Freedom Line Blog

The arrival of Obamacare’s ‘Pajama Boy’ ad campaign coincides with an awful truth the supporters of Big Government don’t want the young and trendy to hear.

If you haven’t yet seen the ad yet Rich Lowry has a picture and an explanation of where it fits in the Obama universe: “But it’s hard not to see Pajama Boy as an expression of the Obama vision, just like his forbear Julia, the Internet cartoon from the 2012 campaign. Pajama Boy is Julia’s little brother. She progressed through life without any significant family or community connections. He is the picture of perpetual adolescence. Neither is a symbol of self-reliant, responsible adulthood.

“And so both are ideal consumers of government. Julia needed the help of Obama-supported programs at every juncture of her life, and Pajama Boy is going to get his health insurance through Obamacare.”

They are also the cohort most likely to pay the bills for all this consumption.

“The current $17 trillion aggregate debt is largely a result of out-of-control entitlement obligations that skyrocketed over the last 20 years and largely were paid out to those over the age of 30,” writes Victor Davis Hanson.

Too bad Julia and Pajama Boy never mention that those under 30 will be the ones paying the bills for decades to come.

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

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

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

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

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

This is gangster government.

Q: What does $300 million in federal grant money to build one of the nation’s most expensive Obamacare exchanges get you?

A: If you’re Oregon, 44 enrollees.

So far, federal taxpayers have spent about $6.8 million per Oregon enrollee. And that doesn’t include the federal subsidies any of these Oregonians might qualify for, nor does it contain the remaining premium amount each enrollee will pay to have health insurance.

Maybe the Obama administration will reverse course and start claiming that Oregon’s exchange is really a job creator since someone got paid with all that money because at this point, it’s certainly not a financially viable health insurance portal.

H/T: Philip Klein

It looks like the crass ad campaign aimed at getting keg-standing frat boys and promiscuous coeds to sign up for health insurance on Colorado’s Obamacare exchange is failing badly.

“The White House has set a goal of ensuring that roughly 40% of all enrollees on the federal exchange are young and healthy,” reports CNN’s Political Ticker.

“As of November 30, just 11% of total enrollees in Colorado’s exchange fall into the targeted 18 to 34 age bracket. The majority of new enrollees – more than 60% – are between 45 and 65.”

If this trend holds, it means that the funding ratios for Colorado’s insurance pools won’t work because there won’t be enough ‘young invincibles’ in the system. As I explained in a post about a similar problem in Kentucky, too few young and healthy people translates into an insufficient wealth transfer to older and sicker people.

Right now, Obamacare’s supporters are telling themselves that young people always wait till the last minute to comply, so all will be well when the enrollment period ends in March. That might be true. But if enough young invincibles pay a fine instead of enroll, Colorado, Kentucky and any other state with too few net payers will see next year’s premiums surge through the roof.

Just in time for the 2014 elections.

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

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

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

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

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

But that’s not quite right.

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

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

No amount of spin or surrogacy can fix that.

Gallup released a new poll this week showing that a sizeable portion of an important cohort for Obamacare’s success is planning to pay fine rather than foot the bill for most costly insurance.

The so-called young invincibles – defined by Gallup as Americans under 30 years old – is the group whose purchase of health insurance on Obamacare exchanges is most coveted because they are projected to pay for more services than they use. The money made off their premiums will cover the cost of care for older and sicker people in the risk pool.

But the financial coercion desired by Obamacare’s operators could likely hit a snag this year because the penalty for not buying insurance is only $95, or less than any monthly premium available on an exchange.

Unfortunately for Obamacare’s supporters, Gallup says that 26 percent of young invincibles are planning to pay the fine instead of buy insurance. If enough do so, Obamacare’s cost structure gets up-ended, putting the feds on the hook to cover the overruns. Private insurers will then spike premiums in future years to compensate.

The big question is, “What number is ‘enough’?” No one knows the answer.

That’s because the key number for making the Obamacare exchanges financially workable is a ratio. For Healthcare.gov – the federal exchange – the Congressional Budget Office estimates that 38 percent of the risk pool needs to be young invincibles in order for the system to operate.

That means that the critical number for Healthcare.gov isn’t whether it actually enrolls the 7 million people it originally projected; it’s whether 38 percent of whatever population enrolls is made up of young invincibles, says Ezra Klein.

Early returns aren’t boding well, reports Breitbart News. The Obama administration so far has refused to release a breakdown of federal enrollees by age bracket, but the State of Kentucky has. The Bluegrass State runs its own exchange and only 19 percent of its enrollees are between the ages of 18-34 – a span that includes more years than Gallup’s. If that trend holds throughout the enrollment period that runs through March, Kentucky – and any other exchange with less than 38 percent of young invincibles – could face the dreaded ‘death spiral’ where premium costs soar to cover a sicker population that anticipated.

For now, we’ll have to wait and see whether the Obamacare-affiliated exchanges hit the magic number by the enrollment deadline. My guess is that the lack of transparency is directly related to the failure to meet the goal.

Obamacare’s “original vision of seamless Medicaid enrollment for all consumers will remain elusive indefinitely because of varying levels of readiness among states and the continued inability of the feds to transfer accounts directly to individual Medicaid agencies,” reports Governing.

That’s more bad news for Healthcare.gov, the federal health insurance exchange serving 36 states.

The problem is simple but not easy to fix. Because there is such a wide disparity among states in their ability to connect their Medicaid databases to the federal server, many of those who qualify for Medicaid can’t sign up for the program online. To compensate, federal workers send digital copies of an applicant’s qualifying information to state counterparts who then must verify eligibility.

Bottom line: All this checking and rechecking loses the efficiency gains assumed by Obamacare’s drafters. Among others, these cost savings were counted toward the health law’s now dubious claim of deficit neutrality.

Now the bad news for states.

Since every state participates in Medicaid, problems with the program created by Obamacare will impact state budgets regardless of whether they run their own health insurance exchange or let the feds do it. That’s because the exchanges are designed to serve those who don’t qualify for Medicaid. If seamless Medicaid enrollment proves impossible, then the resulting expenditures to meet the uptick in demand will be yet another unfunded mandate passed on to state taxpayers.

Federal subsidies are the lynchpin holding Obamacare together. Without them, insurance plans bought on state-run exchanges would be too expensive for most people to buy.

Which means there’s a huge gaping problem if you live in one of the 36 states that chose to let the feds run the exchange: You don’t qualify for federal subsidies.

“Congress was exceedingly clear that tax credits and subsidies are available to people whose plans ‘were enrolled in through an exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act,’” argues Scott Pruitt, Oklahoma’s Attorney General, in the Wall Street Journal.

“Congress specified that credits and subsidies are only to be available in states that set up their own health-insurance exchange for a reason: It could not force states to set up exchanges. Instead, it had to entice them to do so.”

But if the enticement fails, then citizens are exposed to the full brunt of Obamacare’s increased cost structure for health insurance. That’s the risk the health law’s drafters took. Now the plain meaning of the text should result in a massively unpopular program.

The Obama administration is spooked. If the vast majority of Americans are forced to choose between paying the real price of Obamacare-related insurance or a hefty fine, there will be an electoral tsunami in 2014.

Here’s hoping Oklahoma’s lawsuit gets a favorable ruling from the Supreme Court sooner rather than later.

Byron York has a characteristically subtle and devastating critique of the Obama administration’s recent attempt to ruin Thanksgiving.

The kerfuffle began when Obama’s still operating campaign arm, Organizing for Action, released talking points to convince relatives and friends to enroll in Obamacare over Thanksgiving dinner. Reluctantly, conservative blogger Ben Domenech responded with counterpoints.

Watching from afar, York was reminded of an exhibit in Berlin explaining how the communists who ran East Germany for the USSR tried to make every personal event into a celebration of socialism.

The memory prompted York to make this heretofore unnecessary declaration: “Now is the time to state definitively: The United States is not communist East Germany. It’s not in any way close to being communist East Germany. So why is the Obama administration seeking to politicize Thanksgiving? And Hanukkah, too? At the very least, why invite the ridicule and derision that inevitably follow?”

It’s crazy to think we’re in an era where the President of the United States is green-lighting not only massive increases in government-run health care, but also beseeching everyday Americans to make support for such interventions the topic of completely private, non-political family gatherings.

York can be excused for sensing some totalitarian tendencies in the present administration. The parallels seem obvious.

“Since the Oct. 1 rollout of the Affordable Care Act in New York, nearly half of New Yorkers who signed up for insurance on the state-run exchange qualified for Medicaid,” reports the New York Post.

Apparently, the media attention surrounding Obamacare enticed many lower-income Empire State residents to apply for insurance, only to find out they qualified for taxpayer subsidized Medicaid instead. If every New Yorker that qualifies for Obamacare’s expanded version of Medicaid actually signs up, the state’s total Medicaid population could hit 6 million in a few years. That would be nearly 1/3rd of the state’s population.

The implications for federal spending levels are ominous. Currently, Medicaid spending is split between states and the feds. But once 2014 arrives, “the feds will pick up 75 percent of the tab and eventually 90 percent for childless Medicaid adults, instead of the current 50 percent.”

As the Post’s article indicates, Obamacare’s failure to lure enough buyers onto its public-private insurance exchanges is only half the story. The real win for those who want to impose a government-run, single-payer system onto the American health care system may be in the massive expansion of Medicaid consumers paid for out of the federal treasury. Thus, even if the public-private part of Obamacare fails, the number of citizens depending on Washington for health care will increase dramatically. In the long run, that may be just what Obamacare’s staunchest supporters desire.

The launch of the Obamacare website for small businesses will be delayed until November 2014 – a full year from when it is required by law to go online.

Along with the Obama administration’s inability to create functioning health insurance portals, today’s announcement is yet another craven attempt by Washington liberals to shield themselves from the political consequences of their failures.

By pushing back the federally-run small business exchange (called SHOP) until after the 2014 midterm elections, President Barack Obama and Democrats in Congress want to avoid a fresh round of voter anger when the newest website inevitably implodes.

But doing so means that three federal elections will have taken place between the time Obamacare passed into law in 2010 and its full implementation in 2014. That time period will cover half of the Obama presidency. If performance predicts the future, all we have to look forward to in 2014 is more failure.

Republicans should spare Americans the experience and put forward a slate of candidates that run and win on a promise to repeal Obamacare, without delay.

California’s Obamacare-aligned health insurance exchange will not bail out President Barack Obama.

Data released by Covered California, the state’s exchange, explains why.

“People between the ages of 45 and 64 have enrolled in California’s health exchange at a much higher rate than their overall portion of the state’s total population, while younger adults’ enrollment levels essentially track their overall population,” reports CNBC.

“If the trend holds up, it could mean that insurance plans are overweighted with older customers, and underweighted with younger, presumably healthier people. Since their premiums are much needed to offset the cost of benefits paid out to sicker individuals, that could lead to higher premium prices in 2015.”

In other words, Covered California – like any other Obamacare exchange – can’t afford President Obama’s costly ‘fix’ that would allow young and healthy people to keep their pre-Obamacare insurance plans and stay out of the post-Obamacare risk pools. As I explain in my column this week, doing so would lead to the dreaded ‘death spiral’ that will doom the Obamacare exchanges.

There’s no other way to say it. California’s refusal to go along with Obamacare’s latest ‘fix’ is a huge blow to President Obama. So far, the Golden State is home to the most Obamacare-related enrollments, so if it’s afraid that adopting Obama’s enforcement delay will put its fiscal sustainability in jeopardy, it’s hard to see how any other state that’s serious about the issue will disagree.

All four of the cyber security experts that testified before a House committee yesterday agreed that Americans should not use Healthcare.gov until its security features are enhanced, or in some cases, built.

Three of the four said the website should be shut down until the security problems are fixed; preferably by rebuilding the site from scratch.

While that may sound drastic, an Obama administration official responsible for developing Healthcare.gov says that up to 40 percent of the site isn’t finished yet – including the parts that deliver subsidies to insurance companies on behalf of qualified Obamacare enrollees.

And it’s not like the roughly 60 percent of the website that is completed is running smoothly, as HHS Secretary Kathleen Sebelius discovered when it crashed while she was demonstrating its (in)effectiveness to the public.

Bombarded as we are with the epic ineptitude of this fiasco, it’s hard to improve on Charles Krauthammer’s sentiments: “…this is a level of incompetence that is indescribable. And it stands to reason. We have a president who never ran anything. He was never a governor. He never ran a hot dog stand in his life and he presumed that his team could remake one-sixth of the American [economy] and this is what happens.”

Brace yourself. There is much more to come.

Time’s Swampland blog quotes a health care industry expert to confirm the obvious: “Many people are going to find out that the second part of the promise – that if you like your doctor, you can keep your doctor – just wasn’t true,” says a former George H.W. Bush Medicare and Medicaid official.

Fundamentally, Obamacare is designed to increase access to health insurance. It does this by increasing its costs and then transferring the extra money to eligible people in the form of insurance subsidies and enlarged Medicaid programs. To compensate, insurance companies will narrow their doctor networks. In many cases this will result in people losing access to the doctor of their choice.

In other words, the logical outcome of President Barack Obama’s law is to show that his promise of keeping one’s doctor is a lie.

Though the Swampland writer says “It’s unclear why the President made the promise about keeping your doctor,” it is abundantly clear that without such a promise Obamacare could not have passed. People were told they could get a flashy new entitlement at no cost to themselves. Now, they are finding out how truly wrong that promise was.

Byron York has a potential sneak peak at some of the most devastating political ads in the upcoming 2014 election.

It’s a list of Democratic U.S. Senators parroting President Barack Obama’s promise that “if you like your insurance plan, you can keep it.”

The list comes with names, dates and the exact phrasing from 27 current Democratic Senators, courtesy of Republican Senate Leader Mitch McConnell (R-KY).

Among those profiled, three are in tight reelection fights ahead of 2014: Mark Begich (Alaska), Mary Landrieu (Louisiana) and Kay Hagan (North Carolina).

If you live in one of these states, expect to see and hear the following statement as the campaign season heats up:

SEN. MARK BEGICH (D-Alaska): “If you got a doctor now, you got a medical professional you want, you get to keep that. If you have an insurance program or a health care policy you want of ideas, make sure you keep it. That you can keep who you want.” (Sen. Begich, Townhall Event, 7/27/09)

SEN. MARY LANDRIEU (D-La.): “If you like the insurance that you have, you’ll be able to keep it.” (MSNBC’s Hardball, 12/16/09)

SEN. KAY HAGAN (D-N.C.): ‘People who have insurance they’re happy with can keep it’ “We need to support the private insurance industry so that people who have insurance they’re happy with can keep it while also providing a backstop option for people without access to affordable coverage.” (“Republicans Vent As Other Compromise Plans Get Aired,” National Journal’s Congress Daily, 6/18/09)

If you’re thinking about using Healthcare.gov to shop for an Obamacare-approved insurance plan – wait.

The personal information you enter to create an account may be unprotected from hackers.

That is the startling reality uncovered in testimony given by one of Healthcare.gov’s top IT officials to House investigators. Apparently, a memo documenting several “open high findings” – including the website’s vulnerability to identity thieves – was kept away from the person responsible for green-lighting its launch.

As the plot thickens, Avik Roy asks several pertinent questions: “First: Did Tony Trenkle intentionally conceal this critical information about high security risks from Henry Chao, or was it an accident? Second: Would Chao have recommended that the exchange go forward if he had been aware of high findings? Third: Did Marilyn Tavenner—the head of CMS—know about these issues when she issued the final go-ahead authorization? Fourth: Now that this information is public, why is the Obama administration encouraging people to enter their sensitive personal data into the non-secure healthcare.gov website?” (Emphasis added)

Why indeed?

Could it be that there is such a rush to spike Healthcare.gov’s enrollment numbers that Obama administration officials are willing to overlook the potential risk to millions of Americans’ private information?

It brings a whole new ominous meaning to the warning buyer beware.

Fox News says Democrats in Congress gave the Obama White House an ultimatum today: Fix the Obamacare-caused insurance policy cancellations by Friday, or we’ll vote for Republican measures that do.

Ordinarily, I would welcome bipartisan fervor allied against the Obama administration, but the 48 hour deadline has me holding my applause. No good policy or law can result from a two-day cram session overseen by panic-stricken political appointees. We’re much more likely to see a hastily written executive order rather than a carefully targeted proposal.

Because of that, it’s very likely that whatever the Obama White House produces on Friday will – over time – cause more problems than it fixes.

As to the Republican proposals that seek to reinstate canceled insurance plans, I’m not sure that’s a sound strategy either. Republicans didn’t vote for Obamacare, so they have zero responsibility for helping President Barack Obama keep his fallacious promise to let people keep their insurance policies if they want to.

People are losing their insurance plans because Obamacare changes the insurance market. If Republicans want to keep pre-Obamacare insurance plans, they should insist on returning to a pre-Obamacare insurance market. Thus, as ever, the simplest Obamacare ‘fix’ is also the most effective: Complete repeal.

Anything else runs the risk of further distorting an already overregulated part of the health care sector.

Leave it to a former federal prosecutor to make the case for impeaching President Barack Obama over the latter’s massive fraud regarding the security of insurance policies after Obamacare.

“Fraud is a serious federal felony, usually punishable by up to 20 years’ imprisonment — with every repetition of a fraudulent communication chargeable as a separate crime,” writes Andrew McCarthy. “In computing sentences, federal sentencing guidelines factor in such considerations as the dollar value of the fraud, the number of victims, and the degree to which the offender’s treachery breaches any special fiduciary duties he owes. Cases of multi-million-dollar corporate frauds — to say nothing of multi-billion-dollar, Bernie Madoff–level scams that nevertheless pale beside Obamacare’s dimensions — often result in terms amounting to decades in the slammer.”

As everyone knows by now, President Obama has lied repeatedly since at least 2010 that Americans who like their insurance will be able to keep it.

But just because Obama won’t be prosecuted doesn’t mean that his actions should go unpunished. As McCarthy reminds us, the standard for impeachment is “high crimes and misdemeanors,” which Alexander Hamilton argued in the Federalist Papers as relating “chiefly to injuries done immediately to the society itself.”

I agree with McCarthy that the billions of dollars lost by millions of health insurance consumers seems to qualify as a massive injury to society perpetuated by the man in the Oval Office.

Read the entire piece here.

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

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

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

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

Another day, another leaked attempt to make an end-run around Congress.

In the wake of the widespread insurance policy cancellations forcing individuals onto Obamacare exchanges, Obama administration officials are letting it be known that they are working on an “administrative fix” that would somehow provide financial relief for those affected that don’t qualify for federal subsidies to offset the health law’s higher premiums.

This trial balloon seems to be the necessary corollary to President Barack Obama’s promise Thursday night “to work hard to make sure that [people losing their individual policies] know we hear them and we are going to do everything we can to deal with folks who find themselves in a tough position as a consequence of this.”

Even if that means rewriting the law without Congress, and exploding the cost of Obamacare.

As written, Obamacare subsidies are capped at 400 percent of the federal poverty line, which translates into an annual income of no more than $46,000 per year for an individual.

But, “In June 2009, the CBO evaluated a draft proposal from the Senate Health Education Labor and Pensions Committee that offered subsidies as high as 500 percent of the federal poverty level,” writes Philip Klein.

“In the period from 2014 through 2019 alone, CBO estimated that the exchange subsidies would cost $1.2 trillion.” Dropping the cut-off level to 400 percent of FPL reduced the cost estimate to $458 billion over the same six year period.

If the Obama administration elects to go this route, Klein says expect to see another famous presidential pledge come under fire: “I will not sign a plan that adds one dime to our deficits – either now or in the future. I will sign if it adds one dime to the deficit, now or in the future, period.”