The Daily Caller

The Daily Caller
Health and Human Services (HHS) Secretary Kathleen Sebelius testifies on Capitol Hill in Washington, Friday, April 12, 2013, before the House Ways and Means Committee hearing on President Barack Obama

Obama’s $62 billion unconstitutional maneuver

Photo of Betsy McCaughey
Betsy McCaughey
Author, "Beating Obamacare"

The Obama administration disguised last week’s edict delaying the Affordable Care Act’s employer mandate as administrative tweaking. White House advisor Valerie Jarrett told reporters the impact would be miniscule, because 95 percent of employers subject to the mandate already provide coverage. Don’t be fooled by that figure. The delay could add over $60 billion to the cost of Obamacare in 2014 alone, affect 10 million workers, and double enrollment on the exchanges.

Few bills debated in Congress affect that many people or cost that much. The delay will cost more than the annual budget for Medicare Part D prescription drug program. Shockingly, the administration failed to consult Congress or provide an iota of candor about why the delay was necessary.

Delaying the employer mandate was likely a last ditch maneuver to avert an under-enrollment crisis on the health exchanges. Success depends on enrolling young, healthy adults and families whose minimal health needs will offset the cost of the sick and middle aged, a process scheduled to begin on October 1. Health and Human Services Secretary Kathleen Sebelius begged the NBA and the NFL to coax their fans into signing up for exchange plans.

But the NBA and NFL refused Sebelius’s request. Just days later, the administration suddenly postponed the employer mandate – a ploy to compel uninsured workers to sign up on the exchanges. According to the Employee Benefits Research Institute, there are 6.9 million uninsured full-time workers whose employers would have had to start providing coverage on January 1. 2014 if the mandate had not been delayed. These 6.9 million workers will have to enroll in exchange plans or pay a penalty to the IRS.

The same goes for 3.1 million workers currently covered by mini-med plans (that have annual or lifetime caps on benefits.) These plans are allowed under waivers granted from the administration, but the waivers expire January 1, 2014.

All in all, the administration’s edict puts 10 million workers between a rock and hard place. Sign up for an exchange plan, or pay a penalty to the IRS for not being insured. The average single man earning $29,000 a year before tax will get some subsidy but will still have to write a check every month for roughly $137. That’s for the cheapest plan with a $5,000 deductible. It’s a raw deal, and many single people will opt for the $95 penalty instead.

On the other hand, uninsured workers with dependents are likely to enroll in an exchange plan. Last February the IRS ruled that the dependents of any worker offered affordable on-the-job coverage are ineligible for coverage from the subsidized exchanges. That left millions of spouses and children without taxpayer-funded coverage. With the employer mandate delayed, they will be eligible.

If half of these 10 million workers go to the exchange and enroll with their spouses and dependent children, the cost to taxpayers will be a staggering $52 billion the first year, even after subtracting the $95 per-adult penalty the other half will pay. (The average subsidy will be $5,290 according to the Congressional Budget Office.) Add to that the $10 billion in foregone penalties the CBO had predicted the employer mandate would yield the first year, and the cost of delaying the employer mandate one year could total $62 billion. With no Congressional approval.

But there’s more.