Healthcare

Poor Sebelius, So Many Mandates to Impose

Poor Health and Human Services Secretary Kathleen Sebelius: so many mandates, restrictions and penalties to impose on Americans, so little time.

When Democrats jammed Obamacare down Americans’ throats, they decided to punt a lot of the important decisions, letting the HHS secretary do their dirty work.

And a lot of dirty work there is. But the former Kansas governor headed the state’s trial lawyers association for several years, so she knows something about dirty work.

A quick search of the Obamacare legislation reveals that the word “secretary” appears nearly 3,000 times in the 2,700-page legislation. And the vast majority of those references are to the secretary of HHS.

Over and over again we see: “the Secretary shall establish,” “the Secretary shall promulgate regulations,” “the Secretary shall develop standards,” “the Secretary shall periodically review,” “as the Secretary deems are important,” “the Secretary may develop and impose appropriate penalties,” “the Secretary may adjust the rates,” “if the Secretary determines necessary”; and “the Secretary has the authority.” 

 

And that’s on top of running the biggest federal agency in Washington, with about 70,000 employees (full-time equivalents), a budget of about $860 billion (for 2010), and the largest health-insurance programs in the world, Medicare and Medicaid.

Meeting Many Deadlines
The biggest immediate problem facing Sebelius is to figure out how to meet the deadlines imposed by Congress. The Kaiser Foundation identifies 30 reforms that must be implemented by the end of this year. Most are major changes that should not be rushed if they are to be done correctly.

But Congress wanted to fast track some of the reforms so that President Obama could boast about how his healthcare plan was helping people immediately. Like his recent trip to Maryland to tell seniors they will soon be getting a $250 check in the mail—though only about 10% of them will actually get a check.

Another example: Right after its passage, health insurers began to raise questions about whether the legislative language required them to immediately accept all current policyholders’ children up to age 26. Sebelius sent them a letter essentially saying that the intent of the legislation was that insurers should cover those children, and health insurers should do it regardless of what the actual legislation said. 

If you are a health insurer and must now operate with the HHS boot on your neck—to adapt a new White House slogan—you will probably acquiesce to such demands regardless of the actual legislative language. 

And though the secretary appears to have embraced the challenge of implementing Obamacare, she’s already behind. According to “The Daily Caller,” the secretary is required to provide a list of her new authorities under Obamacare, but she missed the deadline. I’m inclined to give her a pass on that one, however. Democrats have given an unelected individual unprecedented control over every healthcare decision that will be made in this country. Enumerating those powers will take a little time.

And there are other examples. The legislation requires health plans to report their “minimum loss ratios.” That’s the percentage of premiums insurers spend on claims as opposed to administrative expenses. The legislation says 80% or 85% of the premiums must be spent on claims, depending on the size of the group. 

But the initiative has already missed one imposed deadline because state insurance commissioners are divided on what should be considered administrative costs. And now the New York Times reports that perhaps half of the policies owned by individuals (i.e., not a group plan) could lose their coverage because the insurers can’t meet that 80% loss ratio.

In other cases, Obamacare is doing things the most inefficient way. For example, the legislation requires establishing a temporary high-risk pool—i.e., until 2014, when full Obamacare is imposed—for uninsurable individuals by July 1. There were already 34 existing state-based high-risk pools before Democrats passed the legislation. The most efficient course would have been to rely on those existing pools. But Congress created different eligibility rules, so many states will just have two separate pools for the next four years. 

No Company Qualifies

And there are examples of deadlines met, but to little avail. Obamacare provides a tax credit to help small businesses pay for healthcare coverage. The government sent out thousands of postcard-size announcements encouraging small businesses to sign up. The only problem is almost no companies qualify.

The National Federation of Independent Business (NFIB), a trade association of about 350,000 small businesses, has already announced that very few of its members will qualify because the restrictions are so high. Average salaries need to be around $25,000 among relatively few employees to get the full credit. 

In addition to those already mentioned, the secretary still needs to establish a process to review health insurance premium increases and determine if they are justified (read: Impose price controls); create a temporary reinsurance program, which will shift money around from health plans making money to health plans losing money; and create a whole new list of preventive services that insurers must cover.

There will also be a number of changes in Medicare and Medicaid, with one of the most important being cuts to the Medicare Advantage program, which provides private-sector healthcare to nearly a quarter of seniors. Hypocritically, Democrats just sent Sebelius a letter instructing her not to let Medicare Advantage plans, whose reimbursements will decline, get away with cutting benefits or charging seniors more.

And then there’s the new taxes: a 10% increase on tanning services and a $50,000 tax on nonprofit hospitals that fail to meet certain requirements. Plus, there are the new price controls on the salaries of health insurance executives, board members and employees.

All to be done this year. And 2010 is just a warm-up for the massive changes coming in 2011 and beyond.

Cartoon courtesy of Brett Noel

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