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Critical Condition

NRO’s health-care blog.

I’m Tweeting from Outside SCOTUS



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Vermont’s Health-Care Petri Dish



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While the rest of America steels itself for the onset of Obamacare — or hopes the Supreme Court puts a stop to it — little deep blue Vermont is well on its way toward installing its own Canadian-style single-payer health-care system.

“Single payer” refers to a universal taxpayer-financed government-managed health-care system that replaces private health insurance. Under Green Mountain Care, the emerging Vermont version, a newly-appointed government board will ensure that by 2017 all covered Vermonters will receive “affordable and appropriate health care at the appropriate time in the appropriate setting.”

Republican Governor Jim Douglas held Vermont’s single-payer forces at bay from 2003 until his retirement in 2010. In that year, five qualified Democrats sought their party’s nomination for governor. The single-payer forces declared they would not support any primary candidate who failed to unequivocally endorse installing single payer as a first order of business. All did. The winner (by 197 votes), was Senate president pro tem Peter Shumlin, who was elected governor in the general election. In his first year as governor Shumlin pushed through to passage — in a legislature with better than two-to-one liberal majorities — the blueprint for installation of the historic new plan.

To its enthusiasts, the emerging Green Mountain Health Care plan will finally deliver on their long proclaimed assertion that “health care is a human right”; that is, everyone has a right (of unspecified origin) to have the government force someone else to provide them with health-care services. The providers of these services — doctors, dentists, nurses, hospitals, nursing homes — will be remunerated at rates established by the five-member Green Mountain Care Board. The costs of this sweeping program — over twice the present state general-fund budget ($1.3 billion) when it’s implemented in 2017 — will be covered (its backers hope) by Medicaid, General Fund revenues now paid to cover state employees and retired teachers, and above all, new taxes. The menu of new taxes was thoughtfully scheduled to be revealed in January 2013, after Governor Shumlin’s expected reelection. It will presumably include some mix of payroll, income, and sales taxes.

The governor believes that single payer is the only hope for “cost containment.” With government standing athwart the only money pipe paying out to all health care providers, government can tell them which treatments are “inappropriate” for which patients, and how much they will be paid for their services. The single payer system will, it is said, also curb duplicate billings, prevent fraud, rationalize the technology available for treatments, and end the dead weight waste that results from multiple insurers promoting their products and pocketing profits.

The 2009 legislature hired Dr. William Hsaio of the Harvard School of Public Health to explain how to install a single-payer system. Dr. Hsaio is well known for designing the Resource Based Relative Value System used to control costs under Medicare.

A key feature of Dr. Hsaio’s proposal was the importance of keeping the Green Mountain Care Board independent of office-holders and political pressures. When the governor made his five appointments to the powerful new Board, its chair turned out to be Anya Rader-Wallack, Governor Shumlin’s special counsel for health-care reform. Queried about how Green Mountain Care will be paid for, Rader-Wallack (who holds a PhD in “social policy”), replied “We can move full speed ahead with what we need without knowing where the money’s coming from.” At the board’s first meeting, assistant attorney general Cliff Peterson explained, “You’re charged with improving the health of Vermonters, reducing the rate of growth in health-care costs, enhancing the patient and health-care professional experience, recruiting and retaining high-quality health professionals, and achieving administrative simplification both in financing and in delivery of health care. You can, for example, set rates for health-care professionals, for manufacturers of drugs, for medical-supply companies, and the like, and for other companies providing services.” He added wryly, “That’ll be done by Friday.”

By 2014, according to the Obamacare law, the state must establish a health-insurance exchange. Shumlin has asked the current legislature to require that 98 percent of Vermont’s small businesses (those with up to 100 employees) be allowed to purchase coverage only through the exchange, from no more than the two surviving health insurers in the state. It’s likely that there will be only one left, Blue Cross Blue Shield of Vermont, since 1990 a virtual ward of the state.

Shumlin’s proposed Vermont Exchange law also provided that all plans must have at least what Obamacare calls a “silver” actuarial value: at least 70 percent of coverage provided by the insurer. This provision would have killed off the high deductible Health Savings Account-eligible policies now enjoyed by thousands of Vermont families.

On February 6, in the face of a rare business uprising, the governor was forced to retreat. For the first two years, the governor explained at a news conference, companies with 51 to100 employees would not be forced to purchase coverage through the exchange. He neglected to mention that these businesses were precisely the ones that led the rebellion against being swallowed up in the Exchange, after they learned that their premium rates would increase by 18 percent. The governor also agreed to allow “bronze” plans (60 percent of actuarial value) to be sold on the exchange, thus reversing the legislative death sentence imposed in 2011 on popular high-deductible plans that are coupled with health savings accounts. The Shumlin Democrats have always detested such plans because they encourage individuals to make rational choices in their own interest, instead of acceding to the common good.

Before House passage of the governor’s Exchange bill on February 25, the badly outnumbered Republicans sought to allow small businesses with 50 or fewer employees to purchase their own health coverage outside of the Shumlin Exchange. Representative Michael Fisher, the chair of the House committee on health care and an “outreach social worker” by trade, opposed the amendment. He stated that allowing people to choose to remain outside the exchange was a “mystifying” concept, saying, “I can’t see any potential value that can be gained outside the exchange.” The amendment went down 57–80.

Shumlin has made it clear that the exchange will only be temporary. If he can obtain a host of waivers from Obamacare — highly doubtful — he intends to fold Obamacare’s promised premium tax credits into the huge pot of money needed to pay for Green Mountain Care when it springs full blown in 2017.

Meanwhile the Green Mountain Care Board is laboring to produce the many policy and price-control decisions required by the Vermont law. Its decision to hire a public relations consultant to explain its workings to citizens produced a tempest. Governor Shumlin, supposedly far removed from the “independent” board, publicly disapproved. The Board members expressed their independence by grumbling as they reversed the decision. During the single-payer debate, the outgunned critics argued that Green Mountain Care will quickly degenerate into Quebec-style rationing, waiting lines, maddening bureaucracies, demoralized doctors and nurses, shabby facilities, obsolete technology, declining quality of care, and economy-wrecking taxation. There is little reason to believe otherwise.

As the enormous difficulties inherent in creating such a system become ever more apparent, some are speculating that at some point the governor will bail out. At a business meeting in Rutland last year he said “We will only go ahead [with Green Mountain Care] if we’re convinced together as a state, that the system is better than what we have, that it costs less, it’s going to help create jobs, and we’ve got the cost-containment system right. If we can’t do that, we’ll take our marbles and go home.” If this comes to pass, it will mark the end of yet another costly failed experiment from little Vermont, long notorious for being the nation’s petri dish for foolish and expensive collectivist schemes that end badly.

John McClaughry, a former Vermont state senator, headed the free-market Ethan Allen Institute for eighteen years.

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Tea Party Leaders Are Holding an Impromptu News Conference @SCOTUS



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Tea Party Patriots try to hold a news conference over loud chants and drums of pro-ObamaCare marchers:

Bitter Pill



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A friend headed into the Supreme Court this morning e-mailed: 

In case there is any doubt what this is about: Protesters outside wearing NARAL Pro-choice America t-shirts are yelling “We. Love. Obamacare.” They are holding big circular signs of birth-control pills.

Who is that picking a fight about contraception again in the public square

Obamacare: Not So Popular



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Obamacare Supreme Court Live Blog - Day Two



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On Tuesday, March 27, the Supreme Court will hear oral arguments regarding the constitutionality of the Affordable Care Act’s individual mandate: its provision requiring that Americans buy health insurance.

Feeding off the success of our first live blog for Monday’s session, come by this space to discuss the ins and outs of the individual mandate, starting at 10:00 a.m. Eastern Standard Time. I’ll be joined by a number of leading conservative health-care journalists. Bring your comments and questions!

Avik Roy is a senior fellow at the Manhattan Institute and the author of The Apothecary, the Forbes blog on health-care and entitlement reform. You can follow him on Twitter at @aviksaroy.

Obama’s Lawyer Confuses Himself: Is the Mandate a Penalty or a Tax?



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Is the individual mandate a penalty or a tax? That was today’s question at the Supreme Court. Unfortunately for the Court, both the respondents — the states — and the petitioners — the Obama administration — agreed that the mandate was a penalty. So the Court had to hire an outside lawyer, Robert Long, to argue that the mandate was a tax. He didn’t get very far. “I would not argue that this statute is a perfect model of clarity,” Long conceded.

The headline you’ll read in tomorrow’s paper is that the justices seemed nearly unanimous in objecting to the idea that the mandate was a tax. After all, the text of the law itself is clear in describing the mandate as a penalty. And this matters because the Anti-Injunction Act of 1867 prohibits people from suing the government for a tax that hasn’t yet gone into effect. (The individual mandate goes into effect in 2014.) People can sue, however, over a penalty.

Robert Long tried to argue that it doesn’t matter what the text of the law actually says; what matters is what the mandate is meant to achieve, and that the mandate is meant to garner revenue for the government. But Justice Ginsburg shot down that argument: “This is not a revenue-raising measure,” she pointed out, “because, if it’s successful, nobody will pay the penalty, and there will be no revenue to raise.”

The highlight of the session was when President Obama’s solicitor general, Donald Verrilli, got up to articulate the administration’s position, which was that the mandate wasn’t a tax, for the purposes of the Anti-Injunction Act, and yet also that “the minimum-coverage provision of the Affordable Care Act is an exercise of Congress’ taxing power.”

To which Justice Alito said: Huh?

“General Verrilli, today you are arguing that the penalty is not a tax,” Alito said. “Tomorrow you are going to be back, and you will be arguing that the penalty is a tax. Has the Court ever held that something that is a tax for purposes of the taxing power under the Constitution is not a tax under the Anti-Injunction Act?”

“No, Justice Alito,” replied Verrilli.

Verrilli kept misspeaking, describing the “penalty” as a “tax.” “Why do you keep saying tax?” asked Justice Breyer, after which Verrilli started referring to the mandate as a “tax penalty.”

Other justices came up with their own terminology; Justice Ginsburg repeatedly referred to the mandate as a “must-buy provision.”

On a conference call after the session, Virginia attorney general Ken Cuccinelli did not mince words. Verrilli’s gymnastics were “the precursor to the kind of postmodern language twisting the federal government will have to do to win this case,” he said, according to Ben Domenech, who was on the call. “Noah Webster may be the toughest challenge for the feds to overcome in this case.”

You might wonder: If the Supremes are nearly, if not totally, unanimous in their view that the mandate is a tax, why did they bother to hold a day of oral argument on this issue? “It was absolutely essential,” says Georgetown constitutional-law professor Randy Barnett, “once the Fourth Circuit ruled that it was a tax.” Because at least one lower court said that the mandate was a tax, the Supremes had to take up the issue. “Law professors would have jumped all over them” had they not.

For more on today’s hearing, check out the transcript from our live blog. Audio and transcript of today’s SCOTUS session can be found here.

Tomorrow, of course, is the biggest day of all, the day that the constitutionality of the individual mandate is itself discussed. I’ll be back with another live blog tomorrow at Critical Condition, starting at 10:00 am ET. Stay tuned.

— Avik Roy is a senior fellow at the Manhattan Institute, and the author of The Apothecary, the Forbes blog on health-care and entitlement reform. You can follow him on Twitter at @aviksaroy.

A Report from the Court



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I just returned from doing a hit at Fox Business on the health-care case at the Supreme Court, and I took a detour to visit the Court on my way back to the office. The atmosphere was somewhat raucous, but nowhere near the wild scene that was outside the Court during the Bush v. Gore case in late 2000. By my very unscientific count, liberals appeared to outnumber conservatives, reminding me of a famous exchange between Andy Ferguson and P. J. O’Rourke at the beginning of O’Rourke’s Parliament of Whores. When O’Rourke asked why liberal protests tended to outnumber conservative protests, Ferguson answered: “We have jobs.”

Conservatives did have a moment when Rick Santorum arrived, taking attention away from the liberal protest taking place nearby. Santorum’s remarks seemed aimed for the cameras and not the crowd, though, as he spoke mainly into the mikes arrayed in front of him. 

The early news reports suggest that the justices questioned the notion of whether the mandate is a tax, which means that the Anti-Injunction Act would not apply, but I am going to spend the next few hours listening to the just-released audio of the case and make my own judgments.

Richard Epstein on the Constitutionality and Economics of Obamacare



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I had the priceless opportunity to co-write three amicus briefs for the Supreme Court in the challenge to Obamacare with Professor Richard Epstein, one of the luminaries of the “Chicago school” of law and economics. (The three briefs were on individual mandateseverability; and Medicaid expansion.)

Professor Epstein demonstrates the value of taking both economics and law together in this gem for the Hoover Institution, “Obamacare: An Unconstitutional Misadventure.” Epstein argues that “In the end, Obamacare’s rickety economic structure is intimately connected to its constitutional infirmities.” As always, Epstein starts with the real-world (and often perverse) incentives that the law creates.  

The least risky individuals, therefore, have every incentive to get out of the system, which is regrettably accommodated by the ACA rules that allow people to terminate coverage unilaterally at any time for any reason. A sounder system would have allowed health-insurance carriers to require the insureds to pay a penalty to withdraw from coverage, or to insist that they remain in the plan for some minimum period.

What phone companies can routinely do is thus systematically denied to health-insurance carriers. Viewed in this context, the controversial individual mandate is a desperate measure to use direct government penalties to counteract the unnecessary abuse that the ACA builds in on its ground floor. So one unsound legislative provision counteracts the perverse effects of another unsound provision.

Read the rest here.

On the Ground at the Court



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The Tea Party is here.

And is getting engaged in a shouting match with a religious pro-Obamacare group.

As the Tea Partiers chant “Breitbart…”

The religious pro-Obamacare faction sang “We Shall Overcome.”

Their press conference appears to be garnering most of the press attention.

The religious pro-Obamacare group has now given way to a group of Catholic and evangelical speakers who stridently disagree.

A SCOTUS Guide



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Young People Hit Hardest by Obamacare



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Residents of Indiana who buy individual health-insurance policies can expect to pay 75 to 95 percent more when the Affordable Care Act takes effect in 2014 than they would have had the health-care-overhaul law never passed, largely because of changes to the health insurance marketplace dictated by the law.

And the news is even worse for young people. Young healthy men earning $28,000 a year can expect to pay nearly 100 percent more for health insurance, even after counting the new tax credits for which most will be eligible.

Young healthy males at higher income levels earning about $45,000 a year can expect to pay two-and-a-half times more for health insurance in 2014, according to studies produced by independent actuaries who are helping the Hoosier state calculate the impact of Obamacare.

The premium-cost increases are caused primarily by two key provisions in Obamacare — “essential health benefits,” in which the government determines what must be covered by health-insurance policies, and the community rating provisions, which require health insurers to level out premiums so younger people pay more and older people pay less.

According to the Indiana study:

— By eliminating rating on health status, the ACA brings the highest risk to the general marketplace resulting in premium increases of 35 percent to 45 percent.

— The essential-health-benefit requirements will represent a benefit expansion for the individual market, forcing Hoosiers to buy coverage they may not want or need. This will increase premium rates by 20 percent to 30 percent.

— The increases in premiums are not equally distributed. On average, individual-market premiums will increase by 75 percent to 95 percent. However, these increases will be greatest for young healthy males due to the fact that the ACA eliminates premium rating based on gender and health status, and restricts premium rating based on age.

— Young healthy males at 250 percent of the federal poverty level (FPL), or $28,000 a year, can expect to experience almost a 100 percent premium increase even after the application of the premium tax credit. Young healthy males at higher income levels — 400 percent of the FPL and above, or about $45,000 a year — can expect to realize premium increases over 250 percent in 2014.

The bad news doesn’t end there: Women over age 55 with incomes for a single person of $45,000 are expected to experience premium-rate increases of more than 100 percent. And all carriers that offer child-only policies have been forced to leave the state, largely because of Obamacare’s impossibly restrictive rules and regulations.

And the state faces costs of between $2.5 and $3.1 billion between the years 2014 and 2020 because of the Obamacare mandate to expand eligibility for Medicaid. This does not include any increased payments to providers and likely will force more cost-shifting to commercial patients, driving up premiums for all Hoosiers.

And to add to the frustration of Governor Mitch Daniels, HHS is refusing to answer his request to use his popular and successful Healthy Indiana Plan (HIP) as the basis for the Medicaid expansion. HIP currently provides coverage to 40,000 Hoosiers through an innovative consumer-driven program. While the Indiana legislature, on a bipartisan basis, called for HIP to be the coverage vehicle for the new Medicaid program, HHS has yet to respond to the state’s request. 

‘Innovation’ Center Has Unilateral Power



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As the two-year anniversary of health-care law looms, conservatives have mounted a loud and effective campaign against its individual provisions, such as the individual mandate and the IPAB.

One important but oft-overlooked element of the health-care law is the Center for Medicare and Medicaid Innovation over at CMS. One reason for the center remaining largely under the radar is that its pro-”innovation” mission has sounded fairly innocuous, though also expensive — $10 billion over ten years.

According to a new report by senator-physicians Tom Coburn and John Barrasso, however, the center is more worrisome than its name suggests. The report, which relies on a Congressional Research Service memo to Coburn, demonstrates that the legislation authorizing the center gives Health and Human Services Secretary Kathleen Sebelius and the CMS administrator enormous power to experiment with new payment and delivery systems — which is one thing — but also to impose the results of the experiments without external checks on those results.

Coburn and Barrasso note that CRS found “no references in [the law] to any external reviews or checks on the CMS” in evaluating the results of their experiments. Not only will patients lack judicial and administrative review if they object to the center’s demonstration projects, but doctors will as well. According to Coburn and Barrasso, “health care providers are also legally prohibited from contesting the Secretary of Health and Human Services’ (HHS) use of new payment models.” The “innovation” center appears to be one more way in which the health-care law is going to interfere with the practice of medicine, and one that physicians should start paying more attention to.

Obamacare Supreme Court Liveblog - Day One



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I will be live-blogging the Supreme Court hearings on the Patient Protection and Affordable Care Act from March 26 to 28, beginning at 10 a.m. on Monday. I invite readers and NRO contributors to chip in with their observations. I will also incorporate Twitter feeds from various people from the health-care and legal worlds who are covering the case.

This is my first time running a live-blog, so my apologies if there are beginners’ technical glitches. See you in this space on Monday!

Sebelius: What Deficit? What Waivers?



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The Obama administration’s top spokesperson on health care was unable to defend the string of promises that already have been broken about the health-care law when questioned before a Senate Appropriations Committee hearing on Wednesday.

Health Secretary Kathleen Sebelius was clearly flummoxed when questioned by Senator Ron Johnson (R., Wis.). For example, Senator Johnson asked her about the “1,200 to 1,700 waivers” that have been granted to give employers, particularly labor unions, temporary relief from parts of Obamacare. “I’ve no idea what waivers you’re talking about,” Sebelius replied.

Senator Johnson also listed a number of the president’s specific promises about the law, including claims it would reduce the deficit, cut health costs, and allow people to keep their coverage and their doctors. When Sebelius was confronted with the facts, she either said she didn’t have those facts or said the law hadn’t had a chance to work yet.

It was clear that Johnson knew much more about the health law and its impact than the top Obama administration official in charge of implementing it. During his questioning, Senator Johnson took apart Obamacare’s promises one by one:

Reducing the deficit. “Instead of saving $143 billion, we are adding $54 billion to our deficit, correct?” Johnson asked, breaking down the numbers. The secretary didn’t dispute them. Broken promise number one.

Health costs rising. Johnson continued: “It is true that the president said that by enacting this health-care law, every family would save $2,500 per year, in their family insurance plan — correct? . . . The Kaiser Family Foundation has already released a study saying that average costs of family health-care plans is up $2,200, correct?” Secretary Sebelius said the exchanges aren’t in place yet so there are no Obamacare savings. “We’re already different by $4,700; it’s going to be hard to get us down to $2,500 cost savings. I would consider that broken promise number two,” Johnson said.

Employers dropping coverage. Senator Johnson cited a McKinsey & Company study that estimated 30 to 50 percent of employers would drop their employee coverage once the new law is fully implemented, and he said that adding so many more people to taxpayer-subsidized coverage would add hundreds of billions of dollars, if not trillions, to the federal deficit.

Secretary Sebelius could not say how many employers would drop coverage, but used Massachusetts as an example where coverage was not dropped. Senator Johnson quickly dismissed that defense with a specific explanation of how the incentives in the federal law are significantly stronger for employers to drop coverage. Broken promise number three.

Waivers. “Now, you’ve granted quite a few waivers — about 1,200 to 1,700 waivers — on about 4 million Americans, correct?” Johnson said. “I’ve no idea what waivers you’re talking about,” Sebelius replied. She continued to have a hard time understanding that he meant the waivers that have been granted to select employers (disproportionately labor unions) to protect them temporarily from early provisions of Obamacare.

“The bottom line here is, the cost of this health-care law is so uncertain, don’t you think we ought to put the brakes on it?” Johnson asked. “You know, Nancy Pelosi said, ‘We have to pass this law to figure out what’s in it.’ What I don’t want to see is that we have to implement it to figure out how it’s going to bust a hole in our already horribly broken budget.”

He could not be more correct. The administration is left sputtering when confronted with the actual facts about the impact of the health-care overhaul law. Putting on the brakes is a first step to repealing the whole law.

This partial transcript is very much worth a few minutes of your time.

SEBELIUS: The original estimate, yes. I think that’s —

JOHNSON: Right. So, the original estimate for deficit reduction —

SEBELIUS: I’m assuming —

JOHNSON: The original estimate for deficit reduction in the first ten years was $143 billion, correct?

SEBELIUS: Yes —

JOHNSON: So now we, we’ve reduced that $143 billion by $86 billion — by not getting revenue from the CLASS Act — and now $111 billion because we’ve increased the mandatory costs of the exchanges, correct?

SEBELIUS: I’m assuming the numbers are correct. I’m sorry I don’t have them.

JOHNSON: So, when you add those together, that’s $197 billion added to the first ten-year cost estimate of Obamacare, so now we are instead of saving $143 billion, we are adding $54 billion to our deficit, correct?

SEBELIUS: Sir I —

JOHNSON: We’ll submit that to the record. But, that’s basically true. So instead of saving $143 billion, by this administration’s own figures and budget, we’re now adding $54 billion to our deficit in the first ten years. To me, that would be the first broken promise. It is true that the president said that by enacting this health-care law, every family would save $2,500 per year, in their family insurance plan — correct?

SEBELIUS: He said that once the exchanges are up and running, and you have an affordable marketplace, the insurance estimates were that the rates would go down by about $2,500, yes — that has not occurred yet.

JOHNSON: The Kaiser Family Foundation has already released a study saying that average costs of family health-care plans is up $2,200, correct?

SEBELIUS: Again, there is no new marketplace yet for insurance policies.

JOHNSON: But the costs are already up. We’re already different by $4,700; it’s going to be hard to get us down to $2,500 cost savings. I would consider that broken promise number two.

It’s also true, that President Obama very famously said, ‘If you like your doctor, you will be able to keep your doctor. Period. If you like your health-care plan, you will be able to keep your health-care plan. Period. No one will take it away, no matter what.’ Now, you’ve granted quite a few waivers — about 1,200 to 1,700 waivers — on about 4 million Americans, correct?

SEBELIUS: I’ve no idea what waivers you’re talking about or —

JOHNSON: Well, those are waivers —

SEBELIUS: On doctors and health plans, is that . . . I —

JOHNSON: Just waivers from having to implement portions of the health-care law that probably would have allowed those — or forced those workers — off their employer-sponsored care.

SEBELIUS: Again, I’d be happy to answer these questions, but I have no idea what waivers you’re talking about —

JOHNSON: The waivers that HHS has granted to employers not —

SEBELIUS: Which do what?

JOHNSON: Not having implemented sections of the health-care law.

SEBELIUS: There have been waivers granted to employers, yes.

JOHNSON: And had those waivers not been granted, chances are, those employees probably would have lost their employer-sponsored care, correct?

SEBELIUS: I have no idea. I mean, I’m happy to answer those one at a time and look at the waivers and see what —

JOHNSON: Unfortunately, I’m pretty short on time.

In Case You Missed This: ObamaCare’s Non-Tax Tax



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From the Wall Street Journal:

 

The quicksilver qualities of the Affordable Care Act individual mandate penalties—what you pay if you don’t buy government approved health coverage—are something to behold. Does the Obama Administration think they’re a fine, a tax, or maybe something else? Well, that depends, as revealed in a telling exchange at a House budget hearing Wednesday.

New Jersey Republican Scott Garrett asked White House budget director Jeff Zients about his claim that no one earning under $250,000 will see a tax increase under his boss: “So if I am part of a family that does not buy health insurance in violation of the President’s health-care program and I got to pay because of that, that is not a tax increase—that is not a tax on me?”

Mr. Zients replied, “The Affordable Care Act saves money,” which is not merely irrelevant but false. Mr. Garrett tried again and Mr. Zients said “I’m not sure I’m following the question.” Mr. Garrett once more: “Is that a tax on me or is that not a tax on me?”

Mr. Zients: “Well, this is—” Mr. Garrett: “A moment ago you said there’s no tax increase.” Mr. Zients: “There aren’t.” Mr. Garrett: “So that’s not a tax?” Mr. Zients: “No.” Mr. Garrett: “That’s not a tax. Okay. I just want to be clear on that because that’s not the argument the Administration is making before the Supreme Court.”

Game, set, match. Mr. Garrett is better informed about the Obama legal team’s arguments before the High Court, which call the penalty a tax to try to better defend its constitutionality. What Mr. Zients’s confusion really shows is that what the President also once tried to define as a non-tax tax is indefensible.

Bureaucratic Delay Costs Lives



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One of the countless concerns with growing government control over the health sector is additional bureaucratic delay in getting new treatments to patients. We’re seeing more and more evidence of these hurdles.

And we have another example involving a new life-saving vaccine: The Food and Drug Administration expedited approval of Prevnar 13, which prevents pneumonia and related diseases in people over age 50 by targeting the most common pneumonia bacterium (Streptococcus pneumoniae).

The FDA approved the use of Prevnar 13 in December under its “accelerated approval pathway,” which allows for faster consideration of treatments for serious and life-threatening illnesses.

At least 300,000 adults are hospitalized each year because they contract this form of pneumonia and at least 5,000 of them die. “Pneumococcal disease is a substantial cause of illness and death,” the FDA wrote in its release. “Today’s approval provides an additional vaccine” for this disease.

So you should be able to get it right away, right?

Wrong. There is yet another hurdle — the Centers for Disease Control and Prevention. The CDC’s Advisory Committee on Immunization Practices (ACIP) apparently does not share the FDA’s sense of urgency in getting this life-saving medicine to patients.

In its meeting later this month, Prevnar 13 is slated only for “Information and Discussion” but not a vote. That’s important because ACIP votes to decide what vaccines to recommend for the adult-immunization schedule. Public programs like Medicare and private insurers rely on ACIP for guidance on what vaccines they will pay for.

No vote. No vaccine.

ACIP only meets three times a year. If it doesn’t vote on the vaccine during its February meeting, then it will have to wait until June to hold a vote. That means at least 100,000 adults could be hospitalized unnecessarily and more than 1,500 could die waiting for the government agency to act.

The vaccine has been approved by the FDA as safe, and the FDA put it on its “accelerated approval pathway” to get it to patients faster. Prevnar 13 already has been approved for use in children age 6 weeks to 5 years old, and administration of the vaccine supports the government’s Healthy People 2020 objectives.

A delay is not just another bureaucratic hurdle. It can cost lives.

Defend Freedom --- Repeal CLASS



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Democratic senator Tom Harkin of Iowa may have inadvertently revealed why President Obama has pledged to veto efforts by Congress to repeal a part of Obamacare that already has failed — the long-term-care entitlement program known as the CLASS Act.

“The problem with CLASS is that it’s voluntary,” Senator Harkin said on Tuesday.

In the liberal mind, the program would be fine if we were forced to pay into its long-term-care program. The president is determined to keep CLASS on the books, apparently hoping that the Supreme Court will declare the individual mandate constitutional, requiring us to purchase health insurance. If it does, then it would be only a small step to a new mandate for long-term care. 

There is the minor concern about our freedom, and our ability to spend our own personal after-tax money as we please. But that shouldn’t get in the way of the Obama administration’s determination to turn America into an entitlement state.

Speaker John Boehner has scheduled a vote in the House on Wednesday to repeal the CLASS Act (for Community Living Assistance Services and Supports), and it is expected to pass easily, likely with some support from Democrats. 

Representative Charles Boustany (R., La.), a physician, is the lead sponsor of H.R. 1173, which would strike the CLASS provision from the health-overhaul law. Senator John Thune (R., S.D.), chairman of the Republican Policy Committee, is pushing the companion measure in the Senate.

Senate Finance Chairman Max Baucus (D., Mont.) said, “I don’t know how it’s going to come up over here, but [CLASS] does have major long-term financial problems.”

You think? During the 2009 debate over Obamacare, Senator Kent Conrad (D., N.D.), chairman of the Senate Budget Committee, said the CLASS Act is “a Ponzi scheme of the first order, the kind of thing Bernie Madoff would be proud of.”

The Obama administration concluded in October that it saw “no viable path forward” to implementing CLASS. Since participation is voluntary, it could not figure out a way to guarantee that the program would be fiscally sound for 75 years without taxpayer bailouts, a requirement that former senator Judd Gregg (R., N.H.) managed to get into the health law.

The news of the program’s demise was a slap in the face to CLASS advocates, who knew it was in trouble but were surprised that the administration gave the program a death certificate. To appease them, Mr. Obama vowed to veto any CLASS repeal legislation.

A recent article lamenting the failure of the program inadvertently admitted the core problem.  Howard Gleckman of the Urban Institute wrote in the journal Health Affairs: “The law allowed low-income people to purchase coverage for just $5 a month. That meant that many enrollees could pay just $300 over five years and receive at least $18,000 a year in benefits for the rest of their lives.”

CLASS was a fiscal time bomb. It’s clear the program’s main initial function was to pump up Obamacare’s financing, since it would have collected premiums for five years before paying out a penny in benefits. As a result, the Congressional Budget Office estimated that it would reduce budget deficits by $81 billion over the next decade.

But the payouts would soon bleed red ink. The new entitlement program would have paid $50 a day for long-term-care services for anyone who had paid premiums for five years. It was inevitable that the program would attract older, sicker people, sending CLASS into a death spiral. 

Budget expert Jim Capretta concludes: “There was never any shred of evidence that CLASS could ever be made sustainable. Not before enactment, and not since. Indeed, any fair reading of the analyses that were done on the concept prior to its passage would conclude that CLASS was hopeless. And it wasn’t a close call.

“CLASS’s enactment . . . was a deliberate and cynical ploy to put a phony veneer of fiscal restraint on top of a massive tax-and-spend program,” Capretta writes.

In light of the administration’s decision to pull the plug on CLASS, the CBO released another estimate of the cost of repealing CLASS in December — showing repeal would have zero budgetary impact.

Senator Harkin, chairman of the Health, Education, Labor, and Pensions Committee, said he was “neither here nor there” on repealing the program. “It’s not going to be implemented,” Harkin said in an interview. “But we need something like it. It’s causing a lot of families a lot of financial problems. The problem with CLASS is that it’s voluntary.”

That is why, in the defense of freedom, it must be repealed. Tom Miller of the American Enterprise Institute rightly advises that Congress “should never leave a partly loaded gun on the table.”

The Sebelius Deceit



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Health and Human Services Secretary Kathleen Sebelius hopes you will believe her and not your own eyes, as she pens an op-ed in the Washington Post deceptively entitled, “The Affordable Care Act, helping Americans curb health-care costs.”

Health costs are rising, as we all can see, and independent analysts confirm they will accelerate under Obamacare.

Nonetheless, Sebelius claims that if we will just be patient, Obamacare will help lower health costs “in three ways: by increasing insurance-market competition, assisting those who can’t afford coverage, and tackling the underlying cost of medical care.”

The law is doing exactly the opposite, of course. The Congressional Budget Office projects that a family purchasing its own insurance will pay $2,100 more a year for a policy under Obamacare than they would have paid if the law had not passed. The president repeatedly promised the American people that he would cut a typical family’s premium $2,500 a year before the end of his first term. That misses the mark by $4,600 a year.

Costs already are rising faster than they did before the law was enacted in March 2010. A Kaiser Family Foundation survey found that premiums for a family policy topped $15,000 a year in 2011, increasing an average of $1,300 in the last year — three times faster than the year before.

A number of factors contribute to rising health-care costs, but the mandates, taxes, and regulations in the health-care law are accelerating the trend. The premium increases reflect the law’s early provisions, such as “free” preventive care and adding “children” up to age 26 to their parents’ policies. Consumers may like these features, but they come at a cost.

The many Obamacare mandates to come will raise premiums even further. The $500 billion in new taxes in the law will further fuel premium increases, including a new tax on health insurance that took effect January 1.

Analysts at the Congressional Budget Office estimate that the average policy for those who get health insurance through the workplace will cost $20,000 a year for a family of four by the year 2016. And obtaining health insurance will not be optional, since everyone will be required to have coverage or pay a fine. Yes, there would be subsidies, but they would be financed by higher taxes, cuts to Medicare, and, most likely, more deficit spending.

Facts are stubborn things. Health insurance is consuming a bigger share of employer budgets, preempting pay raises and pushing higher costs onto employees.

The American people know their health costs are rising, despite Secretary Sebelius’s claims to the contrary, and Obamacare is making it worse.

Ryan-Wyden: The Best Medicare Proposal Yet



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Oregon Democratic senator Ron Wyden is getting hammered by the White House for his courageous move to join House Budget Committee chairman Paul Ryan in co-sponsoring the best Medicare-modernization proposal yet.

The Ryan-Wyden plan would move Medicare to a more modern defined-benefit program and give seniors a choice of competing plans — plans that would have an incentive to innovate and produce the best care at the best prices. Seniors would be guaranteed coverage, including traditional Medicare, and lower-income seniors would get extra help, including a funded account for out-of-pocket expenses. Prices would be determined by the marketplace, not Washington’s price controls. It also creates a path to a more seamless transition from job-based private insurance to Medicare.

Importantly, Ryan-Wyden plan builds on the structure that has had bipartisan support for more than a decade and which virtually everyone who has studied Medicare reform agrees is the platform to save the program from bankruptcy and from bankrupting the federal government.

This shows, once again, that Senator Wyden is a serious legislator concerned about good policy, and it also shows that legislative proposals are improved when Republicans and Democrats work together. This is the platform for reform moving forward.

The White House has been cutting in its attacks on Senator Wyden for daring to talk policy when the president is fully focused on politics. The voters are tired of the political games. That time is over. We need to get serious about reform, and this is the most serious proposal yet.

President Obama himself has acknowledged that “if you look at the numbers, then Medicare in particular will run out of money and we will not be able to sustain that program no matter how much taxes go up. I mean, it’s not an option for us to just sit by and do nothing.”

Yet the president proposes we do nothing. If we stick with the Medicare cuts already in law, seniors will see Medicare payments to doctors cut to Medicaid rates, making it extremely difficult to find a doctor to see them, and 15 unelected bureaucrats at the Independent Payment Advisory Board will be put in charge of rationing care through deeper payment cuts. The president does not have a serious or credible solution.

Democrats seem most distressed that, while the Ryan-Wyden plan gets the policy right, it weakens their attacks against Republicans. The New York Times reports: “Democrats expressed concerns about the proposal based on policy and politics. A senior Democratic Congressional aide said, ‘This plan gives bipartisan political cover to Ryan and other Republicans against whom we have been waging a very successful political offensive.’”

White House communications director Dan Pfeiffer piled on:

The Wyden-Ryan scheme could, over time, cause the traditional Medicare program to ‘wither on the vine’ . . . At the end of the day, this plan would end Medicare as we know it for millions of seniors. Wyden-Ryan is the wrong way to reform Medicare.

Ryan’s office responded:

The President’s failure to offer credible solutions to the challenges facing Medicare is a disservice to seniors, a disservice to hardworking families, and a disservice to the next generation. A more glaring disappointment is the President’s failure to recognize a sincere effort by a Democrat and a Republican to come together and offer solutions, betraying his own rhetoric and his own commitment to those we have the privilege to serve. America deserves better.

You can see more details here. Watch for support to build on this serious and credible plan.

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