Tackling Obamacare Through Administrative Action
By Elizabeth Wright
WasteWatcher, February 2017
The process of repealing and replacing the Patient Protection and Affordable Care Act (ACA), better known as Obamacare, is underway. While Republicans in Congress are anxious for Obamacare to disappear as soon as possible, most Democrats want the healthcare reform law to be preserved and “fixed.”
On January 20, the day President Trump was sworn into office, he signed his first Executive Order (EO), which directed federal agencies to “minimize the economic burden of Obamacare pending its repeal.” The EO stated “It is the policy of my Administration to seek the prompt repeal of the Patient Protection and Affordable Care Act (Public Law 111-148), as amended (the ‘Act’). In the meantime, pending such repeal, it is imperative for the executive branch to ensure that the law is being efficiently implemented, take all actions consistent with law to minimize the unwarranted economic and regulatory burdens of the Act, and prepare to afford the States more flexibility and control to create a more free and open healthcare market.”
On Capitol Hill, the first step to repeal and replace much of Obamacare began with a complicated budgetary process called reconciliation, which Citizens Against Government Waste (CAGW) discussed in its January 2017 WasteWatcher. Following the approval of reconciliation instructions by the House and Senate, two House authorizing committees are now writing their respective implementing legislation and will send their recommendations to the House Budget Committee. From there, the two bills will be merged into one budget reconciliation bill that will be voted on in the House, then the Senate (if changes occur there will be a conference to work out any differences), and then sent to President Trump for his signature.
While the reconciliation process only permits Congress to deal with spending, taxing, and budget matters, the confirmation of Secretary of Health and Human Services (HHS) Tom Price and his swearing in on February 10, 2017, enables the Trump administration to dismantle parts of Obamacare by administrative action. The ACA has more than 1,300 directives that state “the secretary shall” or “the secretary may.” These provisions were used by the Obama administration to adopt onerous regulations and guidance for Obamacare, many of which can now be reversed.
On Wednesday, February 15, DHHS released a proposed rule to will help to stabilize the individual marketplace that has been devastated by Obamacare. The rule will shore up the individual market until legislation to repeal and replace Obamacare can be enacted. Among other provisions, the rule tightens up the lenient enrollment process under the Obama administration, which encouraged people to “game” the system by allowing individuals to purchase insurance when they needed it, run up expensive bills, and then stop paying for their insurance. Those actions destabilized the market and drove up costs.
Other agencies are also following the directive in the EO and addressing some of the arduous provisions of the ACA. On February 15, 2017, the Internal Revenue Service (IRS) noted a change in policy regarding line 61 on the 1040 tax form, which requires individuals to indicate their health insurance coverage status. Prior to the 2016 tax year, the IRS would accept a tax return if line 61 was not filled out. Starting with 2016 tax returns, the IRS planned to require individuals to fill out line 61 or it would reject the tax return. Instead, the IRS announced that it “will continue to allow electronic and paper returns to be accepted for processing in instances where a taxpayer doesn’t indicate their coverage status.”
The IRS reminded tax filers that “legislative provisions of the ACA law are still in force until changed by the Congress, and taxpayers remain required to follow the law and pay what they may owe.” In other words, while the ACA requires individuals to pay a penalty for failing to purchase health insurance, the IRS may not attempt to determine whether a taxpayer needs to pay if line 61 is not filled out. The policy change makes sense, since the reconciliation bill is scheduled to eliminate the tax for not purchasing health insurance and make line 61 unnecessary.
Clearly President Trump and Secretary Price need the help of the federal bureaucracy to implement any changes and a replacement to Obamacare. In fact, the administration plans to reduce the regulatory burden across federal government, not just at HHS, as President Trump issued an EO calling for the elimination of two regulations for every new one that is adopted.
But a January 31, 2017 Washington Post article wrote about a disturbing and growing resistance from federal workers that actively resist the implementation of President Trump’s policies: “Less than two weeks into Trump’s administration, federal workers are in regular consultation with recently departed Obama-era political appointees about what they can do to push back against the new president’s initiatives. Some federal employees have set up social media accounts to anonymously leak word of changes that Trump appointees are trying to make.” CAGW discussed this alarming trend in a February 3, 2017, Swine Line blog.
Congress is in the process of considering legislation that will make sure career civil servants do the job required not only by President Trump, but for future administrations too.
Rep. Barry Loudermilk (R-Ga.) has introduced H.R. 559, the MERIT Act of 2017, which will reduce the time it takes to remove a federal employee that is underperforming, unqualified, or has committed acts of misconduct. According to Rep. Loudermilk, it currently takes more than 300 days to remove an incompetent employee under current employment policies. His legislation would provide an alternative and expedited dismissal process for federal administrators.
Congress and the Trump administration should repeal and replace Obamacare by any legal means necessary. But to do so effectively will require the cooperation of the federal bureaucracy. Congress needs to exercise its oversight powers to make sure that the process moves forward properly, and CAGW will also be monitoring whether federal employees are doing their jobs.