In ongoing negotiations, it's reported that some are proposing to employ destructive drug price controls…
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Budget Negotiations: CFIF Opposes Use of Drug Price Controls via "Mandatory Inflation Rebates"

In ongoing negotiations, it's reported that some are proposing to employ destructive drug price controls as a mechanism to reach a budget agreement.  For multiple reasons that CFIF has highlighted, that poses a potentially catastrophic idea.

Specifically, it appears that debt ceiling negotiations may include a destructive proposal to reduce federal spending levels by targeting $115 billion from Medicare, which would derive largely from alleged “Medicare savings” through instituting a government-imposed mandatory “inflation rebates.”  As we've explained, inflation rebate proposals work by penalizing drug innovators with higher taxes whenever their products exceed an arbitrary inflation mark.  Currently, Medicare Part D’s structure works by employing market-based competition…[more]

July 22, 2019 • 01:09 pm

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ObamaCare Plan B: Contract with States to Save Subsidies Print
By Ashton Ellis
Tuesday, March 17 2015
Despite all the machinations engaged in by the Obama administration, the intent of the law is evident in its text.

If the Supreme Court strikes down an unauthorized IRS rule that gives ObamaCare subsidies to ineligible citizens, the Obama administration thinks it has a way to save them.

Last week the United States Supreme Court heard oral arguments in King v. Burwell, a Virginia-based challenge to the mechanism that makes “The Affordable Care Act” affordable.

In order to claim that ObamaCare would not increase federal spending beyond federal revenues – i.e., it would be deficit neutral – the drafters of the law made subsidies available to citizens who purchased their health insurance through a state-run exchange. But only through a state-run exchange. Though the law said that a federal exchange would be created to serve citizens in states without one, no subsidies would be allowed through it.  

ObamaCare’s drafters also tried to sweeten the deal by making available at least $4.9 billion in start-up grants to help states pay for the cost of building their own exchanges. However, high-profile failures in Nevada, Oregon, Hawaii and Vermont – among others – wasted nearly $1.2 billion.

To date, only 13 states and the District of Columbia operate their own exchanges, putting the Obama administration in an awkward position. Either officials could watch as millions of people are unable to afford ObamaCare – and thus hate it – or they could rewrite the rules. The IRS rule being challenged at the Supreme Court indicates which decision they made.

But now it’s coming to light that the Department of Health and Human Services is attempting yet another work-around if the Court gets in the way.  

“It involves encouraging states to declare that they are subcontracting the management of an insurance exchange to HHS, thereby ‘establishing’ an exchange as per the law,” writes Avik Roy. “However, HHS is not 100 percent certain that such a maneuver will fly; the Supreme Court may choose to define specifically what an ‘exchange established by the State under Section 1311’ actually means. If the Court’s majority opinion specifies that an exchange has to be actually established by a state, rather than subcontracted out to the federal government, HHS will have to go to ‘Plan C.’”

It’s not at all clear whether the criteria for establishing a state exchange under ObamaCare would be met under this new subcontractor theory. For example, the text of the law allows states to partner with other states in regional or interstate exchanges. It also allows states to create subsidiary exchanges to serve discrete markets within their own borders. However, in neither case does the language of the statute mention outsourcing management operations to the federal exchange.

This is crucial since the whole point of making subsidies contingent on local operation of an exchange is to incentivize states taking on the financial burden of launching and maintaining those costly bureaucracies. If the law allowed states to get all the benefits of subsidies simply by paying a fee to the feds, no state would have borne the costs to launch a start-up. Nor would the federal government have doled out $4.9 billion in grants to grease the process.

Despite all the machinations engaged in by the Obama administration, the intent of the law is evident in its text. The feds tried to entice states into a pay-to-play scheme that would hide the true cost of health insurance, let ObamaCare’s backers claim they had covered millions of uninsured Americans and pad state budgets just long enough to make those new bureaucracies seem affordable.

It’s often said that the Supreme Court’s job is to say what the law is. There’s no better way to honor that duty than to hold Congress and the president accountable for the laws they pass. If the political branches lose on the gamble to tempt a majority of states to trade away financial sustainability for a few years’ worth of good press, then it’s not the Court’s job to bail them out.

Question of the Week   
On July 20, 1969, the first man to walk on the Moon was Neil Armstrong, making “one giant leap for Mankind.” Who was the last person to walk on the Moon?
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Quote of the Day   
"Rarely has a foreign country seemed so eager to get bombed by the United States as Iran does right now.In its latest provocation, Iran seized a British-flagged tanker in the Strait of Hormuz on Friday. It wasn't a subtle operation. Revolutionary Guard forces rappelled on to the tanker from a helicopter, and if you have any doubt, it was all captured on videotape.The act raised the stakes in the regime…[more]
—The Editors, National Review
— The Editors, National Review
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