July 5, 2013

Of Course: Health Law That Will Ship Jobs Overseas to Be Overseen by… An Overseas Company

Reported on the Fourth of July, no less. As it turns out, the British are coming…

WASHINGTON — Racing to meet an October deadline, Obama administration officials said Thursday that they had awarded a contract worth as much as $1.2 billion to a British company to help them sift applications for health insurance and tax credits under the new health care law.

The company, Serco, has extensive experience as a government contractor with the Defense Department and intelligence agencies, and it also manages air traffic control towers in 11 states and reviews visa applications for the State Department. But it has little experience with the Department of Health and Human Services or the insurance marketplaces, known as exchanges, where individuals and small businesses are supposed to be able to shop for insurance.

A billion dollar contract to a foreign company with limited experience in the health care industry? What could go wrong?

Of course, it remains to be seen how Serco will be able to determine tax credit eligibilities since the tax credits themselves are partly dependent on… the employer mandate,.

The IRS both delayed the imposition of penalties and “suspend[ed] reporting for 2014.” As the American Enterprise Institute’s Tom Miller observes, without that information on employers’ health benefits offerings, the federal government simply cannot determine who will be eligible for credits and subsidies. Without the credits and subsidies, the “rate shock” that workers experience will be much greater and/or many more workers will qualify for the unaffordability exemption from the individual mandate. …

All of these tax credit details matter to Missouri taxpayers. According to Daniel Kessler, a senior fellow at the Hoover Institution, insurance rates for many Missourians could rise a whopping 89% in 2014 because of the Affordable Care Act. To make matters worse, the question of whether tax credits can even be issued in Missouri and many other states is already unclear. Under the text of the law, tax credits flow through state exchanges only; Missouri, as well as a majority of the country, will have federal exchanges. The Affordable Care Act not only raises costs for most, but indeed, the law may be written in such a way that even its cost-mitigating provisions won’t apply to most of the country, Missouri included. Assuming Serco could determine whether tax credits can be issued to anyone, it may end up that only a fraction of the country would qualify for the tax credits outlined in the law.

It’s pretty cynical of the government to dump news of its health law outsourcing on a holiday — and of all holidays, a patently American holiday — to ensure fewer people found out about it. And it’s a sad commentary not only on the unpopularity of the law itself, but of the kind of political leadership slowly and sneakily implementing it. What a massive mess.

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