CBO Report Shows Bogus Nature of Obamacare “Sabotage” Charges

If you need any additional evidence as to the trumped-up (pardon the pun) charges of Obamacare “sabotage” leveled against the current president, look no further than the Congressional Budget Office (CBO) report about cost-sharing subsides released yesterday. In the report, CBO concluded that ending subsidy payments—which the law never appropriated to begin with—would keep premiums roughly constant for most individuals, increase spending on insurance subsidies, and increase the number of insured Americans modestly.

Which one of those outcomes do Democrats oppose? Exactly none. Which illustrates why all the self-righteous indignation about President Trump “sabotaging” Obamacare is as much about the individual inhabiting the Oval Office as it is about health care policy.

Check the Cost-Sharing Analysis

The CBO report, as with other prior analyses, assumed that eliminating the cost-sharing reductions—used to reimburse insurers for providing discounted deductibles and co-payments to certain low-income households—would lead insurers to raise premiums, but only for certain plans. Because the law requires insurers to lower cost-sharing regardless of whether the federal government provides separate reimbursement payments for that, insurers would “load” those reductions on to silver insurance plans—but only on insurance exchanges. This change would exempt plans sold off the exchanges, where individuals do not qualify for subsidies, from the higher premium effects.

The higher premiums for silver plans on exchanges would lead to higher spending on insurance subsidies, which Obamacare links to the second-lowest silver premium. And those richer subsidies would attract some more individuals to insurance markets, reducing the number of uninsured by about one million.

Democrats may seize upon CBO’s finding that this scenario would increase the deficit as reason to oppose it. But if Democrats cared about protecting taxpayers, they would have objected to the Obama administration’s actions—actions that the Government Accountability Office concluded last year violated the statute—placing insurance companies ahead of ordinary taxpayers in receiving reinsurance payments. They didn’t object on behalf of taxpayers then, so why object in this case? Is it really about policy, or is it just crass politics?

Liberal Hypocrisy on the Individual Mandate

Likewise, liberals charge that the president could refuse to enforce Obamacare’s individual mandate, encouraging healthy people to drop coverage and causing insurance markets to deteriorate further. In reality though, his room for maneuver is more limited. If the president decided to issue blanket exemptions to the mandate, or not enforce it, insurers likely would sue the administration for failing to execute its constitutional duties—and they could, and should, win. Under our Constitution, the president can, should, and must enforce all the laws, including the mandate, not just the ones he agrees with.

Given their own party’s history with the mandate, liberals’ sudden insistence on its “enforcement” sounds more than a bit rich. Democrats were the ones who, when faced with the fact that non-compliance with the mandate could lead to jail time, expressly wrote the law to prevent the use of such enforcement mechanisms. And the last administration was, if anything, far too liberal with hardship exemptions to the mandate, giving them to individuals who received a notice from a utility threatening to shut off service, or those who had a close family member die in the past three years.

So is the issue with President Trump’s supposed non-enforcement of the mandate, or the fact that he’s the one making decisions on exactly how the mandate will be enforced?

Pester People into Enrolling

The Trump administration could certainly influence insurance markets through outreach efforts. Liberal groups have spent weeks complaining that the Department of Health and Human Services has not solicited them for this fall’s open enrollment season.

But put things into perspective. A Politico story in January noted that the Trump administration reduced television advertising by about $800,000 per day for the last four days of open enrollment—a few million dollars. If Obamacare—entering its fifth open enrollment period this fall—is so fragile that losing a few million dollars of advertising will tank insurance markets, what does that say about the stability, let alone the wisdom, of the law in the first place?

The federal government shouldn’t need to spend millions of dollars every year pestering people into enrolling in coverage, not least because insurance companies can and should do that themselves. President Trump should enforce the law as it’s written—a novel task compared to his predecessor, who seemingly relished in re-writing it unilaterally—but sabotage? Democrats sabotaged the law themselves when they passed it seven years ago, and no amount of opportunistic (and disingenuous) rhetoric can change that fact.

This post was originally published at The Federalist.

Restoring the Rule of Law to Obamacare

Over the last several months, this space has highlighted that President Trump has an opportunity and a challenge: Restoring the constitutional rule of law his predecessor often ignored. Such a move would require ending the Obama administration’s ad hoc rewriting of Obamacare, implementing the law as written—no more, no less.

Into that debate stepped the Conservative Action Project on Friday, with a memo noting that the president can and should lead on Obamacare. The title suggests a continuation of Obama’s “pen and a phone” mentality, emphasizing executive unilateralism in the face of Congress’ inability to pass “repeal-and-replace” legislation regarding Obamacare.

So Far Trump Is Perpetuating Obama’s Law-Breaking

The document contains numerous important suggestions to undo President Obama’s illegal executive acts. For instance, it encourages Trump to “take action to end the illegal and unconstitutional cost-sharing subsidies to the insurance companies,” ending their disbursement. This development would be not only welcome, but far overdue.

For more than six months President Trump has continued his predecessor’s habit of violating the Constitution to disburse billions of unappropriated dollars to insurance companies. To both enforce the rule of law and end crony capitalist dealings between “Big Government” and “Big Insurance,” Trump should end the unconstitutional subsidies forthwith.

The CAP letter also rightly calls on Trump to “end the illegal diversion of money from the U.S. Treasury to insurance companies.” The Government Accountability Office ruled last September that the Obama administration had violated the text of Obamacare by prioritizing reinsurance payments to insurers over required payments to the Treasury. As with the cost-sharing subsidies, President Trump should put the rule of law—and taxpayers—ahead of insurance companies’ special interests.

The CAP document calls for President Trump to “continue to fight for repeal of the individual mandate,” but—thankfully—does not call for Trump to defang the mandate unilaterally. As I wrote back in January, when administration officials first suggested they may not enforce the mandate at all, “a Republican Administration should not be tempted to ‘use unilateral actions to achieve conservative ends.’ Such behavior represents a contradiction in terms.”

You Can’t Ignore the Law Because You Don’t Like It

In this same vein, CAP’s call for the Trump administration to “expand the exemption for so-called ‘grandmothered’ plans” represents an open invitation for the president to violate the Constitution, just as his predecessor did. These “grandmothered” plans should have been cancelled in January 2014, as they did not—and do not—comply with the new statutory requirements included in Obamacare.

In late 2013, President Obama faced political controversy for his “If you like your plan, you can keep it” broken promise, which became PolitiFact’s Lie of the Year. To stanch his political bleeding and solve the problem of millions of cancellation notices—along with a broken website preventing individuals with cancelled plans from buying new ones—Obama tried to pass the proverbial buck. He said his administration would allow states, if they chose, to let individuals keep their plans—temporarily. This purportedly “temporary” solution has been extended numerous times, and now is scheduled to expire at the end of 2018.

Unfortunately, as law professor (and Obamacare supporter) Nicholas Bagley has noted, Obama’s unilateral creation of these “grandmothered” health plans violated his constitutional duties as chief executive: “The Administration thus used the public pronouncements of its non-enforcement policies to encourage the regulated community to disregard provisions of [the law]. Prospectively licensing large groups of people to violate a congressional statute for policy reasons is inimical to the Take Care clause.”

To put it more bluntly, the president cannot decline to enforce the law because he finds himself in a political jam, whether due to a broken promise, a non-functioning website, or mere disagreement with the law in question. That principle applies as equally to President Trump as it does to President Obama. Trump’s extension of “grandmothered” plans violates the Constitution as much as President Obama’s did—and expanding those plans to include other forms of insurance would represent a further violation.

To be clear, as a matter of policy, I hate the idea of cancelling millions of insurance policies because they do not meet Obamacare’s myriad regulatory requirements. But as I noted recently, I believe President Trump should do just that—not because I support that outcome, or because President Trump supports it, but because the law requires it. He should have done that months ago—within days of taking office—to make clear that the cancellations stemmed from President Obama’s violation of his own health law, not any measure Trump himself wanted to implement.

Unfortunately, however, President Trump has yet to enforce the law, or the Constitution, when it comes to Obamacare, having undone none of his predecessor’s illegal and extralegal acts. For this conservative, hope springs eternal, as tomorrow always brings another opportunity to do the right thing. Here’s to this administration finally realizing that the rule of law by definition means enforcing the laws one disagrees with—for that critical principle exceeds the value of any particular law, no matter how onerous or obscure.

This post was originally published at The Federalist.

Liberals’ Hypocrisy on Per Capita Caps

It was, to borrow from Arthur Conan Doyle, the dog that didn’t bark. In releasing the annual report on its finances, Medicare’s actuary last month found that the program would not trigger requirements related to the Independent Payment Advisory Board (IPAB) this year—or for several years to come. Although the Senate and House health-care bills avoided altering Medicare, the IPAB development—or non-development, as it were—should inject some important perspective into the legislative debate.

Many liberal critics of the Republican bills have attacked proposals to impose per capita caps on state Medicaid programs, while conveniently forgetting that Obamacare imposed similar spending caps on Medicare. In fact, Section 3403 of the law empowers IPAB—a board of unelected bureaucrats—to make binding recommendations to Congress reducing program spending if Medicare will exceed statutory limits for spending per beneficiary.

The IPAB non-event should therefore put the harsh rhetoric surrounding Medicaid caps in perspective. After all, how damaging can per capita caps be if spending remains sufficiently low not to trigger them? And why do liberals who claim that health-care delivery reforms implemented by Obamacare can slow Medicare spending not believe that, given sufficient flexibility, states could similarly reform their Medicaid programs to lower costs—as states like Rhode Island already have done?

We Care More About Politics than Policy

Some Obamacare supporters claim that statutory restrictions on IPAB—in enforcing Medicare spending caps, the board may not change Medicare benefits or “ration health care”—will protect Medicare beneficiaries in a way that the current bills do not protect Medicaid recipients. But IPAB’s supposed “protections” have their own flaws. The statute does not define “rationing,” and then-Secretary of Health and Human Services (HHS) Kathleen Sebelius testified in 2011 that HHS would need to draft regulations to do so. But the Obama administration never even proposed rules “protecting” Medicare beneficiaries from rationing under the IPAB per capita caps—so how meaningful can those protections actually be?

When push comes to shove, few liberals can justify their support for per capita caps on Medicare, but opposition to similar caps in Medicaid. One day on Twitter, I posed a simple question to Topher Spiro, of the Center for American Progress (CAP): If the Republican proposals for per capita caps in Medicaid included the same beneficiary “protections” as IPAB creates for Medicare recipients, would he support them? I never received a substantive answer.

Therein lies the problem: Many critics of the Republican Medicaid proposals seem to prioritize political partisanship over policy consistency. Five years ago, CAP made very clear it supports IPAB’s per capita caps on Medicare spending, denouncing a 2012 legislative effort to repeal the board. But earlier this year, the organization denounced as “devastating” Republican proposals for per capita caps on Medicaid. So why exactly does this purportedly non-partisan organization support per capita caps when a Democratic Congress enacts them, but oppose similar caps proposed by a Republican Congress?

It’s Okay, It’s Just Hypocrisy

Likewise, the disability community has raised concerns about the proposed changes to Medicaid, attacking per capita caps as causing “massive cuts in Medicaid services.” But when issuing comments on the bill that became Obamacare in January 2010, the major coalition representing disability groups proposed 73 different recommendations in a document exceeding 5,500 words yet included not a sentence on the Medicare per capita caps ultimately included in the law.

Democratic senators appearing with disability advocates at events to denounce spending caps for Medicaid fail to recognize that they voted for similar caps in Medicare, which provides health coverage to 9 million Americans with disabilities. Moreover, despite being in place for several years, the Medicare caps have yet to be breached. So how damaging is a policy that hasn’t affected Medicare beneficiaries in the slightest, and which Democratic lawmakers themselves have voted for?

In his Sherlock Holmes story “Silver Blaze,” Doyle wrote of the guard dog that didn’t bark because it was friendly with an intruder. Likewise, many liberal advocates and Democratic lawmakers are quite friendly with per capita entitlement caps, already having imposed such caps for Medicare. Particularly given the non-factor of such caps in the Medicare program in recent years, they should perhaps “bark” less in opposing similar caps in Medicaid. Both beneficiaries and taxpayers deserve better than opportunistic—and politically inconsistent—scaremongering.

This post was originally published at The Federalist.

“Problem Solvers’” Obamacare Solution: Single Payer

On Monday, a bipartisan Problem Solvers Caucus in the House released their list of “solutions” regarding Obamacare. Developed over the past several months, the list can easily be summed up in a single phrase: Single payer.

The lawmakers didn’t come out and say as much, of course, but that would be the net result. In funding more bailout spending for insurers, the proposal clearly states that Obamacare is “too big to fail”—that no amount of taxpayer funding is too great to keep insurers offering coverage on the health exchanges. Enacting that government backstop would create a de facto single-payer health-care system—only with many more well-priced insurer lobbyists around to demand more crony capitalist payments from government to their industry.

Cost-Sharing Reductions

Suppose for a minute that a burglar comes into your house late at night and tries to steal your belongings. Upon apprehending the suspect, the burglar tells you that he only stole your property because he’s hungry and struggling to provide for his family.

In this scenario, how likely would you be just to give the burglar your property, so he could have the resources he needs? Probably not very. On the one hand, that would solve the burglar’s immediate problem, but the burglar broke the law—and ignoring that offense will only encourage future law-breaking.

That’s essentially the scenario facing Obamacare’s cost-sharing reduction payments, meant to subsidize discounted co-payments and deductibles for certain low-income individuals. Obamacare didn’t include an actual appropriation for the payments, so Barack Obama just made one up that didn’t exist. In essence, he stole both the constitutional spending power of Congress and taxpayer funds—recall that spending money without an appropriation is not just a civil, but a criminal, offense—to get Obamacare started.

Yet Congress seems far more worried about propping up Obamacare than holding President Obama to account—focusing solely on the outcomes to individuals, while caring not a whit for the effects on the rule of law. The Problem Solvers Caucus plan includes cost-sharing reduction payments with no accountability for the Obama sdministration’s flagrant violation of the Constitution.

Ironically, Tom Reed (R-NY) and other Republican members of the Problem Solvers Caucus voted in 2014 to authorize the lawsuit that declared the cost-sharing payments unconstitutional last year. But do Reed and his other colleagues actually want to do anything to enforce that lawsuit, and preserve the Constitution that they swore to uphold? Not a chance.

Reinsurance

The Problem Solvers Caucus plan also includes “stability fund” dollars designed to subsidize insurers for covering high-cost Obamacare enrollees. But here again, the proposal throws good money after bad at insurers, creating a new government program after non-partisan auditors concluded that insurers illegally received billions of dollars from the last federal bailout.

Last September, the Government Accountability Office (GAO) concluded that the Obama administration illegally funneled billions of dollars in reinsurance funds to health insurers rather than the U.S. Treasury. After taking in “assessments” (read: taxes) from employers, the text of Obamacare itself requires the government to repay $5 billion to the Treasury (to offset the cost of another Obamacare program) before paying health insurers reinsurance funds.

But when employer “assessments” generated less money than originally contemplated, the Obama administration put insurers’ needs for bailout funds over the law—and taxpayers’ interests. GAO found the Obama administration’s actions violated the law, costing taxpayers billions in the process.

As with the cost-sharing reduction payments, the Problem Solvers Caucus would give insurers even more money, while ignoring the prior illegal—and unconstitutional—acts that benefited health insurers under the Obama regime. In so doing, the Problem Solvers proposal would create another big problem, by incentivizing future presidents to keep breaking the law to advance their political agenda.

Throwing Money at Problems

In general, the Problem Solvers Caucus attempts to solve problems by throwing money at them, by paying tens of billions of dollars (at minimum) to insurers. But as Margaret Thatcher pointed out four decades ago, socialism always runs out of other people’s money—a problem that the proposal wouldn’t solve, but worsen.

The Problem Solvers Caucus proposal amounts to little more than an Obamacare TARP—that’s Turning Against Repeal Promises (or Taking Away Repeal Promises, if you prefer). In abandoning the repeal cause, and setting up a federal backstop for the entire health-care system, the plan would create a de facto single-payer health-care system. Bernie Sanders would be proud.

This post was originally published at The Federalist.

Tomi Lahren Is What’s Wrong with Obamacare

Over the weekend, as commentators Chelsea Handler and Tomi Lahren engaged in a political debate, a comment by the latter unwittingly pointed to one of the singular problems of Obamacare. When Handler asked what health plan she belonged to, Lahren responded, “Luckily I am 24 so I am still on my parents’…” Cue sarcastic laughter from the crowd.

The liberal audience in Pasadena mocked Lahren for her hypocrisy—attacking Obamacare while benefiting from it by staying on her parents’ health insurance—but they weren’t wrong in their criticism. While Lahren rightly pointed out that Obamacare “fails the very people that it’s intended to help,” if she wants to know the root cause of that failure, she should look in the mirror.

The Slacker Mandate Is Aptly Named

One report on the incident claimed that “extending insurance to older ‘dependents’ is not typically targeted by conservatives who criticize Obamacare.” In reality, though, conservatives have targeted this mandate—for instance, the paper released in 2012, while I worked for the Senate Republican staff of the Joint Economic Committee. It noted that mandates such as the under-26 provision raise premiums by a minimum of several hundred dollars per year, and that proposals to provide health insurance to 20-something “dependents” like Mark Zuckerberg (then 28) would create definite costs to achieve questionable benefits.

Since then, the case against this particular mandate has only increased. A National Bureau of Economic Research paper released last year found a significant economic impact: “We find evidence that employees who were most affected by the mandate, namely employees at large firms, saw wage reductions of approximately $1,200 per year. These reductions appear to be concentrated among workers whose employers offer employer-sponsored health insurance; however, they do not seem to be only borne by parents of eligible children or parents more generally.”

As the Wall Street Journal noted last year, the paper made clear that “no alleged government benefit is free and people should be allowed to make the trade-offs for themselves.” Apparently, however, alleged “conservative” Lahren believes otherwise.

The Tomi Lahren Case Study

Lahren’s comments provide a perfect case study against the under-26 mandate, in two respects. First, the “dependent” mandate has few statutory limits—whether income, lack of access to employer coverage, or both. That a pundit like Lahren can hold lucrative media contracts while remaining on her parents’ health coverage speaks to the absurdity of Obamacare’s definition of “dependent.”

Second, it proves Lahren’s criticism of Obamacare that the law “fails the very people it’s intended to help.” Because Lahren refuses to buy her own insurance plan, she raises premiums 1) for her parents’ co-workers, who have to pay for Lahren’s health costs as part of their coverage and 2) on insurance exchanges, where individuals are older and costlier than average precisely because many young adults remain on their parents’ policies.

With upper-middle-class households largely obtaining coverage through employers, and households of more modest means going through exchanges instead, the under-26 mandate represents a sizable transfer of wealth from the working class—who pay higher premiums—to the affluent—who gain the benefit of “free” coverage for their children. So Lahren is correct that Obamacare “fails the very people it’s intended to help”—because of people like her, who grab government “benefits” irrespective of the other individuals those “benefits” harm.

The end of the 2012 Joint Economic Committee paper noted that “a welfare state administered by the private sector, yet mandated by government, remains a welfare state at its core.” If Lahren wants to help the people Obamacare hurts, or even if she just wants to adhere to the conservative political beliefs she purports to follow, then perhaps she should use the coming weeks to explore her own health insurance options, rather than remaining part of the Obamacare welfare state she claims to abhor yet perpetuates.

This post was originally published at The Federalist.

Inconvenient Truths over Obamacare’s Cost-Sharing Reductions

Leaders in both parties engaged in rhetorical bluster over the weekend regarding Obamacare’s cost-sharing reductions. Those payments to insurers for lowering deductibles and co-payments—ruled unconstitutional by a federal district court judge last May—remain in political limbo, and a subject of no small controversy.

But the rhetorical exchanges yielded inconvenient truths, both for Democratic leaders demanding the Trump administration continue the payments, and for the president himself, who has threatened to stop them.

Schumer: If the Payments Are Constitutional, Trump Can’t Withhold Them

Senate Majority Leader Schumer tweeted about what might happen “if @POTUS refuses to make CSR [cost-sharing reduction] payments.” There’s just one problem with his statement: If the payments are lawful, President Trump cannot refuse to make them. More than four decades ago, the Supreme Court held unanimously in Train v. City of New York that the Nixon administration could not spend smaller amounts than what Congress appropriated for a environment program.

Schumer therefore implicitly admitted—as elsewhere—that the payments are not only illegal, but unconstitutional. Obamacare lacks an explicit appropriation for the cost-sharing reduction payments. That’s the reason Judge Rosemary Collyer ruled the Obama administration’s actions in making said payments unconstitutional last year. (The ruling is currently stayed pending appeals.)

As one summary of the case noted, Train v. City of New York established the principle that “the President cannot frustrate the will of Congress by killing a program through impoundment.” Yet Schumer, in asking the Trump administration to continue making payments to a program that Congress never funded in the first place, wants the executive unilaterally—and unconstitutionally—to frustrate the expressed will of the legislative branch, thereby diminishing Schumer’s own authority as a lawmaker.

It’s highly likely Schumer, a lawyer who spent several years serving on both the House and Senate judiciary committees, knows full well the nature of unconstitutional actions, begun by the last administration, that he wants the current one to continue. But if he wants to have any credibility on the rule of law—whether criticizing the Trump administration’s other “abuses,” or standing up for the independence of the Russia investigation—he would be wise to 1) admit that the Obama administration violated the Constitution in making the payments to begin with and 2) hold the last administration just as accountable as he wants to hold the current president.

Trump: Upholding the Constitution Is a Choice

Conversely, the president seems to delight in dangling in front of Democrats the prospect of cancelling the CSR payments, as he did most recently on Twitter Saturday, one day after the Senate failed to approve a “skinny” health-care repeal.

But for the president, as for Schumer, the question of the cost-sharing reduction payments should come down to a binary choice: Does a lawful appropriation for CSRs exist, or not? If a lawful appropriation exists, then the president must make the payments, consistent with Train v. City of New York outlined above. If a lawful appropriation does not exist, then the president must not make the payments, consistent with both Article 1, Section 9, Clause 7 of the Constitution—“No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law”—his duty to “take Care that the laws be faithfully executed,” and his oath of office.

This conservative believes President Trump should have cancelled the CSR payments within days of taking office, not because it would have been popular—it likely would not have been—but because the rule of law demands it. Likewise, President Trump should have long since undone billions of dollars in reinsurance payments to insurers that the Government Accountability Office found illegal, and cancelled the “grandmothered” plans President Obama allowed some individuals to keep in 2014—violating his constitutional duty to “take Care that the laws be fully executed” in the process.

Making a clean break with the numerous legal and constitutional violations the Obama administration perpetrated to keep Obamacare afloat early in his administration would have demonstrated President Trump’s desire to escape the executive unilateralism of his predecessor.

Government of Laws, Or of Men?

In drafting the Constitution for the Commonwealth of Massachusetts, John Adams famously spoke of creating a government of laws, not of men. Yet both participants in the CSR drama this weekend seem insistent on creating an arbitrary government based on whim. In Schumer’s case, that whim stems from placing Obamacare on a higher pedestal than the Constitution, while the president’s whims seem most directed towards achieving a legislative victory on health care, no matter its form.

That Barack Obama, a constitutional law professor, bequeathed such legal gamesmanship and a culture of inherently arbitrary actions to both parties stands as one element of his legacy. As the debate this weekend demonstrated, that legacy has affected—and infected—our constitutional discourse, and not for the better.

This post was originally published at The Federalist.

Legislative Update: “Skinny” Repeal Bill

A little bit ago, Sen. McConnell introduced text of the Health Care Freedom Act, the “skinny” repeal bill, on the Senate floor. Text is available here, and a CBO score here. A vote is expected later this evening.

The substitute amendment as introduced would:

  • Repeal the individual mandate tax/penalties, retroactive to January 1, 2016, reducing revenues by $38 billion over ten years;
  • Suspend the employer mandate penalties for periods from January 1, 2016 through December 1, 2024, reducing revenues by $146 billion over ten years;
  • Extend the moratorium on the medical device tax from December 31, 2017 to December 31, 2020, reducing revenues by $5.8 billion over ten years;
  • Increase contribution limits to Health Savings Accounts for periods between January 1, 2018 and December 31, 2020, reducing revenues by $5 billion over ten years;
  • Prohibit federal funding for one year to any non-profit provider that offers elective abortions and receives more than $1 million in Medicaid funding (a change from $350 million in earlier drafts of repeal legislation, to address concerns by the Senate Parliamentarian that the provision only targets Planned Parenthood), saving $100 million over ten years;
  • Eliminates funding for the Prevention and Public Health Fund for fiscal years after 2018, saving $11.1 billion over ten years;
  • Increases mandatory spending for community health centers by $422 million in fiscal year 2017;
  • Provides $2 billion for states to prepare and submit Section 1332 Obamacare waivers;
  • Makes certain technical changes to the Section 1332 Obamacare waiver process;
  • Provides for an automatic approval of Section 1332 waiver applications 45 days after submission by a state;
  • Provides for a Section 1332 waiver to last for eight years unless a state requests a shorter duration, with additional eight-year renewal periods possible;
  • Prohibits Department of Health and Human Services from revoking an approved Section 1332 waiver during the eight-year period;
  • Does NOT amend the criteria used to determine the waivers, such that all state waivers must continue to cover as many individuals as Obamacare, and provide coverage at least as robust as under the law — a move that some conservatives may believe will severely limit states’ ability to innovate.

The Congressional Budget Office believes that the bill as a whole will reduce the deficit by a total of $178.8 billion — $135.6 billion in on-budget savings, and $43.2 billion in off-budget (i.e., Social Security) savings. In 2026, CBO believes that the substitute would, compared to current law, reduce the number of Americans in Medicaid by 7 million, the number of Americans in Exchange coverage by 6 million, and the number of Americans in employer-sponsored coverage by 2 million.

Some conservatives may be concerned that the bill does not represent a repeal of Obamacare, leaving in place most of the law’s taxes, its new entitlements, all of its regulations, and more than 400 of the 419 legislative sections of the original 2010 statute. Moreover, some conservatives may be concerned that, by effectively repealing the individual mandate but retaining Obamacare’s costly insurance regulations, the substitute would only increase the cost of health insurance for struggling middle-class families.

The Binary Choice Behind a “Skinny” Health Care Bill

Are you for The Swamp—or are you against it?

It’s really that simple. Text of the supposed “skinny” bill—or the “lowest-common denominator” approach, if one prefers—has not yet been released. But based on press reports, it appears the legislation will repeal the individual and employer mandate penalties, along with the medical device tax, and little else, so the House and Senate can set up a conference committee to re-write the bill—if the House does not decide to pass this “skinny” bill outright.

On both process and policy, here are some of the likely consequences if this legislation passes:

  • It will embolden Senate leadership to keep bullying rank-and-file members on future pieces of legislation, pulling bait-and-switch moves at the last minute and daring members to vote no;
  • It will move the health-care debate from an open Senate floor process into a conference committee, where after one token public meeting most legislative work will occur behind closed doors;
  • It will concede that the “world’s greatest deliberative body” cannot deliberate as an institution, and instead empower unelected leadership staff in a secretive process to cobble together a new bill that can pass both chambers;
  • It will continue a process that Republican staffers themselves have described as “making it rain” on moderate senators through various backroom deals and spending sprees—bringing parlance heretofore used in strip clubs to the U.S. Congress;
  • It will raise premiums an estimated 20 percent, by eliminating the individual mandate penalty, but leaving all of Obamacare’s regulations intact;
  • It will all-but-guarantee a future Obamacare bailout, destabilizing insurance markets such that carriers will come running to Congress demanding corporate welfare payments to keep offering exchange coverage; and
  • It will prioritize K Street lobbyists who have fought for years to repeal the medical device tax, virtually guaranteeing that provision will remain in the final legislation, while raising premiums on hard-working American families.

If senators support the above scenarios, then they should vote for the bill. If not, perhaps they should consider another course.

Blast from the Past

Conservatives have seen these games played before—and rejected them. In 2015, House Republican leaders initially offered a bill eerily similar to the rumored “skinny” legislation. That bill repealed the individual and employer mandates, the medical device tax, the “Cadillac tax,” the Obamacare prevention “slush fund,” and a few other ancillary provisions. Conservative groups could have supported it—just to keep the process moving, and continue the momentum for a broader repeal—as leadership is asking them to do right now. They did not because:

The bill would not restore Americans’ health care freedom because it leaves the main pillars of Obamacare in place, nor would it actually defund abortion giant Planned Parenthood. This bill violates an explicit promise made in the budget, which ‘affirm[ed] the use of reconciliation for the sole purpose of repealing the President’s job-killing health care law.’

That statement comes from Heritage Action, which key-voted against passage of the “skinny” repeal bill in 2015. Likewise, in the fall of 2015 conservative senators Mike Lee (R-UT), Marco Rubio (R-FL), and Ted Cruz (R-TX) said publicly they could not support what they viewed as an insufficient attempt at repeal:

On Friday the House of Representatives is set to vote on a reconciliation bill that repeals only parts of Obamacare. This simply isn’t good enough. Each of us campaigned on a promise to fully repeal Obamacare and a reconciliation bill is the best way to send such legislation to President Obama’s desk. If this bill cannot be amended so that it fully repeals Obamacare pursuant to Senate rules, we cannot support this bill. With millions of Americans now getting health premium increase notices in the mail, we owe our constituents nothing less.

As Heritage Action noted, that 2015 “skinny” bill not only didn’t qualify as a repeal measure, it would have undermined the attempt to pass an actual repeal:

The bill does not even touch Obamacare’s main two entitlement expansions: The Medicaid expansion and the Exchange subsidies. The bill leaves all of Obamacare’s new insurance rules and regulations in place. It also leaves many of Obamacare’s taxes in place….

The Obamacare repeal movement has been successful in the last 5 years in keeping full repeal intact. It has recognized that it will be much easier to repeal Obamacare as a whole if all of the mandates and entitlement expansions are repealed at once, since we know that the law is vastly unpopular when taken as a whole. The threat is that ‘repeal’ is defined-down to simply mean repealing a couple high-profile provisions, while allowing the main pillars of the law to continue untouched. This package threatens that very outcome: defining down ‘full repeal’ and jeopardizing the entire repeal effort. [Emphasis mine.]

Need for Consistency

In the past several days, conservatives have attacked Senate moderates—rightly—for flip-flopping on a full repeal of Obamacare, voting for it in 2015 but opposing it now. Those who face a similar situation from the Right—that is, those who opposed a “skinny” bill two years ago—should not fall into the same trap as those from the center. On both policy and process, conservatives should reject the minimalist approach floated by leadership, and continue working to repeal Obamacare.

This post was originally published at The Federalist.

What You Need to Know about the Senate’s Obamacare “Vote-A-Rama”

It’s not a carnival ride—although it might prove even more adventurous. The Senate’s consideration of health-care legislation will soon result in a grueling series of votes dubbed “vote-a-rama.”

After 20 hours of debate on the budget reconciliation measure, equally divided between the majority and minority parties, the Senate will complete consideration of all pending amendments, with the process’ conclusion typically determined when senators exhaust all the amendments they wish to offer—not to mention themselves.

Here’s what you need to know about “vote-a-rama.”

1. It’s Physically Demanding

The “vote-a-rama” process during consideration of the 2010 reconciliation bill that “fixed” Obamacare provides an example. On Wednesday, March 24, senators began voting on amendments at 5:32 PM. Nearly nine hours later, at 2:17 on the morning of Thursday, March 25, senators had completed votes on 29 amendments. The Senate then took a brief break, re-convened at 9:45 the same morning, and disposed of a further 12 amendments over an additional four-plus hours, with a vote on final passage at 2 PM on March 25.

For 20-something or 30-something staffers—let alone senators several times their age—this lengthy process can prove grueling, with long hours, late nights, lack of sleep, and little food (or bad food) the norm.

2. It’s Mentally Confusing

Between votes on amendments, senators usually allow for brief one-minute speeches by the amendment’s proponent and an opponent (generally the majority or minority floor manager of the bill). However, as Senate procedural expert James Wallner notes, that habit has derived from custom and unanimous consent, not any formal rule. If any senator objects to the brief “well speeches” as part of “vote-a-rama,” then the Senate will vote on amendments without any debate or a summary of what the amendment does.

Even with the brief summaries by amendment sponsors, it’s often difficult for senators—and particularly Senate staff—to understand exactly what’s going on down on the Senate floor. Amendment text can occasionally change at the last minute, as can the sequence of amendments offered. On occasion, senators may have to “fly blind” without clear guidance or recommendations from their staff on how to vote. Coupled with the long hours and lack of sleep (for members and staff alike), it’s a recipe for mistaken votes and confusion.

3. It’s Hard to Pass Amendments with a Simple Majority…

As Wallner noted in an article earlier this week, the Senate’s rules essentially give preferential treatment to the underlying reconciliation bill, making it difficult to craft amendments that can pass with a simple (i.e., 50-vote) majority. The amendment must be germane (i.e., relevant) to the underlying bill, and cannot increase the deficit.

Moreover, to pass with a simple majority, an amendment must also comply with the six-part “Byrd rule” test. For instance, an amendment may not have only an incidental fiscal impact, make programmatic changes to Title II of the Social Security Act, or exceed the jurisdiction of the committees who received the reconciliation instructions (in this case, the Senate Finance and Health, Education, Labor, and Pensions committees). Other than simple motions striking particular provisions, amendments will face a difficult time running the procedural gauntlet necessary to pass on a 50-vote threshold.

4. …But It’s Easy to Get Amendment Votes

Even if an amendment does not comply with the budget reconciliation rules, senators can still offer a motion to waive those rules. The motion to waive requires the approval of three-fifths of senators sworn (i.e., 60 votes), which often does not materialize, but the motion to waive provides a way to get senators on the record on a specific issue. Many votes in a “vote-a-rama” series consist of a “motion to waive all applicable budgetary discipline”—i.e., the “Byrd rule” and other restrictions that make passing an amendment with a simple majority difficult.

5. It Will Result in Messaging Amendments

Perhaps the classic example comes from the Obamacare “vote-a-rama” in March 2010, when then-Sen. Tom Coburn (R-OK) offered an amendment that included the following language:

(b) Prohibiting Coverage of Certain Prescription Drugs—

(1) In general.–Health programs administered by the Federal Government and American Health Benefit Exchanges (as described in section 1311 of the Patient Protection and Affordable Care Act) shall not provide coverage or reimbursement for—

(A) prescription drugs to treat erectile dysfunction for individuals convicted of child molestation, rape, or other forms of sexual assault;

The “No Viagra for Sex Offenders” amendment drew no small amount of attention at the time, and led to political ads being run against the Democrats who voted against it (as some predicted prior to the amendment vote).

Democrats will almost certainly offer similar messaging amendments this year, including amendments unrelated to the bill, or even health care. They may offer amendments regarding the Russia investigation—those would likely be subject to a 60-vote threshold, as foreign policy is not germane to a budget reconciliation bill, but if Democrats wish to get Republicans on record, any vote will do.

Doubtless Democrats will offer amendments related to Donald Trump’s taxes—the reconciliation bill is in the jurisdiction of the Finance Committee, so these amendments could theoretically prove germane, but amendments specifically targeting the president (i.e., making policy, with only an incidental fiscal impact) could violate the “Byrd rule,” making them subject to a 60-vote threshold. For Democratic political consultants, the possibilities are virtually endless.

6. It May Lead to Chicanery—and ‘Strategery’

Senate Republican Leader Mitch McConnell (R-KY) has generally opposed allowing reimportation of prescription drugs from Canada or other countries, with one noteworthy exception. In December 2009, McConnell, along with several other Republicans, supported one of two reimportation amendments offered on the Senate floor.

While opposing reimportation on the merits, some Republicans supported these particular amendments because they wanted to break up the “rock-solid deal” between Democrats and Big Pharma—whereby pharma agreed to support Obamacare in exchange for a promise from Democrats not to support reimportation of prescription drugs.

As it happened, Democrats spent an entire week—from December 8 through December 15, 2009—without floor votes on amendments to Obamacare. The delay—effectively, Democrats filibustering their own bill—came in part because party leaders could not persuade fellow Democrats to vote against the reimportation amendment—and could not afford to allow the amendment to pass.

One can expect similar gamesmanship by the Democratic minority this time around, as evidenced by their tactical decision to abstain from voting on Tuesday’s motion to proceed to the bill until Republican senators mustered a majority solely from within their own ranks. If only three Republicans defect on an amendment, Democrats could have the power to play a decisive role in that amendment’s outcome. It’s an open question how they will do so.

For instance, will some or all of the 12 Democrats who voted against reimportation earlier this year—during January’s “vote-a-rama,” when the Senate passed the budget enabling the current reconciliation process—switch their votes so the amendment will pass, causing Republicans heartburn with the pharmaceutical lobby? When and how will Democrats use other tactical voting to gum up the process for Republicans? The answers range from possible to likely, but it remains to be seen exactly how the process will play out.

7. It Will Inflict Political Pain

Consider for instance a flashpoint in the reconciliation bill: Whether to defund Planned Parenthood. Two Republican senators, Susan Collins and Lisa Murkowski, have already stated they oppose defunding the organization. If one more Republican defects, Democrats would likely have the votes to strip the defunding provision. (While Democratic Sen. Joe Manchin previously supported defunding Planned Parenthood two years ago, in the immediate aftermath of sting videos featuring organization leaders, he has since reversed his position, and will presumably vote with all Democrats to strip the provision.)

To put it another way: Sen. Dean Heller (R-NV) may not just have to be the 50th vote supporting the underlying bill, he may also have to provide the 50th vote to keep the Planned Parenthood defunding provision in the legislation. Will Heller vote to defund the nation’s largest abortion provider—and what will happen to the bill if he, and the Senate as a whole, votes to strip the provision out? Senate leaders will face several of these white-knuckle amendment dramas during “vote-a-rama,” any one of which could jeopardize the entire legislation.

8. It Could Unravel the Entire Bill

Ultimately, with no agreement among Republicans to preserve the underlying bill text, and no clear roadmap on how to proceed, “vote-a-rama” could resemble pulling on the proverbial thread—one good tug and the whole thing unravels. What if Heller ends up helping to strip out Planned Parenthood defunding—and conservatives respond by blocking more funding for Medicaid expansion states? What if moderates vote to strip the “consumer freedom” amendment offered by Sen. Ted Cruz (T-TX), and conservatives retaliate by taking out the “side deals” included to assuage moderates’ concerns?

At the end of “vote-a-rama,” senators could be left with an incoherent policy mess, legislation that no one would readily support. It’s the big potential downside of the freewheeling amendment strategy—but a chance that McConnell apparently feels he has no other choice but to take.

9. It’s Why Senate Leadership Is Talking about a Conference with the House

In recent days, Senate Majority Whip John Cornyn (R-TX) and others have floated the idea that, rather than having the House pass the Senate’s bill whole, sending it straight to the White House, members may instead want to have a House-Senate conference to resolve differences between the two chambers. Some have gone so far as to propose the Senate passing a “skinny” bill—repeal of the individual and employer mandates, along with the medical device tax—as a placeholder to get the reconciliation measure to a conference committee.

This strategy would have one beneficial outcome for the Senate’s Republican leadership: By allowing congressional leaders to re-write the bill in conference, it would save them from having to abide by the results of “vote-a-rama.” If, for instance, senators vote to strip out Planned Parenthood defunding, or to add in reimportation language, congressional leaders could re-write the bill in conference to negate the effects of those votes—presenting a new measure to both chambers with a binary choice to approve the bill or not. (In other words, rather than a “wrap-around bait-and-switch” on the Senate floor, senators could instead face a bait-and-switch in conference.)

That leadership has mooted a conference committee speaks to the nature of the “vote-a-rama” ahead. Despite the complaints on both ends of Pennsylvania Avenue about the lengthy nature of the health-care process, Senate leaders are now looking to extend the process further via a House-Senate conference—because they may need to regain control of the legislation after a wild and unpredictable debate on the Senate floor.

This post was originally published at The Federalist.

Why the Motion to Proceed Is a Sucker’s Bet

In trying to win support for their Obamacare “repeal-and-replace” bill, Republican Senate leaders are making a process argument to their fellow senators: We know you don’t like the bill, but work to mend it, rather than ending the process. As Sen. John Thune (R-SD), the chairman of the Senate Republican Conference, argued, “We gotta get on the bill.…If we don’t at least get on the bill, we’re never going to know.”

It’s a typical leadership argument: The promised land is only one bad vote away, not two bad votes, not ten bad votes, only one bad vote away. (Until the next bad vote crops up.) But to skeptics of the bill—whether moderate or conservative—that argument should sound like a sucker’s bet.

Without a clear vision of the final legislation and an agreement from 50 Republican senators to preserve that vision on the Senate floor regardless of the amendments offered—both things that Senate Majority Whip John Cornyn (R-TX) last week admitted Republicans do not have—proceeding to the bill will result in a policy morass that could make the confusing events of the past week look tame by comparison.

As things stand now, a successful motion to proceed will result in an amendment process under which various provisions of the bill get struck—due to guidance from the parliamentarian, dissension within the Republican conference, or both. Then, a last-minute substitute amendment from Majority Leader McConnell (R-KY) will attempt to win over or buy off votes (or both), with the hope that he can dare enough Republicans not to kill the legislation just before the finish line. Here are the likely ways the bill could change—and not for the better.

The ‘Byrd Bath Bloodbath’

As I have previously written, the prior versions of the Senate bill had not gone through the “Byrd bath” testing which provisions comply with the Senate’s “Byrd rule” for budget reconciliation. Late last Friday, the Budget Committee minority staff released a list of provisions that could get stricken from the bill for not complying with the “Byrd rule,” including pro-life protections ensuring no taxpayer funding of abortion, or plans that cover abortion; funding for cost-sharing subsidies; a prohibition on Medicaid funding to certain entities, including Planned Parenthood; and a provision imposing waiting periods on individuals lacking continuous health coverage.

Multiple sources indicate that the list produced by Budget Committee Democrats comprised preliminary guidance on a prior version of the legislation. Therefore, that list should not be considered definitive—that all the enumerated provisions will get stricken.

Conversely, provisions not on the list released Friday could fail to pass Byrd muster, not least because the parliamentarian’s guidance can change. In 2015, a provision repealing Obamacare’s risk corridor program was stricken from that year’s reconciliation bill on the Senate floor, because the parliamentarian was persuaded by Democrats’ last-minute arguments.

Regardless of the specifics, the “Byrd bath” will doubtless make it more difficult for Republicans to present a coherent policy vision through budget reconciliation legislation, meaning the bill could change significantly from its introduced version on procedural grounds alone.

Death by Amendments

In calling for Republicans to vote to begin debate on the bill, Sen. Lamar Alexander (R-TN), a close McConnell ally, has argued that senators will “have a virtually unlimited opportunity…on the floor to make amendments to the bill and try to improve it.”

Alexander’s key phrase is “try to,” because the numbers are strongly stacked against Republicans wishing to offer amendments. If three of 52 Senate Republicans—only 5.8 percent of the Republican conference—defect on an amendment vote, the amendment sponsor will have to rely on Democrats to approve the amendment. And why would Democrats vote for any amendment that might help Republicans pass an Obamacare “repeal” bill?

The most likely answer: They won’t. As a result, it appears more likely that the amendment process could see Republicans stripping out other Republicans’ amendments—from Cruz’ “consumer freedom” provision to the various “side deals” included in the bill—than inserting provisions into the bill to win support. After all, if a provision is so popular that it could attract the votes of 50 Senate Republicans, why didn’t McConnell include it in the base bill to begin with?

The ‘Wraparound Bait-and-Switch’

As Politico notes, the myriad amendment votes don’t represent the end of the process—they’re merely the beginning: “At some point, [Senator] McConnell will introduce a substitute that will represent the Senate’s draft bill. It may be different than what is introduced…and could be subject to amendment on the Senate floor next week. The bill, in other words, will be a work in progress until the final vote.”

That’s exactly what happened the first time the Senate considered Obamacare legislation under reconciliation, in 2015. At the end of the process, McConnell laid down a “wrap-around” amendment—essentially, a whole new version of the bill replacing the prior substitute. Reports suggest McConnell could well do the same thing this time round: introduce a new bill just prior to the vote on final passage, then dare recalcitrant Republicans to vote against it.

Conservatives in particular should fear the “wrap-around,” for the new “goodies” potentially lurking in it. With McConnell having roughly $200 billion in taxpayer funds to distribute in the form of “candy” to members, and staff brazenly telling reporters they plan on “making it rain” on moderates by including additional cash for home-state projects, the “wrap-around” could well include all sorts of new last-minute spending intended to buy votes, and not enough time to scrutinize its contents. (Will we have to pass the bill to find out what’s in it?)

If this process works as outlined above, Alexander’s argument about amendments seems less an invitation to offer suggestions in an open process than a call for senators to go to McConnell’s office and work out a special deal behind closed doors in exchange for their vote.

Willing Disbelief

If the Senate votes to proceed to the bill and McConnell’s office turns into a trading floor, with staff “making it rain” taxpayer funds just like they promised, senators will claim themselves “Shocked—shocked!” that the process took an ugly turn.

They shouldn’t be. The signs are as plain as day. If senators have objections to the bill now, they should vote down the motion to proceed, for the bill—likely on substance, and certainly on process—isn’t going to get much better, and almost assuredly will get worse.

This post was originally published at The Federalist.