There He Goes Again: Lamar Alexander Misrepresents His Obamacare Bailout

As Ronald Reagan might say, “There you go again.” Last week, Sen. Lamar Alexander (R-TN) published an op-ed in the Washington Examiner making claims about the Obamacare “stabilization” bill he developed with Sen. Patty Murray (D-WA).

The article tells a nice story about how conservatives should support the bill, but alas, one can consider it just that: A story. The article includes several material omissions and outright false statements about the legislation and its impact. Below are the facts and full context that Alexander wouldn’t dare admit about his bill.

Fact: In reality, the Congressional Budget Office in its score of the Alexander-Murray bill said the exact opposite:

Simply comparing outcomes with and without funding for CSRs [cost-sharing reduction payments], CBO and [the Joint Committee on Taxation] expect that federal costs in 2018 would be higher with funding for CSRs because premiums for 2018 have already been finalized and rebates related to CSRs would be less than the CSR payments themselves. [Emphasis mine.]

Insurers have already finalized their premiums for 2018 (in most states, open enrollment ends this Friday, December 15), and when doing so assumed cost-sharing reductions would not be paid. If Congress now turns around and appropriates those payments for 2018, insurers would have the possibility to “double-dip.” That means getting paid twice by the federal government to provide lower cost-sharing to low-income individuals.

While CBO believes insurers will return some of the “extra” subsidies they receive to the federal government—$3.1 billion worth, according to their estimate—they also believe that insurers will keep some portion of the excess, as much as $4-6 billion worth. That dynamic explains why CBO believes federal spending will increase, not decrease, as Alexander claims, if Congress appropriates cost-sharing reduction payments for 2018.

Fact: The $194 billion figure has no bearing to the Alexander-Murray legislation. Elsewhere in the op-ed, Alexander admits his bill would include “two years of temporary cost-sharing reduction payments.” If these payments would be “temporary,” then why cite a purported savings figure for an entire decade? Is Alexander trying to elide the fact that he wants to continue both Obamacare and these taxpayer payments to insurance companies in perpetuity?

Claim: “This bill includes new waiver authority for states to come up with their ideas to reduce premiums.”

Fact: The bill includes precious little new waiver authority for states. On substance, it retains virtually all of the “guardrails” in Obamacare that make implementing conservative ideas—like consumer-driven health-care options that use health savings accounts—impossible in a state waiver. While the bill does provide for a faster process for the federal government to consider waiver applications, without changing the substance of what provisions states can waive, the bill would just result in conservative states getting their waivers rejected more quickly.

Fact: This provision appears nowhere in the Alexander-Murray measure. Instead, it comprises a separate bill, introduced by senators Susan Collins (R-ME) and Bill Nelson (D-FL). And that bill, as originally introduced, would appropriate not $10 billion in reinsurance funds, but “only” $4.5 billion.

Some conservatives may find it bad enough that, in addition to appropriating roughly $20-25 billion straight to insurance companies in the Alexander-Murray bill, Alexander now wants a second source of taxpayer funds to subsidize insurers. Moreover, by more than doubling the amount of reinsurance funds compared to the original Collins-Nelson bill, Alexander seems to be engaging in a bidding war with himself to determine the greatest amount of taxpayers’ money he can shovel insurers’ way.

Claim: “Almost all House Republicans have already voted for its provisions earlier this year.”

At this point readers may question why Alexander made such a series of incomplete, misleading, and outright false claims in his op-ed. One other tidbit might explain the article’s dissociation with the truth.

Fact: Since 2013, the largest contributor to Alexander’s re-election campaign and leadership PAC has been…Blue Cross Blue Shield.

This post was originally published at The Federalist.

How to Repeal Obamacare — And What Comes Next

Secretary of Health and Human Services Tom Price’s confirmation early Friday morning marks both an end and a beginning. While his installation after a bitter nomination battle formally begins the Trump administration’s work on healthcare, Price will also seek to bring about the end of former President Barack Obama’s unpopular and unaffordable healthcare law.

Dismantling Obamacare should be a three-fold process, involving coordination among HHS, the rest of the administration, and the Republican-led Congress. The steps can occur concurrently, but all must take place to prevent people from suffering any further from Obamacare’s ill effects.

Having assumed his post, Price should use the regulatory apparatus at his disposal to bring immediate relief from Obamacare. Press reports indicate the administration has already taken steps in that regard, sending a package of insurance stabilization rules to the Office of Management and Budget for clearance prior to their release, potentially as soon as Friday afternoon.

The reports suggest the administration is considering many of the proposals to provide regulatory flexibility that I included in a report analyzing repeal last month. Specifically, the administration may reduce the length of the annual open enrollment period and require verification of individuals seeking special enrollment periods outside of open enrollment. These are two critical steps to prevent individuals from signing up for insurance after they become sick.

In many cases, the administration and Price have significant latitude to provide flexibility, but that latitude is not unlimited. Until Congress acts, Obamacare remains on the statute books. While regulators can reinterpret the law, they cannot ignore it. Already, the liberal-leaning AARP has threatened legal action over one of the new administration’s rumored regulatory changes.

These legal constraints illustrate why Congress should act, preferably sooner rather than later, in passing legislation repealing Obamacare. Congress should use as the basis for action the repeal bill it passed in the fall of 2015, which Obama vetoed early last year. That bill repealed all of the law’s tax increases, and sunset the law’s coverage expansions after a two-year period to allow for an appropriate transition.

While the 2015 legislation should represent the initial template for Obamacare’s repeal, Congress can and should go further. Legislators should also seek to repeal the law’s insurance regulations, which have raised premiums and caused millions to receive cancellation notices.

Although some assume Congress cannot repeal the regulations using budget reconciliation — the special process that allows legislation to pass with a 51-vote majority, rather than the usual 60 votes, in the Senate — that may not be accurate. The Congressional Budget Office and others have made estimates showing the significant budgetary impact of these costly regulations. Republicans should use those cost estimates, and past Senate precedent, to enact repeal of the major insurance provisions using the special budget reconciliation procedures.

While adding repeal of the insurance regulations to the 2015 measure, Congress should also ease the transition away from Obamacare by freezing enrollment in the law’s new entitlements upon enactment of the repeal bill. It makes no sense to allow millions of individuals to continue enrolling in a program Congress has just voted to end. Especially with respect to the law’s massive expansion of Medicaid to the able-bodied, freezing enrollment would allow individuals currently on Obamacare to retain their coverage, while starting a process to transition away from the law’s spending and allow individuals to transition off the rolls and into employer-based coverage.

When thinking about a post-Obamacare world, Congress and the new administration should have three priorities: lowering costs, lowering costs and lowering costs.

Americans of all political stripes view lowering health costs as their number-one priority, and it isn’t even close. While candidate Obama promised in 2008 that his health plan would lower costs by an average $2,500 per family per year, the bill he signed into law instead raised costs and premiums for millions.

The answer to the top health concern lies not in new spending and taxes to subsidize health insurance (the failed Obamacare formula) but in reducing the underlying costs of care.

Reducing costs involves equalizing the tax treatment of health insurance, limiting current tax preferences that encourage over-consumption of health insurance and health care. But this must be done in a way that does not raise tax burdens overall. Lowering costs should include incentives for wellness and promote health savings accounts, the expansion of which could reduce health expenditures by billions of dollars.

States have a big role to play in the health debate, both in lowering costs and protecting individuals with pre-existing conditions.

Congress can and should provide states with incentives to reduce insurance benefit mandates that drive up the cost of care. Congress should guarantee that individuals with pre-existing conditions have access to coverage, but give states funding, and let them decide the best route — whether through high-risk pools, or some other risk transfer mechanism — to ensure access to care. While not the panacea President Trump and others have claimed, Congress should allow individuals to shop across state lines for the coverage that best suits their needs.

These changes will not require a 2,700-page piece of legislation like Obamacare. They should not even be considered a “replacement” for Obamacare. But they would have an impact in reducing health costs, the issue Americans care most about. They would represent a new beginning after the canceled policies and premium spikes associated with Obamacare.

This post was originally published in the Washington Examiner.

Gov. Jindal Op-Ed: An Obamacare Debate Worth Having

Repeal is not enough.

Five years later, that much should be clear. The law’s ill effects — higher premiums, cancelled health plans, bureaucratic ensnarements for doctor and patient alike — have all been well documented. This spring, the American people also got to know for the first time how Obamacare has complicated the tax code — raising taxes for many, and causing confusion and headaches for everyone.

But it’s long past time for the American people to get to know what conservatives would do in Obamacare’s stead. Our healthcare system did face a major threat before President Obama took office — rising costs that threaten to overwhelm middle-class families, and the federal budget as well. But while candidate Obama promised in 2008 to tackle costs, and lower premiums by $2,500 for the typical family, President Obama instead focused on expanding government-run health coverage, and missing the mark on his premium promise by over $1 trillion.

So yes, by all means, let’s ask the question: “Obamacare — when have you stood up and fought against it?” But anyone who wants to ask that question should have a detailed answer to this one: “Obamacare — what would you do instead?” Because it’s not particularly courageous for conservatives simply to oppose a law that remains deeply unpopular with voters. We must tell people what we are for, and let the American people know exactly what we will do, and how we will do it.

That’s why I put forward my own plan to replace Obamacare last year. It’s a plan that focuses like a laser beam on slowing the growth of healthcare costs. It offers 16 specific, proven methods that can work to curb health spending — from Health Savings Accounts, to wellness incentives, to lawsuit reforms that can reduce defensive medicine practices, to more insurance options that can spur competition and bring down prices. Just as important, the plan repeals all of Obamacare’s trillion dollars in tax increases and doesn’t replace them with a single penny of revenue hikes.

Thankfully, more Republicans are finally starting to put out specific proposals about how to replace Obamacare. I’m glad — that’s long since overdue. I think this issue is so important to conservatives, to our party, and to the future of our country that I want to lay down a very clear marker. I’m willing to debate anyone with a serious healthcare plan who wants to compare their Obamacare replacement plans with mine.

Obamacare is so harmful to our country — our health system, our economy and jobs, and our freedom — that we simply must repeal it, and put in place good reforms that will undo the damage Obamacare has caused.

It’s become fashionable in Republican circles in Washington to say that the hour is past, and that it is now too late to repeal all of Obamacare, and to say that we will just have to try to change it best we can. That’s nonsense.

After Hillary Clinton’s health plan went down to defeat in 1994, the Left never stopped their fight. I’ll bet Mrs. Clinton even sent a few emails out about it.

We as conservatives must do the same — we must fight until we win, and put forward a good conservative replacement for Obamacare now and challenge the President to do the right thing.

As Sen. Mike Lee recently said in Iowa: “If a presidential candidate tells us that he wants to repeal Obamacare but doesn’t have a healthcare reform proposal of his own, then maybe we should keep looking for another candidate.”

Sen. Lee is exactly right. We have to fight for what we promised the American people. And putting out clear, specific plans to replace Obamacare should comprise a major element of that effort — because repeal is not enough.

This post was originally published at the Washington Examiner.

More CBO Transparency Could Have Prevented Obamacare’s CLASS Debacle

Mere days into a Republican Congress, Democrats are making charges of ideological bias when it comes to the majority’s handling of the Congressional Budget Office. A group of leading Senate Democrats wrote a letter to House Speaker John Boehner specifically noting that “a CBO director should not be required to revise the score of the Affordable Care Act in order to please partisan interests.” It’s an ironic charge, given that it’s far from partisan to question why the CBO failed to perform analyses that could have predicted the collapse of an $86 billion Obamacare program — exactly what happened under its current director, Doug Elmendorf.

The program in question, Community Living Assistance Services and Supports, or CLASS, was designed to provide cash benefits for those needing long-term services and support. CLASS made it into Obamacare at the behest of then-Sen. Ted Kennedy, and over the objections of both Republicans and moderate Democrats, who considered it fiscally unsustainable; then-Senate Budget Committee Chairman Kent Conrad, D-N.D., famously dubbed CLASS “a Ponzi scheme of the first order, the kind of thing Bernie Madoff would have been proud of.” And so it proved — in October 2011, less than two years after the law’s passage, the Department of Health and Human Services determined CLASS could not be implemented in a fiscally solvent manner, and in January 2013, Congress repealed it entirely.

But Congress and the American people could have been spared this trouble had CBO performed a more thorough analysis of CLASS. In 2009, the budget agency assumed that CLASS’s administrative expenses would remain confined to three percent of premiums, even though HHS’ own actuary later called this requirement “unrealistic and undesirable.” The actuary hired by HHS went on to estimate total expenses at 20 percent of premiums — nearly seven times the level specified in the law.

The unrealistically low administrative expenses go to the heart of CLASS’s structural flaws. The program proved fiscally unsustainable because it faced a classic actuarial death spiral—a lack of healthy people paying into the pool to fund benefits for those needing care.

Had CBO formally analyzed CLASS’s administrative expenses, it likely would have concluded that the unrealistic assumptions written into the law meant premiums would eventually have to rise, benefits fall, or both, to meet the shortfall — making the program even more unattractive to healthy individuals, and further imperiling its solvency. The CBO does have models to estimate the cost of insurance; with Obamacare, it stated in November 2009 that insurance exchanges would reduce the administrative costs of individually-purchased coverage. But when it came to CLASS, CBO did not perform a similar analysis.

Likewise, CBO at no point attempted to quantify the potentially massive costs to states that CLASS would have imposed. The program would have required state Medicaid programs to create a benefit eligibility system similar to that used by the Social Security disability insurance program. That program costs nearly $3 billion to administer every year — meaning CLASS could easily have imposed costs to states of $20 billion-30 billion over a decade.

Within HHS, officials expressed concern that CLASS would “create significant new burdens on the states.” Coming at a time when governors of both parties were criticizing the “mother of all unfunded mandates” in the form of Obamacare’s Medicaid expansion, a CBO finding that CLASS imposed mandates on states in the billions, or tens of billions, would have prompted bipartisan outrage — and could have scuttled the program entirely. But from its introduction to its repeal, CBO at no point even acknowledged the significant cost to states associated with CLASS.

In fairness to CBO, the months leading up to Obamacare’s passage were by far the busiest in my time as a Capitol Hill staffer. Lack of enough hours and lack of sleep could, and did, cause details to slip through the cracks; to quote Nancy Pelosi, we really did have to pass the bill to find out what was in it. But that neither excuses nor explains why CBO has not publicly acknowledged the shortcomings outlined above, and what if anything it needs to change — whether in resources, oversight, or both — to improve its analysis going forward.

Judging from his silence on CLASS, Elmendorf may view protecting his office’s budget analysts as a prime objective of a CBO director. As much as I value loyalty, CBO’s prime loyalty should lay to Congress — and ultimately to the public, which funds both CBO and the programs it analyzes. While Elmendorf has taken measures to release more information publicly — developments I welcome — such steps generally fall into the realm of making CBO less opaque, rather than truly transparent.

Democrats’ political posturing aside, it’s not partisan to ask for a public explanation why an independent budget office did not produce analyses that could have revealed the instability of an $86 billion “Ponzi scheme” before Congress enacted it into law. In fact, the principles of good governance should compel the CBO in exactly this direction. Hopefully CBO’s next director, whoever he or she is, will move more rapidly down the road of this much-needed transparency.

This post was originally published at the Washington Examiner.

Obamacare’s Terrible, Horrible, No Good, Very Bad Week

It’s now been seven days since Obamacare’s exchanges officially launched. In reality, however, the “launch” has more closely resembled a blooper reel of rocket failures than a smooth takeoff. Here is but a sampling of the problems, failures, and glitches that have turned the exchanges into a comedy of errors:

TUESDAY

  • Some state exchanges delay their opening to address technical problems; Maryland’s exchange postpones its launch by four hours.
  • When the federally run exchanges in 36 states open, they are immediately overwhelmed by massive volume and technical errors. One MSNBC reporter spends more than half an hour trying in vain to establish an account and compare insurance options.
  • Reuters reports that in total, 47 state exchange websites “turned up frequent error messages.”

WEDNESDAY

  • The Los Angeles Times reports that California’s state exchange vastly overstated its first-day web traffic. Instead of receiving 5 million hits, the exchange actually received 645,000 visitors.
  • The Washington Examiner notes that new co-operative health insurance programs funded by billions of Obamacare dollars featured “sites [that] were difficult to navigate and provided little understandable insurance information on topics like eligibility, costs, and benefits.”

THURSDAY

  • The Washington Post’s Sarah Kliff writes a story, illustrated with a picture of a unicorn, asking whether anyone has actually purchased health insurance on from the federally run exchange—or whether these individuals are just “mythical creature[s].”
  • An Arizona television station profiles a leukemia survivor who “just got a letter from his insurance carrier saying as of January 1, he would be dropped from coverage because of new regulations under Obamacare. His doctor at the Mayo Clinic may be gone as well.”

FRIDAY

  • Liberal blogger Ezra Klein admits that the Administration “did a terrible disservice by building a website that, four days into launch, is still unusable for most Americans.”
  • CNBC reports that “as few as 1 in 100 applications on the federal exchange contains enough information to enroll the applicant in a plan.”
  • One of the few individuals claiming to have enrolled in a federally run insurance exchange admits that “he has not in fact enrolled in a health-care plan.”
  • The Department of Health and Human Services (HHS) announces it will take major portions of its website offline over the weekend for repairs and major upgrades.

SATURDAY

  • Reuters interviews IT experts who believe the exchange contains major design flaws: “so much traffic was going back and forth between [exchange] users’ computers and the server hosting the government website, it was as if the system was attacking itself.”
  • The San Jose Mercury News profiles people suffering premium increases due to Obamacare—including one whose premiums may increase by nearly $10,000 for his family of four.

SUNDAY

  • Treasury Secretary Jack Lew refuses to tell Fox News’s Chris Wallace how many people have, or have not, enrolled in coverage.
  • The Charlotte Observer profiles one Charlotte family, whose premiums could rise from $228 per month to $1,208 per month—a 430 percent increase—because their current health insurance does not meet Obamacare’s standards.
  • The Wall Street Journal quotes technology consultants as saying that the federal exchange site “appeared to be built on a sloppy software foundation,” and that “basic Web-efficiency techniques weren’t used…clog[ging] the website’s plumbing.”

MONDAY

  • Politico finds many individuals are resorting to paper applications for coverage, due to the continued problems with online exchanges.
  • The New York Post reports that navigators were entirely unprepared for the launch of Obamacare’s exchanges last week; many staffers working for purported navigators seemed unaware the program existed.
  • HHS announces it is taking the exchange website offline again for more repairs.

Given this track record, some may find the words of Saturday’s Reuters piece prescient: “Five outside technology experts interviewed by Reuters…say they believe flaws in system architecture, not traffic alone, contributed to the problems” with the exchanges.

That quote is an apt metaphor for the entire law itself. Just as the exchanges’ problems stem from fundamental “flaws in system architecture,” so do these “glitches” prove that the entire law is unworkable—not just parts of the measure. It’s why Congress should act now to save America from this unpopular, unfair, and unworkable law.

This post was originally published at The Daily Signal.

Sen. DeMint Op-Ed: Obamacare Isn’t About Health Care–It’s About Power

Members of the House of Representatives are scheduled to vote Thursday to repeal all of Obamacare. Given that the House voted to repeal the law last year, some commentators and observers have questioned the need for another repeal vote.

However, the scandals coming to light over the last week perfectly make the case for why Congress must eradicate the law from the statute books.

On Friday, the Internal Revenue Service finally disclosed that it had spent years targeting Tea Party and other conservative groups, delaying their applications for non-profit status and giving those applications additional scrutiny — solely because of those groups’ political beliefs.

Also on Friday, the Washington Post revealed that Health and Human Services Secretary Kathleen Sebelius personally asked health industry groups to contribute to Enroll America, a pro-Obamacare front group working to “educate” the public about the law’s supposed benefits.

While we don’t yet know all the details about these scandals, we do know that the IRS grossly abused its power at a time when Obamacare grants it massive new authority. The Treasury Department’s Inspector General has said Obamacare represents “the largest set of tax law changes in 20 years,” with at least 42 provisions adding to or amending the tax code.

Obamacare taxes most people with health insurance, and most people without health insurance. Likewise, the law taxes many employers who provide health insurance, and most employers who don’t provide health insurance.

Obamacare’s heavy reliance on the IRS seems somehow fitting, as the entire law relies on a scheme of government controls and regulations to work its will on the health care system. The law imposes price controls on insurance companies and extends a system of price controls for pharmaceutical companies. Obamacare also places a board of unelected, unaccountable bureaucrats at the center of its plans to control health care costs.

A 2010 Congressional Research Service report found that the number of new bureaucracies “that will ultimately be created” by Obamacare “is currently unknowable.” Little wonder that Vice President Biden boasted shortly before the law was passed, “We’re going to control the insurance companies.”

That’s what Obamacare is about. It’s not about health care. It’s about government control and power. And the record of this administration shows its willingness to use this power in arbitrary and harmful ways.

Secretary Sebelius’ recently disclosed fundraising campaign tried to make an end-run around Congress, forcing private companies to give money for a pro-Obamacare marketing campaign that Congress itself has refused to fund.

It isn’t the first time the secretary has skirted the law, either. HHS’ infamous waivers, the majority of which went to individuals in union health plans, weren’t mentioned in Obamacare. And in recent weeks, Democrats who support the law have criticized the secretary for taking funds from other programs to fund Obamacare implementation.

Just like the IRS, HHS has also targeted the First Amendment rights of private organizations. In 2009, the department applied an infamous “gag order” on Medicare Advantage plans, ordering them not to communicate with seniors about how Obamacare’s cuts to Medicare Advantage would affect their coverage.

If past experience is any guide, IRS and HHS could use their newfound Obamacare powers to target their political opponents. Will individuals who choose not to buy insurance under Obamacare’s mandate find themselves subjected to government audits?

Will corporations who choose not to “donate” to Sebelius’ fundraising campaign find themselves targeted by Obamacare regulators — or even the IRS itself? Given the events of the past week, few can answer these questions with an unequivocal “no.”

There’s one easy way to stop the rot, and that’s to repeal Obamacare once and for all. At a time when this week’s revelations show how the government has abused its existing powers, it’s exactly the wrong time to give the government yet more authority. Congress should instead focus on repealing Obamacare and restoring freedom.

This post was originally published in The Washington Examiner.