Tag: employer mandate

Rick Scott’s ObamaCare Flip-Flop

Word is that Florida Gov. Rick Scott (R) has decided to throw his support behind, or at least drop his opposition to, ObamaCare’s Medicaid expansion. His formal announcement, which may come tomorrow, will receive much attention. Scott was an early opponent of ObamaCare. He parlayed that opposition into a bid for governor in 2010, and rode the anti-ObamaCare wave into office. Shortly after becoming governor, he announced he would not lift a finger to help the federal government implement the law. I followed all this pretty closely. I served on Scott’s gubernatorial transition team, at his invitation.

Now, it appears Scott doesn’t see the point in opposing the Medicaid expansion. Never mind that – according to my colleague Jagadeesh Gokhale, whom the Social Security Administration consults when making these types of projections – the expansion will cost Florida $20 billion over the first 10 years, and add 3 million Floridians to the Medicaid rolls. Never mind that many of those Floridians currently have private health insurance. Never mind that Medicaid will provide them inferior access to care. Never mind that expanding Medicaid would make those millions of voters dependent on government for their health care, and thus would expand the constituency for more government spending and higher taxes.

There is speculation that Scott made a deal with the Obama administration: he would drop his opposition to the Medicaid expansion in exchange for HHS approving Florida’s plan to put its Medicaid enrollees in managed care plans. HHS approved Florida’s plan today. But economists have shown that moving Medicaid enrollees into managed care increases state and federal spending because it lures more people into the program. So it appears that Scott supported ObamaCare’s Medicaid expansion so that the Obama administration would support his.

Scott says he still opposes having Florida create a health insurance Exchange. Then again, he said the same thing about the Medicaid expansion. So in addition to whatever other damage his flip-flop does, he has squandered his credibility as an opponent of ObamaCare.

To reclaim any credibility on this issue, Scott would have to file an Oklahoma-style lawsuit to block the illegal taxes that the Obama administration is trying to impose on employers in Florida and the other 33 states that have opted for a federal Exchange. Or will he sell out Florida’s job creators too?

Goldwater Attorney: ObamaCare-Compliant Exchange Would Violate Idaho’s Health Care Freedom Act

Idaho Gov. Butch Otter (R), who added Idaho to the multi-state challenge that sought to overturn ObamaCare as unconstitutional, now supports helping the Obama administration implement the law by establishing and funding a health insurance “exchange.” Exchanges are new government bureaucracies that enforce ObamaCare’s many regulations, channel billions in deficit-financed government subsidies to private health insurance companies, and help the IRS penalize individuals and employers who fail to purchase government-approved insurance. So far, some 32 states have refused to establish an Exchange themselves. If Idaho’s legislature authorizes an Exchange, they will make Idaho the only state where a Republican legislature and governor acted together to implement this essential piece of ObamaCare.

One could argue this is a debate Idaho shouldn’t even be having. Establishing an ObamaCare compliant Exchange would violate Idaho state law.

In a letter sent to Idaho legislators today, Goldwater Institute attorney Christina Sandefur explains, “establishing a PPACA state health insurance exchange in Idaho would conflict with the state’s Health Care Freedom Act.” Idaho’s Health Care Freedom Act protects the “right of all persons residing in the state of Idaho in choosing the mode of securing heatlh care services free from the imposition of penalties” including “any civil or criminal fine, tax, salary or wage withholding, surcharge, fee or any other imposed consequence.” Sandefur explains (as I have explained elsewhere), “State exchanges that conform to PPACA are inconsistent with this safeguard because they are the key vehicles for implementing the individual mandate tax,” as well as the penalties ObamaCare levies on employers under the employer mandate. Idaho’s Health Care Freedom Act forbids state officials or state-created non-profits from doing anything that helps to enforce such penalties: “No public official, employee, or agent of the state of Idaho or any of its political subdivisions, shall act to impose, collect, enforce, or effectuate any penalty in the state of Idaho that violates the public policy set forth in [this Act].” As a result, Sandefur writes, “Idaho public officials who operate exchanges would be violating state law,” and “the Attorney General is charged with taking legal action against those who do so.”

Otter himself signed the Health Care Freedom Act into law in 2010, and was the first governor in the nation to do so. The purpose of that Act was to prevent state officials from doing what Otter is now trying to do. “What the Idaho Health Freedom Act says,” Otter boasted at the time, “is that the citizens of our state won’t be subject to another federal mandate or turn over another part of their life to government control.” Yet he is now trying to subject Idaho residents to those mandates, and violating his own law to help the federal government implement ObamaCare. The best spin I can put on this is that Otter is getting some very, very bad advice about the Health Care Freedom Act and ObamaCare’s Exchanges.

The situation in Idaho is a replay of Arizona, which enshrined a similar Health Care Freedom Act in its Constitution. As Arizona officials were wrestling with whether to establish an Exchange, Sandefur and her Goldwater Institute colleagues threatened legal action if Arizona did so. That threat was likely a major factor in Gov. Jan Brewer’s (R) decision to oppose an Exchange.

How Firms Will Adapt to Avoid ObamaCare’s Mandates (and Drive up Its Cost)

An oped in today’s Wall Street Journal explains:

How big can a company get with just 50 employees? We’re about to find out.

Thousands of small businesses across the U.S. are desperately looking for a way to escape their own fiscal cliff. That’s because ObamaCare is forcing them to cover their employees’ health care or pay a fine—either of which will cut into profits and stymie future investment and growth…

“Going protean” offers a better strategy for many businesses. Owners of protean companies create a core of strategic employees who manage the big-picture elements of the enterprise—the culture, business model, product mix, vision, strategy, etc. This core then outsources the business tasks to other corporations…

Non-core tasks could include things like accounting, marketing, product development, manufacturing, IT, PR, legal, finance, etc. There is almost nothing that cannot be outsourced…

These new contracts will be a mix of large corporations, small businesses, micro-corporations and even nano-corporations (an individual doing business as a corporation). But to be a protean solution, it must involve a corporation-to-corporation relationship…

In the context of ObamaCare, a small business could go protean by offering current employees contracts for doing their current work as a corporate entity instead of as an employee…

[A]s government continues to impose itself into the marketplace and reduce the freedom of the commercial sector through statist programs like ObamaCare, businesses will have to look for creative solutions to survive. Going protean is only one way, and others will emerge.

Keeping the core company below 50 full-time employees will allow such companies to avoid the employer mandate. But it will also drive up ObamaCare’s cost, because most of the workers in the new corporate entity will be eligible for government subsidies through ObamaCare’s health insurance “exchanges.” This will drive up the cost of ObamaCare wherever those subsidies exist.

Debate Challenge to Jonathan Gruber and Any Other ObamaCare Supporter

My coauthor Jonathan Adler and I have been educating state lawmakers about how ObamaCare allows them to block the law’s employer mandate, and to exempt collectively 15 million taxpayers from its individual mandate. So far, 32 states have exercised those powers, exempting all of their employers and 10 million residents from those punitive taxes. In Mother Jones, MIT economics professor Jonathan Gruber calls our interpretation of the law “screwy…nutty…stupid.” (This issue is currently being litigated in Oklahoma.) 

In this Cato video, I challenge Prof. Gruber (and any other supporter of the law) to a debate on the powers Congress grants states under ObamaCare.


Laszewski on ObamaCare: ‘Get Ready for Some Startling Rate Increases’

The invaluable Robert Laszweski:

The Affordable Care Act: Ten Months to Launch “Obamacare”––Get Ready for Some Startling Rate Increases

[…]

I conducted an informal survey of a number of insurers…None of the people I talked to are academics or work for a think tank. None of them are in the spin business inside the Beltway. Every one of them has the responsibility for coming up with the correct rates their companies will have to charge…

On average, expect a 30% to 40% increase in the baseline cost of individual health insurance to account for the new premium taxes, reinsurance costs, benefit mandate increases, and underwriting reforms…

In states with the least mandates or for health insurance companies with the tightest underwriting now, the increase could be a lot more…

[E]xpect individual health insurance rates for people in their 20s and early 30s to about double…

Will the feds be ready to provide an insurance exchange in all of the states that don’t have one on October 1, 2013?

I have no idea. And neither does anyone else I talk to inside the Beltway. We only hear vague reports that parts of the new federal exchange information systems are in testing.

The former CIA director couldn’t get away with an affair in this town but the Obama administration has a complete lid on just where they are on health insurance exchanges and haven’t shown any willingness to want to talk about their progress toward launching on time––except to tell us all not to worry.

We are all worried. I would not want to be responsible for the work that remains and only have ten months to do it…

The Republicans said this would not work. If it does not launch on time, or does with serious problems, I would not want to be an incumbent Democrat.

I told them not to call this the “Affordable Care Act.”