Posted 10/26/11 on Health Policy and Marketplace Review
Republican presidential frontrunner Mitt Romney has pledged to end “Obamacare.” Upon taking office, he would immediately begin the process by granting the states waivers from having to implement it:
“I’ll grant a waiver on Day One to get repeal started. On Day One, granting a waiver for all 50 states doesn’t stop it in its tracks entirely. That’s why I also say we have to repeal Obamacare, and I will do that on Day Two, with a reconciliation bill [requiring only 51 votes in the Senate] because as you know, it was passed by reconciliation with 51 votes.”
Romney appears to be on thin ground in making his waiver promise and his promise to use reconciliation to stop “Obamacare” could lead to chaos in the market and among consumers.
The waiver promised is based on a provision in the law authored by Senator Ron Wyden (D-OR). Wyden’s provision was designed to allow states to petition the feds to opt out of the new health care law by taking the federal money that was going to be spent in their state under the Affordable Care Act and draft a comprehensive plan of their own that covered at least as many people as well as the Affordable Care Act would have.
Here is the provision straight out of the Affordable Care Act:
“(1) IN GENERAL.—The Secretary may grant a request for a waiver [to a petitioning state]…only if the Secretary determines that the State plan…will provide coverage that is at least as comprehensive as the coverage defined [by the new health law] and offered through Exchanges established under this title as certified by Office of the Actuary of the Centers for Medicare & Medicaid Services based on sufficient data from the State and from comparable States about their experience with programs created by this Act and the provisions of this Act that would be waived; [that the state] will provide coverage and cost sharing protections against excessive out-of-pocket spending that are at least as affordable as the provisions of [the new health care law] would provide; [and] will provide coverage to at least a comparable number of its residents as the provisions of [the new health care law] would provide; and…will not increase the Federal deficit.”
And, in any event, this waiver provision in the law will not take effect until 2017. How Romney could use this waiver provision to stop the law in its own tracks on its primary effective date of January 1, 2014 is not at all clear.
Romney is arguing that this language is written in a way that would give his Health and Human Services (HHS) Secretary the ability to just grant a waiver to the states to skip most of the law!
For example, the Romney camp is suggesting that the requirement to provide coverage to a comparable number of people doesn’t refer to how many people are covered but instead allows them to interpret that as just making a comparable number of health insurance plans available in the market.
It is possible that a Romney administration could try to delay implementation of critical parts of the law from the scheduled January 1, 2014 implementation date. With so much of the implementation of the law up in the air waiting for a Supreme Court ruling and the 2012 election results, it is not out of the question that there will have to be delays past 2014, no matter who is president.
But if Romney tried any delays intended to derail the law, I would have to believe that about every liberal and progressive group in America would instantly be in front of about every federal judge in the land—likely with success.
Romney has also argued that he would use the Senate budget reconciliation process to repeal the new health law, “on Day Two.” Presuming the Republicans continue to control the House, and have a simple majority in the Senate, as well as the White House, they can do lots of damage to the law with the 51 votes needed to pass a budget reconciliation bill. But a budget reconciliation bill would have to apply only to the budget-related elements of the new law—such as the premium subsidies. That procedure could also kill the individual mandate, Medicaid expansion, money for the insurance exchanges, and the employer mandate.
Key non-budget elements of the bill—such as the insurance underwriting reforms—would take 60 votes to repeal—a big stretch for the Republicans most likely to capture Senate seats in the low 50s. Even with a couple of Democratic defections, it would be very difficult to get to 60-votes for a full repeal.
So, Romney and Republican majorities could create a scenario where any budget items, like premium subsidies, would be stripped from the law. But non-budget items, like the insurance reforms granting coverage to all comers, would remain in effect. The impact of that kind of situation would be sizeable for the insurance risk pool where insurance companies would have to take all comers but have little growth in the number of people they would insure.
And, don’t look for Democrats to come to the rescue of the insurance industry in this kind of scenario. They would use every bargaining chip they had to try to preserve the law Romney has promised to kill.
In trying to keep his promise to kill the law, Romney could end up creating a chaotic environment driven by enormous uncertainty over just which parts of the new health care law would be implemented–for consumers, health care providers, and insurers.
Doesn’t that make you feel better?
Bob Laszewski is a DC-based health policy analyst and advisor. He writes at Health Policy and Marketplace Review.