The recently passed health care law grants sweeping new powers to Secretary of Health and Human Services Kathleen Sebelius. Our June cover story — “America’s Most Powerful Woman.”
Nancy Pelosi has often been referred to as “the most powerful woman in America” for her ability to wrangle votes for major legislation. But, after muscling through the massive new national health care law this March, the House Speaker has some tough competition.
As Democrats in Congress rushed to pass a health care overhaul of stunning scope, they didn’t bother working out key details about how the new law would be implemented. Instead, they left many crucial decisions in the hands of one woman: Secretary of Health and Human Services Kathleen Sebelius.
There are more than 2,500 references to the secretary of HHS in the health care law (in most cases she’s simply mentioned as “the Secretary”). A further breakdown finds that there are more than 700 instances in which the Secretary is instructed that she “shall” do something, and more than 200 cases in which she “may” take some form of regulatory action if she chooses. On 139 occasions, the law mentions decisions that the “Secretary determines.” At times, the frequency of these mentions reaches comic heights. For instance, one section of the law reads: “Each person to whom the Secretary provided information under subsection (d) shall report to the Secretary in such manner as the Secretary determines appropriate.”
The powers given to Sebelius are wide ranging. In the coming years, if she remains in office, the former Kansas governor will be able to determine what type of insurance coverage every American is required to have. She can influence what hospitals can participate in certain plans, can set up health insurance exchanges within states against their will, and even regulate McDonald’s Happy Meals. She’ll run pilot programs that Democrats have set up in an effort to control costs, and be in a position to dole out billions of dollars in grant money.
But the full breadth of her powers will be known only over time, due to the ambiguity of the language in many parts of the health care legislation. As conservatives make the case for repealing ObamaCare over the course of the next several years, it will be imperative to highlight the arbitrary new powers given to an unelected bureaucrat.
KATHLEEN SEBELIUS IS NO STRANGER to wielding power as a regulator. As a former director of the Kansas Trial Lawyers Association and a state legislator, her first foray into statewide office came when she was elected Kansas insurance commissioner in 1994. It was a position she would hold for eight years, until she assumed the governorship in 2003.
During her tenure at the helm of the regulatory body, Sebelius won praise from the national media for her battles with insurers. Governing magazine named her one of its “public officials of the year” in 2001 for upgrading the department’s technological capabilities and putting more pressure on insurance companies. She also served as president of the National Association of Insurance Commissioners. The following year, Modern Healthcare magazine listed her as one of the 100 most powerful people in health care because of her “aggressive campaigns to force insurers to promptly pay claims.”
In 2002, the year she ran for governor, Sebelius took her boldest action as commissioner when she decided to block a planned merger of two large insurance companies, Indiana-based Anthem and Blue Cross Blue Shield of Kansas. “I am denying this takeover because it would have cost Kansas businesses, small employers and families millions of dollars in additional health insurance premiums,” she said at the time, according to Newsweek. She forced insurance company executives to appear before the state legislature to expose the fact that they wouldn’t be able to promise not to raise premiums, and put together a commission to investigate them. Her decision to block the deal was appealed to the state supreme court, but she won the case.
As a prominent female chief executive, Gov. Sebelius provided a key endorsement to Barack Obama in January 2008, when he found himself in a bitter primary battle with Hillary Clinton for the Democratic presidential nomination. Sebelius had been floated as a possible vice-presidential choice because many political observers thought Obama would have to pick a female running mate to mollify women voters still miffed about the outcome of the nomination fight. Though she didn’t ultimately get chosen for the number-two slot, Sebelius emerged as a natural pick for secretary of HHS after President Obama’s first choice, Tom Daschle, had to withdraw for failure to pay taxes. Despite objections among conservatives to her record on life issues, specifically donations she received from late-term abortion provider George Tiller, Sebelius was confirmed to her post with 65 votes in the Senate.
The 2,409-page comprehensive health care law, along with its companion 153-page reconciliation package, spells out many of the steps that will put America on the pathway to a government-run health care system. The law forces individuals to purchase insurance coverage or else hits them with a tax. It adds 15 million people to Medicaid rolls. It creates a raft of new regulations on the health care industry. And it provides hundreds of billions of dollars in subsidies to individuals to purchase government-designed insurance policies on government-run insurance exchanges.
The legislation is so expansive that even thousands of pages of legislative text were insufficient to spell out how huge chunks of the new program will operate in reality. One Republican health care staffer in the Senate complained that those who drafted the health care bill were so “incompetent and out of their depth” that whenever they couldn’t grasp how an idea would translate into reality, they simply left it to the secretary of HHS to work out.
When the federal government gives itself the power to force individuals to purchase insurance coverage, it also has to define what constitutes insurance. The new health care law provides the broad outlines of the “essential health benefits” that every insurance policy must have. But as for the details, the law states that “the Secretary shall define the essential health benefits…” Thus, with the stroke of a pen, Sebelius could coerce every American, under the threat of a tax penalty, into purchasing any health benefit she deems “essential.”
Government-run health insurance exchanges, similar to the one Mitt Romney set up as governor of Massachusetts, form the spine of ObamaCare. While the plans offered by the exchanges are ostensibly private, government will effectively design them. And under the new law, once again, it’s the Secretary who “shall, by regulation, establish criteria for the certification of health plans as qualified health plans.”
There are a number of problems with having the government dictate such benefits. Most importantly, in a free society, individuals should have the right to purchase a health care plan with as many or as few benefits as they want, or to go without health insurance at all. Setting such requirements makes a mockery out of the idea that the exchanges will offer more competition and choice to consumers. And in financial terms, mandating additional benefits will jack up the cost of premiums and help drive up health care spending.
According to the Congressional Budget Office, the new law will increase health care premiums by 10 to 13 percent in the individual market in 2016 as a result of the more generous benefits that will have to be offered. To be clear, that’s not relative to today’s prices, but relative to what prices would have been in 2016 had we stuck with the status quo that President Obama consistently called “unsustainable.” In addition, the chief actuary at the Centers for Medicare and Medicaid Services determined that the new health care law will increase health spending as a percentage of gross domestic product, because an expansion of insurance coverage will lead to wider use of health services. This means that the determinations by Sebelius, or any future HHS secretary, on what constitutes “minimum essential benefits” or a “qualified health plan,” will have a tremendous impact on the nation’s health care costs.
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