Wednesday, November 6, 2013

Obama Administration proposes to cut yet another great road thru ACA

According to Kaiser Health News, today the administration will propose exempting “certain self-insured, self-administered plans” from the law’s temporary reinsurance fee in 2015 and 2016.  Kaiser notes the exemption will affect mostly Taft-Hartley union plans which are often not only self-insured, but also self-administered.  Thus the exemption would not apply to insurers or to self-insured employers who hire a third-party to adjudicate their medical benefit claims.

I haven't been able to find authority in the ACA as enacted that supports this exemption – other than the sweeping discretionary powers given to the Secretary of HHS. (ACA 1321 (a)(1)(D) “such other requirements as the Secretary determines appropriate.”) So this exemption – as with other exemptions and waivers before it – will be implemented by administrative diktat, not by due process in Congress and public debate of the issue.

KHN also observes that “Both unions and business have criticized [the new reinsurance fee] as penalizing employer-sponsored health insurance to support plans bought directly from insurers.”

I think KHN is correct.  But it seems to me that fact makes it hard to rationalize the proposed new exemption:

■ In the first place, why exempt some union plans but not all?  Not all union plans are self-administered.

■ Second, why is it important to distinguish between self-insured plans?  Why not treat all self-insured plans the same way, regardless whether the self-insured plan sponsor is self-administered, or not?

■ Third, why should ANY plans be exempt if ALL are not exempt?  In other words, why is a self-insured plan different for the purposes of this reinsurance fee, from an insured plan?
Further I don’t find anything in the KHN article or in the proposed HHS rule that explains why it’s suddenly so important to slice the self-insured market this way. Who can or will explain all these things?

Besides, this administration’s habitual reliance on exemptions, waivers and executive orders outside due legislative process has become worrisome.  It calls to mind this exchange from the 1967 Academy-Award winner A Man for All Seasons:

Sir Thomas More: What would you do? Cut a great road through the law to get after the Devil?

William Roper: Yes, I'd cut down every law in England to do that!

Sir Thomas More: Oh? And when the last law was down, and the Devil turned 'round on you, where would you hide, Roper, the laws all being flat? This country is planted thick with laws, from coast to coast, man's laws, not God's! And if you cut them down—and you're just the man to do it—do you really think you could stand upright in the winds that would blow then? Yes, I'd give the Devil the benefit of law, for my own safety's sake!
Is the Obama administration moving America away from a government of laws?  If so where exactly are we heading?  Can Americans trust this administration to answer these questions forthrightly? The question is important - - for our own safety's sake.

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