Ethics & Public Policy Center

Centralized Power Saps Fairness and Innovation

Published in New York Times' Room for Debate Blog on March 20, 2014



Most of the Affordable Care Act’s most significant aspects were scheduled to take effect at the beginning of 2014, but even now, we are not seeing full implementation.

That’s because the president has unilaterally delayed and rewritten many of the law’s key provisions, including the employer mandate, the application of the individual mandate (under certain circumstances) and the enforcement of certain new insurance rules.

Among other things, these alterations of the law raise issues of fairness. By essentially deciding to look the other way and permit the continued sale of certain insurance policies in the individual insurance market that violate the requirements of the law, the administration will only help people in states that go along with this legally dubious work-around and whose former insurers are willing to reopen the disallowed plans. This supposed fix leaves millions of Americans out, which means they won’t get to keep the plans they had and liked after all.

Similarly, the president has suspended the individual mandate tax for persons with policies in 2013 that were canceled due to new insurance requirements in the law. But this tax clemency does not extend to persons who are arguably even more sympathetic because they couldn’t afford coverage at all in 2013 and were therefore uninsured.

The lesson to be drawn here is that a law as consequential as health care reform should not be written in a way that allows the executive to effectively rewrite it in an ad hoc and discriminatory manner. It invites bending the rules and pushing legal boundaries for political reasons.

It is also evident that the law’s huge concentration of power in the Department of Health and Human Services is, and will be, a serious mistake. This department now can make every important decision in the health insurance sector, and it is gradually accumulating power over the organization of the medical delivery system too. Consequently, the health system is responding to the steady flow of H.H.S. pronouncements, rather than to private initiative.

Over time, as recognition spreads that the federal government is now calling all of the shots in the health system, innovation and adaptation will suffer, and, in time, so too will the quality of American medicine. Instead of taking the initiative to seek or deliver higher value care, the key players — employers, providers, states and consumers — will look first to see what the government requires to ensure reimbursement for services. The result will be a steady increase in federal bureaucratic control, and a commensurate decline in the quality of American medicine.

James C. Capretta is a senior fellow at the Ethics and Public Policy Center and a visiting fellow at the American Enterprise Institute.

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