Obamacare: Why the need for waivers?

Hearing Date: March 15, 2011 12:00 am

Subcommittee Chairman Trey Gowdy Opening Statement

The purpose of the oversight committee is not necessarily to balance the relative merits or demerits of a law or proposed legislation. Other committees do that. Oversight is calculated to ensure trust and confidence in the institutions of government – to investigate areas that demand transparency and accountability.

Our duty is to ask fair questions with an expectation of an honest and complete answer on behalf of the people we represent.

That is why we are here today. Many in this room – including myself – fundamentally oppose the healthcare legislation passed last year. We have serious concerns with federal mandates on individual citizens, and massive new government spending programs in such an austere fiscal environment. But those conversations are reserved for other forums.

The current health care law was marketed to the American people as a means to provide high-quality health coverage options to every citizen in our country – while ensuring that those who like their current coverage can keep it.

Over the past year, it has become abundantly clear that companies are having trouble complying with the new law. In order to escape the onerous burdens placed on businesses by this legislation, many of these companies have sought waivers from the Secretary for Health and Human Services with varying levels of success.

The necessity of these waivers arose because many companies employ a health coverage strategy that provides some employees with mini-med plans that run afoul of current federal rules – mandated by the new health care law – that set a minimum annual dollar limit on essential benefits that health care plans must provide in 2011, 2012, and 2013.

Thus the myth that if you like your current health care you can keep it has been exposed for around 3 million employees.

Through an amorphous process shrouded in ambiguity and understood by few, the Administration has exempted over 1,000 companies from certain requirements – and at the same time has neglected to afford others the same accommodation.

So our first question today is substantive. In light of over 1000 companies requesting waivers from the burdens of this law, what did the President mean when he said, “if you like your health insurance, you can keep it” and where are the failings of this law that necessitate a waivers process.

Further, the entire waivers process is predicated on the ability of the Secretary to grant waivers in the first place. However this seemingly fundamental step – the statutory basis for waiving compliance with the law – appears to have been wholly neglected by the plain language of the statute.

What is the legal authority by which the Secretary can grant waivers? Where in the health care law does it specifically grant the Secretary the authority to waive compliance with the law?

Congress all too often in recent memory has abdicated its law making responsibility to employees or appointees in the executive branch who are not elected – and are not accountable via popular election to the American people.

It is not Congress’ job to simply pass big ideas and leave the details to another entity – and it is also not the job of agencies to invent statutory authority where none exists.

However the most important questions today concern the procedural aspects of this highly nebulous process.

Initially, how were these waivers advertised before a link was placed on the HHS website?

What was the process by which subsequent waivers were applied for, reviewed, accepted, denied, determined, and appealed?

The American people expect open and honest answers to these legitimate questions. Waivers to the healthcare law have widespread implications – implications that demand transparency and accountability from the federal government.

In order for companies to compete on a level playing field, as is the custom in our country, they must know their burden of proof – the standards their applications will be evaluated by. They must know why certain companies’ applications were accepted, and others were denied. There must be an identifiable process not a labyrinthine morass of vague standards with no statutory definitions.

The waivers process, such as it is, lends credence to the conventional wisdom surrounding enactment of this transformative law – people don’t know what is in it or how specific provisions are affecting America’s business and individuals.

These are due process, equal protection and fundamental fairness questions that are essential to be asked and to be answered.

Witnesses and testimonies

Name Title Organization Panel Document
Steven Larsen, J.D. Deputy Administrator and Director, Center for Consumer Information & Insurance Oversight Centers for Medicare and Medicaid Services Document
Edmund Haislmaier Senior Research Fellow, Center for Health Policy Studies The Heritage Foundation Document
Scott Wold, Esq. Shareholder Hitesman & Wold, P.A. Document
Judith Feder, Ph.D. Professor of Public Policy, Georgetown University Senior Fellow at the Center for American Progress Document