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From The Heritage Foundation:
Obamacare and the States: Freedom To Do What Sebelius Tells Them To Do
Posted February 11th, 2011 at 5:00pm
The Washington Post on February 10 ran an op-ed by Secretary of Health and Human Services (HHS) Kathleen Sebelius asserting that the new health reform legislation empowers the states and gives them the flexibility they are asking for. Indeed, she says, the Patient Protection and Affordable Care Act (PPACA) “gives states incredible freedom to tailor reforms to their needs.”
The Secretary’s piece offers a revealing glimpse into the mindset of PPACA’s advocates. At the same time, it is fundamentally wrong as a factual matter.
Before PPACA was enacted, states could make insurance reforms they thought would be in the public interest. A number of states were doing so, including Utah and Massachusetts, as the Secretary mentions. But PPACA now imposes a national system of regulation. This is described here. The Administration’s begrudging and constricted view of what plans are grandfathered and not subject to the new regulatory scheme is described here.
Any state flexibility that may remain after enactment of PPACA is at the discretion and even indulgence of the federal government. The flexibility that Sebelius cites are, as she herself reveals, what the PPACA permits the states to do. In her view, PPACA has given the states lots of flexibility (“incredible freedom,” in her words) to act. This freedom is what is permitted by the PPACA. It is clear: The federal government is the overlord, which has graciously granted states flexibility to act within the new federally controlled scheme. Thus her revealing choice of words, in several instances, that the PPACA “gives” states freedom and flexibility.
The attitude, widely shared by those who have pushed the PPACA—that freedom for the states to act is bestowed by the federal government—is one of the reasons the law has rubbed so many Americans the wrong way.
But even on the turf she has chosen, the Secretary does not accurately state what the new law does. It does not give the states the freedom she claims.
Then-House Speaker Nancy Pelosi told us last year that Congress had “to pass the bill so you can find out what’s in it.” It has been nine months since enactment, and it seems that the Administration itself is still not up to speed.
The PPACA requires the states to organize and operate “exchanges” through which individuals and small businesses can obtain insurance. This is a federally imposed mandate. If a state does not create an exchange that meets the federal requirements, HHS will create one for the state. Federal subsidies for the purchase of insurance and for co-payments are available only with respect to plans sold through the exchanges.
Sebelius writes that the PPACA “gives” states the option to design and run their own exchanges. This is not true.
PPACA specifies what functions exchanges must perform and how they operate in numerous details. HHS is required to set “standards” for their operation. The federal government sets the requirements for what exchanges do and how they function. This is a far cry from being able to design and run the exchanges as they wish.
Sebelius also writes that the states have “the flexibility to decide what benefits plans must offer” when they participate in the exchanges. This too is not true.
Exchanges can admit only plans that meet federal qualification standards. It determines how plans must calculate their premiums (determining, for example, the extent to which individuals who engage in risky behavior are subsidized by others) and what geographic areas they must use for setting premiums (determining how much high-cost areas will subsidize low-cost ones).
The federal government decides what benefits insurers must provide. The exchanges can admit only plans that provide the coverage that the federal government sets. Americans will be required to purchase the kind and level of insurance the federal government decides is best for us. This may well be far more expensive than people want. But the federal government sets the standard. The only flexibility the states have is to require an even richer package of benefits. Except in this limited realm, they do not have the freedom to determine what benefits plans offer.
Even if freedom for the states were interpreted to be what is permitted by federal legislation, it is difficult to find a basis for saying that the PPACA gives the states “incredible freedom.”
Obamacare and the States: Freedom To Do What Sebelius Tells Them To Do
Posted February 11th, 2011 at 5:00pm
The Washington Post on February 10 ran an op-ed by Secretary of Health and Human Services (HHS) Kathleen Sebelius asserting that the new health reform legislation empowers the states and gives them the flexibility they are asking for. Indeed, she says, the Patient Protection and Affordable Care Act (PPACA) “gives states incredible freedom to tailor reforms to their needs.”The Secretary’s piece offers a revealing glimpse into the mindset of PPACA’s advocates. At the same time, it is fundamentally wrong as a factual matter.
Before PPACA was enacted, states could make insurance reforms they thought would be in the public interest. A number of states were doing so, including Utah and Massachusetts, as the Secretary mentions. But PPACA now imposes a national system of regulation. This is described here. The Administration’s begrudging and constricted view of what plans are grandfathered and not subject to the new regulatory scheme is described here.
Any state flexibility that may remain after enactment of PPACA is at the discretion and even indulgence of the federal government. The flexibility that Sebelius cites are, as she herself reveals, what the PPACA permits the states to do. In her view, PPACA has given the states lots of flexibility (“incredible freedom,” in her words) to act. This freedom is what is permitted by the PPACA. It is clear: The federal government is the overlord, which has graciously granted states flexibility to act within the new federally controlled scheme. Thus her revealing choice of words, in several instances, that the PPACA “gives” states freedom and flexibility.
The attitude, widely shared by those who have pushed the PPACA—that freedom for the states to act is bestowed by the federal government—is one of the reasons the law has rubbed so many Americans the wrong way.
But even on the turf she has chosen, the Secretary does not accurately state what the new law does. It does not give the states the freedom she claims.
Then-House Speaker Nancy Pelosi told us last year that Congress had “to pass the bill so you can find out what’s in it.” It has been nine months since enactment, and it seems that the Administration itself is still not up to speed.
The PPACA requires the states to organize and operate “exchanges” through which individuals and small businesses can obtain insurance. This is a federally imposed mandate. If a state does not create an exchange that meets the federal requirements, HHS will create one for the state. Federal subsidies for the purchase of insurance and for co-payments are available only with respect to plans sold through the exchanges.
Sebelius writes that the PPACA “gives” states the option to design and run their own exchanges. This is not true.
PPACA specifies what functions exchanges must perform and how they operate in numerous details. HHS is required to set “standards” for their operation. The federal government sets the requirements for what exchanges do and how they function. This is a far cry from being able to design and run the exchanges as they wish.
Sebelius also writes that the states have “the flexibility to decide what benefits plans must offer” when they participate in the exchanges. This too is not true.
Exchanges can admit only plans that meet federal qualification standards. It determines how plans must calculate their premiums (determining, for example, the extent to which individuals who engage in risky behavior are subsidized by others) and what geographic areas they must use for setting premiums (determining how much high-cost areas will subsidize low-cost ones).
The federal government decides what benefits insurers must provide. The exchanges can admit only plans that provide the coverage that the federal government sets. Americans will be required to purchase the kind and level of insurance the federal government decides is best for us. This may well be far more expensive than people want. But the federal government sets the standard. The only flexibility the states have is to require an even richer package of benefits. Except in this limited realm, they do not have the freedom to determine what benefits plans offer.
Even if freedom for the states were interpreted to be what is permitted by federal legislation, it is difficult to find a basis for saying that the PPACA gives the states “incredible freedom.”
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