Single-Payer Will Increase Fraud and Corruption

It seems fitting that the Democratic National Committee chose Miami to host the first debates of the 2020 presidential campaign. Given that many of the candidates appearing on stage have endorsed a single-payer health care plan, the debates’ location epitomizes how government-run care will lead to a massive increase in fraud and corruption.

In South Florida, defrauding government health care programs doesn’t just qualify as a cottage industry — it’s big business. In 2009, “60 Minutes” noted that Medicare fraud “has pushed aside cocaine as the major criminal enterprise.” One former fraudster admitted that likely thousands of businesses in the Miami area alone were defrauding Medicare. Eric Holder, then the attorney general, explained why: Medicare fraud is easier — and carries smaller penalties — than dealing drugs.

A 2009 Government Accountability Office report also highlighted pervasive fraud within Medicare. For instance, some South Florida home health agencies “have submitted claims for visits that were probably not provided, such as claims for visits that allegedly occurred when hurricanes were in the area.” Auditors also found that fraudsters paid off seniors to cooperate with their scams. Because some “beneficiaries purportedly received more income in illegal [kickbacks] than from their monthly disability checks,” they would not report fraud to government officials.

Lest anyone believe that much has changed in the past decade, the spring of 2019 saw not one but two billion-dollar — that’s billion with a B — fraud rings against Medicare exposed in a single week. On April 7, Philip Esformes, a South Florida businessman, was convicted for bilking Medicare and Medicaid out of $1.3 billion in fraudulent nursing home claims. Two days later, federal authorities charged dozens more individuals in a $1.2 billion Medicare scam regarding neck braces.

If you think that the single-payer bills promoted by Sens. Bernie Sanders, Elizabeth Warren, and others would stop this rampant fraud, think again. Both the House and Senate single-payer bills include not a single new provision designed to stop crooks from defrauding government health programs. The bills would apply some existing anti-fraud provisions to the new government-run health program. However, given the widespread fraud in Medicare and Medicaid, expanding the failed status quo would increase corruption rather than reducing it.

To give some sense of perspective, in the last fiscal year Medicare had a rate of improper payments — payments either made in the wrong amount, or made under fraudulent pretenses — of 8.12%. Medicaid had an even higher improper payment rate of 9.8%. Extrapolating those rates to all health spending nationwide yields estimated improper payments under a single-payer system of between $296.1 billion and $357.3 billion. These sums of potential improper payments under single payer exceed the entire economies of countries like Finland and Denmark.

If lawmakers like Bernie Sanders want to see the ways in which socialized medicine will increase fraud, they don’t have far to look. Sanders’ Senate colleague Robert Menendez received nearly $1 million in gifts and favors from Salomon Melgen, yet another South Florida medical provider convicted of defrauding Medicare. Yet over several years, Menendez repeatedly lobbied Medicare officials on his friend Melgen’s behalf — using his influence as a senator to try to protect Melgen from his crimes.

At next week’s debates, moderators should ask candidates supporting Sanders’ plan whether they condone the actions of their colleague Menendez — and whether they think concentrating all power in a government-run health plan will increase or decrease the incidence of fraud and corruption within our health care system. The American people deserve better than to pay massive tax increases for this $32 trillion scheme, only to see much of that money end up in the hands of criminal fraudsters.

This post was originally published at Real Clear Politics.

Politico Reporter’s “Fact Check” of Trump Riddled with Omissions

Who will fact check the fact checkers? That question reared its head again late last week, as a reporter from Politico attempted to add “context” to health-care-related comments the president made at a political rally in Las Vegas. As with Trump himself, what Politico reporter Dan Diamond omitted said just as much as what he included.

During his speech, the president talked about pre-existing conditions, saying Republicans want to “protect patients with pre-existing conditions:”

I’ve previously written about the Obamacare lawsuit in question—why I oppose both the lawsuit, and the Justice Department’s intervention in the case, as unwise judicial activism—and Republicans’ poor response on the issue. But note what neither Diamond nor Trump mentioned: That the pre-existing condition “protections” are incredibly costly—the biggest driver of premium increases—and that, when voters are asked whether they would like these provisions “if it caused the cost of your health insurance to go up,” support plummets by roughly 40 percentage points.

If you need any more persuading that the media are carrying liberals’ water on pre-existing conditions, consider that the Kaiser Family Foundation released their health care tracking survey earlier this month. In it, Kaiser asked whether people are worried that “if the Supreme Court overturns the health care law’s protections for people with pre-existing health conditions you will have to pay more for health insurance coverage.”

The survey didn’t mention that all individuals are already paying higher premiums for those “protections” since Obamacare took effect—whether they want to or not, and whether they have a pre-existing condition or not. In fact, the survey implied the opposite. By only citing a scenario that associates premium rises with a Supreme Court ruling striking down the provisions, Kaiser misled respondents into its “preferred” response.

Then last week, Politico ran another story on the Republican strategy to “duck and cover” regarding the states’ lawsuit, which might of course have something to do with the tenor of Politico’s “reporting” on pre-existing conditions in the first place.

Next, to Single-Payer Proposals

Following the comments about pre-existing conditions, the president then went on the attack, and Diamond felt the need to respond.

Diamond accurately notes that “there is no consensus ‘Democrat plan.’” As the saying goes, the left hand doesn’t always know what the far-left hand is doing. But Trump also made crystal clear what specific Democratic plan he was describing—the single-payer plan written by Sen. Bernie Sanders (I-VT). He even quoted the $32 trillion estimated cost of the plan, as per a Mercatus Center study that became the topic of great dispute earlier this summer.

Here’s what Section 102(a) of Sanders’ bill (S. 1804) says about coverage under the single-payer plan: “SEC. 102. UNIVERSAL ENTITLEMENT. (a) IN GENERAL.—Every individual who is a resident of the United States is entitled to benefits for health care services under this Act. The Secretary shall promulgate a rule that provides criteria for determining residency for eligibility purposes under this Act.”

And here’s what Section 107(a) of the bill says about individuals trying to keep their own health coverage, or purchasing other coverage, to “get out” of the single-payer system:

SEC. 107. PROHIBITION AGAINST DUPLICATING COVERAGE.

(a) IN GENERAL.—Beginning on the effective date described in section 106(a), it shall be unlawful for—

(1) a private health insurer to sell health insurance coverage that duplicates the benefits provided under this Act; or

(2) an employer to provide benefits for an employee, former employee, or the dependents of an employee or former employee that duplicate the benefits provided under this Act.

In other words, the Sanders bill “would force every American on to government-run health care, and virtually eliminate all private and employer-based health care plans”—exactly as the president claimed.

His “most” wording cleverly attempted to elide the fact that the most prominent Democratic plan—the one endorsed by everyone from Sanders to Sens. Elizabeth Warren (D-MA), Cory Booker (D-NJ), Kamala Harris (D-CA), and Kirsten Gillibrand (D-NY), and vigorously pursued by the activist left—does exactly what Trump claimed.

I have little doubt that, had the president inflated the Mercatus study’s estimated cost of Sanders’ single-payer plan—for instance, had Trump said it would cost $42 trillion, or $52 trillion, instead of using the $32 trillion number—Diamond (and others) would have instantly “fact checked” the incorrect number. Given that Diamond, and just about everyone else, knew Trump was talking about the single-payer bill, this so-called “fact check”—which discussed everything but the bill Trump referenced—looks both smarmy and pedantic, specifically designed to divert attention from the most prominent Democratic plan put forward, and Trump’s (accurate) claims about it.

Medicare Benefits Not Guaranteed

Ironically, if Diamond really wanted to fact check the president, as opposed to playing political games, he had a wide open opportunity to do so, on at least two levels. In both cases, he whiffed completely.

In the middle of his riff on single-payer health care, President Trump said this: “Robbing from our senior citizens—you know that? It’s going to be one of the great catastrophes ever. The benefits—they paid, for their entire lives—are going to be taken away.” Wrong, wrong, wrong.

Politicians can claim all they want that people “paid into” Medicare to get back their benefits, but it isn’t true. The average senior receives far more in benefits than what he or she paid into the system, and the gap is growing. Medicare’s existing cash crunch makes a compelling case against expanding government-run health care, but it still doesn’t mean that seniors “paid for” all (as opposed merely to some) of the benefits they receive.

Second, as I have previously noted, Sanders’ bill is not “Medicare-for-all.” It’s “Medicare-for-none.” Section 901(a)(1)(A) of the bill would end benefits under the current Medicare program, and Section 701(d) of the bill would liquidate the existing Medicare trust fund. If seniors like the Medicare coverage, including the privately run Medicare Advantage plans, they have now, they would lose it. Period.

To sum up, in this case Politico ignored:

  1. The cost of the pre-existing condition “protections”—how they raise premiums, and how Obamacare advocates don’t want to mention that fact when talking about them;
  2. The way that the most prominent Democratic health care bill—the one that President Trump very clearly referred to in his remarks—would abolish private coverage and force hundreds of millions of individuals on to government-run health care;
  3. Inaccurate claims President Trump made about seniors having “earned” all their Medicare benefits; and
  4. The fact that Sanders’ bill would actually abolish Medicare for seniors.

And people say the media have an ideological bias in favor of greater government control of health care. Why on earth would they think that?

This post was originally published at The Federalist.

The Return of the Individual Mandate

Well, that didn’t last long. Fewer than six months after Congress effectively repealed Obamacare’s individual mandate—and more than six months before that change actually takes effect, in January next year—another liberal group released a plan to reinstate it. The proposal comes as part of the Urban Institute’s recently released “Healthy America” plan.

In the interests of full disclosure: I criticized Republicans for repealing the individual mandate as part of the tax reform bill last fall. I did so not because I support requiring Americans to buy health insurance—I don’t—but because Republicans need to go further, and repeal the federal insurance regulations that represent the heart of Obamacare and necessitated enacting the mandate in the first place.

Lipstick on an Unpopular Pig?

The Urban Institute plan tries to re-brand a federal requirement to purchase insurance by never even using the term “mandate” in its proposal. Instead, the document says that “uninsured people would lose a percentage of their standard deduction (or the equivalent for the itemized deduction) when they pay income taxes….Half the lost deduction amount could be refunded the following year if the person enrolls in coverage and maintains it for the next full plan year.”

But as the saying goes, if it looks like a mandate and functions like a mandate, it’s a mandate. The paper claims that taking away a “tax benefit…would be better received politically than the additional tax penalty” under Obamacare, but functionally, that provides a distinction without a difference. Even the Urban researchers call this “loss of a tax benefit” a “penalty” later in the paper, because that’s what it is: A penalty for remaining uninsured.

The paper even includes a chart highlighting the average tax for remaining uninsured by income under the proposal, which generally mimics the tax penalties the uninsured pay under Obamacare:

Other Components of the Plan

Unfortunately, the Urban Institute plan goes well beyond merely reinstating the individual mandate, albeit in a slightly different form. It also makes other major changes to the health care system that would entrench the role of the federal government in it. It would federalize Medicaid health insurance coverage by transferring Medicaid enrollees into exchanges, supplementing benefits for low-income children and individuals with disabilities, and requiring states to keep paying their current contributions into the system. (Long-term care coverage under Medicaid would continue unchanged.)

The exchanges would have a new government-run plan—the default option for low-income enrollees automatically enrolled into coverage—and options run by private insurers. However, all plans would cap reimbursement to doctors and hospitals at Medicare rates, making premiums more “affordable” by imposing price controls that would potentially pay providers at below-market levels. The plan also proposes to “save” on prescription drugs by extending Medicaid rebates (i.e., price controls) to additional individuals.

The Urban plan also proposes much richer health coverage subsidies, consistent with its earlier 2015 proposal. Specifically:

  • Individuals with incomes below the federal poverty level would not pay either premiums or cost-sharing;
  • Individuals with incomes below 138 percent of poverty (the threshold for Obamacare’s Medicaid expansion) would not pay premiums;
  • Premium subsidies would be linked to a plan paying 80 percent of expected health care costs (i.e., actuarial value), as opposed to a 70 percent actuarial value plan under Obamacare;
  • Individuals would have to pay less of their income in premiums than under Obamacare—for instance, an individual with income just under four times poverty would pay 8.5 percent of income in premiums, as opposed to 9.56 percent under Obamacare; and
  • Unlike Obamacare, which limits eligibility for subsidies to those with incomes under four times poverty, the Urban plan would limit premium payments to 8.5 percent of income at all income levels (i.e., including for those making more than four times poverty).

Moreover, “short-term and other private insurance plans that do not comply with Healthy America regulations (consistent with [Obamacare’s] regulatory framework” would be prohibited, including association health plans and other concepts the Trump administration has proposed to give Americans more flexible coverage options.

The Urban researchers admit their plan would require significant new revenues to pay for the new subsidies—an estimated $98 billion in the first year alone. The plan only briefly discusses options to pay for this new spending, but it admits that, even if Congress hikes the payroll tax by an additional percent, raising an estimated $823 billion over ten years, “other adjustments to excise and income taxes would be needed.”

Where the Plan Fits In

At the end of their paper, the Urban researchers include a helpful chart comparing the various liberal proposals for expanded government involvement in health care—lest anyone claim that the left hand doesn’t know what the far-left hand is doing. In general:

  • Elizabeth Warren (D-MA) introduced a bill that would not go as far as the Urban plan. It incorporates the subsidy changes Urban proposed, adds a government-run plan, and imposes other regulatory changes to the exchanges, but (unlike the Urban plan) retains the status quo for Medicaid;
  • The Center for American Progress’ “Medicare Extra” proposal, which I wrote about earlier this year, goes farther than the Urban plan, by eliminating Medicaid (which the Urban plan modifies) entirely, and including more robust auto-enrollment provisions, with “Medicare Extra” the default option for all Americans; and
  • The single-payer bill introduced by Sen. Bernie Sanders (I-VT) would go farthest of all, abolishing virtually all forms of insurance (including Medicare) and creating a single-payer health system.

So much for “If you like your plan, you can keep it.” For that matter, so much for “If you like your freedom, you can keep it.” Like it or not, the Left seems insistent on terrifying the American public with what Ronald Reagan viewed as the nine most effective words to do so: “I’m from the government and I’m here to help.”

This post was originally published at The Federalist.

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

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

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

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

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

Oops.

If You Like Your Obamacare, Too Bad

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

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

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

Liberals Can’t Help Deceiving People

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

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

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

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

Hey, Reporters…?

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

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

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

This post was originally published at The Federalist.