There is some more bad news for ObamaCare. According to a recently released report from the Government Accounting Office (GAO), the Patient Protect and Affordable Care Act (PPACA) — President Obama’s signature domestic policy achievement — could cost taxpayers dearly in the long-term if cost-savings measures don’t work as intended.
The report, which was requested by Sen. Jeff Sessions (R-AL), who is the ranking Republican on the Senate Budget Committee, explains that the “effect of PPACA on the long-term fiscal outlook depends largely on whether elements designed to control cost growth are sustained.”
“Overall, there was notable improvement in the longer-term outlook after the enactment of PPACA under our Fall 2010 Baseline Extended simulation, which, consistent with federal law at the time the simulation was run, assumed the full implementation and effectiveness of the costcontainment provisions over the entire 75-year simulation period,” noted the GAO. “In contrast, the long-term outlook in the Fall 2010 Alternative simulation worsened slightly compared to our January 2010 simulation. This is largely due to the fact that cost-containment mechanisms specified in PPACA are assumed to phase out over time while the additional costs associated with expanding federal health care coverage remain.”
The baseline scenario is used by the government budget officials to determine the the cost effects of current law. However, the alternative scenario gauges budget implications based on past behavior of Congress, such as its proclivity for bypassing scheduled Medicare payments to doctors (also known as the “doc fix”).
Seemingly in response to this letter from Chairmans Darrell Issa (R-CA) and Dave Camp (R-MI) on January 29 to the Treasury and IRS, on February 1, the IRS again finalized the Obamacare subsidy regulations that flagrantly deviate from the statutory authority. This issue continues to simmer relatively under the radar since I last wrote about it in August. To refresh everyone’s memory, Obamacare’s core redistributionist provisions are its refundable premium tax credits and cost sharing subsidies available for individuals to purchase coverage on state exchanges starting in 2014. The credits will be available to anyone with annual income under 400% of the federal poverty line who isn’t covered under an employer-sponsored plan. To put that in perspective, a family of four today earning up to $92,200 per year would be eligible for the credits.
Federal Exchanges Excluded
Here’s the kicker: Obamacare specifically limits these credits and subsidies to individuals who purchase coverage on an exchange established by the state. Below is the actual, unambiguous provision from PPACA [emphasis added]:
We are now only a month into the President Obama lame duck-era, yet the post-election deluge of Obamacare regulations is already well underway. Clearly, these regulations were completed prior to the election, withheld to prevent any political blowback. This should come as no surprise. Here’s a quick rundown of the latest expansive entries into the Federal Register:
Essential Health Benefits (77 FR 70644, November 26, 2012)
Obamacare lists ten broad categories of health benefits as essential health benefits (EHB), to be defined in detail by the Secretary of Health and Human Services (HHS). Secretary Kathleen Sebelius has instead put this burden on the states. States are to choose a benchmark plan to serve as the framework for EHB in that state. The states that refuse will have a default benchmark plan assigned to them. Individual health policies sold on state or federally facilitated exchanges (referred to as qualified health plans, or QHP) must actually provide these EHB. For employer sponsored group health plans, only non-grandfathered plans that are insured in the small group market must provide EHB. Any grandfathered, large market, or self-funded group health plan does not need to provide EHB, but they cannot impose any lifetime or annual limits on the dollar value of EHB. Welcome to Obamacare.
The former head of the Centers for Medicare and Medicaid Services (CMS) Donald Berwick infamously made the following statement in praising Britain’s National Health Service:
[A]ny health care funding plan that is just, equitable, civilized, and humane must – must – redistribute wealth from the richer among us to the poorer and less fortunate. Excellent healthcare is by definition redistribution.
ObamaCare- or the Patient Protection and Affordable Care Act- is the product of this same socialist ideological tradition that views government-run health care as a central component of any comprehensive wealth transfer scheme. However, the PPACA’s methods are more devious and radical than the NHS in accomplishing this goal. The main consumer-level redistribution provisions in PPACA are the refundable premium tax credits and cost-sharing subsidies available to individuals purchasing policies on the soon-to-be-established “exchanges.”
These tax provisions were at issue on Friday as IRS Commissioner Douglas Shulman testified in front of the House Oversight and Government Reform Committee. Shulman’s difficult job was to defend the Department of the Treasury’s recently issued regulations implementing PPACA’s tax credits. Why was that such a difficult job? That requires some background on how PPACA’s statutory provisions are structured.
As you know, the Supreme Court did not rule yesterday on the Patient Protection and Affordable Care Act. Many observers speculated that they would not rule on the Arizona immigration case and ObamaCare on the same day. Everyone is now looking to Thursday, which is the last day the Supreme Court will deliver opinions for the current term.
The thinking right now is that Chief Justice John Roberts will write the majority opinion, which leads opponents of ObamaCare to believe that, at the very least, the individual mandate will be struck down. Sen. Mike Lee (R-UT), who clerked for Justice Samuel Alito, is among those that express this thinking, as noted by Philip Klein:
Sen. Mike Lee, R-Utah, a former clerk to Justice Sam Alito, said that if Chief John Roberts writes the majority opinion in the health care case, as some have speculated, it would make it “substantially more likely” that the Supreme Court would strike down the individual mandate.
Following the release of today’s decisions, SCOTUSblog’s Tom Goldstein suggested that the decision on the constitutionality of President Obama’s health care law would “almost certainly” be written by Roberts, based on the authorship of recent opinions.
“It certainly would not surprise me,” Lee told the Washington Examiner, standing outside the Court after this morning’s opinions where handed down. “It would not be unusual for a Chief Justice to assign to himself a decision of monumental importance. This certainly fits into that category.”
While the U.S. Supreme Court keeps everyone in suspense about when the ObamaCare decision will be announced, it is important to prepare for what happens next. A recent Associated Press poll shows that just ⅓ of Americans support the new law, with only 21% of independents approving. Another poll shows that a majority of former U.S. Supreme Court law clerks believe at least the individual mandate will be struck down.
In an interview with ThinkProgress, Congressman Allen West indicated that he was “fine” with keeping some key provisions of the Patient Protection and Affordable Care Act:
…West pointed to three popular provisions of the health care law that he would like to see preserved: allowing parents to keep children on their health insurance plans until 26, ensuring that people with pre-existing conditions aren’t denied insurance, and closing Medicare’s prescription drug donut hole…
West is just another Republican walking in line after Majority Leader Eric Cantor expressed his desire to retain some of the same aspects of President Obama’s landmark legislation.
Ostensibly, Republicans have no plan of their own for health insurance reform nor are they serious about freeing up the market. Instead, they are campaigning against the individual mandate in PPACA while piggybacking on some of the less unpopular provisions of the Act. This serves as a great reminder that Republicans do not have any inherent opposition to government intervention, only government intervention with a Democratic authorship. Despite campaigning for the repeal of ObamaCare since its passage two years ago, Republicans are promising to implement a meekly watered down version of the same thing.
The case against the Patient Protection and Affordable Care Act (PPACA) — what we often refer to as ObamaCare — is in the books. Members of the Supreme Court will cast their initial votes today than begin their deliberations, issuing their rulings — likely in four parts — at the end of the term in June.
It’s hard to make predictions about which way a majority of the Supreme Court, particularly Justice Anthony Kennedy, is going to go on the individual mandate and severability. But as has been noted by Jim Antle and Stephen Richer, many legal pundits never took the case seriously and now seem out-of-touch due to how close the end result is likely to be, no matter whether liberty prevails or statism hacks away another limited government principle from the Constitution.
Admittedly, I wasn’t going to write any predictions about the case simply because I don’t want to get my hopes up. But over at the National Review, Daniel Foster has given his predictions based on what we read and heard from oral arguments. He believes the Supreme Court will overturn the mandate, but split on severability, which he says will lead to “Chief Justice Roberts ask[ing] one of the liberal justices to write the operative opinion as a way of extending an olive branch.”
So with that, here are my predictions. I really hope I’m not let down, but I wouldn’t be surprised to see the court go the opposite way on severability. I think there is just too much concern in the mind of Justice Kennedy to sign off on the individual mandate.
Rep. Mike Pompeo (R-KS) had some choice words for Sen. Max Baucus (D-MT), the man who both wrote and voted for ObamaCare.
During the Senate Finance Committee hearing on Wednesday, Baucus pressed DHHS Secretary Kathleen Sebelius on the Obama Administration’s implementation of the law and education efforts directed toward businesses and individuals. Baucus warned that this could become a “train wreck” and gave the administration a “failing grade” in its efforts.
The spectacle was one with which conservatives can agree. However, for Baucus, who is up for re-election in 2014, it may be too little too late.
In a letter made available yesterday on his House website, Pompeo expressed indignation toward Baucus, noting that “[n]o one in the country bears more responsibility for the complexity of this law” than Montana’s senior Senator.
“I was stunned, and also saddened, to read of your complaint that Health and Human Services Secretary Kathleen Sebelius is doing an insufficient job informing the public about the Patient Protection and Affordable Care Act (PPACA), otherwise known as Obamacare,” wrote Pompeo to Baucus. “My shock wasn’t because I disagreed: You’re right to say this legislation has led to great uncertainty for hard-working Americans, small business owners, and families.”
Last night, the Senate symbolically voted to repeal yet another part of ObamaCare — the medical device tax. This provision will imposed 2.3% tax on medical devices, which could lead to the loss of some 43,000 jobs:
By a vote of 79 to 20, the Senate moved to rescind the 2.3 percent tax on manufacturers and importers of medical devices. The tax will raise nearly $2 billion in new revenue in 2013 and $20 billion over the next seven years.
Thursday night’s vote was nonbinding since it was on an amendment to a Senate budget resolution which is not likely to result in a budget plan that Republican-controlled House would agree to.
The medical device tax is one of $24.6 billion in 2013 tax increases mandated by the Affordable Care Act which took effect on Jan. 1.
Click here to see how your Senators voted.
Not only would the medical device tax hit the medical industry and hurt innovation, consumers would have been hit with higher healthcare costs. The tax was even blamed for an increase in prices for pet owners at vet offices.