NCPA - National Center for Policy Analysis

ObamaCare Faces the Implementation Iceberg

November 30, 2012

With all the talk about the looming fiscal cliff, many commentators fail to discuss the "implementation iceberg" of the Patient Protection and Affordable Care Act ("ObamaCare"). The implementation iceberg refers to the implementation of key provisions of the law that were put off until after the 2012 election, say Paul Howard Paul Howard, director and senior fellow of the Manhattan Institute's Center for Medical Progress, and Stephen Parente, the Minnesota Insurance Industry Professor of Health Finance in the Carlson School of Management and director of the Medical Industry Leadership Institute at the University of Minnesota.

The massive regulatory impact is likely to be felt by many voters in the coming year and will keep the Obama administration and insurance companies occupied for months on how to implement the law.

The administration has just begun to issue guidance to the insurance industry on some of the reforms. However, some of the newer rules will likely increase prices for younger people.

Additionally, there is so much uncertainty facing the industry and the states that it is unlikely that the regulations will actually be implemented correctly, if at all, by the stated deadlines.

  • It will take stakeholders a significant amount of time to comment on provisional regulations and for the Department of Health and Human Services to issue its final rules.
  • Furthermore, many states are still evaluating their options, with 13 states opting to build insurance exchanges in partnership with the federal government.
  • Similarly, 17 states are planning to just allow the federal government to run their exchanges.
  • However, the administration has yet to unveil its plan on how to implement the federal exchange, which is problematic considering that people need to be enrolled by next October.

Another uncertainty that ObamaCare faces is how many states will embrace its Medicaid expansion, another large element of the overall health care reform. As a result, governors have leverage to call for changes to the program, which places more uncertainty around the implementation of new regulations.

The fiscal cliff is likely to affect the implementation of ObamaCare as well, considering the cuts that will need to be made to several programs. It is likely that implementation, for state exchanges at least, will be pushed back even farther because the administration has yet to give insurance companies and states time to accommodate to the new guidance.

Source: Paul Howard and Stephen Parente, "ObamaCare Faces the Implementation Iceberg," Real Clear Politics, November 26, 2012.


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