You're Losing Your Plan

Late last week saw the first leaks of the administration's draft regulations for implementing the ObamaCare law--and everything is playing out just as the critics warned.

The 3,000-odd pages of legislation left most of the really important (and controversial) policy decisions to the regulations that government agencies were told to issue once the bill passed. Now that those regs are starting to take shape, it's clear that the Obama team is using its new power to exert tight control over the payment and delivery of all formerly "private" health insurance.

The ObamaCare law references the Secretary of Health and Human Services almost 2,200 times and uses the phrase "the secretary shall" more than 725. Each reference requires HHS to set new rules on medical care, giving control to an existing federal office or one of 160 new agencies that the bill created.

HHS Secretary Kathleen Sebelius (who was once the Kansas state-insurance commissioner) has taken to these tasks with zeal. In some circles, she's now known as the nation's "insurance regulator in chief."

She's starting off by applying new regs to health plans offered by large employers--even though these costly rules were supposedly only going to apply to plans sold in the state insurance "exchanges" that don't get created until 2014. This twist is spelled out in an 83-page draft of a new regulation that leaked late last week.

Bottom line: Sebelius means to dictate what your insurance plan must look like almost from day one, no matter how you get your coverage.

Indeed, the draft regs envision more than half of all policies having to change within three years--an unmistakable break with President's Obama's oft-repeated promise, "If people like their insurance, they will be able to keep it."

Yet that may be the least of the broken promises.

Ultimately, these rules force consumers to buy one of just four health policies--which vary mostly only by trading off higher co-payments for lower premiums, while offering essentially the same actual benefits. In arguing for passage of the law, ObamaCare's defenders claimed the rules were aimed at health plans sold in the "exchanges." Oops: Now Sebelius is applying them to employer plans. Eventually, this would force all but the very wealthiest Americans into a single government-designed insurance scheme.

This is far from the only area where Secretary Sebelius is exploiting the law's fuzzy language to tighten her control over the private insurance market. In recent weeks, she has said that the new law gives her authority to review and even set the rates on health policies sold in private markets, a role previously left to state insurance regulators.

The ObamaCare bills were written to paper over an intellectual divide between White House economists and HHS policy wonks. Some economists wanted genuine competition to take root in the new federally managed insurance "exchanges." The HHS crew favored a one-sized government plan with tight federal regulation over benefits.

The law itself didn't explicitly side with either school--but it did leave the writing of the implementing regs to those same HHS wonks. Unfortunately, those more moderate White House economists are now leaving the administration, including the rumored departure of widely admired businessman and health-care expert Robert Kocher.

Washington insiders refer to this HHS team as "true believers"--a group of earnest, left-leaning activists who've long favored a single nationalized health plan. They are massaging the law's vagueness to give themselves the tight federal control over health care that will bring their vision into practice.

Critics warned that the Obama bill meant a federal takeover of health care, with Washington bureaucrats making core decisions about medical care. With ObamaCare taking shape, that's exactly what consumers are getting. Saying "we told you so" is no consolation to those who took the president at his word.

Scott Gottlieb, M.D., is a resident fellow at AEI.

Photo Credit: iStockphoto/DNY59

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