Obama backtracks on health mandate, wants to allow earlier opt-out

President Obama backed a significant change to the healthcare reform law for the first time Monday, supporting a plan that could delay implementation of the unpopular mandate to buy insurance.

Speaking to the nation’s governors, Obama said states should be able to request waivers for implementing alternatives to the reform law starting in 2014, three years earlier than the law allows. 

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“If you have a better way of doing it, help yourself,” Obama told the National Governors Association. “Go ahead, take that route.”

The president said repeatedly after his party’s midterm election defeat that he was open to improving the healthcare law, but the White House had not endorsed any specific proposals beyond scrapping a tax provision that affects small businesses. 

Now the president is supporting legislation that would allow states to receive waivers to pursue alternatives to the law, a change that could let states opt out, beginning in 2014, from the requirement that individuals buy insurance. Polls have shown the mandate is deeply unpopular with the public.

Obama announced his support for a bill proposed by Sens. Ron Wyden (D-Ore.), Scott Brown (R-Mass.) and Mary Landrieu (D-La.) that would let states opt out of many of the law’s mandates until 2017. 

A spokesman for Senate Majority Leader Harry Reid (D-Nev.) said Senate Democrats would take a close look at the legislation. 

“The date was set at 2017 [for the waivers] because that was the earliest experts thought these measures could be implemented, but we are open to hearing the administration’s reasons for concluding they can be implemented earlier,” Reid spokesman Jon Summers said. “In addition, we would have to work with the administration and Republicans to find a way to pay for this in a responsible manner.”

The waiver provision comes with a catch, however. A state’s waiver proposal must show that it is capable of providing coverage that is at least as comprehensive and affordable as that offered through new state-run health insurance exchanges, which also open in 2014. The state must also provide coverage to as many residents as the exchanges would have, and the proposal must not increase the federal deficit.

House Majority Leader Eric Cantor (R-Va.) said Obama’s change of position “makes the case” that Republicans have made against the entire law.

“The ‘ObamaCare’ bill is something that is an impediment to job growth. It is something that seems to be an impediment to states now getting their fiscal house in order,” Cantor said.

A Kaiser Family Foundation poll released last week found the 67 percent oppose the requirement to buy health coverage, and the administration is fighting dozens of legal challenges to the mandate. A federal judge in Florida who struck down the entire reform law is expected to say this week if he meant to halt its implementation.

The administration has argued that without the mandate, it would not have been able to enact new consumer protections included in the reform law. Those protections include barring insurer discrimination against pre-existing conditions, banning rescissions and allowing young adults to stay on their parents’ insurance until age 26. A state’s waiver request must include the law’s new protections and benefits.

The administration reiterated its belief Monday that the individual mandate continues to be the best way to expand affordable coverage to the most people.

“It’s possible that a state could devise a plan to achieve the goals that doesn’t include an individual responsibility provision,” a senior administration official said. “We just don’t know yet.”

With the Monday announcement, Obama tried to put the onus on the states to take charge of their healthcare systems at a time when governors are demanding more flexibility to run their Medicaid programs for poor individuals.

“I’ve said before, I don’t think any single party has a monopoly on good ideas,” Obama said. “I will go to bat for whatever works no matter who they are or where it comes from.”

Democratic governors were receptive to the White House announcement. 

“There’s lots of things on the table,” Delaware Gov. Jack Markell (D) told The Hill. “The important thing here is that ... throughout the weekend the administration expressed a great willingness to work with governors to figure out what makes sense for our states.”

Oklahoma Gov. Mary Fallin (R) said she hopes Congress accelerates the law’s waiver provision. 

“Oklahoma wants to do Oklahoma’s own plan,” she said. “We don’t think some one-size-fits-all, national healthcare plan is right for the nation.”

The announcement, however, is unlikely to temper calls from Republican lawmakers to repeal the law in its entirety. A spokesman for Speaker John Boehner (R-Ohio) described the president’s announcement as an admission of the reform law’s flaws.

“Now that the administration has conceded that ObamaCare is unworkable, we hope they will work with us to repeal the law and replace it with common-sense reforms that actually lower cost,” said Boehner spokesman Michael Steel.

Kansas Gov. Sam Brownback (R), a senator in the last Congress, said the accelerated waiver does not sufficiently address Republican issues with the law.

“A number of us strongly oppose the healthcare bill the president put forward, and there is just a fundamental, philosophical different point of view,” Brownback said. 

Meanwhile, liberals saw the announcement as an opportunity to bring back single-payer healthcare and the public option, which were both defeated when the law was being crafted.

“Obama is giving those of us who favor a public insurance option to the private insurance market an opportunity to move our states forward,” said Consumer Watchdog President Jamie Court.

Senior administration officials said the White House would propose rules in the spring on how states could qualify for waiver requests.


This story was originally posted at 12:37 p.m. and updated at 12:55 p.m., 2:52 p.m and 8:37 p.m.