Tag: health insurance exchanges

Politico: Opponents Are Winning the Debate over ObamaCare ‘Exchanges’

Politico has a great story about how free-market groups are defeating ObamaCare Exchanges at the state level:

Conservatives like John Graham of the Pacific Research Institute have also been touring states with the platform provided by the American Legislative Exchange Council to help kill off state-based exchanges, a key piece of health reform that will help millions of people purchase insurance coverage — often with federal subsidies — starting in 2014.

“Our approach has to be absolute noncollaboration, civil disobedience — well, not civil disobedience but resistance … by whatever means,” said Graham.

Two years into the law’s implementation, conservative emissaries have contributed to impressive stats. Almost all red states are holding off on exchange legislation at least until the Supreme Court decides on the Affordable Care Act, and in most of those states, exchange-building legislation has crawled to a stop.

I have to point out three problems with the story, though. First, the Cato Institute and I are libertarian, not conservative.

Second, the article identifies Cato, ALEC, and AFP as being “funded partly by the Koch brothers.” Even though these groups have no direct or indirect financial interest in this issue, and even though Cato currently receives no funding from the Kochs, and even though Cato is currently fighting a hostile takeover attempt by the Kochs, I guess that’s a fair categorization. What isn’t fair is how the article fails to disclose that Leavitt Partners has a direct financial interest in this issue: Leavitt is getting paid by states to help implement Exchanges. (See “Health Exchanges: A New Gold Mine,” Politico, June 27, 2011.) It would have been nice if the article mentioned that all the moneyed interests – including health insurance carriers and many Chambers of Commerce – are on the pro-Exchange side. But it at least should have mentioned Leavitt’s financial interest.

Third, I’m not sure what basis there is for saying “most legal experts think” the federal government can offer tax credits and subsidies in federal Exchanges. My co-author Jonathan Adler and I have been following that debate closely. Only a handful of scholars have even commented on the issue, and they are fairly evenly split. If I’m unaware of others who have weighed in, I’d like to hear about them.

Gingrich Adviser Urges States to Implement ObamaCare

State after state is refusing to implement ObamaCare’s health insurance Exchanges. Republican David Merritt hopes they will “grudgingly decide” to change their minds.

Merritt is a health care adviser to Newt Gingrich. He is also a senior adviser at Leavitt Partners. Leavitt Partners is a consulting firm that makes money by helping states implement ObamaCare. In the Daily Caller, Merritt tries to persuade state officials to help implement a law they oppose.

Merritt begins his pro-Exchange argument like so: “Imagine that you’re being required to buy a car.” Would you rather choose that car yourself, he then asks, or would you rather the dealer choose the car? Hmm, good question. I choose Option C: wring the neck of whoever is requiring me to buy a car. Not Merritt, though. He counsels states to choose their own “car.”

There are so many problems with this analogy that it’s hard to list them all. First, as Merritt essentially admits, states would be able to choose from such a narrow range of “cars” that it scarcely makes a difference whether they pick their own or let the feds do it. Second, states would only have to pay for their “car” if they pick it out themselves; otherwise, the feds pay for it. So Merritt is literally urging states to volunteer to pay for a “car” when the feds would otherwise hand them one for free. Finally, he says states should select their own “car” even though “no one knows what a federal [car] would look like.” How can Merritt counsel states to choose Option A if he admits he doesn’t even know what Option B is? Wouldn’t the prudent course be to wait and see? Especially since the Obama administration admits it doesn’t have the money to create Exchanges itself?

Merritt’s hypotheticals don’t make his point, either:

Take, for example, the treatment of high-deductible health plans with health savings accounts. A state exchange could and should include them as an option…But considering that many on the left oppose consumer-directed plans, a federal exchange may very well exclude them.

Perhaps a federal exchange will lard mandate upon mandate on participating plans, driving costs through the roof. Perhaps it will be so restrictive in its plan eligibility that only a few options will be available. Perhaps HHS will offer a public option.

This is nonsense. If the federal government wants to exclude HSAs, etc., it will do so in both federal and state-run Exchanges. States that establish their own Exchanges won’t be able to do a darned thing about it.

But here’s where Merritt’s argument really fails:

Unless and until the law is repealed by Congress or overturned by the Supreme Court, all health care stakeholders — including state policymakers — need to prepare for it as though it will be the law of the land forever. Wishing the law away is not a strategy. Hoping that it is overturned is not a plan.

Wishing? Hoping? Perhaps Merritt hasn’t noticed, but countless Americans are pursuing multiple well-considered strategies (and working their fingers to the bone) to ensure that ObamaCare is not “the law of the land forever.”

State-run Exchanges undermine all of those repeal strategies. In fact, they completely derail one of the most promising ones. Worse, Exchanges create new constituencies that would be dependent on ObamaCare, and would therefore fight repeal – constituencies not unlike Leavitt Partners. One of the most important reasons for states not to establish Exchanges is that the federal government does not have the money to establish Exchanges itself. Translation: fewer constituencies for ObamaCare.

For all these reasons, scholars from the Heritage Foundation, the Cato Institute, and countless other groups are advising states to refuse to create ObamaCare Exchanges and to send all related grants back to Washington. Perhaps Newt Gingrich’s health care advisers could lend a hand, instead of trying to cement ObamaCare in place.

Update: While it is important to understand the financial interests involved in such issues, I do not believe that financial interest is what’s motivating Merritt. He sincerely believes that creating their own Exchanges will allow states to make the best of a bad situation.

Update #2: Gingrich campaign spokesman Joe DeSantis writes, “Mr. Merritt is still an advisor to Speaker Gingrich, but he was not writing this article as a representative of the campaign. Newt receives advice from a large number of people. That does not mean he always agrees with the advice he is given. In this case of states implementing ObamaCare as a precaution, he explicitly disagrees with Mr. Merritt. He believes states need to resist the implementation of the law because it is a threat to our freedom.”

 

 

Sebelius Admits ObamaCare Exchanges Aren’t Happening, Then Disqualifies Herself from Office

Politico Pro has published a short but remarkable article [$] stemming from an interview with HHS secretary Kathleen Sebelius. It offers a couple of illuminating items, and one very glaring one.

First, Sebelius undermines the White House’s claim that “28 States and the District of Columbia are on their way toward establishing their own Affordable Insurance Exchange” when she says:

We don’t know if we’re going to be running an exchange for 15 states, or 30 states…

So it turns out that maybe as few as 20 states are on their way toward establishing this “essential component of the law.” Or maybe fewer.

Second, the article reports the Obama administration has reversed itself on whether it has enough money to create federal Exchanges in states that decline to create them. The administration has repeatedly claimed that the $1 billion ObamaCare appropriates would cover the federal government’s costs of implementing the law. And yet the president’s new budget proposal requests “another $1 billion” to cover what Sebelius calls “the one-time cost to build the infrastructure, the enrollment piece of [the federal exchange], the IT system that’s needed.”

In other words, as I blogged yesterday, the Obama administration does not have the money it needs to create federal Exchanges. Therefore, if states don’t create them, ObamaCare grinds to a halt. (Oh, and this billion dollars is the last billion the administration will request. Honest.)

Most important, however, is this:

Even if Congress does not grant the president’s request for more health reform funding, Sebelius said her department will find a solution. “We are going to get it done, yes,” she said.

An HHS staffer prevented the reporter from asking Sebelius what she had in mind.

This is a remarkable statement. Sebelius basically just copped to a double-subversion of the Constitution: Congress appropriates money for X, but not Y. Sebelius says, “I know better than Congress. I’m going to take money away from X to fund Y.” Sebelius has already shown contempt for the First Amendment, first by threatening insurance carriers with bankruptcy for engaging in non-fraudulent speech, and again by crafting a contraceptives mandate that violates religious freedom. Now, she has decided the whole separation of powers thing is for little people. What will Sebelius do the next time something gets in the way of her implementing ObamaCare?

I don’t see why a federal official should remain in office after showing so much contempt for the Constitution she swore to uphold.

Oregon Legislature Blocks ObamaCare ‘Exchange’

From the Portland Oregonian:

House Republicans block Oregon’s health insurance exchange in surprise vote
Updated: Monday, February 13, 2012, 1:08 PM

A coalition of 30 Republicans and 1 Democrat in the state House of Representatives blocked approval of Oregon’s health insurance exchange this morning…

Last year, a bill to set up the exchange passed both houses of the Legislature with broad bipartisan approval.

House Bill 4164, which would give final approval to the exchange, cruised through its committee hearings without incident. But then, as the House met Monday morning to forward the bill to the Senate, Rep. Tim Freeman, R-Roseburg, made a motion to instead refer the bill to the Joint Ways and Means Committee, where he co-chairs a subcommittee on human services.

Freeman said questions had arisen in a recent caucus meeting of House Republicans over what commitments existed over federal funding of the program, as well as the potential for a change to the legal status of federal health care reforms, currently under consideration by the U.S Supreme Court…

The move led by House Republicans comes as Republicans in the Senate have vowed to block a companion bill on health care reform unless it is modified to include limits on lawsuit awards against health providers.

(HT: Eric Fruits.)

President’s Budget Shows Feds Can’t Create ObamaCare ‘Exchanges’

According to Politico Pro [$]:

More than $860 million of President Barack Obama’s proposed $1 billion increase in the CMS budget will go to building the federal exchange, acting [Centers for Medicare and Medicaid Services] Administrator Marilyn Tavenner said during a budget briefing at HHS on Monday.

This funding is necessary in part because the amount originally appropriated for the federal costs of implementing the Affordable Care Act — $1 billion — is expected to be gone by the end of this year, HHS officials said.

Assistant Secretary for Financial Resources Ellen Murray said at the briefing that half of these funds have already been obligated, and the remaining amount will be used by the end of the year.

She also said states will still be able to get help building exchanges, because other ACA funds are still available for exchange work.

“Funding for [state grants] was provided in the Affordable Care Act, so the money we’re asking for in this budget is just for the federal exchange,” Murray said.

In other words, the federal government doesn’t have the money to create ObamaCare Exchanges, and the administration has no hope of getting that funding through the Republican-controlled House. So if states don’t create Exchanges, they might not exist. (And even if the federal government does create them, they won’t work.)

Never mind the lawsuits. The Exchanges may be ObamaCare’s most serious vulnerability.

RTD: ‘Insurance Exchange: Just Say No’

Regarding legislation to create an ObamaCare “Exchange” in Virginia, the Richmond Times-Dispatch explains:

Republicans at the General Assembly are falling prey to the fallacy of the false alternative…

[H]ere are the real options facing Virginia: (a) federal bureaucrats determine the form of our exchange, or (b) federal bureaucrats determine the form of our exchange. There is no (c)…

Running a health-insurance exchange would cost a lot of money — money Virginia does not have. Since Washington will dictate how it will be run, Washington should pick up the tab.