Tag: ppaca

The Friday Bad News Dump: CLASS Dismissed

It turns out, the U.S. government cannot run a voluntary insurance scheme.  Who knew.

The Washington Post reports that the Obama administration has officially scuttled ObamaCare’s long-term care entitlement program, known as the CLASS Act. Note the time stamp:

Obama pulls plug on troubled long-term care program in new health law, citing design flaws

By Associated Press, Updated: Friday, October 14, 4:57 PM

WASHINGTON — The Obama administration says it is unable to go forward with a major program in the president’s signature health care overhaul law—a new long-term care insurance plan.

Officials said Friday the long-term care program has critical design flaws that can’t be fixed to make it financially self-sustaining.

Health and Human Services Secretary Kathleen Sebelius told Congress in a letter that she does not see a viable path forward at this time. By law, implementation of the program was contingent on Sebelius certifying it financially sound.

The program was supposed to be a voluntary insurance plan for working adults regardless of age or health. Workers would pay an affordable monthly premium during their careers, and could collect a modest daily cash benefit if they became disabled later in life.

The problem all along has been how to ensure enough healthy people would sign up.

One ObamaCare entitlement program down, one more to go.

Who Understood RomneyCare Better: Mitt Romney or Ted Kennedy?

The video below shows former Massachusetts governor Mitt Romney (R) relaying a quip that former U.S. senator from Massachusetts Ted Kennedy (D) made at the 2006 signing ceremony for RomneyCare, a law that both men labored to make a reality.  Cato adjunct scholar David Hyman quotes Kennedy’s quip in this paper on RomneyCare:

When you come to a celebration of a signing and Mitt Romney and Ted Kennedy and the Heritage Foundation are all together, it’s clear one of us didn’t read the bill.

Romney paraphrases Kennedy’s quip at 1:12 into the video, to the amusement of the conservatives attending the National Review Institute’s Conservative Summit:

RomneyCare later served as the model for ObamaCare.  Guess who didn’t read the bill.

RomneyCare: Making a Fool of Every Republican It Touches Since 2006

New Jersey Gov. Chris Christie’s (R) hearts former Massachusetts Gov. Mitt Romney (R), so much that Christie says it is ”completely intellectually dishonest” to compare RomneyCare to ObamaCare.  Why?  Because Romney didn’t raise taxes, and President Obama did.  Oh.

Avik  (pronounced O-vik) Roy explains how Christie gets RomneyCare so very, very wrong:

There isn’t a single person, left or right, who follows health policy seriously who disagrees with the assertion that Romneycare was the model for Obamacare. And Massachusetts has had to raise taxes, after Romney left office, to pay for the law’s significant cost overruns.

Here are some examples, left and right. But Roy o-mits a few important points.

  1. Mitt Romney increased taxes the moment he signed RomneyCare.  RomneyCare increased net government spending.  That in itself is an increase in the tax burden.  All that remains to be determined is who will pay for that added spending and when they will pay it.  The fact that the incidence of that added tax burden fell after Romney left office does not mean that’s when the added tax burden was created.
  2. Mitt Romney has raised taxes on as many people as Barack Obama has.  Half of RomneyCare’s new spending was financed by the federal government through the Medicaid program, which is financed through federal taxes, which fall on taxpayers in all 50 states.  That means that when Romney financed half of RomneyCare’s new spending by pulling down more federal Medicaid dollars, he increased taxes on residents of all 50 states.
  3. RomneyCare was born of, and expanded, a corrupt scheme by Massachusetts politicians to tax residents of all 50 states.  What motivated Romney to enact RomneyCare, as former Romney/Obama adviser Jonathan Gruber explains here, was the widespread desire (within Massachusetts) to hang on to $385 million of federal Medicaid money that Massachusetts had secured using one of Medicaid’s notorious and fraudulent “provider tax” scams.  In other words, the whole purpose of RomneyCare was to enable Massachusetts to hold on to $385 million that it received by defrauding and taxing residents of other states.  And of course, Romney/RomneyCare caused the tax burden that Massachusetts effectively imposes on non-Massachusetts residents to grow.

Christie is so laughably wrong about RomneyCare that one cannot help but smile that his remarks came during the same news cycle as this:

Newly obtained White House records… show that senior White House officials had a dozen meetings in 2009 with three health-care advisers and experts who helped shape the health care reform law signed by Romney in 2006…One of those meetings, on July 20, 2009, was in the Oval Office and presided over by President Barack Obama, the records show.

“The White House wanted to lean a lot on what we’d done in Massachusetts,” said Jon Gruber, an MIT economist who advised the Romney administration on health care and who attended five meetings at the Obama White House in 2009, including the meeting with the president. “They really wanted to know how we can take that same approach we used in Massachusetts and turn that into a national model”…

Romney said the people involved in the White House meetings were “consultants,” not “aides”…

[Gruber said,] “If Mitt Romney had not stood up for this reform in Massachusetts … I don’t think it would have happened nationally. So I think he really is the guy with whom it all starts.”

All of which is pretty much what my colleague/boss David Boaz and I have been saying since April 2010 in this well-worn Cato video:

On ObamaCare, David Frum Just Doesn’t Get It

David Frum knows that ObamaCare can’t be repealed.  But don’t worry, he also knows how to make it palatable to Republicans:

  1. Move up the start date of ObamaCare’s state waiver program from 2017 to 2014.  As I explain here, that program will only produce alternatives to ObamaCare that are equally or more anti-market, such as a single-payer system.  Frum wants that to happen sooner.
  2. Raise taxes, on everybody.  I swear I am not making that up.
  3. Replace ObamaCare’s individual mandate with an equally coercive tax credit that accomplishes the same thing, but which the courts would probably uphold.  Bra-vo.  Frum implies it is necessary to “work around” the fact that Republicans are not “entirely rational” when it comes to the individual mandate.  (True, but they’re getting more rational all the time.)
  4. Republicans should embrace government rationing of health care.  Frum counsels Republicans to “unleash the cost controllers” and become the “green eyeshade party willing to do the disagreeable work of squeezing waste from the system.”  How?  Well, he doesn’t call for Medicare vouchers, under which enrollees would ration their own care.  In fact, he has thrown cold water on that idea.  But the only alternative is to have the government ration care.  And Frum makes no distinctions between the elderly and non-elderly, which leads me to believe he wants Republicans to ration care to the under-65 crowd too.  Slap that on a bumper sticker!

In sum, Frum’s GOP-palatable alternative to ObamaCare is … ObamaCare.  But maybe more coercive.  And implemented sooner.  With higher taxes.  And less vulnerable to legal challenges.  And with Republicans playing the bad guy.

Frum laments that Republicans mistakenly threw away the opportunity to work with Democrats to implement these brilliant ideas in 2009 and 2010.  But Republicans did so because these brilliant ideas hurt people.  They were wrapped into a bill called ObamaCare, and Republicans rejected it.  They were right to do so.  And they are right that ObamaCare can’t be fixed.

(Related: Ramesh Ponnuru previously took down Ross Douthat’s ideas for fixing ObamaCare.)

(Also related: CNN has signed Frum to provide conservative commentary during the 2012 election.)

Heritage Scholar Urges States: Don’t Implement ObamaCare Exchanges, Send Back Grants

Back in March, Heritage Foundation scholar Ed Haislmaier wrote that states could blunt ObamaCare’s impact (A) by creating non-ObamaCare compliant, “consumer-centered” Exchanges and/or (B) by creating ObamaCare-compliant, “defensive” health insurance Exchanges.  Many states, including some that are suing to overturn ObamaCare as unconstitutional, saw this as a green-light from the free-market groups and forged ahead with creating an ObamaCare-compliant Exchange.

In a blog post last week, Haislmaier recanted on Strategy B.  He writes that “defensive” Exchanges won’t blunt the impact after all, and that states should refuse to create any type of ObamaCare-compliant Exchange and send back all federal ObamaCare grants:

Initially, while HHS was still deciding how to implement the legislation, a narrow window of opportunity existed for states to pursue a “pushback” strategy of creating a restricted exchange and requiring it to contract with the state’s Medicaid program and insurance department to perform the eligibility, enrollment, and insurance regulation functions that state lawmakers seek to retain control of. HHS effectively closed that window in its proposed exchange regulations issued in July…

The combined effect of these regulations and grant requirements are that a state would have to agree to surrender any last vestiges of meaningful control over how Obamacare is implemented. Thus, a state would now have no more real control over an exchange it set up than over one HHS established

Consequently, at this point the best course of action for states is to neither apply for nor accept exchange establishment grant funding.

Free-market groups are now united on these points.

Haislmaier still recommends that states pursue  Strategy A: a “consumer-centered,” non-ObamaCare Exchange using only state-government dollars.  As I explain here, however, there is no such thing as a non-ObamaCare Exchange.  Insurance carriers will not patronize non-ObamaCare Exchanges, and the federal government will commandeer them or push them aside to create an ObamaCare Exchange.  Creating any type of Exchange merely lends manpower to ObamaCare’s federal takeover of health care.  States should refuse.

Obamacare Legal News Gone Wild

Developments in the Obamacare lawsuits are coming at us so quickly that it’s hard to keep up.  After a month and a half of speculation on what the administration would do after it lost in the 26-state/NFIB lawsuit (Florida v. U.S. Dept. of Health & Human Services), in the last week the D.C. Circuit heard argument in yet another case on appeal, the government decided not to seek en banc review in the Eleventh Circuit, yesterday we went from zero to three cert. petitions in that case, and the government filed a reply in the Thomas More (Sixth Circuit) case.  Here’s a breakdown:

1. D.C. Circuit Argument

This past Friday, the D.C. Circuit heard the appeal of Seven-Sky v. Holder (in which Cato filed this brief).  There wasn’t much media coverage, in part because the reporting came in on a Friday afternoon but more because the appellate developments after the Eleventh Circuit created a split from the earlier pro-government Sixth Circuit ruling are somewhat anticlimactic – because the action has moved to the Supreme Court.  I attended the hearing and can report a few key points:

(a) The government still has not managed to come up with an example of something it cannot do under its reading of the Commerce Clause.  This is shocking.  Solicitor General Verrilli (who did not argue here), a word of unsolicited advice before Justice Scalia asks you the same question: come up with a couple of outlandish things and move on.  Unless, you know, you think the government really can do anything it wants if a congressional majority exists for it.

(b) Judge Bret Kavanaugh, Bush II appointee and rising star in the conservative judicial establishment, had some serious concerns regarding the Anti-Injunction Act (the jurisdictional issue on which the Fourth Circuit based its decision to dismiss the Liberty University case).  Beth Brinkmann, arguing for the government and after floundering on the Commerce Clause (see above), seemed to have done a great job in putting Kavanaugh’s mind at ease – or at least getting him over the jurisdictional hump.

(c) Judge Laurence Silberman, Reagan appointee and author of many significant opinions over the years, has a really wide interpretation of government power under Wickard v. Filburn, the 1942 wheat-farming case.  I’m not sure that puts his vote in danger – he was also the one who most went after the government – but it does raise an eyebrow.

(d) Overall, I cautiously predict a 2-1 ruling in favor of the plaintiffs, but we won’t know till later this fall.  For a more detailed analysis of the hearing, see Randy Barnett’s post at the Volokh Conspiracy.

2. No En Banc Review in the Eleventh Circuit

On Monday, the government allowed the deadline for seeking review of the Eleventh Circuit panel ruling by the full court to slip.  Commentators, including myself, had speculated that it might file for en banc review in an attempt to push the inevitable Supreme Court ruling past the 2012 election.  That didn’t happen, and here was my press statement:

En banc rehearing would have been legally futile and politically damaging, so the government made the correct decision in not seeking it. We can now expect the solicitor general to ask the Supreme Court to review the Eleventh Circuit’s decision to strike down the individual mandate while leaving the rest of Obamacare standing. The certainty that such review will provide to a nation battered by this among so many other pieces of economically harmful administration policies cannot come soon enough.

The government’s inactivity here, as it were, provoked a flurry of coverage.  I agree with the analysis that Peter Suderman put up at Reason

3. NFIB Files Cert. Petition

Early yesterday (Wednesday) morning, the National Federation of Independent Business and two individuals asked the Supreme Court to review the one issue on which they lost before the Eleventh Circuit: severability.  That is, despite the government’s concession that at least the community-rating and guaranteed-issue provisions are inextricably tied to the individual mandate, and the obvious practical observation that none of the legislation would’ve passed without the mandate, the Eeleventh Circuit reversed Judge Vinson’s ruling on this point and only struck down the mandate.  The petition also makes the point that the Eleventh Circuit case presents the best Supreme Court “vehicle” among all the lawsuits because it most cleanly presents the relevant issues and doesn’t face lingering concerns over standing.   It’s a strong and aggressively worded brief which makes for a good read.  Here was my press statement:

The NFIB’s cert petition forces the Supreme Court to grapple not simply with the individual mandate’s constitutional defects but with the fatal flaws those defects expose in the overall legislation. The regulatory burden and economic uncertainty – let alone direct financial cost – that Obamacare imposes on individuals, businesses, states, and the nation as a whole are part and parcel of a noxious scheme centered on the individual mandate. The Court should grant this petition and thus begin putting an end to the government’s doomed – and unconstitutional – attempt to control our lives.

Randy Barnett, who’s now part of the NFIB legal team (which is led by veteran appellate litigator Mike Carvin), has this useful post about the petition’s treatment of the Anti-Injunction Act.

4. 26 States File Cert. Petition

On the heels of the NFIB filing, the 26 states in the Florida-led lawsuit filed their own cert. petition yesterday.  “Time is of the essence,” lead counsel (and former solicitor general) Paul Clement argues. “States need to know whether they must adapt their policies to deal with the brave new world ushered in by the ACA.”  The petition asks the Court to review three questions:

(a) Does the threat to withhold all Medicaid funding if states don’t agree to Obamacare’s onerous new conditions on that program constitute impermissible coercion by the federal government? [The Eleventh Circuit said no.]

(b) May Congress treat states no differently from any other employer when imposing invasive mandates as to the manner in which they provide their own employees with insurance coverage?  [This is a new formulation of a claim that hasn’t gotten much attention, and focuses on the somewhat idiosyncratic 1985 Supreme Court decision in Garcia v. San Antonio Metropolitan Transit Authority.]

(c) Does the individual mandate exceed federal power and, if so, can it be severed from the rest of the law?

I’ve only skimmed this petition, but it too is a hard-hitting and elegant presentation of serious issues.

5. Solicitor General Files Cert. Petition

Around lunchtime yesterday, the government filed its own cert. petition.  (The parties were all clearly playing a high-stakes game of legal chicken; once the govenment declined to pursue en banc review, the NFIB incorporated that fact into a petition that it had clearly been considering filing preemptively, its co-plaintiff states soon followed, and the government’s hand was forced to throw its petition – which had obviously also been in the final stages – into the filing cascade. Note that yesterday was not any sort of deadline for seeking Supreme Court review!) 

The new solicitor general, Donald Verrilli, of course asks the Court to address whether the individual mandate is constitutional, but also, curiously, whether the challenges are barred by the Anti-Injunction Act.  On this second point, the government argues that the AIA does not apply but asks the Court to appoint an amicus to argue that it does, effectively to defend the Fourth Circuit’s position.  This is unusual.  The SG is essentially saying that he would prefer to win on the merits but will accept a technical victory so long as he doesn’t have to argue for it.  (This accords with my prediction that the Court will either rule for the plaintiffs or find a procedural way of avoiding the merits while allowing the individual mandate to stand.)

6. Government Responds to Thomas More’s Cert. Petition

There was one actual deadline yesterday, and the government met it: It filed a response (not labeled “opposition” as is typically the case) to the cert petition in Thomas More Law Center v. Obama, the case coming out of the Sixth Circuit.  As expected given its earlier filing, the government asked the Court to hold this petition pending resolution of Florida v. HHS.  There’s really nothing to this filing beyond expressing that position.

Conclusion

The day we’ve all been awaiting since President Obama signed his health care law in March 2010 – the Supreme Court’s ruling – is nigh.  Normally the parties on the other side of cert. petitions have 30 days to respond, after which the Court considers the filings, issues a cert. grant or denial (here a grant of some kind), and sets the case for argument a few months in the future to allow time for briefing on the merits.  In Florida v. HHS, however, all the parties – the government, the states, the NFIB/individual plaintiffs – are requesting cert., so I’m not sure what value they or the Court would get from responsive filings (which would be due Oct.27).  Regardless of that wrinkle, the Court is likely to grant cert. sometime in November – or in any case by the end of the year – and set argument for March or April. 

So we’re on track for a decision that glorious last week of June when the Court releases its most pressing opinions and gets the heck out of Dodge.