Freedom Line Blog

Disfiguring the truth seems to be one of the primary skill sets at Covered California, the state’s Obamacare-aligned insurance exchange.

When the online platform launched on Tuesday, it erroneously stated receiving 5 million hits. A day later, that number was revised down to 645,000.

“Someone misspoke and thought it was indeed 5 million hits. That was incorrect,” said a Covered California spokesman.

This isn’t the first time the Golden State’s Obamacare exchange has been caught misstating the truth.

Earlier this year it misleadingly announced that individual insurance premiums in 2014 would be lower than they are today. The news was quickly circulated as a refutation of the criticism that Obamacare’s heightened coverage requirements will necessarily result in more expensive plans.

But Covered California’s own press release showed that the exchange was comparing apples to oranges. Instead of comparing individual insurance rates from 2013 to 2014, it compared small business rates from 2013 to individual rates in 2014. This sleight-of-hand had the effect of creating a more favorable (i.e. higher) baseline from which to compare Obamacare’s higher individual rates.

In other words, it was a distortion meant to persuade people that Obamacare does the opposite of what it actually did.

And now Covered California is issuing “incorrect” opening day numbers that artificially inflate its popularity.

Call me a cynic, but I think I see a pattern here…

However tonight’s government shutdown/showdown plays out, tomorrow’s big news is likely to be how well the 51 ObamaCare insurance exchanges are performing.

Projections don’t look pretty, according to the New York Times.

A few of the low-lights include:

·    The District of Columbia will not be able to determine online whether people qualify for Medicaid or for a federal subsidy (the difference is crucial)

·    In Nevada, a Spanish-language version of the exchange’s website will not be ready until mid-November

·    In Maryland, small businesses will not be able to buy insurance for their employees until January

Rocky King, Oregon’s exchange director and winner of the Mr. Honesty award, tells the Times, “I have no idea what this thing’s going to look like on Oct. 1. We could crash and burn and have to close it down.”

We’ll know soon enough.

In the run-up to ObamaCare’s launch on October 1st we’ve seen plenty of waste and abuse.

Now comes the fraud.

“In Massachusetts, scammers have deceptively marketed fake health insurance policies and created fake web sites that claimed to sell ObamaCare, targeting seniors to gain their personal information,” reports Fox News.

There’s more.

“In Kansas and Alabama, con artists posing as government employees talked people into giving up their account numbers in order to sign up for fake health care plans.” (Emphasis added)

At first blush, it may seem crazy that people would hand over such sensitive information as their Social Security number, medical records, pay stubs and the like to complete strangers.

Yet that’s exactly how ObamaCare envisions millions of Americans getting health insurance on an ObamaCare exchange – by sharing some of their most sensitive financial and health information with an online-certified ‘navigator.’

Yes, we should believe the best about people and hope they don’t succumb to the temptation to sell private information.

But it’s first-order foolishness to expect millions of sensitive transactions involving most of a person’s critical data to be fraud-free.

Fraud, like most crimes, is a crime of opportunity. Shame on the Obama administration for creating so many.

Want to defund ObamaCare, but think DC’s politics make it impossible? Don’t worry. A new study confirms that convincing young healthy people to opt out is the best and fastest way to starve the beast.

“This study finds that in 2014 many single people aged 18-34 who do not have children will have a substantial financial incentive to forego insurance on the exchanges and instead pay the individual mandate penalty of $95 or one percent of income,” says the study’s author, David Hogberg, Ph.D.

Both the savings and the numbers of people affected are potentially huge. “About 3.7 million of those ages 18-34 will be at least $500 better off if they forgo insurance and pay the penalty,” Hogberg writes. “More than 3 million will be $1,000 better off if they go the same route. This raises the likelihood that an insufficient number of young people and healthy people will participate in the exchanges, thereby leading to a death spiral.”

The reason for the massive savings is that young and healthy people won’t use health insurance as much as older and sicker people on the same plan. Thus, the young and healthy will “cross-subsidize” the old and sick by paying in more than they take out in services.

The Obama administration knows this and is gearing up a multi-million ad campaign to convince at least 2.7 million 18-34 year olds (the amount estimated necessary to make the risk pools solvent) to buy a product ObamaCare’s architects don’t want them to use.

But if that sounds like too much of a conspiracy for some (albeit one that’s true), the young and healthy should be reminded of this: Cash-strapped cities like Chicago, Detroit and others are planning to dump thousands of retired public employees into ObamaCare’s risk pools to reduce the legacy costs associated with unsustainable union benefits. Filling the pool with even more older and sicker consumers than anticipated will make enrolling in ObamaCare even more financially absurd for the young and healthy.

Despite all the spin, paying for insurance through an ObamaCare exchange is little more than a voluntary tax on the young and healthy. If conservatives want to stop the health law in its tracks, hammering this point seems like a great way to do it.

Democratic strongholds like California, Vermont and New York have been quick to use ObamaCare’s state-based insurance exchanges as an excuse to register voters.

State officials are claiming that 1993 National Voter Registration Act (aka the “Motor Voter Act”) requires combining election prospects with health insurance, but the reality is much murkier.

To start, ObamaCare is silent on voter registration. “The health care law spans 974 pages and regulates nearly one-fifth of our economy,” Rep. Charles Boustany (R-LA) wrote in a letter to the Department of Health and Human Services, “yet nowhere in the law is voter registration mentioned.”

Then there’s the Motor Voter Act itself.

As written, the law “requires states to offer voter registration at government offices, most commonly departments of motor vehicles,” explains the Detroit Free Press. “With the exchanges, which are in some ways a new kind of government office, some are questioning whether the law applies to them.”

But unlike a state’s motor vehicles department, not all ObamaCare exchanges are standard government agencies. The paper continues, “In some states, the exchange will be a nonprofit; in others it will be part of the state’s health or human services agency. And in many Republican-controlled states, the federal government will operate the exchanges.”

The lack of uniformity is already leading to differing interpretations about whether the Motor Voter Act applies, which in turn is spawning lawsuits.

With this much uncertainty leading to costly court battles, states and their taxpayers would be much better served leaving the question whether Motor Voter applies to ObamaCare for academics to debate.

The alternative is an expensive and unnecessary distraction.

Today, the Obama administration announced $67 million in grants to 105 groups nationwide who will assist people trying to find health insurance on an ObamaCare exchange, according to Politico.

The groups are non-insurance organizations that will in turn employ so-called “navigators” to help insurance seekers fill out an ObamaCare application, obtain insurance, and yes, even register to vote.

Some of the groups receiving grants include Planned Parenthood affiliates and various community organizers and activists. Care to speculate which political party they’ll steer registrants to?

The likely pay isn’t bad either.

In a proposed regulation issued by the Centers for Medicare and Medicaid two weeks ago, it is suggested that the groups employing navigators pay between $20 and $48 an hour. (Navigators are prohibited by law from being paid by insurance companies, so compensation is expected to come from grant recipients.)

You’ve got to hand it to liberals. Not only do they manage to find a way to pay themselves to grow an entitlement, they get to grow their political support too.

What’s that line about democracy lasting only until the people discover they can vote themselves the treasury…?

With just eight weeks to go until ObamaCare’s October 1 enrollment, the Health and Human Services department is scrambling to meet the deadline.

Its first order of business: A log-in portal where users can create a personal account.

In a few clicks you can get a sense of the kind of information you’ll be sharing via your account: family size, personal income, health history, age, gender and employment status.

Yes, some level of government likely has access to most if not all of this information, but it is ObamaCare’s user account that will, for the first time, house all of it in one place.

It will then be the Federal Data Hub’s job to share this information with the applicable state-based insurance exchange, and check your entries against another federal database to ensure accuracy.

As I’ve written before, the two federal databases will attract attention from hackers and identity thieves.

The ObamaCare user account creates a third inviting target.

Enjoy your privacy, while it lasts.

In a last ditch effort to shield Members of Congress and their staff members from having to pay the same outrageous premiums set to hit everyday Americans under ObamaCare, President Obama personally intervened to ensure that the government would instead pay the bill.

The deal preserves a 75 percent contribution by the federal government for Congress and its staff toward the price of the new, costlier health insurance premiums available under ObamaCare, according to Politico.

The decision flies in the face of an amendment attached to ObamaCare that requires Congress and staff to use the same health insurance exchanges as everyone else with the same rules. Until today, that meant that a person’s salary – from a Senator’s to an entry-level staff member’s – would determine whether a person qualifies for a federal subsidy and if so for how much.

But now we see that, once again, Congress and this President are choosing to operate by a different set of rules than the ones they enforce on everyone else.

Thanks to a little-noticed Republican amendment, ObamaCare puts Members of Congress and their staffers under the same insurance rate-shock being anticipated by the private sector.

Reporting in Politico gives a useful summary:

“Currently, aides and lawmakers receive their health care under the generous Federal Employee Health Benefits Program. The government subsidizes upward of 75 percent of the premiums for the health insurance plans. In 2014, most Capitol Hill aides and lawmakers are expected to be put onto those exchanges, and there has been no guidance whether the government will subsidize those premiums. This is expected to cause a steep spike in health insurance costs.”

The source of the heartburn is the Grassley Amendment. Added to ObamaCare in 2010 during Senate debate, the amendment requires aides and lawmakers to use insurance plans that are either “created” by the law or “offered through an exchange.”

Partisans on both sides agree that the text and the intent of the amendment ensure that Congress and its employees will be subject to the same regulatory pain ObamaCare imposes on everyone else.

So, unless the feds carve out an exemption for Congress, there could be a sudden burst of retirements as staff members try to avoid paying higher premiums on lower incomes than they could get in the private sector.

If that happens, the coming brain drain in Congress will negatively impact the quality of work it produces. But unlike every other employer in America, the national legislature has only itself to blame.

Despite initial reports that California’s ObamaCare health insurance exchange will offer plans that are cheaper than currently available, a closer look at the data shows that the state specializing in concocting fake budgets also lied about the supposed cost savings.

Initially, Covered California, the state’s ObamaCare-ready exchange, announced that insurance rates would drop up to “29 percent below the 2013 average,” prompting many of the health law’s defenders to claim victory over critics who estimate double-digit increases.

But the bloom fell off the rose fast. In order to make the new prices look as favorable as possible, Covered California didn’t compare current individual insurance rates to future individual rates. Instead, it compared current small business rates to future individual rates, and reported the “savings” of 29 percent.

Many conservative analysts caught the switch, and deconstructed the ploy. Avik Roy compared current individual rates in California to future individual rates under ObamaCare and surprise, surprise, confirmed that rates will increase between 64 – 146 percent.

Of course, much of the damage from the false information has already been done. I was in a meeting hours after the rates were announced and was greeted by a liberal friend smiling and saying something along the lines of, “Well, how about that; it looks like ObamaCare is better than your side thought all along. Have you seen the California numbers yet?”

At the time I’d only heard the summaries, none of which drew attention to the obvious apples-and-oranges comparison by Covered California. A week later, none of the liberal cheerleaders for the California miracle are going out of their way to correct the record.

At least now we know the truth. Too bad the left and their friends in the media don’t seem to be interested.

Up to 20 million union members and their families will be ineligible for ObamaCare subsidies to help pay for their Cadillac-style health insurance plans, says CBS News.

Instead, members of unions for part-time and seasonal workers and their dependents will likely have to choose between higher premiums to stay on their plans – whose cost will rise because of the health law’s new coverage mandates – or cheaper plans that cover less – but are subsidized – on the state-based ObamaCare exchanges.

The reason for the choice is because ObamaCare only gives subsidies to people who are not covered by their employer. If union members opt to stay with the plans jointly administered by their union and their employer, then they, in effect, are choosing higher premiums.

Of course, opting out of the union’s negotiated health benefits makes union membership itself a much less attractive prospect, causing union leaders to fear that a mass exodus by members to qualify for ObamaCare subsidies will have the effect of shrinking union enrollment.

For its part, the Obama administration is refusing to carve out any exceptions for the affected unions, prompting at least one union official to say, “In the rush to achieve its passage, many of the act’s provisions were not fully conceived, resulting in unintended consequences that are inconsistent with the promise that those who were satisfied with their employer-sponsored coverage could keep it.”

Welcome to the club.

How big is a “gap” in coverage when it affects 840,000 people?

The Los Angeles Times says that California is racing to pass a “bridge” program into law that helps individuals and families likely to be caught between qualifying for Medi-Cal (the state’s version of Medicaid), and ObamaCare’s new state-based health insurance exchange.

In California, residents earning up to 138% of the federal poverty level, or about $15,000 a year, will be eligible for Medi-Cal next year. Individuals earning up to 400% of the federal poverty level, or about $46,000, will be eligible for subsidies through the exchange, known as Covered California.

The Covered California board approved a plan in March to help patients expected to jump between the two. The “bridge plan” would enable patients now on Medi-Cal managed care whose incomes rise to continue to stay with their health plan once they move to the exchange.

The program, which still needs federal approval and state legislation to take effect, could serve as many as 840,000 people next year. The plan should streamline the process, keep out-of-pocket premiums low and make it easier for people to keep their providers, said David Panush, external affairs director with Covered California. “It is better for their quality of care, it is better for continuity of care,” he said.

While it’s refreshing to see California taking steps to protect people from being penalized for working more, what the article doesn’t mention is how related government policies are putting the squeeze on the state’s working poor.

California’s anti-business climate – coupled with ObamaCare’s perverse incentive structure that makes it more affordable for businesses to cut hours rather than pay hefty premium increases for employee’s health insurance – are underreported tax increases on the working poor.

By diminishing the number and quality of jobs available to people at the bottom of the employment ladder, certain public policies make it exceedingly difficult for people to work their up into a better standard of living.

Because of this, one way to think of the constant tinkering and enlargement of public benefits is as a way to compensate the working poor for taking away their access to an abundance of jobs where they can get the experience and skills needed to move upward an onward.

Under the current regime, a “bridge” program between Medi-Cal and Covered California is the least state policymakers can do. Still, those entangled in the state’s safety net deserve better.

Sally Pipes identifies an “escape hatch” for small businesses trying to avoid the costly employer mandates threatening employers with costly insurance premiums or fines:

A RAND analysis found that a fifth of firms with 50-200 workers had self-insured by 2010, the year Obamacare became law — up from 14 percent of such companies in 2006.

A survey by Munich Health North America found that 82 percent of health insurance executives report seeing growing interest in self-funded coverage among employers. A California-based benefits consulting firm that helps companies self-insure told Kaiser Health News that its business has doubled in the past six months. And Cigna says that it saw self-coverage for small businesses grow by a fifth last year.

Companies with younger, healthier workforces are leading the way. After all, with their population of low-risk employees, they have the most to gain. And that’s bad news for Obamacare’s exchanges.

The problem for ObamaCare is that the only way health insurance premiums will be (theoretically) affordable is if legions of young, healthy people join the exchanges’ insurance pools. That’s because they are needed to pay into the system so that older and sicker people can draw down the benefits.

But if small businesses opt to self-insure – especially if they are newer businesses more likely to employ younger and healthier workers – then that will drain the ObamaCare pools of the very people who will make them (barely) affordable.

With this in mind, don’t be surprised to see an IRS or HHS rule come down that prohibits self-insurance to prop up ObamaCare’s exchange pools.

As with the so-called “family glitch,” it’s a ploy the Obama administration will be ready to use if its slapdash law continues to produce embarrassing unintended consequences.

And the hits just keep on coming.

After news broke that the leadership in both the House and Senate were conspiring to exempt themselves from ObamaCare’s costly insurance exchanges, we’re told that the problem isn’t Congress shirking responsibility for a law it passed.

It’s worse.

The real issue, according to reporting by health policy expert Ezra Klein, is that Congress is too stupid to write a law clear enough to know what it does.

Per Klein:

“Here’s how it happened: Back during the Affordable Care Act negotiations, Sen. Chuck Grassley (R-Iowa) proposed an amendment forcing all members of Congress and all of their staffs to enter the exchanges. The purpose of the amendment was to embarrass the Democrats. But in a bit of jujitsu of which they were inordinately proud, Democrats instead embraced the amendment and added it to the law.
…
“So Grassley’s amendment means that the largest employer in the country is required to put some of its employees — the ones working for Congress — on the exchanges. But the exchanges don’t have any procedures for handling premium contributions for large employers.

“That’s where the problem comes in. This was an offhand amendment that was supposed to be rejected. It’s not clear that the federal government has the authority to pay for congressional staffers on the exchanges, the way it pays for them now in the federal benefits program. That could lead to a lot of staffers quitting Congress because they can’t afford to shoulder 100 percent of their premiums.”

Got that?

Rather than think through how an amendment would alter the structure of a law that, as one of its architects put it recently, “is probably the most complex piece of legislation ever passed by the United States Congress,” Democrats opted to play games. No wonder the lead author of the law sees “a huge train wreck coming down.”

Whether it’s a fine that’s really a tax, a “family glitch,” or now an ambiguous gap in coverage, ObamaCare’s so-called drafting errors are making it one of the worst written laws ever.

Fox News is reporting that the implementation of one of the two state-based, federally-regulated health insurance exchanges is being delayed for an entire year (2015 instead of 2014).

The decision applies to the exchange that will be created to let small businesses shop for affordable insurance policies, not the similar and more well-known exchange for individuals and families looking for insurance.

While it would be easy to blame poor planning and bad execution on the part of the federal government, another explanation seems just as likely.

As originally written, ObamaCare contained a so-called “public option” that would have been offered by the federal government on the exchange as competition with private alternatives.  Conservatives opposed the public option because it threatened to undercut private competitors with an artificially low price since the government, unlike a private business, doesn’t have to make a profit.

After a few years of running private businesses out of the market with artificially low prices, conservatives reasoned, the public option would become the only option as more and more consumers opted for a deal that would be too-good-to-be-true.  When that happened, government could claim the market failed, paving the way for a government-run, single-payer health system.

Of course, the public option was stripped out of the final version of ObamaCare.  But the intent to move America toward government-run health care did not.  Since there’s no requirement under the law for small businesses to provide health insurance, many may now stop bothering if the small business exchange is delayed.  That puts their employees on the individual and family exchange, which as estimates are showing, will cost people much more than originally advertised, even including the government subsidy.

With private insurance unable to deliver a product that covers the heightened floor created in ObamaCare that is also affordable for the people required to buy it thanks to the individual mandate, don’t be surprised if activists and policymakers start clamoring for government to declare a market failure and nationalize the system.

Such a scenario may sound far-fetched, but can anyone seriously say that with the Obama Administration in charge that it’s not at least possible?

With President Barack Obama’s legally required budget proposal arriving two months late (April 10 when it was due February 4), here’s a suggestion to ensure the document is something other than a White House-approved paper weight.

Because of the President’s unprecedented delay, both the Republican House and Democratic Senate have passed budgets, each with only party-line support.  Now that both sides have put their opening bids on the table, it would be wise to make the White House version a kind of third way compromise that includes some elements that both sides like.

One example would be to incorporate Paul Ryan’s idea for putting Medicare plans on a state-based, federally-regulated health insurance exchange.  Then, make the now obvious point that this plan, coupled with ObamaCare’s exchange for non-seniors indicates bipartisan agreement on a major aspect of health insurance reform.  Doing that would help change the focus of the debate on what Republican and Democrats have in common when it comes to moving forward on this issue.

Kudos to Sarah Kliff at Wonkblog for tracking down a draft copy of an ObamaCare application. It’s the one a person would use to get access to a state-based health insurance exchange, and the subsidies to buy coverage that go along with it.

At 21 pages and asking for lots of sensitive information, the document is likely to be much more cumbersome than most people bargained for. That’s one of the biggest hurdles facing implementation, according to Kliff:

The administration is caught in a bit of a bind here. On the one hand, Obamacare is tricky business. In order to figure out how much Americans will pay, the federal government needs to collect lots of information, everything from the size of the family to its income to whether any family members are Alaska Natives (which would make them eligible for additional services through the Indian Health Service). It’s hard to collect all that data in a way that isn’t a bit complex.

At the same time, the whole goal of the Affordable Care Act is to maximize health insurance enrollment. That puts a premium on making the applications simple and easy to use—not the kind of documents that you’d get half way through and give up on.

To find a space between the two of these, there are likely a lot of support services that will start springing up over the next few months. This could include traditional agents and brokers, whose whole line of business is understanding applications like this one.  The Affordable Care Act also envisions a group of navigators, financed by state exchanges, who will—as the name implies—help navigate the insurance system.

Meet the new middle men, the same as the old middle men.

True, cost-efficient health insurance reform would reduce reliance on “navigators” in order to eliminate the transactions costs they generate. If a product is so hard to buy that it requires help to do so, you can bet that the cost of said product will go up. And up, up, up…

The bright side? At least there will be thousands of health insurance broker jobs that the Obama Administration can claim credit for creating or saving.

Unless the Department of Health and Human Services (HHS) decides to once again bump back the deadline that passed yesterday, as of right now 24 states have told the Obama Administration they will not create a state-based health insurance exchange.

Under the terms of ObamaCare, this means that HHS will now take over the process in these states, adding hundreds of millions in new costs to federal taxpayers.  Moreover, the short time horizon between now and October when the plans must be available on the exchanges (they’ll be effective next January), means that there is likely to be an enormous push to hire more HHS bureaucrats to get the job done.

It’s been said that when it comes to something being fast, accurate, and cheap, you can have any two but not all three.  If history is any guide, the feds will go oh-for-three.

H/T: Washington Times

God bless residents of the Pacific Northwest for casting rightful suspicion on ObamaCare’s state-based, federally-directed, health insurance exchanges:

Focus groups in Oregon expressed emotions about buying coverage that included “skepticism” and “frustration,” and some individuals and small businesses used “black hole” and other less-kind terms to refer to insurance, brand design firm Sandstrom Partners told the Oregon Health Insurance Exchange in a presentation made available by the exchange.

The word exchange “raises some suspicions of loopholes and fine print” and “implies current coverage may needed to be traded for something else,” wrote communications company GMMB in a presentation to the Washington State Health Benefit Exchange. Part of the problem, GMMB said, was that the word was “perceived as a verb and unfamiliar as a noun” and reminded people of the New York Stock Exchange or military exchange stores.

…

Washington state is leaning toward calling its program Washington HealthLink, as long as it doesn’t conflict with existing trademarks, and plans to use green and blue in its logo design because the colors are considered to be reassuring, said Michael Marchand, the state’s exchange director. The exchange’s board of directors will make the final decision on the name, he said.

Focus group participants had also been asked to consider HealthChoice but it “makes some wonder if Washington State is making the choice for them,” consultants and the exchange board concluded.

The Wall Street Journal article from which these excerpts are culled goes on to detail other stories of states trying to brand government-created “marketplaces” as something other than a first big step to government-run health care, but you get the point.

No matter what you call an ObamaCare exchange, it’s still an entry point for socialized medicine.

Politico reports that in a campaign speech in Colorado today President Barack Obama framed his Patient Protection and Affordable Care Act (aka ObamaCare) this way:

“Let me tell you something, Denver, I don’t think your boss should get to control the health care that you get,” Obama told the crowd at a campaign stop in Colorado. “I don’t think insurance companies should control the care that you get. I don’t think politicians should control the care that you get. I think there’s one person to make these decisions on health care and that is you.”

What the President neglected to mention is that instead of employers, insurance companies, and politicians – and despite his comments about individuals – the constituency he really favors making health care decisions is the federal bureaucracy.

ObamaCare’s Medicaid expansion is intended to capture millions of Americans newly eligible for government coverage that will be – at least initially – cheaper than their current private provider.  The state-based, but federally-directed, health care exchanges are really just Trojan horse structures allowing HHS to seize control of the states’ traditional role in regulating health insurance whenever a state defies a federal prerogative.

And let’s not forget that the Independent Payment Advisory Board is empowered to act as a backdoor ration board, setting price caps on medical reimbursements that will distort the market and cause shortages.  In socialized systems like Britain and Canada long waiting times are the norm, as are denials of procedures in favor of pain management.

All of these elements – Medicaid expansion, federally managed health exchanges, and IPAB – empower one group: unelected, unaccountable bureaucrats.  To claim as the President does that private individuals will be the ones calling the shots on health care decisions is either foolish or deceptive, and I don’t think the man is lacking in smarts.