As Employer Mandate Falls, The Question Becomes – What’s Next?

The timing of a news story can sometimes tell you as much as the story itself. The famed “Friday evening document dumps,” are a political tactic designed to hide some unseemly information since news readership plummets on the weekend and you’re top investigative journalists generally aren’t working Friday night.

Breaking news right before a holiday is the ultimate hide-the-ball strategy. Not only do you get the benefit of a dead news cycle, but most Americans, except for the most die-hard news-watchers, are spending their time doing much better things than hitting F5 on Drudge Report.

That’s why everyone in the policy world’s ear’s perked up when the Obama Administration announced on the Wednesday before the Fourth of July that a critical piece of Obamacare was being delayed. And it was done in a blog post. The Washington Post’s Sarah Kliff reports:

“By delaying a requirement that all large employers provide health insurance, the Obama administration heads off the unseemly spectacle of companies vowing to cut jobs or workers’ hours to avoid the costly mandate.

But the late Tuesday action is not a free pass: It contributes to critics’ claims that the White House does not have the ability to launch its biggest legislative accomplishment on schedule.

‘You trade off one set of painful stories for another set of painful stories,’ Bob Kocher, a former Obama health policy advisor, said.”

This is clearly a huge public relations setback. The cloak of inevitability, which President Obama and his chorus of defenders, attempted to drape over Obamacare has now been pierced. Obamacare not only looks vulnerable, it looks unworkable.

Compiling the information necessary to successfully determine whether an employer’s coverage meets the definition of “affordable” and then establish eligibility for subsidies no doubt would have been a difficult task. But it is by no means the most difficult task in a law that is filled with them. Which raises the question, if they can’t implement the employer mandate, how on earth do they plan on launching a complicated system of exchanges that will determine subsidy and Medicaid eligibility for millions of new insurance purchasers?

You can bet that many conservative critics will be asking that question. And most worrisome for President Obama, your staunchest allies, who have thus far weathered the storms of implementation, may no longer have a good answer. As Yuval Levin writes for National Review:

“The administration will certainly face added pressure to ignore various taxes, rules, and mandates that can be shown to have detrimental effects on the economy or on some constituency – and pretty much every line of Obamacare falls into that category in one way or another. They have just announced that they can implement or ignore whatever portions of the law they wish, and so will be feeling lots of pressure for lots of people with lots of views about lots of provisions.”

That’s all worrisome. It signals that the writing of Obamacare isn’t over, indeed it’s only just begun. And contrary to Rep. Pelosi’s comments about needing to pass the bill to find out what is in it, it appears we also have to first try to implement before we can offer a definitive answer. But the biggest problem with the announcement that the employer mandate would be delayed has nothing to do with politics – it goes to the core ability of Obamacare to function.

“This is just the beginning. The employer mandate is a cornerstone of the entire Obamacare exchange system,” Timothy Finnell, president of the Group Benefits health consulting told CNN.

What Finnell is referring to is the fact that Obamacare determines whether someone is eligible to receive federal subsidies based on whether they receive “affordable” coverage from their employer. But if employers are no longer required to report on their insurance offerings as part of the delay then the government may no longer be able to determine eligibility. That could dramatically raise the cost of the bill since the subsidy market has been blown wide open, or it could cause the exchanges to implode altogether.

Either way it’s bad news for the Obama Administration. They’re just hoping that you missed it while watching the fireworks this Fourth of July.