Here Comes the Hardest Part About Obamacare

Implementing the "employer mandate" is a major management challenge for Obama and his team.

WASHINGTON, DC - MAY 14: Director of the White House Office of Management and Budget Sylvia Mathews Burwell takes her seat as she arrives at her confirmation hearing before the Senate Finance Committee May 14, 2014 on Capitol Hill in Washington, DC. If confirmed, Burwell will succeed Kathleen Sebelius to become the next secretary of Health and Human Services. (Photo by Alex Wong/Getty Images) (National Journal)

So you thought Obamacare was implemented, the controversy over? Wrong. Buckle up, here comes the "employer mandate."

For people like me who want the Affordable Care Act to work but who worry about the Obama administration's management record, this story in The Washington Post is foreboding: "Businesses Gear Up for Employer Mandate."

Author Sandhya Somashekhar opens with a vignette about Kevin Settles, a forward-looking restaurateur who offered health insurance to dozens of employees in September to comply with the ACA in advance of the mandate. The employer mandate requires companies with 50 or more full-time workers to offer health insurance or pay a fine.

But unlike Settles's other experiments, this one hasn't been great for his business. He put raises and expansion plans on hold as he figured out the cost and logistics of making the changes. To his surprise, his employees have not leaped at the chance to get health insurance. And he is still trying to figure some things out — for example, how to safeguard employee information that must now be reported to the Internal Revenue Service, such as the Social Security numbers of children who are covered under their parents' health plans.

This is a quintessential anecdotal "lede"; it puts a human face on what Somashekhar and other independent health care journalists consider a looming trend — second-guessing about the employer mandate.

A number of businesses, including Regal Entertainment and SeaWorld, have reduced hours for part-time workers to fewer than 30 a week — the law's definition of full time — to avoid having to offer them health insurance. Other companies say they are holding back on hiring to avoid the insurance requirement. Seasonal employees and low-wage workers, such as adjunct professors and cafeteria staffers, have been hit especially hard "¦

Many of the employers that have cut part-time hours or taken other actions to limit their costs under the law, such as fast-food restaurants and school districts, have large numbers of seasonal or hourly-wage workers. Traditionally, most of these workers have not received health benefits. And they are often difficult to categorize as part time or full time, because their hours vary.  

The White House and its apologists in the left-wing media have propagated two myths. First, that the law is a success — full stop — merely because millions of people signed up for health insurance rather than pay a penalty tax. Second, only anti-Obama's partisans harbor concerns as the ACA moves toward full implementation.

Some supporters of the Affordable Care Act say that the employer mandate, which applies to businesses with at least 50 full-time workers, has fueled the law's unpopularity and that getting rid of it wouldn't hurt the central goal of reducing the number of uninsured people.

"We've never thought [the employer mandate] was particularly good policy, and while people have probably screamed too loudly about the effects on employment, there is some of it that's certainly true, and it's not worth the price we seem to be paying," said John Holahan, a fellow at the Urban Institute and a coauthor of the recent paper "Why Not Just Eliminate the Employer Mandate?"

Last week, Unite Here, a union representing cafeteria workers, rallied at the Capitol to criticize what it called a loophole in the law. It says the loophole allowed Sodexo, a French food-service company, to drop health benefits for more than 3,000 workers across the United States.

What can Obama and his team do about all this? They've already delayed the mandate twice. A third time would further diminish the credibility of the law and of the administration.

Canceling the mandate is not a likely course. First, it would require action by a gridlocked Congress, which is divided on the 2010 law. Second, it would create a $150 billion hole in the budget that pays for subsidies to low- and middle-income individuals buying health insurance. That money comes from fines paid by companies that don't comply with the law, a redistribution of wealth that the White House doesn't like to acknowledge.

That brings me to the first thing Obama and his team need to do: Be honest. Discuss directly and truthfully the trade-offs required to expand health insurance. Empathize with its critics, rather than demonize them. Stop spinning and start leading.

Second, the complicated law is going to need superb management from the White House, the Health and Human Services Department, and other agencies. "Superb" is not a word oft associated with Obama or his team. The IRS, for example, still has not produced the information and forms required for business to build ACA reporting systems.

One good sign is the nomination and confirmation of Sylvia Mathews Burwell, the former deputy White House chief of staff (under President Clinton) and budget director (under Obama) who is, by all accounts, a talented leader and manager. As secretary of Health and Human Services, she succeeded Kathleen Sebelius, who oversaw the comically poor ACA launch.

Mathews breezed to confirmation after assuring Republicans that transparency and accuracy would be her hallmarks in dealing with businesses on the employer mandate. "What we're trying to do is commonsense implementation within the law," Burwell said, before buckling up.