Waivers for Favors?

Please consider the following hypothetical argument, as I think in analogies, and this one is as good as any when it comes to understanding the current culture and currency of ObamaCare waivers.

I am a state representative here in South Carolina.   In the Palmetto State, highway fatalities in 2010 were slightly more numerous than in 2009 and 2008 [thankfully, in reality, that's not true].    Even though the increase in the number of highway deaths when compared with previous years was negligible, the environmental lobby here is concerned with the effect that increasing traffic is having on the air quality between the Lowcountry and Golden Corner, and they manage to convince lawmakers in my party that environmental goals can be achieved through the passage of legislation reducing the maximum state speed limit from 70 to 55 miles per hour under the guise of public safety.

As the debate heats up, the folks in my party contend that the reduction in speed limit is absolutely essential in order to save lives, while those jerks across the aisle insist that reducing the speed limit from 70 to 55 will have a disastrous effect on South Carolina business and industry, particularly with regard to freight transportation to and from the Port of Charleston.

Because of my natural charm and good looks [I told you that this was a hypothetical] I become one of the more vocal champions of the prospective law.  I drag still-grieving families of crash victims to the State House floor in Columbia where, sobbing uncontrollably, they can explain to the other party and to the late local news audience that their baby would still be alive today if that dastardly SUV driver was traveling at 55 miles per hour instead of 70.  Across my district and from one end of the state to the other, I tout the limitless merits of this new law.  After months of contentious debate, the law passes with the caveat that the maximum speed limit will not drop to 55 miles per hour right away, but instead will decrease by five miles per hour with every passing year.

A year goes by, and while the effects of the new law cannot be felt in its entirety, the modular implementation has already caused some of the previously stated fears to manifest.  While eating a glorious steak at Grill 225 with a couple of the folks from the environmental lobby–they’re vegan, they swear!–I am approached my a man who runs a trucking company in Hanahan, South Carolina.  Upon his request, I excuse myself from the table and walk with him up to the Pavilion Bar, the rooftop destination atop the adjacent Market Pavilion Hotel.

“What’s on your mind?” I ask him, sipping my $15 dirty vodka martini as I stare across Charleston Harbor at the Sullivans Island lighthouse.

“Jeff, this new law is already killing me,” he says.  “And we’re still at 65 miles per hour.  Once this law goes completely into effect, my trucking business is toast.  Your legislative pride and joy here means that I can no longer ship freight as quick and as efficiently as before — I might as well pack up shop, because I cannot compete with trucking companies up in North Carolina.”

“I don’t know what to tell you, friend,”  I say.  “The law is the law. I don’t think I’m in any position to help you.”

“Funny you should say that, Jeff, because I’m not so sure.”  He takes a puff of his cigar, leans in close, and begins to speak in a hushed tone.  “Word has it that your counterpart down in District 116 made an exception for a taxicab company over in West Ashley.”

“I’m listening,” I say.  And I do.  I listen as he explains exactly what implementation of the speed limit law means for his bottom line.  He talks about layoffs.  He talks about relocating.  And he talks about his ability to raise money for my next re-election campaign.   Being exempt means something to the man in my midst, and in understanding this it becomes all too apparent to me that there is value inherent in any exception made to the speed limit law.  Going into the speed limit debate, we knew that the legislation was bad for business and industry.  Now, it seems, the folks in my party have found a way to profit–politically and possibly otherwise–from the very mess we so passionately advocated for.

Snapping back to reality now, consider that 1,372 waivers from ObamaCare have been awarded to labor unions, large corporations (usually those in favor of the president’s health care reform), and even entire states.  Most recently, the home state of Sen. Harry Reid–Senate Majority Leader during the contentious health care reform debate and through the bill being signed into law–has been granted a waiver from certain provisions of the new law.  From the Las Vegas Sun:

The Health and Human Services Department announced late Friday that Nevada had secured a statewide waiver from certain implementation requirements of the Obama administration’s health care law, because forcing them through, the department found, “may lead to the destabilization of the individual market.”

The “destabilization of the individual market” was not some sort of side effect of ObamaCare — that’s what Barack Obama’s health care legislation was all about.  There’s a reason why the president and his Democratic Party sycophants were so quick and willing to abandon the so-called “public option.”  That reason?  Because of the nature of the health care law, the Democrats had no need to institute a single-payer system because the entire bill was designed to so undercut the ability of private insurers to assess and manage risk that steadily increasing premiums will eventually cause the American public to beg for government intervention.  One way to undercut the ability of private insurers to assess and manage risk is to step in and interfere with how private insurers allocate premiums received from insureds.  That particular element of Obama’s health care is at issue in Nevada:

Nevada’s Insurance Division had appealed to the feds to reduce the federal requirement that health plans serving people who buy insurance on their own must spend at least 80 percent of the money they collect on medical expenses. Under the national rule, companies that don’t spend that percentage of revenue on medical costs have to cut policyholders rebate checks starting this year.

Nevada asked that requirement be reduced to 72 percent for one year, arguing that top insurance providers would be so strapped to make the payments that they’d exit the state market.

Nevada understands that the federal law interferes with insurers’ ability to property manage risk.  Furthermore, Nevada understands that risk assessment and management–that divide between benefits and premiums–stands at the very heart of the insurance industry, and said interference will cause insurers to either relocate to a more business-friendly state or shut the doors altogether.

Unfortunately, as far as the private insurance industry is concerned, premiums are already as high as they are because of a lack of interstate competition; for that reason, opening up the insurance market to interstate competition was a centerpiece of the GOP’s alternative to ObamaCare.   Considering that, it doesn’t take a rocket surgeon to understand that forcing private insurers to leave a given state market will cause further increases to premium costs.

These concerns regarding the downhill consequences of such governmental interference in risk management is in large part what prompted various labor unions and large corporations–as well as the states of Maine and New Hampshire–to seek similar waivers from the president’s hallmark legislation.  With 1,372 waivers, the natural question is: If ObamaCare is so good for the nation as a whole, and if it will help rather than hinder business and economic interests, why have almost 1,500 waiver applications been submitted and more than 1,350 obtained?

Regardless, if a company is faced with an enormous change to its bottom line and a waiver prevents that adverse change, that waiver has value.  Unfortunately for the American people, it seems that the value inherent in a waiver from ObamaCare has become a sort of new currency.  Even more unfortunate is that any exchange is made behind closed doors and in exchange for unknown consideration. Of course, just because 1,372 waivers have been granted does not mean that the circumstances of all 1,372 waivers exhibit impropriety, but it sure does not help that nobody on Capitol Hill seems to be able to provide a solid explanation of why some entities are granted waivers and others are not.

Of course, it also does not help that 38 of the 204 ObamaCare waivers granted in April were awarded to upscale eateries, clubs and hotels in former House Speaker Nancy Pelosi’s district.   From The Daily Caller:

Of the 204 new Obamacare waivers President Barack Obama’s administration approved in April, 38 are for fancy eateries, hip nightclubs and decadent hotels in House Minority Leader Nancy Pelosi’s Northern California district.

That’s in addition to the 27 new waivers for health care or drug companies and the 31 new union waivers Obama’s Department of Health and Human Services approved.

Pelosi’s district secured almost 20 percent of the latest issuance of waivers nationwide, and the companies that won them didn’t have much in common with companies throughout the rest of the country that have received Obamacare waivers.

Other common waiver recipients were labor union chapters, large corporations, financial firms and local governments. But Pelosi’s district’s waivers are the first major examples of luxurious, gourmet restaurants and hotels getting a year-long pass from Obamacare.

For instance, Boboquivari’s restaurant in Pelosi’s district in San Francisco got a waiver from Obamacare. Boboquivari’s advertises $59 porterhouse steaks, $39 filet mignons and $35 crab dinners.

Then, there’s Café des Amis, which describes its eating experience as “a timeless Parisian style brasserie” which is “located on one of San Francisco’s premier shopping and strolling boulevards, Union Street,” according to the restaurant’s Web site.

“Bacchus Management Group, in partnership with Perry Butler, is bringing you that same warm, inviting feeling, with a distinctive San Francisco spin,” the Web site reads. Somehow, though, the San Francisco upper class eatery earned itself a waiver from Obamacare because it apparently cost them too much to meet the law’s first year requirements.

Unless I’m wrong, part of the way that the Democrats–led by Reid and Pelosi–attempted to rationalize ObamaCare before forcing it upon Americans was in arguing that, theoretically, in typical socialized fashion all of us would bear the cost of healthcare for the benefit of the nation as a whole.  By exempting everyone from the state of Nevada to Cafe des Amis, the very communal characteristic at the heart of the Obama health plan is compromised.

Forget for a moment that it was Nancy Pelosi and Harry Reid who quite literally forced the legislation on the nation, refusing even to allow for enough time to read the legislation in its entirety. Forget for a moment the question of whether Pelosi and Reid and others received any form of consideration for agreeing to push through an ObamaCare waiver for a specific organization or corporation.  Focus on the legislation itself, and understand that the waiver process undermines the integrity–I use the word in a structural sense, of course–of the Obama-Pelosi-Reid health care reform law.

In the hypothetical above, I never mentioned whether I intervened on behalf of the man from the trucking company and facilitated an exemption for his organization, nor did I disclose whether or not I profited personally–whether financially or in an electoral sense–if I in fact did arrange for a waiver.  I never mentioned it because, in my hypothetical capacity as a state representative, I did not have to.  Similarly, the ever-expanding waiver program intertwined with the ObamaCare legislation presents an opportunity for those on Capitol Hill to trade in a brand new currency, and to trade in that currency completely behind closed doors.

Unfortunately, there is nothing hypothetical about corruption.



  1. Anonymous says:

    *waivers not included

    The Three Louseketeers
    Barry Soetoro, Harry Reid, Nancy Pelousy

  2. Whiskey Rebellion says:

    Real Americans, believers in Equal Justice Under Law should be storming Washington D.C.

    P A T H E T I C

  3. Anonymous says:

    They only use the 14th amendment when it suits them… not so much in this case.

  4. Anonymous says:

    Boycott those eateries. Oh yeh, I forgot, they’re Californians and don’t give a cr*p.

  5. nana3 says:

    Please tell me these two (Pelosi and Reid) have been having an affair and have a love-child, James Carville, and that they are packing their bags and getting out of Washington!

  6. Anonymous says:

    Obamacare has more waivers than the royal wedding had wavers.

  7. Gail B. says:

    Law school was good for you, Jeff. I surely am glad you are an honest man, because I feel in my bones that you are going to Washington, D.C.

  8. Another brilliant piece of writing.

    Still cemented in my mind is the image of Pelosi and friends pompously marching to the capitol, colossal gavel in hands and arrogant grins on their faces, ready to take over one sixth of the nation’s economy; and further derail the health care industry. And now she eagerly exempts others from the very piece of legislation she rammed down our throats? I’d like to give her a waiver to leave the US Congress and go back to her vineyards and million dollar abode. SHE is a piece of work–both literally and figuratively.


  1. [...] By the end of the debate, Democrats had forced through a $2 trillion, 2400-plus-page piece of legislation that, as a cornerstone of its purported reform, provided for reckless interference with insurance companies’ assessment of risk and business practices, whether it be through mandated coverage for pre-existing conditions or caps placed on what percentage of premiums could be used administratively versus what percentage must be earmarked for patient benefits.  Even on the drawing board, the Congressional Budget Office acknowledged that program would cost $2 trillion over the next ten years and actually cause premiums to increase relative to the status quo; since being signed into law, premiums have been on the rise, and more than one thousand waivers have been granted.  (See “Waivers For Favors?” here at AR.) [...]

  2. [...] Barack Obama’s health care reform law may have been officially titled the “Affordable Care Act,” but perhaps a better name would have been “Waivers for Favors.” [...]

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