Christmas Eve Vote on Obamacare Showed Washington Still Has Shame

A decade ago this morning, 60 Senate Democrats cast their final votes approving the legislation that became Obamacare. The bill took a circuitous route to enactment after Scott Brown’s surprise victory in the Massachusetts Senate contest, which occurred a few weeks after the Senate vote, in January 2010.

Brown’s election meant Republicans gained a 41st Senate seat, giving them the necessary votes to filibuster a House-Senate conference report on Obamacare. Because Democrats lacked the 60 votes to overcome a filibuster, they eventually agreed to a process amending certain budgetary and fiscal elements of the Senate bill through the reconciliation process on a 51-vote threshold.

The grubby process leading up to Obamacare’s enactment, full of parochial politics and special interest pork, cost Democrats politically. But many Americans do not realize that such machinations occur all the time in Washington—indeed, occurred just last week. When one party participates in a corrupt process, it becomes a scandal; when both parties partake, few outside the Beltway bother to notice.

Backroom Deals

The process among Democrats leading up to the final health vote resembled an open market, with each Senator making “asks” of Majority Leader Harry Reid (D-NV). Reid needed all 60 Democrats to vote for Obamacare to break a Republican filibuster, and the parochial provisions included in the legislation showed the lengths he would go to enact it:

Cornhusker Kickback:” The most notorious of the backroom deals came after Sen. Ben Nelson (D-NE) requested a 100 percent Medicaid match rate for his home state of Nebraska. The final manager’s amendment introduced by Reid included this earmark—Nebraska would have its entire costs of Medicaid expansion paid for by the federal government forever. But the blowback from constituents and the press became so great that Nelson asked to have the provision removed; the reconciliation measure enacted in March 2010 gave Nebraska the same treatment as all other states.

Gator Aid:” This provision, inserted at the behest of Sen. Bill Nelson (D-FL), and later removed in the reconciliation bill, sought to exempt Florida seniors from much of the effects of the law’s Medicare Advantage cuts.

Louisiana Purchase:” This provision, included due to a request from Sen. Mary Landrieu (D-LA), adjusted the state’s Medicaid matching formula. Landrieu publicly defended the provision—which she said reflected the state’s circumstances after Hurricane Katrina—and it remained in law for several years, but was eventually phased out in legislation enacted February 2012.

While these three provisions captivated the public’s attention, other earmarks and pork provisions abounded inside Obamacare too—a Medicaid funding provision that helped Massachusetts; exemptions from the insurer tax for two Blue Cross carriers; a $100 million earmark for a Connecticut hospital, and health benefits for miners in Libby, Montana, courtesy of then-Senate Finance Committee Chairman Max Baucus (D-MT).

Not only did senators try to keep these corrupt deals in the legislation—notwithstanding the public outrage they engendered—but Reid defended both the earmarks and the horse-trading process that led to their inclusion:

I don’t know if there’s a senator who doesn’t have something in this bill that’s important to them. And if they don’t have something in it that’s important to them, then it doesn’t speak well for them.

It was a far cry from Barack Obama’s 2008 (broken) campaign promise to have all his health care negotiations televised on C-SPAN, “so we will know who is making arguments on behalf of their constituents, and who are making arguments on behalf of the drug companies or the insurance companies.” And it looked like Democrats didn’t really believe in the merits of the underlying legislation, but instead voted to restructure nearly one-fifth of the American economy because they got some comparatively minor pork project for their district back home.

Déjà Vu All Over Again

Democrats lost control of the House in the 2010 elections, and political scientists have attributed much of the loss to the impact of the Obamacare vote. One study found that Obamacare cost Democrats 6 percentage points of support in the 2010 midterm elections, and at least 13 seats in Congress.

But did the rebuke Democrats received for their behavior prompt them to change their ways? Only to the extent that, when they want to ram through a massive piece of legislation no one has bothered to read, they include Republicans in the taxpayer-funded largesse.

Consider last week’s $1.4 trillion spending package: Two bills totaling more than 2,300 pages, which lawmakers introduced on Monday and voted on in the House 24 hours later. Democrats wanted to repeal one set of Obamacare taxes—and in exchange, they agreed to repeal another set of taxes that Republicans (and their K Street lobbying friends) wanted gone. The Obamacare taxes went away, but the Obamacare spending remained, thus increasing the deficit by nearly $400 billion.

And both sides agreed to increase spending in defense and non-defense categories alike. Therein lies the true definition of bipartisanship in Washington: An agreement in which both sides get what they want—courtesy of taxpayers in the next generation, who get stuck with the bill.

It remains a sad commentary on the state of affairs in the nation’s capital that the Obamacare debacle remains an anomaly—the one time when the glare of the spotlight so seared Members seeking pork projects that they dared consider forsaking their ill-gotten gains. To paraphrase the axiom about casinos, in Washington, The Swamp (almost) always wins.

DeMint Letter to Obama Asks Him to Hold AARP Accountable

This afternoon Senator DeMint sent a letter to the President, asking him to hold AARP to account for its questionable insurance practices:


October 4, 2012

President Barack Obama

The White House

1600 Pennsylvania Avenue, NW

Washington, DC 20500

Dear Mr. President:

During your debate with Governor Romney last night, you criticized Medicare premium support proposals as leaving seniors “at the mercy of insurance companies,” while trumpeting AARP’s endorsement of Obamacare.  However, as I outlined in a recent report about AARP, entitled “Profits Before Principles,” the evidence is clear that Obamacare places seniors at the mercy of one organization – AARP itself.  Because everyone is entitled to his own opinions, but no one is entitled to his own facts, I feel obligated to point out three undisputed facts:

1.       AARP makes most of its money selling health insurance to seniors – and profits financially when premiums rise.  According to its own financial statements, AARP received nearly half a billion dollars in “royalty fees” – or what AARP members have called “kickbacks” – from United Healthcare just last year.  Most of this money came from selling Medigap supplemental insurance to seniors.  And the arrangement under which AARP receives royalties for selling Medigap plans is ethically questionable – AARP receives a percentage of every Medigap premium dollar paid by seniors, meaning AARP makes more in profits the higher premium costs climb.

2.       AARP currently discriminates against seniors with pre-existing conditions.  AARP admits that it imposes waiting periods on individuals applying for its Medigap plans who have pre-existing conditions.  These practices not only violate AARP’s supposed commitment to “ending health status discrimination” – they also violate your claim that insurance companies won’t be able to “jerk you around” now that Obamacare has passed.

3.       Obamacare allows AARP and other sellers of Medigap insurance to continue discriminating against seniors with pre-existing conditions.  The Medigap insurance market – which AARP dominates – received a special exemption from the law’s ban on pre-existing condition discrimination, so AARP can continue its practice of restricting access to those with pre-existing conditions with your Administration’s blessing.  Medigap insurance also received waivers from several other new requirements in the law: Section 1103 exempts plans from medical-loss ratio requirements; Section 9014 exempts plans from caps on industry executive compensation; and Section 10905(d) exempts plans from the tax applied to all other health insurers.  Your Department of Health and Human Services (HHS) went even further, exempting Medigap insurance from premium rate review through regulations – even though AARP, the largest seller of Medigap plans, makes more in profit the higher premiums rise on seniors.

Documents recently released by House investigators also show a close nexus between your Administration and AARP during the rush to ram Obamacare through Congress.  For instance, Jim Messina – then your Deputy Chief of Staff, now your re-election campaign manager – asked AARP for “immediate robo calls into Nebraska urging [Senator Ben] Nelson to vote for cloture” on the bill.  And in December 2009, the White House Office of Public Engagement asked AARP to put out talking points rebutting a Republican amendment related to Medicare.

I am therefore concerned that your Administration may have negotiated a backroom deal, whereby AARP’s lucrative Medigap insurance was exempted from new regulations and enforcement, while AARP provided political cover to your campaign to enact Obamacare – and now your campaign for re-election.  HHS Secretary Sebelius has been very quick to attack other insurers’ practices, but has not dared criticize AARP – even though AARP’s insurance business is more profitable than many other insurance companies.

If you want to ensure seniors are not at the mercy of insurance companies, I encourage you to stop defending AARP’s abusive insurance practices, and instead stand up to the organization when it takes advantage of seniors.


Jim DeMint

The Obama Administration’s Protection Racket

Shortly, President Obama will be addressing the AARP convention via satellite.  He will undoubtedly say nice things about AARP’s role as a “senior advocate.”  But what he won’t discuss are the ways in which his own Administration has allowed AARP to continue making billions in profits on its insurance business:

  1. AARP’s lucrative Medigap insurance was exempted in Obamacare from the ban on pre-existing conditions; medical loss ratio requirements; caps on insurance industry executive compensation; and the tax on all other health insurance plans.
  2. The Department of Health and Human Services didn’t think all these Obamacare exemptions were enough; last year they also exempted Medigap insurance from premium rate review – even though AARP, which carries the plan with the largest market share, earns greater profits the more seniors pay in premiums.
  3. At a conference hosted by America’s Health Insurance Plans in March 2010, HHS Secretary Sebelius encouraged the insurance industry to give up some of its profits, at a time when health insurance profit margins were about 2 percentYet neither Secretary Sebelius nor anyone else in the Administration ever criticized AARP for making a profit margin of nearly 5 percent on its Medigap insurance.
  4. In April 2010, the Administration engaged in very public efforts to “encourage” insurance companies to ban rescissions and extend coverage to young adults earlier than is required by the law.  But no one from the Administration has taken similar steps to encourage AARP to stop discriminating against sick seniors applying for Medigap coverage.
  5. In a speech at an AARP conference in October 2010, Secretary Sebelius praised AARP as the “gold standard in cutting through spin and complexity to give people the accurate information they need.”  Yet the National Association of Insurance Commissioners (NAIC) has previously expressed concern about the potential for conflicts-of-interest associated with percentage-based compensation arrangements.  So Secretary Sebelius praised as the “gold standard” for “accurate information” an organization that has the types of financial conflicts her insurance commissioner colleagues have criticized as ripe for abuse.

Why might the Administration look the other way despite these abuses?  Documents released by the Energy and Commerce Committee yesterday provide myriad reasons, showing all the political favors senior Administration officials asked of AARP as they rammed Obamacare through Congress:

  • Jim Messina, White House Deputy Chief of Staff: “We need [AARP CEO] Barry Rand to go meet with Ben Nelson personally and just lay it on the line.  ‘We will be with you, we will protect you.  But if you kill this bill, seniors will not forget.’  We are at 59 [votes in the Senate], we have to have him.” (page 7)
  • Jim Messina: “Can we get immediate robo calls into Nebraska urging [Ben] Nelson to vote for cloture?” (page 9)
  • Nancy-Ann DeParle, Director, White House Office of Health Reform: “Can AARP support accountable care orgs [sic] and some other delivery system reforms?” (page 26)
  • Jim Messina: “Latest top 25 targets list from House leadership” (page 35)
  • Ann Widger, Office of Public Engagement: “We would really like AARP to participate in this roundtable.” (page 37)
  • Ann Widger: “Did you guys put out any paper today on the McCain [Medicare] amendment?” (page 39)
  • Jim Messina: “[Rep. Larry] Kissel a problem…Help.” (pages 42-43)
  • Nancy-Ann DeParle: “Can you get me a copy of the [AARP] bulletin we discussed yesterday?” (page 64)

Secretary Sebelius has already admitted she has acted improperly in using her office to conduct political activities; the Office of Special Counsel last week concluded she violated the law to do so.  Given all of the above, it is not unreasonable to question whether the Secretary, and others within the Administration, made a calculated political decision to grant special favors to AARP – and ignore its questionable business practices – because AARP endorsed Obamacare.

Yesterday President Obama claimed that he changed Washington “from the outside” by enacting Obamacare.  The pattern of conduct described above suggests just the opposite: That the President rammed Obamacare through only by establishing what amounts to an inside-the-Beltway protection racket between the Administration and AARP – the former will allow the latter to continue overcharging seniors for insurance, so long as AARP uses its advocacy megaphone to endorse the President’s liberal causes.


The Honorable Kathleen Sebelius


Department of Health and Human Services

200 Independence Avenue, S.W.

Washington, DC 20201

Dear Secretary Sebelius:

Today my office is releasing a report, “Profits Before Principles,” regarding the insurance practices of AARP. The report finds that AARP has a strong financial interest in keeping Medigap supplemental insurance premiums high – because the organization receives greater profits the more seniors pay in premiums. In addition, AARP’s financial interests have been aided by the Patient Protection and Affordable Care Act (PPACA), which AARP not coincidentally endorsed. Experts agree that PPACA’s provisions will have the effect of driving seniors out of Medicare Advantage health plans and into Medigap supplemental insurance – a market where AARP enjoys the largest market share.

I am greatly concerned by AARP’s questionable business practices, and by the numerous exemptions granted to Medigap insurance – both legislatively and through your Department’s regulatory process – as a result of PPACA. Therefore, I ask you to respond to the following questions:

  1. The text of PPACA exempts Medigap supplemental insurance plans from several new requirements: Section 1103 exempts plans from medical-loss ratio requirements; Section 1202(2)(A) exempts plans from the prohibition on pre-existing condition exclusions; Section 9014 exempts plans from caps on industry executive compensation; and Section 10905(d) exempts plans from the tax applied to all other health insurers. Does the Administration support all these special exemptions for Medigap plans? Why or why not?
  2. My staff attended a PPACA implementation briefing for Senate Republican staff in April 2010. At that time, Jeanne Lambrew of your Department’s Office of Health Reform admitted that PPACA exempted Medigap insurance from the law’s new regulatory regime. If in fact the Administration does NOT support PPACA’s numerous exemptions for Medigap plans, why has your Department done nothing to publicize that fact in the intervening two-plus years since that briefing?
  3. Your Department continues to claim that PPACA “ended many of the insurance industry’s worst abuses” – even though you are fully aware that these changes do not apply to Medigap plans. For instance, HHS previously released a publicity brochure that says “starting in 2014, discrimination based on a pre-existing condition by an insurer will be prohibited in every state.” Why has your Department continued to repeat these misleading slogans, even though your staff admitted that seniors applying for Medigap insurance remain subject to pre-existing condition discrimination due to the special carve-outs included in PPACA?
  4. In your speech to the Democratic National Convention on September 4, 2012, you criticized Republicans for “let[ting] insurance companies continue to cherry-pick who gets coverage and who gets left out, priced out, or locked out of the market.” Likewise, during his speech at the Democratic National Convention, President Obama said that “no American should have to spend their golden years at the mercy of insurance companies.” Please detail the specific provisions included in PPACA that place new limits on Medigap insurers’ ability to “cherry-pick who gets coverage and who gets left out, priced out, or locked out of the market,” and ensure that no applicant for Medigap coverage with a pre-existing condition will be left “at the mercy of insurance companies.”
  5. In a speech on September 8, 2012, President Obama claimed that Medicare premium support proposals would lead to billions of dollars in greater profits for insurance companies. But a 2011 House Ways and Means Committee member report found that PPACA itself could lead to billions in profits for AARP, because the law’s cuts to Medicare Advantage will reduce enrollment in that program, and encourage seniors to purchase supplemental Medigap insurance instead. Do you agree with the Ways and Means Committee report’s premise that PPACA will lead seniors to migrate from Medicare Advantage coverage to Medigap plans – thereby increasing profits to AARP? If not, on what basis do you disagree with the non-partisan experts at the Congressional Budget Office and the Medicare Office of the Actuary, who have concluded the law will reduce Medicare Advantage enrollment by millions?
  6. In addition to the above exemptions, your Department added yet another Medigap carve-out to the ones included in the statute, by exempting Medigap insurance from PPACA’s rate review process. Why do seniors not deserve this supposed protection? If PPACA’s benefits are so good, why didn’t your Department extend them to seniors as well?
  7. Did AARP, or anyone associated with or paid by it, influence or attempt to influence the Administration regarding the numerous exemptions given to Medigap insurance in PPACA, or the regulatory interpretations of PPACA? If so, please provide details as to the dates, persons, positions, and circumstances of said efforts.
  8. The 2011 House Ways and Means Committee member report noted that for its Medigap plans, AARP receives 4.95% of every premium dollar paid by seniors. As a former insurance commissioner, do you think it’s appropriate that AARP has a perverse financial incentive to keep Medigap insurance premiums high?
  9. In a speech at an AARP conference in October 2010, you praised that organization as the “gold standard in cutting through spin and complexity to give people the accurate information they need.” As a former insurance commissioner, how exactly do you believe AARP can serve as a “gold standard” giving seniors “accurate information” about Medigap insurance plans, when the organization has a financial incentive to sell seniors more insurance than they may need or want?
  10. As a former insurance commissioner, you are no doubt aware that the National Association of Insurance Commissioners (NAIC) has previously expressed concern about the potential for conflicts-of-interest associated with percentage-based compensation arrangements. In fact, Section 18 of NAIC’s Producer Model Licensing Act recommends that states require explicit disclosure by insurer affiliates, and clear written acknowledgement by consumers, of any percentage-based compensation arrangement, due to the potential for financial abuses. Did you undertake any due diligence to ensure that AARP’s Medigap percentage-based compensation model was in full compliance with both the letter and spirit of Section 18 of the Producer Model Licensing Act prior to making your assertion that AARP constitutes the “gold standard” for giving seniors “accurate information?” If not, why not?
  11. Given that AARP holds the largest share of the Medigap market, why did your Department grant a special exemption for Medigap insurance from PPACA rate review? Why do you believe that AARP can act in a proper manner to control premium increases – even though the organization gains profits for every additional dollar Medigap premiums rise?
  12. At a conference hosted by America’s Health Insurance Plans in March 2010, you encouraged the insurance industry to give up some of its profits, at a time when health insurers were earning between 2 and 3 cents of profit for every dollar of revenue, according to Fortune 500 estimates. If you criticized other insurers for earning between 2 and 3 cents of every premium dollar in profits, why haven’t you criticized AARP for taking 4.95 cents of every Medigap premium dollar as pure profit?
  13. In April 2010, the Administration and you personally engaged in very public efforts to “encourage” insurance companies to ban rescissions and extend coverage to young adults earlier than was required by PPACA. Why haven’t you taken similar steps to encourage AARP to stop discriminating against sick seniors applying for Medigap coverage?
  14. At the April 2010 Senate Republican briefing, staff asked whether your Department would write a letter to AARP asking them to stop denying Medigap applications for individuals with pre-existing conditions. Jeanne Lambrew of the Office of Health Reform promised to look into the matter, but the letter was never sent. Why has your Department waited more than two and a half years to ask AARP to stop discriminating against sick and disabled individuals applying for Medigap insurance?
  15. Finally, please forward copies of any and all Administration documents – including those originating from outside your Department – from January 20, 2009 through today inclusive regarding: 1) the Medigap exemptions included in PPACA, and the Administration’s viewpoints and/or technical assistance provided regarding same during the drafting process; 2) the Administration’s administrative interpretations of the Medigap exemptions during the rulemaking process; 3) AARP’s positions on Medigap insurance plans, including but not limited to the exemptions included in PPACA; and 4) AARP’s position on PPACA, including but not limited to any policy changes AARP said it required to be included in the legislation for the bill to receive the organization’s endorsement.

I look forward to receiving your response on these issues within two weeks. If you have any questions, feel free to contact Alec Aramanda or Chris Jacobs of my staff. Thank you for your time, and I look forward to your reply.

The “Rock-Solid Deal” the American People Reject

The House Energy and Commerce Committee released its latest report into the backroom dealings behind Obamacare on Friday.  This report, as well as a memo released the previous week, and the supplemental documents related to each report, provide for an interesting read, on multiple levels.

It is of course interesting to learn precisely how candidate Obama went from criticizing Big Pharma’s CEO for exerting improper influence in a 2008 campaign ad to cutting a “rock-solid deal” with the very same executive he had earlier criticized.  It’s just as ironic to find a President who pledged to televise all health care negotiations on C-SPAN cutting legislative deals behind closed doors.  And perhaps the piece de resistance is the way the Administration endorsed the creation of secret advocacy groups designed to run pro-Obamacare ads – the same kind of “shadow groups” that President Obama has repeatedly criticized as being insufficiently transparent.

But over and above the irony – and hypocrisy – readily apparent in these documents lies a simpler yet more profound truth:  Practically every health care group in Washington SUPPORTED Obamacare, and moved heaven and earth to build public support for the law, yet the American people OPPOSED it – and still oppose it to this day.  The documents reveal just how desperate special interests were to enact the massive 2700-page law:

  • Big Pharma spent $69.7 million on advertising supporting the law through various coalitions – and that’s just one trade association.
  • The CEO of AARP personally called Senator Ben Nelson to solicit his support for the measure – after multiple requests from the White House.
  • The heads of the major hospital associations let White House officials edit their press releases about their own “deals” with the Administration.

A separate study from Bloomberg Government released late last week demonstrated just why all these special interests were so keen on passing Obamacare.  The study found that a Supreme Court decision striking down the law could cost pharmaceutical companies, hospitals, and other health care interests as much as $740 billion in revenue over the next ten years.  Hospitals alone could lose $430 billion.  Coming on the heels of last month’s study indicating insurers benefit from Obamacare to the tune of $1 trillion, the Bloomberg report illustrates perfectly why all the health care special interests were desperate to pass the law – as the Energy and Commerce documents reveal.

As might be expected, the documents also include some comedic moments.  Given that experts have concluded that Obamacare will make 40 percent of hospitals unprofitable, the frantic struggle among hospital association executives to get Democrat members to vote for the bill may be (to paraphrase an historic expression) the first time in recorded history that turkeys desperately lobbied Congress to vote for Thanksgiving.  In a moment of candor, one Pharma executive – a Democrat and former Clinton Administration official – after telling his colleague the bill “raises taxes, raises [insurance] premiums and cuts Medicare,” admitted that “I’ve seen them [i.e., Pharma’s campaign ads about Obamacare].  But I don’t believe them.”

He’s not the only one who didn’t believe the ads.  The American people didn’t believe the hype about Obamacare then, and they don’t believe it now.  And no amount of special interest lobbying, or “rock-solid deals,” can change that fact.

Ben Nelson Said WHAT on Medicare?

At a town hall meeting in Lincoln yesterday, Sen. Ben Nelson (D-NE) indicated that he would oppose extension of the payroll tax holiday due to expire in December.  He said that while he would like to support extending the payroll tax cut, “all you’re doing is taking money that otherwise would help Medicare and Social Security.”

This comment was a curious statement to make, as non-partisan budget analysts and even President Obama have admitted that the health care law the Senator voted for uses more than $500 billion in Medicare funds to pay for new entitlements:

  • Medicare actuary Foster has written that the Medicare provisions in Obamacare “cannot be simultaneously used to finance other Federal outlays (such as the coverage expansions under the PPACA) and to extend the [Medicare] trust fund, despite the appearance of this result from the respective accounting conventions.”
  • The Congressional Budget Office agreed with the Medicare actuary, writing that the Medicare provisions in Obamacare “would not enhance the ability of the government to pay for future Medicare benefits.”
  • President Obama in an interview with Fox News last year admitted that “You can’t say that you are saving on Medicare and then spending the money twice.”

Last year then-Speaker Pelosi famously said we had to pass the bill to find out what’s in it.  Some might suggest that Democrats need to take the Speaker’s advice, to rediscover how Obamacare uses more than half a trillion dollars in Medicare savings – not to improve Medicare’s fiscal situation, but to create new and unsustainable entitlements.

What You Missed Over the August Recess

In case you were out for some or all of the August recess, I’ve compiled a “Dirty Dozen” list of seven important stories you may have missed since the Senate adjourned in August – followed by five stories that I didn’t have a chance to send around over the break:

What You Missed Over Recess

Health Care Law Raising Costs; White House Response “Misleading”:  Last week the Medicare actuaries released their updated projections for future health care costs through 2019 that reflect the changes made in the health care law.  The Health Affairs article (subscription required) found that health costs would RISE about 0.2 percentage points per year more than they would if the law had not passed, leading health care spending to consume nearly one-fifth of GDP by 2019.  When asked about the report at his news conference Friday, the President responded that “we knew that” costs would go up as a result of more individuals obtaining insurance – claims that an Associated Press fact check piece noted “were rarely heard” during the health care debate, when Democrats asserted their bill would reduce costs.  A separate AP fact check piece released this morning called the Administration’s claims that spending per insured person would decline under the law “fuzzy math;” one math professor called the metric “a little misleading,” and Medicare actuary Rick Foster called the White House’s statistics “not meaningful.”

Impact on Premiums:  The Kaiser Family Foundation’s annual survey of employer-provided insurance found that premiums rose by 5 percent for individuals and 3 percent for families last year.  However, because firms are requiring their employees to contribute a greater percentage of premium costs, net premiums paid by employees rose by nearly 13% for families and 15% for individuals.  Last week a Wall Street Journal report found that some carriers are raising their premiums by 5-7% to reflect the new mandates and costs imposed by the health care law.  The Journal’s findings comport with a similar study of employers conducted by Mercer and released last week, which similarly found that the law’s many mandates will raise premiums by more than the 1-2 percent Administration officials have been claiming.  However, the Journal article prompted Secretary Sebelius to send a letter to insurers attacking their “misinformation and unjustified rate increases.”  In this context, it’s worth pointing out that during his presidential campaign, then-Senator Obama promised his health care plan would reduce premiums for family coverage by $2,500 – a claim the Administration has not made about the law in recent months.

Effects on Work:  In its annual August update to the budget, CBO included a section (pages 66-67 of the PDF) outlining the health care law’s effects on the labor supply.  Most notable was the conclusion that “the legislation, on net, will reduce the amount of labor used in the economy by…roughly half a percent, primarily by reducing the amount of labor that workers choose to supply.”  At a time when economic growth remains weak, some may question the impact of policies in the health legislation that will discourage work – and according to CBO, will lead to about 750,000 individuals to stop working.

Liberal Groups Recalibrate their Health Care Pitch:  A Powerpoint presentation prepared for Families USA and other affiliated liberal groups, and obtained by Politico, found that “straightforward ‘policy’ defenses fail to be moving voters’ opinions about the law,” and that voters were skeptical that the law will either reduce the deficit or help the economy.  As a separate article noted, the slide show “stresses repeatedly [that] many are unaware that the reform has passed, an astonishing shortcoming in the White House’s all-out communications effort….The presentation also concedes that the fiscal and economic arguments that were the White House’s first and most aggressive pitch have essentially failed.”

Health Care Measure Remains Unpopular:  The Kaiser tracking poll released in late August showed a significant uptick in opposition to the health care law, with approval falling by seven points and disapproval rising by ten points.  Fewer than three in ten Americans (29%) believe the law will benefit them personally – a near-record low on that measure – and seven in ten (70%) Americans disapprove of the individual mandate, 52% strongly.  For all these reasons, a Politico article last week noted that the only ads being run by Democrats regarding the health care law come from those House Members who opposed the measure – defying earlier predictions by Democrats that “those who voted against health care will find it a liability” by this November’s elections.

The “Stigma” of Enrolling Poor Americans in Medicaid:  In a press release, Sen. Ben Nelson questioned budget estimates released by Nebraska’s Governor that assumed poor Nebraskans would drop their private coverage to enroll in Medicaid, because, in Sen. Nelson’s view, “private insurance generally is better than Medicaid, which also comes with a stigma for some.”  According to the Medicare actuary, more than half of the individuals obtaining coverage as a result of the law – 18 million out of 34 million newly insured – will be enrolled in Medicaid.  It’s also worth noting that individuals newly eligible for Medicaid under the law will be automatically enrolled in that government-run program, and will NOT be given subsidies to choose their own plan on the insurance Exchanges.

Reading the Bill a “Waste of Time”:  At a town hall meeting in Libby, Montana, Finance Committee Chairman Baucus told his constituents “I don’t think you want me to waste my time to read every single word in that health care bill….It takes a real…real…expert to know what the heck it is.  We hire experts.”

What I Missed Over Recess

Budget Chairman Dubious About Deficit Savings:  At a debate in South Carolina last week, House Budget Committee Chairman Spratt acknowledged that the health care law’s supposed savings “may still be in doubt.  ‘That may or may not happen, but those are the projections from CBO,’ he said.”

A “Complicated and Bewildering” System for Consumers to Navigate?  In a New York Times blog posting, noted liberal economist Uwe Reinhardt said insurance brokers shouldn’t worry about losing their jobs as a result of the health care law, because “it’s a pretty safe bet that the state-based exchanges…will be so complicated and bewildering that the services of brokers will still be needed.”  Remember however that CBO predicted administrative savings in the Exchanges would actually mitigate some of the law’s increases in premiums elsewhere – so if Reinhardt’s prediction is accurate, and the exchanges are administratively complex, consumers in the individual market could end up paying even more than the $2,100 increase in premiums CBO projected last November.

Primary Care Doesn’t Equal Better Care:  The Dartmouth Atlas released a report last week that examined whether seniors in areas where more Medicare beneficiaries have at least one primary care visit per year received better care (e.g. mammogram every two years, eye exam for diabetics, etc.)  The researchers ended up finding…nothing: There was virtually no correlation between increased primary care visits and better patient care.  It’s an interesting finding, and one that casts doubt on whether programs like medical homes and accountable care organizations will automatically lead to improved patient care and outcomes.

Medicaid and the Emergency Room:  A Health Affairs article (subscription required) examined the stresses on America’s emergency personnel: Emergency departments comprise only 4% of the American physician workforce, yet handle 11% of all ambulatory visits.  One primary reason for this disparity can be found among Medicaid patients – more than half of all Medicaid patients’ acute care visits took place in the emergency room, with only about 5% taking place with specialist physicians.  The lack of access to physician care (particularly medical specialists), and the reliance on the emergency room as a primary source of health care access, due to Medicaid’s low reimbursement rates was further emphasized by a paper released by the American Action Forum last week.  Former CBO Director Doug Holtz-Eakin found that, because the health care law dumps another 18 million individuals into Medicaid without reforming that troubled program, more new Medicaid patients will flock to emergency rooms – resulting in an estimated 68 million emergency room visits (nearly 13 million annually), and increased costs to hospitals of $35.8 billion.

Patient Choice Improves Health Care Outcomes—Even in Britain:  A National Bureau of Economic Research paper released last month (subscription required for off-Hill users) examined the impact of changes made several years ago to Britain’s National Health Service (NHS) that allowed patients to choose their own hospital.  The results: “We find that the introduction of competition led to an increase in quality without a commensurate increase in expenditure” – because better hospitals attracted more patients, and “the increased competitive pressure led to improvements in quality.”  The study calculated the changes creating patient choice and competition in the NHS saved an estimated 3,354 life-years and £227 million (about $350 million at current exchange rates).  The study may come as a surprise to CMS Administrator Donald Berwick, who previously warned NHS officials: “Please don’t put your faith in market forces.”

Senate Democrat Talks about Medicaid “Stigma”

Earlier this week, Sen. Ben Nelson – he of the infamous Cornhusker Kickback – made the startling admission that the Medicaid program, which the health care law expands dramatically, carries a “stigma for some.”  The statement came in response to Nebraska Governor Dave Heineman’s outreach to education groups encouraging them to support repealing the health law, as its Medicaid unfunded mandates would squeeze out state funds for education.

On Monday, Sen. Nelson’s office put out a release calling the Governor’s accusations overblown.  Specifically, Sen. Nelson alleged that Milliman’s independent analysis of the health care law’s impact on the Medicaid budget was “seriously flawed,” for two reasons:

The Milliman study anticipates 100 percent participation in the Medicaid program under health reform.  Medicaid is voluntary and voluntary programs never see 100 percent participation.  Also, the governor’s new study assumes that about 60,000 people who have private insurance now will switch to Medicaid.  Will that happen when private insurance generally is better than Medicaid, which also comes with a stigma for some?

This remarkable statement leads to some interesting questions for Sen. Nelson, and Democrats generally:

  1. What exactly is voluntary about forcing individuals to purchase “government-approved” health insurance, and then taxing them if they do not do so?  How is the message that Medicaid is a voluntary program consistent with the mantra of “personal responsibility” used for the past year to justify the unpopular individual mandate?
  2. Given that their supposed goal in health “reform” is universal coverage, shouldn’t Democrats WANT 100 percent participation in the Medicaid program?  Or do Democrats merely want to CLAIM they have created universal coverage, while hoping that individuals do not sign up at rates that will overwhelm the fiscal capacity of states and the federal government to finance this new entitlement?
  3. According to the Medicare and Medicaid chief actuary, most individuals obtaining new health insurance coverage as a result of the law will do so via Medicaid.  Why should these projected 18 million individuals be “stigmatized” by what Sen. Nelson himself called an inferior form of health insurance?
  4. The health law’s expansion of Medicaid PROHIBITS individuals eligible for the Medicaid expansion (i.e., those with incomes under 138 percent of poverty) from receiving federal subsidies to cover the cost of private insurance.  In other words, poor people weren’t granted a choice of health care plans, and were instead dumped on to the Medicaid rolls.  If Sen. Nelson believes that the inferior Medicaid program carries a “stigma,” why did Democrats not only not fix this troubled program, but instead perpetuate and deepen the “stigma” attached to it by giving poor people no other choice of coverage?
  5. Is Sen. Nelson’s belief that private insurance “generally is better than Medicaid” the reason why he, along with the rest of his Senate Democrat colleagues, opposed an amendment offered by Sen. LeMieux to enroll Members of Congress in Medicaid?  Do Democrats want to “stigmatize thee, but do not stigmatize me” by enrolling others – but not themselves – in what Sen. Nelson called an inferior Medicaid program?

The comments above illustrate how Democrats are attempting to “have it both ways” when it comes to the health care law – trumpeting supposedly universal coverage, while simultaneously arguing that the law will not bankrupt states and the federal government because many individuals eligible for free entitlements will not enroll in them.  Similarly, the majority consigned 18 million Americans into a health “insurance” program that they themselves refused to accept – not least because, as Sen. Nelson admitted, the program is inferior to private insurance.  This latest example of Democrats’ double-talk, and double standards, once again illustrates why the health care law does not constitute health reform.

Final Floor Update on Reconciliation

A few minutes ago, the Senate approved the reconciliation measure by a 56-43 vote (Lincoln, Nelson of Nebraska, and Pryor were the Democrats who voted no). Because several provisions relating to Pell Grants were stripped from the measure on Budget Act points of order for violating the Byrd rule, the measure must return to the House for further disposition.

Of Summits and “Tricks…”

Even as the President was briefing reporters this afternoon to insist that his proposed bipartisan summit would yield a “constructive debate” about health care and that he was “open to any ideas,” Speaker Pelosi’s top health care aide was quoted by CongressDaily saying Democrats were working to develop a “prenegotiated” package that would be “very close to being done” before the Easter recess, about six weeks away.  He also noted that “there’s a trick” involved in passing the bill through the reconciliation process – to ensure that the legislation could be jammed through on a party-line vote.

In addition to undermining the notion that Democrats were “open to any ideas” on health care, some may find a particular irony in these comments, given that Speaker Pelosi in a House floor speech on December 8, 2003 criticized the way Republicans handled the House vote on the Medicare prescription drug bill: “The Republicans also run this Congress like the Republicans run Florida.  They cannot accept the result of a vote.”  Of course, Speaker Pelosi’s health advisor is now publicly advocating “tricks” so that Democrats can avoid the implications of Scott Brown’s election to the Senate – to say nothing of the message voters have been sending for months now, most recently in today’s new Gallup poll that has President Obama’s approval on health care at an all-time low.

Many Republicans may agree with Speaker Pelosi’s advisor that reconciliation is a “trick” – the question is, will the Democrats insist on imposing this “trick” on an American public that has rejected Democrats’ government takeover of health care?


Pelosi Aide Outlines Healthcare Endgame

Tuesday, Feb. 9, 2010
by Anna Edney

House Speaker Pelosi’s top healthcare adviser today outlined a plan that would allow both chambers to make changes to the Senate healthcare overhaul before the overhaul becomes law.

Wendell Primus said the plan is to have President Obama sign the Senate bill before signing the legislation making the changes, even though Congress will approve them in reverse to satisfy skeptical House members who refuse to pass the Senate bill before changes are made.

“The trick in all of this is that the president would have to sign the Senate bill first, then the reconciliation bill second, and the reconciliation bill would trump the Senate bill,” Wendell Primus told health policy experts gathered at the National Health Policy Conference hosted by AcademyHealth and Health Affairs.

Some have questioned whether rules would allow Congress to pass changes to a bill that is not yet law. House members have insisted both chambers approve the changes, which likely will go through the reconciliation process to require 51 votes rather than the 60-vote supermajority in the Senate, before they pass they Senate bill.

Primus also mentioned bill drafters would need to use certain language to ensure the plan works, although he did not elaborate.

“There’s a certain skill, there’s a trick, but I think we’ll get it done,” he said.

Negotiators first must agree on changes.

The Senate parliamentarian still needs to weigh in, he added.

Despite all these complications, Primus said, lawmakers will be “very close to being done” with an overhaul by Easter recess.

He said the prenegotiated package would be based on agreements reached before Democrats lost their 60-seat supermajority in the Senate last month after the special election in Massachusetts won by GOP Sen. Scott Brown.

“It is quite conceivable that we could have a prenegotiated package much like a conference report, if you will,” he added.

Those agreements include changes to the Senate’s excise tax on high-cost plans so it hits fewer people; increased federal subsidies; a plan to close the coverage gap in Medicare prescription drug coverage; and elimination of a deal that Senate Majority Leader Reid made with Sen. Ben Nelson, D-Neb., to gain his vote.

Reid inserted a provision in the Senate overhaul bill that requires the federal government to cover Nebraska’s entire costs for a Medicaid expansion.

Sweetheart deals such as Nelson’s and additional deals between the White House and industries soured the American public on the bill, Primus said.

Obama attempted this week to revive the overhaul by announcing a bipartisan healthcare summit at the White House later this month. House Republican leaders sent a letter Monday to White House Chief of Staff Emanuel asking that governors and state legislators be invited as well, given at least 36 state legislators have introduced legislation allowing them to opt out of a federal overhaul.

“One of the fundamental problems with the approach the Obama administration has taken to health care is that it seems rooted in a Washington-knows-best mentality.” House Minority Leader Boehner said. “Excluding the voices of America’s governors and state legislators from the proposed ‘summit’ would compound this error.”

Obama vs. Obama on Transparency

In an interview with ABC’s Diane Sawyer yesterday, President Obama accepted some “responsibility” for the secretive process that led to back-room deals with labor unions, pharmaceutical companies, hospitals, and Sen. Ben Nelson (D-NE) in an attempt to buy support for Democrats’ government takeover of health care.  He noted that the “health care debate as it unfolded legitimately raised concerns…that we [i.e. the American people] just don’t know what’s going on.”  (A full transcript of the interview can be found here.)

But in response to the very next question, the President claimed that “I didn’t make a bunch of deals,” blaming the entire secretive process on Congress.  That statement might come as news to Billy Tauzin, CEO of the pharmaceutical industry’s trade organization, who told the New York Times back in August that “the Administration had approached him to negotiate…‘We were assured, “We need somebody to come in first.  If you come in first, you will have a rock-solid deal.”’”  How can the President square his belief that he “didn’t make a bunch of deals” with lobbyists who have been publicly bragging about their “rock-solid deals” with the Administration?

Even more to the point, the President has said “we have to move forward in a way that recaptures that sense of opening things up more.”  Given that statement, and the multiple news reports over the past several days indicating that Democrats are attempting to negotiate more “compromises” to jam their government takeover of health care back through the House, when can the public expect to see THOSE negotiations televised on C-SPAN?