Megan McArdle

Sebelius Reveals Administration’s Flawed ObamaCare Concept of Insurance

Kathleen Sebelius

It’s well established by this point that ObamaCare’s full implementation in 2014 will cause premiums to increase significantly.  This cold fact draws a sharp contrast to President Obama’s campaign promise that he would cut the average family’s premium by about $2,500 per year, and Nancy Pelosi’s 2012 pledge that under ObamaCare “everybody will have lower rates.” The Obama administration is now searching for talking points to explain these failures as the looming realities of 2014 begin to confront the administration’s prior platitudes.

The latest theory making its way through the Beltway is that coverage under ObamaCare will be more expensive because it will provide the type of comprehensive coverage that we’ve all been waiting for.  Here is how the AP reported on HHS Secretary Sebelius’s recent comments in response to a study by the Society of Actuaries finding that insurance companies will have to pay out an average of 32% more for medical claims under ObamaCare:

At a White House briefing Tuesday, Health and Human Services Secretary Kathleen Sebelius said some of what passes for health insurance today is so skimpy it can’t be compared to the comprehensive coverage available under the law. “Some of these folks have very high catastrophic plans that don’t pay for anything unless you get hit by a bus,” she said. “They’re really mortgage protection, not health insurance.”

Megan McArdle makes some good points…then almost ruins it

Megan McArdle

I’ll be honest - I haven’t read much of the “analysis” of the Newtown shooting because, frankly, it’s almost entirely useless.  People on both sides of the political spectrum have used it to make their own points without any regard to whether said points fit the facts.  We have liberals making the case for gun control, ignoring the fact that the killer stole guns legally purchased and in fact was stopped from buying a gun by strict Connecticut gun laws.  And we have conservatives making the absurd argument that schools should be militarized with armed guards - even teachers packing heat.  Neither of these ideas is helpful in the least.  Meanwhile, I’ve spent the few words I’ve uttered on the subject trying to combat these two opposing extremes, lacking the knowledge or boldness (one could say arrogance) to say much of my own.

So far, the only piece I’ve seen that even attempts to make my own feelings clear was written by Megan McArdle at The Daily Beast.  The problem with the post is that Megan, after starting off with some good points, then veers off course and takes a leap into what I will charitably call “unconventional ideas”.  But before making that detour, I found myself agreeing with much of what she was saying - simply that all the obvious “solutions” are not solutions at all, and that we need to be realistic about what we can do to prevent events like the shooting.  Megan notes:

Today in Liberty: Chinese economy to pass United States, conservative Millennials more likely to vote this fall

Today in Liberty is a daily roundup of recent political news and other interesting stories presented with liberty-minded commentary. We frequently keep tabs on liberty-minded politicians and candidates in these updates. Click here to receive Today in Liberty every weekday morning via email.

— First quarter GDP figure disappoints: Though the stock market finished strong yesterday, the first quarter GDP figure was nothing to be happy about. The economy is still sputtering along, folks. “The Bureau of Economic Analysis released its first report for GDP growth in the first quarter of 2014 today,” the Heritage Foundation notes. “It showed the economy grew at an anemic 0.1 percent from January to March. The more meaningful measure of growth, private-sector GDP, rose by a still meager 0.2 percent.” If healthcare spending hadn’t skyrocketed by almost 10 percent in the first three months of the year, first quarter GDP would have been in the negative. Rick Santelli’s reaction? “Holy cow.”

Obama’s cancellation “fix” and the rule of law

As much as President Barack Obama and administration officials don’t want to admit it, the Constitution established three branches of government, all of which have clear and defined roles and are independent of each other, but needed to keep the others in check.

Over the last several decades, the lines between the executive and legislative branches have become increasingly blurred. Presidents have consumed more power and Congress, especially when its controlled by the party occupying the White House, have set idly by while it happens.

But since 2011, when Republicans took control of Congress, President Obama has frequently used this claimed power to create law by executive fiat and, at times, ignore laws passed by the members of a duly elected, equal branch of government. It has created a constitutional crisis.

The latest example of this is President Obama’s “administrative fix” to deal with millions of health plan cancellations caused by Obamacare. Without any constitutional authority to do so, Centers for Medicare and Medicaid Services announced, at his direction, that the government would not enforce grandfathered plan regulations for one year, leaving it up to insurers to decide whether or not to participate.

More problems surface with the ObamaCare exchange website

The traffic bottleneck and slow response times on have been a frequent topic on this space and elsewhere in recent days. But other issues have surfaced, as Philip Klein wrote yesterday at the Washington Examiner, that is causing a lot of confusion for insurers selling policies through the federal ObamaCare exchange:

Affirming what health industry consultant Bob Laszewski has written, my source said that insurers have received a relatively small trickle of enrollments through the federal website, but they are seeing problems.

Duplicate enrollments are a recurring issue. This means that the insurer is notified that somebody has enrolled in an insurance policy through the government exchange, but then receives another notice that the same person has un-enrolled, followed still later by another one that they re-enrolled, and so on.

As of now, it’s unclear whether this duplication problem is triggered by a failure in the way interacts with the systems of insurers, or if shoppers on the federal exchange are enrolling and un-enrolling themselves as they go through the selection process. Insurers can’t ascertain the ultimate choice of the shopper because there are no time stamps attached to transactions on the site.

John Stossel on the real state of our Union

As you can imagine, there wasn’t much in President Barack Obama’s State of the Union address that would please libertarians. John Stossel notes that much of what the president said is in fact anathema to those of us that believe in limited government, and offers some of what he would have said if he were in Obama’s shoes:

Our debt has passed $15 trillion. It will reach Greek levels in just 10 years.

But if we make reasonable cuts to what government spends, our economy can grow us out of our debt. Cutting doesn’t just make economic sense, it is also the moral thing to do. Government is best which governs least.

We’ll start by closing the Department of Education, which saves $100 billion a year. It’s insane to take money from states only to launder it through Washington and then return it to states.

Next, we’ll close the Department of Housing and Urban Development. That saves $41 billion. We had plenty of housing in America before a department was created.

Then we eliminate the Commerce Department: $9 billion. A government that can’t count votes accurately should not try to negotiate trade. We will eliminate all corporate welfare and all subsidies. That means agriculture subsidies, green energy subsidies, ethanol subsidies and so on. None of it is needed.

I propose selling Amtrak. Why is government in the transportation business? Let private companies compete to run the trains.

And we must finally stop one of the biggest assaults on freedom and our pocketbook: the war on drugs. I used drugs. It’s immoral to imprison people who do what I did and now laugh about.

Still, all these cuts combined will only dent our deficit. We must cut Medicare, Social Security and the military.

21% of loan program guarantees went to Georgia Power

I’ve written a lot about Solyndra and it’s loan guarantee courtesy of the Obama White House.  However, over at The Atlantic, Megan McArdle took a look at the Department of Energy’s loan guarantees.  She was looking for something completely different, but in her infographic, she revealed some interesting information.

First, she reveals that 29% of the guarantees went towards what are called the “1703 program”.  Three quarters of that program, according to McArdle, goes towards the building of two nuclear power plants by Georgia Power, which in turn is a division of the Southern Company.  That’s 21.75% of the guarantees in that program went to them.

Now, I’m a big proponent of nuclear power.  I think it’s clean, efficient, and – even after Japan’s issues – safe.  I’m glad to see the Department of Energy isn’t focused solely on pie-in-the-sky energy creation.  However, does a company with a market cap of  $36.44 billion really need loan guarantees from Uncle Sam?  Seriously?

I suspect some on the left will be upset by the fact the loan guarantees went towards something as evil as nuclear power.  I have a problem with Uncle Sam guaranteeing loans in general, but for a huge company like Southern Company in particular.

Now, one downside of nuclear power is that it’s expensive and takes a while to actually start making money back.  I get that, I really do.  However, it will start making money back unless it’s due to gross mismanagement.  People need electricity and nuclear can provide it.  A sound company like the Southern Company shouldn’t have a problem getting private funding for a reactor, so why are we guaranteeing the loan?  Honestly?

Bloomberg calls Obama’s tax hike proposal “theatrics”

New York City Mayor Michael Bloomberg knocked President Barack Obama’s proposal to increase taxes on the rich, noting that there has been some dishonesty in the rhetoric used by the White House and Warren Buffett (emphasis mine):

Mayor Michael Bloomberg dismissed President Obama’s proposal to raise taxes on people who make more than a million dollars a year.

“The Buffett thing is just theatrics. If Warren Buffett made his money from ordinary income  rather than capital gains, his tax rate would be a lot higher than his secretary’s,” he said.

“I think it’s not fair to say that wealthy people don’t pay their fair share. They pay a much higher percentage of their income, they have a higher rate than people who make less,” Bloomberg added.

That is one of the great myths about higher income earners like Buffett. They don’t make their money the “normal” way. Earnings from investments are double-taxed already, once from the corporate income tax and gain from the capital gains tax; not to mention they wouldn’t bring in much revenue. And again, I’ll point to the great post by Megan McArdle, who noted that Obama’s tax hike proposal wouldn’t hit Buffett (emphasis mine):

About the Buffett Rule…

While the so-called “Buffett Rule” is the talk of the week, Megan McArdle notes that the White House isn’t pushing a policy that would impose more taxes on Warren Buffett, a guy that could send a gift to the government if he feels he isn’t paying enough: (emphasis mine):

[I]n the White House document that I read, I saw no proposal to set some sort of AMT on millionaires.  Instead, it claims to do this, while rehashing a bunch of things that the administration has long proposed: allowing the Bush tax cuts to expire for those making more than $250,000; changing the treatment of carried interest income accrued from capital gains; and altering the treatment of deductions for very high earners. If all of these things were passed, guess who would still pay a lower effective tax rate than his secretary?  Hint:  his initials are WB, and he lives in Omaha, Nebraska.

If a “Buffett Rule” is such a great idea, how come the administration doesn’t actually propose enacting one?

Presumably for some of the following reasons: it would add complexity to the tax code; it might not be possible to do in a way that would stand up even in our very IRS-friendly tax courts; it would have upsetting effects on the market for various forms of capital, particularly municipal bonds; it might well involve taking away deductions that less well-heeled voters currently enjoy, and they’d freak out.  Note that I do not include “Republican obstructionism” on this list, because the existing proposals won’t pass the house; there’s no reason not to include a real hard “Buffett Rule” if they think such a thing is even vaguely workable.  From the fact that they didn’t, I infer that they thought the idea maybe had some problems.

CBO stimulus report is not news

The Congressional Budget Office released a report yesterday that our liberal friends are touting as proof the stimulus bill created jobs. But as Peter Suderman notes over at Reason, it’s nothing new:

Once again, the Congressional Budget Office reruns the same models that it used to estimate that the stimulus would create jobs and finds that, to the surprise of no one, that the model still says that the stimulus creates jobs. Hooray for the stimulus! Nevermind that the CBO’s director has confirmed that these reports do not serve as independent checks on the real-world effects of the spending, it’s news!

Over at The Atlantic, Megam McArdle agrees with Suderman:

The CBO has another report out on ARRA.  Every few months, this comes out, and every few months, a bunch of commentators treat this as if this were an empirical analysis, rather than a case of the CBO sticking the numbers back into the same model, re-running them, and conclusively proving that … their model still generates the same results.

As the editoral board of the Wall Street Journal opined last month while slamming the stimulus bill:

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