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The Real Problem with the Obamacare Mandates

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The Patient Protection and Affordable Care Act, otherwise known as the PPACA or Obamacare, became law on March 23, 2010. Passed along strict party lines, it has proven to be one of the most polarizing pieces of legislation ever passed. Some of those who initially supported the president’s health-care law are now some of its most vocal critics. Yet their opposition is both incomplete and inconsistent.

Obamacare consists of many “reforms” to health care and health insurance and a bevy of new taxes and tax increases to pay for them.

In addition to its increased taxes on wages and investment income for higher-income taxpayers, and its decrease in the medical-expense tax deduction (thus effectively raising taxes), Obamacare imposes new taxes on indoor tanning services, drug companies, health insurers, medical-device manufactures, and comprehensive health-insurance plans.

Obamacare’s “reforms” to health care include the expansion of Medicare and changes to the Medicare payment system. Its “reforms” to health insurance include the creation of state health-insurance exchanges; federal subsidies for the purchase of health insurance; and the requirements that insurance companies provide policies with minimum standards, cover all applicants without regard to their pre-existing medical conditions, eliminate annual and lifetime caps on benefits, eliminate co-payments and deductibles for selected health-insurance benefits, and allow children to remain on their parents’ insurance plan until their 26th birthday.

The employer and individual mandates are the most onerous provisions of Obamacare.

The employer mandate dictates that all employers with 50 or more full-time or full-time-equivalent employees must offer them “affordable” health insurance (i.e., it costs no more than 9.5% of an employee’s wages) that provides “minimum value” (i.e., it pays at least 60% of the cost of covered services) or pay an annual tax penalty of $2,000 per employee, excluding the first 30 employees. This is why some companies have begun limiting their employees to 29 hours: so they won’t be classified as full-time workers. Originally scheduled to begin on January 1, 2014, the employer mandate has been delayed until January 1, 2015.

The individual mandate dictates that every American not covered by Medicaid, Medicare, or private health insurance must purchase health insurance or pay a penalty come tax time. The “individual shared responsibility fee” for 2014 is the greater of $95 per adult and $47.50 per child (up to a maximum of $285 per family) or 1 percent of taxable income. For 2015 it is the greater of $325 per adult and $162.50 per child (up to a maximum of $975 per family) or 2 percent of taxable income. For 2016 it is the greater of $695 per adult and $347.50 per child (up to a maximum of $2,085 per family) or 2.5 percent of taxable income.

A less well known, but now extremely controversial, mandate of Obamacare is that all group health-insurance plans must provide certain “preventive services” at no cost, co-pay, or deductible to those they insure. After announcing a general list of those services in September 2010, the Obama administration asked the Institute of Medicine (IOM) to recommend a list of “preventive services for women.” Sterilization and contraceptive services were included in the IOM’s recommendations. The Department of Health and Human Services (HHS) then issued a final rule in January 2012 that the “preventive services” mandate included “all Food and Drug Administration-approved contraceptive methods, sterilization procedures, and patient education and counseling for all women with reproductive capacity.”

There were exemptions for churches and “the exclusively religious activities of any religious order,” but affiliated nonprofit corporations such as schools, charities, and hospitals were not included. This occasioned a number of lawsuits by religious organizations and businesses seeking to be exempted as well. Although the contraception mandate was initially scheduled to take effect on August 1, 2012, it was delayed for a year.

On February 1, 2013, the HHS issued its “Notice of Proposed Rulemaking on recommended preventive-services policy.” It contained special “accommodations” for nonexempt, nonprofit religious organizations:

The proposed rules lay out how non-profit religious organizations, such as non-profit religious hospitals or institutions of higher education, that object to contraception on religious grounds can receive an accommodation that provides their enrollees separate contraceptive coverage, and with no co-pays, but at no cost to the religious organization.

With respect to insured plans, including student health plans, these religious organizations would provide notice to their insurer. The insurer would then notify enrollees that it is providing them with no-cost contraceptive coverage through separate individual health insurance policies.

With respect to self-insured plans, as well as student health plans, these religious organizations would provide notice to their third party administrator. In turn, the third party administrator would work with an insurer to arrange no-cost contraceptive coverage through separate individual health insurance policies.

Some religious groups were not satisfied with the Obama administration’s “accommodations” because of their moral objection to any health-insurance plan that includes coverage for sterilization, contraception, or abortifacient drugs and devices.

The U.S. Conference of Catholic Bishops issued a letter on March 20, 2013, outlining its objections. It identifies the contraception mandate as representing “an unprecedented (and now sustained) violation of religious liberty by the federal government” that “violates the First Amendment.” The letter concludes that “under the proposed ‘accommodation’ for non-exempt religious organizations, plan premiums or the plan, or both, would continue to serve as the source or conduit for the objectionable ‘services.’”

The proposed HHS rules were finalized on June 28, 2013, and their implementation was delayed until January 1, 2014.

Bishop Paul Loverde of the Catholic diocese of Arlington, Virginia, issued a statement the day after the rules were finalized expressing the Catholic right to “oppose any and all governmental coercive mandates that encroach upon religious liberty, and the responsibility to make clear that such policies violate our First Amendment freedom.”

Now, although many negative things could be said about the contraception mandate, that it violates the First Amendment is not one of them. The mandate neither respects “an establishment of religion” nor prohibits “the free exercise thereof.” Something is not a First Amendment issue just because it concerns religion on some way.

The real problem with the Obamacare mandates not only has nothing to do with the First Amendment, it has nothing to with medical care or health insurance either. The problem is simply one of unauthorized, unlawful, unconstitutional intervention by the federal government.

So forget about medical care and health insurance for a moment and consider just what it is the Obamacare mandates, regulations, and reforms are saying:

  • The government is telling employers what benefits they must offer their employees.
  • The government is telling employers the minimum requirements of the benefits they offer their employees.
  • The government is telling employers the maximum amount they can charge their employees for a particular benefit they offer them.
  • The government is telling employers what the benefits they offer must include.
  • The government is telling employers what constitutes a full-time employee.
  • The government is telling individuals what services they must purchase.
  • The government is telling individuals that they must pay for the services that other individuals use.
  • The government is telling businesses how to structure the services they offer.
  • The government is telling employers, individuals, and businesses that it knows what is best for them.

This is what is wrong with Obamacare. Not just that it has a mandate that insurance policies must include contraception coverage. Not just that it has a mandate that certain businesses must provide health insurance. Not just that it has a mandate that individuals must purchase health insurance.

Most opponents of Obamacare miss the real issue. Indeed, the U.S. Conference of Catholic Bishops initially supported Obamacare. Republican opposition to Obamacare is centered on the individual mandate. They have actually advocated many of the other features of Obamacare. And of course, Republicans are among the biggest supporters of things worse than Obamacare — Medicare and Medicaid.

The bottom line is that all government mandates are illegitimate and should be opposed, regardless of whether they concern religion, contraception, medicine, or insurance. The government should have nothing to do with the type of benefits employers offer, the minimum requirements of the benefits, the amount employees contribute for their benefits, what the benefits must include, the classification of employees, the services that individuals use or don’t use, or how businesses structure the services they offer.

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