Tag: mandates

State-by-State Data on the Number of Taxpayers King v. Burwell Would Free from Illegal Taxes

A ruling for the challengers in King v. Burwell would have benefits that swamp other effects of the ruling, including:

  • More than 67 million Americans would be freed from illegal taxes in the form of ObamaCare’s employer mandate.
  • More than 11 million Americans would be freed from an illegal tax averaging $1,200 (i.e., ObamaCare’s individual mandate).
  • Affected workers could receive a pay raise of around $900 per year.
  • The ruling could create an estimated 237,000 new jobs.
  • It could add an estimated 1.3 million workers added to the labor force.
  • It could result in more hours and higher incomes for 3.3 million part-time workers.

The number of people who could benefit from a ruling for the challengers is, therefore, more than ten times the number who would lose an illegal subsidy. And, as discussed here, the pool of people who need such subsidies may be as small as one-tenth the number receiving them.

Click here for state-by-state data on the number of employers and taxpayers who would benefit from King v. Burwell.

ObamaCare’s Triple-Digit Premium Hikes Dramatize the Need for Repeal

In 2010, the Obama administration excoriated health insurance companies for “rate hikes as high as 39 percent.” HHS Secretary Kathleen Sebelius wrote:

This is unacceptable…

President Obama has offered a health insurance reform proposal to help working families and small business owners.  It will hold insurance companies accountable by laying out common-sense rules of the road to keep premiums down…

Reform will change the rules and help stop exorbitant increases.

And the President’s plan will help reduce costs…

According to the Chicago Sun-Times, that double-digit rate increase “helped dramatize the need for regulation.”

That episode came to mind this morning when I read about a survey of health insurers that shows ObamaCare will neither “keep premiums down” nor “stop exorbitant increases” nor “reduce costs”:

The survey, fielded by the conservative American Action Forum and made available to POLITICO, found that if the law’s insurance rules were in force, the premium for a relatively bare-bones policy for a 27-year-old male nonsmoker on the individual market would be nearly 190 percent higher…

Most other studies have tried to estimate average premium increases, which have ranged anywhere from negligible to 85 percent and higher. This survey looks at individual examples in specific markets to show the itemized impact of the major Obamacare reforms…

On average, premiums for individual policies for young and healthy people and small businesses that employ them would jump 169 percent, the survey found.

These findings are in line with projections by neutral observers and even ObamaCare supporters like MIT economist Jonathan Gruber that the law will increase premiums for some individuals and small businesses by more than 100 percent. 

If double-digit premium increases dramatized the need for regulation, do triple-digit increases dramatize the need for its repeal?

Politico offers a strange rationalization for these rate hikes:

The increase will most likely be substantial for “a slice of the younger population,” said Massachusetts Institute of Technology health economist Jon Gruber, a supporter of the health law who has studied its impact on premiums.

And those are the people who, before Obamacare, benefited from insurers’ ability to charge older, sicker people much higher rates — or deny them coverage altogether — practices that have kept premiums for the young low.

Set aside the fact that these rate hikes effectively tax young workers to subsidize older workers who generally have higher incomes. According to this theory – I can’t tell if it came from Gruber or Politico – those young workers are today unjustly enriched because they’re not being robbed.

Cato Files Brief in the First Federal Appeal Regarding the Contraception Mandate

In January, when the Department of Health and Human Services announced that qualifying health insurance plans under Obamacare would have to cover contraceptives and “morning after” pills, many religious institutions — most notably the Catholic Church — vehemently objected to being forced to fund health care that violates their religious beliefs.

More than 30 lawsuits challenging the contraceptive mandate have now been filed across the country by various individuals and religious institutions.  Two of those suits have now been consolidated for the first appellate argument on the issue: one brought by Wheaton College, a Christian liberal arts college in Wheaton, Illinois, and another brought by Belmont Abbey College, a North Carolina college based around a Benedictine abbey.

The legal point here is somewhat technical, but incredibly important for anyone who thinks his freedom of conscience may be violated by the government in the future (a category that includes essentially everyone).  As originally promulgated, the contraception mandate included a narrow exemption for religious institutions, one that wasn’t available to religiously affiliated colleges.  After the strong backlash against the mandate, HHS issued a “safe harbor statement,” saying that the government wouldn’t enforce the mandate for one year against certain non-profit organizations religiously opposed to covering contraception. 

In other words, the contraception mandate is still in place but just won’t be enforced — but only for a year and individuals are still free to sue to enforce it against their religiously opposed employers.  HHS also issued an Advance Notice of Proposed Rulemaking that announced the department’s consideration of more permanent methods of accommodating religious institutions.

Because of the safe harbor notice and the ANPRM, the district court dismissed the colleges’ lawsuits for lack of standing and ripeness — holding that the colleges aren’t currently suffering any injury and it was too early to challenge the proposed rule.  Now at the U.S. Court of Appeals for the D.C. Circuit – considered to be the second-most important federal court because of its role in reviewing executive branch actions – the colleges argue that they are in fact suffering a current injury and that the mere possibility of a future rule that may accommodate them in some way is too remote to terminate their case.

Last Friday, Cato joined the Center for Constitutional Jurisprudence and the American Civil Rights Union in filing an amicus brief supporting the colleges.  We argue that the trial court misapplied the constitutional test for standing by not focusing on the facts that existed at the outset of the case; subsequent government actions, such as the ANPRM, are irrelevant to the preliminary question of standing.  We also argue that the trial court’s ruling compromises the principle of separation of powers by giving the executive branch the power to strip a court of jurisdiction merely by issuing a safe harbor pronouncement and an ANPRM (which doesn’t legally bind an agency to act in any way).

It is thus entirely speculative whether the agency will alleviate the harms that the colleges are suffering.  Without intervention from the courts, therefore, the colleges are left in legal limbo while facing immediate and undeniable harms to their religious freedom:  On one hand, they can’t challenge the constitutionality of a final regulation. On the other, they can’t very well rely on a proposed regulatory amendment that may be offered at some unknown point in the future.

The trial court rulings in the Wheaton College and Belmont Abbey College cases are frightening examples of judicial abdication that permit the expansion of executive power far beyond its constitutional limits.  The D.C. Circuit will hear argument in these consolidated cases later this fall.

ObamaCare’s Preventive-Care Subsidies: Neither Free nor Cost-Effective

Matt Yglesias criticizes my comment in today’s USA Today when he writes, “making preventive health care free to the patient is…very cost-effective.”

Except it isn’t “free” to the patient.

And it isn’t cost-effective. The evidence strongly suggests we would “buy” as much health if we just waited for people to get sick and treated them then.

Cash Rewards For Failing Schools, the Lawsuit Way

I see the editorialists of the New York Times have rhapsodically hailed last week’s 3-2 New Jersey Supreme Court opinion striking down the budget-trimming plans of Gov. Chris Christie. As the press reported, the court ordered instead that an extra $500 million in state funds be allocated to some of the state’s poorest-performing school districts – the so-called Abbott districts, named after the three-decade-running New Jersey school finance litigation, Abbott v. Burke.

It’s too bad the editorial said nothing about the report five years ago in which one leading newspaper surveyed the wreckage done by the then-25-year-old litigation, which it called an “ambitious court-ordered social experiment.” (At that point, $35 billion in state tax money had already been lavished on the Abbott districts.) The paper’s reporting made a convincing case that the orders had squandered billions on mismanaged districts that were already far outspending most others in the state and region, as with Asbury Park, which was spending 70 percent more than the typical New Jersey district. Indeed, “the highest-spending districts were making the fewest gains” in student performance. It’s especially unfortunate because the newspaper that reported all this was the New York Times itself.

As I argue at greater length in my new book, school reform lawsuits like Abbott are much more than just vehicles for inefficiency and waste of tax dollars: they’re examples of an alternative method of governance, accomplished through what is sometimes called institutional reform litigation, and quite remote from the channels of lawmaking and appropriations familiar from civics books. Typically, successful litigation of this sort transfers control over an important issue like school funding from branches of government that are accountable to taxpayers and voters to a cluster of private litigators, expert witnesses, special masters, consultants, law professors, backers in liberal foundations, and so forth. The legal basis for the power grab is often flimsy in the extreme; in the Garden State, for example, the state constitution vaguely mandates that there be a “thorough and efficient” system of public education, and “educational equity” lawyers have prevailed on the courts to erect the whole thirty-year edifice of Abbott orders on a filling in of those mysterious blanks, a process that Gov. Christie has accurately described as “legislating from the bench”. (Our friend Hans Bader at CEI has more here and here.) In New Jersey, as in many other states and cities subject to these suits, governors and legislators may come and go, but the permanent government of court orders and negotiated consent decrees grinds on and on, conferring a curiously unaccountable power on the lawyers who manage and advance the litigation and their circle of allies.

It’s worth noting that since the U.S. Supreme Court’s 1973 decision in San Antonio v. Rodriguez, the federal courts have stayed out of most school finance litigation, leaving it to state courts. For decades, outspoken voices in the law schools have been calling for Rodriguez to be overturned or at least end-run so as to confer an Abbott-like charter for social experimentation on the federal courts, which could then proceed to issue orders equalizing school finance, ordering “Robin Hood” aid to underperforming districts, and so forth. The most prominent advocate of this view in recent years has been a Berkeley law professor named Goodwin Liu – his views are summarized by admirers here and here – which may explain in part why Liu’s recent Ninth Circuit nomination raised such strong feelings.

ObamaCare Leads Minnesota Insurers to Suspend Sales

From the Minneapolis Star-Tribune:

Two of Minnesota’s biggest health plans said Thursday they have temporarily suspended sales of individual health insurance policies because of uncertainty related to the new federal health reform law.

The moves by Blue Cross and Blue Shield of Minnesota and HealthPartners came on the same day some of the federal government’s most-heralded consumer protections came into effect…

The insurers that have suspended individual sales say they are awaiting guidance on new rules, including those around coverage of kids with pre-existing conditions…

Pam Lux, a spokeswoman for Eagan-based Blue Cross, said she expects the suspension of individual sales to be brief but could not say if it would be days or weeks.