Exclusive: D.C. Exchange Website Misled Customers about Individual Mandate

Last year, in response to Congress repealing the Obamacare individual mandate penalty beginning this January, the D.C. Council established its own requirement for District residents to maintain health coverage. If D.C. leaders wished to replicate Obamacare on the local level, they have succeeded beyond their wildest expectations—right down to the non-functioning website.

For nearly six months—including the first month of open enrollment—the District failed to inform visitors to its online insurance exchange about the new coverage requirement. When District officials finally discovered their webpage fail, what did they do to admit their fault, and tell the public? Nothing.

The Webpage Fail, Explained

At the start of the open enrollment period in early November, I went to the District’s health insurance exchange website, D.C. Health Link, to evaluate my coverage options for 2019. While there, I found an intriguing—and misleading—webpage. When discussing whether individuals should purchase coverage, the webpage noted that “federal law requires most Americans to have a minimum level of health coverage,” a requirement that was “still in effect for the 2017 and 2018 tax years.”

By stating that the requirement remained in effect for 2017 and 2018, the webpage implied that the mandate will disappear in 2019. But while the federal penalty disappeared on January 1, the District’s own insurance mandate replaced the federal requirement on that date. However, the webpage I saw did not mention the D.C. mandate at all.

By discussing the expiring federal mandate and not the new D.C. requirement, the webpage I viewed did not just provide misleading statements about the need to maintain coverage in 2019, it contained inaccurate information, too. The webpage noted that the federal mandate did not penalize individuals with short gaps of coverage of under three months—but the District’s stricter law requires individuals to maintain health coverage every single month.

The webpage also directed individuals seeking exemptions from the mandate to apply to federal authorities, even though the D.C. exchange has assumed that role for the District’s mandate, effective January 1.

In fairness, I, and presumably other prior customers, did receive a mailer from D.C. Health Link discussing the District’s new coverage requirement for 2019. However, the mailer did not mention the mandate until the top of its second page—an area where casual readers could easily miss it. Instead, the mailer spent prime real estate on the first page discussing “our award-winning reputation as one of the best health Exchange websites in the nation:”

Which do you think is more important for District residents to know: That the website won some awards, or that if they do not buy “government-approved” coverage, they could have their property seized and sold?

Why District Officials Don’t Care

District officials seem more pre-occupied with bragging about their website than updating their website. For instance, during the November meeting of the D.C. Health Benefit Exchange Authority, no one discussed the flawed webpage about the District’s individual mandate, even though D.C. Health Link staff conducted a presentation for the board explaining the website that showed a link to the flawed webpage.

The November board meeting also showed a video of D.C. Mayor Muriel Bowser’s appearance at the launch event for open enrollment. During that event, Bowser gave remarks claiming that “D.C. Health Link has made navigating its website even easier.” Bowser failed to mention that, even as she spoke, that “easier” website included incorrect, flawed, and misleading information about the individual mandate she had signed into law months previously.

Ignoring the ‘Debacle’

Nearly one month into open enrollment, on November 28, it appears D.C. Health Link finally discovered their error. Officials removed access to the page discussing the expiring federal mandate—the Internet Archive captured the old page—and created a new page discussing the District’s new coverage requirement for 2019.

But did District officials publicly admit that their website included incorrect information, try to inform the public, or make things right with those who viewed that incorrect information? No, no, and no. The Exchange Authority board held their most recent monthly meeting in mid-December, and the incident did not come up at all.

When healthcare.gov famously crashed and burned in 2013, then-Health and Human Services Secretary Kathleen Sebelius publicly accepted responsibility for the website “debacle.” By contrast, Mila Kofman, executive director of the Exchange Authority, apparently wants to pretend that the problems with the website she runs never took place.

Congress Should Fix This Mess

Beyond raising obvious questions of competence, the flawed webpage could have very real consequences for District residents. Any individuals who went to the incorrect webpage during the first month of open enrollment, and used its erroneous information to decide not to purchase health coverage for 2019, will face tax penalties when filing their 2019 returns in April 2020—penalties directly resulting from the bungling of District bureaucrats.

While District officials may try to give individuals who suffered from the incorrect webpage exemptions from the mandate penalty, it does not appear they can do so. The District’s mandate uses the same criteria as the federal one to determine hardship exemptions, namely, whether circumstances “prevented [an individual] from obtaining coverage.”

But in this case, circumstances didn’t prevent individuals from obtaining coverage—they prevented individuals from understanding the consequences of not doing so. D.C. Health Link therefore may not have the authority to solve a problem its own staff caused.

To ensure that no one incurs financial penalties because of the botched exchange website, the D.C. Council—or, better yet, Congress—will have to intervene. They should take the opportunity presented by this affair to repeal the mandate entirely.

Or Congress could use the pending appropriations legislation to include the provisions adopted last summer defunding the District’s mandate. Rep. Gary Palmer (R-AL), who sponsored the defunding amendment last summer, once again offered his amendment earlier this month, when the House considered anew the District of Columbia appropriations measure. Unfortunately, however, the new House Democrat majority refused to make a vote on the amendment in order. This means that, absent additional action, individuals may face sizable tax penalties due to a website mess caused entirely by District officials.

No matter what form it takes, the website mess demonstrates that the District’s insurance mandate should go. Given that D.C. Health Link spends $11 million on IT, yet took six months to update a webpage, it should spend less time ordering District residents to buy insurance and more time getting its own house in order.

This post was originally published at The Federalist.

Do House Republicans Support Socialized Medicine?

Health care, and specifically pre-existing conditions, remain in the news. The new Democratic majority in the House of Representatives has lined up two votes — one last week and one this week — authorizing the House to intervene in Texas’ lawsuit against the Affordable Care Act, also known as Obamacare. Speaker Nancy Pelosi, D-Calif., claims that the intervention will “protect” Americans with pre-existing conditions.

In reality, the pre-existing condition provisions represent Obamacare’s major flaw. According to the Heritage Foundation, those provisions have served as the prime driver of premium increases associated with the law. Since the law went into effect, premiums have indeed skyrocketed. Rates for individual health insurance more than doubled from 2013 through 2017, and rose another 30-plus percent last year to boot.

As a result of those skyrocketing premiums, more than 2.5 million people dropped their Obamacare coverage from March 2017 through March 2018. These people now have no coverage if and when they develop a pre-existing condition themselves.

A recent Gallup poll shows that Americans care far more about rising premiums than about being denied coverage for a pre-existing condition. Given the public’s focus on rising health care costs, Republicans should easily rebut Pelosi’s attacks with alternative policies that address the pre-existing condition problem while allowing people relief from skyrocketing insurance rates.

Unfortunately, that’s not what the Republican leadership in the House did. Last Thursday, Rep. Kevin Brady, R-The Woodlands, offered a procedural motion that amounted to a Republican endorsement of Obamacare. Brady’s motion instructed House committees to draft legislation that “guarantees no American citizen can be charged higher premiums or cost sharing as the result of a previous illness or health status, thus ensuring affordable health coverage for those with pre-existing conditions.”

If adopted — which thankfully it was not — this motion would only have entrenched Obamacare further. The pre-existing condition provisions represent the heart of the law, precisely because they have raised premiums so greatly. Those premium increases necessitated the mandates on individuals to buy, and employers to offer, health insurance. They also required the subsidies to make that more-expensive coverage “affordable” — and the tax increases and Medicare reductions needed to fund those subsidies.

More to the point, what would one call a health care proposal that treats everyone equally, and ensures that no one pays more or less than the next person? If this concept sounds like “socialized medicine” to you, you’d have company in thinking so. None other than Kevin Brady denounced Obamacare as “socialized medicine” at an August 2009 town hall at Memorial Hermann Hospital.

All of this raises obvious questions: Why did someone who for years opposed Obamacare as “socialized medicine” offer a proposal that would ratify and entrench that system further?

Republicans like Brady can claim they want to “repeal-and-replace” Obamacare from now until the cows come home, but if they want to retain the status quo on pre-existing conditions then as a practical matter they really want to uphold the law. Conservatives might wonder whether it’s time to “repeal-and-replace” Republicans with actual conservatives.

This post was originally published in the Houston Chronicle.

Bill Clinton’s Right: Pre-Existing Condition Vote IS “The Craziest Thing in the World”

The new House Democratic majority is bringing to the floor a resolution on Wednesday seeking to intervene in Texas’ Obamacare lawsuit. The House already voted to approve the legal intervention, as part of the rules package approved on the first day of the new Congress Thursday, but Democrats are making the House vote on the subject again, solely as a political stunt.

I have previously discussed what the media won’t tell you about the pre-existing condition provisions—that approval of these Obamacare “protections” drops precipitously when people are asked if they support the provisions even if they would cause premiums to go up. I have also outlined how a Gallup poll released just last month shows how all groups of Americans—including Democrats and senior citizens—care more about rising premiums than about losing their coverage due to a pre-existing condition.

Bill Clinton Got This One Right

The current system works fine if you’re eligible for Medicaid, if you’re a lower income working person, if you’re already on Medicare, or if you get enough subsidies on a modest income that you can afford your health care. But the people that are getting killed in this deal are small business people and individuals who make just a little too much to get any of these subsidies. Why? Because they’re not organized, they don’t have any bargaining power with insurance companies, and they’re getting whacked. So you’ve got this crazy system where all of a sudden 25 million more people have health care, and then the people who are out there busting it, sometimes 60 hours a week, wind up with their premiums doubled and their coverage cut in half. It’s the craziest thing in the world.

Why did people “who are out there busting it, sometimes 60 hours a week, wind up with their premiums doubled and their coverage cut in half”? Because of the pre-existing condition provisions in Obamacare.

Clinton knew of which he spoke. Premiums more than doubled from 2013 to 2017 for Obamacare-compliant individual coverage, only to rise another 30 percent in 2018. A Heritage Foundation paper just last March concluded that the pre-existing condition provisions—which allow anyone to sign up for coverage at the same rate, even after he or she develops a costly medical condition—represented the largest driver of premium increases due to Obamacare.

The Congressional Budget Office concluded that the law would reduce the labor supply by the equivalent of 2.5 million workers. Because so many people cannot afford their Obamacare coverage without a subsidy now that the law has caused premiums to skyrocket, millions of Americans are working fewer hours and earning less income precisely to ensure they maintain access to those subsidies. Obamacare has effectively raised their taxes by taking away their subsidies if they earn additional income, so they have decided not to work as hard.

Why Do Republicans Support This ‘Crazy’ Scheme?

Given this dynamic—skyrocketing premiums, millions dropping coverage, taxes on success—you would think that Republicans would oppose the status quo on pre-existing conditions, and all the damage it has wrought. But no.

Guarantees no American citizen can be charged higher premiums or cost sharing as the result of a previous illness or health status, thus ensuring affordable health coverage for those with pre-existing conditions.

I’ve said it before, but I’ll say it again: As a matter of policy, any proposal that retains the status quo on pre-existing conditions by definition cannot repeal Obamacare. In essence, this Republican proposal amounted to a plan to “replace” Obamacare with the Affordable Care Act.

Even more to the point: What’s a good definition for a plan that charges everyone the exact same amount for health coverage? How about “I’ll take ‘Socialized Medicine’ for $800, Alex”?

There are better, and more effective, ways to handle the problem of pre-existing conditions than Obamacare. I’ve outlined several of them in these pages of late. But if Republicans insist on ratifying Obama’s scheme of socialized medicine, then they are—to use Bill Clinton’s own words—doing “the craziest thing in the world.”

This post was originally published at The Federalist.

Exclusive: Inside the Trump Administration’s Debate over Expanding Obamacare

Last August, I responded to a New York Times article indicating that some within the Trump administration wanted to give states additional flexibility to expand Medicaid under Obamacare. Since then, those proposals have advanced, such that staff at the Centers for Medicare and Medicaid Services (CMS) believe that they have official sign-off from the president to put those proposals into place.

My conversations with half a dozen sources on Capitol Hill and across the administration in recent weeks suggest that the proposal continues to move through the regulatory process. However, my sources also described significant policy pitfalls that could spark a buzz-saw of opposition from both the left and the right.

The Times reported that some within the administration—including CMS Administrator Seema Verma and White House Domestic Policy Council Chairman Andrew Bremberg—have embraced the proposal. But if the plan overcomes what the Times characterized as a “furious” internal debate, it may face an even tougher reception outside the White House.

How It Would Work

After the Supreme Court made Medicaid expansion optional for states as part of its 2012 ruling upholding Obamacare’s individual mandate, the Obama administration issued guidance interpreting that ruling. While the court made expansion optional for states, the Obama administration made it an “all-or-nothing” proposition for them.

Under the 2012 guidance—which remains in effect—if states want to receive the enhanced 90 percent federal match associated with expansion, they must cover the entire expansion population—all able-bodied adults with incomes under 138 percent of the federal poverty level (just under $35,000 for a family of four). If states expand only to some portion of the eligible population, they would only receive their regular Medicaid match of 50-76 percent, not the enhanced 90 percent match.

The Internal Debate

The August Times article indicated that, after considering partial expansion, the administration postponed any decision until after November’s midterm elections. Since that time, multiple sources disclosed to me a further meeting that took place on the topic in the Oval Office late last year. While the meeting was originally intended to provide an update for the president, CMS staff left that meeting thinking they had received the president’s sign-off to implement partial expansion.

Just before Christmas, during a meeting on an unrelated matter, a CMS staffer sounded me out on the proposal. The individual said CMS was looking for ways to help give states additional flexibility, particularly states hamstrung by initiatives forcing them to expand Medicaid. However, based on my other reporting, I believe that the conversation also represented an attempt to determine the level of conservative opposition to the public announcement of a decision CMS believes the president has already made.

Why Liberals Will Object

During my meeting, I asked the CMS staffer about the fiscal impacts of partial expansion. The staffer admitted that, as I had noted in my August article, exchange plans generally have higher costs than Medicaid coverage. Therefore, moving individuals from Medicaid to exchange coverage—and the federal government paying 100 percent of subsidy costs for exchange coverage, as opposed to 90 percent of Medicaid costs—will raise federal costs for every beneficiary who shifts coverage under partial expansion.

The Medicare actuary believes that the higher cost-sharing associated with exchange coverage will lead 30 percent of the target population—that is, individuals with incomes from 100-138 percent of poverty—to drop their exchange plan. Either beneficiaries will not be able to afford the premiums and cost-sharing, or they will not consider the coverage worth the money. And because 30 percent of the target population will drop coverage, the partial expansion change will save money in a given state—despite the fact that exchange coverage costs more than Medicaid on a per-beneficiary basis.

Why Conservatives Will Object

I immediately asked the CMS staffer an obvious follow-up question: Did the actuary consider whether partial expansion, by shifting the costs of expansion from the states to the federal government, would encourage more states to expand Medicaid? The staffer demurred, saying the actuary’s analysis focused on only one hypothetical state.

However, the CMS staffer did not tell me the entire story. Subsequent to my “official” meeting with that staffer, other sources privately confirmed that the actuary does believe that roughly 30 percent of the target population will drop coverage.

But these sources and others added that both the Medicare actuary and the Congressional Budget Office (CBO) agree that, notwithstanding the savings from current expansion states—savings associated with individuals dropping exchange coverage, as explained above—the partial expansion proposal will cost the federal government overall, because it will encourage more states to expand Medicaid.

For instance, the Council of Economic Advisers believes that spending on non-expansion states who use partial expansion as a reason to extend Medicaid to the able-bodied will have three times the deficit impact as the savings associated with states shifting from full to partial expansion.

Because the spending on new partial expansion states will overcome any potential savings from states shifting from full to partial expansion, the proposal, if adopted, would appreciably increase the deficit. While neither CBO nor the Medicare actuary have conducted an updated analysis since the election, multiple sources cited an approximate cost to the federal government on the order of $100-120 billion over the next decade.

One source indicated that the Medicare actuary’s analysis early last summer arrived at an overall deficit increase of $111 billion. The results of November’s elections—in which three non-expansion states voted to accept expansion due to ballot initiatives—might have reduced the cost of the administration’s proposal slightly, but likely did not change the estimate of a sizable deficit increase.

A net cost of upwards of $100 billion, notwithstanding potential coverage losses from individuals dropping exchange coverage in current expansion states, can only mean one thing. CBO and the Medicare actuary both believe that, by lowering the cost for states to expand, partial expansion will prompt major non-expansion states—such as Texas, Florida, Georgia, and North Carolina—to accept Obamacare’s Medicaid expansion.

Who Will Support This Proposal?

Based on the description of the scoring dynamic my sources described, partial expansion, if it goes forward, seems to have no natural political constituency. Red-state governors will support it, no doubt, for it allows them to offload much of their state costs associated with Medicaid expansion onto the federal government’s debt-laden dime. Once CMS approves one state’s partial expansion, the agency will likely have a line of Republican governors out its door looking to implement waivers of their own.

But it seems unlikely that Democratic-led states will follow suit. Indeed, the news that partial expansion would cause about 30 percent of the target population to drop their new exchange coverage could well prompt recriminations, investigations, and denunciations from Democrats in Congress and elsewhere. Because at least 3.1 million expansion beneficiaries live in states with Republican governors, liberals likely would object to the sizable number of these enrollees who could decide to drop coverage under partial expansion.

Conversely, conservatives will likely object to the high net cost associated with the proposal, notwithstanding the potential coverage losses in states that have already expanded. Some within the administration view Medicaid expansion, when coupled with proposals like work requirements, as a “conservative” policy. Other administration officials view expansion in all states as something approaching a fait accompli, and view partial expansion and similar proposals as a way to make the best of a bad policy outcome.

But Medicaid expansion by its very nature encourages states to discriminate against the most vulnerable in society, because it gives states a higher match for covering able-bodied adults than individuals with disabilities. In addition to objecting to a way partial expansion would increase government spending by approximately $100 billion, some conservatives would also raise fundamental objections to any policy changes that would encourage states to embrace Obamacare—and add even more able-bodied adults to the welfare rolls in the process.

Particularly given the Democratic takeover of the House last week, the multi-pronged opposition to this plan could prove its undoing. Democrats will have multiple venues available—from oversight through letters and subpoenae, to congressional hearings, to use of the Congressional Review Act to overturn any administration decisions outright—to express their opposition to this proposal.

A “strange bedfellows” coalition of liberals and conservatives outraged over the policy, but for entirely different reasons, could nix it outright. While some officials may not realize it at present, the administration may not only make a decision that conservatives will object to on policy grounds, they may end up in a political quagmire in the process.

This post was originally published at The Federalist.

What You Need to Know About Friday’s Court Ruling

Late Friday evening, a judge in Texas handed down his ruling in the latest Obamacare lawsuit. Here’s what you need to know about the ruling (if interested, you can read the opinion here), and what might happen next:

What Did the Judge Decide?

The opinion contained analyzed two different issues—the constitutionality of the individual mandate, and whether the rest of Obamacare could survive without the individual mandate (i.e., severability). In the first half of his opinion, Judge Reed O’Connor ruled the mandate unconstitutional.

Wait—Haven’t Courts Ruled on the Individual Mandate Before?

Yes—and no. In 2012, the Supreme Court ruled the individual mandate constitutional. In his majority opinion for the Court, Chief Justice John Roberts (in)famously concluded that, even though Obamacare’s authors proclaimed the mandate was not a tax—and said as much in the law—the mandate had the characteristics of a tax. Even though Roberts concluded that the mandate exceeded Congress’ constitutional authority under the Commerce Clause, he upheld it as a constitutional exercise of Congress’ power to tax.

However, in the tax bill last year Congress set the mandate penalty to zero, beginning on January 1, 2019. The plaintiffs argued that, because the mandate will no longer bring in revenue for the federal government, it no longer qualifies as a tax. Because the mandate will not function as a tax, and violates Congress’ authority under the Commerce Clause, the plaintiffs argued that the court should declare the mandate unconstitutional. In his opinion, Judge O’Connor agreed with this logic, and struck down the mandate.

What Impact Would Striking Down the Mandate Have?

Not much, seeing as how the penalty falls to zero in two weeks’ time. Striking the mandate from the statute books officially, as opposed to merely setting the penalty at zero, would only affect those individuals who feel an obligation to follow the law, even without a penalty for violating that law. In setting their premiums for 2019, most insurers have already assumed the mandate goes away.

Then Why Is This Ruling Front Page News?

If the court case hinged solely on whether or not the (already-defanged) mandate should get stricken entirely, few would care—indeed, the plaintiffs may not have brought it in the first place. Instead, the main question in this case focuses on severability—the question of whether, and how much, of the law can be severed from the mandate, if the mandate is declared unconstitutional.

What Happened on Severability?

Judge O’Connor quoted heavily from opinions in the prior 2012 Supreme Court case, particularly the joint dissent by Justices Anthony Kennedy, Samuel Alito, Antonin Scalia, and Clarence Thomas. He ruled that the justices viewed the mandate as an “essential” part of Obamacare, that the main pillars of the law were inseparable from the mandate.

The judge also noted that some of the lesser elements of Obamacare (e.g., calorie counts on restaurant menus, etc.) hitched a ride on a “moving target,” that he could not—and should not—attempt to determine which would have passed on their own. Therefore, he ruled that the entire law must be stricken.

Haven’t Things Changed Since the 2012 Ruling?

Last year, Congress famously couldn’t agree on how to “repeal-and-replace” Obamacare—but then voted to set the mandate penalty to zero. A bipartisan group of legal scholars argued in this case that, because Congress eliminated the mandate penalty but left the rest of the law intact, courts should defer to Congress’ more recent judgment. Judge O’Connor disagreed.

What Happens Now?

Good question. Judge O’Connor did NOT issue an injunction with his ruling, so the law remains in effect. The White House released a statement saying as much—that it would continue to enforce the law as written pending likely appeals.

On the appeal front, a group of Democratic state attorneys general who intervened in the suit will likely request a hearing from the Fifth Circuit Court of Appeals in New Orleans. From there the Supreme Court could decide to rule on the case.

Will Appellate Courts Agree with This Ruling and Strike Down Obamacare?

As the saying goes, past performance is no predictor of future results. However, it is worth noting two important facts:

1.      The five justice majority that upheld most of the law—John Roberts, Stephen Breyer, Ruth Bader Ginsburg, Elena Kagan, and Sonia Sotamayor—all remain on the Supreme Court.
2.      As noted above, Chief Justice Roberts went through what many conservatives attacked as a bout of legal sophistry—calling the mandate a tax, even though Congress expressly said it wasn’t—to uphold the law, more than a year before its main provisions took effect.

What About Pre-Existing Conditions?

On Friday evening, President Trump asked for Congress to pass a measure that “protects pre-existing conditions.”

I have outlined other alternatives to Obamacare’s treatment of pre-existing conditions. However, as I have explained at length over the past 18 months, if Republicans want to retain—or in this case reinstate—Obamacare’s treatment of pre-existing conditions, then they are failing in their promise to repeal the law.

Poll: People Care MORE About Rising Costs Than Pre-Existing Conditions

Now they tell us! A Gallup poll, conducted last month to coincide with the midterm elections and released on Tuesday, demonstrated what I had posited for much of the summer: Individuals care more about rising health insurance premiums than coverage of pre-existing condition protections.

Of course, liberal think tanks and the media had no interest in promoting this narrative, posing misleading and one-sided polling questions to conclude that individuals liked Obamacare’s pre-existing condition “protections,” without simultaneously asking whether people liked the cost of those provisions.

Overwhelming Concern about Premiums

Ironically, a majority of 57 percent said the denial of coverage for pre-existing conditions did not constitute a major concern for them, with only 42 percent agreeing with the statement. Lest one believe that the relative insouciance over pre-existing conditions came because Democrats won a majority in the House, therefore “protecting” Obamacare, Gallup conducted the survey from November 1–11, meaning more than half the survey period came before the American people knew the election outcome.

By comparison, more than three-fifths (61 percent) of respondents viewed rising premiums as a major concern, with only 37 percent not viewing it as such. Not only did premiums register as a bigger concern by 19 percentage points overall, it registered as a larger concern in each and every demographic group Gallup surveyed:

Income under $30,000: +15 percent (70 percent said premiums were a major concern, 55 percent said pre-existing condition coverage was a major concern)

Income between $30,000-$75,000: +19 percent (63 percent premiums, 44 percent pre-ex)

Income above $75,000: +24 percent (57 percent premiums, 33 percent pre-ex)

On Medicare/Medicaid: +16 percent (60 percent premiums, 44 percent pre-ex)

On private insurance: +24 percent (60 percent premiums, 36 percent pre-ex)

Republicans: +25 percent (52 percent premiums, 27 percent pre-ex)

Independents: +19 percent (64 percent premiums, 45 percent pre-ex)

Democrats: +16 percent (68 percent premiums, 52 percent pre-ex)

Aged 18-29: +16 percent (54 percent premiums, 38 percent pre-ex)

Aged 30-49: +23 percent (65 percent premiums, 42 percent pre-ex)

Aged 50-64: +21 percent (67 percent premiums, 46 percent pre-ex)

Aged over 65: +13 percent (57 percent premiums, 44 percent pre-ex)

Men: +18 percent (56 percent premiums, 38 percent pre-ex)

Women: +20 percent (67 percent premiums, 47 percent pre-ex)

With those double-digit margins (i.e., outside the poll’s margin of error) in every demographic group—including among groups more likely concerned about pre-existing conditions, for reasons either practical (i.e., older Americans) or ideological (i.e., Democrats)—Gallup has overwhelming evidence to support its claim that “concerns are greatest about the possibility of having to pay higher premiums.”

Premiums more than doubled from 2013 to 2017, as the law’s major provisions, including the pre-existing condition requirements, took effect. They again rose sharply in 2018, causing approximately 2.5 million individuals to drop their Obamacare-compliant coverage completely.

Not a Surprise Outcome

The Gallup results confirm prior surveys from the Cato Institute, which also demonstrate that support for Obamacare’s pre-existing condition provisions drops dramatically once people recognize the trade-offs—namely, higher premiums and a “race to the bottom” among insurers, reducing access to specialist providers and lowering the quality of care:

But the polling suggests that Democrats have no such mandate, and that they should think again in their approach. Rather than making an already bad situation worse, and potentially raising premiums yet again, they should examine alternatives that can solve the pre-existing condition problem (and yes, it is a problem) by making it easier for people to buy coverage before they develop a pre-existing condition in the first place.

As the polling indicates, the American people—to say nothing of the 2.5 million priced out of the marketplace in the past 12 months—will thank them for doing so.

This post was originally published at The Federalist.

D.C. Council’s Motto: “Obamacare for Thee — But Not for Me!”

On the first of the month, D.C. Mayor Muriel Bowser held an event at Freedom Plaza to celebrate the start of Obamacare’s annual open enrollment period. She appeared with Mila Kofman, head of the District’s health insurance exchange, D.C. Health Link. In conjunction with the event, the mayor issued a proclamation declaring the open enrollment period “Get Covered, Stay Covered” months, and noting that “residents should visit [D.C. Health Link’s website] to shop for and compare health insurance.”

But in encouraging others to “get covered,” and promoting the D.C. Health Link site, Bowser omitted one key detail: She does not buy the policies that D.C. Health Link sells. My recent Freedom of Information Act request confirmed that Bowser, like most of her D.C. Council colleagues, received taxpayer-funded insurance subsidies to purchase their coverage through the District government, rather than through D.C. Health Link. Thus, DC spent nearly half a million in taxpayer funds because the mayor and council won’t be bothered to enroll in Obamacare.

Forfeiting generous employer subsidies might seem like an unreasonable request to make of the mayor and council. But earlier this year, the council passed, and Bowser signed, legislation requiring all District residents to buy health coverage or pay a tax — including tens of thousands of residents who do not qualify for subsidies.

According to public records, Bowser receives an annual salary of $200,000; council members receive $140,600 annually. This year, I will receive less income than any of them, and as a small business owner my income is far from guaranteed, unlike public officials’ salaries. Yet the mayor and council have required me to buy health coverage without a subsidy, even as they refuse to do so themselves.

I asked Bowser about this obvious inequity. Under Obamacare, an individual with income of $50,000 — one-quarter of Bowser’s salary — does not qualify for an income-based subsidy. Bowser required this individual to buy coverage without assistance, while earning much more in salary and retaining her employer subsidy. Did she see a double standard in her conduct?

When it came to the issue of equity and fairness, she didn’t have a substantive answer, nor did her council colleagues. I asked staff for each council member about their health insurance coverage, and any subsidies received. Most staff never responded to my outreach. Staff for Councilman Robert White said they would ask him about his coverage, but never sent a reply. Staff for two councilmembers, Phil Mendelson and Brandon Todd, replied with explanations about the subsidies being provided as an employer benefit.

But neither Bowser nor the council members could justify requiring other District residents, including many with lower incomes than they, from buying coverage without a subsidy even as they will not do so themselves. And how could they? Quite often, it seems liberals who preach frequently about “fairness” regarding others’ actions fall eerily silent when doing so would cost them personally. “Obamacare for thee — but not for me” doesn’t provide a particularly compelling slogan, but the mayor and council have sent that very message by their actions.

Official Washington contains numerous examples of hypocrisy and double standards, but that doesn’t make either a “D.C. value.” If Bowser wishes to abide by the D.C. values she campaigned on, she and the council members should give up their subsidies and buy health insurance just like ordinary residents do. If they find that task too difficult or costly, then perhaps they should repeal the exact same requirement they put on everyone else.

This post was originally published at The Federalist.

Three Elements of a Conservative Health Care Vision

Recently I wrote about how conservatives failed to articulate a coherent vision of health care, specifically issues related to pre-existing conditions, in the runup to the midterm elections. That article prompted a few Capitol Hill colleagues to ask an obvious question: What should a conservative vision for health care look like? It’s one thing to have answers on specific issues (i.e., alternatives to Obamacare’s pre-existing condition regulations), but what defines the vision of where conservatives should look to move the debate?

Henceforth, my attempt to outline that conservative health-care vision on a macro level with three relatively simple principles. Others may express these concepts slightly differently—and I take no particular pride of authorship in the principles as written—but hopefully they will help to advance thinking about where conservative health policy should lead.

Portable Insurance

Conversely, conservatives believe in insurance purchased by individuals—or, as my former boss Jim DeMint likes to describe it, an insurance policy you can buy, hold, and keep. With most Americans still obtaining health coverage from their employers, a move to individually owned coverage would mean individuals themselves would decide what kind of insurance to purchase, rather than a business’s HR executives.

Conservatives should also promote the concept of portable insurance that can move from job to job, and ideally from state to state as well. If individuals can buy an insurance policy while young, and take it with them for decades, then much of the problem of covering individuals with pre-existing conditions will simply disappear—people will have the same insurance before their diagnosis that they had for years beforehand.

I wrote approvingly about the Trump administration’s proposals regarding Health Reimbursement Arrangements precisely because I believe that, if implemented, they will advance both prongs of this principle. Allowing employees to receive an employer contribution for insurance they own will make coverage both individual and portable, in ways that could revolutionize the way Americans buy insurance.

A Sustainable Safety Net

As it is, the Medicare program became functionally insolvent more than a year ago. The year before Obamacare’s passage, the Medicare trustees asserted the program’s hospital insurance trust fund would become insolvent in 2017. Only the double-counting included in Obamacare—whereby the same Medicare savings were used both to “save Medicare” and fund Obamacare—has allowed the program to remain solvent, on paper if not in fact.

Reasonable people may disagree on precisely where and how to draw the line at the sustainability of our entitlements. For instance, I hold grave doubts that able-bodied adults belong on Medicaid, particularly given the way Obamacare’s expansion of Medicaid has encouraged states to discriminate against individuals with disabilities and the most vulnerable.

But few could argue that the current system qualifies as sustainable. Far from it. With Medicare beneficiaries receiving more from the system in benefits than they paid in taxes—and the gap growing every year—policy-makers must make hard choices to right-size our entitlements. And they should do so sooner rather than later.

Appropriately Aligned Incentives

Four decades ago, Margaret Thatcher hinted at the primary problem in health care when she noted that socialists always run out of other people’s money. Because third-party insurers—in most cases selected by HR executives at individuals’ place of business rather than the individuals themselves—pay for a large share of health expenses, most Americans know little about the price of specific health care goods and services (and care even less).

To state the obvious: No, individuals shouldn’t try to find health care “deals” in the ambulance on the way to the hospital. But given that much health care spending occurs not for acute cases (e.g., a heart attack) but for chronic conditions (i.e., diabetes), policymakers do have levers to try to get the incentives moving in the right direction.

Reforming the tax treatment of health insurance—which both encourages individuals to over-consume care and ties most Americans to employer-based insurance—would help align incentives, while also encouraging more portable insurance. Price transparency might help, provided those prices are meaningful (i.e., they relate to what individuals will actually pay out-of-pocket). Giving individuals financial incentives to shop around for procedures like MRIs, or even surgical procedures, also would place downward pressure on prices.

This post was originally published at The Federalist.

Ocasio-Cortez Suddenly Realizes She Doesn’t Like Paying Obamacare’s Pre-Existing Condition Tax

On Saturday evening, incoming U.S. representative and self-proclaimed “democratic socialist” Alexandria Ocasio-Cortez took to Twitter to compare her prior health coverage to the new health insurance options available to her as a member of Congress.

It shouldn’t shock most observers to realize that Congress gave itself a better deal than it gave most ordinary citizens. But Ocasio-Cortez’ complaints about the lack of affordability of health insurance demonstrate the way liberals who claim to support Obamacare’s pre-existing condition “protections”—and have forcibly raised others’ premiums to pay for those “protections”—don’t want to pay those higher premiums themselves.

She’s Paying the Pre-Existing Condition Tax

I wrote in August about my own (junk) Obamacare insurance. This year, I have paid nearly $300 monthly—a total of $3,479—for an Obamacare-compliant policy with a $6,200 deductible. Between my premiums and deductible, I will face paying nearly the first $10,000 in medical costs out-of-pocket myself.

Of course, as a fairly healthy 30-something, I don’t have $10,000 in medical costs in most years. In fact, this year I won’t come anywhere near to hitting my $6,200 deductible (presuming I don’t get hit by a bus in the next four weeks).

As I noted in August, my nearly $3,500 premium doesn’t just fund my health care—or, more accurately, the off-chance that I will incur catastrophic expenses such that I will meet my deductible, and my insurance policy will actually subsidize some of my coverage. Rather, much of that $3,500 “is designed to fund someone else’s medical condition. That difference between an actuarially fair premium and the $3,500 premium my insurer charged me amounts to a ‘pre-existing conditions tax.’”

Millions of People Can’t Afford Coverage

Because I work for myself, I don’t get an employer subsidy to pay the pre-existing condition tax. (I can, however, write off my premiums from my federal income taxes.) Ocasio-Cortez’s tweet referred to her coverage “as a waitress,” but didn’t specify where she purchased that coverage, nor whether she received an employer subsidy for that coverage.

However, a majority of retail firms, and the majority of the smallest firms (3-9 workers), do not offer coverage to their workers. Firms are also much less likely (only 22 percent) to offer insurance to their part-time workers. It therefore seems likely, although not certain, that Ocasio-Cortez did not receive an employer subsidy, and purchased Obamacare coverage on her own. In that case she would have had to pay the pre-existing condition tax out of her own pocket.

That pre-existing condition tax represented the largest driver of premium increases due to Obamacare, according to a March paper published by the Heritage Foundation. Just from 2013 (the last year before Obamacare) through 2017, premiums more than doubled. Within the last year (from the first quarter of 2017 through the first quarter of 2018) roughly 2.6 million people who purchased Obamacare-compliant plans without a subsidy dropped their coverage, likely because they cannot afford the higher costs.

Lawmakers Get an (Illegal) Subsidy to Avoid That Tax

Unsurprisingly, however, members of Congress don’t have to pay the pre-existing condition tax on their own. They made sure of that. Following Obamacare’s passage, congressional leaders lobbied feverishly to preserve their subsidized health coverage, even demanding a meeting with the president of the United States to discuss the matter.

Senators and representatives do have to purchase their health insurance from the Obamacare exchanges. But the Office of Personnel Management (OPM) issued a rule allowing members of Congress and their staffs to receive an employer subsidy for that coverage. That makes Congress and their staff the only people who can receive an employer subsidy through the exchange.

Numerous analyses have found that the OPM rule violates the text of Obamacare itself. Sen. Ron Johnson (R-WI) even sued to overturn the rule, but a court dismissed the suit on the grounds that he lacked standing to bring the case.

Liberals’ Motto: ‘Obamacare for Thee—But Not for Me’

Take, for instance, the head of California’s exchange, Peter Lee. He makes a salary of $436,800 per year, yet he won’t buy the health insurance plans he sells. Why? Because he doesn’t want to pay Obamacare’s pre-existing condition tax unless someone (i.e., the state of California) pays him to do so via an employer subsidy.

Ocasio-Cortez’ proposed “solution”—fully taxpayer-paid health care—is in search of a problem. As socialists are wont to do, Ocasio-Cortez sees a problem caused by government—in this case, skyrocketing premiums due to the pre-existing condition tax—and thinks the answer lies in…more government.

As the old saying goes, when you’re in a hole, stop digging. If Ocasio-Cortez really wants to get serious, instead of complaining about the pre-existing condition tax, she should work to repeal it, and replace it with better alternatives.

This post was originally published at The Federalist.

Let the Individual Mandate Die

In May New Jersey imposed a health-insurance mandate requiring all residents to buy insurance or pay a penalty. More states will feel pressure to follow suit in the coming year as the federal mandate’s penalty disappears Jan. 1 and state legislatures reconvene, some with new Democratic majorities intent on “protecting” Obamacare. But conflicts with federal law will make state-level health-insurance mandates ineffective or unduly onerous, and governors and legislatures would do well to steer clear.

While states can require citizens to purchase health coverage, they will have trouble ensuring compliance. Federal law prohibits the Internal Revenue Service from disclosing tax-return data, except under limited circumstances. And there is no clear precedent allowing the IRS to disclose coverage data to verify compliance with state insurance requirements.

Accordingly, mandates enacted in New Jersey and the District of Columbia earlier this year created their own coverage-reporting regimes. But those likely conflict with the Employee Retirement Income Security Act, or ERISA, which explicitly pre-empts “any and all state laws insofar as they may now or hereafter relate to any employee benefit plan.” The point is to protect large employers who self-insure workers from 50 sets of conflicting state laws.

No employer has used ERISA to challenge Massachusetts’ 2006 individual mandate, which includes reporting requirements, but that doesn’t mean it’s legal. Last month a Brookings Institution paper conceded that “state requirements related to employer benefits like health coverage may be subject to legal challenge based on ERISA preemption.”

A 2016 Supreme Court ruling would bolster such a challenge. In Gobeille v. Liberty Mutual, the court struck down a Vermont law that required employers to submit health-care payment claims to a state database. The court said the law was pre-empted by ERISA.

Writing for a six-justice majority, Justice Anthony Kennedy noted the myriad reporting requirements under federal law. Vermont’s law required additional record-keeping. Justice Kennedy concluded that “differing, or even parallel, regulations from multiple jurisdictions could create wasteful administrative costs and threaten to subject plans to wide-ranging liability.”

Justice Kennedy’s opinion provides a how-to manual for employers to challenge state-level insurance mandates. A morass of state-imposed insurance mandates and reporting requirements would unnecessarily burden employers with costs and complexity. It cries out for pre-emptive relief.

Unfortunately, policy makers have ignored these concerns. Notes from the working group that recommended the District of Columbia’s individual mandate never mention the reporting burden or ERISA pre-emption. And in August the federal Centers for Medicare and Medicaid Services approved New Jersey’s waiver application that relied in part upon funding from that state’s new individual mandate, even though money from the difficult-to-enforce requirement may never materialize.

States already cannot require federal agencies to report coverage. This means their mandates won’t track the 2.3 million covered by the Indian Health Service, 9.3 million receiving health care from the Veterans Administration, 8.8 million disabled under age 65 who are enrolled in Medicare, 9.4 million military Tricare enrollees and 8.2 million federal employees and retirees.

If a successful ERISA challenge also exempts some of the 181 million with employer-based insurance from coverage-reporting requirements, state insurance mandates become farcical. States would have to choose between mandates that run on the “honor system”—thus likely rife with cheating—or taking so much time and energy to verify coverage that administration becomes prohibitively expensive.

States should take the hint and refrain from even considering their own coverage mandates. But if they don’t, smart employers should challenge the mandate’s reporting requirements. They’d likely win.

This post was originally published at The Wall Street Journal.