Obama Backs
Easing State Health Law Mandates
Published: February 28, 2011 - New York Times
WASHINGTON — President
Obama, who has stood by his landmark health care law through court attacks
and legislative efforts to repeal it, told the nation’s governors on Monday that
he was willing to amend the measure to give states the ability to opt out of its
most controversial requirements right from the start, including the mandate that
most people buy insurance.
In remarks to the National
Governors Association, Mr. Obama said he supported legislation that would
allow states to obtain waivers from the mandate as soon as it took effect in
2014, as long as they could find another way to expand coverage without driving
up health care costs. Under the current law, states must wait until 2017 to
obtain waivers.
The announcement is the first time Mr. Obama has called for altering a
central component of his signature health care law, although he has backed
removing a specific tax provision that both parties regard as onerous on
business.
But the prospects for the proposal appear dim. Congress would have to approve
the change through legislation, and House Republican leaders said Monday that
they were committed to repealing the law, not amending it. Even if the change
were approved, it could be difficult for states to meet the federal requirements
for the waivers.
The White House described the proposal, based on a bipartisan bill recently
introduced in the Senate, as a common-sense date change that would give states
the freedom to innovate and act as laboratories. Mr. Obama called it “a
reasonable proposal,” telling the governors, “It will give you flexibility more
quickly while still guaranteeing the American people reform.”
Political calculations, as much as policy ones, were at work in the
president’s announcement. The shift comes as the health care law — and the
mandate in particular — is under fierce attack in the courts, where federal
judges have issued conflicting opinions on its constitutionality. The mandate is
also a rallying cry for conservatives and Tea
Party supporters, who regard it as a prime example of overreaching by the
federal government.
Mr. Obama has been trying to reposition himself in the political center on
some issues in the wake of the drubbing his party took in the November midterm
elections; dropping his insistence on the mandate is one way to do that. And
with governors pressing the administration to allow them to cut Medicaid
rolls to ease their fiscal distress — a step Mr. Obama does not want to take —
the president is trying to look flexible in other ways.
But Mr. Obama’s flexibility goes only so far. “I am not open to refighting
the battles of the last two years,” he said, “or undoing the progress that we’ve
made.”
Mr. Obama’s announcement did not appear to appease his Republican critics.
The House majority leader, Representative Eric
Cantor of Virginia, told reporters that the health law was “an impediment to
job growth” and that Republicans remained committed to its repeal.
And while some Republican governors praised Mr. Obama for reaching out, they
said the move did not address their underlying discomfort with the law or the
major structural flaws facing state budgets. In meeting with the governors, Mr.
Obama also asked them to come up with a bipartisan group to find ways to reduce
Medicaid costs.
“I was disappointed,” said Gov. Rick
Perry of Texas, chairman of the Republican Governors Association. “Pretty
much all he did was to reset the clock on what many of us consider a ticking
time bomb that is absolutely going to crush our state budgets. The states need
more than that.”
Some Democrats also reacted warily. Many are convinced that it is not
possible to expand health care coverage and achieve deficit reductions without
the federal mandate, and they worry that amending the law would be tantamount to
weakening it.
Senator Max
Baucus, a Montana Democrat who as chairman of the Senate Finance Committee
wrote a bill that included an idea similar to the one Mr. Obama proposed, issued
a tepid statement saying he would consider it.
“We want to give states as much flexibility as possible,” Mr. Baucus said,
“but that flexibility shouldn’t fail to ensure that Americans in every state
have access to quality, affordable health care.”
The White House said the proposal was unrelated to the challenges to the
constitutionality of the mandate. But encouraging states to pursue alternative
ways of expanding coverage could prove useful should the Supreme
Court ultimately rule that the mandate is unconstitutional.
At the same time, the mandate, and the health care law more generally, is
sure to be an issue in the president’s 2012 re-election campaign, which may be a
reason he is offering the proposal now.
“It’s to his advantage to show that he wants to be more moderate on this,”
said Dan Mendelson, a health policy expert who worked in the Clinton
administration, “because the mandate is terribly unpopular politically and he
doesn’t want to be saddled with that going into the next election.”
The bipartisan legislation that Mr. Obama is now embracing was first proposed
in November, eight months after the enactment of the Affordable Care Act, by
Senators Ron
Wyden, Democrat of Oregon, and Scott
Brown, Republican of Massachusetts. Senator Mary
L. Landrieu of Louisiana, a Democrat, is now a co-sponsor.
If states can meet those standards, they can ask to circumvent minimum
benefit levels, structural requirements for insurance exchanges and the mandates
that most individuals obtain coverage and that employers provide it. Washington
would then help finance a state’s individualized health care system with federal
money that would otherwise be spent there on insurance subsidies and tax
credits.
Representative Peter Welch, Democrat of Vermont, has proposed similar
legislation in the House, but he said in an interview Monday that his bill had
no Republican co-sponsors, making its prospects for passage uncertain at best.
Still, Mr. Welch called Mr. Obama’s announcement “extremely significant,” adding
that the waivers were “an act of empowerment for the states.”
In Vermont, Gov. Peter Shumlin, a Democrat, is exploring the idea of using a
waiver to create a so-called single-payer system, a government-run health care
plan.
Such a plan, dubbed the public option in last year’s health care debate,
would never have passed Congress. But Mr. Welch said he saw no reason Vermont
should not get a waiver to establish one.
“My Republican friends argue that you should drive power and responsibility
for implementation to the local level, and they’re right,” Mr. Welch said.
Health economists have mixed views on how difficult it would be to expand
coverage and hold down costs in the absence of a mandate.
Jon Gruber of M.I.T.
published a recent analysis arguing that eliminating the mandate would
“significantly erode the gains in public health and insurance affordability”
made possible by the health care law. But David Cutler of Harvard
said that “given the uncertainty generated by the mandate, it was reasonable” to
let states experiment with other ways to achieve the law’s broad goals “and let
the evidence decide” if the mandate is necessary.
When the health measure was moving through Congress last year, its authors
set 2017 as the date that such experimentation could begin, based on an analysis
by the Congressional
Budget Office, which said it would take three years of experience to
determine how much a state should receive in unrestricted block grants if it
opted out of aspects of the law.
Otherwise, the budget analysts advised last year, the legislation’s 10-year
cost estimate would be about $4 billion higher because Washington would probably
have to make higher than needed payments to states. Senior administration
officials said they had not discussed where to find the additional $4 billion,
but described it as “not a lot of money” compared with the estimated $1
trillion, 10-year cost of the law.
Sheryl Gay Stolberg reported from Washington, and Kevin Sack from Atlanta.
Jeff Zeleny contributed reporting from Washington.