02.13.2012 0

Obama’s tenuous truce with the Church

Barack Obama delivering the State of the Union

Photo Credit: White House

By Robert Romano — In response to the Obama Administration’s supposed modification of its rule mandating religious-affiliated institutions to provide contraceptive services that violate their doctrines, the U.S. Conference of Catholic Bishops (USCCB) adopted an old Reagan mantra — trust but verify.

“[W]e reserve judgment on the details until we have them,” Cardinal-designate Timothy Dolan, president of the USCCB said immediately after Obama spoke on the issue. Obama had promised a new regulation will be issued “to address the religious objections of the non-exempted religious organizations,” according to a White House fact sheet.

Call it a tenuous truce.

At least it was, until the Conference took a look at some of those details when the finalized regulation was released hours after Obama delivered his speech. It had originally objected to the regulation because it would force all private health plans to carry contraception, forcing employers, employees, and students to pay for them even if they had religious objections.

The Church wanted “a conscience exemption for all of these stakeholders — not just the extremely small subset of ‘religious employers’ that HHS proposed to exempt initially.”

The Catholic Church had cast a wider net than Obama could handle, seeking an exemption not just for their institutions, including charities, schools, and hospitals — but for every individual. In essence, the Conference had put the ball back in Obama’s court — placing the onus of proof on the Administration. It was up to Obama to show that those with objections under the finalized regulation would not be forced through their premiums to pay for services that violate their religious beliefs — a violation of the First Amendment.

Obama fell way short of their demands, said the Bishops: “we note at the outset that the lack of clear protection for key stakeholders — for self-insured religious employers; for religious and secular for-profit employers; for secular non-profit employers; for religious insurers; and for individuals — is unacceptable and must be corrected.”

In fact, Obama has not changed a thing about his plan. He merely issued a press release and promised there would be another regulation that would — perhaps this time he means it — take into consideration everyone’s objections. As the rule stands right now, after the one-year grace period stipulated in the regulation, come Aug. 2013, religious-affiliated employers will be required to pay for this coverage — or else drop coverage all together and face a fine. For everyone else, the rule goes into effect Aug. 2012.

Penalties for failing to provide coverage under the employer mandate are $2,000 per employee for a company or organization with 50 or more employees.  That will remain true unless and until Obamacare itself is repealed.

At best, if the Administration made a new regulation a priority, it could issue a new regulation within 30 days, according to sources familiar with the process. Otherwise, under normal circumstances, it might take six months, including a 90-day period of going through the Office of Information and Regulatory Affairs to ensure proper analysis.

For now, the Department of Health and Human Services is leaning on some rather weak arguments in its finalized regulation to back up its position.  For example, the regulation states, “Actuaries and experts have found that coverage of contraceptives is at least cost neutral when taking into account all costs and benefits in the health plan.”

This is a key point. The Obama Administration is saying that the health benefits and cost-savings associated with providing these services will offset the costs of the services of themselves. Therefore, following this logic, is the Administration saying premiums will somehow not wind up being used to pay for the services?

Because that cannot be. Even if there were health benefits derived from the contraceptive services that resulted in cost-savings in other areas of the plan, the services themselves would still cost money.

Contradictorily, Obama is now promising that the religious entities will not pay for the services, but insurers will, acknowledging there is indeed a cost incurred by somebody.

But unless one is a self-insured employer, the institution’s responsibility is simply to pay the premiums for the health plan. The insurer always was going to pay — with the premiums — for the fulfillment of actual services, even under the original regulation.

Attempting to thread a needle, focusing singularly on religious-affiliated employers, Obama has guaranteed that the objectionable services to employees of the religious entities will be provided “free of charge.”

So, the employees will not be paying. Which means somebody else’s premiums will be used to pay for the services. The White House plan does not stipulate who. Nothing is for free, of course, and it will be difficult for the regulation to somehow segregate the religious-affiliated employer’s funds to ensure they are not used to pay for these services.

Consider this tortured rendering from the finalized rule: “the Departments plan to initiate a rulemaking to require issuers to offer insurance without contraception coverage to such an employer (or plan sponsor) and simultaneously to offer contraceptive coverage directly to the employer’s plan participants (and their beneficiaries) who desire it, with no cost-sharing. Under this approach, the Departments will also require that, in this circumstance, there be no charge for the contraceptive coverage.” So who will pay for it?

Either, those with objections, including religious-affiliated employers, would have to be given a discount on the premiums versus other employers, or other non-religious employers would have to have their premiums hiked upward to offset the costs.

Otherwise, if the new promised regulation would not affect premiums at all, since the monies paid are fungible, “the net effect will be that the religious institutions that are paying the premiums will still be paying for the contraceptives,” said Americans for Limited Government President Bill Wilson.

He added, “The White House merely wants the religious institutions to pretend with them they are not funding this coverage, when the reality is they will be. This is unconscionable. Now the President is attempting to get religious institutions to be complicit in this lie, forcing his rule and will upon them. This is wrong and it must be rescinded immediately.”

The problems do not end there. Self-insured religious-affiliated employers that cover the costs directly of all medical services provided will have no escape clause whatsoever. There is no insurance intermediary to pay for it, yet the regulation promises that the “Departments intend to develop policies to achieve the same goals for self-insured group health plans sponsored by non-exempted, non-profit religious organizations with religious objections to contraceptive coverage.” How is anyone’s guess.

Then there are employers that may have religious objections to paying for such coverage, but who simply do not qualify for the exemption because they are not religious institutions. Even under this new, yet-to-be-issued rule, they would not be exempted. Neither would, as the Church notes, individuals with similar objections that pay into employee-funded plans.

All of which means this controversy is far from over. Even if Obama somehow manages to segregate the funds of religious-affiliated employers and deals with the mystery of how to deal with self-insured employers, there will still be thousands of more employers and millions more employees with similar objections who will find no exemption.

The Church is right. The First Amendment’s clause protecting the free exercise of religion applies to individuals as much as to religious institutions. In good conscience, it was inconceivable they would ever pretend with Obama that Americans with religious objections to paying for these services are somehow not.

Obama’s tenuous truce with the Church did not last for very long. Now, the question becomes: Who will pay for this outrage? Our money is that it will be Obama.

Robert Romano is the Senior Editor of Americans for Limited Government.

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