Philip Klein

CMS Drops the Ball on Medicare Advantage Cuts

The Centers for Medicare and Medicaid Services was supposed to, under ObamaCare, reduce payments to insurance companies that offer coverage through Medicare Advantage by 2.3%. Unsurprisingly, they changed their mind. Not only are they not going to reduce payments, they’re going to increase them by 3.3%.

Medicare needs some serious reform. That’s just a fact. If it’s not, it will be bankrupt in just a few years. So why the delay? There are a few reasons. The first is that no politician wants to be labeled as the one that “kills” Medicare. It’s long been the third rail (along with Social Security, of course) of politics – touch it and your career is over. Another reason is lobbyists. According to Philip Klein at the Washington Examiner:

In February, as CMS announced plans to cut payment rates in 2014, it triggered an intense lobbying effort from insurers, who got 160 members of Congress from both parties to send letters asking the administration to back off. The insurance industry’s lobbying group, America’s Health Insurance Plans, celebrated the about face by the administration: “CMS has taken an important step to help stabilize Medicare Advantage at a time when the program is facing significant challenges.”

GOP rolls out Pledge to America, mixed reaction among conservatives

House Republicans officially rolled out the Pledge to America (PDF embedded at the bottom of the page or you can download here) yesterday morning at a lumber company in Sterling, Virginia:

The agenda is reminiscent of “The Contract with America” that House Republicans announced on the steps of the Capitol in 1994. That manifesto helped them win control of the House during the second year of Democrat Bill Clinton’s presidency.

While short on specifics, the new Republican plan calls for $100 billion in annual savings by scaling back federal spending to 2008 levels — with exceptions for the elderly and U.S. troops — and ending government control of mortgage giants Fannie Mae and Freddie Mac.

Republican House leaders also vowed to stop “job killing tax hikes” and allow small business owners to take a tax deduction equal to 20 percent of their business income.
Under pressure from the conservative Tea Party movement to slash the size and cost of government, the Republicans promised to repeal Obama’s landmark overhaul of the healthcare system and eliminate unspent funds from his $814 billion economic stimulus program.

The reaction among Democrats has been predictable as they again try to bring up George W. Bush, a strategy that hasn’t worked thus far:

Obama produces another tax and spend budget

President Barack Obama unveiled his $3.9 trillion budget for FY 2015, just days after Senate Democrats announced that they have no intention of trying to push through a budget in a what’s expected to be a contentious election year.

The proposal doesn’t offer anything in terms of new ideas or policy changes, though it does respect the budget framework agreed upon by Sen. Patty Murray (D-WA) and Rep. Paul Ryan (R-WI), chairs of the respective congressional budget committees, for FY 2015 before blowing past it in later years.

President Obama’s budget is more a nod to the leftist Democratic base than an actual blueprint for governing the country. It’s not passable, and the White House knows it. The proposal is so toxic that no vulnerable Democrat could support it and win reelection.

The Wall Street Journal notes that the budget would impose $1 trillion in new taxes over the next 10 years. Including new taxes and fees and rather rosy economic projections, the White House anticipates $3.15 trillion in new revenue through 2024, according to Philip Klein at the Washington Examiner.

HHS: 24% of Obamacare enrollments are young people

The Department of Health and Human Services (HHS) announced late yesterday afternoon that nearly 2.2 million people had selected health plans through the state and federal Obamacare exchanges.

That in and of itself isn’t news since the administration had already indicated that sign-ups had picked up in December as people sought to get coverage before the beginning of the year. The number of those who selected plans is still below the year-end target of 3.3 million enrollments.

The real news in the report is that HHS has finally provided demographic information of prospective Obamacare enrollees, after weeks of speculation. According to the administration, just 24% of sign-ups are between the ages of 18 and 34, which is an ominous sign for the sustainability of Obamacare:

Too few young people are signing up for ObamaCare to stop premiums from rising, new data released by the administration on Monday show.

Only 24 percent of Obama-Care’s enrollees are young people, well below the 40 percent benchmark set by the administration for the critical 18- to 34-year-old age group. Older people, who are typically more expensive to cover, made up the single largest group of Obama-Care enrollees.
To keep premiums affordable, experts say it is vital that the law attract about that many young and healthy “invincibles” unlikely to need critical care to balance out older and sicker uninsured people who enroll and will be more costly to the system.

Executive fiat is not the way to get rid of Obamacare

King Obama

For the last several months, Republicans have been heavily criticizing President Barack Obama’s use of executive orders and regulatory fiat to subvert the legislative process through executive and regulatory fiat.

President Obama has taken expansion of presidential power substantially further than is his predecessors, including President George W. Bush, and has frequently blurred constitutional lines between the legislative and executive branches. There are many examples of this, from unilateral delays of Obamacare provisions to new environmental rules created by the EPA to military engagements without the consent of Congress.

But is this new “uber executive” also the path to takedown Obamacare? Philip Klein thinks so. In a column last week at the Washington Examiner, Klein explained last week that President Obama has showed a future Republican president the way to dismantle Obamacare.

“The changes instituted by the Obama administration in response to implementation snags have ranged from perfectly legal areas of administrative discretion stemming from the vast regulatory powers granted to the HHS secretary under Obamacare, to more creative interpretations of that discretion, to Obama simply choosing to ignore parts of the law that became inconvenient,” wrote Klein.

“Obama has turned his signature legislative accomplishment into a constantly evolving wikilaw, with editing privileges restricted to himself and a few administration officials,” he jabbed. “He’s largely been able to get away with it due to the difficulties posed by gaining standing in court for legal challenges.”

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.

ObamaCare exchange delayed in Oregon

Cover Oregon

Highlighting the problems that many states are experiencing with ObamaCare implementation, Oregon has been forced to delay online enrollment for insurance coverage through its state exchange:

The online insurance exchange that Oregon established under President Barack Obama’s healthcare law will not allow residents to sign up for coverage on their own when enrollment begins nationwide on Oct. 1, state officials say.

The state is the first to say it won’t be open for all comers by that date, raising concerns that other states running their own “Obamacare” exchanges might also be struggling.
Instead of enrolling in health insurance online themselves, at least through mid-October Oregonians will need the help of an insurance broker or an aide trained by the state to log on, Cover Oregon spokeswoman Lisa Morawski said on Friday.

They also will need assistance to see what policies are available, and to determine which federal subsidies they might be eligible for.

The reason for the delay, according to the Wall Street Journal, is Oregon officials can “debug” the website for potential problems that customers may experience while trying to purchase coverage. That’s a significant concern with reports that the Obama Administration is month behind on data security testing for the exchange websites. Lax security could lead to instances of identity theft.

Obama Administration relying on “honor system” for ObamaCare subsidies

The Washington Post reported on Saturday that the Obama Administration will get rid of verification requirements in ObamaCare to determine whether or not applicants are eligible for taxpayer-funded subsidies to purchase health insurance coverage from the state exchanges.

“The Obama administration announced Friday that it would significantly scale back the health law’s requirements that new insurance marketplaces verify consumers’ income and health insurance status,” wrote Sarah Kliff and Sandhya Somashekhar at the Washington Post. “Instead, the federal government will rely more heavily on consumers’ self-reported information until 2015, when it plans to have stronger verification systems in place.”

“‘The exchange may accept the applicant’s attestation regarding enrollment in eligible employer-sponsored plan…without further verification,’ according to the final rule,” the reporters quoted from the regulations issued by the Department of Health and Human Services. “The federal government will, however, conduct an audit for the states where it is managing the new insurance Web portal.”

The announcement was made on Friday, typically when administrations dump unfavorable news in hopes that Americans won’t pay attention to the stories over the weekend. What may this Friday news dump even convenient is that it came the day after a holiday.

Poll: 43% of uninsured don’t know about ObamaCare’s individual mandate

individual mandate

One of the key components of ObamaCare is the individual mandate, a controversial requirement that all Americans purchase health insurance or face a punitive tax. This particular part of ObamaCare, which goes into effect at the beginning of the year, was focal point of the legal challenge that went all the way to the Supreme Court.

But a new Gallup poll shows that many uninsured Americans aren’t aware of the individual mandate, which may be an unwelcome surprise next year.

“The vast majority of Americans, 81%, say they are aware of the 2010 Affordable Care Act’s (ACA’s) requirement that most Americans must carry health insurance or pay a fine,” wrote Jeffrey Jones of Gallup. “Americans who are currently uninsured — those most directly affected by this requirement — are much less likely to be aware of the provision, with 56% saying they know about it and 43% saying they are unaware.”

The main reason uninsured Americans don’t have health coverage is, according to Gallup, predominately because the can’t afford it.

“Uninsured Americans are most likely to mention cost and affordability as the reason why they do not have health insurance. Forty-three percent cite this reason, not surprisingly given the dramatic increase in health insurance costs in the last 20 years,” noted Gallup, which conducted the poll between June 20-24. “Job considerations are also a major factor for the uninsured, with 24% saying they lack insurance because they are currently unemployed. Also, 8% are working but say their job does not offer health benefits, and another 2% lack health insurance because they are self-employed.”

Social Security Now Faces $23.1 Trillion in Unfunded Liabilities

On Friday, former Sen. Russ Feingold (D-WI) lent his name to, not just to speak out against chained CPI for Social Security proposed by President Barack Obama, but also to call for expanding the government-run retirement and disability program.

“Now that our economy is beginning to recover, it’s time to present a plan not just to protect Social Security, but to strengthen it for our seniors who deserve to retire with the dignity they’ve earned over a lifetime of work,” wrote Feingold. “That is exactly what my friend Senator Tom Harkin has proposed to do with his Strengthening Social Security Act of 2013: boosting Social Security for almost everyone by around $800 a year, extending the trust fund by decades, and paying for it by having millionaires and billionaires owe the same rate as the rest of us.”

The reference to “paying for [the increased benefit payments] by having millionaires and billionaires owe the same rate as the rest of us” is a subtle reference to lifting the cap on taxable wages. This has long been a policy goal of many Democrats in Congress and Leftist organizations like

The already troubling picture was brought back into view with the recent release of the trustees report on the United States’ entitlement programs. This report shows that these two programs face $66 trillion in unfunded liabilities, of which $23.1 trillion come via Social Security. Philip Klein has the very sobering story (emphasis mine):

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