Freedom Line Blog

In an interview with CFIF, Sally Pipes, President and CEO, and Taube Fellow in Health Care Studies, at the Pacific Research Institute, discusses why the ObamaCare Insurance Exchange Train is already coming off the rails and why this train wreck will be riddled with delays, wasteful spending and cost overruns.

Listen to the interview here.

Below is one of the latest cartoons from two-time Pulitzer Prize-winner Michael Ramirez.

View more of Michael Ramirez’s cartoons on CFIF’s website here.

Here’s a troubling prospect: Americans who want to assert their rights of religious conscience will have to go through the famously scrupulous Internal Revenue Service to do so. Ashley E. McGuire writing in the Weekly Standard:

On August 1, the one-year “safe harbor” for religious charities objecting to provisions of Obamacare will end. Starting then, these nonprofit employers will be forced to violate their religious beliefs or pay large fines. In charge of collecting the fines will be our recently newsworthy friends at the Internal Revenue Service.

… Faced with the public outcry, the government did allow nonexempt religious organizations​—​hospitals, universities, charities, and so on​—​a year to get over their scruples and figure out how to comply. That year ends on August 1, when another 30 or so lawsuits filed by objecting nonprofits will be activated. But now, enter stage left: the IRS.

The way the regulation is written, it is the IRS that determines whether an organization qualifies for full exemption from the HHS mandate. To qualify, an organization must be a nonprofit as described in section 6033(a)(1) and section 6033(a)(3)(A)(i) or (iii) (oh, my!) of the amended Internal Revenue Code of 1986 and therefore exempt from filing Form 990, which most nonprofits must file annually.

The good news: in the short term, the IRS is likely to be so conscious of the extra scrutiny it’s under because of the scandal involving tea party groups that it applies an exceedingly light tough in dealing with organizations trying to gain exemption from the mandate. The bad news: wayward government agencies, like misbehaving children, have a tendency to straighten up and fly right only as long as they know they’re being observed.

Even if the IRS discharges this duty with as much objectivity as possible, however, it doesn’t alleviate the underlying problem. No bureaucrat — nor any politician, for that matter — should possess power so sweeping that they get to decide whether or not someone’s religious beliefs earn indulgence from the state. It’s government at its most intrusive. And it’s one more reason that the contraception mandate — and Obamacare with it — needs to be discarded.

A group of conservative House Republicans is readying an anti-ObamaCare messaging campaign to coordinate arguments against the controversial health law in the run-up to its debut in October.

The initiative aims to make criticisms of the law more mainstream.

“The goal of the House ObamaCare Accountability Project is to raise public awareness about ObamaCare’s impact on jobs, health costs and access to care. HOAP is a group of select House members who will supplement and echo the work being done by the House Committees of jurisdiction and all members of the House Republican Conference on this important issue,” a spokeswoman told Politico.

HOAP is being spearheaded by House Majority Whip Kevin McCarthy (R-CA) and Conference Chairwoman Cathy McMorris Rodgers (R-WA). The effort includes 25 House GOP members drawn from across the country.

As far as I can tell, there’s no website or talking points available yet, but even just an announcement is a start in the right direction. Conservatives need to find a way to turn the public’s dissatisfaction into a movement for repeal. With the media in favor of the status quo, that means a messaging unit like this – that’s very good – is needed to get the conversation moving in the right direction.

If you’re a member of the Obama Administration who’s engaged in some official malfeasance, now is the time to come clean. With the orgy of Administration-related scandals in the news right now, there’s a decent chance no one will notice. And if they do, they’ll likely be so numb to the pervasive impropriety that they’ll just ignore it and move on. That seems to be the thinking at the Department of Health and Human Services, where Secretary Kathleen Sebelius suddenly decided to become a little more forthcoming yesterday. From the New York Times:

Kathleen Sebelius, the secretary of health and human services, disclosed on Tuesday that she had made telephone calls to three companies regulated by her department and urged them to help a nonprofit group promote President Obama’s health care law.

She identified the companies as Johnson & Johnson, the drug maker; Ascension Health, a large Roman Catholic health care system; and Kaiser Permanente, the health insurance plan.

At a hearing of the House Committee on Education and the Workforce, Ms. Sebelius said she did not explicitly ask the companies for money, but urged them to support the work of the nonprofit group, Enroll America.

The group, led by former Obama administration officials, is working with the White House to publicize the 2010 health care law and help uninsured people sign up for coverage.

Here’s the deal: News of the Secretary’s freelancing had already gone public a few weeks ago, but the defense at the time was that she had only solicited money from a couple of companies that weren’t regulated by HHS. Now she concedes that she was hitting up companies under her department’s jurisdiction but wants you to believe that it wasn’t that big of a deal.

Here’s the problem: Congress refused to fully fund an extensive PR campaign for Obamacare (as it should have — this is a government health program, not the rollout of a new SUV), leading a bunch of Obama flaks to create the aforementioned Enroll America. Now you have the HHS Secretary — who has the power to bring down the hammer on these companies — ever-so-gently suggesting that they “support the work” of Enroll. She could well be telling the truth about not explicitly asking them for money — because she wouldn’t have to. None of these companies need to be told outright that if mama ain’t happy, ain’t nobody happy.

The dissembling from HHS is bad enough, but it’s representative of a deeper problem. At every turn, Obamacare creates precisely this kind of nexus between government and the private sector. It’s an invitation to corruption. And it looks like the RSVPs are starting to come in.

The job of Republican strategists preparing for the next midterm election just got a lot easier. From Politico:

Scarred by years of Republican attacks over Obamacare, with more in store next year, Democrats have settled on an unlikely strategy for the 2014 midterms: Bring it on.

Party strategists believe that embracing the polarizing law — especially its more popular elements — is smarter politics than fleeing from it in the House elections. The new tack is a marked shift from 2010, when Republicans pointed to Obamacare as Exhibit A of Big Government run amok on their way to seizing the House from Democrats.

But the Democratic bear hug, reflecting a calculation it’s probably impossible to shed their association with the law even if they wanted to, is still a high-wire public relations act. The White House has consistently struggled with messaging on Obamacare, hoping the public would gain an appreciation for the health care makeover as its benefits became apparent. That never really happened, but Democrats seem to be banking that it finally will.

This at a time when 54 percent of the public opposes the law, 40 percent very strongly.

Democrats seem to be banking on the notion that they can run on the law’s benefits while being held blameless for its costs. It should be fun to watch that play out as the former continues to shrink while the latter spirals out of control.

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.

The Hill reports that the plot is thickening as key members of Congress ask 15 insurance companies to turn over any records related to potentially illegal fundraising to support ObamaCare by Health and Human Services Secretary Kathleen Sebelius.

The request went to industry giants Aetna, Blue Shield of California, Cigna, Coventry Health Care, H&R Block, HCSC Group, Highmark, Humana, Independence Blue Cross, Kaiser Permanente, United Healthcare, WellPoint, America’s Health Insurance Plans, BlueCross BlueShield Association, and CareFirst BlueCross BlueShield.

The controversy first surfaced when the Washington Post confirmed that HHS Secretary Sebelius is personally contacting private members of the health care industry – including insurance providers – to ask that they donate six- to seven-figure sums to Enroll America, a pro-ObamaCare non-profit advocacy group running a national summer and fall ad campaign to promote enrollment in state-based insurance exchanges.

H&R Block, one of the companies contacted by both Sebelius and Congress, has already committed to donating $500,000 to fund Enroll America’s efforts, according to the New York Times.

With its records request, you can bet that Congress wants to know what exactly was said/indicated/promised in the Sebelius-H&R Block conversation, as well as any other communications between top health insurance companies and their chief regulator.

If those requests aren’t honored voluntarily, expect to see subpoenas follow very quickly.

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.

As I discuss in my column this week, the primary beneficiary of HHS Secretary Kathleen Sebelius’s legally suspect lobbying of private health companies is the non-profit community organizing outfit Enroll America.

The group’s Advisory Council includes several members of the liberal establishment such as NAACP, La Raza, Planned Parenthood, and the Service Employees International Union (SEIU).

But wait, there’s more:

“Enroll America’s board of directors is made up of insurers and hospital organizations that will benefit from enrolling millions of people in Obamacare. But its management is 100 percent political. Its president is Anne Filipic, formerly deputy director of the White House Office of Public Engagement, where she networked with community organizers. Before that, she had a top job at the Democratic National Committee, and before that she managed Obama’s victorious 2008 Iowa Caucus bid,” according to the Boston Herald.

“To design a media campaign, Enroll America hired Lake Research, which also manages messaging for ACORN, MoveOn.org, LaRaza and 39 members of Congress, all Democrats”

At least now we know how Sebelius is feathering her post-HHS nest – by funneling money to just about every radical liberal group in America.

A group of powerful Republicans in the House and Senate is demanding an investigation into potentially illegal fundraising calls by HHS Secretary Kathleen Sebelius to private health companies.

In a letter to the Government Accountability Office, three House committee chairmen and two Senate ranking members said, “The Secretary’s actions show an apparent disregard for constitutional principles and may violate the Antideficiency Act, the prohibition against augmenting congressional appropriations, and executive branch ethics laws,” according to reporting by Politico.

As I explain in my column this week, Sebelius has been caught quoting specific dollar amounts that private companies should donate to a pro-ObamaCare community organizing group getting ready to promote the law ahead of this year’s October enrollment.

Whatever GAO decides to do, it’s a near certainty that the relevant Republican-led House committees with jurisdiction over this scandal will soon launch investigations into Sebelius’s conduct.

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.

On the heels of a Washington Post report that HHS Secretary Kathleen Sebelius is actively soliciting health industry executives for six- to seven-figure “donations” to help publicize ObamaCare, the New York Times reveals how much she’s netted in pledges so far: $10.5 million.

And that’s just from two groups. One is the Robert Wood Johnson Foundation which bills itself as the largest public health philanthropy. It pledged $10 million. The other is the for-profit tax preparation company H&R Block who, according to the Times, “sees a large role for itself in helping low- and middle-income people apply for tax credits that can be used to buy private health insurance.” It promised $500,000 for the propaganda outreach effort.

An unbiased observer could look at this and easily see at least the probability if not the certainty of a quid pro quo arrangement where payment to an HHS-backed initiative now means preferential treatment later.

And remember, these two transactions are only the tip of the iceberg. Once more health industry entities confirm their involvement Sebelius’ project we’ll be able to see which firms will reap the lion’s share of benefits of ObamaCare’s corrupt pay-to-play scheme.

Crony capitalism is alive and well in the Obama Administration.

Earlier this year Michael Barone catalogued a litany of abuses to the rule of law perpetuated under the Obama Administration. “Gangster Government” is the term Barone coined to describe the behavior.

As of Friday, Barone needs to update his list.

Sarah Kliff broke the news that Kathleen Sebelius, Secretary of Health and Human Services, has been calling health care executives, “asking them to make large financial donations to help with the effort to implement President Obama’s landmark health-care law…”

Imagine the conversation. A health care CEO gets a personal call from the chief regulator of his business suggesting that the company and the people it employs make financial donations to promote a law administered by the regulator.

Sounds like a suggestion that can’t be refused, right?

As Barone would say, this is Gangster Government.

Republicans in Congress need to push back hard on this abuse of power by Sebelius.

The people running businesses are there to make profits, not spend precious resources on ruinous fights with thugs spending taxpayer money.

If Sebelius can get away with coercing businesses to “donate” money to promote a law that increases her power over them, an awful precedent will be set. She – and any of her successors – will be able to tax, fine and now “fundraise” the very people they regulate.

Fail to pay enough, and say goodbye to your livelihood.

Congress needs to put a stop to Sebelius’ abuse of power. Now.

The editors at National Review Online give some much-needed advice to the congressional GOP:

“The basic outline of a workable strategy is easy to draw up. First, Republicans should explain why Obamacare is unlikely to work. Second, they should finally unite behind an alternative that would let at least as many people get coverage as Obamacare but without the law’s side-effects. Third, they should say that they plan to repeal and replace Obamacare as soon as they can do so — whether in one fell swoop, which could occur only under a new president in 2017, or one step at a time. Fourth, they should advance bills that both replace parts of Obamacare and highlight its flaws.”

The most perplexing thing about congressional Republicans is that no one has stepped forward to be the Paul Ryan of health care reform. Ryan spent years in the background learning the federal budget process to construct a clear, workable reform that slows down the growth of entitlement spending while making Medicare and Medicaid more market friendly.

With ObamaCare on the books since 2010, it’s a wonder that no Republican in the House or Senate has taken on the responsibility of putting together an alternative that the GOP can rally around. To my knowledge, no one – not the 16 Republican physicians in Congress or anyone on a relevant committee – is taking steps to make sure there’s a workable replacement in the event conservatives get their wish and repeal ObamaCare.

It’s not enough to be right that ObamaCare is wrong on the merits and impossible to implement. There’s also got to be a contrasting vision of health care reform that is better than ObamaCare.

As of now, we’re still waiting.

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.

And now the other shoe drops.

Less than a week after telling HHS Secretary Kathleen Sebelius that her implementation of ObamaCare’s costly and confusing health care system is a “train wreck,” U.S. Senator Max Baucus (D-MT) announces he’s retiring.

Baucus’s comments caused a stir because they met the Washington, D.C. definition of a gaffe – telling the truth in public.  With the Chairman of the Senate Finance Committee, and lead ObamaCare author, on record as criticizing the President’s signature policy, it looked like it might finally be acceptable for Democrats in Congress to admit the obvious: ObamaCare is a disaster in the making.

But rather than stick around and fight to reform the law, Baucus is choosing to bow out of a tough reelection campaign in 2014. The decision could make it much easier for Republicans to pick up the seat, potentially adding another vote to the conservative-led repeal caucus.

Whatever the spin, this much is clear. Last week Baucus let it be known he could no longer defend the law. Now, it’s clear he can’t win with it either.

Hopefully, it’s the start of a trend.

In an interview with CFIF, Sally Pipes, president, CEO and Taube Fellow in Health Care Studies at the Pacific Research Institute, discusses how ObamaCare is prompting doctors to make plans to retire early or depart from the current system of third-party payment, and what that means for patients.

Listen to the interview here.

Robert Costa says that if the Senate passes the Gang of Eight’s comprehensive immigration reform bill, the House of Representatives stands ready to put the brakes on the latest piece of “must pass” legislation. Their mechanism: Regulator order.

“Regular order” allows House Republicans to dictate the pace of legislation and makes “grand bargains” of any sort harder to pass. Consider immigration. Several sources close to the leadership say that even if the Senate passes something on immigration, the bill will be immediately sent to the committees, and then either sent back to the Senate with changes, or rewritten in a bicameral conference committee. This means that the chance of the Senate’s Gang of Eight bill coming to the House floor, as is , is nearly non-existent. House Republicans would first have to mull it, schedule hearings, and then tinker with its legislative language .

That tweaking process could take months, which is just fine with many Republicans, who’d like the public to have as much time as possible to chew over the controversial elements of Obama’s prized bills. The caucus consensus is: The more time Congress takes to consider a bill, the more time the public has to sour on its components.

Unlike ObamaCare where Nancy Pelosi’s Democratic majority rubberstamped the Senate’s rewrite of the nation’s health insurance market, House Republicans want to make sure they know exactly what’s in the Gang’s immigration bill before voting on it.

If necessary, House Judiciary Committee Chairman Bob Goodlatte (R-VA) is even floating the idea of breaking the Gang’s carefully balanced 1,500 page bill into separate pieces. That way, the most popular measures – such as enhanced border security measures – would likely become law, leaving less desirous elements out until supporters can figure out a way to sell them to the American people.

For a caucus that runs only one-half of one branch of government, regular order sounds like a good strategy to employ.