But it’s no problem if you are a friend of the Obama administration. Then you can get a legal waiver.
The American health care system is a mess, an inefficient public-private hybrid. Federal spending and tax policy have encouraged development of a third party payment system which generates wasteful over-spending.
Unfortunately, the president’s program is no answer. It centralizes medical decisions in Washington. Politicians will decide what health care plans should be offered, what benefits should be included, how much people should pay in premiums, and what medical trade-offs should be made. ObamaCare also reinforces the underlying problem of third party payment, guaranteeing an even greater price spiral in the future.
So far “reform” has caused insurers to raise premiums and cancel policies. Even the administration admits that the president’s promise that Americans could keep their insurance is void. Jobs are being lost as health care providers and insurers cut back on operations to prepare for the new law. The administration double counted the alleged cost savings of health care reform. And Medicare’s chief actuary warned that the fiscal estimates used to pass the legislation are essentially fraudulent.
Still, President Barack Obama defends his program. Trust him, he says, and everything will work out.
If so, why has the administration issued program waivers hither and yon? After all, if the legislation is going to help people, why deny them the benefits?
By mid-June the administration had approved 1433 waivers to companies, unions, associations, and states covering 3.2 million people. The Department of Health and Human Services has been an easy touch.
Earlier this month the Government Accountability Office reported: “as of April 25, 2011 [the Center for Consumer Information and Insurance Oversight] received a total of 1,415 applications for a waiver of restrictions related to annual limits on health benefits, and approved most of these applications. For 1,347 of the applications, or over 95%, CCIIO approved waivers covering all plans in the applications. For another 25 applications, CCIIO approved waivers for some plans and denied waivers for others within the same application. CCIIO denied waivers covering all plans in 40 applications. Three applications were pending at the time of our review.”
The waivers were granted because, contra administration claims, the new rules threatened to harm consumers. Explained the GAO: “CCIIO granted waivers on the basis of applications’ projected significant increases in premiums or significant decreases in access to health care benefits.”
The administration downplayed the importance of its actions. Steve Larsen, head of CCIIO, explained: “When you make changes to the health care system, there are some changes you cannot make immediately.” But how do the premium increases or access reductions turn positive over time? Larsen spoke of “a couple important areas where flexibility is needed to achieve the ultimate goal.”
But this “flexibility” cannot redeem a flawed law. The real issue is political. Larsen acknowledged that “you’d be hearing that the law doesn’t work” if his agency did not approve the waivers.
That’s true — because the law doesn’t work. Granting waivers merely puts off the day of reckoning.
Particularly significant was the waiver recently granted to the state of Maine. The legislation sets medical loss ratios, that is, mandates concerning what share of premiums must be spent on patient care. Setting MLRs is an indirect imposition of price controls. It is a stupid policy, since there ain’t no free lunch.
This provision restricts the sort of health insurance policies which can be offered, such as consumer-oriented health savings accounts. The rule penalizes insurers for unpredictable changes in health care costs and perversely discourages cost-saving provisions, such as administrative action to limit excessive care or fraud. The measures ultimately may drive some insurers out of the market or even out of business. The Congressional Budget Office warned: “A policy that affected a majority of issuers would be likely to substantially reduce flexibility in terms of the types, prices, and number of private sellers of health insurance.”
In granting Maine’s waiver, Steve Larsen acknowledged that the rule “has a reasonable likelihood of destabilizing the Maine individual health insurance market.” The state acted after HealthMarkets Inc. threatened to stop selling individual policies. Unfortunately, this problem will not end in 2014, when the waivers are set to expire. Nevertheless, Kentucky, Nevada, and New Hampshire have requested similar waivers.
The next wave of waivers may be for states seeking to suspend “maintenance-of-effort” requirements under Medicaid, which require preserving a minimum level of benefits. Half of the states already have requested that HHS waive this requirement.
Perhaps the most shameless waiver request came from former Rep. Anthony Weiner before his Twitter mishap. He advocated assisting New York City so it “can save money and have more control over its own destiny.” Fair ’nuff, but why deny other Americans the same control over their destinies?
Presumably because they are not important enough to warrant the administration’s attention. Rep. Weiner noted: “A lot of people who got waivers were … people who are our friends.”
Ah, yes, “our friends.”
The administration recently announced that it will no longer approve waivers as requested, but will require that all applications be filed by September. Steve Larsen claimed that this change is not a response to the embarrassment of a succession of stories about waivers being issued. But the timing is suspicious.
There is a simple solution. Wrote Peter Suderman of Reason Online: “OK, so not everyone is getting a waiver to opt out from one of the new health care law’s requirements. But perhaps everyone should. Already the Department of Health and Human Services seems to have decided that, at least in the reasonably near future, waivers will be handed out generously to unions, businesses, and state governments alike.” Why not do the same for anyone adversely impacted by the law, which is pretty much everyone?
The health care system still needs real reform, which means empowering patients, not politicians. Congress should create a permanent waiver for all of us — by repealing ObamaCare.
