Three Reasons to Oppose the Swampy Budget Deal

On Monday, congressional leaders and the Trump administration announced agreement on legislation that would set budget and spending parameters for the next two years. The agreement would suspend the debt limit through July 2021, and establish spending levels for lawmakers to enact appropriations measures for the remainder of this Congress.

Conservatives have rightly criticized the agreement as abandoning the principles of smaller government, with a return to the trillion-dollar deficits seen under Barack Obama (and this time under a more robust economy). Among the many reasons to oppose the agreement, three in particular stand out.

1. More Spending Now

When the Budget Control Act, which established the existing spending caps, passed in the summer of 2011, Sen. Mitch McConnell (R-KY)—then the minority leader, now the majority leader—famously said it would slow down the “big government freight train.”

But in the time since that bill’s enactment, McConnell and his colleagues in Congress have repeatedly increased the Budget Control Act’s spending caps, speeding up the big government freight train over and over again.

2. More Spending Later

On one level, the agreement at least wins points for honesty, by abandoning the pretense that Congress has any interest in controlling spending. However, future generations will wish that Congress had substituted some actual fiscal discipline for profligacy.

3. No Policy Improvements

To assuage the conservative concerns about the package’s spending binge, Republican leaders have pointed to other language in the agreement. Specifically, the text states that Republican leaders and the White House would have a veto on any appropriations riders passed by the Democratic House that would seek to (for instance) defund regulatory actions by the current administration:

Congressional leaders and the Administration agree that, relative to the [Fiscal Year] 2019 regular appropriations acts, there will be no poison pills, additional new riders…other changes in policy or conventions…or any non-appropriations measures unless agreed to on a bipartisan basis by the four leaders with the approval of the President.

In theory, this language blocks Democrats from eliminating restrictions on taxpayer funding of abortion, among other liberal priorities.

If Democrats could block Republicans from enacting appropriations policy riders over the past two years, despite serving in the minority, could Republicans have blocked Democrats from enacting their own policy riders with continued control of the Senate and White House? That question should answer itself—provided Republicans had any spine (admittedly an uncertain prospect).

Instead, Republicans agreed to hundreds of billions of dollars in additional spending to “win” something they already had—an understanding that neither side would enact appropriations policy riders. Taken from the most cynical perspective, the agreement uses the pro-life community’s worries about Democratic riders—riders which both the White House and Republican Senate already had the means to stop—to rationalize congressional Republicans’ continued spending binge.

Trump came into office pledging to “drain the swamp.” But the new government spending contemplated by this agreement wouldn’t drain the swamp so much as grow it. Conservatives, and the American people as a whole, deserve better.

This post was originally published at The Federalist.

California Is What’s Wrong with Obamacare

In recent days, California lawmakers have finalized their budget. The legislation includes several choices regarding health care and Obamacare, most of them incorrect ones. Doling out more government largesse won’t solve rising health costs, and it will cause more unintended consequences in the process.

Health Coverage for Individuals Unlawfully Present

This move has drawn the most attention, as the budget bill expands Medicaid coverage to illegally present adults aged 19-26. California will pay the full share of this Medicaid spending, as the federal government will not subsidize health coverage for foreign citizens illegally present in the United States.

As to those who disagree with this move, one can study the words of none other than Hillary Clinton. In 1993, she testified before Congress in opposition to giving illegal residents full health benefits, because “illegal aliens” were coming to the United States for health care even then:

We do not think the comprehensive health care benefits should be extended to those who are undocumented workers and illegal aliens. We do not want to do anything to encourage more illegal immigration into this country. We know now that too many people come in for medical care, as it is. We certainly don’t want them having the same benefits that American citizens are entitled to have.

If Clinton’s words don’t sound compelling enough, consider one way that California may finance these new benefits: By reinstating Obamacare’s individual mandate. To put it another way, people who obey the law (i.e., the mandate) will fund free health coverage for people who by definition have broken the law by coming to, or remaining in, the United States unlawfully.

A Questionable Individual Mandate

This issue faces multiple questions on both process and substance. First, the budget bill includes about $8 million for the state’s Franchise Tax Board to implement an individual mandate, but doesn’t actually contain language imposing the mandate. The bill that would reimpose the mandate, using definitions originally included in the federal law, passed the Assembly late last month, but faces opposition in the Senate.

Third, implementing the mandate imposes legal and logistical challenges. I argued in the Wall Street Journal last fall that states cannot require employers who self-fund health coverage to report their employees’ insurance coverage to state authorities. The mandate bill the Assembly passed does not include such a requirement.

Without a reporting requirement on employers, a mandate could become toothless, because the state would have difficulty verifying coverage to ensure compliance—people could lie on their tax forms and likely would not get caught. However, imposing a reporting regime, either through the mandate bill or regulations, would invite an employer to claim that federal labor law (namely, the Employee Retirement Income Security Act) prohibits such a state-based requirement.

More Spending on Subsidies

While the budget bill does not include an explicit insurance mandate, it does include more than $295 million to “provide advanceable premium assistance subsidies during the 2020 coverage year to individuals with projected and actual household incomes at or below 600 percent of the federal poverty level.”

Obamacare epitomized the problems that policy-makers face in subsidizing health insurance. The federal law includes a subsidy “cliff” at 400 percent of the poverty level. Households making just under that threshold can receive federal subsidies that could total as much as $5,000-$10,000 for a family, but if their income rises even one dollar above that “cliff,” they lose all eligibility for those subsidies.

By penalizing individuals whose incomes rise even marginally, the subsidy “cliff” discourages work. That’s one of the main reasons the Congressional Budget Office said Obamacare would reduce the labor supply by the equivalent of 2.5 million full-time jobs.

California decided to replace these work disincentives with yet more spending on subsidies. This year, the federal poverty level stands at $25,750 for a family of four—which makes 600 percent of poverty equal to $154,500. In other words, a family making more than $150,000 will now classify as “low-income” for purposes of the new subsidy regime.

Hypocrisy by Officials

The individual mandate bill gives a significant amount of authority for its implementation to Covered California, the state’s insurance exchange. The bill says the exchange will determine the amount of the mandate penalty, and determine who receives exemptions from the mandate.

Who runs California’s exchange? None other than Peter Lee, the man I previously profiled as someone who earns $436,800 per year, yet refuses to buy the exchange coverage he sells. Or, to put it another way, if the mandate passes, Lee will be standing in judgment of individuals who refuse to do what he will not—buy an Obamacare plan.

If you think that seems a bit rich, you would be correct. But it epitomizes the poor policy choices and hypocritical actions taken by officials to prop up Obamacare in California.

This post was originally published at The Federalist.

Inside the Federal Government’s Health IT Fiasco

Recent surveys of doctors show a sharp rise in frustrated physicians. One study last year analyzed a nearly 10 percentage point increase in burnout from 2011 to 2014, and laid much of the blame for the increase on a single culprit: Electronic health records. Physicians now spend more time staring at computer screens than connecting with patients, and find the drudgery soul-crushing.

What prompted the rise in screen fatigue and physician burnout? Why, government, of course. A recent Fortune magazine expose, titled “Death by 1,000 Clicks,” analyzed the history behind federal involvement in electronic records. The article reveals how electronic health records not only have not met their promise, but have led to numerous unintended and harmful consequences for American’s physicians, and the whole health care market.

Electronic Bridge to Nowhere

The Fortune story details all the ways health information technology doesn’t work:

  • Error-prone and glitch-laden systems;
  • Impromptu work-arounds created by individual physicians and hospitals make it tough to compare systems to each other;
  • An inability for one hospital’s system to interact with another’s—let alone deliver data and records directly to patients; and
  • A morass of information, presented in a non-user-friendly format, that users cannot easily access—potentially increasing errors.

The data behind the EHR debacle illustrate the problem vividly. Physicians spend nearly six hours per day on EHRs, compared to just over five hours of direct time with patients. A study concluding that emergency room physicians average 4,000 mouse clicks per shift, a number that virtually guarantees doctors will make data errors. Thousands of documented medication errors caused by EHRs, and at least one hundred deaths (likely more) from “alert fatigue” caused by electronic systems’ constant warnings.

Other anecdotes prove almost absurdly hysterical. The EHR that presents emergency room physicians 86 separate options to order Tylenol. The parody Twitter account that plays an EHR come to life: “I once saw a doctor make eye contact with a patient. This horror must stop.” The EHR system that warns physicians ordering painkillers for female patients about the dangers of prescribing ibuprofen to women while pregnant—even if the patient is 80 years old.

What caused all this chaos in the American health care market? One doctor explained his theory: “I have an iPhone and a computer and they work the way they’re supposed to work, and then we’re given these incredibly cumbersome and error-prone tools. This is something the government mandated” (emphasis added). Therein lies the problem.

Obama’s ‘Stimulus’ Spending Spree

In June 2011, when talking about infrastructure projects included in the 2009 “stimulus” legislation, President Obama famously admitted that “shovel-ready was not as shovel-ready as we expected.” Electronic health records, another concept included in the “stimulus,” ran into a very similar problem. Farzad Mostashari, who worked on health IT for the Obama administration from 2009-11, admitted to Fortune that creating a useful national records system was “utterly infeasible to get to in a short time frame.”

At the time, however, the Obama administration billeted electronic health records as the “magic bullet” that would practically eliminate medical errors, while also reducing health costs. Every government agency had its own “wish list” of things to include in EHR systems. Mostashari admitted this dynamic led to the typical bureaucratic problem of trying to do too much, too fast: “We had all the right ideas that were discussed and hashed out by the committee, but they were all of the right ideas” (emphasis original).

Meanwhile, records vendors saw dollar signs, and leapt at the business opportunity. As Fortune notes, many systems weren’t ready for prime time, but vendors didn’t focus on solving those types of inconsequential details:

[The] vendor community, then a scrappy $2 billion industry, griped at the litany of requirements but stood to gain so much from the government’s $36 billion injection that it jumped in line. As Rusty Frantz, CEO of EHR vendor NextGen Healthcare, put it: ‘The industry was like, ‘I’ve got this check dangling in front of me, and I have to check these boxes to get there, and so I’m going to do that.’’

The end result: Hospitals and doctors spent billions of dollars—because the government paid them to do so, and threatened to reduce their Medicare and Medicaid payments if they didn’t—to buy records systems that didn’t work well. These providers then became stuck with the systems once they purchased them, because of the systems’ cost, and because providers could not easily switch from one system to another.

David Blumenthal, who served as national coordinator for health IT under Obama, summed up the debacle accurately when he admitted that electronic health records “have not fulfilled their potential. I think few would argue they have.”

Electronic health records therefore provide an illustrative cautionary tale in which a government-imposed scheme spends billions of dollars but fails to live up to its hype, and alienates physicians and providers in the process. When the same thing happens under Democrats’ next proposed big-government health scheme—whether single payer, or some “moderate compromise” that only takes away half of Americans’ existing health coverage—don’t say you weren’t warned.

This post was originally published at The Federalist.

Lowlights of Democrats’ New Single-Payer Bill

Some might think that, having embraced socialism and taking away the health coverage of millions of Americans, the Democratic Party couldn’t move further to the left. Think again.

House Democrats introduced their single-payer bill on Wednesday, and claimed that it’s a “significantly different” bill compared to versions introduced in prior Congresses. It definitely meets that definition—because, believe it or not, it’s gotten significantly worse.

What Remains

Abolition of Medicare—and Most Other Insurance Coverage: As I noted last year, the bill would still eliminate the current Medicare program, by prohibiting Title XVIII of the Social Security Act from paying for any service (Section 901(a)(1)(A)) and liquidating the current Medicare trust funds (Section 701(d)). Likewise, the bill would eliminate the existing insurance coverage of all but the 2.2 million who receive care from the Indian Health Service and the 9.3 million enrolled veterans receiving care from the Veterans Administration.

Taxpayer Funding of Abortion: As before, Section 701(b)(3) of the bill contains provisions prohibiting “any other provision of law…restricting the use of federal funds for any reproductive health service” from applying to the single-payer system. This language would put the single-payer system outside the scope of the Hyde Amendment, thereby permitting taxpayer funding for all abortions.

Lack of Accountability: As with the prior bill, the legislation would give massive amounts of power to bureaucrats within the Department of Health and Human Services (HHS). For instance, the legislation would establish new regional directors of the single-payer system—none of whom would be subject to Senate confirmation.

What Lawmakers Added

More Spending: Section 204 of the new bill federalizes the provision of long-term supports and services as part of the single-payer benefit package. Prior versions of the bill had retained those services as part of the Medicaid program, implemented by states with matching funds from the federal government.

In addition, the revised bill eliminated language in Section 202(b) of the Sanders legislation, which permitted co-payments for prescription drugs to encourage the use of generics. With the co-payments (capped at an annual maximum of $200 in the Sanders bill from last Congress) eliminated, the bill envisions the federal government providing all health services without cost-sharing. This change, coupled with the federalization of long-term supports and services, will result in increased spending—as more people demand “free” health care.

Faster Elimination of Private Coverage: Rather than envisioning a four-year transition to the single-payer system, the revised bill would eliminate all private health insurance within a two-year period. Over and above the myriad philosophical concerns associated with single-payer health care, this accelerated transition period raises obvious questions about whether the new system could get up and running so quickly. After all, Obamacare had an implementation period of nearly four years—yet healthcare.gov failed miserably during its initial launch phase.

In theory, moving away from a fee-for-service method of paying medical providers would eliminate their incentive to perform more procedures—a worthy goal. But in practice, global budgets could also lead to de facto rationing, as hospitals that exceed their budgets might have to stop providing care to patients—just as under-funding within Britain’s National Health Service (NHS) has led to chronic hospital overcrowding.

Compensation Caps: Section 611(b)(5) of the new bill would limit “compensation costs for any employee or any contractor or any subcontractor employee of an institutional provider receiving global budgets,” by applying existing pay restrictions on government contractors to hospitals and facilities in the single-payer program. These restrictions might lead some to wonder whether hospitals could truly be considered independent entities, or merely an arm of the state.

Effective Abolition of For-Profit Medicine: Section 614(a) of the revised bill states that “payments to providers…may not take into account…or be used by a provider for” marketing; “the profit or net revenue of the provider, or increasing the profit or net revenue of the provider;” any type of incentive payment—“including any value-based payment;” and political contributions prohibited by government contractors.

Liberals would argue that eliminating the profit motive will encourage doctors to provide better care, by focusing on patients rather than ways to enrich themselves. But the profit motive also encourages individuals to invest in health care—as opposed to other sectors of the economy—by allowing them to recover a return on their investment.

Effective Elimination of Patents: Section 616(c)(1) of the bill states that “if the manufacturer of a covered pharmaceutical, medical supply, medical technology, or medically necessary assistive equipment refuses to negotiation a reasonable price, the Secretary shall waive or void any government-granted exclusivities with respect to such drug or product,” and shall allow other companies to manufacture the product. By allowing the federal government to march in on a whim and seize a company’s intellectual property, the bill would discourage individuals from investing in such intellectual property in the first place.

“Reasonable” Prices and Rationing: As noted above, Section 616 of the bill requires HHS to determine when the prices of drugs and medical devices are “not reasonable,” by taking into account among other things “the therapeutic value of the drug or product, including cost-effectiveness and comparative effectiveness.” This provision could lead to the federal government denying patients access to drugs deemed too expensive, as occurs currently within Britain’s National Health Service.

This post was originally published at The Federalist.

Do Coverage Expansions Save Lives? ¯\_(ツ)_/¯

A few weeks after two studies called into question whether one particular element of Obamacare—its hospital readmissions program—may have increased mortality rates nationwide, another study released by several economists expressed doubt about whether the law’s more than $1 trillion in spending on coverage expansions actually reduced mortality. Moreover, the latest study also raises fundamental questions about whether any coverage expansion will generate measurable reductions in mortality rates.

Coming in a week when Democrats prepare to release the latest version of their single-payer legislation, which estimates suggest could cost at least $30 trillion, the study raises an obvious question: What exactly will Americans receive for all the trillions of dollars in new government spending the left proposes? The study basically shrugs.

Effects of Medicaid Expansion

The analysis showed the problems inherent with attributing changes in mortality rates to expansions in insurance coverage. The study noted that “if one simply compares the…difference in mortality rates for non-expansion versus full-expansion states…it would appear that Medicaid expansion has a large, immediate effect in reducing mortality.” But in reality, mortality rates among those two groups of states had begun to move in opposite directions before the main provisions of Obamacare took effect in 2014. “There is little additional divergence during 2014-2016.”

The researchers’ work highlights the inherent flaws in this field of study. Because mortality is by definition a rare event (particularly for younger populations), and because so many different factors affect mortality, it becomes exceedingly difficult to attribute any change in mortality rates to changes in insurance coverage.

For instance, the opioid crisis, which has led to a decrease in life expectancy, hit just before Obamacare’s coverage expansions took effect, and in many cases affected the same populations. This and other similar factors introduce statistical “noise” that make it difficult to conclude with any certainty that expanded coverage (as opposed to some other factor) impacted mortality rates.

Simulations Expose Flaws

In most cases, the “power analysis” simulations concluded that, to find a statistically significant reduction in mortality rates at least 80 percent of the time, the coverage expansions would have to reduce mortality by more than 100 percent—a statistically impossible result. Because Obamacare reduced the uninsured rate by only a few percentage points, and because most available data sets lack corresponding income and insurance information—to prove, for instance, that X person had Y type of insurance and Z income over a certain number of years—the researchers could not make conclusive assertions about coverage expansions’ effects on mortality.

As it is, the uninsured already receive significant amounts of health care. One 2017 study found they consume nearly 80 percent of the care used by Americans with health insurance. Therefore, to test the effects of coverage expansions on mortality, researchers either need an incredibly large increase in the number of insured individuals—tens of millions, if not hundreds of millions, of Americans—or much more precise data about the income and coverage sources of those who gain insurance.

Liberals’ Alarmist Rhetoric

The authors caution that “our analysis should not be interpreted as evidence that health insurance does not affect mortality or health, either overall or for particular diseases or subgroups.” (Emphasis original.) However, the analysis does demonstrate that health insurance likely has a small and difficult to quantify effect on mortality rates. The study therefore proves how liberal claims two years ago that Republican “repeal-and-replace” legislation would kill tens of thousands of individuals annually had little bearing in reality.

This post was originally published at The Federalist.

Ten Ways Congress Can Apply the Green New Deal to Itself

Last week, Sen. Ed Markey (D-MA) and Rep. Alexandria Ocasio-Cortez (D-NY) introduced their long-anticipated “Green New Deal” legislation. Observers across the political spectrum derided both the legislation, and a summary document associated with same, as an example of big government overreach with goals that neither can nor should be achieved within a ten-year period.

However, if they wish to persist in their socialistic delusions, members of Congress who believe in the Green New Deal should first apply it to themselves. Hence the following list of proposals that GND supporters should insist Congress take, to put Ocasio-Cortez’s vision into practice.

1. Ban Meat in Congressional Cafeterias

The House and Senate cafeterias can even rely upon the ghost of Clara Peller to promote this new GND “innovation”!

2. Free Arugula

The GND resolution talks about government’s role to “build a more sustainable food system that ensures universal access to healthy food.” To help solve this problem, Congress must make sure that never again should someone like Barack Obama have to complain that Whole Foods is “charging a lot of money” for arugula. Instead, congressional cafeterias can provide arugula free of charge!

3. End Taxpayer-Funded Plane Travel

4. Turn Off the A/C

To promote the zero-emissions agenda, Congress should cease using its highly polluting air conditioning systems. Sure, Sen. Harry Reid (D-NV) didn’t like smelling sweaty tourists in the summertime, but he retired from Congress three years ago!

5. Shut Off the Lights

While they turn off the air conditioning, Congress should also turn out the lights in the Capitol to become emissions free. Better yet, lawmakers could decide to “hold Congress outside” on the National Mall during good weather. After all, it’s not like anyone ever tried to attack Congress in session or anything.

6. Evict Congress from Its Offices

Both the resolution and background document discuss “upgrading all existing buildings” to promote the zero-emissions agenda. Congress should start by throwing itself out of its own offices for some eco-friendly upgrades. Instead of ornate offices with high ceilings, floor-to-ceiling windows, and huge desks, Congress can place some trailers out back for members’ offices. You know, in the congressional parking lots that staff will no longer need—because they’ll be banned from driving cars to work.

7. Unionize Congressional Staff

8. Welfare for Those ‘Unwilling to Work’

The background document talks of guaranteeing “economic security for all who are unable or unwilling to work.” Members of Congress should ensure that their staff aren’t harassed by an obligation to do actual work, and are instead permitted to do whatever they feel like.

9. Vote to Move the Capitol

The resolution talks of “obtaining the free, prior, and informed consent of indigenous peoples for all decisions that affect indigenous peoples.” In theory, this language might refer to Native Americans such as Sen. Elizabeth Warren (D-MA). But what about the individuals indigenous to Washington, DC? Did Congress ever ask them whether they want to maintain the Capitol here? Congress should ballot the citizens of Washington to seek their consent for its continued presence. And if District citizens object, then lawmakers have an easy solution:

10. Congress Can Go to Hell

The resolution calls for “repairing historic oppression of…depopulated rural communities,” and what better way to repair such oppression by moving the entire Capitol to one of them! An ideal location: Hell, California, approximately 200 miles east of Los Angeles, in the middle of the Mojave Desert. (Another possible alternative: Hell, Michigan.)

Lest any of the above satire leave the wrong impression, this conservative does believe in conserving the environment. But when some members of Congress put forward unrealistic proposals that have no chance of happening, and use very real concerns about climate change to shoehorn in every liberal and socialist agenda item of the last century and this, they not only beclown themselves, they do the same to their cause.

Environmentalism deserves more than the socialist crazies behind the Green New Deal.

This post was originally published at The Federalist.

Congress Prepares to Pass Another Huge Bill No One Has Read. Again.

Stop me if you’ve heard this one before: Congress rams through a massive piece of legislation costing hundreds of billions of dollars without bothering to read it. Meet Congress under a Democratic majority—same as under the old majority.

Late Wednesday evening, congressional leaders still had not publicly released their omnibus appropriations legislation, and were not planning to do so until near midnight—hardly an auspicious time to embark on reading a bill exceeding 1,000 pages.

Those predictions ended up largely on the mark. The bill as introduced amounted to “only” 1,169 pages. But House leaders didn’t post the final version online until 1:20 a.m. on Thursday—the same day as the intended vote.

As Yogi Berra might say, when it comes to Congress’s bipartisan willingness to ram through massive bills, “It’s déjà vu all over again.”

Pelosi Breaks Her Promise

Of all things, Politico reported that one of the major holdups preventing an earlier public release included provisions having nothing to do with government spending—or, for that matter, border security:

“Congressional leaders are still haggling over an extension of the landmark Violence Against Women Act—one of the final hold-ups in a funding deal to avert a shutdown on Friday….One dispute centers on a Democratic push to add protections for transgender people, which the GOP is resisting; meanwhile, Republicans want more time to negotiate a broader deal, according to lawmakers and aides.”

Democrats in the House of Representatives promised that this time would be different. In a summary of their rules package for the 116th Congress—one which they released fewer than six weeks ago, remember—they pledged the following:

“ALLOW TIME TO READ THE BILL Require major bill text to be available for 72 hours before the bill can proceed to the House Floor for a vote. The current House rule only requires slightly more than 24 hours of availability.”

(Emphasis in the original.)

Their rules package did change the prior House rule, which had previously called for a three-calendar-day “reading period”—meaning that a bill promulgated at 11:59 p.m. on Monday could be voted on at 12:01 a.m. Wednesday, barely 24 hours after its release—to allow a full 72 hours for review.

And particularly in this case, Democrats find giving people time to read the bill inconvenient. Even though government funds won’t expire until Friday at midnight—and Congress could always extend that funding temporarily, to allow for more time to review the bill—both chambers want to vote on Thursday. Because heaven forbid Congress 1) do actual work on a Friday and 2) delay their “recess” (read: vacation) and their overseas trips during same. (Democratic leaders claimed their members have been “sufficiently briefed”—because it’s very easy to “brief” someone on most, let alone all, of the contents of a 1,200 page bill.)

In other words, the new House Democratic majority has spent barely one month in office, and we’re already back to Speaker Nancy Pelosi (D-CA), circa 2010: “We have to pass the bill so that you can find out what is in it.”

Garbage In, Garbage Out

After last year’s omnibus fiasco, I wrote that members of Congress only had themselves to blame for the awful process leading to that 2,232 page bill:

“As the old saying goes, the true test of a principle comes not when that principle proves convenient, but when it proves inconvenient. Only when Members find themselves willing to take tough votes—and to abide by the outcome of those votes, even if it results in policy outcomes they disfavor—will the process become more open and transparent.”

This post was originally published at The Federalist.

Ocasio-Cortez Wants Congress to Stop Pretending to Pay for Its Spending

Get used to reading more storylines like this over the next two years: The left hand doesn’t know what the far-left hand is doing.

On Wednesday, incoming House Speaker Nancy Pelosi (D-CA) faced a potential revolt from within her own party. Rep.-elect Alexandria Ocasio-Cortez (D-NY) and several progressive allies threatened to vote against the rules package governing congressional procedures on the first day of the new Congress Thursday, because of proposed changes they believe would threaten their ability to pass single-payer health care.

What’s Going On?

Ocasio-Cortez and her allies object to Pelosi’s attempt to reinstate Pay-as-You-Go (PAYGO) rules for the new 116th Congress. Put simply, those rules would require that any legislation the House considers not increase the deficit over five- and ten-year periods. In short, this policy would mean that any bill proposing new mandatory spending or revenue reductions must pay for those changes via offsetting tax increases and/or spending cuts—hence the name.

Under Republican control, the House had a policy requiring spending increases—but not tax cuts—to be paid for. Pelosi would overturn that policy and apply PAYGO to both the spending and the revenue side of the ledger.

Progressives object to Pelosi’s attempt to constrain government spending, whether in the form of additional fiscal “stimulus” or a single-payer health system.

However, Pelosi’s spokesman countered with a statement indicating that the progressives’ move “is a vote to let Mick Mulvaney make across-the-board cuts.” Mulvaney heads the Office of Management and Budget, which would implement any sequester under statutory PAYGO.

Regardless of what the new House decides regarding its own procedures for considering bills, Pay-as-You-Go remains on the federal statute books. Democrats re-enacted it in 2010, just prior to Obamacare’s passage. If legislation Congress passed  violates those statutory PAYGO requirements (as opposed to any internal House rules), it will trigger mandatory spending reductions via the sequester—the “across-the-board cuts” to which Pelosi’s spokesman referred.

To Pay for Spending—Or Not?

Progressives think reinstituting PAYGO would impose fiscal constraints hindering their ability to pass massive new spending legislation. However, the reality does not match the rhetoric from Ocasio-Cortez and others. Consider, for instance, just some of the ways a Democratic Congress “paid for” the more than $1.8 trillion in new spending on Obamacare:

  • A CLASS Act that even some Democrats called “a Ponzi scheme of the first order, the kind of thing Bernie Madoff would have been proud of,” and which never went into effect because the Obama administration could not implement it in a fiscally sustainable manner;
  • Double counting the Medicare savings in the legislation as “both” improving the solvency of Medicare and paying for the new spending in Obamacare;
  • Payment reductions that the non-partisan Medicare actuary considers extremely unlikely to be sustainable, and which could cause more than half of hospitals and nursing homes to become unprofitable within a generation;
  • Tax increases that Congress has repeatedly delayed, and which could end up never going into effect.

A Bipartisan Spending Addiction

An external observer weighing the Part D and Obamacare examples would find it difficult to determine the less dishonest approach to fiscal policy. It reinforces that America’s representatives have a bipartisan addiction to more government spending, and a virtually complete unwillingness to make tough choices now, instead bequeathing massive (and growing) amounts of debt to the next generation.

In that sense, Ocasio-Cortez and her fellow progressives should feel right at home in the new Congress. Republicans may criticize her for proposing new spending, but the difference between her and most GOP members represents one of degree rather than of kind. Therein lies the problem: In continuing to spend with reckless abandon, Congress is merely debating how quickly to sink our country’s fiscal ship.

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.

Four Better Ways to Address Pre-Existing Conditions Than Obamacare

n a recent article, I linked to a tweet promoting alternatives to Obamacare’s pre-existing condition regulations, which have raised health insurance premiums for millions of Americans.

I offered those solutions when asked about a Republican alternative to Obamacare, and specifically the pre-existing condition provisions. While I no longer work in Congress, and therefore cannot readily get legislative provisions drafted and scored, I did want to elaborate on the concepts briefly mentioned, to show that other solutions to the pre-existing condition problem do exist.

1. Health Status Insurance

I mentioned both “renewal guarantees” and “health status insurance,” two relatively interchangeable terms, in my tweet. Both refer to the option of buying coverage at some point in the future—insurance against developing a health condition that makes one uninsurable.

Other forms of insurance use these types of riders frequently. For instance, I purchased a long-term disability policy when I bought my condo, to protect myself if I could no longer work and pay my mortgage. The policy came with two components—the coverage I have now, and pay for each year, along with a rider allowing me to double my coverage amount (i.e. the monthly payment I would receive if I became disabled) without going through the application or underwriting process again.

Since I bought that policy in 2008, my doctors diagnosed me with hypertension in 2012, and I went through two reconstructive surgeries on my left ankle. I don’t know if these ailments would prevent me from buying a disability policy now if I went out and applied for one. But because I purchased that rider with my original policy in 2008, I don’t need to worry about it. If I want more disability coverage, I can obtain it by paying the additional premium, no questions asked.

Health status insurance would complement employer-sponsored coverage. Most people get their coverage through their employers. Because employers heavily subsidize the coverage, and the federal government provides tax breaks for employer-sponsored plans, more than three in four people who are offered employer-sponsored insurance sign up for it.

But employer-based insurance by definition isn’t portable. When you switch your job, or (worse yet) lose your job because you’re too sick to work, you lose your coverage. Health status insurance would get around that portability problem. Individuals could sign up for their employer plan but pay for health status insurance “on the side.”

This coverage, which they and not their employer own, would protect them in case they develop a pre-existing condition or move to a job that doesn’t provide health insurance. It would also cost a lot less than buying a complete insurance plan—remember, they’re paying for the option to purchase insurance at a later date, not the insurance itself.

2. Insurance Portability

A proposed regulation issued by the Trump administration last month would permit just that. Under the proposal, employers could provide fixed sums to their employees to buy individually owned insurance—that is, a policy the employee buys and holds—through Health Reimbursement Arrangements (HRAs). Employees could pay any “leftover” premiums not covered by the employer subsidy on a pre-tax basis, as they do with their current, employer-owned coverage, through paycheck withholding.

I recently wrote about the regulation; feel free to read that article for greater detail. But as with health status insurance, better portability of individual coverage would allow people to buy—and hold, and keep—coverage before they develop a pre-existing condition, reducing the number of people who have to worry about losing their coverage when battling a difficult illness.

3. High-Risk Pools

Of course, health status insurance only helps those who purchase it prior to becoming sick. For people who already have a pre-existing condition, perhaps because of an ailment acquired at birth or in one’s youth, high-risk pools provide another possible solution.

Critics of risk pools generally cite two reasons to argue against this model as a workable policy solution. First, risk pools prior to Obamacare were not well-funded—in many cases, a true enough criticism. While some state pools worked well and offered generous subsidies (even income-based subsidies in some states), others did not.

It would take a fair bit of federal funding to set up a solid network of state high-risk pools. One article, published in National Affairs a few months after Obamacare’s enactment, estimated that such pools would require $15-20 billion per year in funding—probably more like $20-30 billion now, given the constant rise in health care costs. This figure represents a sizable sum, but less than the overall cost of Obamacare, or even its insurance subsidies ($57 billion this fiscal year alone).

Second, risk pool critics dislike the surcharges that many risk pools applied. Most pools capped monthly premiums for enrollees at 150 or 200 percent of standard insurance rates. Of course, individuals with chronic heart failure or some other costly condition generally incur much higher actual costs—costs that the pool worked to subsidize—but some believe that making individuals with pre-existing conditions pay a 50 to 100 percent premium over healthy individuals discriminates against the sick.

Personally, when designing a high-risk pool, I would distinguish between individuals who maintained continuous coverage prior to joining the pool and those who did not. Charging higher premiums to individuals who maintained continuous coverage seems unfair. On the other hand, it seems very reasonable to impose a surcharge for individuals who joined a high-risk pool because they didn’t purchase insurance until after they became sick.

As a small government conservative, I generally oppose intrusive attempts like an individual mandate to require individuals to behave in a certain manner. While I view going without health insurance an unwise move, I believe in the right of people to make bad decisions. However, I also believe in people paying the consequences of those bad decisions—and a surcharge on individuals who sign up for a high-risk pool while lacking continuous coverage would do just that.

4. Direct Primary Care

Direct primary care, which encompasses a personal relationship with a physician or group of physicians, can help manage individuals with chronic (and potentially costly) diseases. In most cases, patients pay a monthly or annual subscription fee to the practice, which covers unlimited doctor visits, as well as phone or electronic consultations and some limited diagnostic tests. Patients can get referrals to specialist care, or purchase a catastrophic insurance policy to cover expenses not included in the subscription fee.

Of course, primary care would not work well for a patient with advanced cancer, who needs costly pharmaceutical therapies or other very specialized care. But for patients with chronic conditions like diabetes, COPD, or chronic heart failure, direct primary care may offer a way better to manage the disease, potentially reducing health care costs while improving patient access to care and quality of life—the most important objective.

As noted above, these types of solutions are not one size fits all. Health status insurance would not work for patients born with genetically based diseases, and direct primary care might not help patients with advanced tumors.

But in some respects, that’s the point. Obamacare took a comparatively small universe of truly uninsurable patients—a few million, by some estimates—and uprooted the individual market of about 20 million people (to say nothing of other Americans’ health coverage) for it. Unfortunately, millions of Americans have ended up dropping insurance as a result, because the changes have priced them out of coverage.

A better way to reform the system would use a more specialized approach—a scalpel instead of a chainsaw. Health status insurance, improved portability, high-risk pools, and direct primary care represent four potential prongs of that better alternative.

This post was originally published at The Federalist.