National News

July 13, 2013

Q&A: Latest health law fight: Battle of mandates

WASHINGTON — If businesses get an extra year to meet a new health care mandate, why not everybody else?

Republicans, seizing on the White House delay for employers, are demanding that the Obama administration give individual Americans an equal break. But the White House says that’s just a thinly disguised gambit for dismantling the entire health care overhaul.

What to believe?

“If businesses can get relief from Obamacare, the rest of America ought to be able to get relief as well,” declares House Speaker John Boehner of Ohio.

“A delay in the individual mandate is repeal by another name,” responds White House communications director Jennifer Palmieri. It’s a political attempt to sabotage health care for the uninsured.

The battle of the mandates is the latest clash in the long-running political fight over health care — a fight that’s far from over.

Under President Barack Obama’s big overhaul, most people will be required to have insurance starting next Jan. 1, and larger businesses were supposed to offer affordable health care to their employees who average 30 hours of work a week.

Here are some questions and answers in the aftermath of the administration’s sudden delay of the employer mandate:

Q: So what are the law’s mandates?

A: One is for individuals and another for employers. The individual requirement takes effect in 2014; the employer mandate has been delayed until 2015.

Under the health care law, virtually all Americans must carry medical insurance, either through an employer or a government program, or by buying their own policies. Most people are unaffected because they already have coverage.

Q: If you don’t have it, how do you get it?

Middle-class individuals and families with no access to job-based health insurance will be able to buy subsidized private coverage through new markets that open Oct. 1.  Low-income people will be steered to an expanded version of Medicaid in states that accept it.

Those who remain uninsured will face fines that start small — as little as $95 in 2014 — but build up over time. There are exceptions for financial hardship and other circumstances.

Q: And what about businesses?

A: The employer mandate applies to companies with 50 or more workers. They could face fines for not providing coverage, and also if their plan is deemed unaffordable under the law.

According to the Kaiser Family Foundation, 95 percent of employers with 50 or more workers already offer health benefits. Nonetheless, it’s a big issue for small businesses that are growing, and for companies that employ lots of low-wage workers not currently offered health insurance.

Q: If the administration delays one mandate, why not the other?

A: Actually, the two mandates are in the law for different reasons and purposes. Delaying the individual requirement, which has survived a Supreme Court challenge, would have a much bigger impact.

It serves as a stiff nudge to get as many Americans as possible into the insurance pool. The premiums of healthy people are needed to offset the cost of covering people in poor health who currently can be excluded by insurers.

“It’s what’s going to keep the insurance markets from collapsing once we open the door to people with pre-existing conditions,” said Timothy Jost, a law professor at Washington and Lee University in Virginia who supports the health overhaul. Starting Jan. 1, insurers are barred from turning away people in poor health.

The employer mandate was designed as a guard rail, to deter employers from dropping coverage and shifting workers to taxpayer-subsidized programs. It’s expected to play only a supporting role in the expansion of coverage to millions of uninsured people.

Q: What’s the impact of delaying the employer requirement?

A: The administration says it will give more time to work out the rules in a way that’s fair to businesses. Reporting requirements that would allow the Internal Revenue Service to enforce the mandate turned out to be extremely complicated. Among the problems is that businesses have to keep track of employees’ hours in a different way. Business groups were relieved to have another year.

However, the delay could also raise government costs and leave some workers uninsured.

Taxpayers would wind up paying more because some workers will get coverage through the new insurance marketplaces instead of through employers, and they’ll be entitled to new tax credits to help with premiums.

Q: Why are Republicans objecting to a delay in a law they’ve been trying to repeal?

A: Democrats say the answer is clear: politics.

White House spokesman Jay Carney calls it “a nihilistic effort” to undermine the law, accusing Republicans of trying to take away benefits from millions of Americans “in the name of partisan political victory.”

Republicans say they are calling attention to problems with the law that run counter to the administration’s reassuring message that everything is on track.

“Clearly the rollout of Obamacare is in disarray,” said Rep. Kevin Brady, R-Texas, chairman of the Ways and Means health subcommittee.  The delay raises questions of whether the White House “is competent enough to administer its own massive health care law.”

Q: How does Obama have the legal authority to delay a law just because rules aren’t ready in time?

A: The Treasury Department — which oversees the IRS — says it is acting under long-settled authority to write the rules for carrying out laws passed by Congress. Additionally, a spokeswoman said the department has authority to grant “transitional relief” when major legislation is being introduced.  

That may be so, critics say, but the delay is clearly not in keeping with the letter of the health care law.

“It is quite obvious, on its face, that this is not what Congress intended,” said James Capretta, a health care expert with the conservative Ethics and Public Policy Center.

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