Tag Archives: section 89

Could Obamacare Collapse Under Its Own Weight?

Despite everything written and said about Obamacare, few seem to have noted the possible analogies to the debacle known as Section 89 of the Tax Reform Act of 1986. Section 89 was the federal government’s attempt to require employers to provide non-discriminatory life and health insurance benefits to all employees, without regard to income. But the nightmarish rules and regulatory burden it was poised to foist onto businesses was so onerous and complex that, as it neared implementation, there were 13 bills before Congress to change or eliminate it, before it was finally killed in 1989.

Could this same fate befall the Affordable Care Act, or Obamacare?

Yes, the possibility that Obamacare will simply collapse under the weight of its 906 pages and more than 15,000 pages of regulations is not just a wish of conservatives but a real possibility.

Here are some of the shoes that have already dropped:

  • Waivers – More than 700 organizations and 2 million Americans have been given waivers.
  • Delays – Companies with more than 50 employees have been given a one-year delay in implementation.
  • Important rule changes – Individual income verification, required for those purchasing through Obamacare’s insurance exchanges, has been replaced with the  “honor system” for now.
  • Missed deadlines – Half of the deadlines for implementation (41 out of 82) have been missed.
  • Insufficient funding – Some of the 18 separate tax increases needed to fund Obamacare are being eliminated or postponed, and some groups are finding ways to avoid them. The lack of funding, combined with an overly optimistic initial estimate about how much would be needed, may lead to a significant shortfall and debt.
  • Messy rollout – Initial enrollment, which started Oct. 1, has been glitch-filled.

So, despite the administration’s relentless efforts to keep pitching President Obama’s landmark legislation to restructure the healthcare and insurance for more than 310 million Americans, there are dark clouds looming on the horizon that may portend its demise.

It happened before. It can happen again.