Ever the Jokester, Sebelius Calls Her Rejection of Utah’s Exchange a ‘Conditional Approval’

by Michael Cannon, CATO Institute

Things are getting desperate in the ObamaCare wing of the U.S. Department of Health and Human Services. How else can one explain today’s announcement to reject—no, to approve! conditionally!—Utah’s unapprovable health insurance “exchange” as ObamaCare-compliant?

Utah’s Exchange does not satisfy a fraction of the requirements ObamaCare imposes. Nevertheless, on December 14, Utah Gov. Gary Hebert (R) asked HHS Secretary Kathleen Sebelius to “certify Utah’s version of an exchange as ACA compliant.” Hebert repeatedly stressed he was speaking about “our version of an exchange,” “our pre-ACA exchange,” and “the Utah version of an exchange.” Indeed, rather than offer to change his state’s Exchange to comply with ObamaCare, Hebert hinted that ObamaCare should change in order that “Utah’s version should serve as the minimum standard for all federally compliant health exchanges.”

Today, HHS Secretary Kathleen Sebelius responded with a “conditional approval” that “reflects [HHS’s] expectation that [Utah] is developing a State-based Exchange, compliant with the Affordable Care Act (ACA).” In other words, Sebelius approved Hebert’s request conditional on Hebert doing what he expressed he has no intention of doing. In the real world, we call that a rejection.

I can think of only a couple of reasons that might explain why Sebelius would issue such a ridiculous letter:

1.  HHS is so overwhelmed by the burden of creating Exchanges in the 32 states (!) that have refused to create one that Sebelius is desperate to create the appearance of progress.
2. A lawsuit filed by the state of Oklahoma has the Obama administration afraid it won’t be able to implement ObamaCare’s individual and employer mandates in Utah, as well as other major provisions of the law, unless it can claim Utah’s Exchange was “established by the state.”

If there’s anything to the first reason, Congress can take some of the pressure off the administration by delaying implementation of the Exchanges and all related provisions for two years (savings: $160 billion). The Obama administration might even be grateful.

If there’s anything to the second reason, Utah and the other 49 states should take care to protect their employers and residents by not establishing an Exchange. That also means taking care not to give HHS an opportunity to pretend they have established one.