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.

Kamala Harris vs. Hillary Clinton on Benefits to Immigrants

Back in January, jaws dropped when presidential candidate Sen. Kamala Harris (D-CA) admitted at a CNN town hall that she wanted to take away the existing health arrangements of hundreds of millions of Americans. Now we know one reason why.

In another interview with CNN that aired Sunday, Harris admitted that she wants to provide taxpayer-funded health care, along with education and other benefits, to individuals unlawfully present in this country. But as even Hillary Clinton recognized, doing so wouldn’t just cost precious taxpayer dollars. It will also encourage individuals to migrate to the United States for “free” health care.

In the interview, CNN’s Jake Tapper asked Harris about language in Section 102(a) of the House and Senate single-payer bills, which would make health coverage available to all individuals present in the United States, regardless of their legal status. When questioned whether she supported granting benefits “to people who are in this country illegally,” Harris responded unequivocally that she does: “Let me just be very clear about this. I am opposed to any policy that would deny in our country any human being from access to public safety, public education or public health, period.”

Compare Harris’ response to the words of none other than Hillary Clinton. When testifying before Congress about her health-care task force’s plan in September 1993, Clinton said she opposed extending benefits to “illegal aliens,” because it would encourage additional migration to the United States:

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.

Clinton may not want illegally present foreign citizens having the same benefits that American citizens would be entitled to under single payer, but Harris does.

The problems sparked by single payer would reach far beyond undocumented foreigners living in this country. To wit, both the House and Senate single-payer bills prohibit individuals from traveling “for the sole purpose of obtaining health care” from the new government-run system. But note the specific wording: It only prohibits foreign citizens from traveling for the sole purpose of receiving health care.

This extremely permissive language would give federal officials fits. So long as anyone states some other purpose—visiting the U.S. Capitol, for instance, or seeing a Broadway play—for his or her visit, the language in the bills would make it impossible to deny these foreign citizens health care funded by U.S. taxpayers.

Provisions like these would not just cost American taxpayer dollars, it would also cost the U.S. health-care system. Growth in benefit tourism would greatly increase demand for health care (as would many other provisions in a single-payer system). Because of this greater demand, American citizens would have an increasingly difficult time accessing care. Foreign residents may not like waiting for care either, but individuals from developing countries lacking access to advanced health treatments might find queues for care in this country far preferable to no care at all in their native land.

Don’t Insult Americans’ Intelligence

In the same CNN interview that aired Sunday, Harris also tried, albeit unconvincingly, to “clean up” her January comments about “mov[ing] on” from private insurance. She claimed to Tapper that single-payer legislation would not fully eliminate private insurance. However, host Tapper rightly pointed out that supplemental insurance could only cover the very few services that the government-run plan would not, like cosmetic surgery.

Tapper also asked Harris about the unions that have health plans that they like now, not least because they gave up pay raises in prior years to keep rich health benefits. Harris could only concede that “it’s a legitimate concern which must be addressed.” I’m sure that those individuals facing the loss of their health coverage feel better, because Harris has officially dubbed their concern “legitimate.”

Note to Harris: Legal hair-splitting about whether single payer bars all health insurance, or just virtually all health insurance, and patronizing constituents fearful of losing their coverage, doesn’t seem like the best way to win support for a government takeover of health care. Perhaps next time she gives an interview with Tapper, she will finally have an answer for why she wants to give benefits to individuals unlawfully present, while taking coverage away from nearly 300 million Americans.

This post was originally published at The Federalist.

Democrats’ Single-Payer Health Care Bill Raises Serious Questions

On Tuesday, the House’s Democratic majority will hold its first formal proceedings on single payer legislation. The House Rules Committee hearing will give supporters an opportunity to move past simplistic rhetoric and answer specific questions about H.R. 1384, the House single payer bill, such as:

Section 102(a) makes “every individual who is a resident of the United States” eligible for benefits, regardless of their citizenship status. But in September 1993, Hillary Clinton testified before Congress that she opposed “extend[ing]” benefits to “those who are undocumented workers and illegal aliens,” because “too many people come [to the United States] for medical care as it is.” Do you agree with Secretary Clinton that single payer will encourage “illegal aliens” to immigrate to the United States for “free” health care?

Section 102(b) prevents individuals from traveling to the United States “for the sole purpose of obtaining” benefits. Does this provision mean that foreign nationals can receive taxpayer-funded health care so long as they state at least one other purpose—for instance, visiting a tourist site or two—for their travels?

Section 104(a) prohibits any participating provider from “den[ying] the benefits of the program” to any individual for any of a series of reasons, including “termination of pregnancy.” What if the nation’s more than 600 Catholic hospitals—which collectively treat more than one in seven American patients—refuse to join the government program because this anti-conscience provision forces them to perform abortions and other procedures in violation of their deeply-held religious beliefs? How will the government program make up for this lost capacity in the health care system?

Section 201(a) requires the Secretary of Health and Human Services (HHS) to compile a list of “medically necessary or appropriate” services that the single payer program will cover. Does anything in the bill prohibit the Secretary from including euthanasia—now legal in at least eight states—on that list of covered benefits?

Section 401(b) requires HHS to compile an “adequate national database,” which among other things must include information on employees’ hours, wages, and job titles. Will America’s millions of health care workers appreciate having the federal government track their jobs and income? Why does the bill contain not a word about employees’ privacy in this “adequate national database?”

Section 611 creates a system of global budgets to fund hospitals’ entire operating costs through one quarterly payment. But what if this lump-sum proves insufficient? Will hospitals have to curtail operations at the end of each quarter if they exceed the budget government bureaucrats provide to them?

Section 614(b)(2) prohibits payments to providers from being used for any profit or net revenue, essentially forcing for-profit hospital, nursing home, hospice, and other providers to convert to not-for-profit status. Coming on top of the bill’s virtual abolition of private insurers, how much will this collective destruction of shareholder value hurt average Americans’ 401(k) balances?

Section 614(c)(4) prohibits hospital providers from using federal operating funds to finance “a capital project funded by charitable donations” without prior approval. Does this restriction—preventing hospitals from opening new wings funded by private dollars—demonstrate how single payer will ration access to care, by limiting the available supply?

Section 614(f) bars HHS from “utiliz[ing] any quality metrics or standards for the purposes of establishing provider payment methodologies.” Does this prohibition on tying any provider payments to quality metrics serve as confirmation of the low-quality care a single payer system will give to patients?

Section 616 states that, if drug and device manufacturers will not agree to an “appropriate” price for their products—as defined by the government, of course—the HHS Secretary will license their patents away to other companies. But the average pharmaceutical costs approximately $2.6 billion to bring to market. How many fewer drugs will come to market in the future due to this arbitrary restriction on innovation?

Section 701(b)(2)(B) sets future years’ appropriations for the program based in part on “other factors determined appropriate by the [HHS] Secretary.” But this month, Nancy Pelosi filed suit against President Trump’s border emergency declaration, after she claimed that the declaration “undermines the separation of powers and Congress’s [sic] power of the purse.” How does allowing an unelected executive branch official to determine trillions of dollars in appropriations uphold Congress’ “power of the purse?”

Section 901(a)(1)(A) states that “no benefits shall be available under Title XVIII of the Social Security Act”—i.e., Medicare—two years after enactment. How does abolishing the current Medicare program square with the bill’s supposed title of “Medicare for All?”

If single payer supporters can answer all these queries at Tuesday’s hearing, many observers will only have one other question: Why anyone thought the legislation a good idea to begin with.

This post was originally published at Fox News.

If Republicans Can Confirm Kavanaugh, They Can Repeal Obamacare

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

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

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

Meanwhile, Back at the Ranch

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

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

Mr. ‘Don’t Blink’ Blinked

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

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

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

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

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

Do Your Job, And Keep Your Promises

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

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

This post was originally published at The Federalist.

How Single-Payer Supporters Defy Common Sense

The move to enact single-payer health care in the United States always suffered from major math problems. This week, it revived another: Common sense.

On Monday, the Mercatus Center published an analysis of single-payer legislation like that promoted by socialist Sen. Bernie Sanders (I-VT). While conservatives highlighted the estimated $32.6 trillion price tag for the legislation, liberals rejoiced.

Riiiiiigggggggghhhhhhhhhttttt. As the old saying goes, if something sounds too good to be true, it usually is. Given that even single-payer supporters have now admitted that the plan will lead to rationing of health care, the public shouldn’t just walk away from Sanders’ plan—they should run.

National Versus Federal Health Spending

Sanders’ claim arises because of two different terms the Mercatus paper uses. While Mercatus emphasized the way the bill would increase federal health spending, Sanders chose to focus on the study’s estimates about national health spending.

Although it sounds large in absolute terms, the Mercatus paper assumes only a slight drop for health spending in relative terms. It estimates a total of $2.05 trillion in lower national health expenditures over a decade from single-payer. But national health expenditures would total $59.7 trillion over the same time span—meaning that, if Mercatus’ assumptions prove correct, single-payer would reduce national health expenditures by roughly 3.4 percent.

Four Favorable Assumptions Skew the Results

However, to arrive at their estimate that single-payer would reduce overall health spending, the Mercatus paper relies on four highly favorable assumptions. Removing any one of these assumptions could mean that instead of lowering health care spending, single-payer legislation would instead raise it.

First, Mercatus adjusted projected health spending upward, to reflect that single-payer health care would cover all Americans. Because the Sanders plan would also abolish deductibles and co-payments for most procedures, study author Chuck Blahous added an additional factor reflecting induced demand by the currently insured, because patients will see the doctor more when they face no co-payments for doing so.

Second, the Mercatus study assumes that a single-payer plan can successfully use Medicare reimbursement rates. However, the non-partisan Medicare actuary has concluded that those rates already will cause half of hospitals to have overall negative total facility margins by 2040, jeopardizing access to care for seniors.

Expanding these lower payment rates to all patients would jeopardize even more hospitals’ financial solvency. But paying doctors and hospitals market-level reimbursement rates for patients would raise the cost of a single-payer system by $5.4 trillion over ten years—more than wiping away any supposed “savings” from the bill.

Finally, the Mercatus paper “assumes substantial administrative cost savings,” relying on “an aggressive estimate” that replacing private insurance with one single-payer system will lower health spending. Mercatus made such an assumption even though spending on administrative costs increased by nearly $26 billion, or more than 12.3 percent, in 2014, Obamacare’s first year of full implementation.

Likewise, government programs, unlike private insurance, have less incentive to fight fraud, as only the latter face financial ruin from it. The $60 billion problem of fraud in Medicare provides more than enough reason to doubt much administrative savings from a single-payer system.

Apply the Common Sense Test

But put all the technical arguments aside for a moment. As I noted above, whether a single-payer health-care system will reduce overall health expenses rests on a relatively simple question: Will doctors and hospitals agree to provide more care to more patients for the same amount of money?

Whether single-payer will lead to less paperwork for doctors remains an open question. Given the amount of time people spend filing their taxes every year, I have my doubts that a fully government-run system would generate major improvements.

But regardless of whether providers get any paperwork relief from single-payer, the additional patients will come to their doors seeking care, and existing patients will demand more services once government provides them for “free.” Yet doctors and hospitals won’t get paid any more for providing those additional services. The Mercatus study estimates that spending reductions due to the application of Medicare’s price controls to the entire population will all but wipe out the increase in spending from new patient demand.

If Sanders wants to take a “victory lap” for a study arguing that millions of health care workers will receive the same amount of money for doing more work, I have four words for him: Good luck with that.

Health Care Rationing Ahead

I’ll give the last word to, of all things, a “socialist perspective.” One blog post yesterday actually claimed the Mercatus study underestimated the potential savings under single-payer: “[The study] assumes utilization of health services will increase by 11 percent, but aggregate health service utilization is ultimately dependent on the capacity to provide services, meaning utilization could hit a hard limit below the level [it] projects” (emphasis mine).

In other words, spending will fall because so many will demand “free” health care that government will have to ration it. To socialists who yearningly long to exercise such power over their fellow citizens, such rationing sounds like their utopian dream. But therein lies their logic problem, for any American with common sense would disagree.

This post was originally published at The Federalist.

Republicans’ Spending Dilemma, In One Tweet

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

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

Voting for the Mandate after They Voted Against It?

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

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

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

Are Democrats Running Congress?

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

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

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

Conservatives Get the Shaft—Again

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

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

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

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

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

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

This post was originally published at The Federalist.

This American Life Doesn’t Understand This American Government

The most recent episode of NPR’s “This American Life” continues a line of liberal laments that the legislative process does not work, and blames most of that ineffectiveness on a single source: Donald Trump. (Shocker there.)

But the idea of removing Trump to Make Congress Great Again doesn’t hold up to scrutiny. Even if it did, such a development would not comport with the Framers’ design of our government, which put the “deliberative” in “deliberative process” far more than the modern-day Left would prefer.

“This American Life” correspondent Zoe Chace laments that the popularity of DACA—which covers individuals brought to the United States illegally as children—has impeded its enactment into law. She thinks lawmakers have used its popularity

as a spoonful of sugar to make tougher immigration measures easier to swallow—stuff like border security, restricting visas, or on the Democrat side, legalizing even more immigrants. That’s the curse of DACA. The most valuable thing about it, on Capitol Hill anyway, is the possibility that it could be used to pass other stuff. So even though we’re a democracy, even though 80% of the country wants DACA, the country doesn’t get what it wants because there’s no incentive for Congress to just put it to a straight up or down vote.

Having castigated Congress for using DACA “to pass other stuff,” Chace spends much of the episode highlighting Flake’s attempts to use “other stuff”—namely, tax reform—to pass DACA.

Looks Can Be Deceiving

Chace calls Flake “the most powerful senator in Congress right now.” Having announced his retirement, Flake has no political constituency to appease. That dynamic, combined with the current Senate split of 50 Republicans and 49 Democrats—Republican John McCain is recovering from cancer treatment in his home state of Arizona—at first blush gives Flake significant leverage.

Second, to pass the Senate, DACA requires not 50 votes, but 60, as most legislation needs a three-fifths majority to overcome a potential filibuster. The tax legislation, enacted under special budget reconciliation procedures, stands as an exception that proves the general rule that would apply to any DACA bill.

Third, by favorably viewing Flake’s attempt (which he privately admits to Chace is a bluff) to tie his tax reform vote to a commitment from leadership to take up DACA legislation, Chace supports the very problem she criticizes—namely, lawmakers using one bill or issue to “pass other stuff.”

Chace’s criticism of the legislative process therefore comes across as inherently self-serving. She doesn’t object to senators using unrelated matters as leverage. For example, she applauds Flake for threatening to hijack the tax bill over immigration, so much as she objects to senators using other matters as leverage on her issue: passing DACA. That double standard, coupled with an ignorance of basic constitutional principles, leads to some naïve misunderstandings.

Let’s Review Some of Those

That principle leads to the “other stuff” dynamic Chace described, because lawmakers have other competing priorities to navigate. Some might support DACA, but only if they receive something they perceive as more valuable in exchange—border security, for instance, or a broader immigration deal.

Occasionally lawmakers take this concept too far, but the system tends to self-correct. As the episode notes, Democrats’ tactics led to a partial government shutdown in January, as Senate Democrats refused to pass spending bills keeping the federal government operating unless Republicans committed to enact a DACA measure with it—“other stuff,” in other words.

But although most Democrats support DACA, they divided over the hardball, hostage-taking tactics that tied passing spending bills to enacting an immigration measure. That division and public pressure over the shutdown led them to beat a hasty retreat.

In 2007, under President George W. Bush an immigration bill famously failed on the Senate floor, in part because then-senator Obama and other liberals voted to restrict the number of guest workers permitted into the United States—a key provision necessary to win Republican votes.

Consider a Case Study in Virginia

To view the immigration debate in a nutshell, one need look no further than Rep. Eric Cantor (R-VA). Or, to be more precise, former Rep. Eric Cantor. In June 2014, Cantor lost his Republican primary to an upstart challenger in Dave Brat. Outrage over the possibility that the House might pass an immigration bill the Senate’s “Gang of Eight” muscled through in 2013 helped Cantor go down to primary defeat, and ended any debate on immigration in the 113th Congress (again, well before most people thought Trump would run for president, let alone win).

The way Cantor’s 2014 defeat changed the landscape on immigration in Congress illustrates that, while not a direct democracy, the American system remains responsive to democratic principles, even if they resulted in an outcome (i.e., inaction on immigration) Chace would decry. Chace might argue that a June primary election where only 65,017 Virginia residents voted—only about one-sixth the number who voted in that district’s November 2016 general election—should not determine the fate of immigration legislation nationwide.

But by making it difficult to enact legislation, the American system of government accounts for intensity of opinion as well as breadth of opinion. In the case of Cantor, a group of 36,105 Virginia residents who voted for Brat—many of whom cared strongly about stopping an immigration bill—sent a message on behalf of the hundreds of thousands of Virginia residents who didn’t care enough to vote in the Republican primary election. (Virginia conducts open primaries, in which voters can choose either party’s ballot, so any resident could have voted for or against Cantor in the Republican primary.)

That outcome might resonate with a former resident of Cantor’s district, Virginia’s own James Madison. In Federalist 10, Madison wrote of how a geographically diverse country would make it difficult for any one faction to command a majority, and impose its will on others. In Federalist 51, Madison returned to the topic of limiting government’s power by separating its responsibilities among co-equal branches: “Ambition must be made to counteract ambition.”

The stalemate on immigration and DACA would likely prove quite satisfactory to Framers like Madison, who feared government’s powers and purposefully looked to circumscribe them. To the modern Left, however, a constitutional government with limited authority seems an antiquated and inconvenient trifle.

‘Slow Government’ Complaints Are Way Older than Trump

Although Chace’s report claims that congressional dysfunction “has changed in ways that are very specific to Donald Trump,” liberals have criticized government inaction for decades. In “The System: The American Way of Politics at the Breaking Point,” Haynes Johnson and David Broder use their seminal analysis of the rise and fall of “HillaryCare” to decry a Washington “incapable as a nation of addressing the major long-term problems facing the society:”

At no point, we believe, has the cumulative assault on the idea of responsible government been so destructive of the very faith in the democratic system as now. A thoroughly cynical society, deeply distrustful of its institutions and leaders and the reliability of information it receives, is a society in peril of breaking apart.

Again, these words far precede any Trump administration. Broder and Johnson wrote them in 1996, while the tycoon looked to rebuild his empire following several corporate bankruptcies.

As “This American Life” notes, Trump has proved more indecisive legislatively than most presidents did. The episode highlights how Trump went from supporting any immigration bill Congress would send him to imposing major new conditions on same in the matter of hours. That series of events illustrated but one of Trump’s many reverses on legislation.

For instance, Trump famously called the American Health Care Act “mean” in a closed-door meeting weeks after Republican representatives voted to approve the legislation, and Trump publicly praised them for doing so. But presidents prior to Trump have also engaged in legislative U-turns or ill-conceived maneuvers.

In his 1994 State of the Union message, Bill Clinton threatened to veto any health-care bill that did not achieve universal coverage. As Johnson and Broder recount, that was a major tactical mistake that Clinton later attempted to undo, but ultimately contributed to the downfall of “HillaryCare.” And of course, Clinton himself might not have become president had his predecessor, George H.W. Bush, not made then violated his infamous “Read my lips—no new taxes!” pledge—the “six most destructive words in the history of presidential politics.”

While Trump undoubtedly has introduced more foibles into the legislative process, he has not changed its fundamental dynamic—a dynamic “This American Life” criticizes yet does not understand. Chace says “we’re a democracy,” but she means that she wants a Democratic—capital “D”—form of government, one in which Congress passes lots of legislation, enacts big programs (more funding for NPR, anyone?), and plays a major role in the lives of the American people.

Yet Madison and the Constitution’s Framers deliberately designed a lower-case “r” republican form of government, one with limited powers and a deliberative process designed to make enacting major legislation difficult. That reality might not suit the liberal dreams of “This American Life,” but it represents how American democratic principles actually live and work.

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.

Who Really Caved on the “Shutdown Showdown?”

While conventional wisdom over the past 18 or so hours, both at The Federalist and elsewhere, holds that Democrats “lost” the shutdown showdown, this contrarian takes the position of noted college football analyst Lee Corso: “Not so fast, my friend!”

While not conceding on the substance of immigration legislation, Senate Majority Leader Mitch McConnell (R-KY) made an important concession on process—one he has not made to conservatives. According to press reports, McConnell pledged that, if lawmakers cannot agree on an immigration package addressing the Deferred Action for Childhood Arrivals (DACA) program by February 8, the expiration date of the continuing resolution that passed Monday, he would begin a freewheeling and open debate on a stand-alone immigration measure—provided the federal government remains open.

No Budget—No Problem!

Compare McConnell’s comments on an immigration bill with this Politico report not two weeks ago: “Republican leaders are considering skipping passage of a GOP budget this year—a blow to the party’s weakened fiscal hawks that would squash all 2018 efforts to revamp entitlements or repeal Obamacare….McConnell has argued that he cannot pass deficit-reduction legislation using powerful budget procedures with his new 51-vote majority—and wasn’t even sure he could find the votes for a fiscal blueprint in the first place.”

While liberals’ priority—immigration policy—will get prime floor time thanks to the commitment McConnell made in exchange for Democrats’ votes to reopen the government, conservative priorities like reforming entitlements and repealing Obamacare won’t see the light of day, because McConnell doesn’t even want to try to pass a budget.

All of this gives conservatives an obvious lesson: For the next appropriations bill, they should withhold their votes unless and until McConnell publicly commits to passing a budget through the Senate, with reconciliation instructions allowing for entitlement reform and Obamacare repeal efforts.

Could Have Been (and Might Get) Worse

Contrast that response to this article from just last month, about bailing out Obamacare through a “stabilization” bill:

U.S. Sen. Susan Collins said she is confident President Donald Trump and Senate Majority Leader Mitch McConnell will ensure passage of two bills aimed at shoring up the insurance markets.…

Collins remains confident that Trump and McConnell, fellow Republicans, will keep their word and make sure the health care bills get approved, said Annie Clark, a spokeswoman for the senator.…McConnell committed in writing to support passage of the bills either before adoption of a final tax bill or before the end of the year, Clark said.

If McConnell didn’t want to bind the House to an Obamacare bailout measure, he sure did a much less convincing job making that clear to Collins than he did to Democrats regarding immigration in the past week. Granted, the Obamacare bailout hasn’t happened—yet. But rest assured that McConnell and Collins, among others, are already looking to the next appropriations bill as a vehicle to pass the “stabilization” measure.

The disparate treatment between immigration and an Obamacare bailout gives conservatives the “consolation” that McConnell could have made far worse concessions to Democrats. But conversely, if McConnell wants to respect the House’s prerogatives, why does Collins believe he made a commitment to her to do the exact opposite?

Given that daunting landscape ahead, conservatives shouldn’t focus their energies celebrating how they “won” this weekend’s battle, as doing so would guarantee they end up losing the larger war.

This post was originally published at The Federalist.

Republicans’ SCHIP Surrender

In spring 2015, Senate Republican leaders pressured their members to accept a clean, two-year reauthorization of the State Children’s Health Insurance Program (SCHIP) added as part of a larger health spending measure.

The SCHIP reauthorization added to a larger Medicare bill included none of the reforms Republicans had proposed that year, many of which attempted to turn the program’s focus back toward covering low-income families first, as the George W. Bush administration had done. But Republican leaders said that the two-year extension, rather than the four-year extension Democrats supported, would allow conservatives to fight harder for reforms in 2017.

The press has focused on the disputes over paying for the SCHIP program, which have held up final enactment of a long-term reauthorization. (The House passed its version of the bill in November; the Senate, failing to find agreement on pay-fors, has not considered the bill on the floor.) But the focus on pay-fors has ignored Republicans’ abject surrender on the policy behind the program, because the media defines “bipartisanship” as conservatives agreeing to do liberal things. That occurred in abundance on this particular bill.

So Much for Our Promises, Voters

On the underlying policy, all the groups who pledged to fight for conservative reforms vacated the field. Senate Finance Committee Chairman Orrin Hatch (R-UT), who brags about how he created the program as part of the Balanced Budget Act in 1997, cut a deal with Ranking Member Ron Wyden (D-OR) that, as detailed below, includes virtually no conservative reforms to the program—raising questions about whether Hatch was so desperate for a deal to preserve his legacy that he failed to fight for conservative reforms.

House Speaker Paul Ryan (R-WI) did not repudiate the agreement Hatch and Wyden struck, even though that agreement maintained virtually the provisions of the 2009 SCHIP reauthorization that Ryan himself, then the ranking member of the House Budget Committee, called “an entitlement train wreck.”

Republicans have thus suffered the worst of both worlds: getting blamed for inaction on a program’s reauthorization, while already having conceded virtually every element of that program, save for its funding.

Details About the SCHIP Proposals

A detailed examination of the Hatch-Wyden agreement (original version here, and slightly revised version in Sections 301-304 of the House-passed bill here) demonstrates how it extends provisions of the 2009 reauthorization passed by a Democratic Congress and signed by President Obama—which Republicans in large part opposed. Moreover, the Hatch-Wyden agreement and House-passed bill includes none of the reforms the House Energy and Commerce Committee proposed, but were not enacted into law, in 2015.

The only “reform” in the pending reauthorization consists of phasing out an enhanced match for states included in Section 2101(a) of Obamacare—one already scheduled to expire. Even though the enhanced match will end on its own in October 2019, the Hatch-Wyden agreement and the House-passed bill would extend that enhanced match by one year further, albeit at a reduced level, before phasing it out entirely.

Child Enrollment Contingency Fund: Created in Section 103 of the 2009 reauthorization. As I noted then, “Some Members may be concerned that the fund—which does not include provisions making additional payments contingent on enrolling the low-income children­ for which the program was designed—will therefore help to subsidize wealthier children in states which have expanded their programs to higher-income populations, diverting SCHIP funds from the program’s original purpose” (emphasis original). Section 301(c) of the House-passed bill would extend this fund, without any reforms.

Express Lane Eligibility: Created in Section 203 of the 2009 reauthorization, as a way of using eligibility determinations from other agencies and programs to facilitate enrollment in SCHIP. As I noted then, “Some Members may be concerned first that the streamlined verification processes outlined above will facilitate individuals who would not otherwise qualify for Medicaid or SCHIP, due either to their income or citizenship, to obtain federally-paid health benefits.” Section 301(e) of the House-passed bill would extend this option, without any reforms.

Citizenship Verification: Section 211 of the 2009 reauthorization created a new process for verifying citizenship, but not identity, to circumvent strict verification requirements included in the 2005 Deficit Reduction Act. As I wrote in 2009:

Some Members may echo the concerns of Social Security Commissioner Michael Astrue, who in a September 2007 letter stated that the verification process proposed in the bill would not keep ineligible individuals from receiving federal benefits—since many applicants would instead submit another person’s name and Social Security number to qualify. Some Members may believe the bill, by laying out a policy of ‘enroll and chase,’ will permit ineligible individuals, including illegal aliens, to obtain federally-paid health coverage for at least four months during the course of the verification process. Finally, some Members may be concerned that the bill, by not taking remedial action against states for enrolling illegal aliens—which can be waived entirely at the Secretary’s discretion—until states’ error rate exceeds 3%, effectively allows states to provide benefits to illegal aliens.

Legal Aliens: Section 214 of the 2009 reauthorization allowed states to cover legal aliens in their SCHIP programs without subjecting them to the five-year waiting period required for means-tested benefits under the 1996 welfare reform law.

As I wrote in 2009, “Some Members may be concerned that permitting states to cover legal aliens without imposing waiting periods will override the language of bipartisan welfare reform legislation passed by a Republican Congress and signed by a Democrat President, conflict with decades-long practices in other federally-sponsored entitlement health programs (i.e., Medicare), and encourage migrants to travel to the United States for the sole or primary purpose of receiving health benefits paid for by federal taxpayers.” The House-passed bill includes no provisions modifying or repealing this option.

Premium Assistance: Section 301 of the 2009 reauthorization created new options regarding premium assistance—allowing states to subsidize employer-sponsored coverage, rather than enrolling individuals in government-run plans. While that reauthorization contained some language designed to make premium assistance programs more flexible for states, it also expressly prohibited states from subsidizing health savings account (HSA) coverage through premium assistance. The House-passed bill includes no provisions modifying or repealing this prohibition on states subsidizing HSA coverage.

Health Opportunity Accounts: Section 613 of the 2009 reauthorization prohibited the Department of Health and Human Services from approving any new demonstration programs regarding Health Opportunity Accounts, a new consumer-oriented option for low-income beneficiaries created in the 2005 Deficit Reduction Act. The House-passed bill includes no provisions modifying or repealing this prohibition on states offering more consumer-oriented options.

Covering Poor Kids First: The 2015 proposed reauthorization looked to restore SCHIP’s focus on covering low-income children first, by 1) eliminating the enhanced federal match rate for states choosing to cover children in families between 250-300 percent of the federal poverty level ($61,500-$73,800 for a family of four in 2017) and 2) eliminating the federal match entirely for states choosing to cover children in families above 300 percent of poverty. These provisions were consistent with the policy of the George W. Bush administration, which in 2007 issued guidance seeking to ensure that states covered low-income families first before expanding their SCHIP programs further up the income ladder. The House-passed bill includes no such provision.

Maintenance of Effort: Section 2001(b) of Obamacare included a requirement that states could not alter eligibility standards for children enrolled in SCHIP through October 1, 2019, limiting their ability to manage their state programs. Whereas the 2015 proposed reauthorization would have repealed this requirement, effective October 1, 2015, Section 301(f) of the House-passed bill would extend this requirement, through October 1, 2022. (However, under the House-passed bill, states could alter eligibility for children in families with incomes over 300 percent of poverty, beginning in October 2019.)

Crowd-Out: The 2015 proposed reauthorization allowed states to impose a waiting period of up to 12 months for individuals who declined an offer of, or disenrolled from, employer-based coverage—a provision designed to keep families from dropping private insurance to enroll in a government program. The House-passed bill contains no such provision.

Program Name: The 2009 reauthorization sought to remove the “state” element of the “State Children’s Health Insurance Program,” renaming the program as the “Children’s Health Insurance Program.” While the 2015 proposed reauthorization looked to restore the “state” element to “SCHIP,” the House-passed bill includes no such provision.

Cave, Not a Compromise

For all the focus on paying for SCHIP, the underlying policy represents a near-total cave by Republicans, who failed to obtain any meaningful reforms to the program. Granted, Democrats likely would not agree to all the changes detailed above. But the idea that a “bipartisan” bill should include exactly none of them also seems absurd—unless Republicans threw in the towel and failed to fight for any changes.

The press spent much of 2017 focused on Republican efforts to unwind Obamacare. But the SCHIP bill represents just as consequential a story. The cave on SCHIP demonstrates how many Republicans, after spending the last eight years objecting to the Obama agenda, suddenly have little interest in rolling it back.

This post was originally published at The Federalist.