Obamacare: A ‘Cascade of Failures’ | U.S. Chamber of Commerce
Mar 24, 2014 - 7:45am

Obamacare: A ‘Cascade of Failures’

Since President Obama signed Obamacare into law in March 2010, his administration has subjected the controversial health care law to a steady stream of changes and delays. But policy experts warn that the endless revisions are sowing uncertainty and weakening the law’s long-term prospects.

Health policy experts Tyler Hartsfield and Grace-Marie Turner of the Galen Institute calculate that more than 37 significant changes have been made to Obamacare since the law went into effect. More than half the changes have been made unilaterally by the Obama administration, rather than through legislative action or the normal regulatory process.

“But even this large number of changes hasn’t stopped the cascade of failures we are seeing today in the implementation of the law,” Hartsfield and Turner write.

Of the numerous delays to the law, two are of particular interest to the business community: the employer mandate and the Small Business Health Options Plan (SHOP) marketplace, an online exchange that was supposed to allow business owners to comparison shop and purchase online affordable employee coverage. Both have been delayed in a variety of ways repeatedly.

The employer mandate, which requires businesses with 50 or more full-time employees to offer insurance or face penalties, has been credited with contributing to the growth in the part-time workforce, as employers strive to keep their total number of full-timers below the threshold. But the Obama Administration delayed that mandate twice, first in July and then in February. Now it won’t take effect as written until 2016. That will be two years later than the statute intended.

Meanwhile, the SHOP exchange was to debut last year, but the Department of Health and Human Services postponed the site’s on-line enrollment capability until November 2014. Business owners are still able to purchase coverage  via paper application or fax. That’s not exactly the cutting-edge 21st century technological solution we were promised.

In some cases, members of the business community have welcomed the delayed actions—grateful for any respite from Obamacare’s tangled web of mandates, taxes and regulations.

But the ever-evolving changes to the law are also feeding into a substantial sense of uncertainty, in which business owners and managers can’t plan for a law that appears to exist in only the most provisional terms.

Bloomberg View economics columnist Megan McCardle argues that the repeated delays show that Obamacare is “beyond rescue.” Even if Obamacare is not repealed, she argues, the administration’s “hacksaw” approach is poor policy.

“The hacksaw makes the insurance market less viable, reduces coverage and forces the government to spend more money trying to keep insurers from exiting the market,” McCardle writes. “And because so much of this is accomplished via administrative rulings of extremely dubious legality, the administration is handing Republicans a tool that they can use to keep dismantling the law should they take the White House in 2016.” 

Delays: Political or Pragmatic?

Four years after the Obamacare became law, it’s fair to ask: with this much lead time to plan and execute the president’s foremost policy priority, why all the delays and ad hoc revisions?

In part, the problem is political. The president and his representatives have sought to portray the numerous changes as pragmatic responses to unforeseen circumstances. But some observers see the various changes and delays as a blatant attempt to forestall voter backlash against the president’s party in the November election.

Even the reliably Obama-boosting New York Times editorial board recognized the baldly political calculus behind the maneuvering: “Ideally, President Obama would not have extended the period for retaining the less-comprehensive policies, but in the current political environment, he opted to take a step to protect health care reform against a Republican takeover in the Senate,” a March 7 Times editorial notes with approval.

But by focusing on short-term political calculations, Bloomberg View’s McCardle argues, the Obama team is causing a long-term headache—not only for the private sector, but also for themselves.

“This is President Obama’s signature legislative achievement, the program for which he will be remembered. And he doesn’t have the courage to defend it, even when he is no longer facing re-election,” McCardle concludes. “If he won’t stand up for the hard choices his law requires, he can’t think that anyone else will either.”

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