01.17.2012 1

ObamaCare implementation grinds forward

By John Vinci — Obamacare is likely to find its way into the national debate continuously throughout 2012 as the Supreme Court takes the constitutionality of the law up, while the regulatory mechanisms for enforcing the law continue to be put into place.

Americans for Limited Government Foundation has put together some key upcoming dates when actions will occur that impact American’s healthcare.  Some will get major news media coverage, others will be ignored in the legacy media.  But all of these dates represent transformative changes that will change the way the government is involved in healthcare forever.

Some Key Dates for Obamacare

Jan. or Feb. 2012            HHS awards first of grants totaling $3.4 billion to Consumer Oriented and Operated Plans (CO-OPs) for startup costs and in order meet state solvency requirements.

Spring 2012            Essential Health Benefits regulation expected.

March 26-28, 2012             Supreme Court hears oral arguments on the constitutionality of Obamacare.

June 25, 2012            The final day of Supreme Court’s 2011-2012 session.  A decision on Obamacare’s constitutionality is expected within a week or two before this date.

June 29, 2012            Deadline for States to apply for federal grants to implement Health Insurance Exchanges.

November 6, 2012            Federal Election Day.

October 1, 2013             Exchanges begin enrolling participants for 2014.

January 1, 2014             Individual and employer mandates commence, annual limits for essential benefits and pre-existing condition exclusions will be prohibited, and Health Insurance Exchange health plans commence.

January 1, 2017             States Innovation Waivers available.

Implementing Obamacare Regulations

Right now there are six Obamacare regulations open for comment and eleven being reviewed by the White House prior to their release.

While there is no statutory deadline for it, the next big regulation the Obama Administration will release is the Essential Health Benefits (EHB) regulation which will determine what minimum benefits most insurance plans must offer—potentially raising the cost of healthcare significantly.

But the Obama administration has already indicated that it will dodge this controversial part of Obamacare by allowing every state to have its own EHB definition at least until 2016 when it will reexamine the issue.

Billions in grants to be awarded to potentially high default risk consumer-run insurance plans

In the meantime, the Department of Health and Human Services is on the verge of awarding its first of $3.4 billion in grants to Consumer Oriented and Operated Plans (CO-OPs).   January 12, 2012, was the anticipated award date, but PoliticoPro reports that these awards may be delayed a couple of weeks.

HHS has indicated that these loans are at risk of default by up to 35-40%, meaning they expect to lose as much as $1.1 billion of taxpayer money.

The Supreme Court to Scrutinize Obamacare

While Obamacare has, and threatens to continue, to make significant changes to American health care over the next few years, the next few months may decide its own fate.

March 26-28, 2012, the Supreme Court is taking three days to hear oral arguments on the constitutionality of Obamacare.  The length of oral arguments is due to the large number of issues the court has agreed to consider including what are essentially four questions:

  1. Can the federal government constitutionally mandate that individuals purchase health insurance?
  2. If it’s not constitutional, how much of the Obamacare statute must the Court strike down?
  3. Does the Anti-Injunction Act bar lawsuits against the individual mandate until after it becomes effective in 2014?
  4. Is Obamacare’s expansion of Medicaid an unconstitutional mandate on the states?

Three days of Oral arguments is unprecedented in the Supreme Court’s modern era, but demonstrates the justices’ desire to get this decision right.

States debating whether to start Health Insurance Exchanges

The Court’s decision could not come too soon. Many states are waiting on this decision before moving forward with implementing Obamacare’s health insurance exchanges.  While nearly every state has received federal grant money to explore the possibility of implementing an exchange, only about a dozen states have actually begun to implement an exchange by law.  Governors and legislatures in the rest of the states are debating whether their states should implement Health Insurance Exchange under federal regulations or let the Federal government do so in their stead.

Whatever decision they make, it must be made quickly.  States have until January 1, 2013 to seek approval of their exchanges from the Department of Health and Human Services.  They must show that their exchange will be ready to take applications by October 1, 2013.

But, for practical purposes, they must make their decision much sooner.  States risk losing millions of dollars in federal exchange implementation grant money if they do not apply for it by June 29, 2012.  That’s just days after the Supreme Court is expected to rule on the constitutionality of Obamacare.

Assuming Obamacare is not overturned, state- and federally-run health insurance exchanges will begin taking applications in October 2013 for plans beginning January 1, 2014.

Full implementation of Obamacare in 2014

Barring judicial or congressional intercession, Obamacare’s biggest changes begin in 2014.  In 2014 the federal government will mandate that every individual have health insurance and that employers with over 50 employees purchase insurance for their employees.  2014 will also mark the end of pre-existing limit exclusions and annual limits of “essential health benefits.”

Limited waivers for states—but not until 2017

But states must wait until 2017 before they can get waivers from certain aspects of the Obamacare.  A regulation describing how states can get these waivers is being finalized now by the White House and is expected to be released in the near future.

Vermont hopes to use this waiver to implement a “single-payer” government-run health system.  While it is conceivable states could use these waivers for less socialist reasons, this is not a waiver from the market-suppressing system but only allows for variations within the system.


But those who seek relief from Obamacare will not find it in waivers but only in repeal.

There have been two major roadblocks to attempts to repeal Obamacare.  They are the Senate and President Obama.  The Presidency and one third of Senate seats will be determined on November 6, 2012.  This makes November 6, 2012, the single most important date on the Obamacare calendar—the date the American people voice their opinion in the ballot box.

John Vinci is a staff attorney with Americans for Limited Government and is the editor in chief for the www.obamacarewatcher.org website.

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