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The Significance of the Missing Employer Mandate

10:02 PM, Jul 30, 2013 • By JAMES C. CAPRETTA
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CBO’s estimates make clear how important the employer mandate is to Obamacare. Today, the agency provided updated projections of what the administration’s one-year delay (as well as related changes in the administrative process for adjudicating claims for federal subsidies) would mean for costs and coverage in coming years. CBO concluded that the administration’s decisions will increase the federal budget deficit over the coming decade by $12 billion. (Incidentally, the blog post from the Treasury Department announcing the mandate delay contained 478 words, so that’s about $25 million per word.) CBO also says the delay and related actions will mean one million people won’t get employer-sponsored health insurance in 2014, and about half of them will be left uninsured as a result. Even by Obamacare standards, these are not minor consequences unless one cares nothing about federal deficits or how many people don’t have health insurance.

More importantly, CBO’s release today made it clear that the budget and coverage numbers would be far, far worse if the mandate delay extended beyond one year because employers and workers could adjust their plans without fear of having to undo them in a matter of months. As matters stand, CBO took the administration’s word for it and assumed that the full employer mandate will be imposed in 2015, thus minimizing the dumping that would occur in 2014.

But is it a safe assumption that the employer mandate will get imposed in 2015? That would mean imposing the highly controversial 30-hour limit on part-time workers, and costly data reporting requirements for just about every employer in the country. These were the reasons the administration flinched in 2013. What are the chances they can withstand the pressure for delay that will inevitably build in the run-up to the 2014 mid-term election? If anything, businesses have been emboldened by what has transpired this year and likely to believe they can push the mandate back again next year if they apply enough pressure.

The employer mandate is one of the central provisions of Obamacare. Without it, the legislation would never have passed Congress because CBO would have tagged it with much higher spending and large-scale migration out of employer coverage. That would have been enough to sink the entire legislative effort. 

By unilaterally delaying the enforcement of such an important provision because of political pressure, the administration has tacitly admitted that the law rests on a very shaky foundation. This should be taken by the law’s opponents as a clear signal to keep the pressure on.

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