The View from Right Field

Bracketology and an Unserious President

Russia is invading Ukraine and annexing part of its territory.  The war in Syria is entering its fourth year with an estimated 150,000 people dead.  The U.S. economy continues to sputter along with millions of long-term unemployed seemingly locked into joblessness.  Who knows how Obamacare is doing; you certainly can’t tell from what the Administration is saying.

So, when will the President be publishing his picks in the NCAA tournament?  And how does he possibly have time to be doing it?

Obamacare: Where Are All the Uninsured People?

The Wall Street Journal reported over the weekend that at least two-thirds of the 2.2 million people who have enrolled in new health insurance plans through the Obamacare marketplaces (through December 28) previously had health insurance, either through a job or a private insurance policy.  In other words, at most one-third of the enrollees were previously uninsured.  And the percentage may be even lower than that.  A McKinsey & Co survey said it might be as low as 11%.

The Congressional Budget Office had estimated that the Obamacare marketplaces would, in the first year, sign up 5 million people who were previously uninsured.  Based on the Journal’s estimates, at most 700,000 uninsured people have signed up so far.

Some previously uninsured people have now signed up for Medicaid, but even the Administration doesn’t know how many it is.  Sean Trende at RealClearPolitics estimates that the number of people getting Medicaid because of the expansion of Medicaid under Obamacare, is considerably less than 500,000 people

When this all this started, there were roughly 40 million American adults without health insurance.  Obamacare has reduced that number by maybe a million or a million and a half people.  We have gone through all of this for that?  Why?

One Reason Why Obamacare Was Designed As It Was – Assuming Obamacare Can Be Called a “Design”

2013 was not a good year for Obamacare, and 2014 may be just as bad, as more and different “glitches” come up.  As they come up, though, it may be useful to think about why they are coming up.  Are they really “glitches,” or are they part of the design?

The more I see of Obamacare (remembering that we had to pass it to see what was in it), the more it becomes obvious that much of the way Obamacare was structured was to achieve a Congressional Budget Office “score” of no cost (actually, savings) over the ten-year period that the CBO looks at in determining the “cost” of a government program or bill.

In promoting the bill, it was important to President Obama to be able to claim that that bill would not only extend health insurance to millions of people who previously did not have health insurance, but it would save money.  The government would spend less money and more people would have health insurance.  A win-win.

Therefore, the bill included a number of provisions designed to minimize costs during the ten-year budget period.  First, there was Ted Kennedy’s long-term care program that collected taxes for ten years but paid benefits for only the last six of those ten years.  The program cost skyrocketed after the ten-year window, but for the first ten years, it would collect more money in taxes than it paid out in benefits.  This one was so bad that even the Obama administration had to eventually agree to cancel the program.

Second, Monday’s Wall Street Journal noted a special little fee/tax on certain health insurance plans.  Big companies and unions were able to lobby themselves out of the fee/tax, but it still applies to smaller plans.  To get the most possible money from the fee, the Affordable Care Act made the fee nondeductible for tax purposes.  Therefore, the amount of the fee, for budget scoring purposes, would not be reduced by any tax effect – and more money would be available to apply to the cost of the program.

Third, the extension of Medicaid is fully paid for by the federal government for only three years.  After that, states have to pay for 10% of the cost of the Medicaid extension.  And the original law provided that states had no choice on the Medicaid expansion.  If they wanted the federal government to continue to pay its share of the costs for those already on Medicaid, they had to agree to extend Medicaid as provided in the ACA.  This one the Supreme Court voided.  They said that the federal government couldn’t “encourage” states to agree to expand Medicaid eligibility by threatening to take away money they had already agreed to give them.

Fourth, hundreds of millions of dollars was to be taken from Medicare to help pay for Obamacare.  It was always amazing to me that people on Medicare were not more upset about this, but I think certain groups are so tied in to the liberal Democratic agenda that they supported it even though it hurt their particular interest group.

Finally, there was the ultimate cost-driven design feature: the individual mandate.  When then-Senator Barack Obama was running for President in 2008 against Hilary Clinton, his health care proposal did not include an individual mandate, and he campaigned against Ms. Clinton on the basis that hers did.  But then he got elected, and by the middle of 2009, his plan had an individual mandate, too.  Why?  They needed the money from healthy/young people, who would pay more in premiums than they received in benefits, to get the CBO score they wanted.  Without the mandate, the government would have had to subsidize and/or reimburse insurance companies for the policies that they were being required to issue to sick people and other people who were almost certainly going to collect more money in benefits than they would pay in premiums.  But by forcing people to buy insurance who would pay in more than they received, the government got the insurance companies to agree to accept the sick people at semi-reasonable rates and/or without a government subsidy.  This enabled Obamacare to get the prized “no cost” award from the CBO.

The question is, of course, what is going to happen in 2014?  Will all of those cost savings and other finagle-lings that were part of Obamacare achieve their projected savings?  For that matter, will they, like the individual mandate, even take effect – or be enforced?  And most of all, what happens to President Obama’s promise that Obamacare would not only not cost money, but would actually save money?  Will it eventually be true or will it wind up as another “If you like your health plan, you can keep it”?

An Economist Meets Obamacare – And It Doesn’t Compute

Greg Mankiw writes about healthcare costs and Obamacare here and includes this in an Addendum.  It is one of the funniest things I have read on the Internet in a long time:

“The Times story, particularly the graphic, suggests that the implicit marginal tax rate some people face under the Affordable Care Act subsidies can sometimes exceed 100 percent.  It is hard to believe that the law is so badly written as to have this feature, but that seems to be the implication.”

I am not trying to make fun of Professor Mankiw, who is a very smart economist and teacher.  It is, however, what happens when an intelligent person who understands government and economics meets a law passed by people so smart that they don’t understand government and economics.

Obamacare: They’re STILL Making It Up

Last Sunday, I posted an article titled “Obamacare: They’re Making It Up As They Go Along”.  I concluded the post as follows:

“‘Pass the law to find out what’s in it’?  [A reference to the Nancy Pelosi quote]  Heck, the Obama administration doesn’t even know on December 15 what is going to be in it on January 1.”

We have found out that was true because on Thursday the Administration handed out another round of exceptions and waivers.  Here’s the new one:

“[A]nyone who received one of the cancellation notices [because there old plan didn’t meet the new Obamacare rules] – and there were at least several million – could get a hardship exemption from the mandate that goes into effect in 2014 or face its penalties.  That hardship exemption paves the way for people to buy slimmed-down ‘catastrophic’ health plans under Obamacare if they choose.”

Of course, the Obamacare website had previously not allowed people above 30 to even see the catastrophic plans, so that means the website will have to be changed.  Also, in some cases, the catastrophic plans are not that much cheaper than the “bronze” plans that the people couldn’t afford. 

Ezra Klein, an Obamacare supporter, notes the problem that this new solution causes:

“6. [T]his puts the administration on some very difficult-to-defend ground.  Normally, the individual mandate applies to anyone who can purchase qualifying insurance for less than 8 percent of their income.  Either that threshold is right or it's wrong.  But it's hard to argue that it's right for the currently uninsured but wrong for people whose plans were canceled.

7. Put more simply, Republicans will immediately begin calling for the uninsured to get this same exemption.  What will the Obama administration say in response?  Why are people who plans were canceled more deserving of help than people who couldn't afford a plan in the first place?

8. The same goes for the cheap catastrophic plans sold to customers under age 30 in the exchanges.  A 45-year-old whose plan just got canceled can now purchase catastrophic coverage.  A 45-year-old who didn't have insurance at all can't.  Why don't people who couldn't afford a plan in the first place deserve the same kind of help as people whose plans were canceled?”

What are they doing?  Do they have any idea?  It’s probably not nice to say, but I am glad I was recently able to sign up for Medicare, so all of this mess doesn’t affect me.  Directly.  Yet.  But it will affect me, and it will affect all of us, if they don’t get it fixed or figure something else to do.  Because a mess this big is going to affect everybody’s healthcare – and it’s probably do it sooner rather than later.

Obamacare: They’re Making It Up As They Go Along

Nancy Pelosi famously said that we would have to pass the Affordable Care Act to find out what was in it.  The statement wasn’t as silly as it sounded, at least back then.  What she meant, I think, was that there were a lot of provisions in the law and that people would not be able to find out about them, and appreciate how good they were, until the law was passed and put into effect.  What has happened, of course, is something very different.

The way things are going now, it is going to a long time before we know we know what was supposed to be in the law.  I say that because the Obama administration has changed so many things about the law, as they try to implement it, that we have no idea what was originally supposed to be in it.

First, they put off the employer mandate by a year.  Then they said the small business website would be late.  The Spanish language website.  Only started in December.  Megan McArdle reported Thursday on yet another set of “fixes”:

“Insurers will be required to accept payment for policies beginning Jan. 1 as late as Dec. 31, and they will be ‘encouraged’ to accept payment after that. …

Insurers are being ‘strongly encouraged’ to treat out-of-network doctors as in-network doctors for acute-care episodes, or if the provider was listed in the plan’s provider directory when the patient enrolled.

Insurers are also being ‘strongly encouraged’ to refill prescriptions in the month of January, even if they aren’t covered under the new plan, if they were covered under the patient’s old plan.”

It is becoming increasingly clear the Administration is out of its depth in implementing the law.  They started late.  They didn’t issue rules and regulations early enough to get things done.  Now, as things are falling apart all around them, they are running around like a bunch of Keystone Kops, trying to get something in place on January 1.  But what they succeed, and what will it be?  Who knows?  It certainly doesn’t look like they do.

It has reached the point, as shown by Ms. McArdle’s article on Thursday, among many others, that the Administration is relying on the good faith and cooperation of the insurance companies, and the willingness of the insurance companies to do things they are not legally and/or contractually obligated to do, to get something in place.

Three questions in this regard, one semi-sarcastic and two real.  First, the semi-sarcastic one:  We all remember how President Obama campaigned against the evil insurance companies when he was running for president and then trying to get the Affordable Care Act passed.  Why are those mean, stingy insurance companies going to be nice now?

Second, a real one:  Insurance companies have shareholders.  Management is supposed to work to maximize profits and the value of the company for the shareholders.  How does giving away free health care and/or not charging the proper price for it, accomplish that?  Or is it okay for them to do it because if they don’t, the Administration will come after them like the IRS went after those Tea Party groups?

Third, another real one:  Congress passed a law, and the President signed it.  It’s in effect, and it has real obligations and requirements.  How does the Administration get the right to keep changing things, waiving this requirement and modifying that one?  Congress passed a law with real provisions.  They didn’t just tell the President to make up whatever new health system he wanted to.  They passed a specific law.  How does the President have the right to change whatever he wants?

“Pass the law to find out what’s in it”?  Heck, the Obama administration doesn’t even know on December 15 what is going to be in it on January 1.

Being President: President Obama Just Doesn’t Get It

President Obama has been talking about what went wrong with the Obamacare rollout, and it’s pretty clear that the one person who he thinks is not to blame is – himself.

Back on November 8, President Obama said: “I promise you, nobody has been more frustrated.  I wanted to go in and fix it myself, but I don't write code.”

Then, in a press conference on November 14, the President made these comments:

"I was not informed directly that the Web site would not be working ... the way it was supposed to.  Had I been informed, I wouldn't be going out saying, ‘Boy, this is going to be great.’”

“What we're also discovering is that insurance is complicated to buy.”

On Thursday, President Obama said this to Chris Matthews of MSNBC:

“The challenge, I think, that we have going forward is not so much my personal management style or particular issues around White House organization.  It actually has to do with what I referred to earlier, which is we have these big agencies, some of which are outdated, some of which are not designed properly ….  The White House is just a tiny part of what is a huge, widespread organization with increasingly complex tasks in a complex world.”

A few comments:  First, President Obama is trying to make it seem like he is just as much a victim of the failed Obamacare rollout as anybody else.  That's not true.  I understand that the President does not “write code” – though if he had had some knowledge about computers, he might have understood how complicated this thing was going to be – but he is in charge of getting things done.  It isn’t his job to write code, but it is his job to appoint people to make sure things get done properly.  It may not be his fault that the website didn’t work, but it is his fault he didn’t appoint the right people to do the job.

Second, it’s also his fault that he wasn’t told that the website would not be working.  It is the president’s job to make sure he gets the information he needs to do his job.  If President Obama didn’t get the information he needed, that is his fault – or the fault of people he appointed, in which case, as above, it is his fault for not appointing the right people to make sure he got the information he needed.

Third: “What we're also discovering is that insurance is complicated to buy.”  He must really have lived his life in a bubble if he is only discovering that now. 

Fourth, President Obama is complaining about “outdated” government agencies, “some of which are not properly designed,” and a “complex world.”  Once again, he must have lived his life, even as a politician, in a bubble if he is only figuring that out now.

But there is a solution to the President’s complaint about “outdated” government agencies, “some of which are not properly designed,” and a “complex world”:  It’s called federalism.  Instead of the federal government trying to do everything for everybody, we divide stuff up among the different levels of government.  The federal government does some things, the things that need to be done on a national scale, like defense, regulating interstate commerce, etc.  Other things, which don’t need to be handled by the national government, can be done by the states and local government.  Education is a prime example here.  The federal government doesn’t need to set curricula for elementary education.  States can do it – or, even better, local government.  And other things we can leave to the people themselves to make their own choices.  Government doesn’t need to be involved at all.

By dividing up government’s jobs among the various levels of government, we give each level of government less to do.  We also give each level of government the responsibility to do those things that it can do best.  With fewer things to do, and with the responsibility to do only those things that it is best able to do, each level of government will do a better job.  And we will get better government.

Do They Really Think We Are That Dumb?

The Department of Health and Human Services announced last night that the enrollment period for Obamacare for 2015 would be delayed a month.  Instead of running from October 15 to December 7, 2014, which would fit the period for changing Medicare Part D plans, the enrollment period would start November 15 and run until January 15, 2005.  HHS claimed this would give insurance companies more time to set rates and would give consumers more time to decide.

It would also put the enrollment period, and the rate shock period, AFTER the 2014 election.

I am getting so tired of the blatant politics of virtually all decisions this Administration makes.  The Washington Post already reported that one of the reasons the Obamacare website is so messed up is because so many decisions regarding the timing and disclosure of information regarding the website were made for political reasons instead of health care reasons.  Now we seeing it again.

The Administration tells us that what the NSA is doing is important and that we should trust them on what they are doing.  But how can we possibly trust them when we see things like this?  And if we do trust them, and if they are lying/misleading us again (because, inter alia, the President doesn’t know), isn’t the fault on us for believing them?

And isn’t it sad, that, even when it comes to things like national security, when we should be in it together, the Obama administration has become “them,” instead of “us."
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NOTE:  I first used a headline like this one on September 14 of last year, when I titled a post “Does then White House Really Think We Are Dumb Enough to Believe This?”  That post related to the White House’s implicit claim that the attack on the consulate in Benghazi was a reaction to some video posted on YouTube in the United States, instead of the planned attack that it obviously was, even then.

Lawless in Washington

This is a little late, but it’s important so let me post it.  It’s late because I was at the Federalist Society Annual Meeting last Thursday through Saturday when President Obama, in yet another Emily Litella moment, said “Never Mind” to another provision of the Affordable Care Act.  The meeting provided an interesting contrast to the President’s announcement, since the Federalist Society is about the rule of law and what the President did was about everything but the rule of law.

As you know, last Thursday, the President announced that the Administration would not enforce the provisions in Obamacare that require individual health plans to provide broader coverage than many of them presently do.  Among the many questions* raised by the President’s action is this one:  How can he do it?  The law says the new coverage requirements for individual health plans come into effect on January 1, 2014.**  How can the President just unilaterally decide to change the date?

On Saturday, The Wall Street Journal had an article on some of the legal questions involved***:

“Republican critics … suggested that Mr. Obama lacks the power to delay enforcement of higher coverage standards when the statute itself sets a specific date for their application. …

The White House argues, however, that the chief executive has some discretion in implementing laws.  Administration lawyers point to a 1985 Supreme Court decision, Heckler v. Chaney, which dismissed a lawsuit seeking to compel the Food and Drug Administration to exercise its enforcement powers.

The circumstances, however, were substantially different.  The suit was filed by condemned inmates who argued that the FDA was required by federal law to review the drugs state officials had chosen for their execution by lethal injection.

The Reagan administration … argued that courts shouldn't second-guess the executive's policy decisions regarding enforcement of the laws.

William Rehnquist, then an associate justice, wrote the court's opinion.  In general, he wrote, executive agencies were better situated to decide the best way to go about carrying out their obligations. …

‘There's a long history of administrative agencies delaying action in implementing particular statutes when there are serious difficulties in doing so, or sometimes when they just don't like the statute,’ said Timothy Jost, a law professor at Washington and Lee University and an expert in the Affordable Care Act.  For instance, he said, Republican administrations have sometimes put off enforcing provisions of the Endangered Species Act and other environmental laws. …

On the other hand, there have been occasions when the courts have required agencies to act against their wishes.

During the George W. Bush administration, in a case brought by Massachusetts and other states that said they were threatened by global warming, the court found the Environmental Protection Agency had ignored its duty to consider whether greenhouse gases should be regulated as air pollutants.

‘While the President has broad authority in foreign affairs, that authority does not extend to the refusal to execute domestic laws,’ Justice John Paul Stevens wrote for the court.”

In other words, President Obama and his lawyers are relying on actions and positions taken by the Reagan and George W. Bush administrations, and a Supreme Court decision by then-Justice Rehnquist, instead of a Supreme Court decision holding against the George W. Bush administration by Justice John Paul Stevens.

The President is basically saying:  I changed my mind.  I don’t want to do it anymore.  So I’m not going to.  I don’t care what the law says.

Except that is not what our government is supposed to be about.  When laws are passed, they are supposed to apply.  Obviously, sometimes there is discretion in enforcement.  But the discretion is usually around the edges, not in the middle.

Once laws are passed, they are not supposed to be ignored.  If a president can pick and choose which laws will apply and which ones will not, based on which he thinks are good and which he thinks are bad (or hard) – or which are causing him problems politically, aren’t we at least part way down the road to a president ruling by decree? 

Our system, and the protection of our liberty, is based on process and procedure.  We have laws and we have a Constitution.  Following them is what protects our rights.  This decision ignores those processes and procedures – and those laws and the Constitution.
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* Among the other questions:  The President called for state insurance commissioners to allow insurance companies to extend old policies, but will they do it?  Even if the insurance commissioners allow insurance companies to extend old policies, will the insurance companies do it?  For that matter, can they do it?  Insurance companies have been preparing for three-plus years to comply with the new law.  Now they are asked to make a 180 degree turn in six weeks.  Even if they want to do it, can they?  If they don’t do it, what will they Administration do to them?  (Remember the Tea Party and the IRS.)  Etc., etc.

** Actually, the President’s decision last week follows the Administration’s decision in July to delay the effective date of the employer mandate for a year.

*** One other legal question, which The Wall Street Journal did not mention.  As Megan McArdle notes:

“Remember that in 2012, the Supreme Court ruled that the mandate was a tax.  And as a lawyer of my acquaintance points out, taxes have to be enforced uniformly; the Internal Revenue Service can pick and choose who it audits, but it cannot pick and choose who has to obey the law.”

Obamacare Is Not a Rube Goldberg Machine

There have been a lot of comparisons of Obamacare to Rube Goldberg machines.  However, as I said back in January of 2010, this is not accurate – and it is unfair to Rube Goldberg machines:  Because Rube Goldberg machines work.  Obamacare doesn’t.