Democrats Agree: Free Health Coverage for Undocumented Immigrants

If a picture is worth a thousand words, then three series of pictures, featuring Democrats discussing health benefits for those in this country illegally, speak volumes. First, Hillary Clinton in September 1993:

Finally, Democratic candidates for president last night:

Whereas Indiana Mayor Pete Buttigieg called coverage for illegal immigrants an “insurance program” and “not a hand out,” Clinton said in 1993—well before the most recent waves of migration—that “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.”

Likewise, whereas Joe Biden said “you cannot let people who are sick, no matter where they come from, no matter what their status, go uncovered,” the president whom he worked for promised the American people that “the reforms I’m proposing would not apply to those who are here illegally.” Granted, the promise had a major catch to it—Obamacare verifies citizenship but not identity, allowing people here illegally to obtain benefits using fraudulent documents—but at least he felt the need to make the pledge in the first place. No longer.

Ironically enough, even as all Democrats supported giving coverage to illegally present foreigners, the candidates seemed less united on whether, how, and from whom to take health insurance away from U.S. citizens. Only Sens. Kamala Harris and Bernie Sanders said they supported abolishing private health insurance, as Sanders’ single-payer bill would do (and as Sen. Elizabeth Warren and New York Mayor Bill de Blasio pledged on Wednesday evening). For Harris, it represents a return to her position of January, after fudging the issue in a follow-up interview with CNN last month.

As usual, Sanders made typically hyperbolic—and false—claims about his plan. He said that his bill would make health care a human right, even though it does no such thing. In truth, the legislation guarantees that individuals would have their bills paid for—but only if they can find a doctor or hospital willing to treat them.

While Sanders pledged that under his bill, individuals could go to whatever doctor or hospital they wished, such a promise has two main flaws. First, his bill does not—and arguably, the federal government cannot—force a given doctor to treat a given patient. Second, given the reimbursement reductions likely under single payer, many doctors could decide to leave the profession altogether.

Sanders’ home state provided a reality check during the debate. Candidates critical of single payer noted that Vermont had to abandon its dream of socialized medicine in 2014, when the tax increases needed to fund such a program proved too overwhelming.

Shumlin gave his fellow Democrats a valuable lesson. Based on the radical, and radically unaffordable, proposals discussed in this week’s debates—from single-payer health care, to coverage for undocumented immigrants, to “free” college and student loan forgiveness, and on and on—they seem hellbent on ignoring it.

This post was originally published at The Federalist.

Another Report Details Fraud on Obamacare Exchanges

What do Obamacare and Haley Joel Osment have in common? They both see dead people.

On Tuesday, the Government Accountability Office (GAO) released another report into eligibility verification checks on the federally run Obamacare insurance exchange used by more than three dozen states. As with prior studies, GAO concluded that regulators still need to improve integrity efforts to ensure the federal government spends taxpayer funds wisely.

GAO previously recommended that the federal exchange verify eligibility periodically, checking changes in circumstances that would affect the status of federal subsidies, such as death. However, to the best of auditors’ knowledge, the Centers for Medicare and Medicaid Services (CMS) has not implemented this recommendation, one of 18 relating to exchange integrity that remain open (i.e., not completed) from two prior GAO reports.

In part, the lack of strong program integrity provisions represents a continued legacy of the healthcare.gov “debacle” in 2013. While CMS managed to get the public segments of the website up and running by December of that year, just prior to Obamacare’s January 2014 launch, the “back-end” portions of the tech infrastructure remained a work in progress for far longer.

For instance, this week’s GAO report notes that only in March 2017 did CMS finally upgrade the system such that the exchange could modify or change Social Security numbers (SSNs)—whether due to a name change, or a typo when filling out the initial application for coverage. Before then, exchange officials “did not actively take steps to resolve SSN inconsistencies in plan year 2015 primarily because [they] could not update SSNs in the data system at the time.” Because the poorly designed system could not distinguish between actual fraud and changed circumstances, CMS didn’t investigate either one.

The GAO report claims that the approximately 1 percent of applicants with potential inconsistencies related to citizenship, Social Security numbers or identity, or death represent a small portion of 8 million subsidized applicants overall. However, the study likely understates the incidence of potentially improper applicants, as it omits other potential sources of fraud relating to Obamacare subsidies: understating income, discrepancies in residency, or incarceration status (incarcerated individuals do not qualify for subsidies).

Moreover, given the amount of spending on health insurance subsidies, even the “small” sums at issue matter. For instance, GAO identified a total of $23 million in premium subsidies associated with the 17,000 applicants covered after their reported date of death. GAO could not determine whether or to what extent federal authorities recovered those subsidies during the reconciliation process (which occurs on an individual’s tax return the following year).

However, if even a fraction of that $23 million remained in insurers’ hands—insurers receive direct subsidies on behalf of beneficiaries in most cases—it represents a waste to taxpayers. Particularly given that the $23 million figure only reflects subsidy spending in 2015—not 2014, or the three years since 2015—it seems an incredible waste to put tens of millions, if not hundreds of millions, of taxpayer dollars at risk, for want of a technological infrastructure likely costing far less.

In other words, while former U.S. Department of Health and Human Services secretary Kathleen Sebelius has long since left government, the Obamacare exchange “debacle” lives on—as do, it would appear, federal insurance subsidies provided to long-since-deceased individuals.

This post was originally published at The Federalist.

What’s Behind the Latest Obamacare Problem

An Associated Press story Wednesday detailing how at least 2 million individuals have data discrepancies in their applications for Affordable Care Act insurance subsidies provides another example of executive implementation gone awry.

The issue lies with verification of income, citizenship and immigration status for those applying for health insurance subsidies. Legislation that reopened the federal government last fall included a requirement (Section 1001 here) for the secretary of health and human services (HHS) to certify that only eligible individuals would receive insurance subsidies.

The 16-page HHS report complying with that requirement has more than a dozen pages of references to federal regulations, statutory requirements, government agencies and administrative processes—suggesting that taxpayer funds would be spent wisely.

Except the processes weren’t ready at all. The Washington Post reported last month that the federal computer systems central to the verification process had yet to be built—meaning that verification documents sent in by Americans have been gathering dust.

Wednesday’s AP story cited an administration official saying that about 60% of exchange applications with discrepancies remain in the 90-day window provided under the law to adjudicate disputes. The implication is that 40% of applications—or about 800,000 individuals’ paperwork—haven’t been resolved, and it’s not known when they might be.

All this means that those Americans receiving subsidies in error—who may later be forced to pay back sizable sums as the verification process drags on—and all taxpayers, who will ultimately foot the bill for any fraud, could face nasty surprises in future months.

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

Morning Bell: The Obamacare Scams Are Already Starting

Heritage warned that the new Obamacare insurance exchanges could threaten your privacy—and it’s already happening, before the exchanges are even open.

In a new report, the House Oversight and Government Reform Committee presented these shocking findings:

there are already numerous reports of scam artists posing as Navigators and Assisters to take advantage of people’s confusion about ObamaCare. According to recent news reports, scam artists are calling individuals and asking for information to sign them up for their “ObamaCare card,” are asking seniors for their personal information to verify their Medicare and Social Security status and are going door-to-door threatening people with prison time if they do not sign up on the spot. The Administration is keenly aware of these reports and concerns, but has thus far failed to take appropriate measures.

Even when it’s not malicious, the new Obamacare system—employing “navigators” who aren’t run through background checks or adequately trained—opens up a host of opportunities for identity theft. Last week, an employee of Minnesota’s insurance exchange (MNsure) emailed out the names and Social Security numbers of 2,400 insurance agents. The insurance broker who received the email said, “If this is happening now, how can clients of MNsure be confident their data is safe?”

Indeed.

The Oversight Committee reports that the exchange system thus far is a combination of shoddy planning and bad incentives. Navigators, who are supposed to help people sign up for the exchanges, are allowed to be paid based on the number of people they enroll in Obamacare.

California’s insurance commissioner—a Democrat and strong supporter of Obamacare—raised concerns that navigators would put consumers at risk for scams: “We can have a real disaster on our hands.”

The exchanges don’t open for business until October 1, but Obamacare has already led to the release of highly sensitive personal information for thousands—and the lack of planning makes it ripe for scams. Nothing about this law is working the way it was advertised, which is why the House is voting today to defund Obamacare (while still funding normal government functions). Next week, Senators will have a chance to do the same—protect their constituents from the ravages of Obamacare.

This post was originally published at The Daily Signal.

How Obamacare Threatens Privacy in America

A PDF of this Issue Brief is available on the Heritage Foundation website.

Over the past several months, a stream of reports from government auditors and news stories has raised serious questions about the Administration’s implementation of Obamacare and its effects on the privacy of millions of Americans. The reports paint a portrait of an Administration casting aside security concerns—potentially putting Americans’ financial and health data at risk—in its push to open insurance exchanges in all 50 states by October 1. These recent developments should provide further impetus for Congress to defund the entire law before the exchanges are able to undermine personal privacy.

Security Delays, Timetables Slipping

In August, the Department of Health and Human Services (HHS) inspector general released a report highlighting many missed deadlines with respect to the security measures surrounding the Obamacare data hub.[1] The hub will provide access to government data from various government agencies—tax filings and Social Security records, for example—allowing exchanges to determine eligibility for subsidized insurance.

The inspector general’s report found that “several critical tasks remain to be completed in a short period of time” in order to ensure the data hub’s security.[2] Important elements of the security testing were delayed by two months. As a result, the official certification that the data hub is secure is not scheduled to occur until September 30, 2013—one day before the exchanges are scheduled to open for business.[3]

The inspector general’s report noted the obvious problem that this tight timetable presents: “If there are additional delays…the authorizing official may not have the full assessment of implemented security controls needed for the security authorization decision by” the time open enrollment begins.[4] In other words, government officials could face a choice about whether to open the exchanges despite the potential risk to Americans’ data security. Even if the security assessments are completed on time, there is no assurance they will work properly; the inspector general’s report “did not review the functionality of the [data] hub.”[5]

Warnings Ignored

Some government officials have warned of the privacy and security implications arising from shoddy data security—even as the Obama Administration ignored those concerns. Michael Astrue, a former general counsel of HHS, offered objections while serving as the commissioner of Social Security through February 2013. He has called the Administration’s exchange portal “an overly simplistic system without adequate privacy safeguards”:

The system’s lack of any substantial verification of the user would leave members of the public open to identity theft, lost periods of health insurance coverage, and exposure of address for victims of domestic abuse and others.[6]

Astrue dubbed the version of the portal “the most widespread violation of the Privacy Act in our history,” noting that both he and the head of the IRS “raised strong legal objections” with the Office of Management and Budget—objections that, Astrue argues, have been ignored in favor of what he calls “an absurdly broad interpretation of the Privacy Act’s ‘routine use’ exemption.”[7]

Navigators Pose a Security Risk

While the data hub creates concerns that Americans could be subjected to electronic identity fraud, Obamacare’s “navigators” could subject Americans to in-person scams.[8] HHS recently announced it was lowering by one-third—from 30 hours to 20—the minimum training time for navigators.[9] As a result, individuals can be certified as navigators with fewer than three full days’ training—and few security checks. While guidelines regarding navigators released in July permitted states to establish “minimum eligibility criteria and background checks” for navigators, it did not require them to do so.[10]

Because their job involves helping Americans figure out their insurance options, navigators will often have access to sensitive personal information—bank accounts, Social Security numbers, insurance identification, and more. Yet navigators will not be required to undergo background checks, and the process for filing complaints about unscrupulous navigators remains unclear at best. Even California’s insurance commissioner—a Democrat and strong supporter of Obamacare—raised concerns that navigators would put consumers at risk for scams: “We can have a real disaster on our hands.”[11]

Not One Dime

Federal agencies have already encountered difficulties preserving the integrity of Americans’ sensitive information. Earlier this year, a medical provider in California sued the IRS for improperly seizing 60 million records of 10 million Americans.[12] Yet under Obamacare, the IRS and other federal agencies will hold more new powers and have access to even more of Americans’ personal health and financial information.

In its mad rush to implement its unworkable law, the Obama Administration has taken a slapdash and shoddy approach to Americans’ personal security. Given these stakes, the choice for Congress could not be clearer: Congress should preserve Americans’ privacy by refusing to spend another dime implementing Obamacare.

 


[1]Gloria Jarmon, “Memorandum Report: Observations Noted During the OIG’s Review of CMS’s Implementation of the Health Insurance Exchange—Data Services Hub,” Department of Health and Human Services Inspector General Report A-18-13-30070, August 2, 2013, http://oig.hhs.gov/oas/reports/region1/181330070.pdf (accessed August 29, 2013).

[2]Ibid., p. 1.

[3]Ibid., p. 5.

[4]Ibid., p. 5.

[5]Ibid., p. 2.

[6] Michael Astrue, “Privacy Be Damned,” The Weekly Standard, August 5, 2013, http://www.weeklystandard.com/articles/privacy-be-damned_741033.html (accessed August 29, 2013).

[7]Ibid.

[8]For more information on the navigator program, see Alyene Senger, “The Cost of Educating the Public on Obamacare,” Heritage Foundation Issue Brief No. 3983, July 1, 2013, http://www.heritage.org/research/reports/2013/07/public-outreach-on-obamacare-cost-of-educating-the-public-on-health-care-reform.

[9]Amy Schatz, “Preparations for Health Exchanges on Tight Schedule,” The Wall Street Journal, August 7, 2013, http://online.wsj.com/article/SB10001424127887324170004578638100820728288.html (accessed August 29, 2013).

[10]“Department of Health and Human Services: Patient Protection and Affordable Care Act; Exchange Functions: Standards for Navigators and Non-Navigator Assistance Personnel; Consumer Assistance Tools and Programs of an Exchange and Certified Application Counselors; Final Rule,” Federal Register, Vol. 78, No. 137 (July 17, 2013), p. 42824, http://www.gpo.gov/fdsys/pkg/FR-2013-07-17/pdf/2013-17125.pdf (accessed August 29, 2013).

[11]“Fraud Fear Raised in California’s Health Exchange,” The Reporter, July 14, 2013, http://www.thereporter.com/rss/ci_23658245 (accessed August 29, 2013).

[12]Scott Gottlieb, “Suit Alleges IRS Improperly Seized 60 Million Personal Medical Records,” Forbes, May 15, 2013, http://www.forbes.com/sites/scottgottlieb/2013/05/15/the-irs-raids-60-million-personal-medical-records/ (accessed August 29, 2013).

Obamacare and Identity Fraud

This morning the Treasury’s Inspector General for Tax Administration testified before two Ways and Means subcommittees about the prevalence of identity theft and fraud within the tax system.  Although the IRS identified 1.1 million incidents of identity theft affecting the tax system in 2011 alone, the Inspector General’s testimony found that even this level of fraud was merely the tip of the iceberg:

However, the IRS does not know how many identity thieves are filing fraudulent tax returns or the amount of revenue being lost….Our analysis found that, although the IRS detects and prevents a large number of fraudulent refunds based on false income documents, there is much fraud that it does not detect.  We identified approximately 1.5 million additional undetected tax returns with potentially fraudulent tax refunds totaling in excess of $5.2 billion.  If not addressed, we estimate the IRS could issue approximately $26 billion in fraudulent tax refunds resulting from identity theft over the next five years.

These findings have troubling implications for the President’s unpopular 2700-page health care law, on several levels:

  1. Rather than increasing efforts to combat identity fraud in the existing tax system, much of the IRS’ time over the next few years will instead be spent on creating and implementing a brand new entitlement – health insurance subsidies administered through the tax code.
  2. The massive amounts spent on Obamacare’s insurance subsidies – $632 billion between now and 2022, according to the Congressional Budget Office’s most recent baseline – will only provide further incentives for identity thieves to engage in tax fraud, so they can receive insurance subsidies to which they are not entitled.
  3. Obamacare will only require applicants for insurance subsidies to verify citizenship, NOT identity; the verification process will check that John Doe is a citizen, but will not confirm that the applicant is in fact John Doe.  Today’s inspector general report highlights that identity fraud is rampant within the current tax system.  Therefore, it is not unreasonable to conclude that non-citizens will commit identity theft – as millions already do by filing bogus tax returns every year – to obtain subsidized insurance.  This scenario would violate the President’s promise made before a joint session of Congress in 2009, that individuals illegally present would not be able to obtain insurance under his plan.

The American people have already questioned why, at a time of trillion-dollar deficits, Democrats want to spend $2.6 trillion creating massive new entitlement programs.  Today’s inspector general report raises the further question of whether and why such spending will be diverted for fraudulent purposes by identity thieves preying on unsuspecting American families and taxpayers alike.

White House Myths vs. Facts

In anticipation of tomorrow’s six-month benchmark since the health care law was signed, the White House has launched a new website designed to “sell” the law.  Included on the site are a list of “myths” about the measure that the White House seeks to respond to.  Unfortunately, however, the website propounds statements that some would view as a selective interpretation of the law.  Here are the White House’s supposed “myths,” along with the REAL facts:

MYTH:                  Health insurance reform will use my tax dollars to fund abortions.

FACT:                    The law specifically permits taxpayer subsidies to flow to private health plans that include abortion, but creates an accounting scheme designed to designate private dollars as abortion dollars and public dollars as non-abortion dollars—provisions that pro-life groups have denounced as an accounting sham.  Moreover, the new national plans run by the federal Office of Personnel Management (OPM) have zero restrictions on coverage of elective abortions—an unprecedented expansion of abortion coverage, when the coverage OPM currently provides to federal employees,  including Members of Congress, prohibits coverage of elective abortions.

MYTH:                  Seniors will not have access to Medicare Advantage plans.

FACT:                    According to the Medicare actuary, enrollment in Medicare Advantage plans is projected to fall in half between now and 2017.  The Congressional Budget Office projects that seniors who remain in Medicare Advantage will lose an average of $816 in benefits each year.  And just yesterday, the Administration announced that nearly one million seniors will be forced to change Medicare Advantage plans – and thousands of seniors will lose access to Medicare Advantage altogether.  The non-partisan Factcheck.org has previously called Administration advertising on Medicare Advantage “misleading” for suggesting that benefits for seniors in Medicare Advantage will remain the same.

MYTH:                  Reform will cut Medicare for seniors.

FACT:                    The Medicare actuary found that provisions in the law will cause as many as 40 percent of Medicare providers to become unprofitable over time, meaning that “providers would have to withdraw from providing services to Medicare beneficiaries.”  As a result, “Medicare beneficiaries would almost certainly face increasingly severe problems with access to care.”

MYTH:                  Health reform will lead to massive tax increases and kill jobs.

FACT:                    The health care law imposes more than half a trillion dollars in tax increases—including tax increases on families with incomes under $250,000.  The law also includes job-killing taxes on businesses that cannot afford to purchase health insurance, which the Congressional Budget Office found “will probably cause some employers to respond by hiring fewer low-wage workers.”  Moreover, the CBO also recently concluded that the health care law could prompt about 750,000 individuals to leave the work force, because provisions in the law “will effectively increase marginal tax rates, which will also discourage work.”

MYTH:                  You will be forced to purchase insurance you can’t afford.

FACT:                    According to the Congressional Budget Office, premiums for individual market insurance will rise by an average $2,100 per family—far from the $2,500 reduction in premiums that candidate Obama promised.  Moreover, the law requires insurance subsidies to grow more slowly beginning in 2019—meaning that individuals will be forced to purchase coverage they cannot afford, or subsidy levels will need to be increased, thus raising the federal deficit.  The Congressional Budget Office (CBO) recently characterized the subsidy reductions as “widely expected” to be scaled back or “difficult to sustain for a long period”—precisely because it would require individuals to pay for coverage they cannot afford.

MYTH:                  Businesses will suffer under health reform.

FACT:                    The bill imposes more than $210 billion in new payroll taxes that could hit small business owners, and $107 billion in taxes on drug and device manufacturers and insurers—taxes which “would be largely passed through to consumers in the form of higher premiums for private coverage,” according to the Congressional Budget Office.  Small business owners will be disproportionately affected by the health care law’s new tax on insurance companies; because larger firms that self-insure their workers are exempted from the tax, smaller businesses will pay the lion’s share of this levy.  In addition, the law imposes 20 new insurance mandates, each of which could raise insurance premiums on small businesses by one to three percent.

MYTH:                  The small business credits won’t actually provide relief.

FACT:                    Unfortunately, the benefits provided by the tax credit are limited in scope and duration, but the costs of the law are permanent and wide-reaching.  An estimate developed by a paid Administration advisor found that only 3.4 million workers—only 1.1% of the American population—are in firms that will actually receive the credit between now and 2014.  While the credit expires after six years, many small business owners will be subject to a new, permanent 3.8% Medicare tax beginning in 2013—on top of the largest tax increase in American history scheduled to take effect this January.  In other words, the health care law imposes permanently higher taxes on small businesses, so that only 1% of Americans can receive a temporary small business tax credit.

MYTH:                  This bill does nothing to bring down the cost of health care.

FACT:                    According to the Medicare actuary, health costs would actually increase over the next decade by a total of $310.8 billion.  And the Congressional Budget Office recently concluded in its long-term budget outlook that most of the major savings proposals in the health care law either are “widely expected” to be scaled back or would “be difficult to sustain for a long period,” thus leading to significant increases in federal deficits.

MYTH:                  The new law extends coverage to illegal immigrants.

FACT:                  Despite the law’s purported prohibition on payments to immigrants not lawfully present, and the insertion of a citizenship verification regime, the provisions do not require individuals to verify their identity when confirming eligibility for subsidies—encouraging identity fraud while still permitting undocumented immigrants and other ineligible individuals to obtain taxpayer-subsidized benefits.

MYTH:                 Health reform will lead to a government takeover of health care.

FACT:                    By one count, the health care law creates 159 various boards, bureaucracies, programs, and commissions.  A report by the non-partisan Congressional Research Service suggested this number may actually be an under-estimate, as it concluded that “the precise number of entities that will be created…is currently unknowable.”  And as of last Friday, the Administration had already released 4,103 pages of regulations—and counting—to implement the 2,700 page law.  If that’s not a government takeover of health care, what is?

Legislative Bulletin: Amendments to H.R. 3962, Pelosi Health Care Bill

The House is scheduled to consider H.R. 3692, the Pelosi health care bill, later today.  The bill will be considered under a modified closed rule, making in order only selected Democrat amendments and a Republican substitute amendment.  The rule provides that the manager’s amendment—as modified by the Rules Committee—shall be considered as adopted upon enactment of the resolution.  An updated summary of amendments made in order follows.

Amendments Made in Order

Rep. Dingell (D-MI):  The modifications to the Manager’s Amendment narrow the scope of the biofuel tax credit that only “black liquor”—a by-product of the pulp-making process—shall be excluded from eligibility for the credit.  The Manager’s Amendment as originally introduced would have made additional products ineligible for the credit.

The modified Manager’s Amendment also establishes two new public health grant programs—one related to the development of medical schools in health professional shortage areas, and the other a demonstration program permitting the National Health Service Corps to offer incentive payments to members assigned to “a health professional shortage area with extreme need.”

Finally, the modified Manager’s Amendment modifies Federal Trade Commission patent enforcement authority with respect to the new restrictions on generic drug makers’ patent settlements with brand name manufacturers.

Rep. Dingell (D-MI):  The 42-page Manager’s Amendment makes several technical and substantive changes to the bill.  With respect to the high-risk pool program established effective in January 2010, the amendment allows individuals with employer-based retiree coverage to buy into the pool if that coverage’s premiums exceeds “such excessive percentage as the Secretary shall specify.”  The amendment also extends the citizenship verification provisions required for insurance affordability credits in the bill—the same citizenship verification regime based upon that enacted in this year’s SCHIP reauthorization (P.L. 111-3).  However, many may be concerned that the provisions as drafted would not require individuals to verify their identity when confirming eligibility for subsidies—encouraging identity fraud while still permitting undocumented immigrants and other ineligible individuals from obtaining taxpayer-subsidized benefits.

Insurance Price Controls:  The amendment creates “a process for the annual review, beginning with 2010…of increases in premiums for health insurance coverage,” requiring carriers to submit justifications to States for any premium increases, and providing $1 billion for a five-year program of grants to States to facilitate such ends, beginning in 2010.  The amendment requires States to make recommendations to the Commissioner “about whether particular health insurance issuers should be excluded from participation in the Health Insurance Exchange based on a pattern of excessive or unjustified premium increases.”  Many may be concerned first that this provision would further increase the role of State and federal bureaucrats in micro-managing private insurance companies, and second would permit bureaucrats to deny all private plans access to the Exchange for the mere reason that an Administration desires to enroll all Americans in the government-run health plan.  Many may further question how a government-run plan will promote “competition” if the government itself will permit which plans are able to “compete.”

Other Insurance Changes:  The amendment permits the Commissioner to permit “direct primary care medical home plans” to meet the bill’s definition of a qualified plan.  Some may view this provision as an authorizing earmark intended to benefit Democrat lawmakers in specific locations.

With respect to the partial repeal of insurers’ anti-trust exemption, the amendment exempts State medical malpractice laws from the bill’s impact, removes an exemption in the bill allowing insurance companies to coordinate actions with respect to “information gathering and rate setting,” and makes other technical changes.  The amendment applies provisions of the Government Performance and Results Act to the bill, and requires reports every three years by executive agencies on “the quality of customer service provided.”  The amendment requires the development of standards for interstate insurance compacts by January 2014, and makes other technical changes to those provisions.  The amendment makes adjustments in reimbursements by the government-run health plan for States operating a cost-containment waiver for providers under provisions in the Medicare statute.

Tax Changes:  The amendment delays for two years (from 2011 to 2013) provisions withdrawing the tax-free status of subsidies provided to employers providing retiree prescription drug coverage, per provisions of the Medicare Modernization Act (P.L. 108-173).  The amendment repeals—rather than delaying until 2019—the application of worldwide interest allocation provisions first enacted into law (but never implemented) in 2004.  The amendment also includes a new provision making adjustments to the existing second generation biofuel producer credit, designed to exclude “black liquor”—a byproduct of the pulp-making process—from eligibility for the credit.

Medicare and Medicaid Provisions:  The amendment delays the application (from January 2010 to April 2010) of certain payment rules related to skilled nursing facilities, and expands the number of physician-owned specialty hospitals permitted to expand their facilities. (The bill would prohibit most physician-owned facilities from expanding.)  As the bill includes a “special rule for a high Medicaid facility,” many may view these provisions as an authorizing earmark intended to protect physician-owned specialty hospitals located in Democrat Members’ districts.

The amendment allows States to (within limits) reimburse nursing facilities for the cost of conducting background checks and screening required in the bill, and requires the Secretary to develop new quality measures for the care of individuals with Alzheimer’s disease.  The amendment allows the Centers for Medicare and Medicaid Services (CMS) to withhold payments for durable medical equipment for 90 days if CMS finds “a significant risk of fraudulent activity” within the program, and inserts provisions requiring disclosure of a toll-free fraud hotline number on Medicare beneficiaries’ explanation of benefits.

The amendment clarifies that all individuals under age 19 with family incomes under 150 percent qualify for Medicaid under the bill’s expansion, and adds sense of Congress language regarding States adding coverage of home- and community-based services to their long-term care programs under Medicaid.

Public Health Provisions:  The amendment provides that funding provided from the new Public Health Investment Fund may be spent “only if…the amounts specified…are equal to or greater than the amounts” spent during Fiscal Year 2008.  The amendment clarifies that the bill’s language regarding liability reform grants shall not pre-empt existing State laws imposing caps on damages or attorneys’ fees, and makes States with such caps eligible for grant payments—provided that the new laws enacted by States to receive incentive payments do not include such caps on attorneys’ fees or damages.

The amendment includes a new grant program for mental health and substance abuse screening in primary care settings, establishes additional Offices of Minority Health in the Centers for Disease Control, the Substance Abuse and Mental Health Services Administration, the Agency for Healthcare Research and Quality, the Health Resources and Services Administration, and the Food and Drug Administration, and imposes requirements related to diabetes screening and outreach and collection of vital statistics data.  The amendment includes a study on duplicative grant programs within the Public Health Service Act, and authority for the Secretary to streamline any programs found unnecessarily duplicative—provisions which many may view as ironic, given the 111 new bureaucracies, boards, and programs established in the bill itself.

Rep. Stupak (D-MI):  The Stupak amendment as modified strikes language requiring the government-run plan to pay for abortion services, and prohibits any federal funds authorized or appropriated by the bill—including those of the Indian Health Service—except in case of rape, incest, or to save the life of the mother.  The amendment further provides that nothing shall prohibit “any nonfederal entity (including an individual or a State and local government) from purchasing separate supplemental coverage for abortions” for which federal funding is prohibited.  Such supplemental coverage must be “paid for entirely using only funds not authorized or appropriated” by the bill, and may not be paid for by “individual premium payments required for a[n] Exchange-participating health benefits plan towards which an affordability credit is applied.”  Likewise, non-federal health plan offering entities (i.e., plans in the Exchange except the government-run plan) can offer separate supplemental abortion coverage.

Boehner (R-OH): The Republican substitute includes a total of $25 billion in mandatory funding for State-based high-risk pools, which provide coverage to individuals with pre-existing conditions.  The substitute provides that, in order to receive risk pool grants, States must ensure all individuals verify both citizenship and identity, under a regime established in the Deficit Reduction Act (P.L. 109-171).
Insurance Reforms:  The substitute eliminates a current-law requirement that individuals must exhaust their COBRA benefits (if eligible for same) before becoming eligible for guaranteed-issue individual coverage under the Health Insurance Portability and Accountability Act (HIPAA).  The substitute eliminates lifetime or annual limits on insurance benefits, and prohibits insurance companies from canceling policies except in cases of demonstrated fraud, further requiring third-party external review of any insurer’s decision to rescind a policy.
The substitute provides a total $35 billion in State innovation grants for States whose insurance reforms result in lower premium costs to individuals.  States would receive the maximum grant for reducing premiums by 8.5 percent over three years, 11 percent over six years, and 13.5 percent over nine years. (Smaller grant amounts would be available for States that achieve premium reductions slightly below the above levels.)  The program also includes bonus grants for States that reduce their percentage of uninsured individuals by 10 percent within five years, 15 percent within seven years, and 20 percent within nine years, with smaller amounts available for States that reduce their percentage of uninsured individuals at levels below the benchmark amounts above.  The substitute includes language encouraging the development of State-based health plan finders, and provisions for the administrative simplification of health insurance claim processing.
The substitute provides for the establishment of Association Health Plans, allowing small businesses to band together across state lines for the purposes of purchasing health insurance.  The substitute permits dependents under age 25 to remain on their parents’ health insurance policies, and prohibits States from enacting laws prohibiting employers from auto-enrolling their employees in group insurance coverage.  The substitute also permits individuals to purchase coverage across State lines.
Health Savings Accounts:  The substitute makes contributions to Health Savings Accounts (HSAs) eligible for the current-law saver’s credit, permits individuals to pay for high-deductible health plan premiums with funds from the HSA account, and includes other clarifying language regarding the coordination of high-deductible health plan enrollment and the establishment of the HSA itself.
Doctor-Patient Relationship: The substitute includes medical liability reforms, imposing caps on non-economic damages of $250,000, caps on punitive damages, restrictions on attorney contingency fees, and restrictions on the liability statute of limitations and collateral source damages.  The substitute includes language clarifying that “nothing in this Act shall be construed to interfere with the doctor-patient relationship or the practice of medicine,” and repeals the Federal Coordinating Council for Comparative Effectiveness Research established in the “stimulus” bill.
Wellness and Other Provisions:  The substitute expands current-law incentives for prevention and wellness, extending to 50 percent from 20 percent the maximum variation in insurance premiums for individuals’ compliance with healthy behaviors and wellness initiatives.  The substitute incorporates anti-fraud provisions, including full funding for the Obama Administration’s request for anti-fraud funding for activities within the Department of Health and Human Services.
Finally, the substitute includes a pathway for Food and Drug Administration approval for follow-on biologics, providing a period of patent exclusivity 12 years, with a six-month extension possible in cases where a manufacturer agrees to an FDA request for pediatric studies.  The substitute gives FDA the authority to issue general or specific guidance documents (subject to a notice-and-comment period) regarding product classifications.
Pro-Life Protections:  Finally, the substitute includes prohibitions on federal funding for abortions, and extends the current-law Hyde Amendment to prohibit federal subsidies being “expended for a health benefits plan that includes coverage of abortion,” except in cases of rape, incest, or to save the life of the mother.  The substitute also includes conscience protections prohibiting discrimination against any “health care entity that does not provide, pay for, provide coverage of, or refer for abortions.”
Score:  The Congressional Budget Office, in its analysis of the Boehner substitute, found that the provisions contained therein would reduce the deficit by $68 billion over the 2010-2019 period, and by similar amounts in future years.  CBO also concluded that 3 million more individuals would have access to insurance coverage than under current law.  Notably, CBO concluded that on average premiums would decline for all forms of health insurance under the Boehner substitute—by about 5-8 percent in the individual market, up to 3 percent in the large group market, and by up to 10 percent in the small group market.  Many may note that President Obama promised the American people that, “For those who have insurance now, nothing will change under the Obama plan—except that you will pay less;” the Boehner substitute meets the President’s own criteria.

House Democrats Break President Obama’s Promise

Why Not Require Individuals to Verify Their Identity?

 

President Obama promised in his address to Congress that, “There are also those who claim that our reform effort will insure illegal immigrants.  This, too, is false—the reforms I’m proposing would not apply to those who are here illegally.” However, the facts indicate that actions by Democrats in Congress do not comport with the President’s own pledge:

  • While Republicans offered common-sense amendments at both the Ways and Means and Energy and Commerce Committees requiring applicants for taxpayer-subsidized benefits to verify their citizenship and identity—thus allowing the bill to meet President Obama’s pledge—Democrats rejected these proposals on a party-line 26-15 vote at Ways and Means, and a 29-28 vote at Energy and Commerce.
  • Section 245 of House Democrats’ government takeover of health care (H.R. 3200) includes language requiring verification of income for individuals wishing to receive federal health subsidies under the bill. However, the bill includes no requirement for individuals to verify their citizenship, immigration status, or identity before enrolling in federal government programs, potentially allowing ineligible individuals, including undocumented immigrants, to receive taxpayer-subsidized health benefits.
  • In fact, nothing in any of the Democrat bills would require individuals to verify their citizenship or identity prior to receiving taxpayer-subsidized benefits—making the President’s promise one that the legislation itself does not keep.
  • In its preliminary score of the House bill, the Congressional Budget Office noted that, “By 2019…the number of nonelderly people without health insurance would be reduced by about 37 million, leaving about 17 million nonelderly residents uninsured (nearly half of whom would be unauthorized immigrants).” Thus, unless the number of undocumented immigrants is projected to be fewer than 8 million individuals in 2019, the CBO score presumes some of the undocumented would have health coverage—raising further questions as to whether or not said coverage would be taxpayer-funded.
  • Given town hall events during the August recess—where Rep. Jim Moran (D-VA) asked to see one constituent’s drivers license before letting him ask a question, and Rep. Gene Green (D-TX) limited his town hall meetings to constituents with identification—some may ask an important question: Why should the process to ask a question of one’s Congressman be more rigorous than policies to ensure ineligible individuals do not receive taxpayer-subsidized health care?

The President’s address included a tacit admission that the number of uninsured Americans is overstated, citing a statistic that “there are now more than 30 million Americans without health coverage”—a much lower number than the Census Bureau’s figure of 46.3 million uninsured. According to the Politico, White House aides admit that as many as 10 million of the uninsured are undocumented immigrants—and his use of the lower figure means the President believes the undocumented should not be considered part of the target population to receive assistance. Republicans agree with the President that federal taxpayer subsidies should not be provided to undocumented immigrants—and question why House Democrats opposed the President’s own position in multiple House Committees.

Weekly Newsletter: August 31, 2009

More Problems with Government-Run Health Care

This past week saw two additional reports from the United Kingdom on how and why that country’s government-run health care system doesn’t work for many of its patients. On Wednesday, the Welsh Assembly Government hinted that it would block access to several cancer drugs, reversing a January decision that would allow patients access to these treatments. The apparent reversal came after the National Institute for Clinical Excellence (NICE) ruled the drugs were not cost-effective—giving the Welsh Government grounds to deny patients access to effective but expensive treatments solely on cost grounds. One patient on the cancer drug Sutent reacted with anger and frustration to the new development: “It is working for me. I don’t see how they can refuse it if it is working. It’s an expensive drug but what price life?”

The next day, a patient advocacy group highlighted problems with basic services at hospitals in England, citing cases of patients left in their own waste and similar problems where family members noted “at no time…did we feel there was ever anyone who cared for patients enough.” In an interview, the head of the Patients Association discussed the problems with a bureaucratic culture in Britain’s National Health Service:

The most awful part of this for many people is that they ring the hospital, they write the hospital, they make a complaint, “Why did my mum die in this terrible state, sitting here in her own…body [waste]…Why did she have to end her days like this?” Nobody answers, nobody phones back, and if they do, they’re very defensive. What does it cost to say, “I’m so sorry this happened—I’m going to find out why and stop it happening in the future?”

Many Members may not be surprised by these stories, which illustrate the problems created by government-run health systems—a bureaucratic culture showing little regard for patient needs and a strong inclination to deny patients access to life-sustaining but costly treatments. Examples such as these from Britain’s NHS represent the prime reason why Republicans believe that doctors and patients, not government bureaucrats, should make health care decisions in a reformed system.

The Real Reason Why Democrats Ignore Liability Reform

This past Tuesday, Rep. Jim Moran (D-VA) held a town hall with former Vermont Governor Howard Dean. When asked by one of Rep. Moran’s constituent, the licensed physician—and known advocate of a government-run health plan—Gov. Dean gave a straight-forward answer:

“This is the answer from a doctor and a politician. Here’s why tort reform is not in the bill. When you go to pass a really enormous bill like that, the more stuff you put in it, the more enemies you make, right? And the reason that tort reform is not in the bill is because the people who wrote it did not want to take on the trial lawyers in addition to everyone else they were taking on. And that is the plain and simple truth.”

In other words, Democrats support a government takeover of health care—except when it comes to the parts of health care controlled by the trial bar.

A Question of Identity

The same exchange at Tuesday’s town hall meeting was also noteworthy for Rep. Moran’s insistence that the constituent show identification before putting forth his query. This exchange follows a similar policy instituted by Rep. Gene Green (D-TX) at his town hall meetings.

However, some Members may note that House Democrats’ health care takeover legislation (H.R. 3200) includes no provisions requiring individuals to show any proof of identity or citizenship in order to receive taxpayer-subsidized health insurance—which could allow individuals engaging in identity theft, or undocumented immigrants, to obtain government-funded health care. The ID policy implemented by Democrats like Reps. Moran and Green at their town hall meetings begs an important question: Why should the process to ask a question of one’s Congressman be more rigorous than policies to ensure ineligible individuals receive taxpayer-subsidized health care?