ludicrous euphemism for fines levied on employers who are unable to afford the lavish, no-limits, ObamaCare health plans.  “Shared responsibility payments” are the employer mandate enforcement mechanism.

So, by suspending the enforcement mechanism the Administration effectively postponed the start of the employer mandate by a year which – too clever by half – places it just beyond the 2014 Congressional elections.

This is not the first significant ObamaCare downgrade.  A few weeks ago the Administration quietly disclosed that the Small Business Health Options Program or SHOP would not be able to meet the law’s requirement that employees of small businesses be offered a choice of several health plan options, like government and big business employees are.  Instead, depending on state and county of residence, SHOP will offer either one or no options.

There was no indication in the July 2 “announcement” that the individual mandate  would be postponed.  This is the requirement that individuals not covered by employer insurance purchase their own health insurance.  Individual plans will be offered by online, state “exchanges” that are supposed to cross check information input by applicants with information provided by employers – via those “reporting requirements” that were just postponed – to verify that an individual is eligible for the main benefit of the exchange, a subsidy based on income.  So how will the government reconcile the individual mandate with the lack of employer data.

As Americans were sweeping up their fireworks ashes on the morning of July fifth, The Department of Health and Human Services published the answer.  On page 356 of a 600 page “Final Rule” document it is revealed that during 2014 state exchanges will not have to verify an applicant’s “attestation” or claim that he/she is eligible for a subsidy!

So, if you’re an individual applying on the exchange you can claim your income is lower than it is and receive a subsidy for which you are not eligible under the law.  Or, if you’re eligible for a small subsidy, you could claim a larger one.  Billions in erroneous subsidy payments are the likely outcome.

The IRS is supposed to cross check the information you gave the exchange with the tax return you file the following April and collect back any excess subsidy you received.  Nobody knows if or when the IRS will actually have the ability to carry out this new assignment.

During the acrimonious debate leading up to passage of the infamous ObamaCare law in 2010 then Speaker Nancy Pelosi famously told a news conference that Congress would “have to pass the bill so you can find out what is in it.”  Three years later “what is in it” turns out to be fluid and still not knowable.

For now all we can do is experience a combination of amusement and dread as we hurtle down the tracks toward the inevitable.

1 Comment so far

  1. Drew on July 14th, 2013

    Moving on from fashion news…….

    I’m amused and saddened by those attempting to spin this is “good governance.” As I’ve always said, when you have evidence of good governance you always bury it right before the 4th of July holiday. (snicker)