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Auteur Archief: Michael F. Cannon
Michael F. Cannon
Hospitals across Pennsylvania and the nation are threatening that unless state lawmakers implement the Patient Protection and Affordable Care Act’s Medicaid expansion, the law’s new taxes and spending cuts will lead to layoffs and closures.
Let’s not forget that hospitals put themselves in this position when they lobbied for that law. Fortunately, Gov. Tom Corbett has thus far refused to punish Pennsylvania taxpayers for the hospital lobby’s mistakes.
“Expanding Medicaid could cost states like Florida, Illinois and Texas $20 billion each over 10 years. Pennsylvania would be in the same ballpark.”
Unlike Corbett, some of Obamacare’s former opponents — notably Florida Gov. Rick Scott, Arizona Gov. Jan Brewer and Ohio Gov. John Kasich, all Republians — have flip-flopped and now support the expansion. They may think they’re helping local businesses, but in reality they’re sympathizing with their captors. It’s Stockholm syndrome, Obamacare style.
Originally, Obamacare would have forced states to open Medicaid to 17 million additional people. Hospitals would have received so many subsidies that they scarcely minded the law’s new taxes and spending cuts. With near unanimity, the hospital lobby strongly urged Congress to pass Obamacare “with or without bipartisan support” as a matter of “national security, equity and fairness.” The hospital lobby saw the law as “historic,” “a giant and essential step forward,” and a “major first step” full of “great improvements.”
Then in June 2012, seven Supreme Court justices let states choose whether to participate in the expansion.
Now, the hospital lobby is terrified. If states don’t expand Medicaid, hospitals won’t get their subsidies. In other words, Obamacare now means the same thing for hospitals that it has always meant for consumers and employers: certain costs, but uncertain benefits. The difference is that hospitals have only themselves to blame.
The smart play would be to call for repeal of the law, as one union that used to support Obamacare has done. Instead, the hospital lobby is doubling down.
According to one report, “Hospital associations have paid for television and newspaper ads, organized rallies, and choreographed legislative testimony,” demanding that state lawmakers unlock those subsidies. According to the hospital lobby’s curious logic, lawmakers who consistently oppose Obamacare will somehow be responsible for the harm it imposes on the hospitals that support it.
Govs. Scott, Brewer and Kasich have fallen for the cries of the hospital lobby and the promise of “free” federal dollars. Given that the expansion offers states $9 of federal cash for every $1 they spend, such flip-flops are hardly surprising. What is surprising is just how many states, including Pennsylvania, are saying no to this money and refusing to expand. Obamacare supporters are dangling an unlimited stream of federal money at the end of their line, yet only 25 states have taken the bait.
Expanding Medicaid could cost states like Florida, Illinois and Texas $20 billion each over 10 years. Pennsylvania would be in the same ballpark. And those are conservative estimates.
Actual costs will exceed those projections not only because they always do but also because President Obama and practically every politician and deficit-reduction commission in Washington have already proposed reneging on that 9-for-1 offer. To cover their ever-increasing share of the cost, states would have to raise taxes and/or cut spending for education and other services.
In dozens of states, lawmakers are fighting to rescue taxpayers from this fiscal time bomb, even at the risk of bucking the leadership of their own party. Florida House Speaker Will Weatherford, Ohio Speaker Bill Batchelder, and Arizona Senate President Andy Biggs and Rep. Adam Kwasman are standing with their GOP base and standing up to Govs. Scott, Kasich and Brewer.
With encouragement from state legislators like Rep. Stan Saylor (R-York), Corbett announced his opposition to the expansion. But his opposition may be weakening. Recently, an aide suggested Corbett may be open to expanding Medicaid in 2015.
Hospitals save lives every day. In this fight, however, the hospital lobby is no different from any other hotshot that made a bad bet and then begged for a taxpayer bailout.
Yet the cure for hospitals’ ills can only be found in Washington, not Harrisburg. Pennsylvania hospitals might join the chorus of voices demanding that Congress reopen Obamacare, but that won’t happen if Corbett develops Obamacare Stockholm syndrome. It is in Pennsylvania’s best interest that he stay strong.
Michael F. Cannon
There is nothing simple about Obamacare. It runs more than 2,000 pages. It has spawned more than 10,000 pages of regulations. The nonpartisan Congressional Research Service reports the law will create so many new government agencies that the actual number is “unknowable.” Senator Jay Rockefeller, Democrat of West Virginia, called Obamacare “the most complex piece of legislation ever passed by the United States Congress” and “just beyond comprehension.”
Three years later, people are still trying to figure out what Obamacare says. Last week, newspapers reported that because the employer mandate fails to specify the “minimum essential coverage” employers must offer, firms can satisfy the mandate by offering “skinny” benefits that cover hardly anything. Thus a government guarantee of comprehensive coverage could instead encourage employers to offer less-comprehensive coverage. Since Obamacare’s provisions are all connected, this glitch could send premiums and government spending even higher.
But the main reason Obamacare is encountering obstacles is simple: the American people do not want it. Recent polls show 54 percent of Americans oppose the law, 53 percent want opponents to “continue trying to change or stop it,” and 56 percent want to return what we had before. This June will mark four solid years of public opposition. Some polls show a mere third of the public supports Obamacare. Unions thatsupported it are now “frustrated and angry” over its unintended consequences. One such union is calling for repeal.
When a minority encounters obstacles to imposing its will on the majority, we call that “democracy.”
Indeed, democratic accountability forced Obamacare’s authors to give states veto power over many of the law’s provisions, and is leading states to exercise those vetoes. Two-thirds of states have refused to implement Obamacare’s health insurance “exchanges,” a move that blocks some $800 billion of new entitlement spending. Thanks to last year’s Supreme Court ruling, as many as half the states may likewise veto Obamacare’s Medicaid expansion.
Yet the I.R.S. is preparing to tax, borrow and spend that $800 billion anyway, and the Department of Health and Human Services continues to coerce states into implementing portions of the Medicaid expansion that the Supreme Court rendered optional.
Obamacare may be the law of the land, but it lacks legitimacy. So does its implementation.
Michael F. Cannon
Three years ago today, the House of Representatives passed the Patient Protection and Affordable Care Act, ensuring that President Obama’s signature domestic initiative would become law. Yet “Obamacare” faced intense public opposition from the start, and its numbers have not improved with time.
Since taking control of the House in 2011, Republicans have voted 33 times to repeal some or all of the law. House Speaker John Boehner (R-OH) promises to hold another repeal vote in the coming months. House Budget Committee Chairman Paul Ryan (R-WI) again included repeal in his latest budget blueprint. Freshman Sen. Ted Cruz (R-TX) is leading the charge for defunding and repealing the law in the Senate. Supporters deride these efforts as futile. After all, Democrats control both the Senate and the White House.
Even so, this law remains more vulnerable than supporters care to admit. Later this year, discontent with the law could push even vulnerable Democratic senators to call for repeal or major revisions, rather than watch their careers go down with Obamacare.
This year, millions of Americans will experience sticker shock when they see how Obamacare will impact their health insurance premiums in 2014. Sticker shock is what caused seniors to rebel against the Medicare Catastrophic Act of 1988. Congress repealed that law in 1989.
Neutral observers and even supporters of the law project some individuals and small businesses will see their premiums double. A survey of insurers reports some consumers will see their premiums triple. Supporters believe tax credits and subsidies will leave consumers numb to these higher premiums. But the American Academy of Actuaries estimates millions of Americans — including 80 percent of twentysomethings and a third of those 30 and older who purchase their own coverage — will pay more even after the subsidies. The insurance industry has launched a public relations effort to convey these premium hikes are the law’s fault, not theirs. Even supporters like Democratic strategist Donna Brazile have experienced a rude awakening.
Nor will consumers be happy when they go to purchase their mandatory insurance later this year.
In theory, Obamacare creates a new entitlement program where tens of millions of Americans can choose a taxpayer-subsidized health plan through the website of a government agency called an “exchange.”
Earlier this month, however, HHS admitted it is developing contingency plans because exchanges may not be functional by the October 1 deadline. One HHS official told an industry gathering, “We are under 200 days from open enrollment, and I’m pretty nervous.” He added: “The time for debating … is it a world-class user experience, that’s what we used to talk about two years ago. Let’s just make sure it’s not a third-world experience.” At a minimum, that argues for delaying implementation.
Even supporters complain the process of applying for subsidized coverage, which includes a 15-page application, is “enormously time consuming and complex.” The media report the process “could be as daunting as doing your taxes” and “run[s] counter to the vision of simplicity promoted by administration officials.” The resulting chaos and frustration would only add to public discontent.
In “50 Vetoes,” a study released today by the Cato Institute, I explain the administration is so afraid of a sticker-shock fueled backlash that it is preparing to spend more than $600 billion that Congress never authorized to numb consumers to the costs of this law. Along the way, the administration will impose roughly $100 billion in illegal taxes on employers and individuals (including some legal immigrants below the poverty level), and deny millions of individuals the right to purchase low-cost “catastrophic plans.”
To cement the law’s Medicaid expansion in place, the administration is also violating the Supreme Court’s ruling in NFIB v. Sebelius. The Court prohibited the federal government from coercing states into implementing the expansion. Yet HHS is still threatening every state with the loss of all federal Medicaid funds if they fail to implement parts of the expansion. These are not the actions of an administration that feels its health care law is secure.
Finally, supporters forget that President Obama and congressional Republicans have already repealed important parts of the law, including Obamacare’s third entitlement program — a long-term care program known as the CLASS Act, repealed as part of the “fiscal cliff” deal. President Obama is already repealing his law one provision at a time.
Obamacare supporters may scoff at repeal. But if vulnerable Democratic senators start hearing from their constituents about the chaos and sticker shock they experience later this year, the scoffing will cease.
Michael F. Cannon is director of health policy studies at the Cato Institute and author of “50 Vetoes: How States Can Stop the Obama Health Law,” published today by the Cato Institute.