Thursday, April 21, 2011

Can Mitt Romney "Waive" ObamaCare Via An Executive Order?

Grace-Marie Turner wrote an article called, "Mitt's Mistake: ObamaCare Is Not 'Waivable'" in which she erroneously claims that Mitt Romney made a grave error in making a promise he knows he cannot keep: 
"As a magna cum laude graduate of Harvard Business School and as the Republican governor who convinced the Democratic Massachusetts legislature to pass RomneyCare, he surely knows a president can't use an executive order to wipe out two massive new entitlement programs, $550 billion in new and higher taxes, vast Medicaid expansion, and mandates on individuals, businesses and the states to comply with President Obama's Patient Protection and Affordable Care Act."
She asserts that Mitt Romney cannot keep his promise of using executive orders to allowing the Secretary of Health and Human Services to issue ObamaCare waivers since it cannot be used to defeat laws that Congress have passed:
"Simply put, executive orders cannot contradict statutory law. Waivers are not a solution and might well detract from the ultimate goal of repealing ObamaCare and replacing it with a truly free market alternative that puts patients — not bureaucrats — in charge of their health care."
Ms. Turner is wrong in her assertion that a President cannot legally use executive order an executive order to over turn statutory law.
The answer is that it is legally realistic for a President to use an executive order to overturn a statutory law.  Presidents have long been using executive orders to defy or overturn laws that Congress has passed. Lets look at the most recent example of a President using an executive order to overturn a federal law. President Obama recently used a "signing statement" to overturn a law requiring the President to defund his czars.
Not only is Ms. Turner incorrect that a President cannot use an executive order to overturn statutory law, but she intentionally misconstrues what Mitt Romney  wants to do with an executive order. She claims that Romney would use an executive order to completely overturn ObamaCare. Yet, that's not what Mitt claimed in his op-ed  in the National Review:
"If I were president, on Day One I would issue an executive order paving the way for Obamacare waivers to all 50 states. The executive order would direct the Secretary of Health and Human Services and all relevant federal officials to return the maximum possible authority to the states to innovate and design health-care solutions that work best for them.
As I have stated time and again, a one-size-fits-all national plan that raises taxes is simply not the answer. Under our federalist system, the states are “laboratories of democracy.” They should be free to experiment. By the way, what works in one state may not be the answer for another. Of course, the ultimate goal is to repeal Obamacare and replace it with free-market reforms that promote competition and lower health-care costs. But since an outright repeal would take time, an executive order is the first step in returning power to the states."
What Mitt Romney said is that he would use an executive order directing the Secretary of Health and Human Services to grant a waiver to all 50 states as a temporary measure while Obamacare was in the process of being repealed in Congress.
What Mitt Romney is proposing is not to overturn ObamaCare with the a stroke of a pen via an executive order. Nor is he saying that he will repeal a portion of it  law either. He simply wants to tell the Secretary of Health and Human Services to grant a waiver to all 50 states. If Mitt Romney becomes the next President of the United States, it would be Constitutionally permissible for him to use an executive order in this manner. 
Under the three branches of government, the executive branch has the power to enforce or not enforce the laws that Congress passes. If you look at the statutory language in ObamaCare, you'll find that under Section 2711 of the Patient Protection and Affordable Care Act, it grants the Secretary of Health and Human Services the authority to determine who gets the waivers and who doesn't
"The entire act is filled with the phrase, “The secretary shall determine” or equivalents, meaning that HHS can essentially make up and change rules as they go along.  No one knows what to expect from this vast expansion of regulatory power precisely because it’s based on executive whimsy rather than sound and objective law."
The President is the head of the executive branch of the government and the President oversees many departments and agencies that make up the executive department. One of those department under the executive branch is the Department of Health and Human Services. 
Executive Orders "are legally binding orders given by the President, acting as the head of the Executive Branch, to Federal Administrative Agencies. Executive Orders are generally used to direct federal agencies and officials in their execution of congressionally established laws or policies."
As a result, not only is Grace-Marie Turner not only intentionally misconstruing what Mitt Romney plans to do if he was President, she is flat out wrong in claiming that what he plans to do is illegal and unconstitutional.  
What Mitt Romney proposes to do is entirely legal and constitutional since a President can use an executive order to direct an executive department that is under his executive authority to use a power that was granted to them by statue by Congress. 

In essence, Mitt Romney would be using ObamaCare against itself and seriously undermine its impletmentation by directing the Secretary of the HHS to grant the waivers to all 50 states until it is fully repealed by Congress. 
So far, under the Obama Administration, the number of waivers that the Obama Administration has granted is over 1,000 and climbing. HHS Secretary Kathleen Sebelius has been granting waivers to big businesses, big unions and big  health insurance companies.  
Under ObamaCare, it allows states to seek waivers from ObamaCare. There are six types of waivers: (1) MLR waiver for mini-med health insurance plans, (2) Annual limit waive (3) MLR waiver for States, (4) State innovation waiver, (5) ACO anti-trust waivers and (6) Individual mandate waivers. 
States can either seek a MLR waiver or a state innovation waiver. 
Govenor Nikik Haley contemplated on getting an state innovation waiver but realized that there were strings attached to the waiver. However, the entire state of Maine successfully obtained a MLR waiver:
. . . [T]he Patient Protection and Affordable Care Act’s mandatory medical loss ratio (MLR) provision, which requires health insurers to spend either 80 or 85 percent of their premium revenue on “clinical services” as determined by federal regulators, is a roundabout form of price control. So it wasn’t terribly shocking when the Congressional Budget Officewarned that particularly high MLR requirements would be “likely to substantially reduce flexibility in terms of the types, prices, and number of private sellers of health insurance.” It’s a pretty straightforward concept: When the government controls prices, private firms exit the market or offer fewer products.
Now it seems the federal government has finally caught on to the idea. The Department of Health and Human Services issued a waiver to the state of Maine exempting its individual health insurance market from from the 80-percent spending requirement. Why the special exemption? According to Steve Larsen, the Obama administration’s deputy administrator of the Center for Consumer Information and Insurance Oversight, the rule “has a reasonable likelihood of destabilizing the Maine individual health insurance market.”
Not only did Maine get a waiver from Obama Care but Florida, New Jersey, Ohio and Tennessee also got them as well. More states such as New Hampshire, Nebraska, and Kentucky have applied for waivers from ObamaCare.

It appears that if Mitt Romney follows through with his promise to issue an executive order on the first day of his Presidency, the best way for his Secretary of Health and Human Services to undermine ObamaCare would be to grant all 50 states an MLR waiver.

The reason why a MLR waiver, rather than state innovation waiver, is the best way to undermine ObamaCare is because every state can demonstrate that it would suffer destabilized insurance markets if ObamaCare was fully implemented. In a letter to HHS Secretary Kathleen Sebelius, the National Association of Insurance Commissioners stated expressed their concerns about the effect of ObamaCare on the insurance market in individual states: 
"...we continue to have concerns about the potential for unintended consequences arising from the medical loss ratio. As we noted in our letter of October 13th, consumers will not benefit from higher medical loss ratios if the outcome is destabilized insurance markets where consumer choice is limited and the solvency of insurers is undermined."
In conclusion, Grace-Marie Turner's article is completely inaccurate. Presidents can use executive orders to override statutory laws as many Presidents have done in the past. She's also incorrect in asserting that Mitt Romney, as President, would be granting waivers to states via an executive order.
Mitt Romney would simply use an executive order as a temporary measure to undermine the implementation of ObamaCare while Congress works to overhaul the law. More importantly, Mitt Romney has the legal and constitutional power to as head of the executive department to tell an executive department, via an executive order, to go ahead and use his or her statutorily authorized powers to grant those waivers as given to them under ObamaCare.


  1. Nice article! Typical liberal media trying to lie about good people.

    Nice work!

  2. Well done! Thanks for researching this topic so thoroughly. Love it when the facts are on our man Mitt's side!