The Daily Caller reports that a substantial percentage of recent health care waivers issued by the Department for Health and Human Services have gone to businesses in Rep. Nancy Pelosi’s San Francisco district — and not just any businesses, but swanky spas, restaurants and nightclubs.
Does this story mean that health care waivers are being used for political purposes? We don’t know. The issuance of 1,000-plus waivers is a relatively short period has raised lots of questions. The problem is that HHS has not been sufficiently clear about the criteria it is using in its waiver decisions. As a consequence, it is difficult to know whether waivers are being used improperly. As I’ve written before (see, e.g., here, here, and here), I think waivers can be a valuable policy tool, so long as their use is guided by a clear, ascertainable standard for their use. Thus far, I don’t think that has been the case with waivers issued under the PPACA.
UPDATE: As a commenter notes below, one explanation for the large number of waiver applications for San Francisco businesses is “Healthy San Francisco”. As this story from the San Francisco Business Times explains:
Under Healthy San Francisco, all San Francisco businesses with over 20 employees must provide health care coverage or access to health care for its employees. Many employers opt to open a Health Reimbursement Account or HRA for its employees; those accounts are then used to reimburse employers for some health care costs.
The waivers that are granted for one-year periods are intended to protect employees from suffering any reduction in coverage because of suddenly increased premiums, and to limit how much employers need to pay in a given year for coverage. The federal Department of Health and Human Services has approved 1,372 waivers so far — almost 90 percent of the waiver requests it has received.
“We have mandatory health care expenditures. We are the only place I know of in the country that has that,” said Rob Black, executive director of the Golden Gate Restaurant Association. “Because we have a 100 percent expenditure rate, we are going to have a much higher take-up rate (of waivers) than the country as a whole. That is what is driving that.”
As for the standards upon which waivers are granted, I do not believe the two guidance documents linked in the comments (here and here) concerning the waiver program HHS created with interim final regulations last year provide much in the way of clear criteria. Further, as Columbia’s Professor Philip Hamburger has argued, it is not clear the PPACA authorizes a wavier authority as wide-ranging as that which HHS has exercised.
Meanwhile, on Friday Nevada became the third state to receive a waiver for the PPACA’s requirements that insurers spend a minimum of 80 percent of premiums on care, following New Hampshire and Maine. Five more state waiver requests are pending.
SECOND UPDATE: The White House defends PPACA waivers here.
[Note: In the first update I accidentally attributed the work of Columbia's Philip Hamburger to his father, Joseph Hamburger, who had been a professor of mine at Yale. The error has been corrected above.]