Tag: kathleen sebelius

What If Cuccinelli Had Sent that Letter to Planned Parenthood?

The following analogy may help to explain why everyone should be troubled by HHS Secretary Kathleen Sebelius’ efforts to intimidate insurance companies who say unflattering things about ObamaCare.

Last month, Virginia Attorney General Ken Cuccinelli (R), issued an opinion that state regulatory boards already have the authority to impose additional regulations on abortion clinics.  Critics pounced, claiming that the measure could shut down 17 of the state’s 21 clinics. What if Cuccinelli responded with a letter threatening to investigate clinics that “misinform” the public about the costs of such regulation?

Sebelius’ Prior Restraint on Speech

Here’s something else to consider about HHS Secretary Kathleen Sebelius’ threatening letter to health insurers who dare to tell their enrollees about how much ObamaCare is costing them.

Sebelius threatened insurers for claiming ObamaCare will increase premiums by as much as 9 percent.  Yet there were no threats issued against the RAND Corporation when it estimated ObamaCare will increase premiums for young adults by an average of 17 percent beginning in 2014, or against Milliman Inc. when it likewise estimated premium increases of 10-30 percent for young adults.  The reasons for the disparate treatment are fairly obvious. Sebelius has less power over RAND or Milliman, and bullies always find it easier to pick on the unpopular kid.

But an equally important implication is that Sebelius knows that ObamaCare’s largest premium increases are yet to come.  Sebelius may be intimidating insurers now to prevent them from blaming those much larger premium increases on ObamaCare.

ObamaCare’s Threat to Free Speech

On Friday, I blogged about HHS Secretary Kathleen Sebelius’ letter to the health insurance lobby, in which she attempts to stifle political speech by using the new powers that ObamaCare grants her to threaten health insurance companies that claim ObamaCare’s coverage mandates are one cause behind rising premiums.  (Never mind that the insurers’ estimates – which project that ObamaCare will increase premiums in 2011 by as much as 9 percent – are in line with those put forward by HHS.)

Here’s a smattering of reactions from others.

  • The Wall Street Journal: “The Health and Human Services secretary…warned that ‘there will be zero tolerance for this type of misinformation and unjustified rate increases.’   Zero tolerance for expressing an opinion, or offering an explanation to policyholders? They’re more subtle than this in Caracas.”
  • Chicago Tribune: “President Obama’s health care reform plan, enacted in March, is not terribly popular with the American people…The administration can’t tell the public to stop grousing. It can, however, try to silence health insurers who have the nerve to say out loud what basic economic theory indicates…Apparently, harsh punishment is in store for anyone who refuses to parrot the administration line. But there is every reason to think this alleged libel is true.”
  • Tyler Cowen: “Nowhere is it stated that these rate hikes are against the law (even if you think they should be), nor can this ‘misinformation’ be against the law…[The letter] is worse than I had been expecting.”
  • Ed Morrissey: “Rarely have we heard a Cabinet official tell Americans to stay out of political debates at the risk of losing their businesses. It points out the danger in having government run industries and holding a position where politicians can actually destroy a business out of spite.”
  • Michael Barone: “Sebelius is threatening to put health insurers out of business in a substantial portion of the market if they state that Obamacare is boosting their costs…The threat to use government regulation to destroy or harm someone’s business because they disagree with government officials is thuggery. Like the Obama administration’s transfer of money from Chrysler bondholders to its political allies in the United Auto Workers, it is a form of gangster government.”
  • Eugene Volokh: “even if such action would be constitutionally permissible, it would be quite troubling, as would threats that seem to hint as such action: It would involve the Administration’s deliberately trying to suppress criticism of its policies, under a ‘misinformation’ standard that sounds highly subjective and politically contestable. (Consider [Sebelius’] reference ‘to our analysis and those of some industry and academic experts’ — what about the analysis of other industry and academic experts?) Perhaps I’m missing some important context here. But my first reaction is that this is ominous behavior on the Administration’s part, and seems to have both the intent and effect of suppressing criticism of the Administration’s policies — including criticism that simply expresses opinions the Administration dislikes, and makes estimates that it disagrees with, and not just criticism that contains objectively demonstrable ‘misinformation.’”

In The Wall Street Journal, economist Russ Roberts recently explained one of the main themes of Friedrich Hayek’s The Road to Serfdom:

When the state has the final say on the economy, the political opposition needs the permission of the state to act, speak, and write. Economic control becomes political control.

One need not agree with all of Hayek’s conclusions to see how ObamaCare is threatening political freedom.

Secretary Sebelius Slips on the Brass Knuckles

This week saw more bad news for ObamaCare.  So the Obama administration slipped on the brass knuckles.

Last week brought news that health insurance premiums grew by a smaller increment in 2010 than in any of the past 10 years.  On Tuesday, The Wall Street Journal reported that ObamaCare appears to be turning that around:

Health insurers say they plan to raise premiums for some Americans as a direct result of the health overhaul in coming weeks, complicating Democrats’ efforts to trumpet their signature achievement before the midterm elections. Aetna Inc., some BlueCross BlueShield plans and other smaller carriers have asked for premium increases of between 1% and 9% to pay for extra benefits required under the law, according to filings with state regulators.

The Journal even included this handy chart, where the blue bars show how much ObamaCare will add to the cost of certain health plans in 2011.

Source: Wall Street Journal

In addition, a Mercer survey of employers found that 79 percent expect they will lose their “grandfathered” status by 2014, and therefore will become subject to many more of ObamaCare’s new mandates—a much higher figure than the administration had estimated.  Employers expect those additional mandates will increase premiums by 2.3 percent, on average, and boost the overall growth of premiums from 3.6 percent to 5.9 percent in 2011.

In response to the health insurers’ claims, HHS Secretary Kathleen Sebelius fired off a letter to the head of the health insurance lobby.  The news release on the HHS website makes her purpose plain:

U.S. Department of Health and Human Services Secretary Kathleen Sebelius wrote America’s Health Insurance Plans (AHIP), the national association of health insurers, calling on their members to stop using scare tactics and misinformation to falsely blame premium increases for 2011 on the patient protections in the Affordable Care Act.  Sebelius noted that the consumer protections and out-of-pocket savings provided for in the Affordable Care Act should result in a minimal impact on premiums for most Americans.  Further, she reminded health plans that states have new resources under the Affordable Care Act to crack down on unjustified premium increases.

In the letter, Sebelius cites HHS’s internal analyses and those of Mercer and other groups to support her claim that ObamaCare’s impact on premiums “will be minimal” — somewhere in the range of 1 percent to 2.3 percent, on average.  Sebelius tells insurers that she will show “zero tolerance” for insurers who “falsely” blame premium increases on ObamaCare, and promises aggressive action against those who do:


[We] will require state or federal review of all potentially unreasonable rate increases filed by health insurers… We will also keep track of insurers with a record of unjustified rate increases: those plans may be excluded from health insurance Exchanges in 2014.  Simply stated, we will not stand idly by as insurers blame their premium hikes and increased profits on the requirement that they provide consumers with basic protections.

First of all, how does Sebelius know these claims are false?  The analyses she cites project a 1-2 percent average increase in premiums. As I blogged back in June, her own agency estimated that just a couple of ObamaCare’s mandates will increase premiums for some health plans by 7 percent or more.  Is 9 percent really that far off?  Didn’t her own agency write that a “paucity of data” means there is “tremendous,” “substantial,” and “considerable” uncertainty about the reliability of their own estimates?

More important: so what if insurers believe that ObamaCare is increasing premiums by 9 percent, while Sebelius believes it only increased premiums 7 percent?  What business does she have threatening insurers because they disagree with her in public?  ObamaCare gave the HHS secretary considerable new powers.  Is one of those the power to regulate what insurers say about ObamaCare?  Excluding insurers from ObamaCare’s exchanges is not a minor threat.  Medicare’s chief actuary predicts that in the future, “essentially all” Americans will get their health insurance through those exchanges.  Does anyone seriously doubt that Sebelius’ threat is about protecting politicians rather than consumers?

When President Obama promised that he would sell ObamaCare to the American people, most people probably assumed he meant with his rhetorical skills.  But National Journal reports, “Remember how the administration was going ‘to sell’ the controversial legislation once it passed? Obama is not doing much pitching.”  He can’t even sell Jon Stewart on ObamaCare.  The administration seems to have settled on a different sales strategy: intimidate those who say unflattering things about ObamaCare.

Earlier this year, I predicted that ObamaCare would get uglier and more corrupt over time.  I didn’t know I’d be proven right so quickly.

Has ObamaCare’s Unpopularity Caused ‘Abject Panic at the White House’?

Politico has obtained and published a confidential messaging-strategy presentation that essentially admits ObamaCare supporters are losing the battle for public opinion.  The presentation was delivered to professional leftists by the left-wing Herndon Alliance, based on public opinion research by Democratic pollsters John Anzalone, Celinda Lake, and Stan Greenberg, in a forum organized by the left-wing group Families USA,  “one of the central groups in the push for the initial legislation.”  It is a stark admission that the public has not warmed to the new health care law, despite predictions that they would do so. 

Here’s how Politico describes the presentation and its implications:

Key White House allies are dramatically shifting their attempts to defend health care legislation, abandoning claims that it will reduce costs and deficit, and instead stressing a promise to “improve it.”

…The confidential presentation … suggests that Democrats are acknowledging the failure of their predictions that the health care legislation would grow more popular after its passage, as its benefits became clear and rhetoric cooled. Instead, the presentation is designed to win over a skeptical public, and to defend the legislation — and in particular the individual mandate — from a push for repeal…

The presentation concedes that groups typically supportive of Democratic causes — people under 40, non-college educated women, and Hispanic voters — have not been won over by the plan. Indeed, it stresses repeatedly, many are unaware that the legislation has passed, an astonishing shortcoming in the White House’s all-out communications effort.

“Straightforward ‘policy’ defenses fail to [move] voters’ opinions about the law,” says one slide. “Women in particular are concerned that health care law will mean less provider availability – scarcity an issue.”

The presentation also concedes that the fiscal and economic arguments that were the White House’s first and most aggressive sales pitch have essentially failed.

“Many don’t believe health care reform will help the economy,” says one slide.

The presentation’s final page of “Don’ts” counsels against claiming “the law will reduce costs and deficit.”

Reason magazine’s Peter Suderman notes that ObamaCare supporters are “backing down from core arguments about cost and deficit reductions in the new health care law… It’s a frank admission that the economic argument in favor of the law has basically failed amongst voters.”

These revelations come at the same time a CNN/Opinion Research poll shows ObamaCare’s individual mandate is increasingly unpopular.  Politico reports:

Just 44 percent favor the health care mandate… Fifty-six percent oppose the mandate, up 3 percentage points from when the bill passed.

Americans still support ObamaCare’s price controls — which force insurance companies to over-charge the healthy and under-charge the sick — by 58-42 percent.  But as President Obama has himself acknowledged, those price controls don’t work without the individual mandate.  Unless a majority also supports the mandate, you don’t have majority support for either.

The Washington Examiner’s David Freddoso speculates there is “abject panic at the White House” over the unpopularity of ObamaCare.

Partnership, ObamaCare-Style: Jump, or Be Pushed

Financial Times writes:

The federal government will step in to ensure that the Obama administration’s health care reforms are implemented in every state, Kathleen Sebelius, the health secretary, said, amid growing resistance to the changes in some parts of the US and an inability to act in others.

The article quotes Health and Human Services Secretary Kathleen Sebelius:

The way the bill is written, it really is a state-based programme with the federal government providing the back-up.  So if a state opts not to set up a risk pool, we do it here at the department. If the state opts not to regulate their insurance market, we do it…

It is not a federal takeover, it’s really a partnership.

Yes, a partnership not unlike that between the Soviet Union and, say, Czechoslovakia.

The Obama administration has good reason to emphasize its conception of this “partnership:”

[S]ome big states, including California and Florida, said they did not have the legal authority to enforce the new consumer protection standards, while others face such severe budget crises that they will struggle to pay for provisions, such as the expanded Medicaid services for lower-income groups, required under the law….

Separately, more than 20 states are challenging a mandate that requires almost all Americans to have some form of insurance by 2014 as unconstitutional. A judge in Virginia has said a challenge brought by the state’s attorney-general can proceed, while Arizona, Florida and Oklahoma will soon follow in Missouri’s footsteps by holding yes-or-no referendums on the mandate….

“Federal/state relations is one of the biggest challenges to implementing healthcare reform,” said Diane Rowland, executive vice-president of the Kaiser Family Foundation, a non-partisan health policy group. “Many of the states are facing fiscal crises and they have real capacity issues.”

Sebelius is undeterred:

The legal challenges will work their way through…. It doesn’t slow anything down. This is the law of the land.

Maybe, but then again, maybe not.

ObamaCare’s Price Controls Threaten HSAs

John Goodman is correct that ObamaCare’s individual mandate – and Kathleen Sebelius’s power to make the mandate more burdensome at whim – threaten the continued existence of health savings accounts (HSAs).  But ObamaCare’s price controls are no less a threat.

The new law requires insurers to charge enrollees of the same age the same average premium, regardless of health status.  That’s a price control, and it will cause premiums for healthy people to rise dramatically and thus lead to massive adverse selection.  Healthy people will gravitate to less-comprehensive insurance – in particular, HSA-compatible high-deductible plans – where the implicit tax is smaller.

As premiums for comprehensive plans spiral upward (ultimately causing comprehensive plans to disappear) and as ObamaCare proves more costly than projected, supporters will be desperate for new revenue.  They will call for the elimination of both HSAs and high-deductible health plans on the grounds that those products – not the price controls, mind you – are causing the market to unravel.

HSAs allow young and healthy consumers to avoid the raw deal that ObamaCare offers them. And that’s precisely why ObamaCare’s supporters will try to kill HSAs. We will end up repealing one or the other.