Politics & Policy

No Debt for Obamacare Fraud

Obamacare opponents could seize this moment to effectively repeal the law.

In his desperation to save his health-care law, President Obama has created a political opening for opponents to stop it.

Obamacare creates a new, trillion-dollar entitlement to health-insurance subsidies. As one might hope, Congress created an eligibility-verification system to prevent fraudsters and others who don’t qualify for these subsidies from scamming taxpayers. But even before it was enacted, supporters called this system “administratively horrendously complex as well as quite intrusive” and possibly “just a dream.”

Unsurprisingly, the eligibility-verification system proved too complex to implement by 2014. At that point, the president should have proposed delaying the entitlement spending. Instead, he repealed the verification system, unilaterally and unlawfully, for one year (so far). In so doing, he effectively expanded eligibility for this entitlement, without so much as a cost estimate or a heads-up to Congress. Millions of ineligible Americans can now claim those subsidies without fear of reprisal, because for millions there will be no enforcement of the eligibility rules in 2014 (and maybe beyond). House Republicans have requested a cost estimate of the change from the Congressional Budget Office; no doubt it will be in the billions of dollars.

This new spending is doubly illegal. Congress never authorized it, and the president had no authority to rescind the protections designed to prevent it. It produces the very sort of fraudulent and improper health-care spending the president promised in 2009 that Obamacare would reduce.

The president also repealed the employer mandate for 2014, again unilaterally and unlawfully. This will further increase the federal debt by reducing federal revenues. And he may do it again in 2015, and possibly beyond.

In response, House Republicans will hold separate votes next week on bills to delay the employer mandate and the individual mandate until 2015. The purpose is to embarrass House Democrats by forcing them either to support relief for employers but not families or to break ranks with their president on Obamacare. That shouldn’t satisfy those who want to repeal Obamacare, because if that’s all House Republicans do, they will be seriously underplaying their hand.

Here’s what someone looking to repeal Obamacare could do:

One news cycle after these votes, Republicans could clarify for the public that President Obama literally wants to increase the debt ceiling to finance his illegal and fraudulent Obamacare spending, and that this latest bit of illegal spending isn’t even the half of it. They could even announce the House will pass a debt-ceiling increase with safeguards to ensure the federal debt does not rise by one penny to pay for this unauthorized and fraudulent spending. Experts say the Treasury may approach the debt ceiling sometime between August and October.

If House Republicans then passed an Obamacare-repeal bill attached to a debt-ceiling increase and an HHS appropriations bill that each lasted through 2014, the move would dominate the August recess. And it would force vulnerable Senate Democrats to spend the month explaining to the folks back home whether they are willing to risk the U.S. economy and the government’s credit rating to protect fraud, not to mention their own president’s trammeling of Congress’s prerogatives.

Ironically, President Obama has given Republicans the strongest hand they have ever had for a debt-ceiling or Obamacare-repeal fight, and he continues to strengthen it every day. The public, including independents, is on the Republicans’ side against Obamacare. Every new glitch and piece of bad news about the law’s implementation would strengthen the GOP’s hand further.

Such a dramatic show of opposition would reinforce the public perception that Obamacare is dangerous and far from an inevitability. The sooner Republicans announce this strategy, the more time there will be for fissures to develop among Obamacare supporters that opponents can exploit. My guess is that more than one vulnerable Senate Democrat will start talking about, you know, maybe just delaying Obamacare until after the next election. Republicans may “lose” in the sense of having to settle for something like a one-year delay. But even the most ardent Obamacare foes would consider that a win, and they could keep fighting for repeal.

For once, Republicans have the advantage on health care.

— Michael F. Cannon is director of health-policy studies at the Cato Institute and co-editor of Replacing Obamacare (Cato, 2012).

Michael F. Cannon — Mr. Cannon is director of health-policy studies at the Cato Institute and co-author of Healthy Competition: What’s Holding Back Health Care and How to Free It.


The Latest