Tag: health insurance exchanges

Operating an ObamaCare ‘Exchange’ Would Violate Ohio’s Constitution

Unconfirmed reports indicate Ohio officials are considering implementation of an ObamaCare health insurance “exchange.” That would be very interesting if true, because operating an ObamaCare exchange would violate the state’s constitution.

Section 21 of the Ohio Constitution provides:

No federal, state, or local law or rule shall compel, directly or indirectly, any person, employer, or health care provider to participate in a health care system…

“Compel” includes the levying of penalties or fines.

In order to operate an exchange, Ohio employees would have to determine eligibility for ObamaCare’s “premium assistance tax credits.” Those tax credits trigger penalties against employers (under the employer mandate) and residents (under the individual mandate). In addition, Ohio employees would have to determine whether employers’ health benefits are “affordable.” A negative determination results in fines against the employer. These are key functions of an exchange.

Ergo, if Ohio passes a law establishing an exchange, then that law would violate the state’s constitution by indirectly compelling employers and individual residents to participate in a health care system. That sort of law seems precisely what Section 21 exists to prevent.

As I explain in a recent column, 13 other states have passed statutes or constitutional amendments (Alabama, Arizona, Georgia, Idaho, Indiana, Kansas, Louisiana, Missouri, Montana, Oklahoma, Tennessee, Utah, and Virginia) that bar state employees from carrying out these essential functions of an ObamaCare exchange.

The ObamaCare Rebellion Turns Exchange ‘Deadline’ into a ‘Rolling Deadline’

The Obama administration had set a deadline of November 16 for states to signal whether they would create their own health insurance “exchanges,” or let the federal government do it.

But the federal government is so desperate to have states do the heavy lifting, and so few states are interested, that for some time (most recently in a National Review Online column that posted yesterday) I have been predicting the Obama administration would push back that deadline. It seems I was right. Well, today’s CQ Healthbeat reports:

The federal government is likely to extend the Nov. 16 deadline for states to decide whether they will run their own health insurance exchanges, according to several state officials. … Instead, HHS officials are expected to set a new deadline for states that want to operate the marketplaces alone but have a rolling deadline with ongoing discussions for states that are interested in a partnership.

What is the difference between a “rolling deadline” and no deadline?

It’s “the REAL ID rebellion“ all over again.

ObamaCare (a Subsidiary of UnitedHealth Group)

Health and Human Services Secretary Kathleen Sebelius has been spending unknown and unauthorized amounts of taxpayer dollars to create a federal health insurance “exchange.”

Now we learn that as the result of a recent purchase, one health insurance carrier’s parent company—UnitedHealth Group—basically just bought the federal exchange that is supposed to regulate it. There’s a former exchange-planning official in the mix, yet nobody told the Securities and Exchange Commission—and now there are allegations that HHS counseled the buyers not to make that legally mandated disclosure.

Maybe a second Obama term won’t be so dull after all.

House Committee Threatens to Subpoena Documents Related to IRS’s Illegal ObamaCare Taxes

Last Friday, House Oversight Committee chairman Darrell Issa (R-CA) and colleagues sent a letter to Treasury Secretary Timothy Geithner and Internal Revenue Service Commissioner Douglas Shulman accusing Treasury of “either willfully misleading the Committee or…purposefully withholding information that is essential to the Committee’s oversight effort.”

As Jonathan Adler and I document in our forthcoming Health Matrix article, “Taxation Without Representation: The Illegal IRS Rule to Expand Tax Credits Under the PPACA,” the IRS has announced it will impose ObamaCare’s taxes on employers and individuals whom Congress expressly exempted from those taxes, and will send potentially hundreds of billions of taxpayer dollars to private health insurance companies, also contrary to the plain language of the statute. Oklahoma attorney general Scott Pruitt has filed a legal challenge to the IRS rule that imposes those illegal taxes.

On August 20, the committee sent IRS commissioner Shulman a letter requesting “all legal analysis, internal or external, conducted by the IRS which authorizes IRS to grant premium-assistance tax credits in federal Exchanges,” and “all documents and communications between IRS employees and employees of the White House Executive Office of the President or any other federal agency or department referring or relating to the proposed IRS rule or final IRS rule.”

When Treasury responded for the IRS on October 12, according to committee member Rep. Scott DesJarlais (R-TN), it “failed to include a single document, memorandum, communication, or email created before the publication of the proposed rule on August 17, 2011”—i.e., when all the interesting discussions would have occurred. The committee’s second letter complains, “Treasury did not provide a single piece of evidence to support its claim that IRS complied with the standard process when issuing this rule.”

Thus, the committee threatened, “If you do not provide all of the requested information by Thursday, October 25, 2012, the Committee will consider the use of compulsory process.” Developing…

For more on this issue, see here, herehere, here, here, here, and here.

Exactly What Is Max Baucus Saying Here? (Updated)

At a packed Cato Institute briefing on Capitol Hill yesterday, Jonathan Adler and I debated ObamaCare expert Timothy Jost over an admittedly wonky issue that nevertheless could determine the fate of ObamaCare: whether Congress authorized the IRS to subsidize health insurers, and to tax employers and certain individuals, in states that refuse to establish one of ObamaCare’s health insurance “exchanges.”

I want you, dear Cato@Liberty readers, to help us get to the bottom of it.

Adler and I claim that Congress specifically, repeatedly, and unambiguously precluded the IRS from imposing those taxes or issuing those subsidies through federal “fallback” Exchanges. We maintain the below video shows ObamaCare’s chief sponsor and lead author–Senate Finance Committee chairman Max Baucus (D-MT)–admitting it. Jost says Baucus’s comments have “absolutely nothing” to do with the matter. You be the judge, and tell us what you think.

A bit of background will help to frame what’s happening in the video: Both sides agree this issue hinges on whether the statute authorizes “premium assistance tax credits” through both state-created and federal Exchanges, or only state-created Exchanges. The video is from a September 23, 2009, Finance Committee markup of ObamaCare. In it, Baucus rules out of order a Republican amendment on the grounds that medical malpractice lies outside the committee’s jurisdiction. Sensing a double-standard, Sen. John Ensign (R-NV) notes that Baucus’s underlying bill directs states to change their health insurance laws and to establish Exchanges, matters which also lie outside the Finance Committee’s jurisdiction, and asks why aren’t those provisions also out of order. Okay, go.

I might note that these are the only comments anyone has unearthed from ObamaCare’s legislative history that bear directly on the question of whether Congress intended to authorize tax credits in federal Exchanges.

Baucus’s response is hardly a model of clarity. But I can see no possible interpretation other than Baucus is admitting that (A) the statute makes tax credits conditional on states establishing an Exchange, and therefore does not authorize tax credits through federal Exchanges, and (B) that this feature was essential for the Senate’s tax-writing committee to have jurisdiction to legislate in the area of health insurance.

But maybe I’m wrong. What do you think Baucus is saying? Since we don’t enable comments on Cato@Liberty, post your interpretation here on the Anti-Universal Coverage Club’s Facebook page. Or post it on your own blog and send me a link.

For more on this issue, see what Adler and I have written for the law journal Health Matrix, the Wall Street JournalUSA Today, the Health Affairs blog, and National Review Online.

Update (August 22, 2014): I blogged over at DarwinsFool.com that I have changed my mind on the Baucus-Ensign colloquy. Not that it matters much. The D.C. Circuit placed no weight on Baucus’ comments and ruled for the plaintiffs anyway.

D.C. Employers: ObamaCare ‘Exchange’ an ‘Undefined, Untested, More Expensive Entity’ Offering ‘Standardized, Cookie-Cutter Coverage’

More than 150 local employers have written a letter to the District’s ObamaCare board, protesting the destruction of D.C.’s individual and small-group health insurance markets:

Those of us who may have had doubts about the health reform law were comforted by President Obama’s repeated assurances that, “If you like your health plan…you will be able to keep your health care plan. Period.” But, by dismantling and recasting the separate health insurance marketplaces that serve small employer groups and individuals in the District, D.C. policymakers would take away the option of keeping the health plan that they now have. Rather, to continue to offer health benefits to employees after 2013, small employers like us would have no choice but to go to an undefined, untested, more expensive entity to obtain coverage. Especially in these uncertain economic times, many employers, and their workers, must be given the time to adjust their budgets for the estimated price increases of the Exchange. In addition, many of us have long-established relationships with health insurers we know and are guided by broker advisors who understand our unique needs. We do not want to be forced to buy the standardized, cookie-cutter coverage that would be offered through a government-run Exchange…

Indeed, forcing all consumers seeking Individual or Small Group health coverage to go to the Exchange to purchase health plans runs counter to the ACA’s essential promise of more – not less – choice…The diversity of small employer health plans currently available in the District cannot be replicated in the standardized plans offered by the Exchange. Small employers rely on choice amongst a wide array of health plans available in the current commercial marketplace and the flexibility to design contributions to complement each employer’s unique budgetary and financial situations…With the many changes that will be required of employers of all sizes under the new federal health care reform law, it seems unreasonable to add to those concerns by eliminating the commercial marketplace which we know for an undefined, unfamiliar and untested Exchange-driven marketplace.

In addition, we cannot ignore the significant costs of administering the Exchange which will undermine one of the key goals of the federal law - affordability.

Signatories include such notorious right-wing groups as the Brady Center To Prevent Gun Violence:

  1. ACDI/VOCA
  2. AIDS United
  3. Allen & Associates
  4. Alliance Insurance Services
  5. American Academy of Orthotists & Prosthetists
  6. American Association for Clinical Chemistry, Inc.
  7. American Bakers Association
  8. American Cleaning Institute
  9. American Council for an Energy-Efficient Economy
  10. American Immigration Lawyers Association
  11. American Insurance Association
  12. American Road & Transportation Builders Association
  13. American Society of Association Executives
  14. Andre Chreky, the salon spa
  15. Apartment and Office Building Association of Metropolitan Washington
  16. Ashcraft & Gerel LLP
  17. Association for Competitive Technology
  18. Association for Professionals in Infection Control and Epidemiology
  19. Axar Management
  20. Beacon Consulting Group, Inc.
  21. Blue House Design
  22. Bogart
  23. Brady Campaign and Brady Center To Prevent Gun Violence
  24. Brawner Management, LLC
  25. Building Owners and Managers Association International
  26. Capital Medical Associates
  27. Center for Constitutional Litigation, P.C.
  28. Center for Nonprofit Advancement
  29. CGH Technologies, Inc.
  30. Chef Geoff’s
  31. Columbia Lighthouse for the Blind
  32. Combined Properties, Incorporated
  33. Communications Development
  34. Consortium of Universities of the Washington Metropolitan Area
  35. David All Group
  36. DC Chamber of Commerce
  37. Development Gateway, Inc.
  38. Distilled Spirits Council
  39. Elizabeth M. Ross and Kenneth M.H. Lee, M.D., P.C.
  40. Entertainment Software Association
  41. Environmental Law Institute
  42. EOP Group, Inc.
  43. Euroconsultants, Inc.
  44. Federation of American Hospitals
  45. Good Neighbors, LLC
  46. Government Accountability Project
  47. Hemsley Fraser Group
  48. High Noon Communications
  49. History Matters
  50. Howard Eales, Inc.
  51. Howard W. Phillips & Co.
  52. ICI Mutual Insurance Company
  53. Innovators Network Foundation
  54. Interstate Natural Gas Association of America
  55. J. Todd Miller & Associates, Inc.
  56. Kaludis Consulting Group, Inc.
  57. Katz, Marshall & Banks LLP
  58. Knightsbridge Restaurant Group
  59. LEVICK
  60. LimeLeap Solutions
  61. Marvin A. Address & Associates, Inc.
  62. McBride Real Estate
  63. McClendon Center
  64. MCLA Inc.
  65. Metro TeenAIDS
  66. Metropolitan Washington Road & Transportation Builders
  67. Miller & Shook Companies
  68. National Association for Gifted Children
  69. National Association of Health Underwriters
  70. National Association of Regulatory Utility Commissioners
  71. National Association of State Departments of Agriculture
  72. National Council for Interior Design Qualification
  73. National Customs Brokers & Forwarders Association
  74. National Mining Association
  75. National Propane Gas Association
  76. Navista, Inc.
  77. NetChoice
  78. Pacific Cargoes
  79. Park Limited
  80. Passion Food Hospitality
  81. Promundo-US
  82. Radio Television Digital News Association / Foundation
  83. Regis & Asociates, PC
  84. Reiter & Hill
  85. Restaurant Association Metropolitan Washington
  86. RULG-Ukranian Legal Group, P.A.
  87. Sabin Vaccine Institute
  88. Society of Chemical Manufacturers & Affiliates
  89. Spiegel & McDiarmid LLP
  90. The Council for Responsible Nutrition
  91. The Episcopal Center for Children
  92. The Farm Credit Council
  93. The Ford Agency, Inc.
  94. The Gabriel Company, LLC
  95. The Prime Rib, Inc.
  96. Timothy A. Price, MD, PC
  97. Triad Communication / TRC Real Estate
  98. U.S. Grains Council
  99. U.S. Soccer Foundation
  100. United Fresh Produce Association
  101. Vinyl Siding Institute, Inc.
  102. Vogel, Slade & Goldstein, LLP
  103. Waterman and Associates
  104. Wenderoth, Lind & Ponack, L.L.P.
  105. Widmeyer Communications
  106. Appleseed Foundation
  107. Atelier Architects
  108. Bockorny Group
  109. Bond & Pecaro
  110. Bonner, Kiernan, Trebach & Crociata
  111. Bonstra Haresign Architects
  112. Capitol Process Services, Inc.
  113. Carr Workplaces
  114. Casey Trees
  115. Clement’s Pastry Shop
  116. Communications Development Incorporated
  117. Computer World Services
  118. Colonnade Condos
  119. Compressus
  120. Environmental Design & Construction
  121. The Fund for American Studies
  122. Fund for Global Human Rights
  123. Futures Industry Association
  124. Hartman-Cox Architects
  125. Hecht, Spencer and Associates
  126. The Herald Group
  127. I. Gorman Jewelers
  128. International Center for Research on Women
  129. International Dairy Foods Association
  130. International Franchise Association
  131. James E. Brown & Associates, PLLC
  132. Jewish Primary Day School of the Nation’s Capital
  133. Jewish Women International
  134. King Branson LLC
  135. Land Trust Alliance
  136. Law Resources
  137. MAG America
  138. Man-Machine Systems Assessment, Inc.
  139. McBee Strategic
  140. McBride Real Estate Services
  141. Medical Device Manufacturers Association
  142. Medical Society of the District of Columbia
  143. Metropolitan Engineering, Inc. | Shapiro – O’Brien
  144. National Institute of Building Sciences
  145. North American Millers’ Association
  146. North American Securities Administrators Association
  147. Pascal & Weiss, P.C.
  148. Poker Players Alliance
  149. Potomac Communications Group, Inc.
  150. Public Properties
  151. Rust Insurance Agency, LLC
  152. Safety Net Hospitals for Pharmaceutical Access
  153. Salsa Labs
  154. Society of the Plastics Industry
  155. Springboard Enterprises
  156. Theodore Roosevelt Conservation Partnership
  157. The Washington Center for Internships and Academic Seminars
  158. Washington Partners, LLC

One might add the Center for Science in the Public Interest, whose president emeritus complains, “the only option the board publicly considered has been this unpopular and unnecessary plan to close the private marketplace to many businesses.”

‘No State Is Going to Be Able to Be Fully Certified on Jan. 1’

I was traveling when the Washington Post published this article on D.C.’s efforts to implement ObamaCare:

If you want to know what health reform in action looks like, here’s what you should picture: a nondescript conference room, on the fourth floor of a government building, with about four dozen people sitting in rows of red chairs and one fluorescent light that keeps flickering on and off…

[T]his is actually a pretty important place. It’s where government officials decide what the Obama administration’s signature legislative achievement will look like for residents of the nation’s capitol…

It started with the first agenda item: Deciding what set of essential health benefits the District of Columbia will require all insurance carriers to cover. Even in one of the most Democratic-leaning districts in the country, there’s was not exactly enthusiasm for this new piece of federal regulation.

“This is mandated by the law,” District of Columbia insurance commissioner Bill White noted. “This is not something anyone here decided to do.”

Still, they did have to set an essential benefit package…

That sounds like to me like bureaucratic hell in action more than health care reform in action. And the last part, about ObamaCare or federal bureaucrats requiring D.C. to make these decisions, isn’t even true.

One consolation is that it looks like not even the 14 states that want to establish ObamaCare’s health insurance Exchanges will be able to do so on time.

Even with widespread support, the District still has a to-do list that stretches 11 PowerPoint slides long…

All of it is supposed to be done by Jan. 1, 2013, but officials here recognize, despite their commitment, it’s just not possible. Even the most stalwart of Obamacare supporters just simply have too much work to meet that deadline…

“No state is going to be able to be fully certified on Jan. 1,” said Bonnie Norton, D.C’s acting director of health reform.. “When they passed the ACA, they were highly optimistic about the timeline for states to implement exchanges.”

Does anyone really think that ObamaCare’s Exchanges will be up an running on time by October 1, 2013?