Freedom Line Blog

Wisconsin Republican Governor Scott Walker won his third gubernatorial election in four years this week, and he’s already drawing fire from national liberal pundits trying to squelch any idea he could be the GOP presidential nominee in 2016.

Welcome to Walker’s victory lap.

After coming into office on the 2010 Republican wave election, Walker survived a 2012 recall attempt spurred by his reforms that loosened the public labor unions’ grip on the state’s budget. Walker’s 2014 reelection – by the same six point margin as in 2010 and one point shy of his 2012 mark – gives him an excellent springboard to run as a reformer-with-results. What other potential GOP White House hopeful can boast such an impressive policy and electoral record in a purple state?

Officially undeclared, Walker remains a dark horse candidate in a field that will likely be crowded with more familiar names like Jeb Bush, Ted Cruz, Rand Paul and Marco Rubio. Still, based on record Walker compares favorably. Bush has been out of office since 2006 and all the other top shelf contenders are sitting U.S. Senators who have labored in the minority for their entire tenure.

Walker knows what it takes to get big ideas implemented, and he has the battle scars to prove it.

Of course he’ll need to cultivate a national profile, but the release of his memoir, Unintimidated: A Governor’s Story and a Nation’s Challenge, is likely to be just the first step in that process.

Come January 2015, we may be hearing even more from the Wonder Worker of Wisconsin.

In a surprise move, the United States Supreme Court announced today it will hear a third challenge to ObamaCare in as many years.

The case, King v. Burwell, is one of many lawsuits challenging a controversial IRS decision to extend federal subsidies to any person eligible to buy insurance on an ObamaCare exchange. The legal fight is over whether the text of ObamaCare permits subsidies to be given to citizens purchasing health insurance through Healthcare.gov, the federal exchange, when the law clearly says they cannot.

Supporters of ObamaCare say the disputed statutory language amounts to typos inconsistent with the spirit and purpose of the law. Opponents insist that the plain meaning of the words be honored, or risk the rule of law taking a back seat to bureaucratic whim.

The timing of the Supreme Court’s decision means that oral arguments will be held sometime in the spring with a final decision likely next summer. If the challengers are successful, King v. Burwell may go down in history as the lawsuit that signaled the beginning of the end of ObamaCare.

Conservative health policy experts Avik Roy and Gracie-Marie Turner both have interesting long reads on what the new Republican majority in Congress should do to transition away from ObamaCare towards a more market friendly alternative.

Both call for a unified strategy focused on repealing ObamaCare’s most unpopular elements and daring President Barack Obama to veto. Importantly, both want the GOP to leave the door open for a truly patient-centered alternative that reduces the government’s role while increasing access to quality health care. It’s a tall order with little consensus.

Roy and Turner each have specific pathways for achieving their goals, and it’s worth reading their articles to get a sense of where conservative health policy may be heading. However, the success of a conservative ObamaCare alternative ultimately comes down to whether House Speaker John Boehner (R-OH) and new Senate Majority Leader Mitch McConnell (R-KY) can corral enough of their members around a unified endpoint. That job is made trickier by the fact that the 2016 presidential campaign will soon be underway, with lots of Republican candidates keeping the specifics of their own ObamaCare alternatives close to the vest.

Going forward, the real goal for Boehner and McConnell is to get rid of what they can, minimize what they can’t and leave enough room for the 2016 presidential nominee to maneuver toward an alternative the public will support.

Easy? No. The price of leadership? You betcha.

In the debate over whether to repeal or reform ObamaCare, the pro-repeal caucus just added ten new members.

And they’re all in the U.S. Senate.

“Every newly elected GOP senator who won in last night’s election campaigned on repealing ObamaCare,” reports CNS News.

Here’s the list:

• Cory Gardner of Colorado
• David Perdue of Georgia
• Joni Ernst of Iowa
• Thom Tillis of North Carolina
• Tom Cotton of Arkansas
• James Lankford of Oklahoma
• Steve Daines of Montana
• Mike Rounds of South Dakota
• Shelley Moore Capito of West Virginia
• Ben Sasse of Nebraska

The election of these ten senators moves the chamber’s new GOP majority in a repeal-friendly direction, perhaps making it easier for Republicans – who extended their majority in the House of Representatives – to demand more concessions from a now isolated President Barack Obama.

Of course, just because a majority in Congress wants to repeal ObamaCare doesn’t mean its namesake in the White House will go along. It does mean, however, that conservatives in Congress have a deeper well of support to draw from over the next two years in trying to reduce and eliminate as much of ObamaCare as they can.

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.

Conservatives who want a “reformer with results” resume to run for President of the United States in 2016 should be praying that Scott Walker gets reelected this year. The Wisconsin Republican governor is in his third tough campaign for the state’s top office in four years, having initially won the office in 2010 and then surviving a recall effort in 2012. If Walker wins again in November, expect to see him become the dark horse candidate to win the GOP nomination.

But first Walker has to win reelection. And that’s no guarantee.

Robert Costa of the Washington Post has an interesting analysis of Walker’s main problem this time around: Falling 150,000 jobs short of his 2010 pledge to create 250,000 jobs in Wisconsin during his first term.

For his part, Walker has blamed the state’s union culture. “We don’t have a jobs problem, we have a work problem,” he said in a televised debate with his Democratic opponent. That may be true, but it’s not sitting well with some voters.

If Walker is defeated, conservatives will likely lose an important voice and option during the 2016 sweepstakes. It will also mean rollbacks of the union-busting laws he helped implement. Neither would be good. Hopefully, Walker can avoid both.

“Amy Lotven of the trade publication Inside Health Reform reports that before insurers agreed to sell coverage through the Patient Protection and Affordable Care Act’s health insurance Exchanges in 2015, they demanded that the federal Centers for Medicare and Medicaid Services explicitly agree to let them cancel policies if any of the Halbig cases succeed in blocking the subsidies that carriers had been receiving in the 36 states whose ObamaCare Exchanges were not, as [ObamaCare] requires before subsidies can flow, ‘established by the State’”, writes Michael Cannon.

You’ll recall that there is a big fight over whether the Obama administration is blatantly violating its own law by making subsidies available to people who don’t qualify under the statute. And, as Cannon points out, making illegal subsidies available also subjects up to 57 million individuals and employers to illegal penalties under ObamaCare’s individual and employer mandates.

That insurance companies demanded the right to cancel policies relying on subsidies shows how concerned the industry is at being blamed for high-cost coverage when and if the government’s policy is ruled illegal. That the Obama administration agreed indicates the strength of the argument that even the executive branch should follow the law.

“Without [ObamaCare’s] premium support, premiums rise by nearly 45 percent, and enrollment falls by nearly 70 percent,” says a report by RAND Health.

The analysis is part of an evaluation commissioned by the federal Department of Health and Human Services (HHS), the agency in charge of ObamaCare implementation.

The report’s publication follows on news that a federal district judge in Oklahoma ruled ObamaCare’s premium support (i.e. subsidies) mechanism is not available in states that use Healthcare.gov, the federal ObamaCare exchange. According to the text of the law, eligibility for subsidies depends on a citizen’s state operating its own exchange. If the law’s plain meaning is followed, RAND’s analysis will apply to citizens in more than half of the states.

The RAND Health report confirms a simple truth about ObamaCare – if people must pay the full freight of its “affordable” insurance, they will refuse.

H/T: The Daily Caller

Next year’s ObamaCare premiums won’t be available through Healthcare.gov – the federal insurance portal servicing 26 states – until the week after the November 4^th midterm elections.

“Insurers say one big challenge for next year will involve millions of returning customers,” the AP reports. “It’s not really a technology issue, but a time crunch that also coincides with the Thanksgiving and Christmas holidays.”

In this case, it’s not the health insurance companies who are to blame, but rather the Obama administration. Late last year when Healthcare.gov was glitching its way into infamy, news leaked that the enrollment period for 2015 would be pushed back a month – from October 15 to November 15. Everybody who could read a political calendar knew the primary motivation was to hide the true cost of ObamaCare’s second year premiums from voters before going to the polls.

This is just one more reason why it’s a bad idea to have the government in control of health care pricing – those responsible will never allow the public to hold them accountable.

H/T: Townhall Tipsheet

As we gear up for another week of politics-as-usual, it’s helpful to keep our eyes on what we’re arguing for and how we do it. In a splendid little essay about civil discourse rightly understood, political scientists Matt Parks and David Corbin explain how to keep one’s dignity when defending our republic.

What’s a critic of Progressivism to do? Follow the example of Publius: argue vigorously about the common good while judging with charity the aims of one’s opponents. Respect friends of the rights and liberties of the people wherever you find them and seek to correct them when their means don’t match their ends.

Lies should be called lies and there’s no need to assume that well-intentioned plans and proposals will end well, but a healthy measure of forbearance joined with an openness to self-criticism will do more for the cause of republican government than a conservative equivalent of the Big Smathers Lie. The result will either be to reopen the public square to civil discourse by enlivening a debate over the common good or by showing Progressives, in their intransigence, to be both cynical and unserious about the most important political questions.

In other words, we honor the public square when we assume the best of our opponents’ intentions, even if we are compelled by logic and evidence to criticize their ideas.

It’s a high bar to clear, but worth the struggle.

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.

The IRS is out-of-control.

In the last year we’ve learned that Lois Lerner and other officials in the tax-exempt unit singled out conservative groups for extra scrutiny before approving their requested non-profit status.

That was followed by revelations from IRS higher ups that they mysteriously lost thousands of emails from Lerner and others during the timeframe of interest to congressional investigators.

Last week, a private jet company alleged that the IRS “wiped clean a number of computer hard drives containing emails and other electronic documents that the Government was required to produce.”

And now this.

“The Internal Revenue Service wrongly withheld or failed to adequately search for records in hundreds of Freedom of Information Act requests, while accidentally releasing sensitive taxpayer information in other instances, an independent government watchdog found,” reports the Washington Free Beacon.

The Beacon is summarizing an analysis released by the Treasury Inspector General for Tax Administration (TIGTA).

“TIGTA sampled FOIA requests to the IRS and found 11 percent ‘in which taxpayer rights may have been violated because the IRS improperly withheld or failed to adequately search for and provide information to the requestors’.”

As an independent federal agency, the IRS has a grave obligation to be accountable to the citizens it serves, either directly through FOIA requests or indirectly through congressional oversight panels. That the IRS seems chronically incapable – and increasingly, it seems, unwilling – to honor due process and the rule of law is reason enough to launch a full-scale reconsideration of what the agency does, how it does it and what kind of people should be entrusted to follow the rules.

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.

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.

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.

It’s been a rough couple of weeks for power-hungry bureaucrats.

Recently, the General Accountability Office (GAO) issued a report faulting the Centers for Medicare and Medicaid Services (CMS) for being unable to produce itemized spending documents, and thus not complying with federal audit guidelines.

This week, the non-partisan government watchdog agency issued a legal opinion saying CMS does not have the authority to bail out ObamaCare-aligned insurance companies, unless Congress agrees.

GAO’s non-binding but influential legal opinion was generated by a request from congressional Republicans concerned about a CMS announcement that it would use money appropriated for other activities to fund ObamaCare’s “risk corridor” program.

Risk corridors refer to a scheme within ObamaCare to compensate insurance companies who lose more than a specified amount of money covering high-cost patients. Initially, funds are redistributed from highly profitable companies. But if the losses exceed a certain threshold, federal taxpayers step in via CMS, the primary agency implementing ObamaCare.

With all of ObamaCare’s pricey mandates – most importantly “guaranteed issue,” which requires insurers to enroll customers with preexisting conditions – there is concern that significant losses among participating companies could put taxpayers on the hook to bailout several firms in the health insurance industry.

It’s worth noting that GAO released its legal opinion on the same day Federal District Judge Ronald A. White struck down a similar bureaucratic power grab by the Internal Revenue Service. While the timing is unconnected, the central issue is not. In both cases agencies within the Obama administration are attempting an end run around the plain meaning of a statute in order to make the president’s legacy program appear to work better than it is.

The rule of law is more important than avoiding bad press for a poorly written bill. Bravo to the GAO and Judge White for having the courage to hold the executive branch accountable.

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.

If you purchase an ObamaCare plan in California, good luck trying to find a directory that matches your insurance policy with a specific doctor.

“Altogether, the 10 insurers in Covered California have contracted with an estimated 75% of California’s licensed physicians, or nearly 90% of those considered active in the state,” reports the Los Angeles Times. “However, many of those doctors are available in just one or two health plans.”

That is, if you can find them.

“There’s no timetable for a state provider directory after the exchange scrapped an initial version that was riddled with errors. Instead, Covered California refers people to insurance company websites that vary in usefulness,” says the paper.

The resulting anger and confusion has spawned almost 300 complaints to state regulators and two consumer lawsuits against some of the biggest insurance companies in California.

Doctors are getting hosed too, according to the report. “Insurers say they can pass along savings by paying doctors less and rewarding that select group with higher patient volume. It’s also hoped those doctors will take on a bigger role coordinating patient care.”

To clarify, in return for getting paid less doctors that accept ObamaCare-compliant plans are getting more patients and more exposure to medical malpractice lawsuits.

No wonder there’s no directory matching providers to plans. The docs want to hide!

Eric Holder, the controversial face of the Obama Justice Department, is stepping down as United States Attorney General.

The timing seems odd. If Democrats lose control of the U.S. Senate in this year’s midterm elections – a very likely prospect – it will be impossible for President Barack Obama to win confirmation for a replacement as polarizing as Holder.

That would be a good thing for the Republic.

Among the many blemishes on Holder’s tenure as AG – such as the Fast and Furious scandal, his unprecedented Contempt of Congress citation, his failed attempt to prosecute the 9/11 conspirators in a civil court instead of a military tribunal – it’s the so-called “legacy” actions Holder took that should give observers the most pause.

According to NPR, “Holder most wants to be remembered for his record on civil rights: refusing to defend a law that defined marriage as between one man and one woman; suing North Carolina and Texas over voting restrictions that disproportionately affect minorities and the elderly; launching 20 investigations of abuses by local police departments; and using his bully pulpit to lobby Congress to reduce prison sentences for nonviolent drug crimes. Many of those sentences disproportionately hurt minority communities.”

Notice what’s missing?

Only one achievement on the list actually enforces the law. (And even this area, prosecuting allegedly abusive local police departments, tells us a lot since it’s directed at cops and not, say, verified abuses by the New Black Panthers.)

Everything else – from refusing to defend a traditional marriage statute to playing a prison reform lobbyist – are actions designed to undermine the law as written.

Eric Holder shouldn’t worry. His legacy is clear. His will be remembered as the time when activism replaced lawyering and the rule of law suffered.

Hopefully, it’s not the start of a trend.

If you’ve tried to buy insurance on an ObamaCare exchange, you’re familiar with the four levels of coverage available: Bronze, Silver, Gold and Platinum. Each level covers a set percentage of costs should you incur health-related expenses.

For example, a Bronze plan covers 58-62 percent, a Silver plan 68-72 percent, Gold 78-82 percent and Platinum 88-92 percent.

Notice, however, that there are gaps between the coverage levels.

Recall as well that ObamaCare’s coverage requirements get tweaked from year-to-year, changing the actuarial value – i.e. the percentage of covered benefits the insurance company is expected to pay – each year.

Here’s the problem.

“Suppose you are in a Bronze plan with an actuarial value of 58 percent. Then, a year from now, because of price changes, technology changes, or some other kind of change, your plan suddenly covers 64 percent of expected expenses. That’s good for you, right? Wrong. Because your plan no longer fits into one of the metallic corridors, it’s no longer a valid plan – despite the fact that it has become a better plan,” explains John C. Goodman, a conservative health policy expert.

The same is true at the other end of the coverage spectrum.

“Now let’s suppose you have a really good plan – a plan that pays 98% of expected health care costs,” writes Goodman. “Given the large number of Democrats who believe that health insurance should pay almost every medical bill, you would think that the law passed by a Democratic Congress without a single Republican vote would strongly encourage such a plan. If you’re inclined to think that, you are mistaken, however.

“Any plan that pays more than 92% of expected health care costs for the average enrollee is illegal under Obamacare.”

Get ready to change your health insurance more often than you change your auto insurance.