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Hearing of the Social Security Subcommittee of the House Ways and Means Committee - The Implementation Status of Health Insurance Exchanges and Related Regulations

Hearing

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Location: Unknown

Let me first say that our thoughts are with Health Subcommittee Chairman Wally Herger as he continues to recover in California from hip replacement surgery and a recent case of the flu. I know I speak for all of us when I say that we wish him well and hope for a speedy recovery.

We are here today to discuss implementation of the ObamaCare health insurance exchanges and related provisions.

Perhaps we shouldn't be surprised that the Obama Administration has chosen to implement the unpopular law the same way it was created: behind closed doors with little or no public input and rammed through without using standard processes.

The Obama Administration has shown it is uninterested in engaging the public when it comes to implementing ObamaCare. This "government knows best" approach is the same mentality that birthed ObamaCare. Rather than go through the standard rulemaking process, the Obama Administration has relied on interim final rules for its pre-existing conditions, dependent coverage, and grandfathered health plan policies. This means that these regulations actually take effect before a single patient group, physician group, or employer group can submit comments to the Administration on how the regulation will impact them.

Equally troubling, the Obama Administration has chosen to circumvent longstanding requirements to conduct thorough analysis, including impacts on government spending, by replacing regulations with so-called "bulletins" and other informal documents. The documents are not enforceable by law, can change on a moment's notice, and provide little clarity and even less certainty for stakeholders. In order to avoid making difficult political decisions and to hide just how much ObamaCare will increase health insurance costs for millions of Americans, the Obama Administration decided to forgo rulemaking on the ObamaCare mandated benefits package and instead issue a meaningless "bulletin." Punting the bad news until after the election may contain the political fallout, but it is not the leadership Americans want, need, and deserve from their President.

This lack of clarity and widespread regulatory uncertainty is paralyzing states, employers, and health plans. Because the Obama Administration purposely delayed critical decisions for political gain, costs will inevitably increase and confusion remains.

Each state must notify the Department of Health and Human Services (HHS) by November 16th if it intends to operate an exchange. Despite this deadline being two months away, the Obama Administration has failed to finalize the required details. For example, the exchange rule referenced nearly 100 areas where future exchange-related regulations would be forthcoming. How are states supposed to commit tens of millions of dollars towards exchange implementation in the face of such uncertainty? How can states be expected to make decisions without so much as a final regulation to inform their decisions?

The law requires enrollment in exchanges to begin roughly one year from now. Before open enrollment begins, insurance plans will be required to design, price and market a product, educate agents and brokers, establish provider networks, and navigate through countless levels of red tape and new regulations at federal and state levels. As previously stated, the Obama Administration has yet to propose a single regulation on the mandated benefit package or on the expected out-of-pocket costs in plans offered through the exchange. How are health plans supposed to design products without any relevant information? Does the White House expect insurance companies to snap their fingers and insurance products will be created? It is this lack of understanding about how private business works that prevents the Administration from leading our country out of this recession.

Employers are in a similar holding pattern because of this level of uncertainty. Without knowing what the mandated benefit package will look like, employers have no idea whether or not they will be subject to the employer mandate tax. Unlike Washington, employers plan ahead. Decisions about benefit package offerings for 2013 have already been made. Employers will begin making similar decisions for 2014 in the earlier part of 2013, just a few short months from now. Yet the silence from the Obama Administration regulators has been deafening. How can businesses plan to invest in new employees, new equipment, or new facilities without knowing whether or not they might be slapped with a new $2,000 per employee tax, courtesy of ObamaCare? Again, it shows a complete disregard and lack of interest by this White House about how the private sector works or what the impacts the Obama Administration's policies will have on employment and economic growth.

Perhaps there's another reason the Obama Administration is withholding needed guidance. If states and health plans do not have the information they need to implement the law that creates a void. Who fills that void? The federal government and its army of bureaucrats. Democrats made no secret about their desire for the federal government to takeover America's health care system -- and withholding information from stakeholders allows the Obama Administration to be in complete control of the health benefits Americans receive, how they buy their coverage, where they buy their coverage, and how much they pay for it. As someone who has long defended states' rights and the patient-doctor relationship, this is terribly concerning to me.

I look forward to hearing from our witnesses today so that members of this Subcommittee are aware of just how much uncertainty exists in the real world because of this damaging health care law.


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