Tag: Obamacare

Harvard Health Policy Review on the IRS’s Illegal ObamaCare Taxes

In the just-released Spring 2013 issue of Harvard Health Policy Review, I have an article titled “ObamaCare: The Plot Thickens.” The article examines the IRS rule that purportedly implements ObamaCare’s tax credits, but actually violates that statute by taxing, borrowing, and spending hundreds of billions of dollars contrary to Congress’ explicit instructions. (The article is a less-technical version of my Health Matrix article (coauthored with Jonathan Adler), “Taxation Without Representation: The Illegal IRS Rule to Expand Tax Credits Under the PPACA.”) Here’s an excerpt:

In broad daylight, the Internal Revenue Service is attempting to tax, borrow, and spend [roughly] $800 billion—contrary to both the express language of the PPACA and congressional intent. Thus in addition to other abuses that have recently come to light, the IRS is attempting to tax millions of employers and individuals without congressional authorization…

In this still-unfolding narrative, the Obama administration’s actions are triply anti-democratic. First, the IRS is violating a direct constraint that popularly elected legislators placed on the executive branch. Second, it is violating that duly enacted statute for the purpose of denying popularly elected state officials the vetoes Congress gave them over certain provisions of the statute. And third, it is violating the statute because administration officials either cannot fathom or will not accept that Congress meant to do what it clearly did.

Obama administration officials continually emphasize that the PPACA is “the law of the land.” That remains to be seen, in more ways than one.

CBO: One-Year Delay of Employer Mandate Increases Spending, Debt, and Dependence

The Congressional Budget Office has released its cost estimate of the Obama administration’s one-year repeal delay of ObamaCare’s employer mandate and anti-fraud provisions. The CBO expects the Obama administration’s unilateral rewriting of federal law (my words, not CBO’s) will increase federal spending by $3 billion in 2014 and reduce federal revenues by a net $9 billion, thereby increasing the federal debt by $12 billion. If President Obama keeps this up, Congress may have to raise the debt ceiling or something.

Where is that $3 billion of new spending going? The CBO estimates the administration’s action will lead to about half a million additional people receiving government subsidies, including through ObamaCare’s Exchanges:

All told, as a result of the announced changes and new final rules, roughly 1 million fewer people are expected to be enrolled in employment-based coverage in 2014 than the number projected in CBO’s May 2013 baseline, primarily because of the one-year delay in penalties on employers. Of those who would otherwise have obtained employment-based coverage, roughly half will be uninsured and the others will obtain coverage through the exchanges or will enroll in Medicaid or the Children’s Health Insurance Program (CHIP), CBO and JCT estimate.

Which makes the president’s delay of the employer mandate and anti-fraud provisions consistent with his administration’s goal of hooking enough voters on government subsidies to affect electoral outcomes and votes in Congress.

An Obamacare Prediction

Based on the White House’s past lawlessness and corruption in the service of Obamacare, I’m willing to venture the following prediction:

The Obama administration will announce in August, probably in a classic Friday news dump, that (1) it will offer Exchange subsidies to workers enrolled in multiemployer union plans, and (2) it will pay the FEHBP contribution toward the Exchange premiums for members of Congress and their staffs.

Here’s what makes this prediction interesting: neither of those things would be legal. So, for the record, I really hope this prediction does not come true.

The last time I made a prediction was this one from December 2012:

HHS maintains they’ll have these [Exchange] things up and running by October 2013. I don’t know anyone who is confident about that and I’m ready to predict that they will not.

That prediction proved true when the Obama administration announced the eligibility verification system for Exchange subsidies would not be ready on time, and took the not-legal step of delaying enforcement of the eligibility rules for a year.

‘Stupid’ ObamaCare Provision Offends America’s Highest Caste: Congress

ObamaCare’s gravest sin may be that it has offended America’s highest caste: members of Congress and their staffs. Thanks to an amendment by Sen. Chuck Grassley (R-IA), the law provides:

the only health plans that the Federal Government may make available to Members of Congress and congressional staff with respect to their service as a Member of Congress or congressional staff shall be health plans that are created under this Act…or offered through an Exchange established under this Act…

In effect, ObamaCare throws members of Congress out of the Federal Employees Health Benefits Program (where most members and staff obtain health insurance) and offers them no other choice but to enroll in coverage through one of ObamaCare’s Exchanges. But here’s the kicker: though the federal government currently pays thousands of dollars of the cost of the congresscritters’ FEHBP coverage, neither ObamaCare nor any other federal law authorizes the feds to apply that money toward a congresscritter’s Exchange premiums. Today’s New York Times reports:

David M. Ermer, a lawyer who has represented insurers in the federal employee program for 30 years, said, “I do not think members of Congress and their staff can get funds for coverage in the exchanges under existing law.”

So ObamaCare essentially delivers a pay cut to members and staff in the neighborhood of $5,000 for single employees and $10,000 for families. 

Even congressional Democrats who voted for ObamaCare are freaking out (and pointing fingers). Again, the New York Times:

Representative Diana DeGette, Democrat of Colorado, said the Senate was responsible for the provision requiring lawmakers and many aides to get insurance in the exchanges.

“We had to take the Senate version of the health care bill,” Ms. DeGette said. “This is not anything we spent time talking about here in the House.”

Another House Democrat, speaking on condition of anonymity, said, “This was a stupid provision that never should have gotten into the law.”

You’d never know they had a choice, and voted for this provision anyway.

Finally, the Times notes, “The issue is politically charged because the White House and Congress are highly sensitive to any suggestion that lawmakers or their aides are getting special treatment under the health law” and, “Aides who work for Congressional committees and in leadership offices, like those of the speaker of the House and the majority and minority leaders of the two chambers, are apparently exempt — though neither Congress nor the administration has said for sure.” That creates the potential for a sneaky, backdoor way that ObamaCare supporters — say, the Senate Democrats who set budgets for congressional offices — could shield their staff from ObamaCare: shift staff from personal to committee and leadership offices.

Or, the White House could just decide to make the same contribution to their Exchange coverage, statute be damned. It wouldn’t be the first time this White House tried to protect ObamaCare by spending money that Congress never authorized.

Congressional watchdogs, be on the lookout. 

Obamacare: House Hearing on the IRS’s Illegal Taxing, Borrowing & Spending

As Jonathan Adler and I detail in our Health Matrix article, “Taxation Without Representation: The Illegal IRS Rule to Expand Tax Credits Under the PPACA,” the Obama administration is attempting to rescue Obamacare from oblivion by literally taxing, borrowing, and spending more than $700 billion without congressional authorization. In a recent letter to the editor of the Washington Post, I explain how these illegal taxes are already hurting workers. 

On July 25, chairmen of the House Ways & Means Committee, the House Committee on Oversight & Government Reform, and two Oversight subcommittees sent a letter to Treasury Secretary Jacob Lew demanding information related to the illegal tax-credit rule.

The House Oversight Subcommittee on Health Care has announced it will hold a hearing this Wednesday, July 31, on the IRS’s illegal tax-credit rule titled, “Oversight of IRS’s Legal Basis for Expanding ObamaCare’s Taxes and Subsidies.” Adler will testify alongside Oklahoma Attorney General Scott Pruitt and Missouri physician and small business owners Charles Willey, each of whom has filed suit to block the IRS’s illegal rule. 

Washington Post: Adding Insult to Obamacare’s Injury

On Sunday, The Washington Post published my letter to the editor:

The excellent July 24 front-page article “Health law’s unintended impact on part-timers” showed how President Obama’s health-care law is cutting part-time workers’ pay by forcing employers to limit these employees’ hours in order to avoid penalties. Yet the reality is even worse.

Obamacare does not authorize those penalties in states that leave the task of establishing a health insurance exchange to the federal government. That means most of the employers the article cited — the commonwealth of Virginia, various Texas employers, the Ohio-based White Castle burger chain, the city of Dearborn, Mich., and Utah’s Granite School District — don’t need to cut part-timers’ hours, because the federal government has no authority to penalize them.

Yet the Obama administration has decreed it will do so anyway, contrary to the clear language of federal law, proving that taxation without representation is not confined to the District.

Two lawsuits have been filed to stop this illegal action — one by the state of Oklahoma, another by employers and individual taxpayers in Kansas, Missouri, Tennessee, Texas, Virginia and West Virginia.

Even so, thousands of part-time workers are already losing wages because of a tax Congress did not authorize. As underemployed music professor Kevin Pace told The Post, “This isn’t right on any level.”

Michael F. Cannon, Washington

The writer is director of health policy studies at the Cato Institute.

On Wednesday, July 31, a House oversight subcommittee will be holding a hearing on the IRS’s illegal taxes, borrowing, and spending.