Tag: insurance

From the Annals of ObamaCare: ‘Illinois Suspends Insurance Exchange Setup’

Here’s the story from WIUS, the NPR affiliate at the University of Illinois Springfield:

A health exchange is one of the main initial components of the Affordable Care Act.

It’s basically a table of insurance plans people who don’t currently have coverage could choose from once the national health care law hits its stride. If it ever does.

The U.S. Supreme Court heard arguments in March challenging the constitutionality of ObamaCare.

“I’ve suspended the talks on the Illinois insurance exchange until the Supreme Court makes its decision, which we expect in June,” Rep. Frank Mautino (D- Spring Valley), who has been leading Illinois’ talks to set up the exchange, said.

“As the negotiator, it’s very difficult to have … businesses – decide how much they’re willing to pay to run an exchange, when the federal law may go away. So I’ve lost a lot of the strength of negotiation,” he said.

Controversial aspects include who’ll run the exchange, how much power insurance companies will get, and who’ll pay for it.

About 50 organizations, including insurance companies, business groups, and health care advocates had been meeting weekly.

Audio is also available here.

Democrats control the executive and legislative branches of government in Illinois.

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.

That’s Not a Limiting Principle, Charles Kolb Edition

Charles Kolb is president of the Committee for Economic Development and was a domestic policy adviser to Bush the Elder. Over at Huffington Post, he articulates why (he thinks) the Constitution’s Commerce Clause empowers Congress to force people to purchase health insurance, but not broccoli. That is to say, he offers (what he thinks is) a limiting principle that (he thinks) would enable the Supreme Court to uphold ObamaCare’s individual mandate, but still leave some constraints on Congress’s ability to force people to buy things. Like broccoli.

Yet Kolb’s proposed limiting principle is no more a limiting principle than Harvard law professor Noah Feldman’s proposed limiting principle, because the two make the same argument. Almost verbatim. So rather than regurgitate my response to Feldman, I’ll just link to it.

Okay, I’ll regurgitate this part:

Like every other so-called limiting principle offered by ObamaCare’s defenders, Feldman’s[/Kolb’s] has no basis in the Constitution or any other law. It is a post hoc rationalization, made by people who are shocked to find themselves before the Supreme Court, defending the constitutionality of their desire to bully others into submission.

Couldn’t resist.

Why ObamaCare Must Go, in Ten Short Minutes

Last week, I appeared on NPR’s Tell Me More program. My discussion with host Michel Martin gives a good synopsis of why ObamaCare is both harmful to consumers and unconstitutional. Listen to the segment here.

For a contrary perspective, listen to former Obama administration acting solicitor general Neal Katyal, who appeared on the program the next day. If you do listen to both programs, let me know what you think about Katyal’s comments, specifically this part:

MARTIN: First, I want to play a short clip from Michael Cannon of the Cato Institute who spoke to us yesterday as we said. This is a little of what he told us. Here it is.

MICHAEL CANNON: If the Supreme Court were to uphold this unprecedented and really breathtaking assertion of government power, there would be nothing to stop the Congress from forcing Americans to purchase any private product that Congress chose to favor. That could be a gym membership. That could be stock in Exxon Mobil. That could be broccoli if Congress decided that any of these products move in interstate commerce and that forcing you to buy it was essential to the regulatory scheme they wanted to enact.

MARTIN: What is your response to that?

KATYAL: Well, I mean, that’s a lot of rhetoric and not really a legal argument because it’s not responsive to what the government is asking for here. What the government is saying is, look, everyone consumes healthcare in this country, you and I. And, you know, even if I might say to myself, I don’t need health insurance. I won’t get sick. The fact is, as human beings with mortality, we are going to get sick and it’s unpredictable when.

You could get struck by a heart attack or cancer or hit by a bus and wind up in the emergency room and then it’s average Americans who have to pick up the tab for that. And so the government is not saying here we have the power to force people to buy goods. They’re saying, look, you’re going to already buy the goods. You’re going to use it. And the only question is, are you going to have the financing now to pay for it.

And so the government is regulating financing. It’s kind of like a government law that says you’ve got to pay cash or credit. It’s not the government coming in and saying, oh, consume this product you wouldn’t otherwise consume. And as for the kind of, you know, ludicrous suggestion that this would somehow lead to the government forcing people to eat broccoli or the like, I mean, I would think that someone from the Cato Institute would know that the Bill of Rights and the privacy protections in the constitution would protect against such drastic hypotheticals.

Now, I’ve been at this for a while. I’ve seen people evade uncomfortable questions and mischaracterize things I’ve said. But for some reason, this instance really surprised me. Maybe Katyal was nervous.

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.”