Tag: ppaca

WSJ: ObamaCare Could Reduce Employee Health Benefits

ObamaCare supporters promised the law’s employer mandate would require employers to provide workers with comprehensive insurance. But they apparently didn’t read the bill very closely. It’s a recurring theme.

According to the Wall Street Journal, employers and employee-benefits consultants have found, and federal regulators now confirm, that the law actually requires most employers to offer no more than very flimsy coverage. Many employers are now exploring the option of offering limited-benefit health plans that cover preventive services and maybe “$100 a day for a hospital visit” but “wouldn’t cover surgery, X-rays or prenatal care.” Indeed, the law could push many employers to reduce the amount of coverage workers receive on the job.

The Obama administration’s reaction demonstrates they had no idea what they were doing. The Wall Street Journal:

Administration officials confirmed in interviews that the skinny plans, in concept, would be sufficient to avoid the across-the-workforce penalty. Several expressed surprise that employers would consider the approach.

“We wouldn’t have anticipated that there’d be demand for these types of band-aid plans in 2014,” said Robert Kocher, a former White House health adviser who helped shepherd the law. “Our expectation was that employers would offer high quality insurance.”

The Law of Unintended Consequences strikes again.

This and other employer responses to the law could make the roll-out of ObamaCare’s health insurance “exchanges” even more of a train wreck.

  • To the extent ObamaCare’s employer mandate pushes firms to offer bare-bones plans, premiums for plans offered through Exchanges will rise. The healthiest workers will enroll in their employers’ bare-bones plans, but workers who have expensive illnesses (or with dependents who have expensive illnesses) will seek more-comprehensive coverage through the Exchanges. The influx of sick consumers will increase the premiums for Exchange-based plans. Many of these sick workers won’t receive any premium-assistance tax credits or cost-sharing subsidies because their employer’s bare-bones plan will likely satisfy ObamaCare’s definition of adequate – and because the statute forbids those entitlements in the 33 states that have declined to establish an Exchange.
  • Employers are also renenwing their health-benefits contracts early (i.e., before January 1, 2014), which allows them to avoid many of ObamaCare’s regulatory costs for several months. That move could also increase premiums for Exchange-based plans by encouraging workers with high-cost illnesses to seek coverage through Exchanges while healthy workers stick with their employer’s plans.
  • Many employers are also considering self-insuring their health benefits, an arrangement in which the employer bears the risk that is usually borne by the insurance carrier and just hires someone (often an insurer) to administer the coverage. This strategy allows also employers to avoid many of ObamaCare’s regulatory costs and could also increase premiums in the Exchanges and small-group market.

Again, the Journal:

Regulators worry that some of these strategies, if widely employed, could pose challenges to the new online health-insurance exchanges that are a centerpiece of the health law. Among employees offered low-benefit plans, sicker workers who need more coverage may be most likely to opt out of employer coverage and join the exchanges. That could drive up costs in the marketplaces.

These are the sort of unintended consequences that ObamaCare’s opponents warned would plague any attempt by Congress to centrally plan one-sixth of the U.S. economy.

Poll: Already Scant Support for Obamacare Erodes

According to the latest Reason-Rupe poll:

The president’s health care law is losing public support… Only 32 percent of Americans say they liked the health care law when it was passed and still like it today. Seven percent liked the law when it was passed, but like it less now. Meanwhile, 45 percent disliked the health care law when it was passed and still dislike it. Four percent of Americans say they disliked the law when it passed, but like it more now.

These results are consistent with the Kaiser Family Foundation Health Tracking Poll, which has always reported a higher level of support for the law than other polls, yet whose latest results show support for Obamacare slipping to just 35 percent of adults.

Never Mind the IRS, You’d Better Be Nice to Kathleen Sebelius

ObamaCare’s Independent Payment Advisory Board is everything its critics say and worse. It is a democracy-skirting, Congress-blocking, powers-unseparating, law-entrenching, tax-hiking, fund-appropriating, price-controlling, health-care-rationing, death-paneling, technocrat-thrilling, authoritarian, anti-constitutional super-legislature. Its very existence is testament to government incompetence. It stands as a milestone on the road to serfdom.

The Congressional Research Service has now confirmed what HHS Secretary Kathleen Sebelius pretends not to know but what Diane Cohen and I explained here

[I]f President Obama fails to appoint any IPAB members, all these powers fall to Secretary of Health and Human Services Kathleen Sebelius.

That’s an awful lot of power to give any one person, particularly someone who has shown as much willingness to abuse her power as Sebelius has. 

I would also like the Congressional Research Service to address a feature of IPAB that Cohen and I first exposed. According to the statute, we write: 

Congress may only stop IPAB from issuing self-executing legislative proposals if three-fifths of all sworn members of Congress pass a joint resolution to dissolve IPAB during a short window in 2017. Even then, IPAB’s enabling statute dictates the terms of its own repeal, and it continues to grant IPAB the power to legislate for six months after Congress repeals it. If Congress fails to repeal IPAB through this process, then Congress can never again alter or reject IPAB’s proposals.

You read that right. For more, read our paper, especially Box 3 on page 9.

CRS, I’m interested to know what you think. Take a close look at the law and get back to me.

Is Kathleen Sebelius Barack Obama’s Oliver North?

I blogged earlier about how HHS Secretary Kathleen Sebelius is unethically, and possibly illegally, shaking down industries she regulates to get them to fund ObamaCare’s implementation.

Sen. Lamar Alexander (R-TN), the ranking member of the Senate’s Health, Education, Labor, and Pensions Committee, says this is “arguably an even bigger issue [than] Iran-Contra,” and ably defends his position against the Washington Post’s Sarah Kliff.

Excerpts from Alexander’s comments:

[I]n Iran-Contra, you had $30 million that was spent by Oliver North through private organizations for a purpose congress refused to authorize, in support of the rebels. Here, you’re wanting to spend millions more in support of private organizations to do something that Congress has refused…

The cause in the first case was the cause of rebels in Nicaragua.  And the cause here is to implement Obamacare. Congress has refused to appropriate more for that cause. The administration seems to be making a decision that’s called augmenting an appropriation. Its a constitutional offense that’s the issue…

If you read the report of the Iran-Contra select committee, it said that the executive cannot make an end run around Congress by raising money privately and spending it. That seems to be happening here. That was essentially the problem. There the money came from a different place, but if you look at my statement [the Iran-Contra report said] “a president whose appropriation requests were rejected by Congress could raise money from private sources or third countries for armies, military actions, arms systems, and even domestic programs.” [Emphasis added.] It’s the same kind of offense to the Constitution. It’s the same kind of thumbing your nose at Article 1…

If that’s what they’re saying…that Congress has refused to appropriate the money, then you can’t do it. That’s a curb on the executive.

Alexander has sent a letter to Sebelius requesting information about her extracurricular fundraising activities.

Sebelius Shakes Down Companies She Regulates for Cash to Implement ObamaCare

Secretary of Health and Human Services Kathleen Sebelius’ latest abuse of power has strengthened the case for her removal from office. Before discussing her latest misconduct, let’s review some of Sebelius’ past abuses of power.

  • In 2010, Sebelius described anonymous political speech as “dangerous.” Ironically, Sebelius’ lashing out at her political opponents’ free-speech rights is dangerous because it is the sort of rhetoric that might encourage agencies like the IRS to target groups that “criticize how the country is being run.” That’s exactly what the IRS has admitted doing – which in turn is a good argument for protecting anonymous political speech.
  • So too is Sebelius’ 2010 threat to put health insurance companies out of business. Shortly after ObamaCare became law, insurers began telling their customers how much it was going to increase their premiums. In a September 2010 letter to insurers, Sebelius shot back that premiums would rise no more than 2 percent, even as her department predicted increases as high as 7 percent. Insurers that didn’t toe the party line “may be excluded from health insurance Exchanges in 2014.” That was no idle threat, I wrote at the time. Since “Medicare’s chief actuary predicts that in the future, ‘essentially all‘ Americans will get their health insurance through those exchanges,” Sebelius was essentially threatening to put insurers out of business if they disagreed with her.
  • In 2011, Sebelius approved her department issuing hundreds of billions of dollars in subsidies to private health insurance companies under the rubric of ObamaCare that the statute expressly forbids HHS to issue.
  • In 2012, the U.S. Office of Special Counsel concluded that Sebelius violated the Hatch Act by campaigning for President Obama and other political candidates while traveling on official business, an offense for which other federal workers are fired.
  • In a July 2012 letter to the nation’s governors, Sebelius arbitrarily rewrote and narrowed the Supreme Court’s ruling in NFIB v. Sebelius to allow HHS to continue coercing states into implementing parts of ObamaCare’s Medicaid expansion.
  • When it became apparent that two-thirds of states would not implement one of ObamaCare’s health insurance “exchanges,” Sebelius dismissed the idea that a lack of congressionally authorized funding for federal Exchanges would stop her department from implementing them. “We are going to get it done,” she said. Now we learn she substituted her own judgment for Congress’ by raiding ObamaCare’s Prevention and Public Health Fund to the tune of $454 million to fund federal Exchanges. But even that wasn’t enough.

Now we learn, from the Washington Post’s Sarah Kliff, “Sebelius has, over the past three months, made multiple phone calls to health industry executives, community organizations and church groups and directly asked that they contribute to non-profits that are working to enroll uninsured Americans and increase awareness of the law.”

This too appears to be unlawful:

IRS Chief, Who Defended Illegal ‘ObamaCare’ Taxes, also Denied Targeting of Tea-Party Groups

In 2011, members of Congress began criticizing a proposed IRS rule implementing ObamaCare’s health insurance tax credits. They claimed that the proposed rule violated the clear language of the Patient Protection and Affordable Care Act, as well as congressional intent, by issuing those tax credits in states that declined to establish a health insurance “exchange.” In effect, they claimed the proposed rule would result in the federal government taxing, borrowing, and spending hundreds of billions of dollars without congressional authorization. 

At the time, then–IRS commissioner Douglas Shulman leapt to his agency’s defense. He wrote that various provisions of the statute “support” the rule. He wrote that the “relevant” legislative history doesn’t show that Congress didn’t want the IRS to tax, borrow, and spend those hundreds of billions of dollars. He wrote that the proposed rule is “consistent with the language, purpose, and structure” of the law. The only thing he didn’t do was cite a provision of the law authorizing the rule, or even creating any ambiguity about the rule’s illegality.

The IRS finalized that illegal rule in May 2012. You can read all about it in my article with Jonathan Adler, “Taxation Without Representation: The Illegal IRS Rule to Expand Tax Credits Under the PPACA.”

It is worth noting that Shulman also leapt to the IRS’s defense against another charge that the agency was abusing its power. In 2012, conservative groups complained that the IRS was targeting them for audits. Shulman issued a forceful and categorical denial:

IRS Commissioner Douglas Shulman told Congress in March 2012 that the IRS was not targeting groups based on their political views.

“There’s absolutely no targeting. This is the kind of back and forth that happens to people” who apply for tax-exempt status, Shulman told a House Ways and Means subcommittee.

Shulman was wrong. Today, the IRS admitted it has been targeting conservative groups for audits

Perhaps some Friday afternoon hence we will be treated to an IRS admission that their tax-credit rule violates the Administrative Procedures Act and the PPACA, as two lawsuits now allege. I won’t hold my breath.

Targeting the Tea Party Isn’t the IRS’s Most Egregious Abuse of Power

Not by a longshot. 

As Jonathan Adler and I explain in this law journal article, and as I explain somewhat more accessibly in this Cato paper, the IRS is trying to tax, borrow, and spend $800 billion in clear violation of federal law and congressional intent.

Yes, you read that right: $800 billion.