Freedom Line Blog

Hat tip to Investor’s Business Daily for pouncing on what will be a very unpopular unintended consequence of passing the Senate Gang of Eight’s immigration reform bill:

Under the immigration reform bill, some employers would have an incentive of up to $3,000 per year to hire a newly legalized immigrant over a U.S. citizen.

In avoiding one controversy — the cost of providing millions of newly legalized immigrants with ObamaCare subsidies — the Senate “Gang of Eight” may have risked walking into another.

The bipartisan legislation released Wednesday dictates that those granted provisional legal immigrant status would be treated the same as those “not lawfully present” are treated under the 2010 health law.

That means they would neither be eligible for ObamaCare tax credits nor required to pay an individual tax penalty for failing to obtain qualifying health coverage. It also means some employers would face no penalty for failing to provide such workers affordable health coverage.

So, in order to avoid the charge that legalization would give illegal immigrants citizen-like access to ObamaCare subsidies, the Gang of Eight simply bars them from access. But that means that legalized immigrants are cheaper to hire than comparable native-born workers who will be competing with more people for less jobs.

There may be a fix, but it will be messy.

Good luck with that.

Don’t look now, but with ObamaCare failing to deliver on its promises before it even takes effect, Democrats are already starting to lay the blame on the one party least responsible for this policy monstrosity: Republicans.

Kathleen Sebelius, Secretary of Health and Human Services and the point person for ObamaCare’s implementation, told a Harvard School of Public Health audience that instead of saying, “let’s get on board, let’s make this work,” Republican opponents coerced her into fighting “state-by-state political battles.” Sebelius complained, “The politics has been relentless,” according to Investor’s Business Daily.

This from the woman whose refusal to honor the conscience rights of religious employers elevates the right to “free” contraception over the First Amendment.

But just because Sebelius’ charge that ObamaCare’s completely foreseen failure is actually Republicans’ fault is laughable to anyone who knows the facts, don’t assume that the GOP communications apparatus can be counted on to frame those facts effectively.

After all, this is the same universe of consultants and staff that got outmaneuvered last election season on liberal talking points like the GOP’s “War on Women,” and Mitt Romney’s “47 percent” comment.

If the Left wants to present Sandra Fluke and “The Life of Julia” as exemplars of modern feminism, why can’t the Right counter with the common sense observation that what liberals really want is a government sugar-daddy who pays for sex and then subsidizes any consequences thereafter?

And rather than deny that 47 percent of Americans don’t pay federal income taxes, why don’t Republicans instead hit back with the explosive growth of food stamps and the unprecedented extension of unemployment benefits in the Age of Obama?  Throw in the Obama Phone mentality, and people will start to understand that there are real costs to the liberal vision of welfare.

All this to say I hope Republicans have learned their lesson about how to contest Democratic smear campaigns.  It would be a shame if when ObamaCare comes off the rails next year the GOP fails to capitalize electorally because no one clearly makes the case that only liberals are to blame for the mess they created.

States looking for flexibility under ObamaCare in how to structure and pay for expanding Medicaid can take a hike, according to an analysis by the Heritage Foundation.

States like Arkansas and Indiana have requested waivers from the health reform law’s expansion formula that creates millions of new enrollees at an eventual cost of billions of dollars to states.

The hope was to use existing state-based models like Indiana’s successful health savings account for low-income Hoosiers to increase Medicaid enrollment while retaining cost certainty for state budget writers.

But those hopes were dashed after the federal Department of Health and Human Services released a frequently asked questions (FAQ) sheet that flatly denied any request to deviate from ObamaCare’s one-size-fits-all, open-ended spending commitment for Medicaid.

With this announcement, the Obama administration has definitively articulated its idea of bipartisan reform.  Republican governors who capitulate and get in line are welcomed with open arms.  Those like Indiana’s Mike Pence can take their policy entrepreneurship somewhere else.

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?

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.

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.

An editorial in the Wall Street Journal nails a specious legal argument by at least two GOP governors trying to convince their Republican legislatures to approve the ObamaCare Medicaid expansion now, with the intention of opting out when the state’s bill comes due in three years.

The argument, a product of a private law firm in Ohio, makes some nice lawyer’s points, but ultimately fails to take into account how government programs – and the politics that drive them – actually work:

But there’s no evidence in the original law or the Supreme Court opinion that states can join or leave at their own whim. The logic of Justice Roberts’s opinion  [upholding ObamaCare] suggests that once states adopt new Medicaid, the program immediately becomes the old program for the purposes of the law and then states can’t leave.

The Becker memo also cites “guidance” from the federal Health and Human Services Department that states “may decide later to drop the coverage.” But these informal documents on the HHS website lack the force of law or even of regulation; they aren’t part of the Federal Register. In any case, HHS doesn’t have such authority. Congress didn’t grant the Administration any more statutory leeway than it did the states.

We wouldn’t be surprised if HHS is promising flexibility now only to revoke it later as a deliberate bait and switch. That wouldn’t be any more deceptive than Mr. Kasich’s legal claims. Republicans tempted to sign up for ObamaCare’s Medicaid expansion had better think twice because once they do, the likelihood is they’re ceding control forever.

The decision facing Republican legislatures is straightforward: Either continue with Medicaid as it is and have (some) discretion over your state budget, or accept ObamaCare’s expansion and get ready to lose control.

It’s time for the GOP flip-floppers to be honest about the implications of this decision and debate the choice, and the consequences, on the merits.

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.

Republicans in the Florida house and senate have rejected Governor Rick Scott’s plan to expand the state’s Medicaid population.  Under ObamaCare, states are promised three years worth of federal funding to cover the cost increases.  Last week, Scott reversed his earlier opposition and accepted those terms.

The move by Florida’s Republican legislators is a welcome corrective to the knee-buckling capitulation of Scott and other GOP governors.  Borrowing a play out of Rep. Paul Ryan’s budget proposals, State Senator Joe Negron is using his no vote to pivot in a new direction.

“This will be the beginning of a transformation of the entire Medicaid system,” committee Chairman Sen. Joe Negron said. “My goal is that we will get out of the federal Medicaid system as we know it. Now, we can’t do that all at once, but we have an opportunity to begin that process.”

Negron wants the state to create a basic health insurance plan for the expanded Medicaid population and require recipients to pay a sliding scale premium based on their income. He suggested using Florida Healthy Kids, a managed care program that provides health insurance to low-income children, as the vehicle for delivering the new system.

Negron and his colleagues are showing real policy leadership.  Now that Scott’s dash for cash is on hold, it’s time for the former health care executive to rediscover his private sector creativity and help Negron put Florida on a path toward sustainable social safety net spending.

H/T: Tampa Bay Online

Pennsylvania Republican Governor Tom Corbett may be wavering on his refusal to expand Medicaid under ObamaCare’s bait-and-switch funding scheme.

I don’t envy him.  He’s surrounded by states like Ohio and New Jersey, whose GOP governors opted to indulge the fantasy that they can accept the federal government’s promise of full funding at face value.

To his credit, Corbett isn’t allowing himself to act like there are no costs associated with agreeing to so-called “free” Medicaid expansion for the next three years.

Here’s some refreshing honesty from Corbett’s spokeswoman Christine Cronkright:

The Corbett administration has estimated that participating in the Medicaid expansion that would add 800,000 people to medical assistance would cost Pennsylvania $1 billion through 2014-15 and a total of $4.1 billion. Advocates maintain that the Medicaid expansion would pay the way for $43 billion in federal contributions, beginning with three years in which the federal government would pay 100 percent of the expansion.

“Regardless of the federal government’s claims, the presumption that they will cover 100 percent of the costs of full expansion is simply not true. Regardless of any other costs under the (Affordable Care Act) that we’d have to bear, there are still IT and staffing costs, costs for additional clients coming into the system that may have been eligible before, and costs for those we believe will drop employer-based coverage,” Cronkright said.

So it turns out “free” really means $1-4 billion.

The simple truth about ObamaCare’s Medicaid expansion is that it establishes a one-way street toward greater federal intervention in every individual’s health care decisions. Democrats know this, and are using the “free” money trope to lure weak-willed Republicans into a federally-dominated system from which a state will not be able to extract itself.

GOP governors who agree to expansion and believe that they will have the political support to simply cut off access to Medicaid when the feds pull back funding are deluding themselves. Besides, what kind of leadership is it to support welfare expansion on the condition that someone else pays for it with their debt-laden credit card?

So far, Governor Corbett is standing firm in the face of tremendous opposition to fiscal sanity.  Let’s hope he continues.

The libertarian-leaning Tenth Amendment Center is doing a double service for people interested in how to fight federal government overreach at the state level.

(Note: Before explaining further, I want to say that I do not endorse all of the views at TAC. The point here is to highlight how one group within the larger conservative movement is finding a way to work within the system to enact constructive alternatives.)

The first service is providing an easy-to-access list of model legislation to use at the state level.  Any limited government activist with an internet connection and a printer can get readymade bill language that a sitting state representative or senator can introduce.  The topics range from preserving Second Amendment gun rights to refusing to cooperate with ObamaCare, with issues like the Constitutional Tender Act in between.

After a piece of model legislation is introduced, TAC then delivers its second service: Tracking the progress of its bills across the fifty states.  For example, since January 2013, nine states have introduced at least one element of TAC’s ObamaCare refusal law.  So far, twenty-three states have introduced TAC bills protecting gun rights, and another three have passed the measure out of at least one legislative chamber.

Some of the model legislation comes from experts in the field like the American Legislative Exchange Council (ALEC), while others look to be homegrown with TAC.  Whatever their provenance, limited government conservatives should get energized by the fact that concerned citizens are finding ways to stem the tide of federal overreach – even if you’d never hear about it from the mainstream media.

In an interview with CFIF, Congressman Steven Palazzo (R-MS) discusses his proposed Constitutional Amendment (H.J. Res. 28) that, if passed and ratified, will effectively abolish ObamaCare’s mandate tax and permanently limit Congress’ power to impose taxes as  penalty simply for choosing not to purchase goods or services.

Listen to the interview here.

The key passage from Governor Chris Christie’s budget speech yesterday speaks volumes about where the New Jersey Republican stands on principle:

Let me be clear, I am no fan of the Affordable Care Act. I think it is wrong for New Jersey and for America. I fought against it and believe, in the long run, it will not achieve what it promises. However, it is now the law of the land. I will make all my judgments as governor based on what is best for New Jerseyans. That is why I twice vetoed saddling our taxpayers with the untold burden of establishing health exchanges.

But in this instance, expanding Medicaid by 104,000 citizens in a program that already serves 1.4 million, is the smart thing to do for our fiscal and public health. If that ever changes because of adverse actions by the Obama Administration, I will end it as quickly as it started.

Almost all of the same criticisms I leveled at Florida Governor Rick Scott this weekend apply to Christie and his reasoning.

The Governor’s characteristic bluntness, though, merits one further point.

By claiming that the Affordable Care Act (aka ObamaCare) “is wrong for New Jersey and for America,” and that “in the long run, it will not achieve what it promises,” Christie is admitting that he has decided to entangle New Jersey in a fundamentally flawed program that will fail to achieve its goals.  But don’t worry.  In the meantime, New Jerseyans can breathe easy because Christie, like Scott and the other Republican capitulators, will make sure to gobble up as much “free” federal taxpayer money as possible until he decides to pull the plug rather than help cover the costs.

One of the first rules of persuasion is to be coherent.  Christie’s tortured, self-serving logic doesn’t come close.

In case you haven’t seen it yet, check out the ObamaCare Burden Tracker (pdf), a summary of 157 rules and regulations that will impose an annual paperwork burden of 127,602,371 hours on the American economy.

The ObamaCare Burden Tracker is a joint project of the House Committees on Ways and Means, Education and Workforce, and Energy and Commerce.

Scrolling through one discovers such things as

• The new “340B Drug Pricing Program Forms” (#6) will impose an annual paperwork increase of 14,504 hours
• A new “Medicare Enrollment Application” (#32) will be 70,693 hours
• Navigating the “Process for Obtaining Waivers of the Annual Limits Requirements of PHS Act Section 2711” (#50) will cost 178,183 hours per year
• The process to file a “Letter Requesting Waiver of Medicare/Medicaid Enrollment Application Fee; Submission of Fingerprints; Submission of Medicaid Identifying Information; Medicaid Site Visit and Rescreening” (#71) will add a whopping 1,248,082 hours per year
• Changes to Medicaid eligibility (#77) will mean 21,279,702 new hours
• The form to get credits for Small Employer Health Insurance Premiums (#131) will be 40,189,456 additional hours

There are many, many more.

Though depressing to read, the report is due to a lot of tedious work by hardworking committee staff members.  Because of it, Americans can see just how much economic productivity is being sacrificed in compliance costs.

With all due respect to Newsmax CEO Christopher Ruddy, and as a fan of his website I mean that sincerely, I couldn’t disagree more with his defense of Florida Governor Rick Scott’s decision to accept ObamaCare’s Medicaid expansion.

Like other Republican governors who’ve flipped on the issue, Scott announced last week that even though he remains philosophically opposed to ObamaCare, he would accept at least the law’s Medicaid expansion for the next three years because federal taxpayers – not the state – would pick up the entire price tag.  Like many of the other capitulators, Scott claims that because the Supreme Court ruled ObamaCare constitutional, it doesn’t make financial sense for Florida residents to pay for ObamaCare through fees and penalties while other Medicaid-expanding states reap a windfall.

Ruddy defends Scott’s about-face with two arguments I don’t find compelling.

The first:

Scott has also made it clear that he has not agreed to continue the Medicaid expansion beyond three years, when federal funding will drop to 90 percent, and Florida could opt out at that point.

Let’s get real.  Once a state accepts more federal dollars and grows a politically sensitive program like Medicaid, the trend is to grow, not cut back.

Moreover, Scott’s calculation betrays a canny reading of the political calendar.  He’s up for reelection in November 2014, but will get credit for expanding Medicaid at no cost to state taxpayers in January of that year.  If successful in his bid, Scott can continue to enjoy favorable press until January 2017 when the federal largesse starts receding and Floridians start feeling the cost of all that “free” healthcare.  But by the time that happens Scott will be wrapping up his second term, and handing off that political football to a predecessor.

Which brings us to Ruddy’s other unpersuasive argument:

So governors like Scott and [Arizona’s Jan] Brewer have to put aside their personal views and accept the reality of the situation.

Since when do conviction conservatives want one of their own – as the Tea Party-backed Rick Scott claimed to be in 2010 – to “put aside their personal views” in favor of growing government?

The “reality of the situation” with ObamaCare’s Medicaid expansion is that it’s completely voluntary.  Any governor that accepts its terms is intentionally saddling his or her state’s future taxpayers with a costly new entitlement that will be impossible to scale back through the political process.

After all, if politicians like Scott can’t weather the storm of saying no to entitlement increases when they don’t even exist, how does it pass the laugh test to think he’ll have the political courage to scale back when the feds re-impose reality?

To be fair, Ruddy isn’t alone trying to defend the indefensible.  Charles Krauthammer is singing a similar tune.  But again, with all due respect, it’s just not true that you can claim to be a fiscal conservative and then capitulate on something as basic as a budget-busting expansion of Medicaid.

According to America’s Health Insurance Plans (AHIP), ObamaCare’s health insurance tax needs to be repealed as soon as possible:

• Starting next year the ACA imposes a new $100 billion tax on health insurance.  The tax will start at $8 billion in 2014, increasing to $14.3 billion in 2018, and will continue to increase each year.

• The health insurance tax is larger than the device tax and the prescription drug tax combined.

• The health insurance tax will increase costs for individuals and families purchasing coverage on their own, small businesses, seniors and people with disabilities enrolled in a Medicare Advantage plan, and state Medicaid managed care plans.

• The health insurance tax is far greater than the minimum penalty for those who choose not to buy health insurance – further incentivizing young, healthy people to forgo purchasing insurance until they need medical care.

The health insurance tax is just one of twenty-one new taxes imposed by ObamaCare on the health industry and its consumers.  Thankfully, there is already bipartisan legislation filed in the House of Representatives to repeal this monstrosity, but unless there is a major breakthrough to convince liberals how bad ObamaCare will hamper health care, it looks unlikely to become law.

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

Like Ohio’s John Kasich and four other Republican governors, Indiana’s Mike Pence seriously considered expanding Medicaid eligibility under ObamaCare.  But unlike Kasich & Company, Pence ultimately decided against it when HHS refused to grant him one sensible reform.

Established under Mitch Daniels, Pence’s predecessor, the Healthy Indiana program allows uninsured adults aged 19-64 to use a state-based health savings account to pay for medical expenses, such as doctor’s visits, hospital services, diagnostic tests, and prescription drugs.  Incentives apply to reward cost-effective spending, but it’s critical to point out that the spending decisions within the account are determined by the policyholder, not the state.

In order to go along with expansion under ObamaCare that increases the eligibility pool for Medicaid, Pence asked permission to use Healthy Indiana accounts to help keep costs down.  The request is imminently reasonable.  If the purpose of Medicaid expansion is to cover uninsured people, why not let Indiana migrate a state-based program with a 94% satisfaction rating?

Predictably, Kathleen Sebelius’ Department of Health and Human Services said no, preferring to retain federal control over coverage and spending.  Without a program like Healthy Indiana in place, costs are likely to spiral upward since Medicaid beneficiaries are not tethered to the consequences of their spending decisions.

So, Pence said no to the Medicaid expansion.  But I think it’s crucial to understand that his response was not a kneejerk reaction against helping the uninsured get normal access to healthcare.  Instead, he proposed a sensible reform that would have accomplished the same goal as Medicaid expansion, but with more cost certainty for the state budget, and thus less tax receipts from taxpayers.

I’ve speculated before that Pence might be the GOP’s best bet in the 2016 presidential race.  A moment like this, even when it doesn’t result in a “win” politically speaking, helps confirm that suspicion because it’s based on sound principles.

In an interview with CFIF, Patrick Louis Knudsen, senior budget expert at The Heritage Foundation, discusses the latest in the debt ceiling fight and what lies ahead for America in the next few months with the implementation of costly new ObamaCare policies, the $1.2 trillion sequestration deadline and other issues.

Listen to the interview here.

The Wall Street Journal shows us that the price of “affordable” health care is a reduced standard of living:

The Affordable Care Act requires large employers to offer a minimum level of health insurance to employees who work 30 hours a week or more starting in 2014, or face a penalty. The mandate is a particular challenge for colleges and universities, which increasingly rely on adjuncts to help keep costs down as states have scaled back funding for higher education.

A handful of schools, including Community College of Allegheny County in Pennsylvania and Youngstown State University in Ohio, have curbed the number of classes that adjuncts can teach in the current spring semester to limit the schools’ exposure to the health-insurance requirement.

The scaled back hours and pay for adjunct professors is part of a larger trend in a wide variety of industries.  Faced with lower thresholds that require new benefits, employers from universities to fast food restaurants face three options: pay-up, pay-out, or tap-out.  In other words, they can increase their health care spending, be fined for not increasing such spending, or cap the hours and pay of otherwise eligible workers to avoid the spending and the fines.

Unfortunately for workers, capping hours and pay reduces their standard of living.  But don’t worry.  In 2014, Obamacare mandates that every state will have a fully functioning health insurance exchange where newly impoverished workers can get “affordable” health care – some even with government (i.e. taxpayer) subsidies – so it’s a safe bet that all will be well when the feds are in charge of at least 25 separate state programs.  Right…