In an online statement posted on Tuesday, Mark Mazur, an assistant secretary at the Treasury Department, said the agency would delay for one year any imposition of penalties onto companies failing to provide insurance coverage for its employees under ObamaCare:
We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively. We have listened to your feedback. And we are taking action.
This was followed up with a posting on the White House website by Obama adviser Valerie Jarrett: "We are cutting red tape and simplifying the reporting process. Some of this detailed reporting may be unnecessary for [some] businesses."
This would impact only companies employing 50 or more employees. The individual mandate and the requirement for state exchanges remained in place. The biggest impact is likely for major hotel chains, restaurants, and retail stores that employ many low-wage workers. Some have already cut workers’ hours to keep them below the “full-time” ObamaCare definition of 30 hours a week while others have put off hiring new workers until the ObamaCare requirements were clarified.
The announcement provided an opportunity for those opposed to ObamaCare to voice their opposition, claiming vindication, venting frustration, and voicing iterations of demands for repeal of the health care law. Senator John Barasso (R-Wyo.) said Mazur’s announcement was a “clear admission [that the law is] unaffordable, unworkable and unpopular.” He also said the timing was suspicious: “It’s also a cynical ploy to delay the coming train wreck associated with ObamaCare until after the 2014 elections.”
There are 21 Democrats in the Senate defending their seats in 2014 and the GOP had already planned to make the ObamaCare compliance difficulties a major issue in their campaigns. The House has already voted repeatedly to repeal or at least defund part of ObamaCare since its passage in 2010. House Speaker John Boehner said:
The president's health care law is already raising costs and costing jobs. This announcement means even the Obama administration knows the “train wreck” will only get worse. … And it underscores the need to repeal the law and replace it with effective, patient-centered reforms.
Senate Minority Leader Mitch McConnell (R-Ky.) added that the announcement is a tacit admission that “ObamaCare costs too much and isn’t working the way the administration promised.” Indeed, it was as recently as June 7 that the president told an audience in San Jose, California, that ObamaCare “is working the way it’s supposed to.”
McConnell was joined by Senator Orrin Hatch (R-Utah) who said, "[This] delay — conveniently past the 2014 elections — only adds to the uncertainty these job-creators face because of Obamacare. The only reasonable recourse is to fully repeal this law."
Rep. Michael Burgess (R-Texas) said there are going to be more delays and difficulties in getting compliance under ObamaCare:
I don’t think [this] is the end of it. I just cannot believe that they’re not having meetings and discussions and email exchanges on contingency plans.
We all know this thing has problems. Here they are, trying to dig out from [under] a problem that they have caused — and I’m not sure if they can do it…
This whole thing is bad, from start to finish.
Rep. Tom Price (R-Ga.) agreed, saying that repeal is the only permanent solution:
House Republicans stand with the vast majority of the American people in our opposition to this disastrous law, and we remain committed to its total and permanent repeal. It is bad for patients. It is bad for doctors. It is bad for workers. It is bad for job creators. It is bad for America.
Tim Phillips, president of Americans for Prosperity, added:
It is increasingly obvious that the Obama administration is nowhere near ready to deal with the countless negative consequences their own law creates. This delay amounts to an admission that forcing small businesses to comply with more onerous regulations only hurts jobs and slows the economy.
Further, the decision to postpone implementation until after November 2014 appears motivated by deceptive politics, rather than an honest effort to protect small businesses from the painful conditions Obamacare creates.
Even hardcore liberals such as John Dickerson, chief political correspondent for Slate magazine and political director of CBS News, said, "As a political matter, this is not good. It sort of contributes to the feeling that the Affordable Care Act is a jalopy they're trying to roll out of the driveway here [that’s] barely operational."
It’s one costly jalopy. According to the American Action Forum, ObamaCare so far has cost American taxpayers more than $30 billion in implementation and more than 110 million man-hours — equivalent to 55,000 employees working 2,000 hours for a year.
Naturally supporters tried to minimize the announcement. NBC News noted that it didn't affect the individual mandate or the states’ exchanges, and the real number of companies affected by the delay is relatively small since most of them already offer health insurance coverage to their employees. And besides, according to Neil Trautwein of the National Retail Federation, “This one year delay will provide employers and businesses more time to update their healthcare coverage without threat of arbitrary punishment.”
The only trouble with that assessment, however, is that ObamaCare is already having an huge negative impact as it is being implemented across the country. Even Health and Human Services (HHS) Secretary Katherine Sebelius announced that her agency could not implement the long term care component of ObamaCare, that it was “simply unworkable.” And she further announced that she was postponing a program designed to allow small businesses to offer more than one plan for their workers.
More than half the states haven’t set up insurance exchanges, which leaves the responsibility to Washington to do it for them. Two major health insurers have pulled out of California (UnitedHealth Group and Aetna) which, according to the state insurance commissioner, “means less choice [and] less competition…”. It also means higher premiums. According to the Wall Street Journal: "Healthy consumers could see insurance rates double or even triple when they look for individual coverage under the federal health law…".
Heritage healthcare expert Chris Jacobs wrote that Tuesday’s announcement is reflective of the ObamaCare disaster:
It is hard to understate the impact of [Tuesday’s] admission from the Administration that, after three years, it still cannot implement Obamacare without strangling businesses in red tape and destroying American jobs.
Given the electorate’s notorious reputation for having short memories and the fact that most individuals won’t be affected by the delay, the timing of the announcement by the Treasury Department might just turn out to be a brilliant political maneuver: defanging Republican opposition so that any remaining resistance to ObamaCare will have evaporated long before the elections in 2014.
A graduate of Cornell University and a former investment advisor, Bob is a regular contributor to The New American magazine and blogs frequently at www.LightFromTheRight.com, primarily on economics and politics. He can be reached at