Last night’s last-minute announcement about the delay in implementing Obamacare’s employer mandate is not just today’s front-page news — it’s also one of the most important news stories of the year. You might remember that a central argument in favor of the Medicaid expansion that Arkansas wrote into law two months ago was that it would “save Arkansas businesses $38 million per year.” This “savings” was derived from the reduced costs that businesses would incur because of this mandate: instead of being forced to insure employees, businesses with 50 or more employees could just dump them onto the taxpayer-subsidized plan. So here’s what just happened: we’ve now discovered that Arkansas has shouldered a gigantic government expansion, which funds a program that does not work, which was justified on the basis of tax savings that no longer exist.
Indeed, that justification was always weak because in order to “save $38 million,” state taxpayers will eventually be obliged to spend five or six times that — at least $200 million per year — to fund the program, thus obliterating any “savings” that Medicaid expansion might’ve magically created. (Nonetheless, you can see this taxpayer website explaining that the “private option” will actually save businesses money.) The White House’s announcement that they’re delaying the employer mandate, moving it from January 2014 to January 2015, has now made expansion even less justifiable than before — just as we predicted would happen. I hope this will draw attention to the fact that the “private option” is largely designed to solve a problem that may never occur.
While many of us were advocating that the legislature slow down and take their time to make such a monumental decision — that will now dictate the political narrative and our state budget for years to come — we were consistently told that we couldn’t wait because the employer mandate was just around the corner and we had to deal with it now. Sen. David Sanders, in an acrimonious and infamous filibuster on KARN, explained that “Obamacare is here, it’s coming.” The governor said he would refuse to call a special session to consider other options. In the waning days of a grueling session, the advocates of expansion manufactured a climate of urgency. But many voices at the Capitol urged legislators to slow down, stressing that Obamacare implementation already faced immense challenges and that Arkansas would be better off to wait and see what happened.
And it wasn’t just crazed, libertarian think-tank drones or even Tea Party activists that had been brainwashed by the Greenberg-Horton media empire saying this stuff — it was the Obama Administration itself that was actually delaying key parts of the law. Here’s a few examples of key components of Obamacare that had already been delayed when Medicaid expansion was being debated in Arkansas:
- Last year, Sebelius announced HHS could not implement the “long-term care” components of Obamacare
- In April, days before the “private option” vote, the administration delayed a key small business provision of the law
- Even closer to the vote, the administration announced they were increasing the uncompensated care reimbursements by half a billion dollars
The U.S. Senate had just passed a resolution to repeal the Medical Device Tax. A new Rasmussen Poll showed that only 36% of Americans had a “very favorable” view of the law. It didn’t take a rocket surgeon to see that Obamacare posed extraordinary administrative challenges and that the Obama administration was willing to delay key components further and further. In fact, I called it “unfundable, unpopular, and unworkable.” And perhaps the most brilliant analyst in Arkansas explained at the time:
These are indisputable signs of recognition by the Obama Administration that the establishment of Obamacare is a difficult and burdensome task that is proceeding much more slowly than planned. It would be a pity for Arkansas lawmakers to race past the federal government with a gigantic expansion of the federal government’s role in health care.
These are just a few examples that demonstrate how predictable — and how predicted — the administration’s most recent announcement was.
As former Rep. Ed Garner noted on Facebook last night, there are more than a few people who have a little “private option” on their faces right now. In contrast, Republican blogger Jason Tolbert remarked that there are a lot of people with “hindsight 20/20 vision on Obamacare” in light of yesterday’s announcement, calling these folks “armchair quarterbacks” (I suspect he meant to say “Monday morning quarterback,” but hey, words are hard). In my view, it’s not really 20/20 hindsight when you predicted it in advance. But perhaps he’s just a little sore: while he was out campaigning for the passage of the “private option,” this blog was educating Arkansans and legislators about the perils of jumping into Obamacare implementation.
So now we know: there won’t be any $38 million in “savings” next year. Instead, we bought a pig in a poke that will gigantically expand state government, stress the state budget, and dump hundreds of thousands more Arkansans into a program that has been scientifically demonstrated to have no effect on health outcomes. Some of us were aware of all that before the vote. Others are now learning it the hard way. In fact, this delay in Obamacare implementation is one of many delays in implementation that could lead to de facto Obamacare repeal. I can only hope that this dynamic will be mirrored on the state level and that it might lead to the delay or death of the immensely flawed “private option.”