Hamburger on Waivers – Part III

Columbia Law’s Philip Hamburger has a third essay on the constitutional problems with the issuance of waivers under the health care reform law.  (Here are my posts on I and II.) The Department of Health and Human Services has given out over 1,000 waivers of various requirements thus far, and more are surely on the way.  Setting aside the general constitutional objections to waivers of regulatory requirements, Hamburger argues that if, as I would argue, waiver authority must be delegated by Congress, some of the waivers issued thus far remain legally problematic.

The constitutional defense of the health-care waivers has thus far been a defense of waivers in general, without attention to the realities of the health-care statute. As a result, the defense of the waivers not only is wrong on the Constitution but also is irrelevant to the statutory realities. . . .

the health-care statute says nothing about granting HHS a power to waive the restricted annual limits. As reported by David J. Shestokas, congressman Cliff Stearns of Florida — chairman of the House Energy and Commerce subcommittee on oversight and investigations — complained, “The word ‘waiver’ is not in there. We can’t find it anywhere.”

Of course, Congress could have granted the power to waive the restrictions in a more subtle manner — for example, as part of the substantive authority granted to the secretary of HHS to determine the restricted annual limits. But statutory provisions must be understood in their statutory context, and this context shows that when Congress sought to give the secretary a waiver power, it had no difficulty doing so expressly. For example, in its provision on state innovation, the statute specifies that “The Secretary may grant a request for a waiver . . . ” In contrast, in its provision on restricted annual limits, the statute does not say anything of the sort. Evidently, Congress did not delegate a waiver power for the restricted annual limits.

I find Prof. Hamburger’s statutory arguments more compelling than the blanket constitutional argument against waiver authority.  Agency authority to waive statutory or regulatory requirements should come from Congress. If, as Hamburger claims, HHS has granted waivers where it lacked clear statutory authority to do so, this would be problematic, but it is not clear who, if anyone, would have standing to challenge the waiver.

UPDATE: The NYT has more on the waiver debate:

Obama administration officials say they were expecting praise from critics of the new health care law when they offered to exempt selected employers and labor unions from a requirement to provide at least $750,000 in coverage to each person in their health insurance plans this year.Instead, Republicans have seized on the waivers as just more evidence that the law is fundamentally flawed because, they say, it requires so many exceptions. To date, for example, the administration has relaxed the $750,000 standard for more than 1,000 health plans covering 2.6 million people. . . .

Waivers are usually seen as a way to deal with exceptional circumstances in which the enforcement of a law or policy might cause hardship. But with the new health care law, exceptions like these have become increasingly common. They provide wiggle room in a law originally thought to be strict and demanding.