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.

An Insight Into Divisions over Administration Authority to Pay Obamacare Subsidies

A federal district judge ruled this month, in a lawsuit brought by House Republicans, that the Obama administration lacks the authority to pay cost-sharing subsidies to health insurers if Congress has not appropriated the funds. Some civil servants in the administration may agree.

The House Ways and Means Committee released a deposition Tuesday of David Fisher, former chief risk officer for the Internal Revenue Service. In it, Mr. Fisher recounts a series of events in late 2013 and early 2014 regarding the source and legality of Obamacare cost-sharing subsidies to insurers. The administration initially argued that the subsidies were subject to the budget sequester. By early 2014, however, it had shifted to the position that the cost-sharing subsidies were not subject to the sequester and could be paid under the appropriation authority for a separate program of premium subsidies created by the Affordable Care Act.

In the deposition, Mr. Fisher describes a January 2014 meeting at the Office of Management and Budget during which OMB staff showed—but did not allow IRS employees to retain—a memo ostensibly giving the federal government legal authority to combine the cost-sharing and premium subsidies. Mr. Fisher said the legal brief lacked a “single, main argument.” It was “almost a commentary on elements that, in total, would draw the conclusion that these payments out of the permanent appropriation would be appropriate.”

Mr. Fisher said he disagreed with OMB’s legal analysis and believed that there was “no clear reference” to an appropriation for the cost-sharing subsidies in the health-care law. He testified that the IRS’s chief financial officer and deputy chief financial officer shared his concerns. IRS Commissioner John Koskinen allowed employees to air those concerns soon after the OMB meeting, he said, but ultimately allowed the payments to proceed. Mr. Fisher testified that it was “a very strong consensus” of people in “fairly senior positions”—then-Attorney General Eric Holder had received a briefing, Mr. Fisher recalled—that the payments should proceed.

There is a notable point in the deposition: “There could be many other people who think this is about health care. To us,” Mr. Fisher said, referring to himself and others who shared his concerns, “this was not about health care.” The issue is abiding by appropriations law, he said, not least because the Anti-Deficiency Act provides criminal penalties for federal employees who spend funds not legally appropriated.

Democrats on the House Ways and Means Committee objected that Mr. Fisher was subpoenaed to testify, with Rep. Sander Levin calling it “another effort by the majority to try to undermine the Affordable Care Act.” Mr. Fisher, though, testified that he views the issue through a different prism.

Shortly before the federal ruling this month, both the House Ways and Means and the Energy and Commerce Committees issued subpoenas for internal documents relating to the cost-sharing subsidies. The panels have sought these documents for 15 months. The internal deliberations and potential conflicts raised by Mr. Fisher’s testimony could be part of the reason the administration has not released all those documents. It appears that there were questions about the legality of the cost-sharing subsidies within as well as outside the Obama administration.

This post was originally published at the Wall Street Journal Think Tank blog.

Gov. Jindal Op-Ed: The “Stupid Party,” Revisited

Nearly two years ago, after Mitt Romney’s presidential campaign went down to defeat, I gave some ideas in these pages on CNN about how Republicans can win future elections. On that list was an instruction that Republicans need to stop being the “stupid party.”

While it is true that we as Republicans need to do a better job articulating our principles and being the party of bold new ideas, the Democrats have a far worse problem. Democrats need to stop being the party that thinks Americans themselves are stupid.

To take one example: At a House Ways and Means Committee hearing in April, members asked Treasury official Mark Iwry if the Obama administration believed it could delay Obamacare’s individual mandate, much as the Treasury delayed the employer mandate.

Iwry’s response was stunning: “If we believe it is fair to individuals to keep that (individual mandate) in place because it protects them…then we don’t reach the question (of) whether we have legal authority.”

The level of sheer arrogance in that response boggles the mind. A Treasury spokesman later publicly disclosed the Obama administration’s official position: The federal government, namely the IRS, is requiring all individuals to purchase insurance to “protect” the American people from themselves.

Lest anyone think this attitude comes from anywhere other than the very top of the Obama administration, take the President’s own comments last October. In a speech in Boston at the peak of the controversy surrounding insurance cancellations, the President repeatedly derided canceled plans as “substandard…cut-rate plans that don’t offer real financial protection.” And he didn’t just insult the plans themselves, he insulted the people who purchased them: “A lot of people thought they were buying coverage, and it turned out to be not so good.”

In other words, if you like your current plan, you’re delusional—or a dimwit.

The President soon backtracked, and unilaterally waived portions of the bill he signed into law, allowing some individuals to keep their plans, temporarily. But while the President expressed regret for having engaged in what Politifact dubbed the “Lie of the Year,” he has not once apologized for the arrogant and patronizing attitude underpinning the entire controversy—one in which the President believes that he and his bureaucrats know better than everyday Americans.

Sadly, this attitude does not just pervade Washington liberals; it’s also right at home in my state of Louisiana.

In 2012, the executive director of a state teachers’ union claimed that school scholarship programs wouldn’t work, because low-income parents could not make decisions about their children’s education, saying they “have no clue.”

These comments perfectly illustrate the left’s double standards. Both President Barack Obama and Eric Holder—the attorney general who filed suit to impede our scholarship program but lied to Congress about it last month—choose to educate their children at elite Washington schools costing more than $35,000 per year.

But if Americans of more modest financial means—whose annual income may be dwarfed by the tuition fees President Obama easily pays for his daughters—want their children to escape failing schools, or buy the health plan they want, the left exclaims: “Oh no, we can’t let you do that.”

That’s exactly how The Nation magazine reacted to the health care alternative I recently endorsed. Responding to the plan’s new incentives giving individuals more choices and insurance options, its analysts claimed that “most people are not informed well enough (sic) to make the right choices about which plan to buy, what it covers, what it will cost them, and especially how to decide what care to seek.” That’s what The Nation considers an “epic fail:” allowing the “ignorant” American people to pick their own health care options.

I will readily admit that we do need to improve the transparency of health care cost and quality information. And of course in an emergency no patient in cardiac arrest will be able to “comparison shop” for treatment options.

But if The Nation, President Obama, or anyone else on the left thinks the American people are too dumb to pick a school or health plan, they should say so publicly—and in so many words.

Ronald Reagan famously quipped that the nine most terrifying words in the English language are “I’m from the government, and I’m here to help.”

I believe the best way to help is to empower citizens, trusting them to make good choices, not creating nanny states to “protect” individuals from themselves. As a matter of policy, giving Americans choice in schools and health care is simply the right thing to do.

And as a matter of politics, insulting voters’ intelligence is just plain stupid.

This post was originally published at CNN.