Tag: Obamacare

Boehner Endorses More Medicare Spending: Meet the New Boss, Same as the Old Boss?

While flipping through the radio on my way to pick my son up from school yesterday afternoon, I was dumbfounded to hear Congressman John Boehner talk about repealing Obama’s Medicare cuts on Sean Hannity’s show.

I wasn’t shocked that Boehner was referring to non-existent cuts (Medicare spending is projected to jump from $519 billion in 2010 to $677 billion in 2015 according to the Congressional Budget Office). I’ve been dealing with Washington’s dishonest definition of “spending cuts” for decades, so I’m hardly fazed by that type of routine inaccuracy.

But I was amazed that the presumptive future Speaker of the House went on a supposedly conservative talk radio show and said that increasing Medicare spending would be on the agenda of a GOP-controlled Congress. (I wondered if I somehow misinterpreted what was being said, but David Frum heard the same thing)

To be fair, Boehner also said that he wanted to repeal ObamaCare, so it would be unfair to claim that the interview was all Bush-style, big-government conservatism. But it is not a positive sign that Boehner is talking about more spending before he’s even had a chance to pick out the drapes for his new office.

Bootleggers & Baptists, Sugary Soda Edition

Here’s a poor, unsuccessful letter that impressed the relevant New York Times reporters, but not their editorial overlords:

It may seem counter-intuitive that bleeding-heart anti-hunger groups and “Big Food and Big Beverage” would ally to oppose Mayor Bloomberg’s request to prevent New Yorkers from using food stamps to purchase sugary sodas [“Unlikely Allies in Food Stamp Debate,” October 16].  Yet the “bootleggers and Baptists” theory of regulation explains that this “strange bedfellows” phenomenon is actually the norm, rather than the exception.

Most laws have two types of supporters: the true believers and those who benefit financially.  Baptists don’t want you drinking on the Lord ’s Day, for example, while bootleggers profit from the above-market prices that Blue Laws enable them to charge on Sundays.  Consequently, both groups support politicians who support Blue Laws.

Baptists-and-bootleggers coalitions underlie almost all government activities. Defense spending: (neo)conservatives and defense contractors.  President Obama’s new health care law: the political left and the health care and insurance industries. Ethanol subsidies: environmentalists and agribusiness. Education: egalitarians and teachers’ unions. The list goes on.

It’s easier to illustrate the theory (and sexier) when the bootleggers are non-believers who cynically manipulate government solely for their own gain.  Yet one can be both a Baptist and a bootlegger. The Coca-Cola Company may sincerely believe that society benefits when the government subsidizes sugary sodas for poor people.  Even so, a bootlegger-cum-Baptist can still rip off taxpayers.

This morning, NPR reported on another bootleggers-and-Baptists coalition: anti-immigration zealots and the prison industry.

Cost-Slashing? No, Cost-Shifting.

Here’s a poor, unsuccessful letter I sent to the editor of the Los Angeles Times:

Three and a half million Californians may become eligible for subsidized private health insurance in 2014 under ObamaCare [“3.5 million Californians would be eligible for healthcare tax credits, study finds,” October 6], but those subsidies will not “slash the cost” of their health insurance.  As ObamaCare causes health insurance premiums to rise by as much as 30 percent, the private-insurance subsidies will shift those costs to taxpayers.  A bipartisan majority of Americans opposes ObamaCare in part because such shell games increase costs rather than reduce them.

Washington State Regulator Can’t Prevent ObamaCare from Destroying Child-Only Market

ObamaCare has touched off a battle between Regence Blue Cross Blue Shield and Washington State Insurance Commissioner Mike Kreidler. From the commissioner’s press release:

Kreidler orders Regence BlueShield to cover children

OLYMPIA, Wash. – Insurance Commissioner Mike Kreidler ordered Regence BlueShield this morning to stop illegally denying insurance to children, effective immediately.

“Regence is in clear violation of state law that prohibits insurers from denying insurance to people on the basis of age,” said Kreidler. “I was shocked and deeply disappointed when Regence announced its decision last week to stop selling insurance to kids.”

The Affordable Care Act requires all health plans to cover kids with pre-existing conditions…

Regence Blue Shield, the largest health insurer in the individual market, notified Kreidler on Sept. 27 that, effective Oct. 1, it would no longer sell individual health insurance policies to kids.

From Regence’s press release:

We were shocked by the Commissioner’s action and press statement this morning. This gross politicization of such a complex regulatory problem does not help address the very real economic challenges of providing coverage to Washingtonians seeking individual insurance policies, especially children.

Over the past several months, we have had at least five separate conversations with the Commissioner and his staff regarding planned changes to how we would cover children under age 19. Our goal in those discussions was and continues to be a solution that would allow us to serve all of our individual members – including children – without exacerbating costs and increasing coverage risks for the entire pool. Never once did the Commissioner or his staff express any concern that these changes might violate state law. We’re disappointed that the Commissioner appears to have suddenly changed his perspective…

We’ve been very clear that we will insure kids during open enrollment periods when the child is not the sole subscriber – and we will do so regardless of health status. Dozens of carriers across the country have found it necessary to adopt similar policies.

We disagree with the Commissioner’s action today and will consider how it might impact our ability to offer coverage to all individuals across the state. While more than ten carriers have deserted Washington’s individual market – leaving three today – Regence has continued to insure these members despite losses of more than $33 million in the last three years. While we remain committed to our individual members, we simply cannot expose our broader membership to greater risk. Therefore, we believe the changes we made are in the best interest of the nearly one million Washingtonians we serve today.

Washingtonians want and need an equitable, stable insurance market that people can afford. We want to avoid the mistakes of the 1990’s when a small minority was allowed to game the insurance system by purchasing insurance only when they were sick, which led to rate spikes and the collapse of the individual market.

Either way, the child-only market is toast.

Anti-Obamacare Rulings a Trend or Just Coincidence?

I’m fond of saying that lawsuits don’t proceed at Internet speed – meaning that people are disappointed when I tell them that a new constitutional challenge to uphold property rights or free speech or individual liberty generally will take years to get through the courts, or that we’ll have to wait several months for a court to issue an opinion in some front-page case.  But lately it does seem that developments from the ongoing legal challenges to Obamacare are coming faster and faster, as if the train has now left the station and, to badly mix metaphors, it’s snowballing to an eventual collision at the Supreme Court.

That “gaining speed” phenomenon is mainly coincidence – given the more than 20 Obamacare lawsuits out there, briefing schedules, hearings, and rulings are bound to overlap at some point – but it has been interesting to compare and contrast the events of the last 10 days.  To recap some of the high points, this summer Judge Henry Hudson denied the government’s motion to dismiss Virginia’s law suit (read my comments here and Cato’s brief here).  Then two weeks ago, Judge George Steeh granted a similar motion in a case brought by the Thomas More Law Center in Michigan – in a cursory opinion I react to here and critique in this op-ed.

Last Thursday, Judge Roger Vinson issued a 65-page opinion allowing most of the lawsuit brought by 20 states, the National Federation of Independent Business, and two individuals to proceed (my reaction here).   This is an important ruling spelling out the unprecedented nature of the power Congress purports to assert here, with the individual mandate of course but also in potentially commandeering state officials and coercing them with strings attached to Medicaid funds and other regulatory burdens.

Finally, yesterday Judge Hudson held a hearing in Richmond on the parties’ cross-motions for summary judgment – which means both sides agree that no material facts are in dispute and the court should go ahead and rule on the law without having a trial.  (Cato filed a brief for this stage of proceedings as well.)  By all accounts, the hearing went well for Virginia; Judge Hudson was skeptical of the government’s argument that individual decisions not to enter the insurance marketplace was the sort of “local economic activity that has a substantial effect on interstate commerce” that the Supreme Court has said marks the outer bounds of Congress’s power under the Commerce Clause.  The judge also indicated that he would issue an opinion by the end of the year.

This is all heartening news – the courts that are seriously grappling with these lawsuits (and especially the highest profile cases brought by the 21 states) actually think the Constitution places limits on federal power.  Then again, I can’t believe that question is even up for discussion!  Stay tuned – and keep track of all the lawsuits at healthcarelawsuits.org.

A Less-Than-Rigorous ObamaCare Fact Check

Kaiser Health News and The Washington Post have posted a piece titled “Campaign Claims: Health Law Myths And Facts,” which examines these common criticisms of ObamaCare:

  1. “The law amounts to a ‘government takeover’ of health insurance and health care.” The article’s conclusion: “it falls far short of a government takeover.”  That conclusion rests largely on the fact that “Medical care will be provided by private hospitals and doctors.”  But as I explain in this study, “it is irrelevant whether we describe medical resources (e.g., hospitals, employees) as ‘public’ or ‘private.’ What matters—what determines real as opposed to nominal ownership—is who controls the resources.”  Obama health official Jeanne Lambrew acknowledges as much: “the government role in socialized medicine systems [can include] public financing of private insurance and providers.”  And as I concluded in this study, “Compulsory ‘private’ health insurance would give government as much control over the nation’s health care sector as a compulsory government program.”  I wonder if the article’s authors spoke to anyone who raised this perspective.
  2. “The law will gut Medicare by cutting more than $500 billion from the program over 10 years; seniors will lose benefits and won’t be able to keep their doctors.” Conclusion: “The gutting of Medicare claim goes too far…What this means for seniors is a bit murkier.”  True enough: even if ObamaCare’s implausible Medicare cuts take effect, they clearly would not “gut” Medicare.  (BTW, click here or here for a politically sustainable way to restrain Medicare spending.)  The authors also note that Medicare Advantage enrollees would lose some benefits.  But when the article claims that ObamaCare will not eliminate any “basic” Medicare benefits, it neglects to mention that Medicare’s chief actuary estimates that the law could cause 15 percent of hospitals, home health agencies, and other providers to stop accepting Medicare patients.  If your hospital no longer accepts your Medicare coverage, is that not a benefit cut?
  3. “The law will cause 87 million Americans to lose their current coverage.” Conclusion: “How true is it?  Partly, at best. But evidence is limited.”  The House Republicans’ Pledge to America claims that ObamaCare “will force some 87 million Americans to drop their current coverage.”  The word drop is a bit strong; it’s more accurate to say that many Americans will have to switch to another plan, even if it’s just a more-expensive version of their current plan.   Indeed, HHS estimates that 69 percent of employer plans will have to do so by 2013.  Yet some people are being dropped from their current health insurance.  When Principal Financial Group leaves the market, its nearly 1 million enrollees will lose their current health plan.  Industry analysts expect more such departures.  Why no mention of that?
  4. “The law is driving up costs and premiums and will continue to do so over the next several years.” Conclusion: “There may be very small increases initially.”  Here the article is kinder to ObamaCare than even ObamaCare’s supporters are.  May be?  Even ObamaCare’s supporters admit the law will increase premiums for some people.  Very small increases?   Even HHS estimates that the requirement that consumers purchase unlimited annual coverage could increase premiums for some by 7 percent.  (There’s no mention of Blue Cross and Blue Shield of Connecticut, which says ObamaCare will increase premiums for some of its customers by nearly 30 percent.)  And why only initially?  Do the authors expect that there will be no premium increases when HHS eventually stops issuing waivers?  Or when HHS sets a minimum level of coverage that Americans must purchase in 2014?  Or that ObamaCare has solved the tragedy of the commons?  For support, the article claims, “the Obama administration, citing [various] estimates…says the law isn’t responsible for any increase greater than 1 to 2 percent.”  Actually, that’s not what the administration says – it’s what they want you to think they’re saying.  Read this letter and other administration utterances carefully.  They say “1-2 percent” when speaking of ObamaCare’s average effect on premiums, and “minimal” when speaking of anything other than the average effect.   (The administration’s threshold for “minimal” is presumably somewhere north of 7 percent.)
  5. “The law’s expansion of Medicaid will put massive pressure on state budgets at a time when many are already in crisis.” Conclusion: “The impact will probably be small, but it’s hard to say for sure.”  The article only cites figures generated by supporters of the law, who say the impact will be small.  Why just mention that there are figures from the other side?  Why not include them?
  6. “The new law uses tax dollars to pay for abortions.” Conclusion: “Open to interpretation.”  This was a missed opportunity to examine two crucial questions.  First, would federal insurance subsidies truly be segregated from the separate premiums that consumers in ObamaCare’s exchanges would have to pay for elective-abortion coverage?  Or would this just be an accounting gimmick?  What would happen, for example, if there were more abortions than an insurer anticipated, and those separate premiums proved insufficient to pay for them?  How would you keep one side of the ledger from spilling over into the other?  Second, would the availability of federal subsidies for health insurance plans that make elective-abortion coverage available as a rider increase enrollment in those plans?  If so, wouldn’t that implicitly subsidize elective abortions?  Rather than examine those questions, the article punted.

On the whole, I’d say this fact check may have been very kind to the new law.

Obamacare Suffers Another Legal Blow

Yes, Speaker Pelosi, the constitutional concerns people have with the health care legislation you rammed through Congress despite overwhelmingly negative public opinion are serious. The Florida court’s ruling, denying the government’s motion to dismiss the challenge to the new health care law brought by 20 states and the National Federation of Independent Business, mirrors the one we saw in July in Virginia’s separate lawsuit. These have been the most thoroughly briefed and argued lawsuits, so these significant and lengthy opinions conclusively establish that the constitutional concerns raised by the individual mandate and other provisions are serious. Nobody can ever again suggest with a straight face that the legal claims are frivolous or mere political gamesmanship.

And that should come as no surprise to those who have been following the litigation because the new law is unprecedented – quite literally, without legal precedent – both in its regulatory scope and its expansion of federal authority. Never before have courts had to consider such a breathtaking assertion of raw federal power – not even during the height of the New Deal. “While the novel and unprecedented nature of the individual mandate does not automatically render it unconstitutional,” Judge Vinson observed, “there is perhaps a presumption that it is.”

This means at the very least that “the plaintiffs have most definitely stated a plausible claim with respect to this cause of action.”

Just so – and the deliberate consideration that these district courts are giving to these serious constitutional arguments (unlike the Michigan judge’s perfunctory treatment last week) indicates that the probability that the Supreme Court will ultimately strike down the individual mandate continues to increase.