Freedom Line Blog

Avik Roy, a conservative health policy expert, penned a very helpful primer on the latest GOP ObamaCare alternative.

The plan – the Patient CARE Act – is an updated version of similar reform concepts presented last year by three leading Republican members of Congress.

Along with other intriguing ideas, the Patient CARE Act replaces ObamaCare’s restrictive subsidy system – i.e. the money can only be spent on federally-approved insurance plans – with “a means-tested tax credit that individuals could use to buy a far broader range of insurance products, or deposit the funds in a health savings account.”

As a tremendous service to readers, Roy also summarizes how the Patient CARE Act compares to other conservative health reform alternatives: his Transcending ObamaCare and one championed by the 2017 Project. All three are serious proposals and deserve attention.

More on these and other ObamaCare alternatives as they develop…

Here’s a look at the newest Republican alternative to ObamaCare.

According to the plan’s authors – Rep. Fred Upton of Michigan, plus Senators Richard Burr of North Carolina and Orrin Hatch of Utah – the plan would rein in Medicaid’s burgeoning costs by turning it into a block grant.

That’s not all.

Among other things, the Patient CARE Act would:

• Enact medical malpractice reforms to reduce frivolous lawsuits
• Require basic price transparency to inform and empower patients
• Cap the exclusion of an employee’s employer-provided health coverage
• Create a targeted tax credit to help buy health care

Billed as a “Bicameral Republican Blueprint,” this proposal has support from three powerful members of the GOP in Congress. Once they produce more details, then we’ll see how many votes they can muster.

Ladies and gentlemen, please welcome another politically-motivated ObamaCare delay to the stage!

Megan McArdle sums up the IRS’ decision to let those who received too much in ObamaCare subsidies last year get extra time to pay back the difference (called the law’s “clawback” provision).

“It’s not relieving you of the obligation to repay; it’s just saying that you won’t be liable for a penalty if you don’t repay by the deadline,” explains McArdle. “Interest will continue to accrue, but the interest rates that the IRS charges are actually pretty reasonable (and probably much better than what your credit card company charges). It’s the failure-to-pay penalties it layers on top – half a percentage point a month, with even stiffer penalties for failing to file – that really make your tax bill add up fast.”

That is, if the Obama IRS ever gets around to enforcing the parts of laws it doesn’t like. McArdle writes, “The IRS emphasizes that this is a one-time deal, just for 2014. But I’m not sure if you should believe it. This emphasizes one of the problems we’ve spoken about a lot in this space: The political will to impose the costs of the Affordable Care Act is a lot less strong than the will to distribute the benefits.”

The Republican establishment was once derided as the tax collector for the welfare state. If Obama and the Democratic Party can’t be bothered to administer both the costs and the benefits of their so-called health reform law, the GOP shouldn’t shoulder the burden of balancing its books.

Every politically-motivated delay in enforcing an aspect of ObamaCare is a tacit admission by its supporters that the law is unworkable in practice. Republicans should acknowledge the obvious and start afresh.

Harry Reid (D-NV) and his Senate Democrats voted to shut down the Department of Homeland Security today.

The piece of legislation they voted down was a Republican bill to fund DHS for the rest of the fiscal year with the caveat that no funds could be spent implementing President Barack Obama’s unilateral immigration amnesty. Currently, the DHS budget is set to expire at the end of February.

The decision probably didn’t involve too much deliberation or anguish since Reid & Co. can count on a sympathetic media to frame the result as Republican obstruction, i.e. not letting Obama and the Democratic Party run roughshod over federal law to curry favor with millions of potential future voters.

If anything Reid and his allies probably think they helped Obama save face by shielding him from having to veto common sense legislation for naked political reasons. Now, Obama can blame Congress for not working, even though it’s the members of his own party that are throwing up roadblocks.

One thing that is clear is that Reid never would have whipped his entire caucus in opposition unless Obama had authorized it. So, call this an indirect veto of Republicans’ immigration funding maneuver and we’re right where we would have been had the bill passed and been rejected.

Obama and Reid play on the same team, so Republicans can’t let the media portray this as anything other than what it is – a high stakes dispute over whether policy gets decided according to the rule of law or the whim of one.

If the president wants to start the negotiating process earlier than expected, so be it. Republicans in Congress shouldn’t use this an excuse to cave.

There had to be a strategy to overcome the veto, at least in the court of public opinion. After today’s vote, it’s time to accelerate the time line.

There are many ways to skin a cat, the saying goes, and there may be more than one way to frame the Supreme Court striking down the IRS’ lawless extension of ObamaCare subsidies to an estimated 5 to 6 million Americans.

If the Court invalidates the subsidies for people living in states without a state-run ObamaCare exchange – as a plain reading of the law requires – then the consequences will have a ripple effect.

“For instance,” columnist Philip Klein explains, “ObamaCare’s fines against employers that do not offer health insurance coverage are triggered when a worker claims government subsidies to purchase insurance on an exchange – but in states where workers can no longer legally receive those subsidies, then there are no fines. The employer mandate, thus, is effectively dead in those states.”

There’s more.

“Additionally,” says Klein, “the individual mandate exempts those who can’t find health insurance options for less than 8 percent of their income – thus, if the subsidies are eliminated, more people will be able to claim this exemption.”

In other words, if a lack of ObamaCare subsidies make individual health insurance unaffordable, then the individual and employer mandates are null and void.

An ObamaCare without mandates weakens the law substantially, and makes it far more likely for Republicans to change. If the Supreme Court delivers a decision that brings it about, the GOP should be in a good position to enact a more workable alternative.

Republicans on both sides of Capitol Hill are busy strategizing for ways to minimize the political fallout if the Supreme Court invalidates health insurance subsidies for millions of people currently receiving them under ObamaCare.

The case, King v. Burwell, challenges the IRS’ decision to make insurance premium subsidies available to citizens of 34 states that do not have a state-run ObamaCare exchange. The policy is in direct conflict with ObamaCare’s text, providing the justices with a clear opportunity to hold the Obama administration to the letter of the law.

The Hill is reporting that Republican members of the House and Senate are discussing ways to be ready when and if an estimated 5 to 6 million Americans suddenly can’t afford to purchase mandated health insurance.

So far, no details have emerged regarding specifics. There is a lot to consider since any change in the law will require President Barack Obama’s signature. A complicating factor may be this president’s willingness to let the media portray Republicans and the Court as heartless conservatives, even though all that’s being asked for is the Obama administration to implement its own law as written.

Nothing new here.

On the flip side, it’s encouraging to hear that Republicans in Congress are trying to get in front of a potentially damaging issue by coalescing around an alternative they can sell to the public.

Hopefully this is the start of a welcome trend.

As Republicans turn to the Congressional Review Act (CRA) to rein in the Obama administration’s executive overreach, they should scrutinize a recent trend to shirk the CRA’s reporting requirements.

In my column this week I explain how the CRA works – a federal agency proposes a rule and Congress gets about 60 days to kill it (so long as the president agrees). Even if the president vetoes Congress’ disapproval, the process helps define each party’s stance on the proper role of regulation.

Importantly, the CRA imposes a reporting requirement on federal agencies to inform Congress about final rule proposals. It turns out, however, that the CRA doesn’t create an oversight process to ensure compliance.

Enter the Government Accountability Office (GAO), Congress’ watchdog over the administrative state.

“Shortly after the CRA was enacted, GAO voluntarily developed a database of submitted rules, began checking the Federal Register to ensure that all covered rules were being submitted, and periodically notified the Office of Management and Budget (OMB) about missing rules,” says a 2014 report from the Administrative Conference of the United States.

“However, in November 2011, GAO decided to reduce its checks of the Federal Register, and to stop notifying OMB about missing rules.”

As a consequence, GAO lost track of whether federal agencies were complying with the CRA. Between 2012 and 2014, “[m]ost of the 43 missing major and significant rules also did not appear to have been received by both houses of Congress – thereby preventing a Member of Congress from introducing a resolution of disapproval under the CRA.”

Since Congress can’t disapprove what it doesn’t know about, the Republicans that control the legislative branch should instruct GAO to ratchet up its oversight to ensure the Obama administration is CRA-compliant.

With oil prices at record lows some Members of Congress have floated the idea of raising the federal gas tax to make up for lost revenue.

Today, Paul Ryan put the kibosh on the proposal.

“We won’t pass the gas tax,” Ryan, a Wisconsin Republican, said to members of the media outside a GOP policy retreat in Hershey, PA.

Ryan’s pronouncement likely quashes the idea that Congress will pass legislation during his tenure as chairman of the tax-writing Ways & Means Committee.

This won’t make the social engineering crowd happy.

According to a piece at Newsweek in support of imposing a higher gas tax, “Whenever you impose a new and unanticipated tax, some part of the existing capital stock becomes less valuable than it was before.” “Adding, say, 50 cents to a gallon of gasoline makes preexisting gas guzzlers, homes in the suburbs and oil-based home heating systems worth less than before.”

“Conversely, when oil prices fall, fuel-efficient cars, homes in city centers and public transit investments all drop in value. This can lead to economic waste: under-used automobiles, unrented homes and empty subways,” complains the author.

Note that the compacted urban lifestyle preferred by liberal social planners is the vision that suffers from low gas prices, while the middle class lifestyle experienced by millions of Americans benefits.

Raising taxes to force people to become public transit-riding renters instead of car-driving homeowners isn’t very popular when put in these terms.

Kudos to Chairman Ryan for putting this idea to rest.

How important is the upcoming 2016 presidential election?

According to research by political scientist Jordan Ragusa, the most favorable time to repeal landmark legislation like ObamaCare occurs about ten years after its passage.

Since ObamaCare was passed in 2010, that means 2020 is the year repeal activity could be at its height.

Ragusa’s ten-year window is an average calculated over a fifty-year study of repeal efforts of major laws. In the context of ObamaCare, Ragusa’s timeline makes perfect sense. Republicans don’t have the supermajority in either chamber of Congress to override a certain veto from President Barack Obama. But if a Republican wins the presidency in 2016, all the GOP would need is a simple congressional majority to repeal any or all of ObamaCare.

Yes, it’s important for Republicans in Congress to get whatever wins they can muster now to weaken ObamaCare before it does more damage. But changes in partisan control take time. When ObamaCare was passed Democrats were in complete control of the political branches. The earliest Republicans could be in such a position is January of 2017.

It will also take time for the GOP to coalesce around a comprehensive alternative to ObamaCare, which, according to Ragusa’s data, shouldn’t be too much of a concern as long as a repeal-and-replace bill is signed into law before the Republican president’s first term expires.

There are a lot of considerations to keep in mind when it comes to securing a free market alternative to ObamaCare. Lack of time to do it right isn’t one of them.

If you want to know how Congress can stop President Barack Obama’s unilateral amnesty plan, take a look at Rep. Martha Roby’s (R-AL) new proposal – H.R. 31, the “Prevention of Executive Amnesty Act of 2015.”

Filed as a standalone bill, the measure could easily be rolled into the upcoming appropriations package for the Department of Homeland Security, the federal agency that is tasked with implementing Obama’s decision to halt deportations for up to 5 million illegal immigrants and grant many of them work permits.

As Byron York explains, “Roby’s bill is essentially a ‘none of the funds’ clause, that is, it forbids the executive branch from spending money for a particular purpose.” In the so-called ‘crominbus’ bill passed in December to fund every other federal agency except DHS, Congress used the ‘none of the funds’ clause more than 450 times. Applying it to the directives that implement Obama’s amnesty is a simple, straightforward way for Congress to use its power of the purse to block the move.

Of course, Obama can veto any bill with Roby’s language. But since the president doesn’t have a line-item veto, refusing to sign the law would defund DHS.

For once, let this president get the blame for shutting down the government.

Now in the majority, GOP Senators are moving quickly to approve the Keystone XL pipeline, a transcontinental project that would link Canadian oil to refineries in American Gulf states.

“The president is going to see the Keystone XL pipeline on his desk and it’s going to be a bellwether decision by the president whether to go with jobs and the economy,” Senator John Barrasso (R-WY), said on Sunday.

President Barack Obama has played games with the approval process over the past few years. Initially, his State Department supported the project and was ready to go forward until environmental activists successfully lobbied for delaying tactics, such as additional feasibility studies.

Without a Democratic Senate running interference, Obama will now have to govern. Though it prefers to partner with the United States, Canada has said it will export its oil to China if the Obama administration remains beholden to the environmental lobby.

The truth of the matter is that the oil is being pumped and its $3.4 billion economic contribution will have to go somewhere. Ultimately, Obama’s decision boils down to whether he wants Canadian oil to boost the American economy or China’s.

Even though Jonathan Gruber did his best to apologize for his incredibly damaging – and seemingly accurate – remarks about how and why ObamaCare was drafted, there was no place to hide from the bipartisan rebuke he received today from the House Committee on Government Oversight and Reform.

Gruber is the now infamous MIT professor and erstwhile “architect” of Democrats’ signature health reform law that called American voters “stupid” for not understanding basic economics and the deceptive policies embedded in ObamaCare.

Gruber’s comments have incensed Republicans, but they’ve also infuriated Democrats. Of all the anger directed at Gruber today, perhaps none was more forceful than that erupting from Rep. Elijah Cummings of Maryland, the ranking Democrat on the committee.

“As far as I can tell, we are here today to beat up on Jonathan Gruber for stupid – I mean absolutely stupid – comments he made over the last few years,” Cummings said. “Let me be clear, I am extremely frustrated with Dr. Gruber’s statements” because “They were irresponsibly, incredibly disrespectful, and did not reflect reality. And they were indeed insulting.”

We’ll see if any of this theater persuades the Supreme Court. Next spring the justices consider whether a section of ObamaCare should be interpreted, as written, to deny subsidies to citizens in 37 states that use the federal health insurance exchange. It’s an interpretation that Democrats oppose, but Gruber in at least one viral video adamantly confirms.

It’s been said that a political gaffe occurs when someone says the truth in public. Regarding ObamaCare’s deceptive elements, that may be Jonathan Gruber’s greatest offense.

On Tuesday this week Jonathan Gruber, the MIT economist and ObamaCare architect made infamous by a series of viral videos confirming suspicions of deceptive lawmaking, will appear before the House Government Oversight and Reform Committee.

It won’t be a pleasant meeting for Gruber.

Committee chairman Darrell Issa (R-CA) has titled the hearing, “Examining ObamaCare Transparency Failures.”

The biggest issue will be whether Issa and his fellow Republicans can get Gruber to confirm his previous statement that ObamaCare only grants insurance subsidies to people in states that operate their own health exchange. That’s the central issue in the case going before the Supreme Court next spring, and if the justices accept it, much of ObamaCare could be gutted.

Liberals are already trying to get ahead of any Gruber confessions under oath that could undermine their landmark domestic policy.

In a long-read piece at Politico, a former Democratic staffer tries to minimize the impact of Gruber’s comments by first saying he wasn’t involved in the policymaking process. That’s a fair point.

But then the staffer seems to completely confirm Gruber’s main argument – that the disputed statutory language was deliberately concocted to confuse people who weren’t in on the backroom political calculations.

The Politico reporter sums up the staffer’s argument this way: “The point of having the ‘Balkanized’ approach – state health exchanges plus a federal one for states that didn’t build their own – was to appeal to centrist senators, he said, since most liberal Democrats would have been happy just to have a federal one.”

As the staffer explains it, “No one was willing to fall on their swords to make sure states ran their own exchanges.”

In other words, the text in the law that limits the flow of subsidies to state exchanges is nothing more than an Orwellian wordplay. It doesn’t mean what it says. Rather, it’s designed to give ‘centrist’ senators political cover for voting to do the exact opposite – give subsidies to everyone.

Confused? Gruber isn’t.

This new rationale sounds an awful lot like the “tortured” drafting of ObamaCare that takes advantage of the “stupidity of the American voter” that Gruber’s been saying for years.

Kudos for being honest. Now let’s see if he will remain so under oath.

For political junkies, the news that MIT professor and ObamaCare architect Jonathan Gruber has agreed to testify before the House Government Oversight and Reform Committee is must see TV.

Gruber has stirred up a hornet’s nest of negative press for the controversial health care law because of statements he’s made at academic conferences over the last few years. Helpfully summarized by the folks at American Commitment, Gruber’s comments include calling American voters stupid and admitting to writing ObamaCare’s text in a tortured way to avoid a straightforward cost estimate from the Congressional Budget Office.

Also appearing at the hearing will be Marilyn Tavener, administrator of the Centers for Medicare and Medicaid Services, to explain – presumably with a straight face – why revelations that ObamaCare’s reported enrollment of 7 million inexplicably counted 400,000 dental plans. Republicans suspect a bad faith face-saving move since without the incorrectly included dental plans enrollment would have failed to reach CBO’s benchmark estimate.

All in all, December 9, 2014 should be an entertaining day in Washington, D.C. – if you like to watch contentious oversight hearings.

Fifty-six percent of Americans disapprove of ObamaCare, the highest number disapproving of the controversial health care law since Gallup began asking the question.

Approval of ObamaCare peaked just before the 2012 presidential election, but has cratered since then.

The culprit is reality.

The beginning of ObamaCare’s nosedive in popularity “occurred in early November 2013”, according to Gallup’s analysis, “shortly after millions of Americans received notices that their current policies were being canceled, which was at odds with President Barack Obama’s pledge that those who liked their plans could keep them. The president later said, by way of clarification, that Americans could keep their plans if those plans didn’t change after [ObamaCare] was passed.”

In other words, the law has continued to grow less popular with each new revelation that it was sold on a pack of lies.

Though completely repealing the entire law seems unlikely because the new Republican Senate majority is less than the number needed to overcome a certain Obama veto, the increasing levels of voter disapproval could convince some Senate Democrats to join Republicans in dismantling large parts.

Unless, that is, they want to risk involuntary retirement when their next election arrives.

With ObamaCare architect Jonathan Gruber’s admissions that the controversial health law was sold on a pack of lies, the probability is rising that the Supreme Court will interpret the law as written and eliminate subsidies for millions of people.

If that happens, will Republicans in Congress be ready?

In order to lay the groundwork for an ObamaCare alternative that covers as many or more people than the current law, and costs less, Republicans in Congress could unite behind a framework proposed by conservative health experts James Capretta and Yuval Levin. Similar ideas have been endorsed by Senator Orrin Hatch (R-UT), the incoming-chairman of the Senate Finance Committee, and Rep. Paul Ryan (R-WI), the likely next chairman of the House Ways and Means Committee.

If the Supreme Court does strike down the subsidies, President Barack Obama won’t have much leverage since, “Much of ObamaCare would have just self-destructed due to its own design flaws and lack of public support, and Republicans would be offering a way to advance the law’s stated goal of assuring coverage – if not in the highly prescriptive and centralized manner the White House prefers”, writes Ramesh Ponnuru. “Democrats’ favored lines of attack on Republicans over health care – that they have no alternative, that they would take people off the insurance rolls – would have been neutralized.”

Sounds like a strategy worth pursuing.

Repealing ObamaCare’s medical device tax is one of the ways to deprive the controversial health law of $30 billion in funding, so it’s no wonder Republicans in Congress are getting ready to do just that.

Unlike other features of ObamaCare – such as the individual and employer mandates – the medical device tax has bipartisan opposition because it threatens up to 43,000 jobs. So, even though President Barack Obama would likely veto any repeal bills that land on his desk, a measure killing the medical device tax might be able to attract enough votes to override him.

If successful, repealing the medical device tax might convince Democrats in Congress that ObamaCare isn’t sacrosanct. Maybe then they’ll be open to trying something else.

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.

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.

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.