Obamacare’s latest delay may not mean much

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A key part of Obamacare will be delayed until 2015, putting it a year behind schedule. That is the provision penalizing large employers that don’t offer health coverage to their workers. (Click here to read the administration’s announcement.)

The law’s drafters included that provision to keep our current employer-based insurance system intact. They feared that companies might drop health benefits once health reform takes effect because the law enables their workers to find alternative coverage in the new insurance exchanges. They also wanted to encourage firms that offer no or limited policies, like some large retailers, to accept responsibility for their employees’ health care.

The penalty applies to companies with 50 or more full-time employees, and it can be steep. Depending on the kind of violation, it can reach as much as $3,000 for each uninsured worker.

To critics of the law, the delay in enforcing the penalty is further proof that Obamacare is unworkable. Why else would the administration wait to implement such an important part of it? Their solution is to repeal the law entirely.

But the delay has no effect on the core of Obamacare. That is the set of exchanges through which those who are currently uninsured will be able to find coverage. They can no longer be turned down or charged extra for having a preexisting medical condition, and financial help is available for those with low incomes.

The administration is struggling to get the exchanges up and running by the scheduled start date of October 1. Its ability to do so is much more important to the success of the law than the employer penalties.

And the delay will have no effect on the vast majority of workers. Most large employers currently offer health coverage, and they are likely to continue to do so. The minority of firms without health benefits now have a year’s reprieve from the obligation to provide them. And during that time, their workers will be in much better shape, since they will have the ability to seek coverage on an exchange. (Click here for recent statistics on employer-based health insurance.)

The delay has the advantage of giving the administration more time to address the concerns of mid-sized firms. Many companies that are just above the 50-employee cut-off do not currently offer coverage and see it as a major expense. Some are considering reducing the size of their workforces or cutting the hours of some workers to avoid the penalty. More time before implementing the penalty means more time to seek a regulatory compromise.

The ultimate test of Obamacare is not whether it is implemented on schedule. It is whether it succeeds in making health care available to all who need it. And the law is already off to a strong start in that regard by extending coverage to millions of young adults and patients with large medical bills.

There is no denying that Obamacare is extremely complex. It has to be to address the daunting challenges of reforming America’s massive health care system. That is the main reason its critics have yet to devise an alternative. 

And Obamacare is not alone in its complexity. Health reform efforts of the past have all been complicated. If that were reason enough to repeal them, we would not have Medicare, Medicaid, veterans health care, or any of the other programs that insure health care access for millions of Americans. 

The focus of politicians should be on finding ways to make Obamacare work and to fix the parts that need repair. It should not be on finding reasons why millions of Americans should continue to be left without access to health care.


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