Tag: employer mandate

Va. Gov. McDonnell (Sort of) Takes My Advice, Defers Creating ObamaCare Exchange

In June, I testified in Richmond before Virginia’s Joint Commission on Health Care that Virginia should refuse to create one of ObamaCare’s health insurance “exchanges”:

[ObamaCare’s] health insurance “Exchanges” are scheduled to become operational in 2014.  These new government bureaucracies would enforce the law’s regulations that will drive up health insurance premiums, and would distribute hundreds of billions of taxpayer dollars to private health insurance companies, thereby driving up the national debt…

Neither the Commonwealth nor the federal government has money to waste on new government agencies that might be repealed or overturned tomorrow…

At a minimum, Virginia should defer the question of creating an Exchange until the courts dispose of the constitutional challenges brought against this law.  Legal scholars expect the U.S. Supreme Court to rule on this law in the summer of 2012…If the Court voids the law, Virginia will be glad she waited.

Virginia Gov. Bob McDonnell (R) has inexplicably been gung-ho to create an ObamaCare Exchange. According to the Richmond Times-Dispatch, however, McDonnell may be modulating his tune:

McDonnell said he does not want to create an exchange legislatively until after the court makes its decision on the mandate’s constitutionality. The court will hear arguments in the case in March and possibly rule in July, just after a federal deadline for states to seek grant money to set up exchanges.

“Any major expense prior to the court decision is irresponsible and a waste of money,” the governor said at a luncheon meeting with members of the Capitol press corps.

Unfortunately, McDonnell is still laboring under the misapprehension that creating her own Exchange will let Virginia retain a measure of control over her health insurance markets:

McDonnell said he hopes the Supreme Court will strike down the law’s individual mandate, rendering an exchange unnecessary, but he made clear he wants Virginia to operate the exchange if the law stands.

“If we have to do it, I clearly want to have a state-based exchange,” he said.

To read about why Virginia doesn’t “have to do it,” and why there is no defensible rationale whatsoever for an ObamaCare opponent such as McDonnell to create an Exchange, read my Missouri testimony.

To learn how McDonnell may end up saving ObamaCare from repeal by creating an Exchange, read this Wall Street Journal oped by Jonathan Adler and me.

ObamaCare—The Way of the Dodo

In the latest issue of Virtual Mentor, a journal of the American Medical Association, I try to capture the multiple absurdities that make up ObamaCare. An encapsulation:

During the initial debate over ObamaCare, House Speaker Nancy Pelosi (D-CA) famously said, “We have to pass [it] so you can find out what’s in it.” One irreverent heir to Hippocrates quipped, “That’s what I tell my patients when I ask them for a stool sample.” The similarities scarcely end there…

ObamaCare supporters are ignoring the federal government’s dire fiscal situation; ignoring the law’s impact on premiums, jobs, and access to health insurance; ignoring that a strikingly similar law has sent health care costs higher in Massachusetts; ignoring public opinion, which has been solidly against the law for more than 2 years; ignoring the law’s failures (when they’re not declaring them successes); and ignoring that the law was so incompetently drafted that it cannot be implemented without shredding the separation of powers, the rule of law, and the U.S. Constitution itself. Rather than confront their own errors of judgment, they self-soothe: The public just doesn’t understand the law. The more they learn about it, the more they’ll like it…

This denial takes its most sophisticated form in the periodic surveys that purport to show how those silly voters still don’t understand the law. (In the mind of the ObamaCare zombie, no one really understands the law until they support it.) A prominent health care journalist had just filed her umpteenth story on such surveys when I asked her, “At what point do you start to question whether ObamaCare supporters are just kidding themselves?”

Her response? “Soon…”

(For more proof that ObamaCare supporters can draw from an apparently bottomless well of denial, see this article by Politico.)

Romney Can Run, but He Can’t Hide from Romneycare

Massachusetts Governor Mitt Romney announces today that he will be a candidate for president.   His announcement is expected to tout his business experience and to portray him as the candidate best able to deal with the country’s economic problems.  But one thing you are not likely to hear him talk about is his Massachusetts health plan, Romneycare.

Of course, Romney has already tried to put this issue away with a speech in Detroit last month, and he would probably be happy to never talk about it again.   But if Romney really believes he can hide from the Romneycare fallout, he is badly mistaken. 

Cato scholars have issued several reports detailing the many failings of Romneycare.  Those studies can be found here , here , here and here for instance.  

In his Detroit speech, Romney trotted out three defenses.  First, he says that his plan, unlike Obamacare, did not increase taxes. That is technically true — if you consider only the legislation as Romney signed it. However, it is also true that the legislation relied heavily on federal subsidies — more than $300 million — and was still underfunded. Romney’s successor was forced both to cut back on some benefits that the plan originally offered and to raise the state’s cigarette tax by $1 per pack ($154 million annually) to help pay for the program. The state also imposed approximately $89 million in fees and assessments on health-care providers and insurers. 

Similarly, Romney claims that his plan only costs about one percent of the Massachusetts budget and is, therefore, not a budget-busting, big government program.  In making this claim, however, Romney fails to note that that accounting does not take into account more than $300 million annually in federal funds.  Nor does it count the costs that were pushed off onto Massachusetts businesses and taxpayers through the individual and employer mandates, or the costs of increased insurance premiums.

And, finally, Romney criticizes Obamacare as a “one size fits all” federal plan, whereas his plan was implemented in only one state. That’s true. Governor Romney only messed up the health-care system in Massachusetts, while President Obama has messed up health care for the entire country. Of course, as governor, Romney didn’t have the power to impose his model outside of his state. He now says that he opposes any national plan, calling for states to experiment with different approaches as the “laboratories of democracy.” That would certainly be an improvement over Obamacare. On the other hand, he has repeatedly said that he sees the Massachusetts plan as a model for the nation and has urged other states to copy his approach.

Governor Romney faces many challenges in convincing voters that he really does want to reduce the size, cost, and intrusiveness of government.  For example, Romney has recently been pandering to Iowa voters by renewing his support for ethanol subsidies.  On other issues, he has been a big supporter of federal involvement in education. He backed No Child Left Behind and once called for the federal government to buy a laptop computer for every child born in America. His record as Massachusetts governor was decidedly mixed. In the Cato Institute’s biannual ranking of governors on fiscal issues, Romney received a grade of only “C.” His philosophy of governing can be seen from his comment, “I’d be embarrassed if I didn’t always ask for federal money whenever I got the chance.”

But the biggest single obstacle to his candidacy remains Romneycare.  Unless and until he finds a way to deal with this albatross, he will be a weak and wounded frontrunner.

Opposition to ObamaCare Hits New High in Kaiser Family Foundation Poll

The following chart shows that ObamaCare’s unfavorables reached 50 percent in the latest Kaiser Family Foundation poll.  That’s higher than at any point since KFF started tracking ObamaCare’s unfavorables in January 2010.  The KFF poll also found that opposition is much more intense than support; 19 percent view the law very favorably, while 34 percent view the law very unfavorably.  Despite the availability of the these nuggets, KFF’S press release chose to deemphasize the surge: “Americans Remain Divided Over Health Reform With An Uptick In Public Opposition As GOP Ramped Up Repeal Campaign.”

Even more entertaining was this chart, which purports to show that Americans oppose defunding ObamaCare by nearly 2-to-1.

Dig a little deeper, though, and you’ll find that 16 percent of the public opposes defunding ObamaCare because they want to see the law flat-out repealed.  A less-misleading pie chart would show that 33 percent approve of defunding, 16 percent say “don’t defund, just repeal” (total: 49 percent), and 46 percent disapprove of defunding ObamaCare.

Other findings include:

  • 76 percent of the public oppose the individual mandate (and 55 percent oppose it even after hearing arguments for and against);
  • 69 percent support cutting spending on ObamaCare’s coverage expansions;
  • 60 percent believe ObamaCare will increase the deficit, while only 11 percent believe it will reduce the deficit;
  • 52 percent support cutting Medicaid;
  • 51 percent oppose ObamaCare’s employer mandate; and
  • 51 percent oppose ObamaCare’s new taxes on over-the-counter medications for HSA, FSA, and HRA holders.

Despite these generally sensible views, 68 percent believe that Congress can balance the budget without cutting Medicare.

KFF/HRET Survey, Part III: Employers Can’t Shift to Workers a Cost that Workers Already Bear

In a previous post, I promised to address the negative spin that the Kaiser Family Foundation put on its annual Employer Health Benefits Survey, released this month.  I do so in an op-ed that ran today at the Daily Caller.  An excerpt:

The Kaiser Family Foundation recently issued its annual survey of employer-sponsored health benefitsdeclaring: “Family Health Premiums Rise 3 Percent to $13,770 in 2010, But Workers’ Share Jumps 14 Percent as Firms Shift Cost Burden.” That’s half-right — but the other half perpetuates a myth about employee health benefits that stands in the way of real health care reform….

[Y]ou pay the full cost of your health benefits: partly through an explicit $4,000 premium and partly because your wages are $9,770 lower than they otherwise would be.

Kaiser therefore claims the impossible when it says that firms are shifting costs to workers.  Employers cannot shift to workers a cost that workers already bear. Yet this year, as in past years, the Associated PressBloombergCNNKaiser Health NewsThe Los Angeles TimesThe New York TimesNPRThe Wall Street Journal, and The Washington Post uncritically repeated the cost-shifting myth.

The bolded sentence is Cannon’s Second Rule of Economic Literacy.  (Click here for the first rule.)

I have also collected a series of excerpts from past Kaiser Family Foundation surveys showing this is a persistent issue.  Here are a few:

1998: “Workers in small firms bear a much larger share of the financial burden for health benefits than employees of larger firms.”

2005: “The average worker paid $2,713 toward premiums for family coverage in 2005 or 26% of the total health premium.”

2007: “Annual Premiums for Family Coverage Now Average $12,106, With Workers Paying $3,281”

The folks at the Kaiser Family Foundation were exceedingly gracious when I approached them to discuss this issue.

Obama Flip-Flops on the Individual Mandate (Again)

The individual mandate has been a tricky issue for Barack Obama, leading him to make some impressive self-reversals.

When campaigning against Hillary Clinton for the Democratic presidential nomination, Obama came out hard against an individual mandate to purchase health insurance, alleging that Clinton would garnish workers’ wages and that Massachusetts’ individual mandate has left many residents “worse off”:

He even dismissed an individual mandate by saying, “If a mandate was the solution, we could try that to solve homelessness by mandating everybody buy a house”:

Once president, of course, Obama endorsed and signed into law both an individual mandate and an employer mandate.

During the debate over ObamaCare, Obama likewise mocked George Stephanopoulos – no really, he mocked the poor guy– for suggesting the individual mandate is a tax. Obama didn’t mince words: “I absolutely reject that notion.” The relevant exchange begins three minutes into this video:

Now, the Obama administration says the individual mandate is a tax. According to The New York Times:

When Congress required most Americans to obtain health insurance or pay a penalty, Democrats denied that they were creating a new tax. But in court, the Obama administration and its allies now defend the requirement as an exercise of the government’s “power to lay and collect taxes.”…

Administration officials say the tax argument is a linchpin of their legal case in defense of the health care overhaul and its individual mandate, now being challenged in court by more than 20 states and several private organizations.

(My colleagues Randy Barnett and Ilya Shapiro explain how this flip-flop shows the constitutional challenges to ObamaCare aren’t quite as frivolous as supporters claim.)

The next time Obama is in the mood to reverse himself on the individual mandate, he might consider this statement from June 2009:

When you hear people saying, “socialized medicine,” understand that I do not know anybody in Washington who is proposing that–certainly not me.

When the government makes health insurance compulsory, that is socialized medicine.  (Why else would ObamaCare win plaudits from Fidel Castro?) It would be nice to hear the president admit it.