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OpenMarket: Health and Safety

  • Federal Obamacare Officials Once Recognized the Falsity of Their Current Argument about Tax Credits

    September 10, 2014 2:17 PM

    ​The Obama administration has claimed that despite recurring language in the Obamacare law limiting tax credits to people who buy insurance on an “exchange established by the state,” such taxpayer subsidies are also available to people who buy insurance on the federal exchange, Healthcare.gov.  (The availability of tax credits triggers employer mandates and penalties in any state where the tax credits are available, and the tax credits contain work disincentives and marriage penalties, so the tax credits are not a free lunch.)


    Architects of Obamacare like Jonathan Gruber have argued that it is “nutty” to argue that Congress intended to limit tax credits to state exchanges. But this supposedly “nutty” view was once the view of Gruber himself – and, apparently, the federal government itself. When the Department of Health & Human Services issued a contract to create a federal exchange in 2011, the contract assumed tax credits didn’t apply to the federal exchange. (The original contract did not include any functions to allow purchasers to calculate their tax credits, or factor in tax credits before displaying health-insurance prices, and the contract was not amended to apply tax credits to the federal exchange until much, much later.)


    Back in 2012, Gruber had himself admitted tax credits were not available on the federal exchange, contradicting his later statements. A 2012 video caught “Obamacare architect Jonathan Gruber saying, ‘If you're a state and you don't set up an exchange, that means your citizens don't get their tax credits.’” In July 2013, that video was “nationally-publicized due to the efforts of CEI’s Ryan Radia,” who helped expose Gruber’s two-faced turnabout. (“The Wall Street Journal, Bloomberg, Forbes, New Republic, Slate and others carried stories” due to Radia, noted the Des Moines Register.)


    Gruber claimed that what he earlier said on the video was just a slip-of-the-tongue—a “speak-o” equivalent to a typo—but it turned out that he publicly made the same exact admission on at least one other occasion in 2012, before that admission became politically inconvenient.


    As Forbes Magazine noted, “the irony is that” by 2013, “Gruber was deriding as ‘nutty’ and ‘stupid’ the contention that the Affordable Care Act required subsidies to flow through state-based exchange,” the very contention he himself made back in 2012. “It’s a ‘screwy interpretation’ of Obamacare, alleged Gruber in an interview with Erika Eichelberger of Mother Jones . . . ‘It’s nutty. It’s stupid… it’s essentially unprecedented in our democracy.’” Less than a week before his video was unearthed, “Gruber was on MSNBC’s Hardball,” where he proclaimed the “criminality” of those who argue tax credits are limited state-based exchanges.


    But as Scot Vorse discovered, the government itself once recognized that credits are limited to state-based exchanges. In light of that discovery, CEI has submitted two FOIA requests, one to HHS headquarters, and one to the Centers for Medicaid & Medicare Services, seeking additional information relevant to the government’s about-face.


  • Obamacare Architect Admitted in 2012 States without Exchanges Lose Subsidies

    July 24, 2014 6:09 PM

    This week, an unprecedented circuit split emerged in Halbig v. Burwell and King v. Burwell over whether health insurance premium assistance is available in states that didn’t set up health insurance exchanges. Many commentators have since claimed that there’s no way Congress intended to deny premium assistance to residents of the 36 so-called “refusenik” states that have not set up their own health insurance exchanges.


    But in January 2012, Jonathan Gruber—an MIT economics professor whom the The New York Times has called “Mr. Mandate” for his pivotal role in helping the Obama administration and Congress draft the Affordable Care Act—told an audience at Noblis that:


    What’s important to remember politically about this is if you're a state and you don’t set up an exchange, that means your citizens don't get their tax credits—but your citizens still pay the taxes that support this bill. So you’re essentially saying [to] your citizens you’re going to pay all the taxes to help all the other states in the country. I hope that that's a blatant enough political reality that states will get their act together and realize there are billions of dollars at stake here in setting up these exchanges. But, you know, once again the politics can get ugly around this.



  • CEI Podcast for July 24, 2014: Victory in Halbig v. Burwell

    July 24, 2014 3:16 PM

    General Counsel Sam Kazman talks about what the Halbig decision means for the Affordable Care Act, as well as broader principles such as taxation without representation and the rule of law. Click here to listen.


  • Fraud Rampant and Unpoliced on Obamacare Health Insurance Exchanges

    July 24, 2014 12:04 PM

    Almost anyone can fraudulently obtain taxpayer subsidies to cover most of the cost of their health insurance on the Obamacare health insurance exchanges. That’s the gist of recent news coverage in The New York Times, Reason, and Associated Press. The fraud is possible because the government doesn’t check’s people’s eligibility, or verify the claims they make in their applications, contrary to what former HHS Secretary Sebelius certified in January.  


    Applicants can submit a fake name and social security number, and no one even checks—not the government, not  insurers, not Obamacare contractors. This is the finding of a recent investigation by the federal Government Accountability Office, as described in The New York Times and Reason magazine.


    This matters because most of the cost of health insurance policies on the exchanges is picked up by taxpayers through tax credits, to the tune of billions of dollars a year. (87% of Healthcare.gov customers are getting taxpayer subsidies to purchase health insurance, with taxpayers on average footing 76% of the bill.)

  • Alito’s Excellent Defense of “Corporate Personhood” in Hobby Lobby

    June 30, 2014 1:14 PM

    The groundbreaking decision today in Burwell v. Hobby Lobby Stores, in which the Supreme Court ruled 5-4 that Obamacare’s contraception mandate violates the religious freedom of two closely held corporations,  will be dissected heavily for days, and studied for weeks, years and decades. My colleague Hans Bader has more here.


    For consistent civil libertarians, one of the most remarkable—and favorable—aspects of the majority opinion by Justice Samuel Alito is a no-hold-barred defense of corporations asserting rights of “persons.” Though this case dealt with statutory rights under the Religious Freedom Restoration Act, and did not directly involve constitutional liberties, Alito implied strongly that corporations—even if set up for profit—should enjoy such “personal” rights.


  • Supreme Court Rules in Favor of Hobby Lobby; Religious Businesses Can Invoke RFRA

    June 30, 2014 12:20 PM

    In Burwell v. Hobby Lobby Stores, Inc., the Supreme Court has ruled that it violates the Religious Freedom Restoration Act (RFRA) for the Department of Health & Human Services (HHS) to require religious business owners to provide contraceptive and abortifacient coverage for their employees. HHS imposed the birth control requirement as a regulation issued under the 2010 healthcare law popularly known as Obamacare.


    We previously argued that the requirement indeed violates RFRA, since the requirement substantially burdened the free exercise of religion, and was not the least restrictive means of advancing a compelling governmental interest (see herehere, and here). RFRA, which was passed by an overwhelming bipartisan majority in 1993, requires such religious exemptions to federal regulations. RFRA used to require such exemptions to state laws, not just federal laws, but the Supreme Court struck down RFRA’s application to state law on federalism grounds in 1997, holding that RFRA encroached too deeply on state sovereignty.  By contrast, the Supreme Court continued to uphold RFRA against federal laws that restricted religious practices in ways not essential to vital government interests, such as ruling in favor of Native American claimants seeking to use controlled substances in their religious ceremonies, in its 2006 decision in Gonzales v. O Centro Espirita.


  • The Doctor Will Release You Now: How Official Time Contributed to the VA Scandal

    June 3, 2014 1:00 PM

    Socialized medicine and union corruption are a potent combination and, in the case of the VA, a deadly one. The VA scandal has brought the network of hospitals under a national spotlight.


    But the troubled hospitals have been joined under the spotlight by a more widespread problem in America: union “official time,” also known as, “release time.”


    Kim Strassel of The Wall Street Journal has shed light on how the VA is in a Big Labor choke hold, granting the president of local lodge 1798 of the National Federation of Federal Employees 100 percent “official time,” which effectively means that the president is not really a VA employee since she is not obligated to do any work for the hospital.


    But “official” or release time at the VA doesn’t end with the union president. Strassel also tells us that,


    Manhattan Institute scholar Diana Furchtgott-Roth recently detailed Office of Personnel Management numbers obtained through a Freedom of Information Act request by Rep. Phil Gingrey (R., Ga.). On May 25, Ms. Furchtgott-Roth reported on MarketWatch that the VA in 2012 paid 258 employees to be 100% "full-time," receiving full pay and benefits to do only union work. Seventeen had six-figure salaries, up to $132,000. According to the Office of Personnel Management, the VA paid for 988,000 hours of "official" time in fiscal 2011, a 23% increase from 2010.


  • Failed Obamacare Exchanges and No-Work Contracts Drive up Obamacare Costs

    May 19, 2014 8:45 AM

    Politico tallies the rising costs for "four failed Obamacare exchanges," reporting:


    Nearly half a billion dollars in federal money has been spent developing four  state Obamacare exchanges that are now in shambles — and the final price tag for salvaging them may go sharply higher.


    Each of the states — Massachusetts, Oregon, Nevada and Maryland — embraced Obamacare, and each underperformed. All have come under scathing criticism and now face months of uncertainty as they rush to rebuild their systems or transition to the federal exchange.


    The federal government is caught between writing still more exorbitant checks to give them a second chance at creating viable exchanges of their own or, for a lesser although not inexpensive sum, adding still more states to HealthCare.gov. . .The $474 million spent by these four states includes the cost that officials have publicly detailed to date. It climbs further if states like Minnesota and Hawaii, which have suffered similarly dysfunctional exchanges, are added.


    CNS News and KMOV TV describe how Obamacare is hiring hundreds (or perhaps thousands) of employees to do nothing for weeks on end in largely-useless application-processing centers (such as processing virtually non-existent types of paper applications).


  • Insurance Premiums Rising More Due to Obamacare

    May 16, 2014 11:00 AM

    There are "rate hikes for all" coming due to Obamacare, predicts The Daily Caller, citing state insurance filings:


    Virginians will see upped health insurance premiums in 2015 . . . according to the filings from the first state to release any information about what Obamacare could bring next year. The premium proposals were submitted to the state insurance office for official approval and were made public Monday. Each health plan expects to increase its prices in 201  past nominal increases for inflation, the Wall Street Journal reports. Anthem HealthKeepers, run by WellPoint, expects to up its premiums on and off Virginia’s Obamacare exchange by an average of 8.5 percent. . . others will see increases up to 16.6  percent. The fees are due to a multitude of Obamacare worries, including sicker new customers, an influx of demand for health care services from the newly  insured and a plethora of new Obamacare taxes.


    Big increases in premiums and deductibles are coming after the November election, notes The Fiscal Times. As we noted earlier, Washington, D.C., recently imposed a one-percent health-insurance tax in the city to pay for the ballooning costs of its Obamacare health insurance exchange, increasing costs for both employers and individuals. Obamacare has increased the cost of employer-provided health insurance in the District of Columbia, as predicted by experts, who warned that small employers especially “may see their rates increase” in the city. Hot Air proclaims, “get ready for the next round of Obamacare price spikes."


    Many people will be plunged into the individual health insurance market as they lose their employer-provided coverage due to Obamacare. An NPR report "profiled AmeriMark, a catalog retailer with 700 employees that has long provided coverage for employees. However, the premiums for their 2013 plans escalated 30 percent for 2014, so they switched carriers and forced employees to pay a higher share of premiums with higher deductibles and co-pays."


  • Massachusetts Seeks Millions More from Taxpayers as Its Obamacare Exchange Fails

    May 12, 2014 3:58 PM

    Massachusetts' Obamacare exchange has failed, even though Massachusetts adopted an individual health-insurance mandate in 2006, and thus had a built-in advantage over other states in handling Obamacare's requirements. The New York Times reports:


    The board of the broken Massachusetts health insurance exchange voted on Thursday to support a state plan to buy new software to help people enroll in coverage, while also preparing to join the federal marketplace if the system is not ready by fall.


    But insurers complained about the plan, and several members of the exchange board expressed concerns about the cost — an estimated $121 million, on top of tens of millions already spent on the broken exchange, known as the Health Connector.


    As Forbes observes,


    Massachusetts appears to be preparing to throw good money after bad, as  it has already petitioned the federal government for an additional $121 million more in federal funding (on top of $170 million in federal funds already wasted) to pursue a dual-track strategy.


    As NPR notes, "The state passed its own health care law back in 2006 mandating near-universal insurance coverage," so "Massachusetts had a head start in bringing health coverage to the uninsured."


    Yet Massachusetts threw in the towel Tuesday on the problem-plagued online marketplace that was supposed to make health insurance shopping a snap. The state concluded the Massachusetts Health Connector can't be salvaged . . . So the state is looking at a two-track fix involving an off-the-shelf website making use of technology that worked in other states and HealthCare.gov, the federal site, as a backup. Massachusetts is the latest state that was gung-ho on health overhaul to concede that it had failed to make it simple for people to enroll online. Oregon, after botching its exchange, decided to switch to HealthCare.gov. Maryland, another eager adopter of the Affordable Care Act, is turning to Connecticut to right its failed exchange. How did these states run into such trouble?


    NPR quoted Dan Mendelson, CEO of the consulting firm Avalere Health, attributing the failure partly to "failures of the federal I.T. infrastructure" and the fact that the state systems are interdependent with the federal one.


    "Look, it's hard to build a reliable I.T. platform when your partner [the federal government] is not giving and receiving data properly," he says. Yes, some states pulled it off. California, for one, did pretty well. "They invested heavily, started earlier and had good contractors," Mendelson says of the states that succeeded at building their own exchanges.


    As Politico notes, before Obamacare, the state's health insurance exchange worked. "Massachusetts built the model of a state-run exchange in 2006, a result of the health care reform" law passed by a Democratic legislature and signed into law by then-Gov. Mitt Romney. "The RomneyCare exchange, which helped the state provide health coverage to more than 97 percent of residents," was a precursor to "the Obamacare version. Massachusetts is the second state to begin that transition. Late last month, Oregon opted to scrap its $200 million system and join the federal exchange."


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