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Why is Massachusetts, of all places, requesting waivers from the ACA/Obamacare?

by: Josh_Pioneer

Mon Aug 05, 2013 at 13:47:27 PM EDT


(Very good question. - promoted by Rob "EaBo Clipper" Eno)

The Obama administration's recent decision to postpone enforcement of the employer mandate, a key provision of the Affordable Care Act (ACA), and the House's recent vote to delay both the employer mandate and the individual mandate (with 35 Democrats joining most Republicans in supporting delay of the employer mandate, and 22 Democrats on the individual mandate) should come as no surprise to close observers of the law's rocky implementation process. This latest delay joins the growing list of carve-outs granting year-long or multi-year "grace periods" on various ACA rules, which have largely been ignored by the media.

There is bipartisan concern that the ACA tramples on current state regulation of insurance markets. For example, the law mandates federally regulated national insurance plans that ignore the states' historic role in approving health-care plans. It forces states to allow only plans that offer insurance to everyone regardless of health status (guaranteed issue) and that charge young adults just starting their careers more money to subsidize older and wealthier citizens (modified community rating). These two regulations are the source of many of the headlines popping up around the country detailing the rate shock of premium increases.

In the past, states have decided on the best method to regulate insurance plans to meet local conditions, whereas the ACA implements a one-size-fits-none approach. In response, the National Association of Insurance Commissioners has gone as far as to circulate a report titled "Rate Increase Mitigation Strategies."

Meanwhile, the heavily Democratic Massachusetts legislature has forced Governor Deval Patrick to formally request a partial waiver from the ACA.

Until now, the conventional wisdom has been that the federal law is a carbon copy of former Governor Romney's 2006 state health-care law. However, the Commonwealth's legislature has already passed three separate bills to iron out the conflicts between the two laws; the latest has over 100 sections and makes more than a dozen major changes to state law.

Because of the major differences between the two laws, the Obama administration has granted Massachusetts two highly questionable multi-year delays in implementing the new regulations in order to delay sizable premium spikes.

Cross posted from Nationalreview.com: http://www.nationalreview.com/...

Josh_Pioneer :: Why is Massachusetts, of all places, requesting waivers from the ACA/Obamacare?
Some features of the current Massachusetts law would be prohibited by the ACA. Massachusetts permits insurers to offer discounts to, for example, someone who works in a low-risk industry or participates in a wellness program. The federal law, on the other hand, requires premiums to be based on a single set of factors: family composition, the ages of covered members, tobacco usage, and geographical location. According to state officials, this will cause premiums to rollercoaster, resulting in "extreme premium increases" for many, and a decline for others.

A Pioneer Institute analysis found that 60 percent of small businesses in Massachusetts will experience a rate hike - for some the increase will be over 98 percent - due to this one regulatory change. These same employers are already bracing for the law's 18 new taxes.

Once Bay State officials had identified the adverse impacts of the ACA, they requested additional flexibility or a waiver. The Department of Health and Human Services responded by granting a two-year delay to phase out the prohibited rating factors. This is an extraordinary action, given that HHS itself acknowledges that the ACA doesn't include a provision for granting such a delay.

Most recently, a Boston Globe editorial broke the news that HHS has also granted Massachusetts a two-year grace period before complying with the requirement that insurers set rates once a year. At present in Massachusetts, insurers adjust rates every quarter to best reflect the current cost of health care. The ACA would force health plans, as the Globe puts it, "to develop rates that, in some cases, won't take effect for 18 months." The Globe added, "The predictable effect: because health plans will want a cushion against the greater uncertainty of that longer period, they will seek higher rates than they otherwise would. Some estimates are that premiums will increase by an extra 1 to 2 percent as a result." HHS has yet to reveal the legal rationale for the grace period.

The delay of the employer mandate for the whole nation, along with the grace period for rating factors and rate-setting in Massachusetts, should prompt other states and Congress to raise legal questions about the actions of HHS. Utah senator Orrin Hatch recently started this conversation with a letter to HHS inquiring about the Bay State's delay. He asked for the "specific legal authority to grant a transition period . . . ; whether similar transition periods will be provided under the same legal authority to states expressing similar concerns . . . ;" and for a legal explanation for why HHS was able to grant a delay when it had previously stated otherwise. The reply from HHS failed to address any of these questions. Congress should investigate these matters further.

The proliferation of unevenly distributed waivers, grace periods, delays, and transitions highlights the complexity of the ACA, but it also points to flaws in the final language of the law. The result is a bureaucracy empowered to award special carve-outs to organizations with effective lobbyists and to states with favored political leanings.

The centralized nature of the ACA will create numerous problems for states whose current health-insurance laws are working well. Minnesota governor Mark Dayton, for example, is trying to protect a well-functioning state high-risk pool called the Comprehensive Health Association, since state officials worry that dumping patients with pre-existing conditions into the ACA's exchanges will cause premiums to spike. Idaho and Maine may lose their cost-effective and successful reinsurance systems, which prevent insurers from avoiding coverage of sicker patients.

In the midst of such tumultuous system-wide change, day-to-day decisions by HHScan fly beneath the media's radar. The treatment of Massachusetts serves as a warning about the carve-out governing style that has characterized ACA implementation. Presumably other states can make equally valid claims for delays. Perhaps it's time for a bipartisan discussion about delaying the whole law a couple of years.

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There are some elements that are true to my life. Being an actor in Taiwan, there's not that much work and - because the industry doesn't really create enough films for them to subsist financially - I did play the stock market. Even as I was shooting this film, I was playing the stock market and - when I was making a lot of money - it showed on camera. But then when I wasn't making enough, it likewise affected the tone of the film.


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