• Missed Obamacare deadlines are reasonable and rational

    The following is a guest post by Nicholas Bagley, University of Michigan Assistant Professor of Law.

    Over at Forbes, Avik Roy is crowing about an unpublished government report documenting that the Obama administration has missed about half of the statutory deadlines included in the Affordable Care Act (ACA). As Avik would have it, these missed deadlines “reflect on the administration’s competence” and demonstrate its “flakiness.” Is he right about that?

    Nope. To see why, suppose for the moment that you’ve offered to go grocery shopping for your demanding, geriatric grandmother. She gives you a list of fifty things to buy, some of which she’ll use for dinner tonight and some of which she’ll cook up later. She gives you a crisp $10 bill to pay for it all. And she tells you to get back in twenty minutes so you can drive her to her bridge game.

    Obviously, you can’t manage it all. So what do you do instead? To borrow a medical term, you triage. You rush to Safeway. You grab the food for tonight’s dinner. You get less steak than grandma wants, and a cheaper cut. When the groceries still cost $10.34, you scrounge some coins from your car. You hustle back twenty-five minutes later.

    What do you think? Are you incompetent? Flaky? Not a bit. No matter how attentive and diligent a grandchild you might be, you couldn’t possibly have done everything you were asked to do. So yeah, you got back five minutes late. But grandma’s going to eat tonight and she won’t be all that late to bridge. That ain’t bad.

    Congress is kind of like your difficult grandmother. All too often, it imposes lots of obligations on federal agencies and then doesn’t give them the money, legal authority, and time to fulfill those obligations. That’s not a new story, but it’s a story with particular resonance for the ACA. The statute is massive: it restructures the individual and small-group markets for health insurance, creates dozens of new government programs, transforms and expands Medicaid, tries to get a handle on Medicare spending, and so on and so forth. Implementing the ACA would be no mean feat under the best of circumstances. But these aren’t the best of circumstances. Congress has starved the administration—most importantly, the Department of Health and Human Services (HHS)—of the resources it needs to implement the statute.

    So what’s HHS supposed to do? Well, the most important thing is to make sure the statute works like Congress meant it to. Some of the ACA’s most important operative provisions, for example, can’t go into effect until HHS issues rules to implement them. The effective dates for these provisions therefore serve as unusually strict deadlines, and HHS has worked its tail off to hit them. We’ve got rules about essential health benefits, rules about the exchanges, rules about the individual mandate, and rules about a whole lot more. What does the report that Avik draws attention to say about all of this? Not a word. It altogether excludes from consideration those provisions “that merely had an ‘effective’ date attached to them, as opposed to a specific deadline.” That’s another way of saying that the report doesn’t cover the deadlines that matter most.

    But what about the “specific” deadlines covered in the report? Doesn’t Congress care about them, too? Sure. So does HHS. In general, the agency is much more attentive to deadlines than its sister agencies. But here’s the thing: some deadlines are more important than others. When HHS can’t possibly do everything that Congress has asked of it, it has to set priorities. It’s totally appropriate for the agency to devote its scarce resources to, say, getting the exchanges up and running, even if that means blowing through a deadline for submitting a report to Congress about wellness programs.

    That’s why the missed deadlines don’t remotely suggest that the administration is inept or incompetent. Agencies miss deadlines all the time, sometimes for good reasons and sometimes not. For all this report tells us, HHS is doing exactly what we’d want a faithful congressional agent to do: muddling through as best as it can under trying circumstances. After all, it’s nutty to think that HHS’s most important priority right now is to hit every single deadline in the ACA, however inconsequential or unrealistic. If you doubt it, just think back to your grandma. Better that she’s five minutes late than hungry.

    • Suppose you also have a grandfather, who says the food on the shopping list is terrible and that he doesn’t want to play bridge. Then he organizes some friends to try to block your car in the driveway and take the $10 back. He says this is justified because he knows of better food and entertainment, but won’t say what they are.

      Now suppose when you get home, he complains you didn’t get everything on the list and that he’ll be late for bridge.

      That grandfather seems a better analogy for the complainers.

    • Once upon a time a bill as big and as important as the ACA would have had hearings – many of them – where people would have testified and actual legislation would have been drafted. This process would have allowed folks like those providing farm workers to the California Ag industry to point out that asking a worker – who may or may not be here legally to pay $200+ a month for health care out of his $9 an hour wage is just not reasonable. Providing him or her subsidies is not going to be easy either since he or she is not really in the system – may not have a bank account – may not even be documented. And even with massive subsidies – say 90%, even the remaining $20 a month could be a hardship.

      I don’t think we should be gloating that deadlines are being missed – but suggesting that these delays and omissions are “reasonable” seems a bit disingenuous. Where were you – and others a year ago in warning that the demands of the bill were too harsh – and could not possibly be met.

      To me this sounds like the student complaining that he did not get his homework done on time because he never read the text or attended class so how could he [or she] possibly know how to answer the questions.

      • The ACA was extensively debated, legislators held numerous meetings and the topic dominated the news for many months. Of course there was actual legislation – what do you think was passed?

        The GOP has been and continues to do its best to defund the ACA. Without adequate funding, it’s very hard to implement a law.

        Remember the stories criticizing the administration for seeking outside funding to implement the law? That indicated to those who were paying attention that there were problems.

        In a sane world, if there’s a problem with legislation, the problem gets fixed. The GOP is refusing to make improvements in the law, even improvements suggested by their church base.

    • I would disagree with you. The administration has had 3 years to put this law in place. Everything that we are seeing a delay on, the opponents of this law, pointed out prior to the passing. You can youtube C-Span and see these arguments.

      There is no way Congress or the Senate read the 2200 pages included in this law. There is little chance that Congress or the Senate have read much of the 15,000 pages that have been release to explain the law.

      So the administration should be criticized for their lack of understanding how the real world works.

      • Enough with the page count whinging! The bill has as many words as a Harry Potter novel, no matter what size font and line spacing you choose. A lot of that is the boilerplate attached to any bill. The bill was drafted in 1983 by noted Marxists Orrin Hatch and Chuck Grassley who were considered far-right at the time. It has been kicking around as the GOP plan for healthcare for two decades. This time it was debated extensively for 15 months. Those debates are archived on C-SPAN, if you are so inclined. Yes, Nancy Pelosi said some awkward things that your side enjoys taking out of context, but that doesn’t mean that Rush Limbaugh’s creative intpretations are true, no matter how many times you repeat them. There are substantive criticisms to make about the bill, but your complaints are really just dumb.

        The health insurance plan put in place by this bill is modeled on the Swiss system. It works fine in Switzerland although it does result in the second most expensive health care system in the world after our own. The system has further been tested in a populous state where again it works just fine. It’s not the cheapest choice, but a lot of people who have spent their lives studying health care policy feel it will work. I tend to believe Uwe Reinhardt’s analysis over Bill O’Reilly’s any day.

        • Er, 1993. It was the alternative to Hillarycare. The Heritage Foundation paper was published in 1988. I’m not demented yet.

    • Some problems being addressed by the ACA, lack of access for 50 million, exploding health care costs and stopping the abuses by the Health Insurance Industry, can be difficult even without the proverbial tying of one of HHS hands behind their back.

      I guess I am the type of American who believes the entreaty of JFK. We solve these problems “not because they are easy, but because they are hard”.

    • “That’s why the missed deadlines don’t remotely suggest that the administration is inept or incompetent.”

      Sorry, the three most recent examples suggest something far worse than ineptness or incompetence – the delay in the employer mandate, the decision to extend tax preferenced benefits to members of Congress and their staffs, and the option to rely on “income attestations” for determining tax credits for exchange coverage.

      The delay in the employer mandate was supposedly because they did not have time to implement the IRC 6055 and IRC 6056 data requirements. Baloney. Those rules were in place since December 2009, approved in march 2010, and have not changed since … and were the subject of extensive IRS notices and comments (See IRS Notice 2012-32 and IRS Notice 2012-33). Why the delay? Inept or incompetent – not a chance, any reader of these blogs could have created the reporting requirements and had 3+ years to test it. Lack of funds or resources – when we are running $1+ trillion deficits? Come on.

      With respect to the OPM decision to have the federal government subsidize health coverage purchased in the exchange without imputing the monies as taxable wages and allowing Congressmen and staffers to pay for their portion of exchange coverage with pre-tax dollars, well, that may well violate four specific PPACA that apply to other employees and emploeyrs:

      1. Pretax contributions under an IRC 125 cafeteria plan are not permitted for Exchange coverage for an “applicable large employer” . After tax contributions are OK – so, no problem if they don’t receive tax preferences you and I aren’t eligible for.

      2. PPACA does not allow “applicable large employers” to contribute towards the cost of individual policies in the exchange. Again, OK if they impute it as wages.

      See 1/13 directive on stand-alone HRAs using assets to purchase Exchange policies: http://www.dol.gov/ebsa/faqs/faq-aca11.html

      3. This is not “employer-sponsored” coverage, so, it should trigger $3,000/person IRC 4980H(b) penalty tax in 2015 (I’m sure it will be waived).

      4. Stand-alone HRAs (for employer financial support) violate the PPACA 2711 prohibition on annual dollar benefit limits on Essential Health Benefits.

      Third, and finally, the July 5, 2013 regulatory guidance to accept income attestations in claiming tax credits for exchange coverage is just one more example of why this is something other than inept or incompetent. Sure, some of the people who misrepresent their income will be caught – including both those who overstate their income because the state did NOT expand Medicaid (to qualify for taxpayer subsidies for eschange coverage) and those who understate their income so as to qualify for a higher level of taxpayer credits. HOWEVER, no one seems to notice that IRC 36B (see also Treasury Regulation 1.36B-4) caps the amount of overpayment that can be recovered – even when it is discovered. One example is a family of four that represents income at 139% of FPL, but has income at 399% of FPL, the overpayment is $9,800+ but only $2,500 has to be paid back – allowing them to keep, by fraud, $7,000+ in advanceable credits.

      Inept, incompetent. Looks a lot like something else to me.

    • But suppose YOU set the timetable and the shopping list. Your grandma told you they were unrealistic, but you made as clear as you could that you had no intention of listening to her. Then, when her predictions started coming true, you blame her!! Who is the demented one here?

      So, I gather, Congress is doing great when it passes an unworkable law, and the same Congress is doing badly when it fails to funnel whatever amount of money needed to duct tape together this mess?

      There was nothing requiring a Democratic House to seek a single Republican vote in favor of the bill. There is nothing requiring a Republican Congress to appropriate a single penny to implement the ACA. Both times Congress was acting within its authority. It does seem silly to claim that a perfect piece of legislation us only perfect if a long series of further events takes place.

      This is a democracy. Most voters were opposed to the ACA when it passed. The Democrats made it clear that they did not care. The Republicans took over the House largely in reaction to the ACA. Republicans argued against it before, during, and after passage. Why would one expect Republicans to do anything other than oppose it? What would you say to a Democrat who campaigned against DOMA, won, then said “it is the law of the land, I must support it?

      This is a Democratic law, Republicans are opposed, and are acting like it. What else would you expect?

      • If the law were truly unworkable, Republicans wouldn’t need to sabotage it by cutting funds for implementation. It would fail no matter what funding they provided.

        I am not aware of any supporter of ACA who believes the law to be perfect. I’d be extremely impressed if you found a single supporter who thought it would be perfect.

    • The Republicans do not “need” to sabotage the ACA, except to live up to their campaign promises to their voters. Some apparently consider this to be a trivial consideration. In a representative democracy, some find this to be important.

      If the right is opposed to the bill, then they SHOULD attempt to block it. They should vote against it when it is up for consideration, they should attempt to repeal it and they should try to block implementation. That is how our government works.

      Implicit in a decision to go forward with no amendments to correct known flaws, to refuse to consider any change and to pass with no Republican votes is an apparent belief that the bill could not be improved. To me “cannot be improved” is a functional definition of “perfect”

      Of course the House refuses to fund the ACA. Can you think of behavior less responsible than spending billions to implement something you think should be scrapped?

      • @DBH

        Supporters in the House and Senate passed the bill without further amendments not because they thought it was perfect but because they knew that it would be impossible get enough legislators to agree on the best way to improve the legislation.

        What constructive amendments, from a Democratic point of view, do you claim that Republicans offered?

        Most Republicans ran on a promise to repeal the bill, not to sabotage it. Most of the funding for the bill is mandatory and beyond the reach of the House without Senate support. Not funding implementation adequately won’t stop it from being implemented. It will simply stop it from being implemented as effectively as it could be.

        In any case, it is hypocritical to do everything possible to sabotage the implementation of a bill and then claim that problems with that implementation prove the bill is unworkable or the people implementing it are incompetent

    • The Democrats passed every mandate, obligation, and deadline in the bill. The Republicans voted against them all. Hard to see how failing to comply can be held against those who voted against the bill.

      You are right. It should be “most perfect bill we can get through before our dwindling majority vanishes altogether.”

      Passing a bill that only works if Congress continues to ignore the majority of the country, and your party holds the majority forever, is simple incompetence. Surely someone must have recognized the risk that Coakley would not be the only ACA casualty? That the right might regain control of at least one house of Congress? That someone might try to make the Administration comply with some of the unworkable provisions of the law?

      The law was adopted as the only thing they could do at the time, with an implicit assumption that somehow the parties hostile to it during passage would, what? Change their minds? Go away? Ignore the issue that got them elected?

      it is not obvious how much of the needed spending Congress is obligated to appropriate. There is more to it than just HHS or IRS. Setting aside questions of Administrative authority to reallocate funds within Departments without appropriations, in these times of sequestration the money simply may not be available. Granted, this will be the Republicans fault for refusing to appropriate funds for programs they oppose, but the funds will be lacking nonetheless.

    • And here we are…a few months alter and Open Enrollment has begun. And another deadline of December 23rd is approaching, which is the last day for Jan 1 effective dates. I smell an extension.