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.

If Republicans Can Confirm Kavanaugh, They Can Repeal Obamacare

So Republican lawmakers do have spines after all. Who knew? Last weekend’s confirmation of Brett Kavanaugh to the Supreme Court, notwithstanding the controversies surrounding his nomination, stemmed primarily from two sources.

First, many Republican lawmakers objected to how Democrats politicized the nomination—holding allegations of sexual assault against Kavanaugh for more than a month, then leaking them days before his confirmation.

Lawmakers defied the political controversies, protests, and Kavanaugh’s middling poll numbers, because they felt the need to deliver on a promise they made to voters. Well, if Republicans are going to go all crazy by starting to deliver on their promises, why don’t they deliver on the promise they made for the last four election cycles, by eliminating the health care law that has raised premiums for millions?

Meanwhile, Back at the Ranch

Senate Republicans’ bout of political courage in confirming Kavanaugh belies their other actions in the past several weeks. Even as most of the media generated ridiculous amounts of coverage on the Supreme Court nomination, the noise surrounding such topics as “boofing” allowed Republican lawmakers to renege on other political promises under the radar.

Case in point: The massive spending bill that Congress approved, and President Trump signed, last month. Despite funding most of the federal government, it does not include funding for a border wall. Republicans punted on that fight until after the election—ensuring they’ll never have it.

Mr. ‘Don’t Blink’ Blinked

But the piece de resistance of the spending bill had to come from the way that it fully funded all of Obamacare. Despite funding Obamacare—and breaking so many other promises to voters—only 56 Republicans in the House, and seven in the Senate, voted against the measure.

One Republican who supported rather than opposed the spending bill that broke so many Republican promises? None other than Sen. Ted Cruz. You may recall that in 2013, Cruz mounted a 21-hour speech prodding the Senate to defund Obamacare:

He pleaded with Republican lawmakers to deliver on their promise to voters, exhorting them, “Don’t blink!”

Last month, by voting for legislation that funded Obamacare, Cruz blinked. With “courage” like this, is it any wonder that Cruz faces the fight of his political life in his re-election campaign against Rep. Robert O’Rourke?

It’s no secret why Cruz faces problems, even in a ruby red state like Texas: Conservatives don’t feel particularly motivated to support his re-election. Given that Cruz said one thing about Obamacare five years ago, and acted in a completely contrary manner just before his election, their apathy is not without reason.

Do Your Job, And Keep Your Promises

For the past eight years, Republicans have promised to repeal Obamacare. They have control of Congress for at least the next three months. They could easily pass legislation undoing the measure in that time—provided they have the kind of backbone seen on display during the Kavanaugh nomination.

Some Senate Republicans may have voted for Kavanaugh not just because they support the nominee on his merits, but because they feared what voters would do to them if they did not support him. They should ponder that same dynamic when considering the fate of the health care law. And then they should get back to work, deliver on another promise to voters, and repeal Obamacare.

This post was originally published at The Federalist.

Bill Cassidy’s “Monkey Business”

Last we checked in with Louisiana Republican Sen. Bill Cassidy, he was hard at work adding literally dozens of new federal health care requirements to a Republican “repeal-and-replace” bill. This week comes word that Cassidy continues to “monkey around” in health care — this time quite literally.

STAT reports: “Sen. Bill Cassidy is trying to help hundreds of chimpanzees enjoy an easy retirement in his home state of Louisiana. The Republican is pushing for an amendment to a major appropriations bill winding its way through Congress this week that would force the National Institutes of Health to make good on a 2015 promise to move all its chimps out of research facilities.”

Don’t get me wrong: I oppose animal cruelty as much as the next person. If NIH lacks a compelling scientific justification to conduct research on chimpanzees, or any other animal, then it should cease the research and provide alterative accommodations for the creatures affected.

But on at least three levels, Cassidy’s amendment demonstrates exactly what’s wrong with Washington D.C.

Problem 1: Skewed Priorities

The federal debt is at more than $21 trillion and rising — more than double its $10.6 trillion size not ten years ago, on the day Barack Obama took office. American troops remain stationed in Afghanistan, and elsewhere around the world. Russia still looks to undermine American democracy and to meddle in this year’s midterm elections. The situation with North Korea remains tenuous, as the North Koreans continue to develop intercontinental ballistic missile technologies and their nuclear program.

So why is Cassidy trying to consume Senate floor time with a debate and vote on the chimpanzee amendment, after having already sent a letter to NIH on the subject? On a list of America’s top policy issues and concerns, the fate of 272 chimpanzees wouldn’t register in the top 100, or even in the top 1,000. So why should members of Congress (to say nothing of their staffs) spend so much time on such a comparatively inconsequential issue?

Problem 2: Cassidy Doesn’t Want to Repeal Obamacare

Rather than spending time on a chimpanzee amendment, Cassidy — like his Senate Republican colleagues — should focus on keeping the promise they made to their voters for the past four election cycles that they would repeal Obamacare. But unfortunately, many of the people who made that promise never believed it in the first place.

Based on his record, Cassidy stands as one of those individuals opposed to Obamacare repeal. As I noted in June, Cassidy does not want to repeal the federal system of regulations that lies at the heart of the health care law. In fact, a health care plan released earlier this summer seemed designed primarily to give lawmakers like Cassidy political cover not to repeal Obamacare’s most onerous regulations — even though a study by the Heritage Foundation indicates those regulations are the prime driver of premium increases since the law passed.

Problem 3: Cassidy Just Voted to Entrench Obamacare

Earlier this month, I noted some Republicans in the Senate would likely vote to allow the District of Columbia to tax individuals who do not purchase health insurance, after having voted to repeal that mandate in last year’s tax bill. After I wrote that story, Cassidy became one of five Senate Republicans to do just that, by voting to table (or kill) an amendment defunding Washington’s new individual mandate.

Because Cassidy voted to keep the mandate in place in D.C., he voted to allow District authorities to seize and sell individuals’ property if they do not purchase “government-approved” health coverage. Rather than voting to repeal Obamacare, Cassidy and his colleagues voted to entrench Obamacare in the nation’s capital — for which they have sovereign jurisdiction under the Constitution.

Even apart from Cassidy’s flip-flopping on repeal of Obamacare and its individual mandate, the contrast with the letter to NIH raises its own questions. In that letter, Cassidy emphasized that former research chimpanzees should have “the opportunity to live in mixed-sex groups and … daily access to nesting materials.”

This all sounds well and good, but why does Cassidy seemingly care so much about giving freedom to chimpanzees and so little about giving freedom to District of Columbia residents to buy (or not buy) the health coverage they wish to purchase?

Congress, Stop Monkeying Around

Five years ago, Democratic Rep. Frank Pallone famously called a congressional hearing on the healthcare.gov debacle a “monkey court.” Five years later, the Cassidy amendment on chimpanzee research demonstrates how Congress continues to “monkey around.”

Republicans should stop the primate-related sideshows and focus on things that really matter. Like sticking to the promise they made to voters for eight years to repeal Obamacare.

This post was originally published at The Federalist.

Republicans’ Spending Dilemma, In One Tweet

Most of official Washington woke up apoplectic on Sunday, when a tweet from President Trump invoked “the Swamp’s” most dreaded word: “Shutdown.”

Put aside for a moment specific questions about the wall itself—whether it will deter illegal immigration, how much to spend on it, or even whether to build it. The Trump tweet illustrates a much larger problem facing congressional Republicans: They don’t want to fight—about the wall, or about much of anything, particularly spending.

Voting for the Mandate after They Voted Against It?

Take for instance an issue I helped raise awareness of, and have helped spend the past several weeks tracking: The District of Columbia’s move to re-establish a requirement on district residents to purchase health insurance.

As I wrote last week, Sen. Ted Cruz (R-TX) offered an amendment in the Senate that would defund this mandate. The amendment resembles one that Rep. Gary Palmer (R-AL) offered in the House, and which representatives voted to add to the bill. If a successful vote on the Cruz amendment inserted the provision in the Senate version of the bill, the defunding amendment would presumably have a smooth passage to enactment.

So what’s holding it up? In a word, Republicans. According to Senate sources, Republican leaders—and Republican members of the Appropriations Committee—don’t want to vote on Cruz’s amendment. Several outside groups have stated they will key-vote in favor of the amendment, and the leadership types don’t want to vote against something that many conservative groups support.

Are Democrats Running Congress?

In short, because Democrats might object. Appropriations measures need 60 votes to break a Senate filibuster, and Democrats have said they will not vote for any bill that includes so-called “poison pill” appropriations riders. The definition of a “poison pill” of course lies in the eyes of the beholder.

Politico wrote about the spending process six weeks ago, noting that new Senate Appropriations Committee Chairman Richard Shelby (R-AL) and Ranking Member Pat Leahy (D-VT) “have resolved to work out matters privately. Both parties have agreed to hold their noses to vote for a bill that they consider imperfect, but good enough.”

That “kumbaya” dynamic has led Senate Republican leaders and appropriators to try and avoid the Cruz amendment entirely. They don’t want to vote against the amendment, because conservatives like me support it and will (rightly) point out their hypocrisy if they do. But they don’t want the amendment to pass either, because they fear that Democrats won’t vote to pass the underlying bill if it does. So they hope the amendment will die a quiet death.

Conservatives Get the Shaft—Again

At this point some leadership types might point out that it’s easy for people like me to sit on the sidelines and criticize, but that Republicans in Congress must actually govern. That point has more than a grain of truth to it.

On the other hand, “governing” for Republicans usually means “governing like Democrats.” Case in point: The sorry spectacle I described in March, wherein Republican committee chairmen—who, last I checked, won election two years ago on a platform of repealing Obamacare—begged Democrats to include a bailout of Obamacare’s exchanges in that month’s 2,200-page omnibus appropriations bill.

The chairmen in question, and many Republican leaders, feared the party will get blamed in the fall for premium increases. So they decided to “govern” by abandoning all pretense of repealing Obamacare and trying to bolster the law instead, even though their failure to repeal Obamacare is a key driver of the premium increases driving Americans crazy.

With an election on the horizon, bicameral negotiations surrounding the spending bill could get hairy in September, because two of the parties come to the table with fundamentally different perspectives. Republican congressional leaders worry about what might happen in November if they fail to govern because they stood up for conservative policies. Trump worries about what might happen if they don’t.

UPDATE: On Wednesday afternoon, the Senate voted to table the Cruz amendment blocking DC’s individual mandate. Five Republicans who voted to repeal the individual mandate in tax reform legislation last fall — Louisiana’s Bill Cassidy, Maine’s Susan Collins, Alaska’s Lisa Murkowski, Alabama’s Richard Shelby, and Utah’s Orrin Hatch — voted to table, or kill, the amendment.

Because the vote came on a motion to table, senators may attempt to argue that the vote was procedural in nature, and did not represent a change in position on the mandate. Shelby, the chair of the Appropriations Committee, said he supported the underlying policy behind the Cruz amendment, but voted not to advance the amendment because Democrats objected to its inclusion.

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.

Aetna’s New Obamacare Strategy: Bailouts or Bust

Tuesday’s announcement by health insurer Aetna that it had halted plans to expand its offerings on Obamacare exchanges and may instead reduce or eliminate its participation entirely, caused a shockwave among health-policy experts. The insurer that heretofore had acted as one of Obamacare’s biggest cheerleaders has now admitted that the law will not work without a massive new infusion of taxpayer cash.

In an interview with Bloomberg, Aetna’s CEO, Mark Bertolini, explained the company’s major concern with Obamacare implementation:

Bertolini said big changes are needed to make the exchanges viable. Risk adjustment, a mechanism that transfers funds from insurers with healthier clients to those with sick ones, “doesn’t work,” he said. Rather than transferring money among insurers, the law should be changed to subsidize insurers with government funds, Bertolini said.

“It needs to be a non-zero sum pool in order to fix it,” Bertolini said. Right now, insurers “that are less worse off pay for those that are worse worse off.” 

A brief explanation: Obamacare’s risk adjustment is designed to even out differences in health status among enrollees. Put simply, plans with healthier-than-average patients subsidize plans with sicker-than-average patients. But the statute stipulates that the risk-adjustment payments should be based on “average actuarial risk” in each state marketplace — by definition, plans will transfer funds among themselves, but the payments will net out to zero.

Risk adjustment, a permanent feature of Obamacare, should not be confused with the law’s temporary-risk-corridor program, scheduled to end in December. Whereas risk corridor subsidizes loss-making plans, risk adjustment subsidizes sicker patients. And while plans can lose money for reasons unrelated to patient care — excessive overhead or bad investments, for instance — insurers incurring perpetual losses on patient care have little chance of ever breaking even.

That’s the situation Aetna says it finds itself in now. In calling for the government to subsidize risk adjustment, Bertolini believes that for the foreseeable future insurers will continue to face a risk pool sicker than in the average employer plan. In other words, the exchanges won’t work as currently constituted, because healthy people are staying away from Obamacare plans in droves. Aetna’s proposed “solution,” as expected, is for the taxpayer to pick up the tab.

It’s not that insurers haven’t received enough in bailout funds already. As I have noted in prior work, insurance companies stand to receive over $170 billion in bailout funds over the coming decade. For instance, the Obama administration has flouted the plain text of the law to prioritize payments to insurers over repayments to the United States Treasury. But still insurance companies want more.

Some viewed Aetna’s threat to vacate the exchanges as an implicit threat resulting from the Justice Department’s challenging its planned merger with Humana. But the reality is far worse: Aetna was conditioning its participation not on its merger’s being approved but on receiving more bailout funds from Washington.

Like a patient in intensive care, the Left wants to administer billions of dollars to insurers as a form of fiscal morphine, hoping upon hope that the cash infusions can tide them over until the exchanges reach a condition approaching health. Just last month, the liberal Commonwealth Fund proposed extending Obamacare’s reinsurance program, scheduled to end this December, “until the reformed market has matured.” But as Bertolini admitted in his interview, the exchanges do not work, and will not work — meaning Commonwealth’s suggestion would create yet another perpetual-bailout machine.

Only markets, and not more taxpayer money, will turn this ailing patient around. Congress should act to end the morphine drip and stop the bailouts once and for all. At that point, policymakers of both parties should come together to outline the prescription for freedom they would put in its place.

This post was originally published at National Review.

An Important Test in the Fight Against Obamacare Bailouts

On Wednesday, a House Republican task force is scheduled to release its recommendations regarding a health-care alternative that Congress and a new president can enact next year. It’s an important step in the fight against Obamacare, but a much more immediate, though less publicized, battle will also occur this week — one over the use of the Judgment Fund to pay out certain claims or settlements. This fight will test whether House Republicans can take concrete actions to undermine Obamacare.

The battle will occur in an unlikely venue: Consideration of the Financial Services and General Government appropriations measure, expected on the House floor beginning Wednesday. With that piece of legislation, the House can pass a provision I’ve written about recently at NRO: a prohibition on the use of the Judgment Fund to pay out rewards related to “risk corridor” lawsuits.

Some background on the issue, and the lawsuits: Risk corridors are one of two transitional programs designed to cushion insurers’ losses in Obamacare’s first three years. Through risk corridors, plans achieving high profits on insurance exchanges in the years 2014–16 would forfeit some of those gains, which would subsidize insurers who suffered large losses. At least, that’s the way it was supposed to work.

The reality has proven far different. While the administration repeatedly claimed that risk corridors would be budget-neutral — that is, payments to insurers with losses would equal payments into the system by insurers with gains — that hasn’t happened and isn’t likely to happen. The balky insurance exchanges, the administration’s unilateral change allowing some individuals to keep their pre-Obamacare insurance temporarily, and enrollment by sicker-than-average individuals all mean that insurers have lost billions selling Obamacare plans. As a result, insurers put in claims totaling $2.87 billion for 2014, asking the government to reimburse them. But because few insurers made profits, plans had paid only $362 million into the risk-corridor program, meaning that the administration could pay only 12.6 percent of the risk-corridor payment requests in 2014.

In a November 2015 memo, the Obama administration stated that the $2.5 billion in unpaid 2014 risk-corridor claims represented an outstanding obligation of the federal government. But an appropriations restriction enacted by Congress in 2015 prevents the Centers for Medicare and Medicaid Services (CMS), which manages Obamacare and the exchanges, from using additional taxpayer funds on unpaid risk-corridor claims.

Here’s where the Judgment Fund comes in. Multiple insurers have filed lawsuits seeking their unpaid risk-corridor claims from the federal government. The Obama administration, while sympathetic to their case, remains hamstrung by the language that prohibits CMS from bailing out insurers. But the Judgment Fund — administered by the Treasury, not CMS — currently contains no such restriction.

And that’s why the Financial Services appropriations bill this week matters in the fight against Obamacare. Enacting a restriction on the use of the Judgment Fund to pay any claims or settlements related to the risk-corridor lawsuits would prevent the Obama administration from using the fund as a back-door insurer bailout. Democrats have essentially encouraged the administration to do just that — settle the cases, pay the claims from the Treasury to circumvent the prohibition on a CMS-funded bailout, and give insurers a big, wet, multi-billion-dollar, taxpayer-funded kiss.

While Congress has multiple policy justifications — an aversion to both bailouts and Obamacare — to prohibit the use of the Judgment Fund to pay risk-corridor claims, it also has constitutional prerogatives to protect. The text of Obamacare nowhere contained an explicit appropriation for risk corridors, which is one reason CMS had to create a system by which incoming funds from some insurers had to finance funds outgoing to others. Then Congress went even further and explicitly included a prohibition on taxpayer-funded bailouts. Congress did this not once, but twice: first in December 2014 and then again last winter.

The Obama administration would like nothing better than to chuck those explicit congressional restrictions out the window and use the Judgment Fund to bail out its Obamacare partners-in-crime, Big Insurance. While the Congressional Research Service and the comptroller general of the Government Accountability Office have both ruled that the Judgment Fund cannot be used to spend money where Congress has explicitly declined to appropriate funds, the House should not rest on its laurels and assume that this imperial president will follow the guidance of these nonpartisan experts. It can, and should, go further to protect taxpayer funds and rein in the administration.

Even as it unveils its alternative to the law, House Republicans have the chance to take a critically important step to undermine Obamacare this week. Both to save the country from Obamacare and to preserve its constitutional power of the purse, the House should match deeds with words and prevent the Judgment Fund from being used for a multi-billion-dollar Obamacare bailout.

This post was originally published at National Review.

How to Stop Insurer Bailouts

In the coming decade, actions set in motion by the Obama administration could cost the American taxpayer over $170 billion in publicly funded health-insurance-company bailouts — a scandal I described in detail in these pages last week. Fortunately for taxpayers, however, a future administration could shut off the gushing taps of bailout dollars that President Obama has turned on. Because the bailouts in large part revolve around unilateral administration actions — decisions solely made by the executive, without even the notice-and-comment process used in normal rulemaking — the next administration could reverse those actions almost as quickly as they were introduced.

By taking the steps below, a Republican administration could preserve taxpayer funds — and restore the separation of powers this administration has so badly damaged.

RISK CORRIDORS

One of two transitional programs for Obamacare insurers, risk corridors were designed to provide stability in the law’s early years — insurers with large profits would pay in some of their gains to reduce shortfalls by carriers with large losses. However, because insurers have lost money hand-over-fist on Obamacare exchanges, claims by loss-making insurers seeking payments have greatly exceeded receipts taken in by profit-making insurers. Congress has thus far prevented the Centers for Medicare and Medicaid Services (CMS) from using taxpayer funds to bail out the risk corridors, but insurers are taking legal action seeking unpaid risk-corridor funds as a result.

Action: Revoke the Administration Memo Declaring a Unilateral Bailout: In November, CMS issued a short memo noting that, in 2014, insurers requested $2.87 billion in risk-corridor payments, but because other insurers only paid in $362 million to risk corridors, the administration could only pay 12.6 percent of 2014 payment requests. The memo stated that the $2.5 billion in unpaid payments represent an “obligation of the United States Government for which full payment is required.”

The memo conceded that Congress had provided no appropriation for the $2.5 billion in risk-corridor shortfalls — indeed, Congress had specifically enacted language prohibiting CMS from spending additional taxpayer funds on risk-corridor payments. CMS had no authority to issue such a memo — and the next administration should revoke it.

Action: Refuse to Settle Risk-Corridor Lawsuits — and Refuse to Pay Claims: Insurers have filed several lawsuits seeking to collect their unpaid risk-corridor funds — lawsuits that the Obama administration will be inclined to settle. Congress prohibited CMS from using taxpayer funds to pay risk-corridor claims — but a legal settlement would be paid from the Judgment Fund of the Treasury, allowing the administration to circumvent the appropriations restrictions.

The Obama administration may, in its final days after November’s elections, attempt to settle the insurer lawsuits by paying risk-corridor claims from the Judgment Fund. Such an action would contradict opinions of the Congressional Research Service (CRS) and the Government Accountability Office (GAO). Both organizations have stated their belief that the Judgment Fund cannot be used to spend money on accounts and programs where Congress itself has declined to appropriate funds. Particularly given the views of these non-partisan legal experts, federal judges can, and should, look skeptically upon, and even overturn entirely, any conspiracy by the Obama administration and insurers to create a backdoor bailout without Congress’s explicit consent in the form of an appropriation.

The next administration should fight these insurer lawsuits tooth-and-nail, refusing to either settle the lawsuits or to use the Judgment Fund to pay any claims — unless and until Congress explicitly appropriates funds for that purpose. Under our Constitution, the power of the purse lies solely with Congress, not with unelected bureaucrats who believe they can dispense billions of dollars in taxpayer money to their crony-capitalist colleagues at will.

Potential Savings to Taxpayers: Insurers submitted $2.5 billion in unpaid risk-corridor claims for 2014. Given continued insurer losses in 2015 and 2016, a conservative estimate would suggest a total of $7.5 billion in unpaid claims for each of 2014, 2015, and 2016. Actions by a new administration could save taxpayers from this bailout totaling billions — possibly tens of billions — of dollars.

REINSURANCE

Reinsurance, the second program intended to ease the transition to Obamacare, would, according to the text of the law, impose “fees” on all employer-provided plans from 2014 to 2016. The funds were designed to 1) repay the Treasury for the cost of another reinsurance program in place from 2010 to 2013, and 2) subsidize insurers selling Obamacare-compliant individual plans with high-cost patients.

Action: Reclaim Funds for the Treasury: While the text of Obamacare explicitly states the Obama administration should prioritize repaying the Treasury over repaying insurers, the administration has done precisely the opposite — putting payments to insurers ahead of repayments to taxpayers. The non-partisan experts at CRS have called the Obama administration’s actions a clear violation of the text of the law.

The next administration can and should limit this insurer bailout by reorienting its priorities in line with both the law and basic common sense — taxpayers deserve priority before insurers. It could also sue insurers to recoup bailout funds dispensed in error because of the Obama administration’s reckless disregard for the law.

Potential Savings to Taxpayers: While insurers appear likely to receive the full $20 billion in reinsurance payments provided for under the law from 2014 to 2016, the Treasury is set to receive far less than the $5 billion it was promised under the statute. Reorienting the reinsurance priorities to put taxpayers before insurers will likely save the public billions.

COST-SHARING SUBSIDIES

Obamacare requires insurers to provide reduced cost sharing — that is, lower deductibles and co-payments — to households with incomes under 250 percent of the federal poverty level. But the text of the law nowhere includes an explicit appropriation to subsidize the insurer-provided discounts. The Obama administration, refusing to be bothered by such trifling inconveniences as the plain text of a statute, will have already paid out $13.9 billion by the end of this fiscal year (September 30). A future administration could turn the bailout taps off within days of taking office.

Action: Turn Off the Bailout Taps Immediately: As noted in the deposition of an IRS employee recently released by the House Ways and Means Committee, the Obama administration decided to turn on these bailout taps despite the plain text of the law — and without undertaking any public notice-and-comment process. A future administration could turn the bailout taps off in a similar fashion within days of taking office.

Action: Settle the House Lawsuit: On May 12, in United States District Court, Judge Rosemary Collyer agreed with the House of Representatives in U.S. House of Representatives v. Burwell, an important constitutional case related to the cost-sharing subsidies. The House argued, and Judge Collyer agreed, that the Obama administration’s payments to insurers violated the Constitution — which, by prohibiting any payment without an explicit appropriation, gives Congress, and only Congress, the “power of the purse.”

By settling the House lawsuit, the next administration would provide another level of insurance that the bailout taps to insurers could not be re-started. The House’s suit requests a permanent injunction prohibiting the Treasury Department and the Department of Health and Human Services from spending any taxpayer funds on cost-sharing subsidies to insurers unless and until Congress provides an explicit appropriation. If the next administration agreed to such a measure by settling the House’s lawsuit in federal court, it would bind all future administrations to the same standard — restraining executive power and restoring the separation of powers.

Potential Savings to Taxpayers: The Congressional Budget Office estimates that cost-sharing subsidies will total $45 billion over the next four fiscal years — roughly the time span of the next administration — and $130 billion over a decade, meaning that a new administration could save taxpayers tens of billions, if not hundreds of billions, of dollars.

This series of actions from the next administration would save taxpayers more than $50 billion in total — $7.5 billion from risk corridors, up to $5 billion from reinsurance, and $45 billion in cost-sharing subsidies — and potentially triple that amount if the restrictions on cost-sharing subsidies become permanent.

Just as important, the next administration should also thoroughly investigate the actions taken by the Obama administration regarding these insurer bailouts for any hint of illegality. In the deposition released by the House Ways and Means Committee, the IRS’s chief risk officer noted “there was some risk to making these [cost-sharing subsidy] payments with respect to the . . . Anti-Deficiency Act,” which he recalled “has criminal penalties associated with it” for federal employees who spend money not appropriated by Congress. The chief risk officer noted that “we take [the Anti-Deficiency Act] very seriously.”

At minimum, the next administration should investigate just how seriously all Obama administration employees took the Anti-Deficiency Act, and whether they violated the law — not to mention the Constitution’s separation of powers — to shovel bailout funds to insurers. The IRS’s chief risk officer noted that then-attorney general Eric Holder and Treasury Secretary Jack Lew were personally involved in the decision to turn on the bailout taps for the cost-sharing subsidies. In addition to turning off those taps, a new administration should determine whether the Obama administration’s sweetheart deals for health insurers crossed the line from mere crony capitalism into criminal activity.

This post was originally published at National Review.

Washington Versus the American People

Various press reports indicate that Congress is preparing to announce a “deal” that would allow Obamacare to move forward virtually uninterrupted. If that is what happens, such as a “grand bargain” may be a political win inside the Beltway but a loss for the American people.

It’s a loss for the Americans who are losing their health insurance due to Obamacare. It’s a loss for the workers who have lost their jobs due to the law. It’s a loss for those who will pay more next year for their health insurance. And it’s a loss for future generations, who will pay the price for Obamacare’s trillions of dollars in spending.

This debate has never been about satisfying one political party or another; it’s been about common-sense solutions that protect the American people from Obamacare. And the materializing “deal” ensures their pleas to Washington for relief from the health law’s burdens will, for the moment at least, fall on deaf ears.

This post was originally published at The Daily Signal.

Sen. DeMint Op-Ed: A Letter to President Obama

Dear Mr. President:

As the temporary slowdown in government operations enters its second week, I write to explain why conservatives have insisted on making the Patient Protection and Affordable Care Act the prime source of contention. Speaking for our organization, I can tell you we’re in this fight because of the harm the law is inflicting on Americans across the country.

We are fighting for people like Michael Cerpok, a leukemia patient in Arizona, who recently learned he will lose his current health insurance due to this misguided law. He notes that “my $4,500 out-of-pocket [expense] is going to turn into a minimum of $26,000 out-of-pocket to see the doctor that I’ve been seeing the last seven years,” and he worries that he and his wife might need to take second jobs to stay afloat.

We are fighting for people like California resident Tom Waschura, who voted for you twice, yet was shocked by the higher premium bill he recently received in the mail. Tom’s insurance rates will go up by almost $10,000 for him and his family. He fears that these higher premiums will harm his family, and jobs in his area: “When you take $10,000 out of my family’s pocket each year, that’s otherwise disposable income or retirement savings that will not be going into our local economy.”

We are fighting for people like Rod Coons and Florence Peace, a retired Indiana couple satisfied with their current coverage. “I’d prefer to stay with our current plan because it meets our needs,” says Rod. But their plan isn’t government-approved under Obamacare’s new rules, so Rod and Florence are losing their health insurance plan at the end of this year.

You have claimed that Obamacare has nothing to do with the budget. But over the next decade, this widely unpopular program will add nearly $1.8 trillion in new federal spending—and will cost taxpayers trillions more beyond that, making it nearly impossible to balance the federal budget. What’s more, for millions of struggling Americans, the law will crush their family budgets due to fewer work hours, lost jobs, and higher premiums. With the economy still mired in a scattered and sluggish recovery, these people deserve relief from Obamacare—and they deserve it now.

Your Administration has already granted numerous waivers and exemptions during the three years since the law was passed. Millions of union members received temporary waivers from the law’s costly benefit requirements. Big businesses have received a one-year delay from the onerous employer mandate—a delay your Health and Human Services Secretary, Kathleen Sebelius, struggled to defend in an interview earlier this week. And Members of Congress have obtained special treatment for themselves and their staffs—illegally—that allows them to continue to receive taxpayer-funded insurance subsidies.

At a time when so many Americans are suffering because of the rollout of this new law, I remain puzzled by your failure to acknowledge the faults caused by this unfair, unworkable, and unpopular measure. We believe the law should be fully repealed, but at minimum, both sides should agree not to fund the law for one year—a “time-out” that would halt the law’s most harmful effects before they start.

Even though Democrats have thus far refused to negotiate on anything related to the current government slowdown, millions of citizens need relief from this law. I encourage you and your Administration to work with Congress on ways to stop Obamacare from harming the American people and the American economy.

This post was originally published at The Daily Signal.