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House Hearing Reveals the Truth About the Obamacare Waivers

Posted By Kathryn Nix On March 17, 2011 @ 5:00 pm In Obamacare | Comments Disabled

17 June 2009 - Washington, DC - Senators on the Health, Education, Labor and Pensions (HELP) Committee begins mark-up consideration on the Kennedy Health Care bill. The bill which may cost over a trillion dollars is being debated by both sides of the Senate committee.

To date, over 1,000 companies, covering nearly 2.4 million employees [1], have been granted waivers to escape the burdensome requirements of Obamacare. The House Oversight and Government Reform Subcommittee on Health Care, the District of Columbia, Census and the National Archives held a hearing [2] this week to further examine the transparency and fairness of the waiver process.

Obamacare forbids insurers from placing annual and lifetime limits on health plans. These “consumer protections” have endangered the limited coverage plans that some employers currently offer. Unable to provide more comprehensive coverage, those employers would be forced to drop coverage altogether if they abide by the new law. To avoid this consequence of the new law, employers are flocking to secure the waivers offered by the Department of Health and Human Services (HHS) to keep their employees covered.

At the hearing, Steven Larson, Deputy Administrator and Director for the Center for Consumer Information and Insurance Oversight at the Centers for Medicare and Medicaid Services, argued that [3] waivers act as a bridge from now until 2014, when Obamacare will be fully implemented. Larson said the waivers were always on the table to phase out mini-med plans.

But Heritage Senior Research Fellow Ed Haislmaier pointed [4] to 21 different sections in the new law that authorize the HHS Secretary to provide waivers for specific purposes—and authority to grant waivers for annual and lifetime limits was not among them. In his testimony [4], Haislmaier argued, “HHS has exceeded its statutory authority in creating this waiver process. The statute does not explicitly grant HHS authority to waive the application of this provision.”

It’s simple, really: If Congress intended to institute a waiver process for this particular provision of Obamacare, they would have included it in the legislation. It seems clear, then, that Congress never intended to award waivers for this provision of the law. In doing so, HHS has overstepped its authority.

The hearing also focused on transparency and fairness in the process of granting waivers. While other witnesses said that the waiver process is fair and transparent, Haislmaier argued that the process of applying for a waiver invites the opportunity for favoritism because large corporations and unions can afford to go through the waiver process, unlike smaller businesses that may not have the money or time to apply for a waiver.

Scott Wold, an employee benefits attorney in Minnesota, has had hands-on experience working with employers applying for waivers from the annual limit restrictions. In his testimony, Wold stated that he [5] “encountered several issues or difficulties with the process,” particularly with regard to eligibility for health reimbursement accounts (HRA), a type of consumer-directed health plan. Wold believes that the confusion surrounding HRA eligibility and the nebulous application process has “likely resulted in many sponsors of HRAs not requesting a waiver.”

Darrell Issa (R-CA), chairman of the House Oversight and Government Reform Committee, further questioned the fairness of the application process. He noted that HHS bureaucrats know exactly what company’s application they are reviewing and whether they are union plans. This has arguably led to the disproportional acceptance of waiver application from large corporations and unions. Haislmaier further emphasized that the use of a waiver process has led to a system that is based not on “the rule of law” but rather on “the rule of ‘who you know.’”

Due to the lack of transparency and fairness associated with the waiver application process, Haislmaier urged Congress to instruct HHS to eliminate the waiver program. He also said, “Congress should consider whether or not it will change or further clarify the statutory language of this provision of [Obamacare], in the context of its broader debates over the future of this legislation in general and its numerous specific provisions.”

This post was co-authored by Amanda Rae Kronquist and Raul Tamez.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2011/03/17/house-hearing-reveals-the-truth-about-the-obamacare-waivers/

URLs in this post:

[1] covering nearly 2.4 million employees: http://www.foundry.org/2011/02/11/obamacare-waivers-mount-still/

[2] hearing: http://oversight.house.gov/index.php?option=com_content&view=article&id=1202%3A3-15-11-qobamacare-why-the-need-for-waiversq&catid=35&Itemid=40

[3] argued that: http://oversight.house.gov/images/stories/Testimony/CMS_CCIIO_Larsen_Testimony_FINAL_3.15.11.pdf

[4] But Heritage Senior Research Fellow Ed Haislmaier pointed: http://oversight.house.gov/images/stories/Testimony/Haislmaier_Testimony.pdf

[5] Wold stated that he: http://oversight.house.gov/images/stories/Testimony/Scott_Wold_Testimony_3-15-2011.pdf

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