Democrats Raid Medicare to Pay for Obamacare (Again!)

As Ronald Reagan would say, “There they go again.” A decade after Democrats raided Medicare by more than half a trillion dollars to fund Obamacare, House Speaker Nancy Pelosi (D-Calif.) and her Democratic colleagues recently introduced new Obamacare legislation that would raid Medicare by nearly another half-trillion dollars.

Sadly, the House plans to vote on this legislative package before the Independence Day holiday. Lowering spending in one unsustainable entitlement to fund another represents the height of fiscal irresponsibility. For Democrats, however, it looks like par for the course.

Obamacare on Steroids

Democrats have titled their bill the Obamacare “enhancement” act — and for good reason, because it would effectively put the law on quite the figurative steroids. The bill would stymie recent efforts by the Trump administration to offer more insurance options to consumers, such as short-term, limited-duration insurance and association health plans.

Instead, it would make skyrocketing premiums “affordable” by dedicating more taxpayer dollars towards Obamacare exchange subsidies, while also directing $10 billion per year to insurance companies via a new — and permanent — federal bailout fund.

The legislation would also balloon Obamacare’s Medicaid expansion to able-bodied Americans. It would require states to keep individuals on the rolls for 12 months, allowing affluent individuals to remain in this “low-income” program. The income cap on coverage for children would also be eliminated, permitting states to cover children of millionaires while receiving federal dollars for doing so if they choose.

At a time evidence already suggests significant waste and fraud takes place among individuals receiving Medicaid coverage, the Pelosi legislation would add to the ever-increasing budget woes of numerous states by forcing them to keep ineligible individuals on the rolls.

Socialist-Style Price Controls

How would Democrats fund all this new spending? From Medicare.

The Obamacare “enhancement” legislation includes drug pricing provisions that the House of Representatives passed last December. The provisions would require drug companies to “negotiate” prices with the Department of Health and Human Services (HHS),  which would effectively dictate prices to drug companies based on benchmarks laid out in the bill. Companies that do not “negotiate” would face excise taxes that could cause the manufacturer to lose money on every drug it sells in the United States.

The Congressional Budget Office confirmed back in December that these “negotiation” provisions would lead to the development of fewer drugs, as companies invest less in research and development. The CBO also said, however, that the blunt price controls would reduce Medicare and Medicaid spending. So Democrats used these price controls to fund their recent Obamacare expansion bill.

Raiding Medicare (Again)

According to CBO, the vast majority of the savings from drug pricing — a total of $448.2 billion over ten years, to be exact — used to fund the Obamacare bill comes from Medicare. That the Democrats are effectively raiding Medicare to expand entitlements for younger Americans makes the Obamacare “enhancement” legislation all the more odious and irresponsible, though, at this point, we really shouldn’t be surprised.

We’ve seen this act before. Indeed, the Obama administration spent years trying to justify the raid on Medicare. Kathleen Sebelius, then the HHS secretary, testified before Congress that provisions in the law would “both” extend Medicare’s solvency and pay for Obamacare. This is a position that defies both logic as well as common sense.

As it stands, Medicare has already become functionally insolvent. The year before Obamacare’s passage, the program’s trustees projected the Hospital Insurance Trust Fund would run out of money to pay all its bills in 2017 — three years ago. The Obamacare double-counting gimmicks that Sebelius testified about may appear to have extended the program’s solvency, but if only on paper. But the true cost of these things cannot remain hidden forever. According to current projections, even the funds from these phony solutions will run out by 2026.

Doing the Wrong Thing About Medicare’s Insolvency

Yet what would Pelosi and House Democrats do about Medicare’s looming insolvency? Not just nothing — worse than nothing. Rather than using the savings from their socialistic price controls to make Medicare solvent, they would take that money and throw it at health insurers to prop up Obamacare. As shocking as it may seem to some, this behavior echoes Pelosi’s 2011 interview with CNBC, when she bragged about how Democrats “took half a trillion dollars out of Medicare” to pay for Obamacare.

The Obamacare “enhancement” demonstrates how Pelosi and her fellow Democrats don’t care about fiscal responsibility or protecting America’s seniors. Instead, they view Medicare just as they did in 2010: A slush fund to raid on a whim as part of their effort to expand government-run health care at any cost.

This post was originally published at The Federalist.

Obamacare’s Terrible, Horrible, No Good, Very Bad Week

It’s now been seven days since Obamacare’s exchanges officially launched. In reality, however, the “launch” has more closely resembled a blooper reel of rocket failures than a smooth takeoff. Here is but a sampling of the problems, failures, and glitches that have turned the exchanges into a comedy of errors:

TUESDAY

  • Some state exchanges delay their opening to address technical problems; Maryland’s exchange postpones its launch by four hours.
  • When the federally run exchanges in 36 states open, they are immediately overwhelmed by massive volume and technical errors. One MSNBC reporter spends more than half an hour trying in vain to establish an account and compare insurance options.
  • Reuters reports that in total, 47 state exchange websites “turned up frequent error messages.”

WEDNESDAY

  • The Los Angeles Times reports that California’s state exchange vastly overstated its first-day web traffic. Instead of receiving 5 million hits, the exchange actually received 645,000 visitors.
  • The Washington Examiner notes that new co-operative health insurance programs funded by billions of Obamacare dollars featured “sites [that] were difficult to navigate and provided little understandable insurance information on topics like eligibility, costs, and benefits.”

THURSDAY

  • The Washington Post’s Sarah Kliff writes a story, illustrated with a picture of a unicorn, asking whether anyone has actually purchased health insurance on from the federally run exchange—or whether these individuals are just “mythical creature[s].”
  • An Arizona television station profiles a leukemia survivor who “just got a letter from his insurance carrier saying as of January 1, he would be dropped from coverage because of new regulations under Obamacare. His doctor at the Mayo Clinic may be gone as well.”

FRIDAY

  • Liberal blogger Ezra Klein admits that the Administration “did a terrible disservice by building a website that, four days into launch, is still unusable for most Americans.”
  • CNBC reports that “as few as 1 in 100 applications on the federal exchange contains enough information to enroll the applicant in a plan.”
  • One of the few individuals claiming to have enrolled in a federally run insurance exchange admits that “he has not in fact enrolled in a health-care plan.”
  • The Department of Health and Human Services (HHS) announces it will take major portions of its website offline over the weekend for repairs and major upgrades.

SATURDAY

  • Reuters interviews IT experts who believe the exchange contains major design flaws: “so much traffic was going back and forth between [exchange] users’ computers and the server hosting the government website, it was as if the system was attacking itself.”
  • The San Jose Mercury News profiles people suffering premium increases due to Obamacare—including one whose premiums may increase by nearly $10,000 for his family of four.

SUNDAY

  • Treasury Secretary Jack Lew refuses to tell Fox News’s Chris Wallace how many people have, or have not, enrolled in coverage.
  • The Charlotte Observer profiles one Charlotte family, whose premiums could rise from $228 per month to $1,208 per month—a 430 percent increase—because their current health insurance does not meet Obamacare’s standards.
  • The Wall Street Journal quotes technology consultants as saying that the federal exchange site “appeared to be built on a sloppy software foundation,” and that “basic Web-efficiency techniques weren’t used…clog[ging] the website’s plumbing.”

MONDAY

  • Politico finds many individuals are resorting to paper applications for coverage, due to the continued problems with online exchanges.
  • The New York Post reports that navigators were entirely unprepared for the launch of Obamacare’s exchanges last week; many staffers working for purported navigators seemed unaware the program existed.
  • HHS announces it is taking the exchange website offline again for more repairs.

Given this track record, some may find the words of Saturday’s Reuters piece prescient: “Five outside technology experts interviewed by Reuters…say they believe flaws in system architecture, not traffic alone, contributed to the problems” with the exchanges.

That quote is an apt metaphor for the entire law itself. Just as the exchanges’ problems stem from fundamental “flaws in system architecture,” so do these “glitches” prove that the entire law is unworkable—not just parts of the measure. It’s why Congress should act now to save America from this unpopular, unfair, and unworkable law.

This post was originally published at The Daily Signal.

The REAL Truth about Obamacare

Secretary Sebelius has an op-ed in this morning’s Washington Post entitled “The Truth about Obamacare.”  Unfortunately, the op-ed makes several statements about Obamacare that warrant fact-checking and rebuttal.  Herewith, decoded from the Administration’s spin, the REAL truth about Obamacare:

Claim #1: “The Supreme Court decision upholding the Affordable Care Act was a turning point in the health-care debate, a chance to stop refighting old political battles…”

This claim misleads in two key respects.  First, as we pointed out the day of the ruling, the Supreme Court upheld some of the law – and overturned other portions.  The Court explicitly ruled that “The Affordable Care Act is constitutional in part and unconstitutional in part.”   And in its ruling, the Court threw more than half of the law’s coverage expansions into doubt – because it said Obamacare was unconstitutionally coercive on the part of the states by forcing them to expand their Medicaid programs.

Second, even as the Court upheld the individual mandate under the taxing power, President Obama and the Administration seem pathologically unwilling to concede that the mandate is a tax increase – “fighting old political battles” by re-litigating the basis for the Court’s decision in a vain attempt to avoid an admission that Obamacare broke the President’s promise not to raise taxes on the middle class.  If the President doesn’t want to “refight old political battles,” why won’t he publicly accept that the mandate is a multi-billion dollar tax increase?

Claim #2: “One claim is that the Affordable Care Act is driving up Americans’ health-care costs.  The facts tell a different story.”

The Department’s own actuary noted just last month that Obamacare will increase spending on health care by $478,000,000,000 in its first seven years alone.  That means that costs are going UP even as candidate Obama repeatedly promised that they would go DOWN.  While candidate Obama promised that premiums would go DOWN by $2,500, they actually have gone UP by nearly as much – from $12,680 in 2008 to $15,073 in 2011, according to Kaiser data.  And the Congressional Budget Office found that Obamacare’s new insurance mandates will raise premiums on the individual market by an additional $2,100 per family.  The Secretary’s attempt to argue that premium costs are going up by slightly less is a misleading attempt to define the President’s campaign promise downward and avoid admitting yet another broken campaign promise.

Claim #3: “Another falsehood repeated by opponents of the law is that it is putting a greater burden on small businesses.  Again, the facts show that the opposite is true.”

The facts show that between the time of enactment and last month, the Administration has released a whopping 12,825 pages of Obamacare-related regulations and notices in the Federal Register – and thousands more are likely on the way.  If the Secretary really believes her Department issuing thousands of pages of mandates, regulations, and diktats helps small business, perhaps she should look for opportunities to work in private industry herself – because she would quickly find out that thanks to Obamacare, the private sector is not “doing fine.”

Claim #4: “A third false attack recycled in recent weeks is that the Affordable Care Act cuts Medicare benefits.  In truth, Medicare is stronger than ever.”

That’s not what Nancy Pelosi said.  In an interview with CNBC’s Maria Bartiromo last November, Pelosi admitted that Democrats “took a half a trillion dollars out of Medicare in [Obamacare], the health care bill.”  That is EXACTLY what Obamacare did – it resulted in $500 billion in Medicare spending reductions, savings that in the words of the non-partisan Congressional Budget Office “will not enhance the ability of the government to pay for future Medicare benefits” – because those savings will be used to fund other unsustainable entitlements. 

In short, Secretary Sebelius is 0-for-4 on her claims when it comes to Obamacare being upheld, lowering costs, helping small business, and preserving Medicare.  It’s as good an argument as any for why the law should be repealed – because if these incomplete and misleading statements are the best arguments the Administration can put forward to support the law, there’s no reason not to repeal it.

What about the OTHER Buffett Rule…?

This afternoon, Democrats will engage in yet another politically motivated show vote, voting to raise taxes on job creators in the name of “fairness.”  Their ostensible motivation for doing so comes from a campaign engineered by Warren Buffett, hence the Buffett Rule moniker.

But even as Democrats invoke Warren Buffett’s name in promoting this afternoon’s tax increase, it’s also worth recalling that in March 2010, Mr. Buffett conducted an interview for CNBC where – asked about the health legislation that was then in the process of being rammed through Congress – he said the bill “really doesn’t attack the cost situation that much” and that “I don’t believe in insuring more people until you attack the cost aspect of this.”

In other words, there is not just a Buffett Rule on taxes – there’s a Buffett Rule on health care too, and it’s this: Obamacare’s coverage expansions should not start until the law is proven to have lowered health care spending levels.  But the real question is, why won’t Democrats accept this Buffett Rule as well?  After all, if President Obama is so confident the 2,700-page overhaul will be effective in lowering premiums by $2,500 per family as promised, why doesn’t he believe this condition will be easily met?  Conversely, if the President does NOT believe the law will be effective in slowing the growth of health spending, and will instead result in skyrocketing costs to federal taxpayers, what’s the point of even voting on today’s tax increase, seeing as how new spending on Obamacare will quickly overwhelm the $47 billion in supposed savings from this tax hike?

So this observer looks forward to Democrats embracing both Buffett Rules, and calling for Obamacare’s new spending on coverage expansions to be delayed unless and until the law has been proven to lower costs by $2,500 per family, as candidate Obama promised.  Because if Democrats wish to outsource their legislative agenda to Warren Buffett, they should be willing to outsource ALL of their agenda to him, and not just the bits and pieces they agree with – after all, “fairness” requires it.

Pelosi, Jobs, and Obamacare

Ahead of tomorrow morning’s jobs report, it’s worth pointing out another excerpt from former Speaker Pelosi’s interview with CNBC’s Maria Bartiromo last week.  At about 8:40 of the interview (transcript available here), Bartiromo asked an obvious and telling question about why Democrats were seemingly obsessed with passing a massive health care bill at a time the economy was struggling:  “Do you regret pushing health care as aggressively as you did instead of pushing a jobs package when you had the chance?  Maybe we wouldn’t be in this position right now if you had all the guns behind this jobs package as opposed to what you had with health care?”  Pelosi’s response was telling – she claimed that “the health care bill was part of a jobs bill,” and that “health care jobs are the fastest growing element of jobs in our country…That [Obamacare] is a jobs bill.”

Unfortunately, the former Speaker’s assertions that Obamacare was a “jobs bill” are contradictory and incoherent.  Pelosi’s claim at the White House health summit that Obamacare would “create 4 million jobs – 400,000 jobs almost immediately” was based on a Center for American Progress report that claimed the law would create jobs by slowing the growth of health care costs – i.e., by taking away those fast-growing health care jobs Pelosi said made Obamacare a “jobs bill.”  Anyone who wants to preserve American economic competitiveness – and ensure entitlements won’t bankrupt the government – should WANT health care growth to slow, even if it means some new health care jobs aren’t created. (Of course, Obamacare actually increases health care spending, thus undermining this argument, but that’s a trifling inconvenience.)

It’s also worth pointing out that earlier in the interview, Pelosi claimed that the companies who received Obamacare waivers were “very, very small companies” that “will not have a big impact on the economy of our country.”  So it’s worth listing some of the corporations that did in fact receive waivers – and thus by Pelosi’s own definition do not have a big impact on the American economy*:

  • McDonald’s
  • Dish Network
  • Aetna
  • Cracker Barrel
  • Jack in the Box
  • Foot Locker
  • Pepsi
  • Cigna
  • Jamba Juice
  • The Container Store
  • Crate and Barrel

As with Pelosi’s comments about employers dropping coverage and “taking money out of Medicare,” this portion of her CNBC interview revealed the fatal flaws behind Democrats’ economic policies.  Granted an overwhelming 60-vote majority at the time the economy was struggling, the party instead focused on passing an ideologically-motivated health care law.  Having done that, those same Democrats now can’t figure out whether the law will create jobs by controlling costs, or by exploding them in such a manner that more Americans will go into health occupations.  And Pelosi does not seem aware that big-name companies have a significant impact on American economic growth.  All in all, three reasons why the former Speaker is in fact the former Speaker.

 

* Many of the other waiver recipients were union-run multi-employer plans; does Speaker Pelosi therefore believe that unions do NOT have a big impact on the American economy…?

Pelosi Admits: “We Took Half a Trillion Dollars Out of Medicare”

This space and others have already reported on portions of former Speaker Pelosi’s interview with CNBC’s Maria Bartiromo on Friday afternoon, in which Pelosi talked about employers “emancipating” themselves from coverage.  But what has NOT been reported thus far is what Pelosi said during that same interview in response to a question on deficit reduction and entitlement reform.  When asked about Democrat ads and messages opposing entitlement reform, here’s how Pelosi responded (exchange starts at about 1:45 of the video):

You don’t have to have cuts in those initiatives in order to reduce cost there, and we have proven that we’re willing to make cuts in the cost to initiatives.  We took a half a trillion dollars out of Medicare in [Obamacare], the health care bill, already, and there’s certainly more opportunities for savings in that respect, but it shouldn’t be cuts to seniors.

That is EXACTLY what Obamacare did – it resulted in $500 billion in Medicare spending reductions, savings that in the words of the non-partisan Congressional Budget Office “will not enhance the ability of the government to pay for future Medicare benefits” – because those savings will be used to fund other unsustainable entitlements.  Note also that Pelosi sounded perfectly fine with “taking half a trillion dollars” out of Medicare to fund Obamacare’s new entitlements, only to turn around and oppose new “cuts to seniors” – an intellectually muddled position, at best.

Republicans support reforming Medicare – but to improve Medicare’s solvency, not to fund new government spending.  Five years ago, Republicans took action to reform Medicare by passing the Deficit Reduction Act, which saved $22 billion within the program – less than five percent of the total Democrats “took out of Medicare” last year.  Yet not a single Democrat voted for the legislation in either the House or the Senate.  Perhaps Speaker Pelosi’s comments explain why:  Because Republicans’ Medicare savings were not “taken out of Medicare” and used to fund new entitlement spending.

Last year, Speaker Pelosi famously said we had to pass the bill to find out what’s in it – and by admitting the law “took a half a trillion dollars out of Medicare,” it would appear that she took her own advice and found out what’s in Obamacare.  However, this damaging admission also brings to mind the old saw about a gaffe in Washington taking place when a politician speaks the truth.  In this case, the former Speaker’s gaffe and a half (trillion) reinforced the fundamental truth:  Republicans want to reform Medicare to make the program solvent, while Democrats will only “reform” Medicare if it leads to more unsustainable entitlement spending.

Pelosi Advises Employers to “Emancipate” Themselves from Coverage

In an interview with CNBC’s Maria Bartiromo on Friday afternoon, former Speaker Nancy Pelosi was asked about the ominous headlines surrounding Obamacare – the law’s many waivers to union plans, the recent CLASS Act debacle, and the survey from McKinsey (among MANY others) indicating employers will drop insurance coverage.  Pelosi responded by saying those headlines reflect only one side of the story, and that “on the other side, the way we see it is an innovative prevention-oriented way for businesses to be emancipated from health care costs because they have a way out or whatever works for them.”  (Exchange is at about 7:00 of the video).

Last February, then-Speaker Pelosi promised that the law “will create 4 million jobs – 400,000 jobs almost immediately.”  Apparently the former Speaker believes businesses should create these jobs by “emancipating” nearly 170 million workers and their families from their existing employer-based coverage.  While that would reduce business’ health care expenses, it would NOT “emancipate” the federal budget, raising spending on Obamacare insurance subsidies, and thus the deficit, by trillions.

In that context, it’s particularly ironic that Speaker Pelosi’s interview with CNBC was focused on deficit reduction and the supercommittee recommendations – because her suggestion would not only “emancipate” individuals from the coverage they have and like now, it would also shackle the federal budget will trillions of dollars of obligations for decades to come.

The Bigger Fiscal Problem: Greece or Medicare?

In case you hadn’t been glued to CNBC today, the stock market took another tumble, with both the Dow Jones Industrial Average and S&P 500 index closing at their lowest levels in more than a year.  One of the reasons for the sell-off came early in the day, when Greece announced it would not meet its deficit targets for the current fiscal year.  Greece is now projected to run a budget deficit of €18.69, or about $25 billion, this year, and a further deficit of €14.65 billion, or just under $20 billion.

Unfortunately, the Greek budget deficits – which have created a fiscal crisis in Europe, and the threat of financial contagion spreading to the American banking system – are dwarfed by the ongoing deficits facing the Medicare program.  The Congressional Budget Office projects that Medicare Part A will spend nearly $40 billion more than it takes in this fiscal year, and run a further deficit of nearly $30 billion next year.  The only thing keeping the Medicare program afloat currently are the paper IOUs in the Medicare trust fund, and the Congressional Budget Office projects that even those will be exhausted within the decade.

The fiscal turmoil in Greece and throughout Europe provides the prime example of why our entitlements like Medicare should be fixed NOW; after all, the President’s own chief of staff admitted that the program “will run out of money in five years if we don’t do something.”  But what has the President proposed to solve these looming problems?  A deficit plan that would actually INCREASE Medicare spending, unless the President finds another $300 billion to pay for a long-term physician payment “doc fix” that the White House magically assumes would be offset.

In other words, if you liked today’s stock market rout, just wait until global financial markets stop focusing on Greek and European debt and start scrutinizing America’s (in)ability to fund its own unsustainable entitlement programs.  Then the consequences of the President’s failure to lead on fiscal policy will come into full view.

The Buffett Rule Obama Doesn’t Want to Talk About

One of the headline elements – if not one of the largest elements – of the President’s deficit reduction plan is the so-called “Buffett Rule,” which will have the effect of raising taxes on American job creators.  The President has repeatedly invoked Mr. Buffett’s belief that taxes should rise for the wealthiest Americans – many of whom are small business owners – as a matter of “fairness.”

But it’s worth recalling that in March 2010, Mr. Buffett conducted an interview for CNBC where – asked about the health legislation that was then in the process of being rammed through Congress – he said the bill “really doesn’t attack the cost situation that much” and that “I don’t believe in insuring more people until you attack the cost aspect of this.”

If the President wishes to invoke Warren Buffett on tax policy, why doesn’t he first follow Buffett’s advice on health care policy – and indicate that Obamacare’s coverage expansions will NOT start until the law is proven to have lowered health care spending levels?  After all, if the President is so confident the 2,700-page overhaul will be effective in lowering premiums by $2,500 per family as promised, why doesn’t he believe this condition will be easily met?  Conversely, if the President does NOT believe the law will be effective in slowing the growth of health spending, and will instead result in skyrocketing costs to federal taxpayers, what’s the point of even submitting a “deficit reduction” plan, seeing as how new spending on Obamacare will quickly overwhelm any savings from the President’s proposed tax increases?

In reporting on the “Buffett Rule” Sunday, the New York Times quoted Rep. Chris Van Hollen as criticizing Republicans for “cherry-pick[ing] the [deficit reduction] pieces they like and leav[ing] behind the ones they don’t.”  Given the events of the past week, some would argue that – in outsourcing Democrats’ tax policy to Mr. Buffett, while ignoring Buffett’s advice on health care policy – President Obama has engaged in much the same cherry-picking, in an attempt to preserve his unpopular, and costly, health care law.