GWEN IFILL: We look now at the fallout from the Obama administration’s decision to delay an insurance mandate for employers.
Under the health reform law, companies with 50 or more full-time workers were required to provide coverage for employees beginning next January or pay a penalty of $2,000 dollars per employee. But the administration surprised many yesterday when it said it will postpone that requirement until 2015.
Other major parts of the law, such as an individual mandate and new subsidized insurance exchanges, will still take effect as scheduled. Employers praised the decision, but Republicans said the delay was a sign of underlying weakness. House Speaker John Boehner said, “It means even the Obama administration knows the train wreck will only get worse.”
Two views now. Ron Pollack is with Families USA, which backs the law and is working to increase enrollment. And Tom Miller of the American Enterprise Institute, he’s the co-author of the book “Why Obamacare is Wrong for America.”
Welcome to you both.
Ron Pollack, what is your sense of the reason for this new delay?
RON POLLACK, Executive Director, Families USA: Well, I think it’s largely employers were complaining about the paperwork, and so the administration responded to that.
But I have to say, Gwen, I think this is much ado about fairly little in the following sense. As you accurately indicated, this mandate only applies to large businesses, those that have more than 50 workers. And if you take a look at the businesses that have more than 50 workers, more than 94 percent of them already provide health care coverage.
So, it’s about six percent. It’s actually a little less than six percent that don’t provide this coverage. And so the question is what impact might it have had with respect to that six percent? And, of course, we don’t know whether the mandate would have actually resulted in many of those companies deciding to provide coverage.
But the key aspects of the Affordable Care Act, which are designed to expand coverage, those things are moving forward. This thing is not, but it is not likely to have a significant impact on people who currently don’t have coverage.
GWEN IFILL: Tom Miller, is this much to do about nothing, just about paperwork?
TOM MILLER, American Enterprise Institute: I’m glad we have got a consensus here. We move right on to repealing the employer mandate and take care of the other items along the way.
They lost a car on the train. It wasn’t a caboose. It wasn’t a total train wreck. But it is an indicator of other serious problems ahead. All the pieces of this law are interconnected. The employer mandate was largely passed to try to hide the costs of the law, to basically say, well, the employers are going to pay for it, so, it doesn’t come out of the taxpayers.
This suggested the complexity of what is being pushed through the chute often in very informal guidance. We just — earlier this week, what we had was policy-making by blog, not even a formal rule or guidance.
GWEN IFILL: That’s how this was released.
TOM MILLER: It was announcement from the Treasury.
And, like, we were waiting for the latest hint. So, for both the supporters of the law and the opponents, there’s a great deal of uncertainty. What is going to happen next? They say things are supposed to happen. Congress passed a law that, said there will be employer mandate in 2014. And the administration says, that was an interesting suggestion. We will get back to you on that in a year.
It suggests a degree of haphazard rule-making and policy-making, whatever will work in order to get something going out the door.
GWEN IFILL: If it’s true, if I get that you agree that there was what was considered to be onerous …
TOM MILLER: Information requirements for …
GWEN IFILL: Paperwork. OK, paperwork, we will use that term.
TOM MILLER: Well, it was more than that.
GWEN IFILL: Reporting requirements, can we agree on that?
TOM MILLER: Right, which ties into other regulations and enforcement.
GWEN IFILL: What were they? What were they?
RON POLLACK: Well, so what employers have to do is they have to provide information not just about how many workers they have and whether they provide or don’t provide coverage.
But the purpose of the Affordable Care Act was to make sure that everybody had a decent standard of coverage that is really comprehensive. And so what employers need to do is they need to provide information about what kind of coverage they provide, what kind of deductibles, what kind of co-payments, what benefits are truly covered.
And ultimately employers have to cover a certain so-called actuarial value. And a lot of the employers were saying, this is fairly onerous.
GWEN IFILL: But let me ask you this. It’s been more than a year since the law was enacted. Why are we just realizing …
TOM MILLER: Three years.
GWEN IFILL: OK, three years, more than a year. Same thing.
TOM MILLER: Dog years, maybe.
GWEN IFILL: Why did it take so long now to figure that this deadline could not be met?
RON POLLACK: Well, there’s been an ongoing dialogue between the administration and the employer community.
And the employer community was expressing concern about the paperwork, and so the administration tried to respond to that. Mind you, the administration is keeping its eyes on the key prize, which is namely making sure that the key elements of the Affordable Care Act get implemented. And the key elements include creating these new marketplaces, these so-called exchanges, and for people with incomes below 400 percent of poverty — for a family of four, that’s $94,200 dollars — for an individual, that is $46,000 dollars — that they will get these subsidies that will make coverage affordable.
And they’re trying to make sure that in the states that have decided to expand the Medicaid program, that that will be properly implemented. Those are the key elements that will get people additional coverage.
GWEN IFILL: Do you think that because they have had some trouble implementing this in a timely way, for now, that that would speak to other elements, these critical elements in the law?
TOM MILLER: Yes. There’s blood in the water.
The folks who are looking for further delays or if this isn’t going to work or maybe I shouldn’t look into getting that coverage because I’m hearing a lot of things that it doesn’t look like it’s going to work out for me. Inertia is a very powerful force among the uninsured.
GWEN IFILL: Who would that be? What evidence have we seen that that sort of conversation is …
TOM MILLER: Well, we haven’t actually had the enrollment yet, but to the extent that people are hearing about premium spikes, particularly if you are a younger, healthy male, so it’s going to cost you more money, and then is it going to be ready on time.
The exchanges, we have got about half the states not — more than half of the states, actually, same thing with the Medicaid expansion. All that creates a cloud over simply the ability to execute it. Now, you talk about the business community. There’s really two business communities here. There’s the large business community, which says, just make our life a little bit easier. You’re being onerous. Make the paperwork not as bad.
There’s the smaller business community, which bumps up against these thresholds, which has barriers to growth. They are more concerned about the complexity of determining whether they have 50 employees, how part-time employees are counted. That’s the other component of the reporting requirements which they were complaining about.
RON POLLACK: So, I have to build on what Tom was saying.
The small businesses are the businesses that tend not to provide coverage for their workers. They’re the ones who really, we want to help them provide coverage.
GWEN IFILL: Most large corporations are unaffected by something like this, because they …
RON POLLACK: Because they are providing coverage and they have decided to do it …
TOM MILLER: And it’s really rich coverage.
RON POLLACK: … because it’s a good — because it’s a good way of attracting the best employees.
GWEN IFILL: OK.
RON POLLACK: It’s the small businesses that don’t provide coverage anywhere near like the big businesses do.
What the Affordable Care Act does is it provides relief for small businesses. For those small businesses with fewer than 25 workers, they get tax credit subsidies to help pay for the coverage for their workers. Today, under the Affordable Care Act, they can get as much as 35 percent of the costs. Come Jan. 1, it will be 50 percent.
So the real problem with respect to employers is really being addressed and will continue to be addressed.
TOM MILLER: No.
Like many of the provisions in the Affordable Care Act, there is what is promised and what is delivered. And that example of the small business tax credits, there are plenty of reviews of this. The take-up of it is microscopic compared to what was expected.
GAO reports on that. Just like we had a different, a fund for preexisting conditions, it turned out fewer people enrolled, yet they blew out their budget and they had to close it. There was supposed to be a requirement in the new exchanges for businesses that employees would have a choice of plans. Sorry, we can’t get to that this year. So what we have is time after time what’s being promised in the early stages, and that can’t even be executed.
GWEN IFILL: If there is blood in the water, what is next?
RON POLLACK: Well, what is next is really focusing on getting these new marketplaces set up and getting the tax subsidies — getting the subsidies for individuals.
That’s going to happen. The enrollment period begins on Oct. 1. It’s a six-month enrollment period, and it’s going to be really important that people learn about the new opportunities. If they enroll prior to Jan. 1, they will receive these benefits starting in January.
GWEN IFILL: Final word.
TOM MILLER: There’s a problem of matching this up. We now don’t know what employer coverage they’re being offered.
People can walk in and say, I’m entitled to my exchange subsidy, and there’s no way to verify it.
GWEN IFILL: So, we’re going to wait and see whether something else, another shoe drops at some point down the road.
Ron Pollack of Families USA and Tom Miller of AEI and author of “Why Obamacare Is Wrong for America, thank you both.
TOM MILLER: Thank you.
RON POLLACK: Thank you.