Tag: Obamacare

How ObamaCare Is Destroying Consumer Protections

In this morning’s Charlotte Observer, I explain how ObamaCare is destroying consumer protections.  Exhibit A is Blue Cross Blue Shield of North Carolina’s decision to refund $156 million to its policyholders:

BCBSNC’s refunds show that ObamaCare is leaving seriously ill patients with less protection, not more. Health insurance was hardly perfect before ObamaCare, but BCBSNC’s policyholders had insurance that had pre-funded many of their future medical bills.

Now, ObamaCare has effectively transferred those reserves from the sick to the healthy. Seriously ill policyholders now have less protection against BCBSNC reneging on its commitments to them. Competition used to discourage skimping; ObamaCare rewards it.

Due to space considerations, the editors dropped the parts where I explain (A) how research by Harvard economist (and sometime Obama advisor) David Cutler shows that under ObamaCare’s price controls, insurers must compete to avoid the sick, and (B) that ObamaCare is blocking further innovations – such as those foreseen by University of Chicago economist John Cochrane – that would provide even greater protection to the sick.

Giving Power to Experts Is No Way to Reform Health Care

In the latest Cato Policy Report, Cato adjunct scholar Arnold Kling’s essay on the (mis)rule of experts explains why ObamaCare will fail:

Despite the many pages contained in the health care legislation that Congress enacted, the health care system that will result is for the most part to be determined. The design and implementation of health care reform was delegated to unelected bureaucrats, as was done in Massachusetts.

In Massachusetts, the promises of proponents have proven false, and the predictions of skeptics have been borne out. Costs have not been contained; they have shot up. Emergency room visits have not been curtailed; they have increased. The mandate to purchase health insurance has not removed the problem of adverse selection and moral hazard; instead, thousands of residents have chosen to obtain insurance when sick and drop it when healthy. The officials responsible for administering the Massachusetts health care system are no longer talking about sophisticated ways of making health care more efficient.

Instead, they are turning to the crude tactic of imposing price controls.

Once again, we have legislators putting unrealistic demands on experts. This results in the selection of experts with the greatest hubris, shutting out experts who appreciate the difficulty of the problem. When the selected experts find that their plans go awry, they take out their frustrations by resorting to more authoritarian methods of control.

With ObamaCare, that dynamic took hold before the law even took effect.

Yes, Virginia, Congress Is Not Santa Claus and Is Bound by the Constitution

The legal battle against Obamacare continues. In June, a district court in Richmond denied the government’s motion to dismiss Virginia’s lawsuit (in opposition to which Cato filed a brief).  Despite catcalls from congressmen and commentators alike, it seems that there is, after all, a cogent argument that Obamacare is unconstitutional!  

Having survived dismissal, both sides filed cross motions for summary judgment—meaning that no material facts are in dispute and each side believes it should win on the law.  Supporting Virginia’s motion and opposing the government’s, Cato, joined by the Competitive Enterprise Institute and Georgetown law professor (and Cato senior fellow) Randy Barnett, expands in a new brief its argument that Congress has gone beyond its delegated powers in requiring that individuals purchase health insurance.

Even the cases that have previously upheld expansive federal power do not justify the ability to mandate that individuals buy a product from a private business.  Those cases still involved people that were doing something—growing wheat, running a hotel, cultivating medical marijuana.  The individual mandate, however, asserts authority over citizens that have done nothing; they’re merely declining to purchase health insurance.  This regulation of inactivity cannot find a constitutional warrant in either the Commerce Clause, the Necessary and Proper Clause, or Congress’s taxing power.  Such legislation is not “necessary” to regulating interstate commerce in that it violates the Supreme Court’s distinction between economic activity (which often falls under congressional power as currently interpreted) and non-economic activity (which, to date, never has), it is not “proper” in that it commandeers citizens into an undesired economic transaction.  

Finally, the taxing power claim is a red herring: (a) neither the mandate nor the penalty for not complying with the mandate is a tax, and is not described as such anywhere in the legislation; (b) even if deemed a tax, it’s an unconstitutional one because it’s neither apportioned (if a direct tax) nor uniform (if an excise); (c) Congress cannot use the taxing power to enforce a regulation of commerce that is not authorized elsewhere in the Constitution.

The district court will hear arguments on the cross-motions for summary judgment in Virginia v. Sebelius later this month and we can expect a ruling by the end of the year. 

Obamacare delenda est.

Sebelius: Anonymous Political Speech ‘Dangerous’

In all of Washington, is there a greater enemy of free speech than Secretary of Health and Human Services Kathleen Sebelius?

  • Her department is forcing millions of Americans to finance speech that they oppose, by using taxpayer dollars to broadcast (misleading) television ads that promote ObamaCare.
  • She is using the powers granted her under ObamaCare to threaten insurers with bankruptcy if they publicly disagree with her about the law’s cost.
  • Now, she is decrying the growth of anonymous political speech in congressional campaigns.

Would that coerced speech, or government suppression of speech, troubled her as much as anonymous speech.

ObamaCare Prods Yet Another Insurer to Flee the Market

First, a dozen insurers said they would stop writing child-only health insurance policies.  Now, according to the Wall Street Journal:

By forcing the exit of Principal Financial Group — which ran a profitable, $1.6 billion health insurance business — ObamaCare has now left 840,000 Americans to find another source of coverage.

According to The New York Times, other insurers may soon follow:

More insurers are likely to follow Principal’s lead, especially as they try to meet the new rules that require plans to spend at least 80 cents of every dollar they collect in premiums on the welfare of their customers…

“It’s just going to drive the little guys out,” said Robert Laszewski, a health policy consultant in Alexandria, Va. Smaller players like Principal in states like Iowa, Missouri and elsewhere will not be able to compete because they do not have the resources and economies of scale of players like UnitedHealth, which is among the nation’s largest health insurers.

Mr. Laszewski is worried that the ensuing concentration is likely to lead to higher prices because large players will no longer face the competition from the smaller plans. “It’s just the UnitedHealthcare full employment act,” he said.

Let’s remember what President Obama told a joint session of Congress just one year ago:

So let me set the record straight here.  My guiding principle is, and always has been, that consumers do better when there is choice and competition.  That’s how the market works… And without competition, the price of insurance goes up and quality goes down.  And it makes it easier for insurance companies to treat their customers badly – by cherry-picking the healthiest individuals and trying to drop the sickest, by overcharging small businesses who have no leverage, and by jacking up rates.

Everybody got that?

McDonald’s Case Highlights ObamaCare’s Threat to Low-Income Workers’ Health Insurance, Political Freedom

Many employers, such as McDonald’s, provide health benefits that are less comprehensive than most.  They may have an annual claims limit of $10,000 or less.  But if you’re young, healthy, and need to pinch your pennies, that may suit you just fine.  According to Jerry Newman, a SUNY-Buffalo professor who wrote a book about working at McDonald’s, “For those who didn’t have health insurance through their spouse, it was a life saver.”

These are the health plans (and the workers) that are seeing the highest premium increases under ObamaCare.  The Wall Street Journal reports:

Trade groups representing restaurants and retailers say low-wage employers might halt their coverage if the government doesn’t loosen a requirement for “mini-med” plans, which offer limited benefits to some 1.4 million Americans…

McDonald’s, in a memo to federal officials, said “it would be economically prohibitive for our carrier to continue offering” the mini-med plan unless it got an exemption from the requirement to spend 80% to 85% of premiums on benefits…”Having to drop our current mini-med offering would represent a huge disruption to our 29,500 participants,” said McDonald’s memo…

Insurers say dozens of other employers could find themselves in the same situation as McDonald’s. Aetna Inc., one of the largest sellers of mini-med plans, provides the plans to Home Depot Inc., Disney Worldwide Services, CVS Caremark Corp., Staples Inc. and Blockbuster Inc., among others, according to an Aetna client list obtained by the Journal. Aetna also covers AmeriCorps teaching-program sponsors, who are required by law to make health coverage available.

Aetna declined to comment; it has previously indicated that the requirement could hurt its limited benefit plans.

“There is not any issuer of limited benefit coverage that could meet the enhanced MLR standards,” said Neil Trautwein, a vice president at the National Retail Federation, using the abbreviation for medical loss ratio.

Yet again, we have evidence that President Obama’s oft-repeated pledge that “if you like your health care plan, you can keep your health care plan” should have come with a disclaimer: Offer not valid for low-income workers.

Not to fear, says the Obama administration. According to Bloomberg:

The government may allow some low-cost plans like those offered at McDonald’s, which have limited benefits, to get waivers from the health law’s insurance requirements, according to a Sept. 3 Health and Human Services memo. Those requirements were waived for McDonald’s on Sept. 24, [HHS spokeswoman Jessica] Santillo said.

Sorry, but I don’t find it comforting that ObamaCare gives HHS the power to waive these regulations on a case-by-case basis.  Power corrupts.  We’ve already seen HHS Secretary Kathleen Sebelius use other powers granted her by ObamaCare to threaten insurers who contradict the party line about the law’s cost.  The waiver power gives her another club to use against insurers and employers who complain about the law or donate to the wrong political campaigns.  (Will Home Depot, Disney, CVS, Staples, or Blockbuster dare to misbehave?)

Any such criticism now triggers an autonomic reflex among administration spokesmen where they regurgitate the lines, “Americans have seen what happens when insurance companies have free rein. The Affordable Care Act ends insurance companies’ worst abuses.”

As if giving bureaucrats free rein to engage in abusive government practices is an improvement.

First Lady Asks Nurses to Engage in Legislative Advocacy with Their Patients

No, seriously.  First Lady Michelle Obama is asking nurses to promote ObamaCare to their patients.

With hundreds of thousands of medical errors occurring each year – a problem that ObamaCare does nothing to address – this is exactly what I want my nurse thinking about as she’s inserting a needle into my arm.