The CBO Report on Single Payer Isn’t the One We Deserve to See

On Wednesday, the Congressional Budget Office (CBO) released a 30-page report analyzing a single-payer health insurance plan. While the publication explained some policy considerations behind such a massive change to America’s health care market, it included precious few specifics about such a change—like what it would cost.

Sen. Bernie Sanders (I-VT), perhaps single payer’s biggest supporter, serves as the ranking member of the Senate Budget Committee. If he asked the budget scorekeepers to analyze his legislation in full to determine what it would cost, and how to go about paying for the spending, CBO would give it high-priority treatment.

But to the best of this observer’s knowledge, that hasn’t happened. Might that be because the senator does not want to know—or, more specifically, does not want the public to know—the dirty secrets behind his proposed health-care takeover?

Hypothetical Scenarios

The CBO report examined single payer as an academic policy exercise, running through various options for establishing and operating such a mechanism. In the span of roughly thirty pages, the report used the word “would” 245 times and “could” 209 times, outlining various hypothetical scenarios.

That said, CBO did highlight several potential implications of a single-payer system for both the demand and supply of care. For instance, “free” health care could lead to major increases in demand that the government system could not meet:

An expansion of insurance coverage under a single-payer system would increase the demand for care and put pressure on the available supply of care. People who are currently uninsured would receive coverage, and some people who are currently insured could receive additional benefits under the single-payer system, depending on its design. Whether the supply of providers would be adequate to meet the greater demand would depend on various components of the system, such as provider payment rates. If the number of providers was not sufficient to meet demand, patients might face increased wait times and reduced access to care.

The report noted that in the United Kingdom, a system of global budgets—a concept included in the House’s single-payer legislation—has led to massive strains on the health-care system. Because payments to hospitals have not kept up with inflation, hospitals have had to reduce the available supply of care, leading to annual “winter crises” within the National Health Service:

In England, the global budget is allocated to approximately 200 local organizations that are responsible for paying for health care. Since 2010, the global budget in England has grown by about 1 percent annually in real (inflation-adjusted) terms, compared with an average real growth of about 4 percent previously. The relatively slow growth in the global budget since 2010 has created severe financial strains on the health care system. Provider payment rates have been reduced, many providers have incurred financial deficits, and wait times for receiving care have increased.

While cutting payments to hospitals could cause pain in the short term, CBO noted that reducing reimbursement levels could also have consequences in the long term, dissuading people from taking up medicine to permanently reduce the capacity of America’s health-care market:

Changes in provider payment rates under the single-payer system could have longer-term effects on the supply of providers. If the average provider payment rate under a single-payer system was significantly lower than it currently is, fewer people might decide to enter the medical profession in the future. The number of hospitals and other health care facilities might also decline as a result of closures, and there might be less investment in new and existing facilities. That decline could lead to a shortage of providers, longer wait times, and changes in the quality of care, especially if patient demand increased substantially because many previously uninsured people received coverage and if previously insured people received more generous benefits.

That said, because the report did not analyze a specific legislative proposal, its proverbial “On the one hand, on the other hand” approach generates a distinctly muted tone.

Tax Increases Ahead

To give some perspective, the report spent a whopping two pages discussing “How Would a Single Payer System Be Financed?” (Seriously.) This raises the obvious question: If single-payer advocates think their bill would improve the lives of ordinary Americans, because the middle class would save so much money by not having to pay insurance premiums, wouldn’t they want the Congressional Budget Office to fully analyze how much money people would save?

During his Fox News town hall debate last month, Sanders claimed a large show of support from blue-collar residents of Bethlehem, Pennsylvania for single payer. The ostensible support might have something to do with Sanders’ claim during the town hall that “the overwhelming majority of people are going to end up paying less for health care because they’re not paying premiums, co-payments, and deductibles.”

Where have we heard that kind of rhetoric before? Oh yeah—I remember:

At least one analysis has already discounted the accuracy of Sanders’ claims about people paying less. In scrutinizing Sanders’ 2016 presidential campaign plan, Emory University economist Kenneth Thorpe concluded that the plan had a $10 trillion—yes, that’s $10 trillion—hole in its financing mechanism.

Filling that hole with tax increases meant that 71 percent of households would pay more under single payer than under the status quo, because taxes would have to go up by an average of 20 percentage points. Worse yet, 85 percent of Medicaid households—that is, people with the lowest incomes—would pay more, because a single-payer system would have to rely on regressive payroll taxes, which hit the poor hardest, to fund socialized medicine.

Put Up or Shut Up, Bernie

If Sanders really wants to prove the accuracy of his statement at the Fox News town hall, he should 1) ask CBO to score his bill, 2) release specific tax increases to pay for the spending in the bill, and 3) ask CBO to analyze the number of households that would pay more, and pay less, under the bill and all its funding mechanisms.

That said, I’m not holding my breath. A full, public, and honest accounting of single payer, and how to pay for it, would expose the game of three-card monty that underpins Sanders’ rhetoric. But conservatives should keep pushing for Sanders to request that score from CBO—better yet, they should request it themselves.

This post was originally published at The Federalist.

Kamala Harris Discovers Liberals’ New Health Care Motto

More than a decade ago, Barack Obama ran for president repeatedly pledging that under his health care platform, “If you like your plan, you can keep it.” Of course, that promise turned out not to be true—millions of Americans received cancellation notices as Obamacare took effect, and PolitiFact named Obama’s campaign pledge its “Lie of the Year.”

Given that tortured history, liberals appear to have come up with a simple and succinct slogan to explain their next round of health “reform:”: “If you like your current plan, go f— yourself.”

Medicare for None

Moderator Jake Tapper claimed during the discussion that Harris supports “Medicare for All,” but in reality, the legislation she co-sponsored during the last Congress would eliminate Medicare, along with every other existing form of health insurance save two: the Indian Health Service and Veterans Administration coverage. In short, Harris supports nearly 300 million Americans losing their current form of health coverage.

Patronizing Paternalism

Just as telling: Harris’ blithe dismissal of Americans who might prefer to keep their existing insurance. She claimed that, under single payer, “You don’t have to go through the process of going through an insurance company, having them give you approval, going through the paperwork.” Never mind that single payer systems have long waiting lists, which bring paperwork of their own. Harris then brushed away Americans’ concerns about losing their health coverage with a flick of the wrist: “Let’s move on.”

There are a number of Americans—fewer than 5 percent of Americans—who’ve got cut-rate plans that don’t offer real financial protection in the event of a serious illness or an accident. Remember, before the Affordable Care Act, these bad-apple insurers had free rein every single year to limit the care that you received, or use minor preexisting conditions to jack up your premiums or bill you into bankruptcy. So a lot of people thought they were buying coverage, and it turned out not to be so good.

Obama minimized both the number of people with cancelled plans—“only” a few million—and the quality of the coverage they held. The message was clear: You may think you had good health coverage, but I know better.

It’s Not About Health Care

Some people wonder why I continue to write about the well-heeled Obamacare supporters—including heads of exchanges—who refuse to buy Obamacare coverage for themselves. For a very simple reason: Those individuals, and Harris, and Obama’s remarks all get at the very same point. Obamacare, and single-payer coverage, aren’t really about health care—they’re about power.

Liberal elites consider themselves intellectually superior to the great unwashed masses, whom they must protect from themselves. That reasoning motivates Obamacare’s “consumer protections,” which act to prevent people from becoming consumers, because liberals don’t want individuals to buy health plans lacking all the features they consider “essential.”

An Ironic Campaign Start

The day before her CNN town hall, Harris launched her campaign in Oakland. At the event, which included her campaign slogan, “For the People,” Harris claimed she will “treat all people with dignity and respect.” In making those comments, Harris likely wanted to contrast herself with President Trump’s tone—his temperament, tweets, and so forth.

But one can make an equally compelling argument that Harris’ platform, and her comments one day later, belied her own rhetoric. Pledging to terminate the health coverage of nearly 300 million people might strike some as treating the American people with a distinct lack of respect.

While Democrats may want to make the 2020 campaign a referendum on Trump, elections also present voters with choices. If their party nominates a candidate who reprises liberals’ past mistakes of talking down to voters—“deplorables,” anyone?—they might face a second straight election night shocker.

This post was originally published at The Federalist.

Do Democrats Want Obamacare to Fail under Donald Trump?

In their quest to take back the House and Senate in November’s midterm elections, Democrats have received a bit of bad news. The Hill recently noted:

Health insurers are proposing relatively modest premium bumps for next year, despite doomsday predictions from Democrats that the Trump administration’s changes to Obamacare would bring massive increases in 2019. That could make it a challenge for Democrats looking to weaponize rising premiums heading into the midterm elections.

Administration officials confirmed the premium trend last Friday, when they indicated that proposed 2019 rates for the 38 states using healthcare.gov averaged a 5.4 percent increase—a number that may come down even further after review by state insurance commissioners. So much for that “sabotage.”

The messaging strategy once again illustrates the political peril of rooting for something—particularly legislation Democrats worked so hard to enact in the first place—to fail on someone else’s watch. Like officials accused of “talking down the economy” so they can benefit politically, Democrats face the unique task of trying to talk down their own creation, while blaming someone else for all its problems.

The Obamacare Exchanges’ Prolonged Malaise

While Obamacare hasn’t failed due to President Trump, it hasn’t succeeded much, either. Enrollment continues to fall, particularly for those who do not qualify for subsidies. Two years ago—long before Donald Trump had any power to “sabotage” Obamacare as president—Bill Clinton called Obamacare “the craziest thing in the world” for these unsubsidized persons, and their collective behavior demonstrates that fact.

A recent study from the liberal Kaiser Family Foundation concluded that, away from Obamacare exchanges, where individuals cannot receive insurance subsidies, enrollment fell by nearly 40 percent in just one year, from the first quarter of 2017 to the first quarter of this year. However, the rich subsidies provided to those who qualify for them—particularly those with incomes below 250 percent of the federal poverty level, who receive reduced cost-sharing as well—strongly encourage enrollment by this population, making it unlikely that the insurance exchanges will collapse on their own.

President Trump can talk all he wants about Obamacare imploding, but so long as the federal government props tens of billions of dollars into the exchanges, it probably won’t happen.

Good Reasons for Premium Moderation

Those premium subsidies, which cushion most low-income enrollees from the effects of premium increases, coupled with a lack of competition among insurers in large areas of the country, have allowed premiums to more-or-less stabilize, albeit at levels much of the unsubsidized population finds unaffordable. Think about it: If you have a monopoly, and a sizable population of individuals either desperate for coverage (i.e., the very sick) or heavily subsidized to buy your product, it shouldn’t take a rocket scientist to break even, much less turn a profit.

As a recent Wall Street Journal article notes, insurers spent the past several years ratcheting up premiums, for a variety of reasons: A sicker pool of enrollees than they expected when the exchanges started in 2014; a recognition that some insurers’ initial strategy of underpricing products to attract market share backfired; and the end of Obamacare’s “transitional” reinsurance and risk corridor programs, which expired in 2016.

While some carriers have adjusted 2019 premiums upward to reflect the elimination of the individual mandate penalty beginning in January, some had already “baked in” lax enforcement of the mandate into their rates for 2018. Some have long called the mandate too weak and ineffective to have much effect on Americans’ decision to buy coverage.

It Could Have Been Worse?

Liberals have started to make the argument that, but for the Trump administration’s so-called “sabotage” of insurance markets, premiums would fall instead of rise in 2019. (Some insurers have proposed premium reductions regardless.) The Brookings Institution recently released a paper claiming that in a “stable policy environment” without repeal of the mandate, or the impending regulatory changes regarding short-term insurance and Association Health Plans, premiums would fall by an average of approximately 4.3 percent.

But as the saying goes, “‘It could have been worse’ isn’t a great political bumper sticker.” Democrats tried to make this point regarding the economic “stimulus” bill they passed in 2009, after the infamous chart claiming unemployment would remain below 8 percent if the “stimulus” passed didn’t quite turn out as promised:

In 2011, House Minority Leader Nancy Pelosi (D-CA) tried to make the “It could have been worse” argument, claiming that unemployment would have risen to 15 percent without the “stimulus”:

But even she acknowledged the futility of giving such a message to the millions of people still lacking jobs at that point (to say nothing of the minor detail that studies reinforcing Pelosi’s point didn’t exist).

There’s No Need for a Bailout

While the apparent moderation of premium increases complicates Democrats’ political message, it also undermines the Republicans who spent the early part of this year pressing for an Obamacare bailout. Apart from the awful policy message it would have sent by making Obamacare’s exchanges “too big to fail,” such a measure would have depressed turnout among demoralized grassroots conservatives who want Congress to repeal Obamacare.

As it happens, most state markets didn’t need a bailout. That’s a good thing on multiple levels, because a “stability” bill passed this year would have had little effect on 2019 premiums anyway.

That said, if Democrats want to make political arguments about premiums in this year’s elections, maybe they can tell the American people where they can find the $2,500 in annual premium reductions that Barack Obama repeatedly promised would come from his health care law. Given the decade that has passed since Obama first made those claims without any hint of them coming true, trying to answer for that broken promise should keep Democrats preoccupied well past November.

This post was originally published at The Federalist.

How the Obama Administration Hid Facts to Pass Obamacare

Over the weekend, Politico ran a report about how a “Trump policy shop filters facts to fit his message.” The article cited several unnamed sources complaining about the office of the Assistant Secretary for Planning and Evaluation (ASPE) within the Department of Health and Human Services (HHS), and its allegedly politicized role within the current administration.

One of the article’s anonymous sources called ASPE’s conduct over the past 18 months “another example of how we’re moving to a post-fact era.” Richard Frank, a former Obama appointee and one of the few sources to speak on the record, said that he found the current administration’s “attack on the integrity and the culture of the office…disturbing.”

As a congressional staffer conducting oversight of the CLASS Act in 2011-12, I reviewed thousands of pages of e-mails and documents from the months leading up to Obamacare’s passage. Those records strongly suggest that ASPE officials, including Frank, withheld material facts from Congress and the public about CLASS’s unsustainability, because full and prompt disclosure could have jeopardized Obamacare’s chances of passage.

About the CLASS Act ‘Ponzi scheme’

The Community Living Assistance Services and Supports program, or CLASS for short, intended to provide a voluntary insurance benefit for long-term care. Included as part of Obamacare, the program never got off the ground. In October 2011, HHS concluded it could not implement the program in an actuarially sound manner; Congress repealed the program entirely as part of the “fiscal cliff” deal enacted into law in the early days of 2013.

CLASS’s prime structural problem closely resembled that of the Obamacare exchanges—too many sick people, and not enough healthy ones. Disability lobbyists strongly supported the CLASS Act, hoping that it would provide financial support to individuals with disabilities. However, its voluntary nature meant that the more people already with disabilities enrolled and qualified for benefits, the higher premiums would rise, thereby discouraging healthy people from signing up.

Moreover, although actuarially questionable in the long-term, CLASS’s structure provided short-term fiscal benefits that aided Obamacare’s passage. Because CLASS required a five-year waiting period to collect benefits, the program would generate revenue early in its lifespan—and thus in the ten-year window budget analysts would use to score Obamacare—even if it could not maintain balance over a longer, 75-year timeframe.

This dynamic led the Senate Budget Committee Chairman Kent Conrad (D-ND), to dub CLASS “a Ponzi scheme of the first order, the kind of thing Bernie Madoff would have been proud of.”

Internal Concerns Minimized in Public

A report I helped draft, which several congressional offices released in September 2011—weeks before HHS concluded that program implementation would not go forward—highlighted concerns raised within the department during the debate on Obamacare about CLASS’ unsustainable nature. For instance, in September 2009, one set of talking points prepared by ASPE indicated that, even after changes made by Congress, CLASS “is still likely to create severe adverse selection problems”—i.e., too many sick people would enroll to make the program sustainable.

Frank told me that, during one public speech in October 2009, “I spent about half my time setting out the problems with CLASS that needed to be fixed.” He did indeed highlight some of the actuarial challenges the CLASS program faced. But Frank’s remarks, at a Kaiser Family Foundation event, closed thusly:

We’ve, in the department, have modeled this extensively, perhaps more extensively than anybody would want to hear about [laughter] and we’re entirely persuaded that reasonable premiums, solid participation rates, and financial solvency over the 75-year period can be maintained. So it is, on this basis, that the Administration supports it that the bill continues to sort of meet the standards of being able to stand on its own financial feet. Thanks.

Frank told me over the weekend that his comments “came at the end of my explaining that we were in the process of addressing those issues” (emphasis mine). But Frank actually said that the Obama administration was “entirely persuaded” of CLASS’ solvency, which gives the impression not that the department had begun a process of addressing those issues, but had already resolved them.

Frank’s public comments notwithstanding, ASPE had far from resolved the actuarial problems plaguing CLASS. Two days after his speech, one of Frank’s employees sent around an internal e-mail suggesting that the CLASS Act “seems like a recipe for disaster.”

But the ‘Fixes’ Fall Short

In response to these new analyses, HHS and ASPE came up with a package of technical fixes designed to make the CLASS program actuarially sound. One section of those fixes noted that “it is possible the authority in the bill to modify premiums will not be sufficient to ensure the program is sustainable.”

However, the proposed changes came too late:

  • No changes to the CLASS Act made it into the final version of Obamacare, which then-Majority Leader Harry Reid (D-NV) filed in the Senate on December 19, 2009.
  • The election of Scott Brown (R-MA) to replace the late Kennedy in January 2010 prevented Democrats from fixing the CLASS Act through a House-Senate conference committee, as Brown had pledged to be the “41st Republican” in the Senate who would prevent a conference report from receiving a final vote.
  • While the House and Senate could (and did) pass some changes to Obamacare on a party-line vote through the budget reconciliation process, the Senate’s “Byrd rule” on inclusion of incidental matters in a budget reconciliation bill prevented them from addressing CLASS.

The White House’s own health care proposal, released in February 2010, discussed “a series of changes to the Senate bill to improve the CLASS program’s financial stability and ensure its long-run solvency.” But as HHS Secretary Kathleen Sebelius later testified before the Senate Finance Committee, the “Byrd rule” procedures for budget reconciliation meant that those changes never saw the light of day—and could not make it into law.

Kinda Looks Like a Conspiracy of Silence

By the early months of 2010, officials at ASPE knew they had a program that they could not fix legislatively, and could fail as a result. Yet at no point between January 2010, when ASPE proposed its package of technical changes, through Obamacare’s enactment, did anyone within the administration admit that the program could prove impossible to implement.

Over the weekend, I asked Frank about this silence. He responded that “when the reconciliation package was shelved”—which I take to mean that the CLASS changes did not make it into the reconciliation bill, which did pass—“we began working on regulatory remedies that might address the flaws in CLASS.” However, from the outset some of Frank’s own employees believed those changes might prove insufficient to make the program actuarially sound, as it later proved.

To put it another way: In February 2011, Sebelius testified before the Senate Finance Committee that “the snapshot [of CLASS] in the bill, I would absolutely agree, is totally unsustainable.” She, Frank, and others within the administration had known this fact one year previously: They just hoped they could arrive at a package of regulatory changes that would overcome the law’s structural flaws.

But did anyone within the administration disclose that CLASS was “totally unsustainable” as written back in February 2010? No, because doing so could have jeopardized Obamacare’s chances of passage. The law passed the House on a narrow 219-212 margin.

If HHS had publicly conceded that CLASS could become a “zombie” program—one that they could not fix, but could not remove—it would have caused a political firestorm, and raised broader questions about the bill’s fiscal integrity that could have prevented its enactment.

Was Obamacare Sold on a Lie?

Conservatives have pilloried Obamacare for the many false statements used to sell the law, from the infamous “Lie of the Year” that “If you like your plan, you can keep it” to the repeated promises about premium reductions, Barack Obama’s “firm pledge” to avoid middle-class tax increases, and on and on.

But there are sins of both commission and omission, and the CLASS Act falls into the latter category. Regardless of whether one uses the loaded term “lie” to characterize the sequence of events described above, the public statements by HHS officials surrounding the program prior to Obamacare’s enactment fell short of the full and unvarnished truth, both as they knew it at the time, and as events later proved.

Politico can write all it wants about ASPE under Trump “filter[ing] facts to fit his message.” But ASPE’s prior failure to disclose the full scope of problems the CLASS Act faced represents a textbook example of a bureaucracy hiding inconvenient truths to enact its agenda. If anonymous HHS bureaucrats now wish to attack a “post-fact era” under Trump, they should start by taking a hard look in the mirror at what they did under President Obama to enact Obamacare.

This post was originally published at The Federalist.

Liberal Think-Tank Admits Obamacare’s Failures

Once again, the movement to expand government-run health care continues apace. No sooner had one think tank published a paper calling for the return of an individual mandate at the federal level than the liberal Commonwealth Fund published a paper, released on Friday, calling for states to impose their own Obamacare-style mandates at the state level.

However, the paper proves most interesting for what it tacitly admits. Over time, Commonwealth believes that more and more people will purchase coverage solely due to a government order—because health costs and premiums will continue to rise. Because Obamacare failed to control health costs, more and more individuals will purchase health coverage only under the threat of government-imposed taxation. That’s Commonwealth’s version of health “reform.”

Late Wednesday evening, the House of Representatives adopted the amendment by a 226-189 vote. Next week, the Senate could take up its version of the District of Columbia appropriations bill. If a similar amendment passes on the Senate floor, then the final version of the appropriations measure likely will contain the defunding language—thus preventing individuals who do not buy “government-approved” health coverage from having their property seized by DC authorities.

Longer-Term Effects of the Mandate

As to the Commonwealth report itself: It concludes that enacting an individual mandate in all 50 states would increase insurance coverage by roughly 3.9 million in 2019. Nearly half of those individuals (1.7 million) would comprise individuals purchasing unsubsidized exchange coverage—the people for whom Bill Clinton said Obamacare was the “craziest thing in the world,” because they don’t receive subsidies (which might explain why they won’t purchase insurance unless the government taxes them for not doing so). Individuals enrolling in Medicaid (600,000), subsidized exchange policies (1.1 million), and employer plans (450,000) comprise the rest of the coverage gains.

Particularly noteworthy however: In 2022—just four years from now—the mandate will lead 7.5 million people to obtain health coverage, or nearly twice the 2019 total. Commonwealth explains the reasoning:

As health care costs get more expensive relative to incomes over time, fewer people tend to purchase insurance and the number of uninsured rises. However, with an individual mandate in place, the effect of health care cost growth is lessened because more people hold on to their insurance to comply with the mandate. As a result, the effect of the individual mandate on reducing the number of people without insurance increases over time in percentage terms.

Wasn’t Obamacare Supposed to Reduce Health Costs?

The obvious question: Why would health care costs continue to “get more expensive relative to income over time”? Wasn’t Obamacare supposed to fix all that?

Recall that during his 2008 campaign, Barack Obama repeatedly promised that his health plan would cut families’ premiums by $2,500 per year. Commonwealth provided some of the intellectual firepower behind the pledge, releasing in 2007 a report that it claimed could save $1.5 trillion in health expenditures over 10 years. Many of that report’s proposals, although not all (limiting Medicare’s coverage of expensive drugs and treatments being an obvious exception), made their way into the measure that became Obamacare.

In 2013, Commonwealth upped the ante, releasing another report whose recommendations promised $2 trillion in lower health spending over a decade. Yet Commonwealth’s report released Friday admits that health costs in 2022 will continue to rise faster than income, resulting in more and more people feeling squeezed to afford coverage. At this rate, Commonwealth should stop putting out reports talking about all the health costs we could save. Our country can’t afford them.

The Left’s Arrogant Conceit

I’ll give the last word to—of all people—Barack Obama. In 2010, he talked about how he didn’t want to “give the keys back” to people who “didn’t know how to drive.” The Commonwealth report makes plain that despite all the intrusions on freedom Obamacare included, it didn’t accomplish its supposed goal of making health care more affordable. (And no, using government to re-distribute money doesn’t qualify as making the underlying cost of care more “affordable.”)

Given that dynamic, who would want to give people like the researchers at Commonwealth even more control over the health care system? The question should answer itself.

This post was originally published at The Federalist.

Congress Needs to Eat Its Spinach

The tax bill’s effective repeal of Obamacare’s individual mandate briefly reprised the “broccoli mandate”—whether, as Justice Antonin Scalia asked during Supreme Court oral arguments on Obamacare in March 2012, the federal government could compel individuals to purchase certain foods.

But instead of broccoli, spinach might serve as a more apt analogy, for the way the tax bill came to repeal the mandate demonstrates the ways Congress refuses to eat its policy spinach, following the path of least resistance in making easy choices rather than tough ones.

Avoiding Tough Choices on Taxes

Cotton said the “looks of hesitance and outright terror on the faces of my colleagues” convinced him that Republicans had to repeal the mandate as part of the tax package. Translation: Republicans thought it easier to obtain revenue from repealing the mandate than to weed out the tax code of popular tax breaks—the point of tax reform, which Republicans initially sold as a way to simplify the Internal Revenue Code.

Remember how Speaker of the House Paul Ryan (R-WI) sold tax reform as a way to allow Americans to complete their taxes on a postcard? That type of reform didn’t happen, because enacting that reform would have involved eliminating many more popular deductions than the final tax bill ended.

Revenue Neutrality and Spending

Another key point in the tax debate surrounded the issue of revenue neutrality. The “Better Way” platform released by House Republicans last year not only “envision[ed] tax reform that is revenue neutral,” it included a very clear standard for that metric: “House Republicans measure revenue neutrality by reference to a ‘current policy baseline’—i.e., achieving a level of federal revenues that is approximately $400 billion less over the ten-year [budgetary] window than the current law baseline.”

Congress may have valid justifications for reducing revenues, such as to increase economic growth, or to shrink the size of government. But the fact remains that, when faced with enacting a supposed “parade of horribles” to achieve a revenue-neutral tax bill, Congress chose to change the nature of the bill rather than to make the tough choices needed to achieve its original benchmark.

Likewise on spending reductions arising from the tax bill. Because the tax measure increased the federal deficit, the Statutory Pay-as-You-Go (PAYGO) act would normally require commensurate spending cuts offsetting the revenue loss. However, rather than allow these reductions to go into effect—or replacing the proverbial hatchet of automatic cuts with more targeted spending reductions—both Republicans and Democrats voted to exempt the tax bill from the PAYGO law, ducking another difficult choice.

Repeal Only Unpopular Parts of Obamacare

Repealing only Obamacare’s individual mandate—one of the most loathed parts of the 2010 health care law—echoes a problem Republicans faced during the “repeal-and-replace” debate last year: Many want to retain popular elements of the law, while repealing its unpopular features. Witness Republicans’ statements of support for keeping the status quo on pre-existing condition exclusions.

By repealing the unpopular parts of Obamacare but retaining the popular parts, Congress may have created an incoherent, and potentially unstable, policy that results in premium increases, infusions of taxpayer cash to “stabilize” markets, or both. Senate Republican leaders have already proposed the latter, precisely because they fear the political effects if the former occur.

Therein lies the problem with the congressional strategy: Avoiding tough choices generally only postpones them for a time—not forever. If insurers decide to leave markets after the mandate’s repeal takes effect in 2019, Congress will have to fix a problem it helped create. Likewise attempts by today’s Congress to reduce taxes, and not reduce spending, in shifting the blame to future generations.

At some point those bills will come due, so Congress might want to consider actually making some tough choices now, rather than creating even tougher choices in years to come.

This post was originally published at The Federalist.

Repealing Obamacare Is about the Regulations, Stupid

As Congress considers repealing Obamacare’s individual mandate as part of tax reform, some conservatives believe doing so would “fulfill [Republicans’] promise to the American people” by “return[ing] personal decisions about health care choices to patients.”

In reality, however, repealing only the mandate would accomplish little of the former, and virtually none of the latter. For this conservative, at least, the answer to what would fulfill Republicans’ promise echoes James Carville: At its core, an Obamacare repeal is about the regulations, stupid.

We Don’t Want to Own the Consequences of Our Policies

In 2009, Democrats probably didn’t want to subject themselves to attacks for spending trillions of dollars on new entitlements. They didn’t want to take the political hit for raising taxes and reducing Medicare spending to pay for those entitlements. Also, Democrats—not least Barack “Mandate to Buy a House” Obama, who ran against the mandate in the 2008 presidential primaries—certainly didn’t want to require individuals to purchase government-mandated insurance.

But they realized that imposing unprecedented federal regulations on insurers would raise premiums, necessitating requirements on employers to offer, and individuals to purchase, that costlier coverage, higher spending on subsidies to make that more expensive coverage “affordable,” and new taxes to pay for that higher spending.

By contrast, repealing only the mandate would do nothing to restore health-care freedom, or “return health care choices to patients.” While Americans would not face taxes for not buying coverage they may not want, need, or afford, they would have no greater or lesser ability to buy coverage they do want and can afford than they did in the first place, because all of Obamacare’s regulations would remain in place.

But neither proposal undermined Obamacare’s central principle: That Washington can and should impose myriad regulations on insurers. In fact, by creating an opt-out process at the federal level, both bills effectively reinforced Washington’s control of health insurance.

Both Parties Want to Control Americans’ Health Choices

It’s worth emphasizing the unprecedented nature of the change Obamacare wrought. Since 1947’s McCarran-Ferguson Act, which devolved regulation of insurance to states, the federal government made few and minimal intrusions into health insurance markets—until Obamacare. Yet purportedly conservative lawmakers have not pushed back on this breach of Tenth Amendment principles, with Washington intruding into states’ business.

For instance, Sen. Lindsey Graham (R-SC) claimed the proposal he and Sen. Bill Cassidy (R-LA) introduced would “empower each individual state to choose the path that works best for them.” Unfortunately, however, that plan would keep in place federal dictates regarding pre-existing conditions—the most costly of all the Obamacare mandates. There are other, arguably better, ways to cover individuals with pre-existing conditions than a federally imposed requirement, but by keeping control in Washington, the Graham-Cassidy plan would effectively preclude states from exploring them.

Two years ago, for procedural and tactical reasons, Republicans chose not to attach provisions repealing Obamacare’s insurance regulations to the repeal bill that went to President Obama’s desk. If they fail to repeal—not waive, or opt-out, but repeal—the regulations this time around, they will undermine federalism and fail to meet their promise to eradicate Obamacare “root and branch.”

For both the Tenth Amendment and the American people looking for relief from Obamacare’s spiraling costs, the stakes couldn’t be higher.

This post was originally published at The Federalist.

How Barack Obama “Sabotaged” Obamacare

To paraphrase Mark Twain, rumors of the demise of bipartisanship in health care are greatly exaggerated. While Republicans and Democrats claim different principles on health policy, their actions indicate a surprising level of agreement.

To wit: Both President Trump and President Obama took action to prevent Americans from suffering dramatic premium spikes due to Obamacare’s insurance mandates. Yet somehow the Left’s indignation over Trump’s alleged “sabotage,” in the form of his recent executive order on health care, has not extended to Obama’s actions four years ago.

It’s Cool Only If Obama Does It?

Following its initial decision to permit non-compliant plans, the Obama administration repeatedly extended these “transitional” arrangements. In March 2014, after the insurance exchanges began to function more smoothly, the Centers for Medicare and Medicaid Services extended the non-compliant plans through October 2016, followed by a further extension through October 2017. Upon taking office earlier this year, the Trump administration extended the non-compliant plans a fourth time, through December 2018.

On no fewer than three separate occasions, then, the Obama administration expressly permitted Americans to hold policies that did not comply with Obamacare’s new regulatory regime—its prohibition on pre-existing condition restrictions, its essential health benefits requirements, and its myriad other new mandated subsidies. In perpetuating these non-compliant plans, the Obama administration’s actions parallel President Trump’s recent executive order, which among other proposals would expand access to short-term insurance policies.

As with the plans that Obama thrice permitted, short-term insurance policies need not adhere to the regulations Obamacare permitted, from the pre-existing conditions requirements to age rating bands to mandatory benefits like maternity care. Short-term plans, like the non-compliant plans the Obama administration permitted, can provide a much more affordable alternative to Obamacare-compliant coverage, for which premiums have more than doubled since 2013.

Actually, Trump’s Actions Are Better than Obama’s

Conversely, Obamacare expressly exempts coverage of less than one year in duration from its regulatory requirements, allowing for lawful action by the Trump administration in this sphere. Expanding access to short-term insurance plans of up to 364 days in length, while ending the existing non-compliant plans arrangement the Obama administration started, would create more affordable coverage options, while ceasing President Obama’s sabotage of the rule of law.

Critics claim that expanding access to short-term insurance coverage would bifurcate insurance markets, thereby “sabotaging” exchange regimes. But in some states, President Obama’s actions regarding non-compliant plans undermined the exchanges well before Trump ever took office.

For instance, in 2016 90,000 Iowa residents retained non-compliant plans—compared to only 55,000 enrolled in the Obamacare-compliant exchange coverage—and the latter endured higher premium increases than the former. Liberals attacking Trump over reports he personally intervened in Iowa’s application for a federal waiver to change its insurance markets fail to recognize that executive actions by Obama, not Trump, created the conditions where Hawkeye State officials felt the need to apply for a waiver in the first place.

This post was originally published at The Federalist.

CBO, the Individual Mandate, and Tax Reform

This week, word that the Congressional Budget Office (CBO) was preparing to re-estimate the fiscal impact of repealing the individual mandate prompted consternation among Republican ranks. Sen. Mike Lee (R-UT) claimed the budget office was playing a game of “Calvinball,” constantly revising its estimates and making up rules a la the comic strip Calvin and Hobbes.

CBO is reassessing the effectiveness of the mandate in light of research published earlier this year by a team of researchers including Jonathan Gruber—yes, that Jonathan Gruber—that examined the effectiveness of the Obamacare mandate in the law’s first few years.

Consternation about CBO aside, the debate speaks to larger concerns about the effects on both health policy and tax policy of repealing the mandate.

Inconvenient Truths are Truths Nonetheless

Lee will find no argument from this observer about the need for CBO to increase its transparency. As previously noted, I’ve seen it up close and personal. Former CBO Director Doug Elmendorf repeatedly failed to disclose to Congress material omissions in CBO’s analysis of Obamacare’s CLASS Act—omissions that could have led the budget office to conclude that the program was financially unstable before Congress enacted Obamacare (with the CLASS Act included) into law.

That said, some people on the Right apparently think that difficulties with CBO allow them simply to ignore or dismiss its opinions. Witness this response back in July, when I noted that CBO believed one version of the Senate “repeal-and-replace” bill would raise premiums by 20 percent in its first few years:

The reconciliation bill being used as the vehicle for tax reform does not include reconciliation instructions to the House Energy and Commerce and Senate HELP Committees, the primary committees of jurisdiction over Obamacare’s regulatory regime. Because the tax reform bill cannot repeal, waive, or otherwise alter any of the Obamacare regulations, repealing the mandate as part of tax reform will definitely raise premiums.

Do Republicans Want to Repeal Obamacare’s Regulations?

This criticism shouldn’t apply to Lee, who fought hard to repeal as much of the Obamacare regulations as possible during the budget reconciliation debate in July. However, many other Republicans have demonstrated a significant lack of policy forthrightness on the issue of Obamacare’s regulatory regime. For many reasons, the claim that Republicans can “repeal” Obamacare while retaining the status quo on pre-existing conditions presents an inherent policy contradiction.

Health Policy Is Taking a Back Seat to Tax Policy

Whatever the merits of using the revenue from the mandate’s repeal to help the tax reform effort, Republicans did not campaign for four straight election cycles on enacting tax reform. They campaigned on repealing Obamacare.

From a health policy perspective, enacting a “solution” that involves repealing the mandate and walking away from the issue would represent a bad outcome—one measurably worse than the status quo. Insurance costs—the health care priority that Americans care most about—would rise, only alienating voters who objected to Democrats not delivering on the $2,500 per-family reduction in premiums Barack Obama promised in 2008.

Done right, tax reform can rise and pass on its own merits. But using repeal of the mandate to pass tax reform—which would lead to another round of high premium increases in (you guessed it!) the fall of 2018—represents a game of policy and political Russian roulette that Congress should not even contemplate.

This post was originally published at The Federalist.

Elizabeth Warren Promises to “Defend” Obamacare While Sponsoring a Bill to Repeal It

Note to Politifact: We’ve found your “Lie of the Year” for 2021. Or 2025. Or the next year Democrats take the levers of power in Washington. We submit a claim made Wednesday by one Elizabeth Warren (D-Mass.): “We will not back down in our protection of the Affordable Care Act. We will defend it at every turn.”

She made that statement at a press conference announcing her support for Sen. Bernie Sanders’ single-payer health care bill—which, if one searches for “Affordable Care Act,” will uncover the following section:

SEC. 902. SUNSET OF PROVISIONS RELATED TO THE STATE EXCHANGES.

Effective on the date described in section 106, the Federal and State Exchanges established pursuant to title I of the Patient Protection and Affordable Care Act (Public Law 111–148) shall terminate, and any other provision of law that relies upon participation in or enrollment through such an Exchange, including such provisions of the Internal Revenue Code of 1986, shall cease to have force or effect.

Oops.

If You Like Your Obamacare, Too Bad

Perhaps Warren should learn a lesson from Barack Obama, who in 2013 was forced to apologize for what Politifact then called the “Lie of the Year”: “if you like your plan, you can keep it.” Millions of people received cancellation notices that year, because their plans did not comply with Obamacare’s myriad new mandates and regulations on insurance.

Four years later, many people now on Obamacare can’t keep their plans—because, like me last year, they have seen their plans cancelled. But some—maybe not many, but some—Obamacare enrollees might actually like their current coverage.

Sanders’ bill tells each and every one of them, “If you like your Obamacare, too bad,” even as Warren claims she will “defend [the law] at every turn.” Somewhere, George “Those Who Cannot Remember the Past Are Condemned to Repeat It” Santayana is smiling.

Liberals Can’t Help Deceiving People

But perhaps it isn’t surprising to see Warren throw out such a whopper, claiming to defend Obamacare even as she signed on to a bill to destroy it. Suffice it to say the accuracy of her biography has undergone scrutiny over the years.

But more to the point, look at the way liberals sold Obamacare. Obama said if you like your plan, you can keep it. He also said that if you like your doctor you can keep your doctor. And that his plan would cut premiums by $2,500 per year for the average family. And that he wouldn’t raise taxes on the middle class—“not any of your taxes”—to pay for it. How did all of those promises work out?

In short, liberals can’t help themselves. To use liberals’ own vernacular about “repeal-and replace” efforts, they can’t just stop at taking away health care from 178.4 million people with employer-sponsored coverage. No, they want to take away health care from millions of people in the Obamacare exchanges too.

Some of them think Americans will want the “better” health care liberals will provide in their utopian socialist paradise—that the American people won’t mind giving up their current health plan, and don’t care about (or won’t even notice) people like Warren promising one thing and doing another.

Hey, Reporters…?

Given all the stories from reporters accusing Health and Human Services Secretary Tom Price of lying about Republicans’ “repeal-and-replace” measure, I naturally assume that journalists have already beaten down Warren’s door asking her about her comments Wednesday. Did she not read the bill she just co-sponsored? How can she claim to “defend” a law when she just endorsed a bill that—by its own wording—will “terminate” one of its main sources of coverage? Isn’t that lying to the American people?

I also assume that, just as they did stories about the “faces of Obamacare” during the repeal debate, those same reporters will go back to individuals with coverage under the exchanges and ask how those people might feel about the prospect of having their plans taken away by Sanders’ bill.

At least one group can truly celebrate the Sanders plan: Politifact. Judging from Warren’s start, and given the number of whoppers used to sell the last health-care takeover, they and their fellow fact checkers will have their hands full for some time to come.

This post was originally published at The Federalist.