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Posts Tagged ‘HHS’
October 25th, 2018 at 2:09 pm
HHS Prepares to Commit Unforced Error On Drug Price Disclosure Mandate
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Healthcare costs, including pharmaceutical costs, remain a legitimate concern.  But the Trump Administration Department of Health and Human Services (HHS) is about to commit a needless unforced error.

The issue in question is an effort to force pharmaceutical companies to announce “list price” of drugs that they advertise.

A similar effort was recently introduced as legislation in Congress by Senator Dick Durbin (D – Illinois), which is itself proof of the wrongfulness of the idea.  A coalition of conservative and libertarian voices, including CFIF, stopped Senator Durbin’s effort.  But for some reason the HHS announced intent to impose the mandate via regulation, reminiscent of Barack Obama’s “pen and phone” manner of presiding.

Here’s why this is a terrible idea.

First, a drug’s “list price” is more likely to confuse consumers than enlighten them.  The reason is that what consumers actually pay for a drug is almost always very different, and much lower, than its list price.  Most patients’ drugs are subsidized by co-pays or co-insurance programs, whether via Medicare, Medicaid or insurance companies.  Insurance companies themselves typically don’t even pay the full list price, since they also receive various rebates and discounts from pharmaceutical sellers.  Overall, approximately 9 out of 10 consumers pay below the technical list price.  Consequently, compelling advertisers to state the list price in ads would mislead consumers into assuming that their out-of-pocket cost would be higher than they price they’d actually pay.

That hardly advances the goal of informing consumers.

An even more fundamental problem with the contemplated HHS mandate is that it would violate the First Amendment by compelling speech.

Under First Amendment free speech application, including commercial speech, courts strictly scrutinize any effort by government to force private citizens or entities to what it wants them to say.  Only where the compelled speech is purely factual and non-controversial will allow exceptions to the general prohibition against compulsory words.  As noted above, a drug’s list price doesn’t qualify as purely factual for purposes of informing consumers, because consumers rarely pay that price.  Nor does the HHS proposal qualify as non-controversial, for obvious reasons.

Accordingly, a government attempt to force advertisers to state prices that are higher than what almost all consumers actually pay can’t withstand First Amendment scrutiny, and will be struck down when challenged in court.

Finally, the HHS doesn’t even possess authority to impose this proposed mandate.  That authority under Congressional statute instead lies with the Food and Drug Administration (FDA).  Proponents of the HHS mandate assert that the Social Security Act provides a loophole to force this proposal upon the pharmaceutical market, but that too won’t withstand court scrutiny.

For all of these reasons, the HHS proposal to engage in compulsory speech, speech that isn’t even accurate or informative, is a head-scratcher.  Hopefully it will reconsider this ill-advised effort sooner rather than later, and pursue more effective ways of reducing pharmaceutical and healthcare costs.

April 29th, 2015 at 5:58 pm
IG Warning: States May be Illegally Using ObamaCare Grants

At least 37 states have received a total of $4.8 billion to implement ObamaCare, but under the terms of the “establishment grants” those monies cannot be used to pay for overhead costs like rent, software maintenance, staffing and utilities.

That hasn’t stopped some states from trying, apparently.

“We have concerns that, without more detailed guidance from [the Centers for Medicare and Medicaid], [State-based ObamaCare exchanges] might have used, and might continue to use, establishment grant funds for operating expenses after January 1, 2015, contrary to law,” writes the Inspector General at the Health and Human Services Department.

“In media reports and during our review of [states’] budget information, we have observed that some [states] face uncertain operating revenues in 2015 and future years. Because operating revenues are uncertain, there is a risk that [states] might use establishment grant funds to cover operational expenses,” warns the IG’s letter.

The IG points to evidence that the Rhode Island exchange does not have a dedicated funding source, and the Washington exchange is short $125 million unless the state legislature steps in.

In other words, ObamaCare gave seed money to start expensive new state agencies that are now supposed to be self-sustaining. At least two are not, and the tone of the IG’s letter implies that many more are suspect.

If an enterprising conservative committee chairman wants to protect taxpayers while exposing one of the failures of ObamaCare, following up on the IG’s warning letter with a detailed investigation would be a good strategy.

H/T: The Hill

November 20th, 2014 at 7:49 pm
HHS Caught Padding ObamaCare Enrollment Numbers

Is anything the Obama administration says about ObamaCare worth believing?

“The Obama administration said it erroneously calculated the number of people with health coverage under [ObamaCare], incorrectly adding 380,000 dental subscribers to raise the total above 7 million,” reports Bloomberg.

The revelation came to light thanks to diligent work by House Oversight Committee investigators.

Bloomberg quotes Health and Human Services Secretary Sylvia Mathews Burwell as saying, “The mistake we made is unacceptable,” but the news agency goes on to report HHS may have been intentionally misleading in its counts in the run-up to the midterm elections.

“Federal officials said in September they had 7.3 million people enrolled in coverage through new government-run insurance exchanges. They didn’t distinguish between medical and dental plans, breaking from previous practice without notice.” (Emphasis mine)

Along with the Grubergate deceptions, it’s hard to believe that HHS did anything other the deliberately fudge the numbers to help ObamaCare (barely) meet a previous CBO projection. Falling below that threshold would surely have been an embarrassment to the Obama administration, so someone at HHS just changed the rules so the home team could win.

Sounds similar to the president’s approach to immigration, doesn’t it?

November 18th, 2014 at 6:10 pm
Ahead of SCOTUS Challenge, HHS Murky on State-Based Exchange Definition

With its surprising decision to hear oral argument on an ObamaCare subsidy challenge next spring, the Supreme Court of the United States is causing a flurry of activity as some states try to shore up their status ahead of a potentially costly decision.

“The consulting firm Avalere Health estimates that nearly 5 million people would see their premiums spike 76 percent, on average, if the Supreme Court strikes down subsidies in states that don’t operate their own exchanges,” reports Governing. “That estimate assumes a greater number of exchanges are considered federal, not state-based, but the question of what exactly constitutes a ‘state-based’ health exchange is murky.”

How murky?

“States have the option of running their own exchange completely (a state-based exchange), managing aspects of plan design or consumer outreach (a partnership exchange) or leaving everything to the federal government (a federally facilitated exchange),” according to the website.

Predictably, the federal Department of Health and Human Services isn’t divulging its exact criteria for categorizing an exchange, a stance that leaves states without a clear picture of how to prepare for a possible elimination of subsidies to residents.

Some states, like Nevada and Oregon that switched to Healthcare.gov – the federal website – are still considered to have state-based exchanges because they retain control over functions like plan approval, data collection and quality reporting. Others, like Utah and Mississippi, also fall into the state-based category because they host small business exchanges (but not individual exchanges).

So, the bottom line appears to be this: If the Supreme Court axes ObamaCare subsidies per the law’s text and intent, there’s a good chance President Barack Obama’s political appointees will engage in verbal gymnastics to find ways to define “state-based exchanges” in whatever manner best suits them.

No matter. Getting something fundamentally better than ObamaCare isn’t the Supreme Court’s job anyway. Best to pocket the subsidy win if it comes and work toward a policy consensus among the political branches that delivers real reform.

November 10th, 2014 at 7:07 pm
HHS Reduces ObamaCare 2015 Enrollment Prediction by 30%

On Monday, the Obama administration threw out a Congressional Budget Office (CBO) estimate that ObamaCare would have 13 million enrollees by February 15, 2015. It also discarded a CBO forecast that the controversial health law would have 25 million enrollees by 2017.

Instead, the federal department of Health and Human Services (HHS) said a more likely scenario would be between 9 and 9.9 million by mid-February – a reduction of 30% from CBO’s calculations. As for 2017 totals, HHS will not commit to any numbers.

“The reduced projection is due to recent data showing ‘mixed evidence’ about how quickly – and how dramatically – people will shift from employer-sponsored health insurance and non-ObamaCare plans into insurance plans sold on government-run marketplaces such as HealthCare.gov,” reports CNBC.

What HHS isn’t saying is how the Obama administration playing politics with statutorily mandated deadlines has fouled up ObamaCare’s implementation timetable. Originally, CBO and others could reasonably anticipate quick and dramatic shifts onto ObamaCare plans because the employer mandate made it financially smart to dump workers onto the exchanges and pay a relatively small fine.

But fearing a voter backlash at such a quick and dramatic change, the Obama administration has delayed implementing the employer mandate at least three times. It now isn’t scheduled to go into effect until 2017 – the first year after President Barack Obama is out of office.

According to an HHS report, “there is considerable uncertainty that a large shift will occur over the new two years”, which, “contributes to an analysis that the ramp up to 25 million will take more than three years.”

In other words, thanks to politically motivated regulators, no one knows when, or if, ObamaCare will meet its most important benchmark – sustainable enrollment.

November 3rd, 2014 at 5:09 pm
Fed Court Blocks Contraception Mandate Reporting Requirements

With its newest batch of regulations, the federal Department of Health and Human Services (HHS) essentially is telling non-profit religious employers that they can claim an exemption from ObamaCare’s contraception mandate, so long as they provide all the information necessary to violate the deeply held beliefs that justify the exemption.

As Lyle Denniston of SCOTUS Blog explains, the rules “also required the organization to tell the government what its health coverage plan for its employees was by name and type, and to provide contact information to the insurer operating the plan.

“The added information was designed to enable HHS to then take the initiative to arrange for the religious organization’s female employees to have contraceptive coverage at no cost, and with no cost to the organization itself.”

The controversial HHS rules came to light because of a legal challenge filed by a Catholic university in Florida. A federal judge blocked enforcement of the rules pending the outcome of the lawsuit.

A couple of observations immediately come to mind. First, there is no such thing as free contraception. If the insurance company must provide it “free” to some customers, it will then pass on the cost to others (e.g. higher premiums). Even the manpower at HHS spent on coordinating this run-around the First Amendment costs taxpayers money.

This brings up another point. How can it be that the federal agency charged with implementing ObamaCare has the resources and personnel available to investigate, negotiate and procure “free” contraception to the thousands (and more) employees working at exempt religious employers?

It’s not like there’s a public health crisis over lack of access to contraception. If HHS has so many extra people and dollars laying around, it should funnel them to real priorities like fighting Ebola, or perhaps, finishing ObamaCare’s main insurance portal before the second enrollment period begins in a matter of days.

Instead we get demands for information in order to make religious objectors participate in the very activity they cannot abide.

October 9th, 2014 at 3:15 pm
Arkansas’ Medicaid Expansion Violated Obama HHS’ Own Budget Neutrality Rules

The Government Accountability Office (GAO) says that the State of Arkansas and the federal Department of Health and Human Services (HHS) violated federal guidelines when they agreed to expand Medicaid under a “private option” plan.

Arkansas was one of the first states to get permission from the Obama administration to expand Medicaid, but on different terms than laid out in ObamaCare.

Medicaid is the state-federal program that pays for health care services for the nation’s poor and disabled.

Under normal circumstances, Arkansas would only be allowed to get a waiver from ObamaCare’s expansion structure if it could prove that its plan would be budget neutral.

Guess what happened instead.

“According to federal regulations, the U.S. Department of Health and Human Services (HHS) has certain procedures they must follow when reviewing state requests for Medicaid waivers,” write experts at the Foundation for Government Accountability.

“One key component of any waiver is budget neutrality: states seeking waivers must demonstrate that they will not spend any more federal dollars under the waiver than they would have without the waiver. But as it turns out, the Obama Administration cut corners and ‘did not ensure budget neutrality’ requirements were actually met before approving Arkansas’ ObamaCare expansion.”

The result is an additional $778 million more in spending on Arkansas’ version of Medicaid expansion than would have occurred had HHS insisted on following its own budget neutrality rules.

The entire analysis of the GAO’s report is worth reading since it explains other serious problems with the Arkansas plan. Perhaps the most egregious is the depth at which the Democratic governor’s office and loyal state agencies went to mislead Republican state legislators on the true cost of the expansion. Evidence of bad faith negotiations like this make it impossible to have a substantive policy conversation. Even now there are reports that the governor is peddling incorrect information, and trying to silence opposition.

What’s emerging from the Arkansas fiasco is the extent to which supporters of bigger government will go to entrench their policies – truth, fairness and accountability be damned.

October 7th, 2014 at 6:06 pm
Pence-HHS Negotiations over How to Expand Medicaid Stall

A months-long negotiation over whether and how Indiana might expand Medicaid under ObamaCare may be coming to an impasse.

On Monday, Indiana Republican Governor Mike Pence emerged from a meeting with federal Health and Human Services Secretary Sylvia Burwell Mathews without any positive news.

“We had a substantive discussion, but we are not there yet,” Pence said in a statement quoted by the Indianapolis Star.

At issue is whether Indiana will be able to use ObamaCare’s Medicaid expansion dollars in a way that moves the program in a more market-friendly direction. As I’ve written before, conservatives can support reforms to entitlement programs so long as they move in that direction.

With HHS refusing to let Indiana require modest co-pays under its expanded Medicaid plain, the next move is up to Pence. He could weaken his proposal, but doing so would sacrifice any pretense his plan has for being fiscally conservative. On the other hand, he could stand firm on principle and absorb the potentially damaging criticism that he’s leaving almost $1 billion in federal Medicaid payments on the table – all of which is new taxpayer-financed spending.

Pence is thought to be a dark horse GOP candidate for president in 2016. His decision on this policy issue will go a long way towards determining how viable such a campaign would be.

October 6th, 2014 at 6:49 pm
Expert: ObamaCare Bailout of Insurance Industry Similar to Bush Era Prescription Drug Program

The Obama administration has been catching some flak over its intent to redirect taxpayer dollars toward a controversial “risk corridor” program designed to bailout ObamaCare-friendly health insurance companies that lose too much money.

The primary line of attack stems from the absence of any specific congressional appropriations to fund the program. Congressional Republicans and the Government Accountability Office say this precludes any end-run maneuvers to pay for it anyway, while the Obama administration is ignoring opposition.

But in the drive to add this abuse of executive discretion to President Barack Obama’s long list of power grabs, a bit of history is sure to make Republican critics think twice before pushing much farther.

“But Loren Adler, research director for the Committee for a Responsible Federal Budget, points out that a similar risk-protection program in the Medicare prescription drug program does not receive an explicit annual appropriation, yet has not been challenged,” reports an entry on the Modern Health Care blog. “He thinks that makes it highly unlikely that HHS will be deterred from making the payments to insurers under the risk corridors program.”

Indeed, any federal judge reviewing a future legal challenge to HHS’ pending move would very likely analogize the two programs and conclude that if Congress has not objected to the practice in one instance, and the two cases are similar, it probably intended to defer on both. In such a scenario, the end result is a judge (rightly) telling Congress to speak more clearly and fix the law.

The upshot of all this is that it makes everyone painfully aware of how important it is for Congress to pass clear laws. Republicans aren’t responsible for ObamaCare’s poor draftsmanship, but if they ever get enough power to make changes, they should take care to make them unambiguous to interpret.

October 3rd, 2014 at 11:24 am
ObamaCare Nearing a Fannie and Freddie-Style Bailout of Insurance Companies?

Could ObamaCare’s “risk corridor” program become the health insurance industry’s equivalent of Fannie Mae and Freddie Mac – the federally funded entities that spent $180 billion bailing out banks who issued subprime mortgages?

Stephen Moore, the chief economist at the Heritage Foundation, thinks so.

“But insurance experts warn that [the risk corridor] program creates the same moral hazard problem for health insurance that we saw in the mortgage market with Fannie Mae and Freddie Mac,” Moore writes at Investor’s Business Daily. “The guarantee on bad mortgages encouraged bad mortgages. The guarantee against losses on ObamaCare enrollees encourages insurers to toss sound underwriting standards out the window. This didn’t turn out so well with Fannie and Freddie, which received a taxpayer-funded bailout of more than $180 billion after issuing subprime mortgages that should never have been written.”

Moore goes on to say that surveys of health insurance companies selling plans on ObamaCare exchanges say that the vast majority expect to receive a payment from the federal government to cover their losses. Estimates for the first year near $1 billion. And, since there is no cap to how much the feds will reimburse, there is no limit to how much money a company can lose and still expect a check from Uncle Sam.

Despite all this, the Obama administration is chugging ahead with plans to make payments under the risk corridor program without explicit congressional appropriations. Republicans are contesting President Barack Obama’s authority to do this – with an assist from a recent GAO legal opinion – but they should really train their fire on eliminating the risk corridor program as is. As with IRS tax credits, ObamaCare can’t survive without a convoluted shell game that hides the true cost of health care.

We’ll never get health care policy right until we can talk honestly about how it’s funded. Now would be a good time for the GOP to being that process.

September 30th, 2014 at 7:25 pm
HHS’ Burwell Caught Low-Balling Congress on Cost of Healthcare.gov

A new report by Bloomberg Government indicates that Sylvia Burwell, the Secretary of Health and Human Services (HHS), gave a potentially misleading answer when she told Congress that Healthcare.gov – the federal government’s ObamaCare portal – cost taxpayers $834 million to build.

Nicole Kaeding at the CATO Institute teases out some of the unstated, but related, costs that balloon the overall price tag to $2.14 billion, far north of Burwell’s testimony.

I’ve summarized them here as bullet points:

  • $300 million contract to process paper applications to serve as backups to electronic files
  • $387 million for real-time interfacing between the IRS and Healthcare.gov to verify income and family size for insurance subsidy calculations
  • $400 million in accounting tricks HHS used to pay for creating Healthcare.gov when 26 states refused to take federal start-up grants to build their own. Congress made no appropriations to build Healthcare.gov, so HHS shifted money from other units to fund the project.
  • $255 million in spending between February 2014 – the end of Burwell’s timeline – and August 20, 2014, the most recent information available. Bloomberg also included projected spending at current levels through September 30, 2014, the end of the fiscal year.

These are the kinds of expenses that Members of Congress would expect the HHS Secretary to include when testifying about full cost of a program. The fact that Burwell gave a low-ball estimate when these figures were easily accessible to her or her staff weakens her credibility as an honest broker of information. As her departing colleague Eric Holder knows, once Congress loses its ability to trust a Cabinet official, the gloves come off.

August 11th, 2014 at 2:24 pm
HHS to Fund Coming ObamaCare Bailout of Insurance Companies

What makes conservatives so sure that the Obama administration will bailout insurance companies losing money under ObamaCare?

“According to a recent investigation conducted by the House Oversight and Government Reform Committee chaired by Darrell Issa, insurers widely expect to receive funds from the bailout program,” writes U.S. Senator Marco Rubio (R-FL). “One large insurer recently filed financial statements claiming they expect part of their revenue to come from American taxpayers via the ObamaCare bailout ‘fund.’”

Thwarted by the GOP majority in the U.S. House of Representatives who refuse to appropriate money for this part of ObamaCare, the Department of Health and Human Services “figured out a way to use general funds available through the Centers for Medicare and Medicaid Services to pay off health insurers,” says Rubio. “The effect is to circumvent Congress’ power of the purse for the purpose of bailing out health insurers with taxpayer funds.”

Whether it’s the CIA lying about spying on congressional investigators or IRS officials conveniently losing potentially damaging emails, executive branch officials in the Obama administration are destroying the ability of anybody outside their clique from being able to trust anything they say.

May 20th, 2014 at 1:28 pm
Feds Can’t Verify Over 1 Million Income Statements Seeking ObamaCare Subsidies

Amid all the legitimate privacy concerns with ObamaCare’s regulatory apparatus – in particular the proposed data hub that allows agencies like the IRS, Social Security Administration and HHS to share reams of information about individual citizens with each other, states and insurance companies – it’s been taken for granted that the liberals in charge of this grand social experiment at least had the technical competency to build the necessary infrastructure.

But the facts say otherwise.

“Of the roughly 8 million Americans now signed up for coverage this year under the health care law, about 5.5 million are in the federal insurance exchange,” reports the Washington Post. “And according to internal documents, more than half of them – about 3 million – have an application containing at least one kind of inconsistency.”

The Post says the most frequent inconsistency is a discrepancy in the income reported on an ObamaCare application and the income reported to the IRS. This type of inconsistency is present on between 1.1 million and 1.5 million applications. To their credit, citizens have sent in “about 650,000 pieces of ‘proof’” to justify their asserted income.

Because of the level of detail required when filling out the 20-plus page ObamaCare application, it’s no surprise many people mistakenly enter something wrong; especially when considering that most people get help on their taxes from either a certified professional or software that easily finds all the right deductions. Neither option was readily available to the vast majority of ObamaCare applicants.

What is astonishing, however, is the federal government’s complete inability to process and verify corrections digitally. “Because the computer capability does not yet exist, the work will start by hand, according to two people familiar with the plans,” says the Post. (Emphasis added)

ObamaCare subsidies are the essential ingredient for claiming that ObamaCare insurance is “affordable” since they at least partially offset the increased cost of coverage. Failing to launch a website capable of verifying income claims that determine whether a person qualifies for subsidies is inexcusable.

If there is any silver lining to this latest blunder it’s that Serco – the federal contractor accused last week of billing HHS $1 billion while hiring employees literally to do nothing – is now on the hook for correcting the inconsistencies. Small comfort though, since apparently Serco gets paid based on the number of employees it hires rather than the efficiency of its work product. Requiring the company to sort paper applications by hand seems almost too awful to be true.

April 14th, 2014 at 4:57 pm
Will Sebelius’ Replacement Follow Her Lawless Lead?

Here’s a suggested question for GOP Senators to ask Sylvia Burwell – President Barack Obama’s nominee to succeed Kathleen Sebelius as Secretary of Health and Human Services – at her confirmation hearing next month.

Studies by the RAND Corporation and Goldman Sachs estimate as much as 20 percent of the claimed 7.5 million ObamaCare enrollments have not paid their first month’s premiums.

When enrollees start seeing how much their deductibles are – commonly $3,000 to $5,000 – many more may choose to stop paying ObamaCare’s higher out-of-pocket expenses.

If that happens, it’s really bad news for doctors and hospitals.

“Section 1412 of the health law gives consumers a 90-day ‘grace period’ before their subsidized plan is canceled for nonpayment. But insurers only have to keep paying doctors and hospitals for 30 days. The next 60 days of care on the care provider,” explains Betsy McCaughey.

“[I]t could pose a significant financial risk for medical practices,” the American Medical Association warns.

The HHS Secretary has no express power to bail out such care providers.

However, under the previous Secretary, the Department of Health and Human Services didn’t shy away from spending $8 billion without congressional authorization to hide Medicare Advantage cuts before the 2012 presidential election.

This and many other extra-legal actions by Secretary Sebelius have come to define HHS as the most powerful domestic federal agency.

Ms. Burwell, Do you think the absence of express authority to bail out care providers in the above situation limits you in any way from spending money for this purpose?

December 20th, 2013 at 12:02 pm
Individual Mandate Starts to Crumble

Late yesterday, the Department of Health and Human Services (HHS) announced that anyone whose individual insurance policy was cancelled due to Obamacare and now has to pay for a more expensive plan is exempt from the individual mandate until 2015.

You read that right. The individual mandate – the keystone of Obamacare’s coverage and funding structure – no longer applies to an estimated 5 million Americans.

This is HUGE. By granting this carve-out, the Obama administration has voluntarily weakened the mechanism that is supposed to guarantee insurance companies selling plans through an Obamacare exchange sufficient numbers of people to fill out their risk pools.

Now, suddenly, these companies are facing the very real possibility that millions of people will choose to hold off buying insurance until they get sick. The new exemption changes a consumer’s calculation. Prior to yesterday, all the emphasis was on signing up by the December 23rd deadline to avoid a 2014 tax penalty.

Now, for up to 5 million people, the decision point to buy insurance occurs when they get sick. Thus, insurance companies won’t get to spread the risk of illness by banking premium payments from healthy people. Many more people buying insurance going forward will need costly care the moment they sign up.

In other words, this move destroys the nature of insurance.

It’s also indefensible as a matter of justice to require the uninsured to comply with the mandate.

“Put more simply, Republicans will immediately begin calling for the uninsured to get this same exemption. What will the Obama administration say in response? Why are people whose plans were cancelled more deserving of help than people who couldn’t afford a plan in the first place?” asks Ezra Klein.

As I said in my column this week, Obamacare’s failures are completely that fault of its supporters. Republicans shouldn’t help fix something that is so broken. 2014 should be the year the GOP unites around a viable alternative to replace this monstrosity after it is repealed.

December 18th, 2013 at 2:31 pm
HHS Threatening to Expel Insurers That Don’t Give Away Free Health Care

New regulations by the Department of Health and Human Services (HHS) say that the price of not complying with government demands to lose money will result in being kicked off Obamacare exchanges next year, reports Avik Roy.

“We are considering factoring into the [qualified health plan] renewal process, as part of the determination regarding whether making a health plan available… how [insurers] ensure continuity of care during transitions,” HHS warns.

‘Continuity of care’ refers directly to the massive disruptions in health insurance coverage meted out by Obamacare. With only a fraction of enrollees likely to have paid their premium in time to be covered by January 1, many people who think they are covered won’t be.

But that’s if ordinary rules of insurance coverage apply. In order to avoid another PR disaster, HHS is demanding that insurance companies pay for services even if the claimant hasn’t paid her premium. Refusal to do so would disrupt continuity of care, and thus give HHS – according to its self-serving rule – reason to expel the insurance company from selling plans on an Obamacare exchange.

Roy says this latest move by HHS is lawless and unconstitutional. I agree. But the worst thing about it is that the insurance companies most vulnerable to this type of abuse probably won’t challenge the Obama administration in court, since doing so would likely get them kicked off the exchanges they have spent three years reorganizing their business model around.

This is gangster government.

December 9th, 2013 at 6:32 pm
O-Care PR Disaster Lacked Truth, Success and Credibility

A consensus is forming in the public relations world about what went wrong with Obamacare’s horrendous Healthcare.gov rollout.

In what Politico calls “a case study for crisis management consultants and their clients of what not to do,” three problems are clear.

First, the Obama administration wasn’t truthful. By downplaying the website’s crashes and error messages as “glitches” due to heavier-than-expected traffic, the White House misled the public on how bad the system actually was.

Second, updates lacked success stories. That’s probably because only 6 people successfully enrolled via the website on its first day.

Finally, despite more than three years to get ready Obamacare still lacks an effective spokesperson.

But that’s not quite right.

Until recently, President Barack Obama was a very effective spokesman when he told anyone who would listen that his signature bill would expand coverage, reduce costs and improve quality – all without requiring anyone to forfeit their current plans, doctors and hospitals.

Though the criticisms from PR consultants of the Obama administration’s handling of its latest fiasco are well-deserved, the problem with Obamacare runs much deeper than a textbook failure of crisis management. The problem with Obamacare is that it was designed by ideologues, implemented by amateurs and sold on a lie.

No amount of spin or surrogacy can fix that.

November 9th, 2013 at 5:58 pm
Obamacare and the Culture Wars

Among other social-engineering priorities, Obamacare’s drafters decided that pricing insurance policies for men and women in relation to the services each group is likely to use is discrimination, since women, unlike men, need access to costly reproductive services.

The solution to this perceived problem is to mandate that all people purchasing insurance under Obamacare – including males covering only themselves – must pay for services like maternity care that they cannot use. The result is another HHS mandate that significantly raises the cost of health insurance on one group (men) for the sake of making it more affordable for another (women).

For a glimpse of where this comes from and where we’re heading, consider the Obama 2012 campaign’s much-maligned “Life of Julia” web video. It shows how a young girl in America progresses through adulthood without ever forming a family. Instead, her entire life requires a series of massive interventions from paternalistic government, including the likes of Head Start, public school, college loans, small business subsidies, child support services, as well as health and pension payments. The creators revel in the fact that all of these programs allow their heroine to live a life completely unimaginable absent such government-coerced public assistance.

My hunch is that many Republicans aren’t brave enough to denounce the Democrats’ “War on Men,” for fear of a feminist backlash. But if no protest is lodged, then the Party of Dependency will be encouraged to continue enacting policies that force traditionally conservative constituencies to pay for the lifestyle choices of consistently liberal voters.

November 1st, 2013 at 4:51 pm
More Legal Woes for Obamacare

Though Obamacare’s individual mandate barely survived the Supreme Court last year, there’s no guarantee that some of the law’s other elements will be so lucky.

Last week, Tim explained that litigation challenging the health law’s federal subsidy structure is proceeding toward the Court. If the Court’s four consistent conservatives and swinger Anthony Kennedy stay true to the text, citizens in 34 states won’t be eligible for subsidies that make Obamacare-approved insurance plans (somewhat) more affordable.

Another series of cases challenge the controversial ‘HHS mandate’ that requires all non-houses of worship to provide employees with access to contraceptives and abortion-related services; despite the objecting employer’s religious beliefs. Appellate level decisions are split between the government and private business, meaning the Court is very likely to decide the issue as a way to provide continuity throughout the nation.

If recent trends hold, the Supreme Court will hear oral arguments in both lines of litigation sometime next spring, releasing a high-profile opinion in mid-summer.

As long as Obamacare is the law of the land, there will be no end to the headaches it creates.

October 29th, 2013 at 4:51 pm
Obamacare Subsidies Could be Illegal

If you think Obamacare-approved insurance is expensive now, imagine how high it could go if the Supreme Court rules federal subsidies illegal.

Currently, there are four lawsuits making their way through the federal judiciary. I’ve profiled one from Oklahoma previously, and its arguments are essentially the same as the others.

In a nutshell, the text of Obamacare makes federal subsidies available to people buying health insurance on state-run exchanges created under Section 1311 of the law. The law says nothing about subsidies being available for insurance bought through federally-run exchanges created under Section 1321.

The Internal Revenue Service tried to paper-over the problem by issuing a regulation that made subsidies available on both sets of exchanges, but that’s being vigorously challenged as an illegal affront to the plain meaning of the Obamacare statute.

As Sean Trende notes, this challenge to Obamacare, if successful, wouldn’t kill the law outright. That might make voting against the IRS’s power grab more palatable for Chief Justice John Roberts, who cast the crucial fifth vote to uphold the individual mandate last year.

Of course, if the subsidies aren’t available to people in the 34 states where HHS is operating an exchange, then the system will implode. Even with subsidies many people are struggling to pay for the higher costs. Take them away and a huge political backlash will be unleashed.

If any of these cases gets to the Supremes, let’s hope they stick to the law and leave the politics for Election Day.