A number of smart conservatives have weighed in on the administration’s announced delay of the employer mandate. Most, as we have, find it politically problematic for the president to lift the mandate on business while keeping it for employees. There are two points worth addressing.
Yuval Levin points to another problem with moving forward only with the individual mandate:
Under the law, eligibility for exchange subsidies depends on an individual not receiving an affordable offer of qualified insurance from an employer. If employers will now not be required to report on their insurance offerings in 2014, I don’t see how the government will be able to determine eligibility for subsidies, and therefore how the exchanges will be able to function.
Making subsidies available without proof of eligibility would be very expensive and destabilizing to the insurance system, and would also require the retraction of such subsidies if the employer mandate ever does return. Coming up with other ways to prove eligibility would be very difficult at this late stage (as exchanges are supposed to start operating in three months), and would also be totally lawless—though I recognize that is a rather quaint and old fashioned concern in the age of Obama.
Second, he and others, such as James Capretta, urge that the only viable measure at this point is to delay implementation of the whole thing:
For starters, the delay confirms precisely what the critics have been saying all along: That Obamacare is a huge burden on the economy that will reduce employment and stifle wages. By delaying enforcement of the mandate, and citing complaints from employers as the reason, the Obama administration is essentially conceding this point. How do Democrats defend the law now that the administration has admitted it has the potential to harm business vitality and job growth?
And if the law has that potential now, why wouldn’t it have it in a year? Next year, with the mid-term election approaching, how would Democrats resist pushing the employer mandate back again, to 2016, or 2017? A one-year delay will also be interpreted by the business community as the first step in the ultimate repeal of the mandate, and such an expectation could easily become a self-fulfilling prophecy.
I’m coming around to that for both policy and political reasons. On the policy side, rather than proposing another slice-and-dice of the law (e.g. freeze the individual mandate’s implementation), Republicans should try to prevent as much damage as possible to the health-care system and to the economy. Carving out additional pieces of the law doesn’t do that (e.g. What about the medical device tax?) and would be confusing (as is the president’s Obamacare-lite).
As a political matter, Republicans should use the time to come up with a clean replacement for whatever is delayed. (Republicans have essentially agreed already on the provisions regarding pre-existing illness and keeping children on their parents’ plan until age 26). Ideally this should involve equalizing tax treatment for individual health-care plans, expanding health savings accounts, opening interstate insurance sales, supporting high-risk pools and requiring some transparency from insurance companies. Anything more complex is unlikely to be seen as a markedly better alternative to Obamacare.
Then the issue would be joined for voters: Do they want the cumbersome scheme to descend on them or would they like the Republican’s plan (which actually does let them keep the insurance they have)?
When the House returns from recess it should get cracking on a bill to delay all of Obamacare. Let the Senate Dems chew that over for a bit. Then Republicans can work on a simple, modest alternative — one that certainly doesn’t require a maze of taxes and huge expenditures. In this case, less is more.