Tag Archives: Politifact

Elizabeth Warren’s Single-Payer Falsehood: If You Like Your Obamacare, You CAN’T Keep It

Note to PolitiFact: We’ve found your “Lie of the Year” for 2021. Or 2025. Or the next year Democrats take the levers of power in Washington. We submit a claim made Wednesday by one Elizabeth Warren (D-Mass.): “We will not back down in our protection of the Affordable Care Act. We will defend it at every turn.”

She made that statement at a press conference announcing her support for Sen. Bernie Sanders’ single-payer health care bill—which, if one searches for “Affordable Care Act,” will uncover the following section:

SEC. 902. SUNSET OF PROVISIONS RELATED TO THE STATE EXCHANGES.

Effective on the date described in section 106, the Federal and State Exchanges established pursuant to title I of the Patient Protection and Affordable Care Act (Public Law 111–148) shall terminate, and any other provision of law that relies upon participation in or enrollment through such an Exchange, including such provisions of the Internal Revenue Code of 1986, shall cease to have force or effect.

Oops.

If You Like Your Obamacare, Too Bad

Perhaps Warren should learn a lesson from Barack Obama, who in 2013 was forced to apologize for what PolitiFact then called the “Lie of the Year”: “if you like your plan, you can keep it.” Millions of people received cancellation notices that year, because their plans did not comply with Obamacare’s myriad new mandates and regulations on insurance.

Four years later, many people now on Obamacare can’t keep their plans—because, like me last year, they have seen their plans cancelled. But some—maybe not many, but some—Obamacare enrollees might actually like their current coverage.

Sanders’ bill tells each and every one of them, “If you like your Obamacare, too bad,” even as Warren claims she will “defend [the law] at every turn.” Somewhere, George “Those Who Cannot Remember the Past Are Condemned to Repeat It” Santayana is smiling.

Liberals Can’t Help Deceiving People

But perhaps it isn’t surprising to see Warren throw out such a whopper, claiming to defend Obamacare even as she signed on to a bill to destroy it. Suffice it to say the accuracy of her biography has undergone scrutiny over the years.

But more to the point, look at the way liberals sold Obamacare. Obama said if you like your plan, you can keep it. He also said that if you like your doctor you can keep your doctor. And that his plan would cut premiums by $2,500 per year for the average family. And that he wouldn’t raise taxes on the middle class—“not any of your taxes”—to pay for it. How did all of those promises work out?

In short, liberals can’t help themselves. To use liberals’ own vernacular about “repeal-and replace” efforts, they can’t just stop at taking away health care from 178.4 million people with employer-sponsored coverage. No, they want to take away health care from millions of people in the Obamacare exchanges too.

Some of them think Americans will want the “better” health care liberals will provide in their utopian socialist paradise—that the American people won’t mind giving up their current health plan, and don’t care about (or won’t even notice) people like Warren promising one thing and doing another.

Hey, Reporters…?

Given all the stories from reporters accusing Health and Human Services Secretary Tom Price of lying about Republicans’ “repeal-and-replace” measure, I naturally assume that journalists have already beaten down Warren’s door asking her about her comments Wednesday. Did she not read the bill she just co-sponsored? How can she claim to “defend” a law when she just endorsed a bill that—by its own wording—will “terminate” one of its main sources of coverage? Isn’t that lying to the American people?

I also assume that, just as they did stories about the “faces of Obamacare” during the repeal debate, those same reporters will go back to individuals with coverage under the exchanges and ask how those people might feel about the prospect of having their plans taken away by Sanders’ bill.

At least one group can truly celebrate the Sanders plan: PolitiFact. Judging from Warren’s start, and given the number of whoppers used to sell the last health-care takeover, they and their fellow fact checkers will have their hands full for some time to come.

This post was originally published at The Federalist.

Three Ways Kathleen Sebelius Sabotaged the Rule of Law

Of all the people crying “sabotage” when it comes to Obamacare, Kathleen Sebelius might be the most qualified on the subject. Presiding over the disastrous “launch” of healthcare.gov in the fall of 2013, then-Health and Human Services Secretary Sebelius famously testified before Congress: “Hold me accountable for the debacle—I’m responsible.”

Likewise, in her claims this week that the Trump administration “has consistently tried to undermine the law that is the law of the land,” Sebelius knows of which she speaks. She presided over numerous actions that violated the text of Obamacare, and the Constitution, to thwart the will of Congress and undermine “the law of the land”—Obamacare as it was actually written, not as Democrats wished it were written—and the rule of law in general.

1. Unconstitutional ‘Like Your Plan’ Fix

As Sebelius presided over the healthcare.gov “debacle,” the Obama administration faced a serious political crisis. While the federally run exchange melted down, millions of Americans received cancellation notices in the mail, learning that because their plans did not meet Obamacare’s myriad new regulations, they would lose their coverage effective January 1, 2014.

The notices demonstrated the emptiness of Obama’s repeated promises that individuals who liked their plans could keep them—PolitiFact’s “Lie of the Year.” Moreover, the malfunctioning website created the possibility that millions of Americans could lose their existing coverage while having no way to purchase a replacement policy.

In response to the uproar, the Obama administration essentially decided to take the law into its own hands. Sebelius’ department issued a memo saying it would refuse to enforce the law for certain categories of insurance policies, allowing states and insurers the latitude to maintain individuals’ prior coverage. Even supporters of Obamacare like Nicholas Bagley said the administration’s actions violated the Constitution—the executive refusing to enforce provisions of a law it found politically inconvenient.

This space has previously argued that the Trump administration must enforce Obamacare’s individual mandate, despite any opposition to the mandate on policy grounds, given that the executive must faithfully execute the laws—all of them. But given that Sebelius failed to enforce parts of the law as written for political reasons, who is she to argue that Trump cannot do likewise?

2. Illegal Reinsurance Subsidies

The Government Accountability Office last year ruled that the Obama administration “undermined the law that is the law of the land,” as Sebelius alleges of the Trump administration. Specifically, GAO found that the Obama administration illegally prioritized health insurance companies over American taxpayers, funneling billions of reinsurance dollars that should have remained in the U.S. Treasury (to pay for a separate Obamacare program) to corporate welfare payments to insurance companies. After this rebuke from nonpartisan auditors, the Obama administration still made no attempt to comply with the law as interpreted by GAO.

If Sebelius is as concerned about “undermin[ing] the law that is the law of the land” as she claims, she should have publicly demanded that the Obama administration comply with the law, and the GAO ruling. She did no such thing then, and is unlikely to ask the Trump administration to claw back the corporate welfare payments to insurers now.

3. Unconstitutional Payments to Insurers

The Obama administration did not just violate the law in making payments to health insurers, it violated the Constitution as well. The text of Obamacare—“the law that is the law of the land,” in Sebelius’ words—included no appropriation making payments to insurers to reimburse them for cost-sharing reductions provided to individuals. The Obama administration made the payments anyway.

A federal judge ruled against the Obama administration’s actions last year, stating that they violated the Constitution for spending money without an appropriation. While the payments have continued pending an appeal, if Sebelius worries about preserving “the law that is the law of the land,” then she would support implementing the law as written, and stopping the payments immediately, unless and until Congress approves an explicit appropriation.

Ends and Means

Sebelius’ comments show a fundamental disconnect between means and ends. The Obama administration’s actions suggest a concern largely, if not solely, about signing up as many individuals for taxpayer-funded coverage as possible. If achieving that object meant violating the law, or the Constitution, so be it—the ends justified the means.

Sebelius’ real disagreement therefore doesn’t lie with the Trump administration on “undermining the law.” She did plenty of that herself, likely with full knowledge she was doing so. Instead, her true objection lies in the fact that the Trump may have different policy ends than ones she supports.

If Sebelius wants to espouse different policy positions than the current administration, that is her right. But given the ways in which the last administration repeatedly violated Obamacare to suit its own purposes, conservatives should take no lessons from Sebelius on how to avoid “undermining the law.” Physician, heal thyself.

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.

Explaining Both of the Obamacare Risk Corridor Bailouts

It never rains that it doesn’t pour. Even as nonpartisan experts at the Government Accountability Office concluded that the Obama administration broke the law with Obamacare’s reinsurance program, the Washington Post reported the administration could within weeks pay out a massive settlement to insurers through another Obamacare slush fund—this one, risk corridors.

The Post article quoted Republicans criticizing risk corridor “bailouts.” But in reality, the Obama administration itself has admitted using risk corridors as a bailout mechanism—trying to pay insurers to offset the costs of unilateral policy changes made to get President Obama out of a political jam. These two interlinked bailouts—one political, the other financial—explain this administration’s rush to pay off insurers on its way out the door.

Let’s Go Back to 2013

To understand the risk corridor story, one must head back to fall 2013. Millions of Americans received cancellation notices in the mail, informing them that their existing health insurance would disappear once Obamacare’s major provisions took effect. Those individuals also faced long odds to buy replacement policies, given that healthcare.gov and related insurance exchanges remained in a near-constant state of meltdown. Amid the controversy, President Obama had to apologize publicly for misleading the American people with his “like your plan” pledge—which Politifact later dubbed the “Lie of the Year.”

To fix the problem, the Centers for Medicare and Medicaid Services (CMS) tried a stopgap solution. Essentially, CMS said it would ignore the law’s requirements, and allow people to keep their prior coverage—albeit temporarily. States and insurers could allow individuals who purchased coverage after the law’s enactment, but before October 2013, to keep their plan for a few more months (later extended until December 2017). The final paragraph of CMS’ November 14, 2013 announcement of this policy included an important message:

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.

CMS offered insurers a quid pro quo: If you let Americans keep their existing plan a little longer—getting the administration out of the political controversy President Obama’s repeated falsehoods had caused—we’ll turn on the bailout taps on the back end to make you whole. You scratch my back…

I’ll Pay You Tax Dollars to Play

But this arrangement created several problems. First, CMS cannot decide that it just doesn’t feel like enforcing the law. In a paper analyzing the administration’s implementation of Obamacare, University of Michigan professor Nicholas Bagley called the non-enforcement of the law’s provisions “bald efforts to avoid unwanted consequences associated with full implementation of” the law. He argued the administration’s inaction abdicated the president’s constitutional obligation to “take care that the laws be faithfully executed:”

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.

While disagreeing that “President Obama has systematically disregarded” the text of the statute, Bagley explicitly conceded that—with respect to the “like your plan” fix and other administrative delays—“the President appears to have broken the law.”

That law-breaking brought with it major financial implications. While healthy individuals kept their existing plans and stayed out of the Obamacare risk pool, sicker individuals signed up in droves. Because the Obama administration unilaterally—and unlawfully—changed the rules after the exchanges had opened, insurers found they had substantially under-priced their products. A 2014 House Oversight Committee report found major impacts after the administration announced the “like your plan” fix:

Insurers immediately started lobbying for additional risk corridor payments, meeting with and e-mailing Valerie Jarrett the day after the Administration’s announcement;

Insurers actually enrolled many fewer young people, and many more older people, than their original estimates made before the Exchanges opened for business on October 1, 2013—consistent with other contemporaneous news reports and industry analyses; and

‘One insurer told the Committee that it expects greater risk corridor receipts because of a sicker risk pool than it anticipated on October 1, 2013 due, in part, to the President’s transitional policy.’

All these developments are entirely consistent with CMS’ November 2013 bulletin announcing the arrangement. CMS pledged to use risk corridors to make insurers whole because it knew insurers would suffer losses as a result of the administration’s unilateral—and illegal—“like your plan” fix.

How About You Pay for Me to Break the Law

To sum up: The administration conjured a political bailout. It pledged not to enforce the law, so people could keep their plans, and President Obama could get off the hook for misleading the American people. This necessitated a financial bailout through risk corridors. Actuaries can debate how much of the unpaid risk corridor claims stem from this specific policy change, but there can be no doubt that the “like your plan” fix increased those claims. CMS itself admitted as much when announcing the policy.

Ironically, Bagley admits the first bailout, but denies the second. His paper concedes the “like your plan” violated the law, and the president’s constitutional duties, largely for political reasons. But he believes the administration can, and should, pay outstanding risk corridor claims using the Judgment Fund. All of this raises an interesting question: Why should the executive be allowed to break the law, abdicate its constitutional obligations, and then force Congress—and ultimately taxpayers—to pay the tab for the financial consequences of that lawbreaking?

The answer is simple: It shouldn’t. While insurers stand in the middle of this tug-of-war, they could have acted differently when President Obama announced his “like your plan” fix. They could have cancelled all pre-Obamacare plans regardless of the president’s announced policy, demanded the opportunity to adjust their premium rates in response, pulled off the exchanges altogether, taken legal action against the administration—or all of the above. They chose instead to complain behind closed doors, get their lobbying machine to work, and hope to cut yet another backroom deal to save their bacon.

But there are two political parties, and two branches of government. To say that Congress should have to write bailout checks to insurers as a result of the executive’s lawbreaking quite literally adds injury—to taxpayers, to the legislative power of the purse, and to the separation of powers—to insult. Any judges to whom the administration will try to bless a risk corridor settlement with insurers should ask many questions about the linked bailouts motivating this corrupt bargain.

This post was originally published at The Federalist.

Is Obamacare Really Lowering Premiums?

Supporters and opponents of the health-care law disagree about a lot. When it comes to whether the Affordable Care Act is reducing health insurance premiums, they even disagree on the definition of success.

Recently the Commonwealth Fund, a think tank that supports the law, released a paper on overall premium levels. The analysis by Jonathan Gruber, a paid consultant to the Obama administration on the Affordable Care Act, argues that premium increases routinely exceeded 10% before the law was enacted in 2010 and that Obamacare will help lower the scope of increases in future years.

But during the 2008 presidential campaign, Barack Obama promised on numerous occasions that his plan would “cut costs” and “lower your premiums” by $2,500 per year for the average family. Ironically, the foundation for Mr. Obama’s promises rests in a memo released by three consultants to the 2008 campaign—one of whom, David Blumenthal, now heads the Commonwealth Fund.

Since the law was enacted, Commonwealth and other supporters, while saying that Obamacare would mitigate premium increases, have largely failed to address the earlier promise that the law would reduce them outright. Another author of the 2008 memo, David Cutler, said in 2012 that, in retrospect, Mr. Obama made “occasional misstatements” when pledging that premiums would fall by $2,500 annually. In August 2012, PolitiFact rated that premiums pledge a “promise broken.”

Supporters of the law started out saying that Obamacare would reduce premiums in absolute terms. Now, backers say that the law will lower premium increases relative to what they would have been without the law—a tougher metric to quantify and a more difficult measure of success to sell politically. This is another example of how in Washington, where one stands on an issue frequently depends upon where one sits.

This post was originally published at the Wall Street Journal’s Think Tank blog.

Fact Check: Taxes on the Middle Class

Vice President Biden just claimed that Republicans are blocking tax cuts on the middle class. That’s ironic, because the Obama Administration — in Obamacare and elsewhere — passed massive tax increases on the middle class. As Politifact noted when it called Barack Obama’s “firm pledge” not to raise taxes on the middle class a promise broken: “Smokers, tanning aficionados, the happily uninsured: More taxes coming at ya!” In fact, the Congressional Budget Office recently noted that 600,000 people with incomes UNDER the federal poverty level — that’s $15,130 for a family of two in 2012 — would pay higher taxes due to Obamacare’s mandate that all individuals buy health insurance or pay a tax.

The Vice President’s claims aside, the American people will take no lessons from this Administration on how to cut taxes on the middle class.

In Defense of J.D. Kleinke

On Sunday the New York Times published an op-ed by American Enterprise Institute fellow J.D. Kleinke, entitled “The Conservative Case for Obamacare.” In recent days, the piece has drawn a great deal of pushback from right-leaning commentators.

Some of the criticism is justified, for the article itself is internally inconsistent. Even as it claims the law is market-based, the article talks about Obamacare’s “forcibl[e] repatriat[ion]” of individuals who choose not to purchase health coverage — and any “market” that relies upon coercion isn’t really a market at all. It attempts to equate Obamacare with association health plans, when the former is the antithesis of the latter — association health plans were designed to allow small business to opt-out of onerous state benefit mandates, whereas Obamacare imposes a whole new cohort of benefit mandates at the federal level.

Kleinke’s article is also misleading and factually inaccurate on critical points. He claims that “Republicans conveniently forgot that [an individual mandate] was something many of them had supported for years.” The only problem with that claim is that Kleinke conveniently forgot that an individual mandate was something many Republicans had opposed for decades:

  • Conservatives made the claim in 1993 that an individual mandate was unconstitutional, claims which quickly gained resonance.
  • In “The System” — the seminal account of the Clintoncare debate –Haynes Johnson and David Broder note that by the time Senate Republicans gathered in Annapolis in mid-1994, the individual mandate was an area of much controversy within the Conference (page 363).
  • Senator Don Nickles — who introduced a bill that included an individual mandate in the fall of 1993 — introduced an entirely new version of the same bill seven months later – one which excluded the mandate. In comments in the Congressional Record back in June 1994, Nickles noted that “as we received input from the states, it is my belief that this individual mandate should be dropped from the legislation.” (Record, June 16, 1994, page S7085).
  • Two dozen Senate co-sponsors — more than half the Republican Conference at the time — agreed with Nickles’ view, and dropped the mandate from the bill.

So there is ample evidence that an individual mandate was not conservative orthodoxy back in 1993-94, let alone 2008. Senator Nickles pointed all this out in a letter to the editor published in the Times earlier this year — meaning the facts were, and are, readily available for all those who wish to search for them. Sadly, however, Kleinke, like Ezra Klein and others, failed to do so, perhaps because the “Republicans switched positions on the mandate to defeat Obama” meme is too politically valuable to abandon. One would have hoped that an AEI scholar would have been slightly more thorough in his research than a liberal “JournoList.” Unfortunately, that does not appear to have been the case.

On the other hand, it’s worth examining the behavior of liberal analysts over the past several months:

Given this behavior from the left’s purported “scholars,” Kleinke benefits himself from the soft bigotry of low expectations. Yes, his piece is factually incorrect, and logically and philosophically inconsistent. But hey — at least he’s not being two-faced about his position.

The Truth about Obamacare Keeps Coming Forward

From the Manchester Union Leader last week came word of an interesting development.  In a debate, former Congresswoman Carol Shea-Porter, who looks to regain her seat this fall, admitted that Obamacare — which she voted for two years ago — WON’T reduce health costs:

Shea-Porter said the Obama health care plan will slow the increase in health care costs, but no one should expect them to drop. “Everyone knows that costs go up. For him [Rep. Frank Guinta] to say health care costs should drop when nothing else ever drops, it’s just not accurate,” Shea-Porter said.

But Guinta said Congress should try to reduce health care costs. “I’ve yet to hear anyone say ‘Thank goodness for the Affordable Care Act because it slowed my (premium) increase,’” he said.

And the reason Rep. Guinta has yet to hear anyone say Obamacare has cut their premium increases is because the law hasn’t fulfilled its promise.  Even fact-checkers have admitted this reality, when Politifact last month officially declared candidate Obama’s promise to “cut the cost of a typical family’s health insurance premium by $2,500 a year” a broken promise:

No cut in premiums for typical family

Back in 2008, we collected over 50 promises Barack Obama made about health care….When it came to health care premiums for the typical family, Obama said he would cut the annual cost by $2,500.  Months before Obama took office, a New York Times reporter dubbed it one of the most audacious pledges of the campaign.

We reached out to David Cutler, an economist who advised Obama during the 2008 campaign and helped calculate the $2,500 figure that appeared in Obama’s speeches.  He said the calculation encompassed total health care costs, not just premiums.  These would include out-of-pocket costs, employer-provided insurance costs, and taxes to pay for public insurance programs.

Cutler acknowledged that Obama made “occasional misstatements” that tied the $2,500 reduction to premiums and not total medical spending.  We can’t judge whether Obama misspoke, but we checked the Project Vote Smart database of public statements by politicians, which shows that Obama said premiums (and only premiums) would go down for the typical or average family by $2,500 repeatedly.  You can see examples throughout the arc of his 2008 presidential campaign here, here, here, and here.

It is also true that Obama used the number in a more expansive context sometimes, such as here during a speech in Newport News, Va, and here in a response to a report about Medicare and Social Security.

The 2008 New York Times article explains how Cutler and his colleagues calculated the $2,500 figure, a round number based on back-of-the-envelope arithmetic.

“That number is much simpler than the world of insurance actually is,” said Deborah Chollet, a health economist for Mathematica Policy Research, a nonpartisan policy analysis group….

In our search for evidence that the law might reduce the typical family’s premiums, we contacted the Department of Health and Human Services, the federal agency implementing the law.  The department could not provide proof that the average family would see a reduction, much less a $2,500 reduction.

In assessing this promise, we consider the following: An author of the $2,500 figure has disavowed its use as it relates to premiums alone.  An independent health care analyst projects that premiums will go up for the typical family.  The federal agency implementing the Affordable Care Act did not provide evidence that premiums will go down for the typical family.  We rate this a Promise Broken.

The fact that Democrats — and even President Obama’s own Administration –acknowledge that the law won’t meet the President’s stated promise is yet another way that the promise of “hope and change” has evaporated for families struggling to pay their insurance bills.

Getting the ‘Politifacts’ Right

Politifact this afternoon issued a “ruling” calling Mostly False a statement that Obamacare utilized Medicare funds to pay for its coverage expansions.  The Politifact piece claims — correctly — that other Presidents have signed laws reducing Medicare spending, and that therefore claims about Obamacare’s impact on Medicare are overblown.  However, there’s a BIG difference between those prior laws and Obamacare — Obamacare used Medicare savings to pay for more government spending.  On that count, there is near universal agreement that’s exactly what the law did:

  • The non-partisan Congressional Budget Office said that the Medicare reductions in Obamacare “will not enhance the ability of the government to pay for future Medicare benefits” — because those savings will be used to fund other unsustainable entitlements.  If Democrats want to use the Medicare savings provisions to extend the life of the Medicare trust fund — and not to fund the new entitlements created by the law — the Congressional Budget Office previously estimated what the fiscal impact would be:  “A net increase in federal deficits of $260 billion” through 2019.
  • Likewise, the Medicare actuary has written that the Medicare provisions in the law “cannot be simultaneously used to finance other Federal outlays (such as the coverage expansions under the PPACA) and to extend the [Medicare] trust fund, despite the appearance of this result from the respective accounting conventions.”
  • Back in November, even Nancy Pelosi admitted that Democrats “took a half a trillion dollars out of Medicare in [Obamacare], the health care bill” to pay for more federal spending.

President Obama himself admitted the problems with Obamacare’s supposed logic in a 2010 interview, when he stated that “You can’t say that you are saving on Medicare and then spending the money twice.”  Yet that’s EXACTLY what the law did — and no amount of spin can change that fact.

Medicare’s Growing Problems

The Washington Post has a lengthy story out today on the causes of Medicare spending, and the reasons for comprehensive reform.  Several thoughts regarding the piece:

  1. Former CBO Director Robert Reischauer opined in the article that “I think many of us would accept the fact that…payroll tax payments probably have to go up.”  His quote brings up a little-discussed point: Not only do Democrats have political reasons for delaying reforms to Medicare – as numerous quotes over the past year have demonstrated – dithering aligns with their policy goals as well.  After all, if you want to enact massive tax increases, the best way to achieve this goal is to ignore Medicare’s looming problems, keep on spending, wait for the crisis to hit, and then say tax increases are the “solution.”
  2. Medicare program head Jonathan Blum is quoted in the story as stating that a recent slowdown in Medicare spending is thanks to Obamacare.  Blum’s statement ignores the Medicare actuaries’ conclusions about the prime reason for the slowdown in spending: “Estimated spending growth in 2010 was slow due to continuing declines in employment and private health insurance coverage associated with the recent recession.”  In other words, spending growth was slower than projected NOT because Obamacare worked, but because the Obama “stimulus” didn’t.  Surprisingly, Blum did not appear to want to take credit for the failed “stimulus” in the Post article.
  3. Even though the article talks about a predicted dramatic slowdown in per capita Medicare spending growth over the coming decade, those projections are based on assumptions that most experts have concluded are unrealistic.  For instance, the Medicare actuary found that provisions in Obamacare “are unlikely to be sustainable on a permanent annual basis.”  Likewise, CBO concluded that the Medicare reductions will be “difficult to sustain for a long period.”
  4. The Post article emphasizes the problem that demographics will create for the Medicare program in the medium term.  According to CBO, between now and 2035, 64% of the growth in entitlement spending, and 48% of the growth in health care entitlement spending, will be driven by demographic factors associated with the retirement of the Baby Boomers and general aging of the American population.  Even if health care costs were brought under control, entitlement programs face significant structural difficulties, as nearly half of the growth in entitlement spending over the next generation comes from demographics, NOT rising costs.

Medicare faces a looming financial crisis.  Yet Congressional Democrats’ prime contribution to the debate this year has not been a reform proposal, but a political campaign of demagoguery dubbed the “Lie of the Year.”  Republicans have offered numerous solutions to advance the cause of entitlement reform; it’s long past time for Democrats to step up to the plate.