Regulation

ObamaCare's Opaque Waiver Process

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There's been a lot of speculation about the many ways that last year's health care overhaul might break down. The Medicare cuts might not be sustainable; the Cadillac tax might further delayed or canceled; the Independent Payment Advisory Board might not achieve the savings the law's authors hoped for; etc., etc.

But in fact, we already know that some provision within the Patient Protection and Affordable Care Act won't—indeed, don't—work as written, at least in some specific instances. The Obama administration has implicitly admitted that some sections are flawed and unworkable by issuing at least 222 waivers allowing certain companies and unions to get out of some of the law's requirements on a temporary basis. You can portray the waivers as a way for the administration to offer some regulatory flexibility, but they carry a clear subtext: The law, as written, expects too much. The requirements, at least for now, are too great.

At the same time, the waivers also potentially give the administration some flexibility of their own—flexibility to play favorites, that is. That's because the process involved in obtaining a waiver is as clear as mud. As Hoover Institution research fellow (and Reason contributor) David R. Henderson explained in an NCPA brief last October, "the petitioning process is ill-defined, and there is no legal standard at all for granting the waivers themselves. Asking for such waivers is a crapshoot, dependent on the whims of bureaucrats."

The lack of a transparent standard presents a dual problem. It makes it even tougher for those companies who want waivers to determine whether or not they'll qualify. It also potentially politicizes the process, as the waivers could easily be used to reward friends, pick favorites, and alter the competitive equilibrium within certain industries. The administration would no doubt deny such a charge. But of course without clear definitions, it would be difficult to prove otherwise.

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  1. “It also potentially politicizes the process, as the waivers could easily be used to reward friends, pick favorites, and alter the competitive equilibrium within certain industries.”

    You mean like reward friends and punish enemies?

    1. What??! That’s un-possible.

      1. Just put some money in the meter and STFU.

  2. And here I was hoping the waiver process would be the single aspect of PPACA not to be nebulous.

  3. You can have a discretionary waiver process, or you can have the rule of law, but you can’t have both.

    1. Exactly. Rule of law = everyone treated the same, no special favors.

      This IMO is one of the worst parts of the bill and that is saying a lot. If it’s such a great fucking law then everyone should have to follow it. If it’s unworkable then repeal it.

    2. I seem to recall that laws that improperly grant too much discretion are invalid.

      1. What? Look, some animals are more equal than others.

      2. I’m wondering about whether this waiver process is constitutional, e.g. what about separation of powers? Isn’t telling people what laws they have to follow a function of the legislature, not the executive branch? Im not a con law scholar but it seems like another basis for a constitutional challenge.

        Then again my question assumes that the courts still care about the Constitution.

  4. It also potentially politicizes the process, as the waivers could easily be used to reward friends, pick favorites, and alter the competitive equilibrium within certain industries.

    But not by this administration. Maybe the evil GOP would abuse power granted it by a wussified congress, but not The Obama.

    1. If this law still stands when the GOP takes over the rest of the government in 2012, they should openly and blatantly demonstrate this feature. “Here we are rewarding this guy we like. And here we are awarding a Republican constituency. See how this works?” Then repeal the sucker for good.

    2. As near as I can tell, the Democrats are suffering from the same syndrome that was afflicting Republicans during the Bush administration: “MY president will live forever! And he’ll win every election for the rest of eternity! 22nd Amendment? Never heard of it, and whatever it is I’m sure we can find a loophole for MY president only!”

      1. How can they possibly think that when a GOP takeover is almost inevitable now? I mean, come on.

        It’s stuff like this that convinces me that all of the supposed party hatred is bullshit. They’re winking and nudge-nudging each other each time they take their turn serving up the milk from America’s big teats.

        1. I’m sure that the politicians themselves are just one big club. I was referring to their brain-dead followers, who think they’re worshipping the One True God.

  5. So how is this regime uncertainty working out for you, Barry?

  6. “As Hoover Institution research fellow (and Reason contributor) David R. Henderson explained . . .”

    Peter, you don’t see a problem Reason stating a problem exists because Reason believes a peoblem exists?

    1. Sorry, there should be a “with” in that last post.

  7. Did Suderman (or David R. Henderson) call the phone number listed on the waiver guidance document (PDF) to find out more details about the process? I don’t see any sign that they did.

    Without actual research, it’s just as reasonable to assume that the HR departments of companies who offer mini-med plans know every detail of the waiver process as it is to assume the process is opaque and/or politicized.

    Given that the law is less than a year old and the Office of Consumer Information and Insurance Oversight was only established in April 2010, it’s even more reasonable to assume that the office would rather spend time processing the waivers than post a detailed process online.

  8. As regards the union plan, an explanation from the union point of view can be seen here: http://www.local802afm.org/pub…..y=44107060

    Most of the people served by Local 802’s plan simply can’t currently get health insurance any other way. That should change under the new law, but it’s not going to change overnight. Denying such waivers simply denies people coverage without offering the possibility of replacing it.

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