All Commentary
Thursday, October 21, 2010

Obamacare: Rule by Decree

Is there a way to make Obamacare worse? Yes, by giving the authorities loads of discretionary power so they can selectively exempt favored companies from the onerous rules. And that’s what’s happening right now. Bloomberg reports,

Nearly a million workers won’t get a consumer protection in the U.S. health reform law meant to cap insurance costs because the government exempted their employers.

Thirty companies and organizations, including McDonald’s (MCD) and Jack in the Box (JACK), won’t be required to raise the minimum annual benefit included in low-cost health plans, which are often used to cover part-time or low-wage employees.

The Department of Health and Human Services, which provided a list of exemptions, said it granted waivers in late September so workers with such plans wouldn’t lose coverage from employers who might choose instead to drop health insurance altogether.

Without waivers, companies would have had to provide a minimum of $750,000 in coverage next year, increasing to $1.25 million in 2012, $2 million in 2013 and unlimited in 2014….

The biggest single waiver, for 351,000 people, was for the United Federation of Teachers Welfare Fund, a New York union providing coverage for city teachers.

So here we have government officials admitting that their beloved scheme to overhaul medical insurance is creating hardship — that indeed the laws of economics cannot be repealed. But instead of moving to repeal the hopeless tangle of laws and regulations, they prefer to give selective waivers. What favors might be asked for in return for these waivers? Will companies hesitate to take stands against government policy for fear that a waiver might be denied?

This is government by arbitrary decree. It should be of concern to everyone who values liberty.

  • Sheldon Richman is the former editor of The Freeman and a contributor to The Concise Encyclopedia of Economics. He is the author of Separating School and State: How to Liberate America's Families and thousands of articles.