Boehner Wins Repeal Of Obamacare Provision You Never Knew Existed

Monday night’s spending agreement between the White House and Congress would repeal part of the Affordable Care Act. But the provision is a narrow one that few people knew existed and even fewer supported enthusiastically.

The Obama administration had stalled writing the rules that would have put it into effect and, with no signs of imminent action, most Washington insiders figured it was only a matter of time before Congress took it off the books anyway.

For better or worse, or maybe a bit of both, the provision was the regulatory equivalent of a dead man walking.

The clause -- which policy nerds will find in Section 1511 of the Patient Protection and Affordable Care Act, right under the heading “Employer Responsibilities” -- calls for automatic enrollment by large employers. If the administration fully implemented the provision, all companies that have more than 200 full-time employees and offer job-based insurance would sign up their workers for coverage.

Workers would have the right to decline coverage or select alternative policies, but they’d have to take the initiative to do so -- in other words, they’d have opt-out coverage rather than opt-in. Automatic enrollment is a textbook example of the kind of “nudging ” many economists believe is the most effective way of changing behavior to achieve public policy goals. In this case, the hope was to increase the number of people who have health insurance.

But the provision was unpopular almost from the get-go. Conservatives and employer groups complained that it would be difficult to implement and create unnecessary hassle. Some of the loudest cries came from the restaurant  and retail industries -- which, perhaps, were less than enthusiastic about having to cover more of their workers.

The Department of Labor and Department of Justice were supposed to come together and, by 2014, finish writing regulations implement this provision. Maybe officials were struggling to compose the regulation in a way that avoided adverse consequences, maybe pressure from employers and their allies was intense -- or perhaps it was some combination of the two -- but their deadline came and went.

Sen. Johnny Isakson (R-Ga.) last year introduced a bill to repeal the automatic enrollment provision, while a pair of Republicans in the House proposed a bill of their own. Interest groups representing employers and benefit managers quickly endorsed both.

This week's agreement effectively turns those proposals into law. According to the Congressional Budget Office, it will eventually mean that 750,000 fewer workers enroll in insurance from their employers. A small portion of these people will find alternative coverage, either by enrolling in Medicaid or purchasing subsidized coverage on one of the new health care marketplaces. The rest, CBO predicts, will remain uninsured.

CBO expects the shift will also affect the federal budget. Government revenue should rise because money that goes to employer health coverage is exempt from taxes -- and now, thanks to the agreement, more of that money will remain as regular wages, which are taxed. Government spending will also rise, because, again, a small portion of the people not enrolling in employer plans will now go to Medicaid or the subsidized marketplaces, where they’ll receive some form of financial assistance from the government.

Overall, the CBO says, the deficit should increase by less than $1 billion a year and by a little less than $8 billion over the next decade. How much those numbers mean in the context of the law, which is insuring many millions and has an annual price tag in the hundreds of billions of dollars, ultimately depends upon whom you ask.

On Tuesday, for example, House Speaker John Boehner celebrated the agreement, putting in the context of other efforts to chip away at the Democrats’ signature health care law.

“By eliminating the law’s auto-enrollment mandate that forces workers to automatically enroll into employer-sponsored health care coverage that they may not want or need, we will repeal another major piece of Obamacare,” he said at a press conference.

But most Democrats didn’t seem overly upset about the sacrifice, and said as much to reporters when speaking on background.

As one senior Democratic aide told The Huffington Post, “It’s an open secret that this provision wasn’t going to be implemented, so a Republican-added provision to this deal making doubly sure [that the provision never takes effect] will hardly have any effect on the long-term success of the ACA.”