Subsidies

Obamacare’s architect agrees: Healthcare law subsidies were supposed to apply only to state-run Exchanges

The Obama administration’s claim that Congress never intended for Obamacare subsidies to apply only to states that implemented their own Exchanges looks much, much weaker this morning. Reason’s Peter Suderman has passed along some video gold, in which the architect of the law says it was worded to place political pressure on states.

Jonathan Gruber, the MIT economist who worked on Romneycare in Massachusetts, helped the administration craft Obamacare and, in January 2012, stated pretty clearly that consumers in states that opted out of the law would be denied subsidies.

“What’s important to remember politically about this is if you’re a state and you don’t set up an exchange, that means your citizens don’t get their tax credits — but your citizens still pay the taxes that support this bill,” Gruber told an audience. “So you’re essentially saying [to] your citizens you’re going to pay all the taxes to help all the other states in the country.”

“I hope that that’s a blatant enough political reality that states will get their act together,” he said, “and realize there are billions of dollars at stake here in setting up these exchanges.”

Here’s the clip (the original is almost an hour long) via Phil Kerpen:

The Obama White House’s whining doesn’t change the fact that the IRS illegally tried to rewrite Obamacare

The White House may not like the D.C. Circuit Court of Appeals’ panel decision in Halbig v. Burwell, but President Barack Obama need only look to his own administration for what is yet another smackdown by the judicial branch.

Judge Thomas B. Griffith realized the impact the decision could have on the availability of Obamacare subsidies for consumers who purchased plans on the federal Exchange. He was mindful, however, of the role the judicial branch plays in interpreting statues. And, in this instance, the Internal Revenue Service acted without authority by authorizing subsidies to consumers in states that refused to participate in Obamacare.

The Affordable Care Act, in §1311, makes it very clear that subsidies were limited to states with established Exchanges. Claims that Congress intended to apply the subsidies broadly, including to the federal Exchange, rang hollow. “The fact is that the legislative record provides little indication one way or the other of congressional intent,” Griffith wrote, “but the statutory text does.”

Rather than illegally promulgating guidance to dole out subsidies, the Obama administration should have gone to Congress to seek a legislative remedy to fix the problem. That’s something President Obama just wasn’t willing to do, whether it was pride holding him back or the prospect of having to try to forge a compromise with House Republicans on the law.

The D.C. Circuit Court of Appeals just gutted Obamacare in a big way: Judges smack down another administration power grab

The U.S. District Court of Appeals delivered a huge blow to the Obama administration this morning, ruling that it’s illegal for the Internal Revenue Service to dole out tax subsidies for enrollees in the nearly three-dozen states on the federal Obamacare Exchange.

At issue in Halbig v. Burwell is whether the IRS has the authority to provide tax subsidies to enrollees in states that opted not to comply with Obamacare. A reading of the Affordable Care Act statutes in question (§1311 and §1321) confirms that the subsidies were meant to apply only to states with established Exchanges.

But the IRS, apparently unconcerned with the actual text of the law as passed by Congress, wrote rules to apply the subsidies to the federal Exchange, which didn’t exist until states refused to establish their own.

In a 2 to 1 decision this morning, a panel of judges from the U.S. District Court of Appeals agreed that the IRS overstepped its statutory authority, even though the majority acknowledged that the opinion will have major ramifications for healthcare policy.

“We reach this conclusion, frankly, with reluctance,” wrote Judge Thomas B. Griffith in the 42-page opinion. “At least until states that wish to can set up Exchanges, our ruling will likely have significant consequences both for the millions of individuals receiving tax credits through federal Exchanges and for health insurance markets more broadly.”

Today in Liberty: GOP Senator’s Obamacare lawsuit dismissed by a federal judge, Kevin McCarthy smears Rand Paul in Kentucky

“I used to support the wars in Iraq and Afghanistan. I thought being ‘patriotic’ and loving my country meant never questioning foreign wars. I was all rah rah America! show ‘em who is boss!…Boy…things change. I saw too many men in their early 20s who lost limbs in war. Their entire lives destroyed. Young 22 year olds dealing with post traumatic stress. Unable to live a normal life. Too many mothers crying over caskets. They will never be able to cope with losing their son or daughter at such a young age.”Julie Borowski

Here’s how the D.C. Circuit Court of Appeals could gut Obamacare and cause a huge headache for the Obama administration

Though last week’s decision in the Hobby Lobby case is still the center of discussion in the media, the D.C. Circuit Court of Appeals is expected to issue a ruling in another Obamacare case, one with much larger implications to the framework of the law.

At issue in Halbig v. Sebelius (now known as Halbig v. Burwell) is whether the Internal Revenue Service can legally dole out tax credit subsidies to Obamacare enrollees in states that opted out of creating their own health insurance exchange. The National Journal offers a primer on the case, which could be decided any day now:

The Halbig challenge argues that the Obama administration—specifically the IRS—is breaking the law by offering those tax subsidies in all 50 states. It relies mainly on the text of the statute, which authorizes subsidies in “an exchange established by the State.”

That phrasing clearly restricts subsidies to state-run exchanges and does not authorize them to flow through the federally run fallback exchange, the lawsuit claims.

Looks like Obama may have gotten ahead of himself: HHS reports 2.6 million unresolved Obamacare data inconsistencies

Barack Obama

President Barack Obama may have gotten ahead of himself when he announced in April that more than 8 million people had signed up for coverage on the federal and state Obamacare exchanges.

The Department of Health and Human Services (HHS) hasn’t resolved some 2.6 million data inconsistencies in Obamacare enrollments, according to a report from the department’s internal watchdog.

“During the period of our review, marketplaces were unable to resolve most inconsistencies, which they reported most commonly as citizenship and income,” the report from the HHS inspector general explains. “Specifically, the Federal marketplace was unable to resolve 2.6 million of 2.9 million inconsistencies because the Centers for Medicare & Medicaid Services (CMS) eligibility system was not fully operational.”

The report explains that applicants can have multiple inconsistencies and that the 2.6 million remaining inconsistencies that the “do not necessarily indicate that an applicant provided inaccurate information or is enrolled in a qualified health plan or is receiving financial assistance through insurance affordability programs inappropriately.”

Inconsistencies weren’t limited to the federal exchange, Healthcare.gov, which covers 36 states. States operating their own exchanges reported their fair share of issues, though seven states were able to resolve the inconsistencies on their own. But, still, the federal exchange is the biggest challenge.

“We also found that data on inconsistencies are limited,” the report continues. “For example, the Federal marketplace could not determine the number of applicants who had at least one inconsistency.”

It’s time to end Ex-Im: This New Deal relic costs too much, doesn’t boost exports, and is rife with cronyism

President Barack Obama and Big Business have teamed up with politicians from both sides of the aisle to push reauthorization of the Export-Import Bank, a New Deal-era federal agency that makes billions of dollars worth of taxpayer-backed loans to politically-connected businesses.

In a new video from Reason TV, Nick Gillespie gives three reasons why Congress should end the crony Export-Import Bank.

The first reason, Gillespie explains, is expensive. “In 2012 alone, Ex-Im authorized $36 billion in loans, guarantees, and insurance,” he says. “The bank can carry a portfolio of up to $150 billion, meaning that taxpayers could be on the hook that much money.”

Thanks, Obamacare: Customers may have to switch their health plans to avoid significant premium increases

Changes to health insurance plans many customers have purchased through the Obamacare exchanges will mean that they will have to switch plans to avoid significant premium increases in 2015.

According to an analysis released late last week by Avalere Health, the subsidies provided to consumers who purchase plans on the exchanges are tied to the second-lowest cost silver plan available. Any premium cost over the subsidy for the benchmark plan is the responsibility of the consumer.

“Most enrollees in 2014 chose a plan based on the monthly premium. However, the lowest cost plans in 2014 may no longer be low cost in 2015,” Avalere Health Director Elizabeth Carpenter explained in a release. “Before consumers renew their 2014 plan, they should consider the tradeoff between continuity of care and lower monthly premiums.”

Avalere Health found that the benchmark silver plan will lose that status in 2015 in six of the nine states it analyzed and the lowest-cost plan changed in seven of the nine states.

In Maryland, for example, a customer earning $17,500 received a $156 subsidy and paid $58 out of pocket for the benchmark plan in 2014. But that plan is now the ninth-lowest cost silver plan, meaning that the part of the premium for which they’re responsible will rise to $94 in 2015, a 62 percent increase. The subsidy will increase slightly to $173.

In the era of the “most transparent administration ever,” Ex-Im Bank’s second greatest beneficiary is: unknown

Export-Import Bank

Timothy P. Carney said it best when he urged Republicans to show they oppose corporate welfare by killing the Export-Import bank. And now, an extra incentive has finally materialized.

According to Veronique de Rugy’s latest investigation into the agency, the Ex-Im Bank has benefitted several major industries between the fiscal years of 2007 and 2014, but the second greatest beneficiary of what I like to call the country’s largest subsidies dealer, doesn’t have a name.

The number one industry receiving money from Ex-Im is the aircraft manufacturing business. Boeing, for an instance, received $7,955 million in FY 2013 alone, but when it comes to its second grossing industry, data doesn’t produce any specific beneficiary.

The Export-Import Bank’s own reports regarding project applications list “unknown” as the second most supported beneficiary between FY 2007 and 2014. The total amount of money directed to “unknown,” however, has been reported.

According to de Rugy, $24.3 billion was handed over to unnamed or sloppily registered recipients between 2007 and 2014.

Does that mean the agency has a slight transparency issue?

The Kronies are back to tell you how the Export-Import Bank uses your money for corporate welfare

The Kronies are at it again, “teaching” members of Congress about all of the great things that the Export-Import Bank does.

The superheroes — representing crony lobbyists — explain that the Export-Import Bank has been around since the time of FDR and subsidizes massive companies such as Enron, Boeing and Solyndra. And, of course, subsidizing big corporations with taxpayer dollars means big payouts for legislators’ re-election campaigns.

The Kronies, a project of Generation Opportunity, highlights how crony special interests and big government collude to rob hardworking taxpayers of their money and drown out competition with regulations, subsidies, and bailouts.


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