January 9, 2012

Beware the Rush to Presumption, Part A

Material Omissions in Regulatory Analyses for the Affordable Care Act's Interim Final Rules
Key materials
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Scholars of health politics view the enactment of the Affordable Care Act (ACA) as a historic achievement. Because of the importance of this signature piece of legislation to President Obama‘s legacy, one might have expected the highest level of care and diligence would be invested in writing the myriad rules required by the ACA.

In her June 2011 testimony before the House Energy and Commerce Committee, U.S. Department of Health and Human Services (HHS) Assistant Secretary for Policy and Evaluation Sherry Glied assured legislators that HHS considered the full range of benefits and costs for these regulations and issued regulations only when benefits exceeded costs. "We‘ve already weighed their benefits and costs and shown that their benefits considerably exceed their costs," she stated.

Our review of the eight major ACA regulations issued as "interim final rules" in 2010 suggests otherwise. These eight rules encompassed nearly all the major components of the ACA scheduled to go into effect prior to 2014. Executive Order 12866 requires agencies to consider a wide variety of alternative solutions and regulate only after determining that the benefits of the regulation justify its costs (including qualitative factors). We find, however, that the regulatory impact analyses (RIAs) for these regulations were seriously incomplete, often omitting significant benefits, costs, or regulatory alternatives. Analysis of equity was cursory at best.

To read the other papers in this study, please see: "Beware the Rush to Presumption: Regulatory Analysis and the Affordable Care Act's Interim Final Rules."