CBS News – When Health and Human Services Secretary Kathleen Sebelius leaves her post at the end of next month, her successor will immediately confront a host of challenges associated with the Affordable Care Act, dealing with both politics and policy.
President Obama acknowledged as much on Friday, when he announced that he was nominating Sylvia Mathews Burwell, the director of the Office of Management and Budget, to replace Sebelius.
“We know there’s still more work to do at HHS,” he said. “There’s more work to do to implement the Affordable Care Act. There’s another enrollment period coming up about six months from now. There’s whole array of responsibilities to meet over at this large and very important agency.”
Before she can dive into the policy issues, Burwell will have to make it through the political hoops that Republicans are sure to set up for her confirmation process in the Senate. That, however, is just the beginning. Once she’s actually leading HHS, she’ll have to help the agency finish the back-end computer programs to keep HealthCare.gov running smoothly, help it enforce the new “individual mandate” penalty, and prepare to enact the controversial “employer mandate” — all within in an election year.
Sen. Charles Grassley, R-Iowa, gave a blunt assessment of the challenges ahead when it was reported Thursday that Sebelius would resign: “Anybody put in charge of Obamacare would be set up to fail. Secretary Sebelius was asked to promote something unready, poorly structured, and unpopular… The next secretary might have a fresh start with the public and Congress but the flawed law is still the law.”
While other presidential nominees have had trouble making it through the Senate, Burwell’s nomination is likely to go through — if only because the Senate late last year changed the rules so that a minority could no longer use a filibuster to block the confirmation of executive branch nominees.
Furthermore, at least one Senate Republican has already given his nod of approval to the nomination: “Sylvia Burwell is an excellent choice to be the next #HHSSecretary,” Sen. John McCain, R-Ariz., said on Twitter.
White House spokesman Jay Carney on Friday refused to even entertain speculation that her nomination could stall in the Senate, given that Burwell was confirmed by a vote of 96 to 0 last year to head the OMB.
Still, Republicans have made it clear they won’t pass by this midterm election-year opportunity to highlight all of the Affordable Care Act’s problems.
“Secretary Sebelius oversaw a disastrous rollout of ObamaCare, but anyone can see that there are more problems on the way,” Republican National Committee chairman Reince Priebus said in a statement. “The next HHS Secretary will inherit a mess–Americans facing rising costs, families losing their doctors, and an economy weighed down by intrusive regulations. No matter who is in charge of HHS, ObamaCare will continue to be a disaster and will continue to hurt hardworking Americans.”
Conservative commentator Ben Domenech argues that Sebelius’ resignation “presents Republicans with an unexpected opportunity to refocus the conversation on Obamacare’s negatives, offers a chance to force vulnerable Senate Democrats to take a hard vote on Obamacare six months before the midterms, and serves to disrupt what had been a positive few days of media spin for the health care law into another conversation about its many failings.”
Carney challenged the notion that “the name of the person at the head of the Department of Health and Human Services — an agency that most Americans probably don’t even know exists — will affect how they vote in November.”
What will matter, he said, “is whether or not they signed up successfully for a quality and affordable health insurance.”
Doling out subsidies, collecting taxes
Millions of people did sign up for insurance — but the process of smoothly transferring federal subsidies to insurers for those new customers is still a work in progress. The responsibility for this project now falls to Burwell.
Most of the consumers who signed up for insurance on the new Obamacare marketplaces are eligible to federal subsidies. Those subsidies are given to the insurers directly, rather than the consumers, and the insurer then passes on the savings in the form of lower premiums.
In February, Carney told reporters it would take “several months” to finish the back-end portion of HealthCare.gov that will automate this process. Sebelius told Congress last month that they’re still building the automated payment system. The government has created a system to temporarily process payments owed to insurers in the meantime.
Doling out subsidies is one key challenge for the new HHS secretary — on the flip side, Burwell will also have to help oversee the collection of the individual mandate tax from those who didn’t get insurance before the March 31 deadline.
For 2014, the tax amounts to $95, or 1 percent of household income. This money will be deducted from a person’s 2014 tax returns when they file their income taxes in 2015. However, the administration will rely on people self-reporting to the IRS whether or not they acquired insurance.
Collecting the tax will be even harder, given that the Affordable Care Act stripped the IRS of any capability of enforcing the individual mandate. Typically, when a person doesn’t pay his taxes, he could face fines or even time in jail. However, a specific portion of Obamacare says, “In the case of any failure by a taxpayer to timely pay any penalty imposed by [the mandate], such taxpayer shall not be subject to any criminal prosecution or penalty with respect to such failure.”
HHS and the IRS will also have to navigate through the many exemptions granted. The government is issuing exemptions from the individual mandate tax for a number of reasons; for instance, those with religious objections, people with serious financial hardship, or people who fall in the “Medicaid gap” may be exempt.
Expanding Obamacare: Medicaid, the employer mandate
In addition to overseeing the financial portions of the ACA, Burwell this year will have to continue expanding the reach of Obamacare.
For one thing, only about half of the states have expanded Medicaid. The expansion — which makes the government health care program available to anyone under 138 percent of the poverty line — was a key part of Obamacare, but the Supreme Court ruled that the administration couldn’t force states to go along with it.
Sebelius had made a number of compromises with conservative states to entice them to expand Medicaid, and that work continues, against the partisan backdrop of the midterm elections. In fact, the question of whether to expand Medicaid could be on the November ballot in some states like Montana or Louisiana.
Meanwhile, another critical portion of Obamacare goes into effect starting in 2015 — the requirement for businesses with more than 50 workers provide health-care coverage or pay fines of $2,000 per employee. The mandate was supposed to take effect in 2014, but the Obama administration delayed it by a year.
The administration said its decision was “designed to meet two goals,” including reducing the amount of paperwork required from employers and working with small companies who were threatening layoffs or reduced hours in order to report a workforce of fewer than 50 people.