Postponement isn’t a major blow
The Obama administration announced last week that it was delaying one of the Affordable Care Act’s mandates — a requirement that medium and large employers offer good health care coverage to their workers or pay penalties based on the number of workers left uncovered. White House officials said that the administration had been hearing from businesses and wanted to simplify the rules before imposing reporting requirements and assessing penalties. Others weren’t so sanguine. “This is a clear acknowledgment that the law is unworkable,” House Speaker John Boehner, R-Ohio, declared.
Actually, it’s not. While the administration’s move could be part of a political strategy to avoid overheated attacks from Republicans during the 2014 election year, it is no policy disaster, and it certainly doesn’t indict the whole law.
Under the law, all Americans next year will have to obtain insurance from somewhere — from their employers, or from an expanded Medicaid program if they are poor, or on new, subsidized insurance marketplaces the government is setting up for better off individuals seeking coverage. These marketplaces are highly regulated — insurance companies won’t be able to reject applicants based on preexisting conditions, for example — and they are designed to serve people who can’t get good coverage elsewhere. The individual mandate and the new insurance marketplaces are the core of Obamacare and are still scheduled to start on time.
But what will opening those marketplaces do to the employer-provided insurance that many Americans are used to? Lawmakers paired the individual mandate with the employer mandate, which requires firms with 50 or more full-time workers to cover their employees or to chip in to the system with cash. That is what the administration is delaying for a year.
The real test will be in how the individual insurance marketplaces function in response to expected and unexpected forces in the health-care market. If they have real trouble, or if, when fully implemented, key elements of the system turn out to be economically onerous, then Republicans will have reason to call the law unworkable.
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