Alexandria Ocasio-Cortez Doesn’t Understand How Obamacare’s Exchanges Work

On Twitter Sunday evening, Rep. Alexandria Ocasio-Cortez (D-N.Y.) complained about what she viewed as the daunting prospect of having to choose her health insurance plan for 2020.

It’s not the first time Ocasio-Cortez has taken issue with the health coverage for members of Congress. She griped about the process last year, as a newly elected official just taking her seat.

But, as someone who has gone through the process of buying health insurance as a DC resident for years, I can characterize most of the points she makes in the tweet as inaccurate, or rooted in the special privilege she receives as a member of Congress.

She’s Not Buying ‘Off the Exchange’

To start with, Ocasio-Cortez claimed that “Members of Congress also have to buy their plans off the Exchange.” That statement contains numerous false elements. Most obviously, she cannot buy her insurance off the exchange because the District of Columbia abolished its private insurance market “off the Exchange.”

Upon seeing her tweet, I went to eHealthInsurance, a private market away from the government-run exchange, and tried to search for a plan. (Disclosure: I used to represent eHealth more than a decade ago as a paid lobbyist.) When I typed in a DC-based ZIP code, I found the following:

eHealth doesn’t offer insurance plans in the District of Columbia, because it can’t offer them. DC law prohibits anyone but the exchange from selling insurance to individuals.

Rather than purchasing coverage “off the Exchange,” Ocasio-Cortez buys her health insurance through DC’s small business exchange, as opposed to its marketplace for individuals. As a Congressional Research Service paper on health coverage for members of Congress and their staff explains, both groups buy insurance through the DC small business exchange to obtain their (illegal) employer subsidy.

Admittedly, Ocasio-Cortez may have meant “from the Exchange” when she said “off the Exchange.” But her imprecise language implies that she does not understand the important distinction between buying plans from the Exchange directly and not doing so. (Only Exchange-purchased plans qualify for subsidies under the Obamacare statute.)

She Gets Access to More Plans as a Member of Congress

Ocasio-Cortez complained about having to choose from 66 different insurance plans. She wouldn’t have that problem if she weren’t a member of Congress. People who buy insurance on DC’s individual exchange have far fewer options. I know, because I have to buy coverage there. Take a look at the “choices” my personalized webpage presented to me: Only 23 plans—about one-third the number available to Ocasio-Cortez:

Some may think that 23 plans still represent a large number to choose from, but my reality proved far different. To begin with, those plans come from only two carriers: CareFirst Blue Cross Blue Shield and Kaiser Permanente, which only offers HMO options. If you don’t want to get locked into an HMO’s provider network—and I don’t—you have exactly one choice of carrier: CareFirst.

Couple my preference for non-HMO coverage with my desire for insurance that includes a health savings account option, and I ended up with only two plans to choose from: CareFirst’s Bronze HSA plan, and its Gold HSA plan.

I would prefer more choices for health insurance. I would particularly appreciate the opportunity to buy coverage that doesn’t need to comply with the Obamacare insurance regulations that have driven up premiums and priced millions of people out of coverage. But DC’s insurance regulators have prohibited carriers from offering non-complaint plans, because they’re from the government and they’re here to help.

She Gets Special Privileges as a Member of Congress

To say that members of Congress and congressional staff receive kid-glove treatment from the DC small business exchange would put it mildly. This flyer (from 2013) shows that the DC exchange conducted no fewer than 12 separate in-person enrollment events for members and staff during Obamacare’s first open enrollment period.

Congressional staff confirmed to me that the in-person enrollment sessions continued on Capitol Hill this year. Congressional staff also confirmed that House and Senate benefits counselors can walk them through the entire enrollment process.

Even as an individual DC exchange participant, I received no fewer than five separate e-mails, starting on Friday afternoon, reminding me that Sunday represented the last day to sign up for coverage taking effect on January 1. The timing of Ocasio-Cortez’ tweet suggests that she waited until the last minute to examine her coverage options, but she can’t say she wasn’t warned. Maybe if she and her colleagues spent less time focused on impeachment, Ocasio-Cortez could have found more time to select her plan sooner?

Ocasio-Cortez Gets an Illegal Subsidy

I and others have made this point before: members of Congress and their staff represent the only group that can receive a subsidy from their employer on the exchange. That subsidy came through a rule promulgated by the Office of Personnel Management in 2013, but several analyses have called that rule illegal.

Ocasio-Cortez claimed that “Members of Congress have to buy their plans off the Exchange.” Just as the off-exchange claim holds no basis in fact, she and other members of Congress do not have to buy plans via the DC small business exchange. Nothing in law forces them to do so—unless they want to receive the (illegal) subsidy.

In fact, at least one member of Congress has turned down the (illegal) congressional subsidy. Dr. Michael Burgess frequently mentions at hearings, including the House Energy and Commerce Committee hearing on single payer last week, that he buys his own coverage with his own money, not taxpayer funds. As someone who earns less than members of Congress do, and has no access to (illegal) insurance subsidies, I appreciate Burgess’ integrity in this regard.

If Ocasio-Cortez wanted to do something other than complain—and if she didn’t want so many choices—she could ditch the special, and illegal, subsidies she receives as a member of Congress, and buy coverage with the hoi polloi like me. She’s welcome to do so any time she likes, but I’m not holding my breath.

UPDATE: This post was updated after publication to clarify potential interpretations of Ocasio-Cortez’ comments about “off the Exchange” coverage.

This post was originally published at The Federalist.

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

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

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

The Webpage Fail, Explained

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

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

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

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

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

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

Why District Officials Don’t Care

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

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

Ignoring the ‘Debacle’

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

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

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

Congress Should Fix This Mess

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

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

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

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

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

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

This post was originally published at The Federalist.

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

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

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

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

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

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

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

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

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

This post was originally published at The Federalist.

Let the Individual Mandate Die

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

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

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

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

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

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

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

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

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

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

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

This post was originally published at The Wall Street Journal.

About That “Junk” Insurance

On Wednesday, the Trump administration released its final rule regarding short-term, limited-duration insurance coverage. For all critics’ carping about how short-term coverage epitomizes “junk insurance,” these plans will provide another option for individuals who find Obamacare-compliant policies unattractive and unaffordable.

Pros and Cons of the Rule

The Cato Institute’s Michael Cannon lists a good summary of the rule’s benefits. At a time when the market for unsubsidized coverage away from the exchanges has dropped by nearly 40 percent, short-term plans will allow individuals who find Obamacare-compliant coverage unaffordable to purchase coverage.

Whereas the Obama administration defined “consumer protections” as “protecting people from being a consumer” of anything other than exchange plans, the Trump administration’s rule allows consumers to buy coverage that actually protects them from future harmful health events.

That said, the rule brings with it two notable drawbacks. First, the administration believes it could raise federal spending by $28.2 billion over a decade. The estimate comes because some healthy people likely will leave the exchanges to buy more affordable short-term coverage, raising premiums—and thus premium subsidies—for those who remain in Obamacare-compliant plans. While the Congressional Budget Office estimated a much smaller (and slightly positive) fiscal impact, the rule could end up increasing spending at a time when the federal government has racked up $21 trillion in debt (and counting).

Second, the rule doesn’t repeal Obamacare—an obvious statement, but one with important implications. Another president can easily revoke the Trump administration’s actions, and the next Democrat will almost certainly do just that. While helpful, the rule itself should not serve as an excuse for Congress not to take action to repeal Obamacare’s harmful regulations—because if you like your short-term plan, and Congress does nothing, you probably won’t be able to keep it.

What’s the Real ‘Junk Insurance’?

But as I wrote last week, Kofman has refused to buy an Obamacare plan, because she claims she requires an employer subsidy—this despite making more than $217,000 per year. Given her sizable income, Kofman must not think exchange policies unaffordable, even without an employer subsidy.

After all, the Exchange Authority recently endorsed, and the District enacted, a mandate requiring people with far less income than her—that is, people like me—to buy unsubsidized coverage or pay a tax. Why does she not buy the insurance policies she sells—because she considers them “junk insurance?”

She’s not alone. At a briefing last month, Sara Collins, a vice president at the Commonwealth Fund, asked whether short-term plans and other non-Obamacare policies would have “warning labels on them.” Collins neglected to provide a warning of her own: She has not purchased an exchange plan. Lest one think she cannot afford to do so, Commonwealth’s tax filings reveal that for the 12 months ending in June 2017, Collins received $334,353 in total compensation (including benefits).

I consider the very definition of “junk insurance” a policy that one encourages others to buy but refuses to purchase. On that, Corlette has a sterling track record. At a 2016 briefing, her presentation included a bullet point about the need to increase exchange sign-ups. She went further in her oral remarks: “I think it’s critical to do everything we can do boost enrollment.”

But when I asked Corlette at that same 2016 briefing if she had taken her own advice and bought an exchange plan, I received a song-and-dance about her life as a “spoiled academic.” Lest anyone think her unfeeling, however, she allowed that “I do try to think about” individuals without employer-sponsored coverage when designing insurance coverage standards.

Principles Versus Power

That’s the point. If Obamacare advocates thought achieving the law’s goals was so critical, they would have put their money where their mouths are and enrolled in exchange plans long ago. For all liberals’ talk of solidarity and “We’re all in this together,” the unwillingness for individuals making hundreds of thousands per year to enroll in exchange coverage, even though they could easily afford to do so, astounds. Given their own failures to enroll, who are they to criticize President Trump for “sabotaging” the law?

In their quiet moments, people like Kofman, Collins, and Corlette may wonder what strange confluence of events led the American people to elect Donald Trump, and empower him with the authority to dismantle their liberal paradise. But their failure to practice what they preach yields a ready answer: They need only look in the mirror.

This post was originally published at The Federalist.

How D.C. Leaders Ignore Their Own Constituents on Health Care

The July 24 editorial “ ‘Here we go again’ ” misapportioned blame. Instead of attacking the House, the editorial should have examined the disregard the D.C. government has shown residents by passing a controversial requirement to purchase health coverage.

The D.C. Council opaquely enacted a major policy change, burying the provision in a 300-page bill featuring clerical amendments to things such as the Eastern Market Enterprise Fund. The council’s press release said not a word about the mandate’s enactment.

Second, the head of the D.C. Health Benefit Exchange Authority, which requested the mandate, refuses to buy the plans she sells. When I asked her about this in 2016, Mila Kofman claimed that buying an exchange plan would cause her to forfeit her employer subsidy. I find it absurd that an individual making more than $217,000 per year requires insurance subsidies yet wants to tax people such as me — who make far less yet receive no subsidies — who do not purchase a “government-approved” plan.

D.C. officials who complain about disregard from Congress should not deprecate or disregard their own residents. Unfortunately, passing laws surreptitiously, imposing requirements on others while not following them oneself, and ignoring constituent complaints all qualify.

This post was originally published at The Washington Post.

Will the Senate Make Exchange Heads Purchase Exchange Coverage?

This week, the Senate will likely consider a package of several appropriations measures. The legislation provides an opportunity for senators to offer, and possibly vote on, an amendment defunding the District of Columbia’s new health insurance mandate.

Because such an amendment, proposed by Rep. Gary Palmer (R-AL), passed in the House last week, if a similar amendment passes the Senate, it would almost certainly remain in the final version enacted into law. As a result, residents of the nation’s capital would not face the threat of having their property seized if they cannot afford to purchase “government-approved” health insurance.

A Firsthand Display of Hypocrisy

I have seen up close how the heads of exchanges do not purchase exchange coverage. In the fall of 2016, CareFirst Blue Cross cancelled my exchange insurance policy, in part due to regulations promulgated by the District’s exchange authority.

To find out the reasons for the cancellation, I attended a meeting of the authority board. When I asked whether employees of the exchange purchase exchange coverage themselves, Mila Kofman, the exchange’s director, responded that doing so would cause employees to forfeit their employer insurance subsidy, making coverage unaffordable.

That explanation makes sense for junior employees making $40,000, $60,000, or even $80,000 annually. But it seems much less justifiable for Kofman. Kofman did not disclose it at the meeting I attended, but I later learned through DC public records that in 2016, she received a salary of more than $217,000—more than Mayor Muriel Bowser herself.

If Kofman cannot, or will not, purchase the exchange plans she sells without a subsidy, why would she, and the exchange board, support requiring residents making a fraction of her income to do so, and punishing them with taxes—and the threat of property seizure—if they do not?

‘1 Percenters’ Won’t Buy Exchange Coverage

Nor do the double-standards remain confined to the District of Columbia. The head of California’s exchange receives a salary putting him in “the 1 percent,” yet refuses to purchase the plans he sells.

I had previously recounted how Peter Lee, Covered California’s executive director, admitted to me at a briefing that his health insurance coverage comes through California’s state employee plan—at taxpayer expense, of course. Yet Covered California’s website lists his current monthly salary at a rate of $36,400, or a whopping $436,800 per year.

With all that money, does Lee really need to have taxpayers fund his health benefits as well? Does he think the policies Covered California sells so unaffordable, or so poor in quality, that he refuses to buy them? Or does he just feel entitled to have taxpayers fund his benefits on top of his fat paycheck because he thinks he’s better than we are?

The Amendment Concept

In theory, the Trump administration could have solved this problem months ago, by issuing regulations requiring all CEOs of state-run exchanges—and, for that matter, their board members too—to purchase plans from the exchanges. If those individuals consider exchange plans so inferior or unaffordable that they will not purchase them for themselves, then they have no business selling them in the first place.

(In case you were wondering, yes, I do believe that at the federal level, the U.S. secretary of Health and Human Services and Centers for Medicare and Medicaid Services administrator should buy exchange plans. I previously criticized former CMS Acting Administrator Andy Slavitt for failing publicly to disclose that he held exchange coverage during a Democratic administration, and I would be remiss not to point that out under a Republican one.)

At that point, people like Mila Kofman and Peter Lee will have a choice to make. They can determine whether they care more about keeping their taxpayer-funded health insurance benefits, or ensuring their constituents continue to have access to insurance subsidies. In short, they can choose whether they will finally put their principles ahead of their own pocketbooks—which they should have been doing all along.

This post was originally published at The Federalist.

Preserving Health Care Freedom in the Nation’s Capital

Two weeks ago, I described how provisions in a budget bill that the District of Columbia Council quietly passed would extend the reach of government-controlled health care in the nation’s capital. The provisions buried in that budget bill would not only reimpose the health insurance mandate penalty within the District of Columbia that Congress set to zero beginning in January, but would go further, by allowing DC authorities to place liens on, seize, and sell the property of individuals who cannot afford to pay the mandate tax.

Thankfully, my post had its intended effect in raising awareness of the issue among federal policy-makers. The office of Rep. Gary Palmer (R-AL) responded, introducing an amendment to appropriations legislation that the House of Representatives will consider this week.

Prevents Affordable Options from Qualifying 

The Palmer amendment would also allow individuals to purchase the type of health coverage they desire without getting hit with a “stealth” tax bill after-the-fact. If the District’s law goes into effect in January, individuals buying the new, more affordable coverage options proposed by the Trump administration could face exactly that.

The mandate the DC Council approved (see pages 168-82 here) effectively re-imposes on the District Obamacare’s individual mandate as it existed last December 15—the date the congressional conferees on the tax bill filed their conference report (i.e., before legislation setting the federal mandate penalty to zero was signed into law). By linking the District’s mandate to the policies and regulations in place as of last December 15, the DC mandate also prevents the new options the Trump administration is introducing from qualifying as “minimum essential coverage” for purposes of complying with the mandate.

For instance, the DC law defines “minimum essential coverage” as “minimum essential coverage as defined by section 5000A of the [federal] Internal Revenue Code of 1986 and its implementing regulations, as that section and its implementing regulations were in effect on December 15, 2017.” It further specifies that “minimum essential coverage” shall include:

Health coverage provided under a multiple employer welfare arrangement; provided that the multiple employer welfare arrangement provided coverage in the District on December 15, 2017, or complies with federal law and regulations applicable to multiple employer welfare arrangements that were in place as of December 15, 2017.

Locks Out Short-Term Coverage, Too

The District’s statute also would exclude short-term health plans from qualifying as “minimum essential coverage” for purposes of its health insurance mandate. Obamacare itself defined “minimum essential coverage” to include “coverage under a health plan offered in the individual market within a state.” But because another portion of federal law says “‘individual health insurance coverage’ means health insurance coverage offered to individuals in the individual market, but does not include short-term limited duration insurance,” short-term plans would not qualify.

Obamacare did give the secretary of Health and Human Services, along with the secretary of the Treasury, discretion in determining other forms of “minimum essential coverage” for purposes of the federal mandate. However, because the District linked its mandate to those federal definitions in effect as of December 15, 2017—well before the Trump administration first proposed its changes to the regulation of short-term plans on February 20, 2018—short-term plans would not qualify as acceptable coverage under the District’s mandate.

District residents who purchase short-term plans, like those who access the expanded association health plans, would not comply with the new coverage requirements. Particularly given the very quiet way the DC Council enacted the legislation, many individuals may not know that the District re-imposed a health insurance mandate or that certain types of coverage do not comply with it, and face an unpleasant tax “surprise” in the spring of 2020 (as they file their DC tax returns for 2019). Unless, of course, Congress enacts the Palmer amendment into law.

Congress’s Constitutional Duty

Moreover, it also belies the fact that DC officials made little attempt—one could argue purposefully made little attempt—to publicize the council’s deliberations over this change. I e-mailed three people in Mayor Muriel Bowser’s press office about the council’s actions two weeks ago, and still have yet to receive so much as an acknowledgement.

Bowser can argue all she wants about “Taxation without Representation,” but given that her office made zero attempt to represent me, she has little right to complain. The House should pass the Palmer amendment this week, and prevent the strong-arm tactics associated with government-controlled health care from taking root in the nation’s capital.

This post was originally published at The Federalist.

D.C.’s Latest Health “Reform:” Seizing People’s Property

Just when you think the move for government control of health care couldn’t get any worse, somehow it manages to. Last Wednesday, the District of Columbia City Council approved a requirement for all DC residents to purchase health insurance. The mandate would take effect in January, right when the federal mandate penalty drops to $0, as per last year’s tax law.

The D.C. mandate contains three elements that make it just as bad as, if not worse than, the federal mandate it is intended to replace.

A (Deliberately?) Opaque Process

A cynic might believe that the D.C. Council acted in such a low-key manner by design. The council did not approve the mandate as a stand-alone bill, but wrapped it into a 297-page Budget Support Act. That bill contains such unrelated provisions as an amendment regarding the Fort Dupont Ice Arena, technical corrections to a supermarket tax incentive program, and amendments regarding civic associations using public schools.

Likewise, a press release by the D.C. Council summarizing Wednesday’s meeting contained not a word about imposing the individual mandate, nor did the council website show any stand-alone votes on the mandate itself. This lack of disclosure pushed me to contact my council member, Charles Allen, to find out what had happened at the council meeting Wednesday.

Upon hearing that the mandate as passed of a much larger package, I asked one of Allen’s staffers whether this provision had been “snuck in at the last minute.” The staffer said DC Mayor Muriel Bowser had proposed the mandate as part of her budget submission to the council back in March. He then rather sheepishly added that, while people had testified on behalf of other portions of the Budget Support Act, no one had spoken about the mandate specifically.

For a district that decries “Taxation Without Representation,” this Nancy Pelosi-esque behavior—where we literally had to pass the bill to find out what was in it—seems to embody the very congressional tactics that DC leaders love to hate.

Harsher Penalties for Violators

During the 2009-10 debate on Obamacare, the threat of penalties for violating the individual mandate became a source of intense controversy. During the Senate Finance Committee’s markup, Sen. John Ensign (R-NV) received a handwritten note from Thomas Barthold, head of the Joint Committee on Taxation, stating that, under federal law, non-payment of the mandate tax could result in imprisonment. Democrats buckled under this political pressure, removing from the Internal Revenue Service the power to imprison violators, or impose liens on personal property, for non-payment of the mandate tax.

By contrast, the district’s mandate—which comprises pages 168-182 of the Budget Support Act—includes this language at the bottom of page 180: “A taxpayer who fails to pay the District of Columbia shared responsibility payment imposed…shall be subject to all collection, enforcement, and administrative provisions applicable to unpaid taxes or fees, as provided in Chapter 18, Chapter 41, Chapter 42, Chapter 43, and Chapter 44 of this title [emphasis mine].”

Unlike the federal Internal Revenue Code, it does not appear at first glance that the district’s tax law allows for imprisoning individuals for non-payment of taxes (as opposed to deliberate tax evasion or fraud). However, Chapter 44 includes the following language:

If a person determined to be liable to the District of Columbia for a tax neglects or refuses to pay the tax within 10 days after notice and demand, the Mayor may collect the tax, with interest and penalties thereon (and an amount sufficient to cover the expenses of the levy), by levy upon all property (including rights to property) of the person or on which there is a lien provided in this chapter for the payment of the tax.

No wonder the D.C. Council didn’t want to hold an up-or-down vote on just this provision.

Hypocrisy Much?

Another relevant fact to the district’s mandate: The head of the District’s health insurance exchange—which recommended creating a DC mandate following the removal of the federal tax penalty—doesn’t buy exchange coverage herself. As I previously noted, many exchange heads (and Obamacare supporters) refuse to buy the coverage they promote, including the head of the district’s exchange, Mila Kofman.

When I discovered in late 2016 that I could not retain that plan in 2017, due in part to regulations imposed by the district’s exchange, I attended a meeting of the exchange authority. I asked Kofman whether she, and other exchange employees, purchased exchange coverage. She claimed that she and her colleagues could not purchase exchange policies, because they would lose their employer subsidy in the process.

I don’t know whether Bowser and the DC Council behave similarly to Kofman, but I can guess. On Thursday afternoon, I e-mailed Bowser’s office asking about the DC insurance mandate, and whether Bowser received a taxpayer subsidy for her insurance coverage. (The district’s mayor receives a salary of $200,000 annually.) I also asked what Bowser would “say to District residents like me—who make far less in salary than she does, yet do not receive [taxpayer-]subsidized benefits—being forced to buy coverage under penalty not just of taxation, but of property seizures through DC’s tax enforcement mechanisms?”

Wouldn’t you know it: I have yet to receive a response.

Here Are Some Policy Solutions

Thankfully, several of the policy and process problems outlined above contain within them readily achievable solutions:

  • The D.C. Council should pass legislation requiring the mayor, council, exchange CEO, and exchange board members to buy coverage through the exchange—without using separate taxpayer-funded benefits available to other district employees.
  • If the council will not act, the Trump administration could promulgate regulations requiring the CEOs and board members of all state-run exchanges (including the district’s) to buy the coverage they promote and oversee.
  • Congress could also exercise its constitutional prerogatives and strike down the district’s individual mandate, ensuring that no individuals will have their property seized by an overzealous government if they cannot afford to buy “bureaucrat-approved” health insurance.

Better yet: The District of Columbia Council could decide to stop micromanaging its residents’ health care by surreptitiously passing onerous mandates in legislation that few district residents know about.

This post was originally published at The Federalist.

Washington’s Government Takeover of Health Care

The Washington Post reported yesterday of a major development in Obamacare implementation here in Washington:

The District’s small businesses may have to buy their employee health insurance through a city-run exchange come 2014, following a controversial vote by a city board.  The D.C. Health Benefit Exchange Authority, charged with implementing the federal health-care overhaul law, voted Wednesday to accept a recommendation that all health-insurance plans sold in the city for 50 members or fewer must be purchased through the exchange.

In other words, you can buy any plan you like – so long as it’s the government plan.

District officials attempted to defend this onerous mandate by saying they needed to ensure a viable marketplace: “For the exchange to be sustainable, it has to have approximately 100,000 people…If the exchange isn’t sustainable in the long haul, if it does not have enough people, then we are wasting our time and our effort.”  This is the same kind of logic that led Democrats to create the unprecedented mandate that nearly all Americans purchase a product for the first time ever – because Obamacare would be unsustainable without a large market.  Now we get word that even with an individual insurance mandate, one key element of Obamacare – the Exchange – could be “unsustainable” and a “waste of time” without even more government intrusion – telling people not just to buy something, nor just what to buy, but even where to buy it.

As one letter of opposition from the D.C. business community noted, Barack Obama repeatedly promised that “you will not have to change plans” under Obamacare.  This week’s development in the District of Columbia is yet another illustration of that broken promise.  Moreover, the fact that Washington wants to shut down the private health insurance market and replace it with a government-run Exchange further proves that Obamacare is indeed a government takeover of health care.