President Barack Obama knows that, in many ways, the fate of his landmark 2010 health care law is not within his control. In June, the Supreme Court could strike down the most high-profile elements of the law, including the requirement that most people in America buy medical coverage. In January, officials in every state will announce whether they will create new health insurance markets called exchanges or whether the federal government will have to do the work for them.
Even if the law survives that gauntlet, its continued existence likely hinges on whether Obama and his Senate Democratic allies retain power after the November elections.
But in the midst of all the uncertainty, administration officials are moving steadily ahead in their efforts to shore up political support for the law while implementing as many of the substantive policy changes as they can.
Those dual missions are sometimes in conflict. Officials at the Department of Health and Human Services face pressure to cement the foundation of the law in ways that would be difficult to reverse. At the same time, the administration has at times sought to avoid controversy that might draw more negative attention to the law, which most polls show has never garnered majority support since its passage. In their efforts to defuse opposition, officials have deferred some decisions to the states, unsuccessfully tried to soften criticism by offering waivers to parts of the law and sought to compromise on hot-button issues.
The administration’s attempts to find a balance sometimes do nothing more than anger both defenders of the law and its critics, as evidenced by a recent flap over a rule requiring employers to provide free birth control. Last year, the nonpartisan Institute of Medicine recommended that contraception be included in a list of preventive services that employers would have to provide for free to their employees under new regulations stemming from the health care law. HHS agreed but exempted most churches and some religious institutions in a final rule issued in January.
Many religious groups objected, saying the mandate would violate their religious freedom unless affiliates — including but not limited to universities and hospitals — were also exempt. In what the administration called an “accommodation,” the proposal was tweaked so religiously affiliated institutions’ insurers, rather than the institutions themselves, would have to provide the birth control.
The convoluted “accommodation” is destined to face courtroom challenges and, if it is put into effect, significant operational issues. It’s also considered no compromise at all by opponents.
The fundamental questions that Obama confronted in the controversy that matched the birth control mandate against religious liberty are the same that he has to weigh in all of the choices about how far to push implementation of the law: In an election year, as Obama seeks a second chance at presiding over a sharply divided nation, which groups can he afford to anger? And how long can he wait to announce decisions that are certain to displease some important constituency?
Benefits Deadlines Approach
The Obama administration is delaying some politically tricky questions until after the elections.
“They’re punting as much as they can,” said Chip Kahn, president and CEO of the Federation of American Hospitals and a veteran of health care policy debates.
But the administration can’t stall on every sensitive question. Officials who will have to work through complex questions about how the new system will operate — such as state government officials, medical providers and patient advocates — are prodding the federal government to act more quickly to provide details about what to expect.
Take the key question of what types of benefits will have to be offered to consumers who buy health care coverage through new insurance marketplaces that are supposed to go live on Jan. 1, 2014. The exchanges will offer insurance to small employers and to individuals that aren’t eligible for other coverage.
The health care law outlines 10 broad categories of coverage that insurers are supposed to offer to patients who buy coverage in the new individual and small-group health insurance exchanges. The categories include maternity and newborn care, hospitalization, emergency care and mental health services. Federal regulators had been expected to fill in the details of precisely what levels of coverage will be required in each category.
Instead of issuing a formal rule spelling out which benefits insurers have to offer, HHS officials issued a more informal bulletin Dec. 16 that gave states some discretion in choosing which benefits to include.
Federal officials outlined several options that states could use to select the benefits. State officials may choose from four options: any of the three largest small-group plans in the state, any of the three largest health care plans for state workers, any of the largest federal employee plans or the biggest commercial non-Medicaid health maintenance organization in the state.
But some state officials aren’t pleased that federal regulators delegated the decision to the states. The approach has been criticized by some policymakers as too complex, considering that states will have to examine the specifics of the plans and choose which to use by the third quarter of this year. States also will be expected to defray the costs of any benefits that are required by state law but not federal law, and they will need to modify the plans so they offer the types of benefits required by federal law.
Some hospital executives, other medical providers, patient advocacy groups and policy experts who had been expecting regulators to issue more specific and uniform rules say it would have been better if federal officials had clearly spelled out the coverage levels rather than leave the decision partly to the states.
“It’s a matter of articulating a base benefit so they’re not wildly different from state to state,” said Dan Mendelson, an Office of Management and Budget health official in the Clinton administration who is now CEO of Avalere Health. “These are insurance products that will be federally subsidized. When they’re subsidized with federal dollars, you want to know what’s being purchased and the federal government has to come up with a way to ensure that the health benefit offered is reasonable. At some point, a judgment will be rendered about what an essential health benefit is.”
HHS officials say they intend the policy to last for two years and will revisit it in 2016.
Whether the administration is deferring to the states in part to push tough decisions about coverage past the elections, the temporary benefits policy is one reason state officials say they are having a tough time figuring out whether they will construct the new exchange markets themselves. To be sure, the primary reason that state officials are waiting to start working in earnest on implementing the exchanges is the uncertainty about whether the Supreme Court or Congress might upend the law. But even state policymakers who want to create their own exchanges say it would be easier if all the federal rules were clearer.
Federal regulators also have not yet published a final rule explaining how the state exchanges should operate; that appears to be in the final stages. The proposal is undergoing a review by the Office of Management and Budget, according to documents. But state health officials and lawmakers now in the midst of state legislative sessions have been waiting to see what kinds of choices the administration will make in the final rule.
Rules Will Be Released
Until the elections, the safest bet is that the White House will continue its campaign to promote popular parts of the law, such as tax credits for small businesses or provisions to let young adults stay on their parents’ insurance until age 26, while quietly building more infrastructure to support the law.
Besides the rule governing exchanges, an important part of creating the new system envisioned in the law, federal officials also are expected to issue policies affecting Medicaid. The law calls for a major expansion of Medicaid, the federal-state partnership that provides medical coverage for lower-income people and those with disabilities.
As they release rules and push states to move ahead on implementation, federal officials hope to avoid further public controversies that could raise doubts about the law among voters.
Even though the most dramatic changes are a little less than two years away, the administration has begun taking steps to alter insurance and health care delivery in the United States. For instance, the White House issued several limits on insurers’ practices. Health care plans are no longer supposed to put lifetime dollar limits on coverage, rescind benefits because patients get sick or deny children coverage for pre-existing medical conditions.
On some provisions that have been implemented, the administration has shown flexibility. For example, the law requires insurers to pay out 80 percent of premium dollars in benefits to patients or issue rebates to consumers. Rather than stick to the strict percentage, HHS officials have agreed to grant waivers and phase in the rules for seven states so far. The department also granted waivers for companies that said they couldn’t comply with other rules to raise annual caps on coverage amounts.
The waivers may have won the administration some good will from those who want extra time to comply. But the flexibility did not prevent Congressional Republicans from criticizing the provisions. In fact, GOP lawmakers said the waivers were a sign that the law is too strict.
And at some point, the administration will have to further explain its “accommodation” on the birth control mandate and how it will work. One question that arose is how the policy would affect employers who contract with health care plans to process claims but play other roles usually conducted by insurers, such as bearing most of the costs of the claims themselves. Health and Human Services Secretary Kathleen Sebelius has hinted that these self-insured plans may be asked to hand out free birth control to consumers who ask for it, but has not revealed details. One thing is clear, however: The specifics are unlikely to come until after the elections.
This online version of this article was updated after the print version went to press.