When the history of the 2012 campaign is written, a special place may be reserved for Kathleen Sebelius, Health and Human Services secretary and former governor of Kansas, who is doing her best to make the Affordable Care Act — a.k.a. Obamacare — disappear as a political liability for the president. The most compelling evidence of this is her decision to delegate to states the final decision on defining “essential health benefits” for minimum health insurance coverage.
Some background: The Affordable Care Act (ACA) requires all Americans to have health insurance. But what is acceptable insurance? Under Section 1302 of the ACA, the secretary of HHS is supposed to answer that question. It’s a fateful decision. By 2016, an estimated 35 million uninsured Americans will receive subsidized health insurance under the ACA through Medicaid or from policies purchased on state “exchanges,” according to the Kaiser Family Foundation. The package of essential health benefits would apply directly to their coverage. It would also apply to unsubsidized beneficiaries receiving coverage in the individual and small-group insurance markets (small group usually means firms of less than 100 workers). All told, about 73 million Americans would be affected, the foundation estimates.
Robert J. Samuelson
Samuelson writes a weekly column on economics.
Defining essential health benefits poses a basic conflict. On one hand, everyone wants broad coverage; on the other, the broader the coverage, the more expensive policies will be — pushing government spending up (because government pays for the subsidies) and wages down (because employers will shift compensation from wages to fringe benefits).
Sebelius ducked this question by requiring each state to define essential health benefits based on existing policies in that state. Almost no one anticipated this. The ACA does not suggest it. Sebelius asked for advice from the nonpartisan Institute of Medicine. Its report talks of a national standard for essential health benefits, although it also notes that the ACA allows the secretary to provide state-by-state waivers beginning in 2017.
Politically, Sebelius’s decision is a masterstroke. One Republican criticism of Obamacare is that it imposes a “one-size-fits-all” straitjacket on health care. Mitt Romney — the ex-governor of Massachusetts and author of that state’s universal health insurance plan — has made this point repeatedly. President Obama can now retort: “No, we’ve left crucial decisions to the states.” He can also argue that Washington isn’t dictating “how medicine should be practiced.”
More generally, Sebelius has muddled the health-care debate by splintering the argument over essential health benefits into 51state-level debates immersed in highly technical issues. Under her approach, states must base their essential-healthbenefits package on any one of 10 existing insurance plans. The choices include, for example, “the largest plan by enrollment in any of the three largest small group insurance products in the state’s small group market.” Got it? This isn’t likely to engage the masses.