Freedom Line Blog

Last night President Barack Obama issued a half-hearted apology for lying to millions of Americans.

“I am sorry that they [i.e. people who are losing their insurance plans due to Obamacare] are finding themselves in this situation based on assurances they got from me,” Obama said in an interview with NBC News Thursday night. “We’ve got to work hard to make sure that they 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.”

But even with the mea culpa, Obama couldn’t resist trying to minimize his culpability. His method was trying to make the amount of people affected seem like a rounding error.

“I mean, we’re talking about 5 percent of the population.” Of course, 5 percent of the American population is still 15 million people – enough to swing an election. More importantly, that number would be several times larger if Obama hadn’t already delayed the employer mandate.

A reasonable person in Obama’s shoes would now spend the next month or two in lock-down mode trying to fix his broken website and restore credibility to his administration’s ability to govern. But instead this president is going on the campaign trail to defend the indefensible to a skeptical public.

The president doesn’t seem to realize that achievement is what’s needed now, not tired empty rhetoric. If this keeps up, the odds look good for another Republican wave election in 2014.

It looks like the glitch-ridden federal health insurance portal Healthcare.gov isn’t the only Obama administration website in need of fixing.

A statement on WhiteHouse.gov still parrots President Barack Obama’s recently disavowed promise that “If you like your plan, you can keep your plan,” reports Fox News.

On a page labeled “health reform details” the following statement appears: “For Americans with insurance coverage who like what they have, they can keep it. Nothing in this act or anywhere in the bill forces anyone to change the insurance they have, period.”

And yet President Obama said to his supporters on Monday, “What we said was, ‘You could keep if [your plan] if it hasn’t changed since the law was passed.’”

The about-face is due to the President of the United States being caught in a multi-year, bald-faced lie.

As I explain in my column this week, the Obama administration from the president on down has known since at least June 2010 that nearly 100 million Americans would lose their pre-Obamacare health care plans if the law was implemented as written. That’s one reason they delayed the employer mandate, and with it, the vast majority – almost 80 million – of projected policy cancellations. (Consumers in the individual insurance market are the ones being hit as the law intended.)

The conflicting statement on WhiteHouse.gov is just more confirmation that President Obama and his administration can’t be trusted to tell the truth.

A meme circulating through the liberal punditry claims that the jaw-droppingly bad launch of Healthcare.gov, the federal Obamacare insurance website, is nothing to get all hot-and-bothered about. Remember the Bush administration’s poor rollout of Medicare Part D, the prescription drug benefit? Its website was glitch prone at the start, but now the portal and the program are considered successful.

The same fate awaits Obamacare.

Or so supporters claim.

The analogy doesn’t hold though.

For starters, Part D was a far simpler program than Obamacare because it (1) added a new benefit to an existing federal scheme, and (2) could tap into existing relationships between Medicare and the intended beneficiaries. By contrast, Obamacare’s exchange model fundamentally changes how millions of individual Americans must buy health insurance; including those without any previous history of doing so.

Unlike liberal sympathizers who want to blur the distinctions in order to obscure Obamacare’s much more significant problems, thoughtful analysts like health expert Yuval Levin see the analogy pointing in a very different direction.

“The fact that even a much simpler federal undertaking ran into real problems should lead us to think that Obamacare could well encounter far, far worse and more difficult problems, on a scale that may not be readily addressable – as in fact seems now to be happening,” writes Levin. “It doesn’t suggest everything will be fine, it suggests the government hasn’t been good at even much easier tasks than the ones now set before it.”

Time will tell if the Obama administration’s “tech surge” fixes the glitches, but in the meantime it would be better if liberals stopped hiding behind false analogies, and admit that their big gamble to remake health care is dangerously close to an unprecedented failure.

Though Obamacare’s individual mandate barely survived the Supreme Court last year, there’s no guarantee that some of the law’s other elements will be so lucky.

Last week, Tim explained that litigation challenging the health law’s federal subsidy structure is proceeding toward the Court. If the Court’s four consistent conservatives and swinger Anthony Kennedy stay true to the text, citizens in 34 states won’t be eligible for subsidies that make Obamacare-approved insurance plans (somewhat) more affordable.

Another series of cases challenge the controversial ‘HHS mandate’ that requires all non-houses of worship to provide employees with access to contraceptives and abortion-related services; despite the objecting employer’s religious beliefs. Appellate level decisions are split between the government and private business, meaning the Court is very likely to decide the issue as a way to provide continuity throughout the nation.

If recent trends hold, the Supreme Court will hear oral arguments in both lines of litigation sometime next spring, releasing a high-profile opinion in mid-summer.

As long as Obamacare is the law of the land, there will be no end to the headaches it creates.

If you think Obamacare-approved insurance is expensive now, imagine how high it could go if the Supreme Court rules federal subsidies illegal.

Currently, there are four lawsuits making their way through the federal judiciary. I’ve profiled one from Oklahoma previously, and its arguments are essentially the same as the others.

In a nutshell, the text of Obamacare makes federal subsidies available to people buying health insurance on state-run exchanges created under Section 1311 of the law. The law says nothing about subsidies being available for insurance bought through federally-run exchanges created under Section 1321.

The Internal Revenue Service tried to paper-over the problem by issuing a regulation that made subsidies available on both sets of exchanges, but that’s being vigorously challenged as an illegal affront to the plain meaning of the Obamacare statute.

As Sean Trende notes, this challenge to Obamacare, if successful, wouldn’t kill the law outright. That might make voting against the IRS’s power grab more palatable for Chief Justice John Roberts, who cast the crucial fifth vote to uphold the individual mandate last year.

Of course, if the subsidies aren’t available to people in the 34 states where HHS is operating an exchange, then the system will implode. Even with subsidies many people are struggling to pay for the higher costs. Take them away and a huge political backlash will be unleashed.

If any of these cases gets to the Supremes, let’s hope they stick to the law and leave the politics for Election Day.

President Barack Obama lied. NBC News says so.

In 2009, President Obama went around the country saying “if you like your health plan, you will be able to keep your health plan.” After Obamacare passed, he persisted: “If [you] already have health insurance, you will keep your health insurance.”

But in between, the Health and Human Services department gutted that guarantee.

“The law states that policies in effect as of March 23, 2010 will be ‘grandfathered,’ meaning consumers can keep those policies even though they don’t meet requirements of the new health care law,” reports NBC.

“But the Department of Health and Human Services then wrote regulations that narrowed that provision, by saying that if any part of a policy was significantly changed since that date – the deductible, co-pay, or benefits, for example – the policy would not be grandfathered.”

See the game? Obama can claim that so long as insurance companies freeze a plan in time, the consumer won’t be bothered. But change any part of a product – including making it cheaper – and the grandfather clause no longer applies.

In other words, insurance companies can either ignore their market’s price signals and lose money, or respond and get blamed for forfeiting their clients’ health plan.

The worse part: “[T]he administration knew that more than 40 to 67 percent of those in the individual market would not be able to keep their plans, even if they liked them.”

That’s because HHS put that estimate in a federal regulation in July 2010.

Looks like President Obama has about as much respect for the American people as he does for the rule of law: Zilch.

Yuval Levin has a must-read summary of the problems crippling Obamacare’s federal health insurance exchange, Healthcare.gov.

The summary is based on Levin’s interviews with sources in the Obama administration and in the health insurance industry.

Key problems include:

·    Overly Complex: A “late-in-the-game decision to require users to go through a complex account-creation process before even reaching any coverage options.” Not only does this block users from seeing prices up front, the slap-dash decision is the main reason people can’t access the site.

·    Inadequate Oversight: The Obama administration did not hire a general contractor to oversee the IT project, opting instead to keep oversight in-house. The inability of health policy people to adequately manage the technical details meant big problems were not understood until too late.

·    Erroneous Subsidy Calculations: So far, this hasn’t gotten much attention because only a few people have been able to complete the purchasing process. But as Levin points out, if the front-end log-in problems get resolved, the back-end problems regarding faulty subsidy calculations could severely undercut both consumers’ and providers’ confidence in the system. If millions of people buy insurance with a subsidy they don’t qualify for, that’s millions of angry voters who will owe a refund to the IRS come tax time.

Today, the Wall Street Journal (subscription required) gives more detail into this burgeoning crisis.

“Emerging errors include duplicate enrollments, spouses reported as children, missing data fields and suspect eligibility determinations,” reports the paper.

The reality is that the dissatisfaction with Healthcare.gov is likely to get much worse. With the shutdown saga behind us, perhaps some politically savvy conservatives in Washington can figure out a way to turn the growing frustration into a mandate for delay.

Even though it’s been delayed for a year, Obamacare’s employer mandate is still giving business owners cold sweats.

North Georgia Staffing, a family-owned boutique staffing agency, currently employs 18 full-time workers and 400 temporary workers. Next year it plans to add another 200 temps.

The problem facing Debbie and Larry Underkoffler, the owners, is whether to extend the same insurance coverage to all workers or pay a $2,000 per employee fine, they told Fox News.

The projected fine would be $400,000, while giving all workers an Obamacare-approved plan would top $2 million.

The Underkofflers’ case is particularly galling because prior to any government mandate they already provide their workers – both full-timers and temps – with access to health insurance.

Yet under Obamacare’s system of mandates and penalties, it makes better financial sense for the Underkofflers to dump their temporary workers on Georgia’s federally-run exchange and pare back benefits for the full-timers. In both cases, workers are projected to pay more for health insurance and get less.

All this makes perfect sense, however, if you agree with Obamacare’s primary goal of increasing the number of people with health insurance by regulatory fiat.

North Georgia Staffing, supporters would argue, is laudable but an outlier. Most temporary workers don’t have health insurance. The way to (somewhat) pay for the cost of covering them is to either (1) make employers eat the price increase, or (2) use the fines when they refuse to (partially) fund the federal subsidies temps will use to buy insurance on an exchange. If that means that some owners and workers will pay more for less, it’s a worthy sacrifice to increase access to health insurance for others.

That’s the baseline policy argument for Obamacare’s employer mandate. No doubt it doesn’t poll as well as “If you like your doctor and insurance you can keep it,” but at least it’s the truth.

If anyone is looking for another reason to criticize the Obamacare website rollout, here it is.

“Rather than open the contracting process to a competitive public solicitation with multiple bidders, officials in the Department of Health and Human Services’ Centers for Medicare and Medicaid accepted a sole bidder, CGI Federal, the U.S. subsidiary of a Canadian company with an uneven record of IT pricing and contract performance,” reports the Washington Examiner.

An open, competitive process would have revealed that CGI was fired in 2011 by the Ontario government for failing to deliver on time “a new online medical registry for diabetes patients and treatment providers.”

In other words, CGI – the firm responsible for creating a health insurance portal to service 36 American states – couldn’t deliver a much less complicated system for 1 Canadian province. The service was so bad that the Ontario government still refuses to pay any outstanding fees it owes to CGI.

Remember when liberals screamed bloody murder about the no-bid contracts awarded by the George W. Bush administration to defense contractors?

Well, it’s time to mount their high horses again and demand accountability.

I’m looking at you in particular, Jon Stewart.

Tom Bevan thinks so.

“Any corporation that allowed a COO to mismanage a new product line as important to its image as the Affordable Care Act is to Obama’s would be contemplating their severance package,” writes the Executive Editor of RealClearPolitics.

“The fact that Republicans haven’t called for Sebelius’ scalp should tell Democrats all they need to know about how much conservatives think she is hurting Obamacare’s cause. If the president cares about rescuing his signature policy initiative, he should consider putting it under new management right away.”

Though cathartic, I’m not sure Bevan’s idea helps the GOP all that much.

True, if Obama fired Sebelius it would touch off a huge confirmation battle over her successor as Secretary of Health and Human Services, the agency overseeing Obamacare’s implementation. But since Democrats control the Senate, confirmation would be won eventually.

Better, I think, to schedule a series of high-profile congressional hearings to grill Sebelius, her deputies and the contractors responsible for the glitch-heavy federal insurance exchange website. Sebelius is fast-becoming the bureaucratic face of Obamacare – let her try to defend it.

The tone coming from House GOP members should be sharp but measured. Already, Speaker John Boehner has used a line that would be devastating to repeat to every pro-Obamacare witness at every hearing:

“How can we tax people for not buying a product from a website that doesn’t work?”

Then there are the simple questions Sebelius couldn’t answer in a cringe-inducing appearance on The Daily Show.

Host Jon Stewart – an Obamacare supporter who thinks America deserves a single-payer system – got no good answers from Sebelius about why Healthcare.gov stinks and businesses get a one year mandate delay but individuals do not.

In response, Sebelius said – without a shred of evidence – that the site is getting better, and that individuals can delay the mandate, so long as they pay a fine.

If that’s the best she can do with a friendly host, imagine the possibilities under good cross-examination at a House hearing.

No, Obama shouldn’t fire Sebelius until House Republicans get a chance to turn up the heat.

Healthcare.gov, Obamacare’s federally-run, error-prone health insurance exchange, costs north of $500 million, according to the best information available.

To put this in perspective, compare that amount to the operating budgets of some of the tech industry’s biggest names:

·    Facebook operated for six years before passing the $500 million mark in 2010

·    Twitter operated for five years on $360.17 million in total funding

·    Instagram used $57.5 million before being bought by Facebook last year

·    LinkedIn has raised $200 million, while Spotify has raised $288 million

Despite the huge funding disparities, however, all of these private sector firms fielded much better online products than the glitch-filled, click-and-crash monstrosity offered by the Obama administration.

After more than a week of operation, Healthcare.gov is doing little more than waste people’s time.

Defunding never looked so good.

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.

With ObamaCare’s insurance exchanges going online next week, there is suddenly an avalanche of information confirming that the law is bending the cost curve significantly upward for people already buying health insurance on the individual market.

The most famous example so far is conservative pundit Michelle Malkin’s notice that her high-end PPO policy is being eliminated by her insurance provider in order “to meet the requirements of the new laws,” i.e. ObamaCare.

Jim Angle of Fox News describes how a Kentucky family’s monthly premium is set to spike from $333 to $965. Humana, the family’s insurance provider, explains that “Increases aren’t based on your individual claims or changes in health status. Many other factors go in to your premium including: [ObamaCare] compliance, including the addition of new essential health benefits.”

Those “new essential health benefits” are a big part of what will make many plans bought by individuals and families unaffordable under ObamaCare.

As I write in this week’s column, the disruptive impact of ObamaCare on the self-employed is just one element of many that, taken together, articulates ObamaCare’s biggest lie.

Defund, repeal or replace – whichever it is, this law cannot be allowed to stand.

No, I don’t mean news of yet another delay in the controversial health law’s implementation – this time a Reuters report that the Health and Human Services department is pushing back by two weeks its timetable for finalizing deals with health insurance companies.

I mean today’s announcement that former President Bill Clinton is being tasked with explaining what’s so great about ObamaCare to the country. Clinton’s speech next week is being billed as the first of several high-profile speeches designed to sell the law to the 54 percent of Americans who don’t like it.

To be sure, if anybody in politics can make this train wreck look good, it’s Bill Clinton. But why would President Obama wait till now, after three-and-a-half years of public relations futility, to bring in his party’s best spokesman?

Simple: With just over a month to go before ObamaCare’s enrollment begins the president and his administration are in full-blown panic mode. Nothing is on schedule. Their multi-million dollar ad campaign may not attract enough people to enroll. And, oh yeah, we’re about to intervene in Syria’s civil war.

If Clinton gets any traction with his speeches it will be of limited value because so much of the public’s mind has been made up in the years since the law was passed. Prior to that, who knows? As a matter of Politics 101, failing to use such a successful political spokesman strikes me as a huge wasted opportunity. Of all the delays with ObamaCare, putting off Clinton’s rhetorical talents may be the most fatal to the law because – perhaps – they could have done so much to keep it alive.

How’s this for a snapshot of ObamaCare’s priorities?

Since the controversial health law passed in March 2010, the Department of Health and Human Services (HHS) has hired 1,684 new employees.

Of those, 86 are criminal investigators while only two are consumer safety officers.

The numbers come from HHS data extracted by a Freedom of Information Request by The Daily Mail, a British newspaper.

Bear in mind, HHS’s health cops are in addition to the estimated 16,500 new agents the Internal Revenue Service is seeking to fulfill its ObamaCare policing mandate.

There are, of course, better, much less intrusive ways to do health reform.

“People would voluntarily purchase the health insurance of their choice with basic subsidies. Additional special assistance could be targeted to help those with low incomes and/or high risk-based premium costs in purchasing health insurance,” according to Thomas Miller of the American Enterprise Institute.

Instead of the demanding detailed financial and health information from millions of Americans, Miller proposes treating ObamaCare health insurance subsidies like other income tax issues, so that only “a tiny fraction of taxpayers would be subject to mostly random audits to ensure that their tax subsidies for insurance are being spent appropriately.”

Miller’s solution would nix the need for all the new ObamaCare investigators. Eliminating the 86 new HHS hires would save taxpayers approximately $138.8 million annually.

But that would mean less oversight and control for the federal government, which, as we are seeing with the rise in police-related hiring at HHS and IRS, is not a priority under ObamaCare.

News broke today that the United Parcel Service (UPS) is dropping an estimated 15,000 spouses of its non-union employees from the company’s health insurance plan – largely because of ObamaCare.

Doing so will save UPS around $60 million a year.

Under the health law, working spouses who have access to medical insurance from another employer don’t have to be covered.

The UPS memo explaining the decision cites ObamaCare’s stepped-up coverage requirements as playing a big role, reports Kaiser Health News.

Costly benefits such as the law’s “ban on annual and lifetime coverage limits and its requirement to cover dependent children up to age 26” will raise the cost of premiums for employers.

Eliminating coverage for working spouses is one of the few ways companies can rein in costs while still complying with the law.

But along with losing access to their current doctor networks and benefits, UPS’s soon-to-be-severed working spouses will also likely pay more for health insurance.

“The $500 in-network family deductible for UPS’s basic plan, for example, is less than the nationwide average of $733,” says Kaiser.

Remember that oft-repeated line from President Barack Obama in 2009 that if you like your current doctor and insurance plan you will be able to keep them after ObamaCare goes into effect in 2014?

Fast forward to today, and reality is singing a very different tune.

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.