Obama Administration Backs Down on Healthcare Provision

The lead article in today’s New York Times, “Health Care Law Will Let States Tailor Benefits,” describes a major policy reversal by the Obama administration regarding the implementation of the Affordable Care Act. The federal government will let the states define the essential elements of a benefit package within broad categories set by the administration. This reversal means there is, in effect, no minimum standard of coverage.

While the Affordable Care Act does delineate areas of coverage, such as preventative care, emergency services, doctor services, maternal care and prescription drugs, this decision will give the states broad leeway regarding the components required in each field. As a result, the impact of the Affordable Care Act will be much greater in states such as New York than, say, Alabama.

It is important to note that this structure is similar to the way Medicaid and the Children’s Health Insurance Program (CHIP) works, but the idea of elemental coverage is inherent in the concept of national health insurance. In fact, this decision may be more political than policy-oriented; one of the main criticisms of Republican Presidential candidates involves the effort by the Affordable Care Act to impose a rigid, bureaucratic, one-size-fits-all system upon the states.

There is bound to be some reaction to this decision by the Democratic base, and it may represent just one more example of the President caving in to pressure by Republicans.