Health Care Reform

Sequestering ObamaCare’s Employer Mandate

Last week, Senators Orrin Hatch (R-UT) and Lamar Alexander (R-TN) introduced the American Job Protection Act to repeal the ObamaCare employer mandate (a.k.a. the pay or play rules, or the employer “shared responsibility” rules).  Companion legislation was also introduced in the House on the same day.  Full text of the bill is available here.

As FreedomWorks reignites the movement to defund ObamCare in the House as we near the end of the CR on March 27, the American Job Protection Act offers a strong second front against one of ObamaCare’s most damaging provisions.  Sadly, full repeal is not politically feasible right now.  But that doesn’t mean we can’t keep trying to chip away at its more unpopular provisions through bills like this.

It’s Been Done Already
Let’s not forget that we’ve already repealed some of the nastier programs and mandates in prior legislation.  As nicely summarized in this post on Forbes by Grace-Marie Turner, the law’s government takeover of the long-term care industry called the CLASS Act, a major piece in the original legislation, is now history.  Other chunks now out for scrap include the burdensome $600 1099 reporting requirement and the odd employee free choice voucher, which would have allowed certain employees to apply their employer health plan contribution to the cost of coverage on the ObamaCare exchange.

GAO: ObamaCare could add $6.2 trillion to national debt

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”).

Know Your Consumer-Driven Health Care: HSA

This is the third and final post on the primary consumer-driven health care arrangements under the current Internal Revenue Code.

As stated in the prior posts discussing the health FSA and HRA, the ideal consumer-driven health care vehicle should strive to achieve three main objectives:

1) Provide incentive for the individual to spend less on health expenses;

2) Maximize the individual’s flexibility in contributions and ownership of all assets contributed; and

3) Limit the individual’s financial exposure by including an out-of-pocket maximum.

The HSA is the only vehicle to effectively meet all three.

What is an HSA?

The health savings account (HSA) is the closest thing to the holy grail when it comes to applying free market principles and consumerism to modern health coverage.  HSAs are governed by Section 223 of the Internal Revenue Code.  And it’s one powerful Code section.  HSAs are triple tax-advantaged: contributions are made on a pre-tax basis (by payroll deduction) or tax deductible (above the line), funds held in the account grow tax-free, and distributions for qualified medical expenses are tax-free.  That’s as good as it gets.  The HSA is not perfect, but it is a solid foundation for a true consumer-driven model of health reform.

The basic premise of the HSA is to provide a tax-advantaged account to pair with a high deductible health plan (HDHP).  The HDHP is structured to leave a risk corridor that you’re responsible for paying, and the HSA is structured as a way to fund that risk corridor.  The HDHP will pay for some basic preventive services, but everything else will be subject to the high deductible before it’s covered.  If you incur expenses up to the extent of the deductible, you can (but don’t have to) use your HSA reimburse those costs.  The HDHP also has an out-of-pocket maximum to limit your financial liability.

Feds May Not Have ObamaCare Operational on Time

Written by Michael F. Cannon, Director of Health Policy Studies at the Cato Institute. Posted with permission from Cato @ Liberty.

The Washington Post reports:

By the end of this week, states must decide whether they will build a health-insurance exchange or leave the task to the federal government. The question is, with as many as 17 states expected to leave it to the feds, can the Obama administration handle the workload.

“These are systems that typically take two or three years to build,” says Kevin Walsh, managing director of insurance exchange services at Xerox. “The last time I looked at the calendar, that’s not what we’re working with.”…

The Obama administration has known for awhile that there’s a decent chance it could end up doing a lot of this. Now though, they’re finding out how big their workload will actually become.

Betcha didn’t see that coming.

Part of the reason the workload is so heavy? “Buying health insurance is a lot more difficult than purchasing a plane ticket on Expedia.” You don’t say. But I thought that’s why we needed government to do it.

The Problems with Third-Party Payer Healthcare Systems

One of my favorite bloggers is Dan Mitchell. Seriously, if you aren’t reading his blog, you’re really missing out. He’s got this great habit of using facts to back up his points…it’s wonderfully refreshing.

Anyway, Dan sent an email to some bloggers recently to share a video about third-party payer systems and why health care costs continue to rise. Dan also wrote a great piece about the video here.

The video, narrated by Julie Borowski of FreedomWorks shows the problems with a third-party payer system:

  • People shop smarter with their own money.
  • Consumers pay less out of pocket for health care.
  • Consumers have no idea what their health care really costs.
  • Health insurance should be about risk management, not prepaying for health care.

Republicans are running for reelection on promises to repeal ObamaCare, but the ObamaCare legislation is just the tip of the iceberg. We need to get rid of the third-party payer system, as detailed by Dan and Julie.

Here’s that video Dan referenced:

Some thoughts on the ObamaCare decision

Those of us that oppose President Barack Obama’s health care law are still no doubt wondering what exactly happened on Thursday when the Supreme Court, in a 5 to 4 decision, opted to keep the individual mandate in place under the Taxing Power of Congress. If you’re still trying to figure out the details of the decision, Philip Klein has put together a good primer on the ruling, breaking it down as simply as the bizarre, confusing opinion can be explained.

The decision does give a break to President Obama, who has been struggling with the weak economy and shaky polling as of late. But, as Michael Barone notes, it may all be short-lived thanks to the law’s unpopularity and now the headache that comes with a clearly defined tax hike on Americans.

But what do we make of the decision itself? There is a lot there to parse through, but here are some points that may help explain parts of the decision and the tenuous future of a push to repeal ObamaCare.

Supreme Court to rule Thursday on ObamaCare

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.”

Predictions on the ObamaCare case

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.

ObamaCare goes on trial

Today, the Supreme Court will take up perhaps one of the most important cases we’ll see in our lifetime. Over the next three days, members of the nation’s High Court will hear arguments on the constitutionality of the Patient Protection and Affordable Care Act (PPACA), also known as ObamaCare.

While we’ve seen several important cases over the 20 years that have dealt with economic and civil liberties — including property rights, free speech, and habeas corpus, Department of Health and Human Services v. Florida deals directly with the limitations placed on Congress by the Constitution.

The question of whether or not ObamaCare is good policy is meaningless to the Supreme Court. The issue at hand isn’t that law won’t keep health insurance premiums, or because it raises taxes or that it is unpopular with the American public. The only thing that matters, or at least should matter, is the Constitution.

During today’s oral arguments, the Supreme Court will hear an hour of arguments on whether or not legal challenges to the individual mandate are barred by the Anti-Injunction Act. The reason for this question is because the penalities that would be imposed by the individual mandate won’t be in place until 2014. Since no one has been necessarily impacted by the policy, the theory is that the court could punt until it’s implement.

House Republicans should get behind the OPTION Act

As you can imagine, there has been a lot of discussion about Rep. Paul Ryan’s budget proposal for the upcoming fiscal year. And while the budget would, if passed, repeal ObamaCare, it doesn’t replace it. This, along with other aspects of the proposal, has been a sticking point for many conservatives.

On Tuesday, Rep. Ryan said that he didn’t include a replacement for ObamaCare, for which costs have doubled, in his budget because there is no consensus amongst House Republicans as to what their model for health care reform should be.

Given all of the problems with ObamaCare, many of which were laid out in an op-ed at the Wall Street Journal by Sen. Ron Johnson (R-WI), proposing such a comprehensive budget proposal without at least some foundation of replacement proposals is odd. It’s even more odd when the budget was unveiled during the second anniversary of the health care reform law and the week before it’s due to come before the Supreme Court.

However, Rep. Paul Broun, MD (R-GA) has introduced the OPTION Act (H.R. 4224), a patient-centered health care reform replacement. According to Broun’s office, the OPTION Act would repeal and replace ObamaCare with a reform package that would protect the interests of patients:

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