by Arnold Ahlert
A lawless and politically transparent Obama administration just became more so on both counts. The “imminent” decision to implement yet another delay of ObamaCare, reported by The Hill on Tuesday, became reality Wednesday. Americans who have plans that don’t comply with the ObamaCare mandates can keep them through October 2017, provided that their states allow it, according to the latest fixes. In addition, next year’s open enrollment period was extended by a month, and insurers will get additional financial help to offset the costs of claims made by new ObamaCare enrollees. The Hill provided an accurate assessment of just why the administration is making these changes: “The White House is intent on protecting its allies in the Senate, where Democrats face a battle to keep control of the chamber,” the website stated.
Why should they need protection? According to Senate Majority Leader Harry Reid (D-NV), all is well with the Affordable Healthcare Act (ACA) itself. It is only the propagandists who despise it who are raining on the parade. “Despite all that good news, there’s plenty of horror stories being told,” Reid declared on the floor of the Senate Feb. 26. “All are untrue, but they’re being told all over America.” A few hours hours later, he added the American left’s favorite targets to the mix. “I can’t say that every one of the Koch brothers’ ads are a lie, but I’ll say this: Mr. President, the vast, vast majority of them are,” he contended.
On Monday, a dose of inconvenient reality overtook the Senator from Nevada’s bluster. A Rasmussen survey reveals that one-in-three voters have had their insurance coverage changed because of the law, and that change has affected them negatively. The same survey reveals that Americans still view the law unfavorably by a 56-40 percent margin.
Apparently the nation is inundated with liars.
Unfortunately for Democrats, many of those liars vote, and the timing that Obama himself perpetrated with his unilateral pronouncement that Americans could keep their existing plans for an additional year was ill-conceived. The one year moratorium imposed by the president was designed to get Democrats past the mid-term election, but he failed to account for the reality that insurance companies must notify their customers regarding policy cancellations 90 days in advance. That means insurers would have to mail those notifications by Oct. 1, five weeks before the election. “I don’t see how they could have a bunch of these announcements going out in September,” one consultant in the health insurance industry said. “Not when they’re trying to defend the Senate and keep their losses at a minimum in the House. This is not something to have out there right before the election.”
Unsurprisingly, insurance company executives are not amused. “These continual delays, these stops and starts, make it very difficult because we set rates based on predictive modeling,” one executive said. “When you change the rules, it has a detrimental impact on your ability to calculate your risk pool and your prices.”
What difference does that make? Sections 1341 and 1342 of the ACA provide for a taxpayer-funded bailout of insurance companies in the event their predictive modeling is inaccurate. As of now, that bailout can only be applied to the years 2014 through 2016, courtesy of a $25 billion fund amassed by a $63 levy assessed on almost everyone with an insurance plan. Since Americans can now keep their non-conforming plans through October 17, there is a real possibility that insurers will be absorbing losses past the bailout deadline.
Does anyone seriously believe the bailout deadline won’t be unilaterally and unconstitutionally extended as well?
ObamaCare architect Ezekiel Emanuel envisions an alternative scenario. In an op-ed for the New Republic, the former White House senior health adviser and fellow at the Center for American Progress contends that insurance companies are on the verge of extinction. “The good news is you won’t have insurance companies to kick around much longer,” he writes. “The system is changing. As a result, insurance companies as they are now will be going away. Indeed, they are already evolving. For the next few years insurance companies will both continue to provide services to employers and, increasingly, compete against each other in the health insurance exchanges. In that role they will put together networks of physicians and hospitals and other services and set a premium. But because of health care reform, new actors will force insurance companies to evolve or become extinct.”
Yet even as Emanuel insists these new actors will be accountable care organizations (ACOs) and hospitals competing on the exchanges and for private contracts, he acknowledges that they lack “the actuarial capacity to predict and manage financial risk.” He also predicts that many of the nation’s hospital will close. “Hospitals are a grossly inefficient way of providing jobs,” he told a Princeton University lecture hall, according to The Daily Princetonian. “We don’t need 5,000 hospitals.”
The latest fixes, including a sop to unions who will now be excluded for two years from the ”reinsurance contribution” of $63 assessed for each enrollee, mark the second set of changes in less than a week. Last Friday, the administration added another “tweak” to a provision in the law it had already illegally altered. After determining that many of the state-run health exchanges were poorly run, they decided that individuals who obtain healthcare coverage outside of those exchanges are still eligible for health insurance subsidies. Again, Section 1401 of the ACA states that subsidies shall be available “through an Exchange established by the State under Section 1311″ of the law. The administration already steamrolled past Section, 1401 unilaterally determining that the words “state” and “federal government” were interchangeable terms with regard to those exchanges. Now neither of them are relevant, as the administration has determined insurance subsidies can be offered to anyone.
And as the AP noted in reporting the change, that move was also transparently political. “Although the new policy fix is available to any state, Republican governors basically defaulted to federal control of online sign-ups in their states,” they report. “Those who stand to benefit the most are Democratic governors who plunged ahead and ran into problems. Some are facing sharp criticism at home, from both sides of the political aisle.”
Sen. Mary Landrieu (D-LA), one of those Senators facing sharp criticism for her support of ObamaCare, has introduced a bill in Congress that would force insurance companies to reinstate the policies that were cancelled due to their failure to cover the 10 medical benefits mandated by ObamaCare. That would be the same Mary Landrieu who in 2010 voted with her fellow Democrats against a Republican proposal to broaden the “grandfathering” provision whose narrowness caused the avalanche of cancellations she is now seeking to undo. No doubt the fact that she’s in a tight race to keep her seat has broadened her thinking.
Despite all of this maneuvering, the hits just keep on coming. Centers for Medicare & Medicaid Services Administrator Marilyn Tavenner revealed that the number of Medicare enrollees, touted by some administration officials to be as high as 8 million, is far lower than that. She notes that only 2.5 million to 3 million new enrollments have been added by ObamaCare. Furthermore, insurance company executive are only beginning to talk about the reality that many people who sign up for healthcare, and even make the first payment, don’t necessarily continue making payments. According to insurers and actuaries who spoke with Forbes Magazine contributor Merrill Matthews, 30 to 50 percent of enrollees drop coverage within 12 months, with as many as half of them (15-25 percent) doing so for financial reasons.
It remains to be seen if ObamaCare follows this pattern. An incentive to continue making payments might be the subsidies one gets to help pay for coverage, or the penalty for not having coverage that will ostensibly be enforced by the IRS. Disincentives include the reality that even with subsidies, ObamaCare will be far more expensive than the policies many Americans had beforehand, and the reality that insurance companies are now required to carry a customer for 90 days before canceling a policy for unpaid premiums. Thus, it is possible to pay one month’s worth of premiums, and run up a high amount of healthcare costs for three months without making any more payments. While this is a disincentive to continue making payments, it’s also an incentive to game the system. Both of these factors would destabilize the insurance pool and make the aforementioned bailout even more likely.
Whatever becomes more or less likely with regard to ObamaCare and its ramifications, one thing is absolutely certain: the president and his administration will do everything they can to mitigate the political damage to themselves and the Democrat Party by any means necessary. One would have to be a complete fool to think any provision of ObamaCare is immune to such self-serving considerations.
Despite that reality, administration officials denied it. ”The motivation here is really to implement the law in the way it should be implemented,” one of them said–speaking on condition of anonymity.
Utter nonsense. How any law should be implemented is the way it is written, passed by both houses of Congress, and signed by the president. If Americans remember nothing else when they go to the polls next November, they should remember that. Nothing less than the future of our country could depend on it.
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