Monthly Archives: November 2013

Morning Bell: Obamacare Undermines American Values

We wrote earlier this week about the ways Obamacare discourages marriage and work. These aren’t the only traditional values it undermines.

Obamacare goes against two values that should be no-brainers: prioritizing American citizens over non-citizens, and prioritizing help for the disabled over assistance for able-bodied adults.

Prioritizing Non-Citizens Over American Citizens

Obamacare includes special provisions that allow many legal, non-citizen residents to qualify for federally subsidized insurance and, in so doing, offers these non-citizens more and better coverage options than American citizens.

The law as implemented creates two inequities that put American citizens at a disadvantage compared with non-citizens.

First, in states that expand their Medicaid programs, citizens with incomes under 138 percent of the federal poverty level will be automatically enrolled into Medicaid, while non-citizens will receive subsidies to purchase coverage in the Obamacare exchange.

Several studies show that patients with Medicaid coverage have worse outcomes than the uninsured, and some Medicaid beneficiaries do not consider the program “real insurance.” Yet Obamacare dumps millions of American citizens into this troubled program, even as it grants many non-citizens the opportunity to pick health plans of their choosing.

Second, in states that do not expand their Medicaid programs, non-citizens will be able to purchase subsidized health insurance in the exchanges, while American citizens below 100 percent of the poverty line may not qualify for subsidized coverage at all.

It simply doesn’t make sense to offer non-citizens more and better coverage options than American citizens. This potentially encourages immigration to the United States by those seeking to benefit from taxpayer-funded welfare programs, which increases the incentives for people not to become citizens, and thus full, integral members of our civic society.

Prioritizing Able-Bodied Adults Over Disabled Americans

A public safety net is necessary for those truly in need. But by spending more than $700 billion on its massive Medicaid expansion, Obamacare puts a greater emphasis on covering able-bodied adults than the disabled, which Medicaid was originally intended to serve.

By extending health coverage to those who should be able to work, Obamacare could jeopardize the coverage of disabled Americans. And by subsidizing health coverage for millions of unemployed and underemployed, Obamacare could accelerate the development of a permanent underclass that has little financial incentive to work.

Given its poor outcomes for patients, Medicaid needs significant changes. However, true reform cannot come from adding able-bodied adults to an already overburdened program. Instead, Congress should focus on improving Medicaid’s quality of care, while restoring its emphasis on providing a safety net for the truly needy.

This post was originally published at the Daily Signal.

Morning Bell: How Obamacare Discourages Work and Marriage

We were told that Obamacare was supposed to be compassionate toward the needy in America.

While President Obama and his fellow liberals may have held the best of intentions while ramming Obamacare through Congress, the law’s policies are far from compassionate toward the uninsured and Americans with low and modest incomes.

In fact, the law perpetuates some of the country’s worst trends that trap people in poverty. It includes disincentives for individuals to marry and for Americans of low and modest incomes to work. Discouraging work and marriage will only perpetuate poverty and income inequality, not alleviate them.

Discouraging Work

The way Obamacare calculates federal premium subsidies and cost-sharing subsidies includes several “cliffs.” A person might qualify for a hefty subsidy at his current income, but if he gets a raise and makes a little more, that Obamacare subsidy disappears.

At these cliffs, individuals and families will actually benefit more by working less because additional earnings could cause them to lose thousands of dollars in taxpayer-funded subsidies.

Families facing these kinds of poverty traps may ask the obvious question: If I will lose so much in government benefits by earning additional income, why work?

Rather than encouraging hard work, initiative, and entrepreneurship, Obamacare instead undermines these essential American values.

Discouraging Marriage

Obamacare contains not one, but two penalties on marriage—one for families with low and moderate incomes and another for families with higher incomes. By continuing failed policies that undermine the institution of marriage, Obamacare will accelerate a root cause of income inequality in the United States.

Here’s an example. A 50-year-old non-smoker making $35,000 per year would qualify for a sizable insurance subsidy, according to the Kaiser Family Foundation’s insurance subsidy calculator. The individual’s premium would be capped at 9.5 percent of income, resulting in an insurance subsidy of $2,065 paid by the federal government.

However, if this 50-year-old is married to another 50-year-old who also makes $35,000 per year, the couple would receive no insurance subsidy at all. This couple would incur a marriage penalty of $4,130 in one year—equal to the $2,065 that each individual could have received if they were not married.

As Urban Institute fellow Gene Steuerle has said: “Our tax and welfare system thus favors those who consider marriage an option—to be avoided when there are penalties and engaged when there are bonuses. The losers tend to be those who consider marriage to be sacred.”

Obamacare sends a clear message that reliance on government is preferable to these traditional American values—work and marriage.

Our health care policy should not be undermining these foundations of society. For a more commonsense approach to health care reform, check this out.

This post was originally published at the Daily Signal.

Is the Administration Offering Insurers an Obamacare Bailout?

The Centers for Medicare and Medicaid Services (CMS) today released guidance to state insurance commissioners implementing President Obama’s “fix” for people losing their insurance. Not only does it violate the explicit text of Obamacare itself, but it also raises the possibility of insurers getting access to a new pool of bailout funds.

As previously reported, the Administration’s latest plan waives many of the costly mandates included in Obamacare that are scheduled to take effect on January 1, 2014. The guidance says that these requirements will be waived—in clear violation of the text of the law—for one year for all plans renewed between January 1, 2014, and October 1, 2014. CMS also implies these waivers could be extended, stating it will “assess…whether to extend [the waivers] beyond the specified timeframe.”

However, the real story is buried in the final paragraph of the three-page memo, where CMS implies it is exploring options to provide additional payments to insurers to offset their losses from this Obamacare debacle:

Though this transitional policy was not anticipated by health insurance issuers when setting rates for 2014, the risk corridor program should help ameliorate unanticipated changes in premium revenue. We intend to explore ways to modify the risk corridor program final rules to provide additional assistance.

To translate into English: If some Americans can keep their pre-Obamacare health plans next year, they will not enroll in the Obamacare exchanges. That means the enrollees in the exchanges are likely to be sicker than insurers previously expected. Already this afternoon, the health insurance industry trade association has alleged the President’s “fix” could have a significant impact on premiums in the marketplace, for that very reason.

The CMS guidance today raises the possibility of using Obamacare’s risk corridor program to compensate insurers for these losses. Briefly stated, the risk corridor program shifts funds among insurers—it minimizes losses from carriers with sicker-than-expected enrollees, by redistributing gains from carriers with healthier-than-expected enrollees.

But as has been noted elsewhere, the risk corridor program “doesn’t need to be budget neutral; if the math demands it, the government can pay out more than it collects through the program.” CMS’s comments today imply that it’s contemplating exactly that—undoing the concept of budget neutrality for the risk corridor program, and using it to compensate insurers for their losses.

According to the Congressional Budget Office, Obamacare already gives more than $1 trillion in subsidies to insurance companies over the next 10 years. President Obama’s extra-legal “fix” could now result in the Administration offering insurers a bailout totaling billions of dollars more. It’s one more reason why there is only one real Obamacare “fix,” and that’s scrapping the law entirely.

This post was originally published at the Daily Signal.

Obama’s Cancellation “Fix:” Violating the Law for a Short-Term Public Relations Move

President Obama has told Obamacare’s critics that the law is “settled” and “here to stay.” But today he is saying he’ll violate the law to put a Band-Aid on it for another year. That’s in addition to the one-year delay in the employer mandate and numerous other “fixes” and delays.

The President is announcing his “fix” to the problem of millions of canceled policies: According to press reports, the President’s “plan would allow people to keep their plans into 2014,” by allowing the sale of insurance plans that don’t meet the law’s new requirements.

There’s one problem—the President’s promise that his new “plan” can allow people to keep their plans is just as flawed and false as his original “like your plan/keep it” pledge. The law itself is clear: Obamacare’s new benefit mandates—the requirement to cover all individuals with pre-existing conditions, the new “essential benefits,” and mandates increasing the percentage of health costs insurance plans must cover—all take effect on January 1, 2014.

As any follower of Schoolhouse Rock will know, there’s only one institution that can change the law: Congress. President Obama’s “plan” attempts to ignore them entirely. The President’s proposal is but the latest in a long line of waivers and unilateral changes made in a futile attempt to repair an inherently unworkable law.

The ultimate “fix” lies with Congress, and it’s a simple one: Undo this unfair, unworkable, and unpopular law that never should have been passed in the first place.

This post was originally published at the Daily Signal.

Obamacare Numbers: Not Exactly a Retail Success Story

The first Obamacare enrollment numbers are out—and unsurprisingly, they’re under-whelming. Just 26,794 people “selected” plans through HealthCare.gov since the website launched. An additional 79,391 have selected plans through a state-based exchange—but the Administration qualifies these numbers by saying that all of these people haven’t necessarily paid for a plan yet. The act of putting it in a shopping cart got them on the list.

In a speech three weeks ago, President Obama compared buying health insurance online through the exchanges to “the day after Thanksgiving sales for the latest PlayStation or flat-screen TV.” But comparing today’s anemic numbers to a true giant of the retail trade only shows the depth of the federal government’s Obamacare ineptitude.

According to The Fiscal Times, McDonald’s sells an average of 75 hamburgers every second. That’s 4,500 hamburgers per minute, or 270,000 per hour. In other words, people selected fewer Obamacare policies in one month—that’s 44,640 minutes—than McDonald’s sells hamburgers in half an hour.

True, McDonald’s sells hamburgers all over the world, not just in the United States. But today’s Obamacare numbers are themselves inflated—because they include people who haven’t actually paid for an insurance plan. Today’s data include as “enrollees” those who have merely placed one insurance option in their online shopping cart—even though the Administration’s own chief technology officer admitted this morning that retailers like Amazon do not count items in customers’ shopping carts as “sales” until those items are actually paid for.

It’s outrageous that the federal government has proven so incapable of designing a website that functions properly. But the bigger tragedy is that millions of people are losing their insurance coverage—as many as 16 million losing their individual health insurance plans, according to one estimate. The exchanges’ failure leaves these struggling Americans with fewer options to buy replacement coverage—and the options they will find on the exchanges, if and when they can access them, will in many cases be vastly more expensive.

It’s becoming clearer every day that this law is fundamentally unworkable. Not only should HealthCare.gov go; so should all of Obamacare.

This post was originally published at the Daily Signal.

Morning Bell: Who Is Affected by Obamacare? EVERYONE

In response to the wave of insurance cancellations hitting millions of Americans, and the admission by some on the left that President Obama’s “if you like your plan” promise was false, Obamacare’s defenders are now taking a different tack.

While the law’s supporters finally admit that some people will be worse off under the law, they now claim that those “losers” will be few and far between.

The facts speak otherwise, because few Americans will be unaffected by Obamacare’s new health care regime:

If You Have Insurance Through an Employer: The Administration claims that employer-provided coverage is not changing under Obamacare—even as it brags that Obamacare is providing better benefits to those with employer plans. Those “better benefits” are not free, however. One recent survey from consultants at Mercer found that half of large employers believe Obamacare will raise health costs by at least 2 percent next year. With the average employer plan costing more than $16,000 per family, even a 2 percent increase amounts to hundreds of dollars in added costs for employers and families every year—for “benefits” they may not have wanted to purchase absent a government order.

If You Buy Insurance Yourself: As many Americans have found in recent weeks, the odds are that those who previously purchased their own health plan will not be able to keep it. Some experts have predicted that as many as 16 million individuals could fall into this category. Individuals whose insurance has been canceled will have to buy Obamacare-compliant insurance. As a result, they may face substantially higher premiums for insurance coverage that provides a smaller network of doctors and hospitals.

If You Qualify for Subsidized Insurance: Defenders of the law would argue that these individuals are clear “winners” under Obamacare. But many of these Americans may use taxpayer subsidies to buy insurance coverage they don’t need or want—because the federal government has forced them to, and/or because Washington bureaucrats have taken away their existing plan. What’s more, the nearly $1.8 trillion in spending on exchange plans and for Medicaid will create a significant new burden for future generations of taxpayers.

If You Are a Senior Citizen on Medicare: Obamacare will affect seniors as well—because, as House Minority Leader Nancy Pelosi (D-CA) famously said in 2011, Democrats “took half a trillion dollars out of Medicare in [Obamacare]” to fund the law’s new entitlements. The Administration’s non-partisan actuary concluded that the law’s unsustainable spending reductions to Medicare could cause 15 percent of hospitals to become unprofitable by 2019, and 40 percent to become unprofitable by 2050—which could have a significant impact on beneficiaries’ access to care.

The idea that “only” 3 percent of Americans will end up on the short end of a 2,700-page law remaking the nation’s health care system seems as fanciful as the President’s pledge that anyone who likes their current plan could keep it.

The facts are clear: Obamacare isn’t just unfair for a small percentage of Americans; it’s unfair for the entire country.

The American people deserve better.

This post was originally published at the Daily Signal.

Morning Bell: Security Violation Just the Tip of the Obamacare Iceberg

Over the weekend, Heritage brought you the exclusive story of Justin Hadley, a North Carolina man who, after learning his insurance policy was being canceled due to Obamacare, logged on to HealthCare.gov and found a big surprise—the eligibility information of another family in a different state.

It’s just the latest example of problems with the federally run insurance exchange—from design features that locked Americans out of the website, to inaccurate information about premiums, to a lack of transparency about what caused the online failures in the first place.

But Obamacare is more than just a website—and its flaws go well beyond the security violations we exposed this weekend. The violations to Americans’ personal freedom and well-being are widespread:

Violates Obama’s Promises: Across the country, millions of Americans are finding out the same news as Justin: that the insurance they have and like is being taken away from them due to Obamacare. In fact, the cancellation notices being sent due to Obamacare may well exceed the number of Americans gaining coverage as a result of the law.

Violates Families’ Pocketbooks: Justin was told that a new insurance plan with his same insurer would cost him 92 percent more in premiums. That’s because the mandates and requirements included in Obamacare are raising premiums for many Americans. A recent Heritage study found that, for those buying coverage in the private market, premiums will rise in 45 out of 50 states, in many cases doubling.

Violates Principles of Freedom: For the first time ever, Obamacare forces Americans to buy a product. And Americans don’t just have to buy health insurance—they have to buy government-approved health insurance. That’s why many Americans are losing the current coverage they have and like—because it doesn’t meet the diktats of Washington bureaucrats.

Violates Americans’ Consciences: Obamacare forces many employers to offer, and individuals to purchase, coverage that violates the core tenets of their faith regarding the protection of life. These requirements are currently being challenged in court cases across the country, as Americans protest the concept that they should have to choose between violating the law and violating their deeply held religious beliefs.

Obamacare is a deeply flawed law, and its flaws have become more apparent with each passing day. It’s not just that people’s personal data has become insecure due to government bungling—their financial security and the security of their deeply held beliefs are likewise at stake.

The American people need relief from this inherently unworkable law.

This post was originally published at the Daily Signal.

Obamacare Meets Monty Python

“’Tis but a scratch!”

So insists the knight after King Arthur cuts off his left arm in the movie Monty Python and the Holy Grail. When Arthur severs his right arm and begs him to surrender, the obstreperous knight again refuses: “Just a flesh wound,” he claims.

Given the disastrous rollout of Obamacare, one could easily conflate Health and Human Services Secretary Kathleen Sebelius’ performance on Capitol Hill recently with Python’s knight scene. Secretary Sebelius had no explanation for what has caused the massive technological failures behind the law’s exchanges, didn’t explain how they would be fixed—and didn’t say who would be held to account for failing to get the implementation right.

In fact, when asked by one Congressman whether the President himself was “ultimately responsible” for the healthcare.gov fiasco, Sebelius responded, “Whatever.”

It’s not the first time Secretary Sebelius has shown such insouciance. “No one is getting fired” over the exchanges’ myriad problems, she claimed last Thursday. She went on to say that “the majority of people calling for me to resign…are people I don’t work for.” This from a public servant receiving a salary of nearly $200,000 per year funded by all federal taxpayers!

The President himself is also in denial about the train wreck unfolding before him. Hours after Sebelius’ testimony, the President pooh-poohed the news that millions of Americans will need to shop for new health insurance after losing their current coverage due to Obamacare. In a speech in Boston, the President tried to blame insurance companies for cancelling policies—due to requirements his administration put into place. In other words, “Nothing to see here. Move it along.”

The President also claimed that individuals losing their current plan will get “a better deal.” However, a recent Heritage Foundation study found that the law will raise premiums in the exchanges in 45 states, in some cases causing rates to more than double. So much for the promise of “bending the cost curve down.”

It’s worth pondering why the left—from President Obama on down—seems unwilling to admit any problem with the law, either in its policy or in its implementation. When Nancy Pelosi famously said Congress had to pass the bill so that we could find out what’s in it, she wasn’t just admitting that she and her colleagues hadn’t read the bill they voted on. She was also implying that—unlike the “visionary” leaders of the left—most Americans simply couldn’t appreciate the true wonder and beauty of Obamacare until we experienced it.

It’s that type of patronizing liberalism—don’t worry about a thing, we know what’s best for you—that led people like Sen. Chuck Schumer, D-N.Y., to claim three years ago that Obamacare would “become more and more popular” once the law passed. It’s what led President Obama to tell Charlie Rose last year that his biggest fault was not any errant decision on policy, but rather failing to “tell a story” to the American people.

Yet the stories of the past month demonstrate a wholesale failure of the entire Obamacare scheme. It’s not just the technology behind the exchanges—although that is a mess. It’s also the people losing their coverage, and the people who won’t be able to afford new policies.

Obamacare is a 2,700-page reminder of Reagan’s famous dictum that the nine most terrifying words in the English language are “I’m from the government, and I’m here to help.” When an entire law is based on those nine words, and isn’t working in the least, the only rational move is to stop the law. Alternatively, one could simply go full Monty Python.

In the Holy Grail, the knight meets an ignominious end. His arms and legs severed, he continues to howl into the wind: “I’m invincible!” The knight’s triumphalist rhetoric has echoed through the Obama administration in recent days. But for both the limbless knight and Obamacare, the facts speak otherwise.

This post was originally published at the National Interest.