Delay of employer mandate in health-care law heightens stakes for Obama

The White House delay on the employer mandate to provide health insurance has raised questions about the readiness of the Affordable Care Act on the whole. Wonkblog’s Sarah Kliff provides insight on why the delay comes now. (The Fold/The Washington Post)
Dan Balz
Chief correspondent July 3, 2013

The surprise decision to delay the requirement that businesses offer health insurance to their employees or pay a penalty represents a significant symbolic setback for the Obama administration, one that focuses attention on a larger question: Can government effectively implement something as big and complex as the Affordable Care Act?

That question has been at the heart of the debate over the law from its outset, coloring the long and contentious discussions that preceded its congressional passage along partisan lines in 2010, and following it every step of the way as the administration has begun to put its pieces into place.

Dan Balz is Chief Correspondent at The Washington Post. He has served as the paper’s National Editor, Political Editor, White House correspondent and Southwest correspondent. View Archive

President Obama long has argued that debates over the size and scope of government — of which health care has become the most important example — should not be seen as a question of bigger government vs. smaller government, but rather whether proponents of activist government are able to demonstrate that the federal government can be both smart and effective.

With controversy continuing over other elements of the law, the decision to delay enforcement of the employer mandate for a year clearly heightens the stakes for the president and his allies to prove the critics wrong and demonstrate that they can make bigger government work.

The setback for Obama’s signature domestic achievement also points to another problem for the White House. It could serve to reinforce perceptions of an administration that is beset by controversies, adrift and struggling to find its equilibrium.

On that issue, administration officials take sharp exception. “There have been a number of controversies that have gotten a lot of attention in the press, but if you step back and look at what the president has accomplished in the first six months, it’s pretty compelling,” White House communications director Jennifer Palmieri said.

She pointed to the fiscal cliff negotiations of December that resulted in raising taxes on wealthy Americans, to the Senate passage of immigration reform (although the measure faces more resistance in the House), to the president’s newest initiative on climate change.

Political interpretations of the employer mandate decision broke into rival and predictable camps Wednesday. Opponents of the health-care act saw it as ratification that the law is fatally flawed. “It is a step in the disintegration of what will prove to be an unaffordable, unmanageable disaster,” former House speaker Newt Gingrich (R-Ga.) said in an e-mail.

Even so, Douglas Holtz-Eakin, president of the conservative think tank American Action Forum and an administration critic, called the move “deviously brilliant.”

“Democrats,” he wrote in a post Tuesday night, “no longer face the immediate specter of running against the fallout from a heavy regulatory imposition on employers across the land. Explaining away the mandate was going to be a big political lift; having the White House airbrush it from the landscape is way better.”

Republicans have been planning to make the health-care law a centerpiece of their 2014 campaign against the Democrats and saw Tuesday’s decision as more fodder for their candidates. “The ads in swing races are being written as we speak,” said Kevin Madden, a Republican strategist.

Some Democrats saw the move as a hasty and unnecessary capitulation in the face of continuing GOP and business community criticism. Others saw it as a shrewd retreat that will buy time to deal with what has been a flood of complaints by businesses, though not an action that will diminish the campaign-year rhetoric.

“This gives businesses some breathing room to figure it all out and not have to be rushed,” Democratic pollster John Anzalone said in an e-mail. He said he did not see it as a political decision, but added, “To be quite honest, whether it was implemented in 2014 or not, the Republicans are going to use the same rhetoric on Obamacare to attack Dems in congressional races [next year].”

Other Democrats argued Wednesday that the near-term politics might be better for their candidates than for Republicans. Stephanie Cutter, a former White House official and campaign adviser to the president, noted that key portions of the law — the ban on preexisting conditions, more affordable options for insurance through the exchanges and tax credits for middle-class families — will be in place by next year.

“No matter how you shake it,” she said in an e-mail, “that’s a very different and more affordable, secure and fair system than the country had just a few years ago, regardless of whether employers are required to provide insurance a year later than planned.”

Valerie Jarrett, a White House senior adviser, posted a statement on the White House Web site on Tuesday evening noting that the decision was a reflection of the administration’s flexibility and willingness to listen to the concerns of businesses.

Another administration official, who spoke on the condition of anonymity to talk candidly, said the action was not a reflection of the administration’s inability to implement the law, but rather its concern about getting this right rather than getting it done quickly.

“We’re not saying we can’t do this,” the official said. “It’s not like we don’t have our act together. We could do it. But do you force it on people when they have a lot of concerns or delay it and work with businesses? We decided on the latter.”

But Louisiana Gov. Bobby Jindal (R), a longtime critic of the act, argued that the administration’s decision on the employer mandate raises more fundamental questions about the viability of the law.

“This is not just a tactical retreat,” he said in a telephone interview. “It is such a complicated law with so many unintended consequences, the only solution is to repeal the law and do a bipartisan [replacement].” Jindal said that, at a minimum, the administration should now delay implementation of the individual mandate, as well. “Why should businesses get relief but not individuals also get relief?”

That leaves administration officials with the challenge of proving that they can get it all right. But as William Galston of the Brookings Institution pointed out, the employer mandate was supposed to be less challenging administratively than some other features of the bill.

“Its postponement raises troubling questions about many others — especially the exchanges,” he said. “If — against the odds — the remaining features of the bill are implemented relatively smoothly, it will go down as a ‘strategically shrewd decision.’ If not, it will be the equivalent of blood in the water. And the sharks are hungry.”

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