Tag Archives: HR 3590

Is mandatory insurance enforceable? If so, penalty too small, insurance death spiral possible

Jacob Sullum writes:

After Obamacare was enacted in 2010, the Congressional Budget Office projected that some 4 million Americans would choose to pay a penalty in 2016 rather than comply with the health insurance mandate. Testifying before the House Ways and Means Committee last week, Steven G. Bradbury, who headed the White House Office of Legal Counsel under George W. Bush, argued that number “will be considerably greater” once people understand they have no legal obligation to buy coverage. In fact, since the penalty is essentially unenforceable, it is possible that it won’t produce any revenue to speak of, which would make it an odd tax indeed.

Read more Obamacares Uneforceable Linchpin – Reason.com.

With Avik Roy’s argument that the penalty (“tax”) for not buying government-approved insurance, it’s likely that ObamaCare will create an adverse selection death spiral in the non-group market, which will destroy it.


Leave a comment

Filed under Policy - National

Dave Kopel Responds to ObamaCare Decision

From Jon Caldara:

Hey everyone. I know today’s Supreme Court ObamaCare decision is a lot to stomach right now, but I wanted to share with you our Constitutional Law scholar Dave Kopel’s statement on the issue. It should soften the blow considerably.

The Court’s decision against the Medicaid mandate means that Colorado has the right to choose whether or not to drastically expand state spending on Medicaid; Congress cannot coerce Coloradans to do so. The Medicaid mandate decision stops Congress from misusing of its Spending power to violate the 10th Amendment rights of the States; and it is the first time since 1936 that the Court has enforced significant constitutional limits on the Spending power.
The Medicaid mandate would have required Colorado to provide Medicaid to able-bodied childless adults. Simply put, this mandate would have put Colorado on a short path to insolvency.

The Independence Institute is gratified that the Court agreed with both of our amicus briefs, on the Medicaid mandate and on the Necessary and Proper Clause. On the Medicaid mandate, the Court strongly affirmed the fundamental constitutional principle, detailed in our brief, that the States are separate and independent sovereigns. The decision is in line with the Court’s record over the last two decades years in protecting state sovereignty. The Independence Institute has a long record of advocacy in this field; for example, in 1997, II Research Director Dave Kopel and Colorado Attorney General Gale Norton (herself a former Senior Fellow at II), co-authored an amicus brief for eight States in Printz v. United States. There, a 5-4 majority of the Court held that Congress could not order state and local law enforcement officers to carry out federal background checks on handgun buyers.

Today’s decision on the Medicaid mandate was 7-2, with Justices Breyer and Kagan joining the majority. This is one sign of how the Independence Institute’s long-term work is paying off.

The Court also agreed with our amicus brief on the Necessary and Proper Clause. As the research of our Senior Fellow Rob Natelson has explained, the Necessary and Proper Clause confers no additional powers on Congress. The Clause simply restates the general principle that Congress can exercise powers which are merely “incidental” to Congress’s enumerated powers. For example, since the Constitution gives Congress to power to establish the rules of bankruptcy, Congress can enact laws against bankruptcy fraud. The Court’s adoption the originalist interpretation developed by Natelson is the most important decision on the Necessary and Proper Clause since McCulloch v. Maryland in 1819.

Of course we were disappointed that the Supreme Court upheld the individual mandate under a different theory–not that the mandate is a “Necessary and Proper” regulation of interstate commerce, but instead that the mandate is merely a tax.

While the socialists are celebrating the individual mandate that they love and that most Americans loathe, let’s consider the bottom line, according to Lyle Deniston, the most-esteemed and most senior Supreme Court journalist in the United States: “The rejection of the Commerce Clause and Nec. and Proper Clause should be understood as a major blow to Congress’s authority to pass social welfare laws. Using the tax code — especially in the current political environment — to promote social welfare is going to be a very chancy proposition.”

There are more legal challenges coming to other parts of Obamacare. The political challenges are going to continue too, and the Independence Institute is going to remain at the forefront–in the courts, and in the court of public opinion–fighting for the day when there will be no more Obamacare, and for the day when all Americans will truly enjoy patient protection and affordable care.

Read more of Kopel’s thoughts about the decision at the SCOTUSblog: Major limits on the Congress’s powers, in an opinion worthy of John Marshall.

Leave a comment

Filed under mandatory insurance, Medicaid/Medicare/SCHIP

Small-business health plan tax credit? No thanks, ObamaCare!

Progress Now and the Colorado Consumer Health Initiative “thank Obamacare” for small-business tax credits:

Thanks to Obamacare, small businesses are now eligible for tax credits for providing insurance to their workers. In 2014, the tax credits increase.

This is nothing to be thankful for. First, this policy just entrenches a fundamental problem with medical insurance in the United States: tax policy favors non-portable job-based insurance which stifles competition and discourages wise consumption of medical care.

What’s worse, the tax credit is cumbersome. As the Associated Press reports:

Obama’s health care aid to small firms disappoints 

Many small businesses struggle to afford health insurance for their workers, but a a new tax credit meant to help them seems to be turning into a disappointment. Although opinion polls show the credit is one of the most popular ideas in President Barack Obama’s health care law, only 170,300 businesses out of a pool of as many as 4 million potentially eligible claimed it in 2010, about 4 percent.

 A recent government report found the tax credit time-consuming to apply for and not rewarding enough to be financially attractive. …

 Trying to help, the IRS identified “three simple steps” employers needed to follow, but the GAO found “the three steps become 15 calculations, 11 of which are based on seven worksheets, some of which request multiple columns of information.”

Read the whole article: Obama’s health care aid to small firms disappoints – The Denver Post.

Leave a comment

Filed under insurance, tax code, HSAs

How Obamacare will HSA-qualified plans more costly

At Forbes, Avik Roy explains how government bureaucrats will make high-deductible insurance plans that qualify for Health Savings Accounts more expensive. Note that last year, the RAND Corporation published a study showing people who bought such plans spent less while “without unduly restricting access for lower income and chronically ill populations.”

See also: Success of Health Savings Accounts & high-deductible insurance.

John Goodman also has a good review of ways people in the U.S. can save money for medical care, and how this can be improved.


Leave a comment

Filed under insurance, tax code, HSAs

It’s Not Just the Mandate: ObamaCare’s Other Infringements

Paul Hsieh, MD reviews how ObamaCare violates our liberties in ways other than forcing us to buy politically-controlled health plans. Controlling doctors is one aspect. He writes:

The escalating economic costs of ObamaCare are bad enough. But they pale in comparison to the coming escalating losses of our medical freedom. As a patient, do you want your doctor to be free to practice according his best independent judgment for your best medical interests, or compelled to practice according to government guidelines, beholden to the state for his livelihood?

via PJ Media » It’s Not Just the Mandate: ObamaCare’s Other Infringements.

Leave a comment

Filed under Policy - National

States can refuse federal health benefits exchanges

From a recent newsletter by the Citizens Council on Health Freedom:

States Can Resist and Refuse  (many haveCCHF “status of legislation” map)

This is a summary of an article out this morning: “If court upholds health care reform, states could still resist,” J.Lester Feder, Politico Pro, March 12, 2012.

Although Obamacare gives the U.S. Department of Health and Human Services (HHS) the power to set up a federal exchange for states that refuse to set up their own, states have several sources of power against this incursion, according to the article:

  • “A federal exchange can’t function solo. It needs some help from a state’s Medicaid program and insurance department.”… “The exchange is very difficult to make work if there isn’t some level of cooperation,” said Joel Ario, who oversaw exchange policy at HHS before joining Manatt Health Solutions.
  • If the feds cut Medicaid funds to the states, it would be politically difficult and it would accomplish the exact opposite of what the law intends (expanded coverage).
  • If a state does not make the legally required changes to state programs, such as Medicaid, the federal exchange cannot work. As Mr. Feder notes, “To block the federal exchange [states] could just do nothing.
  • Even if HHS provided the federal exchange to a state, newly eligible Medicaid enrollees wouldn’t get benefits unless State officials added them to the rolls.
  • By declining to enforce new consumer-protection [sic] regulations to private insurance sold outside the exchange, the federal exchange could end up with all the people with the highest health costs — eventually forcing the plans in the exchange out of business.

Feder writes, “Cutting off Medicaid dollars would be both bad policy and bad politics. And usurping state powers would open HHS to massive accusations of a “federal takeover,” which could further inflame political attacks on the health care reform law.”

He also cites former Virginia Rep. Tom Davis, a moderate who says pragmatic Republicans, who have argued that their states should do exchange planning in case they lose in the Supreme Court, have already attracted challengers from the right. If the law is upheld, officials who cooperate could face primaries from those who promise to block an exchange at all costs.

Feder writes that Virginia Attorney General Ken Cuccinelli declines to rule out the possibility of civil disobedience. Says Cuccinelli: “It would be contrary to the law, yes,” [but] “It’s not like there’s criminal penalties out there. It becomes a power struggle.”

Subscribe to the Health Freedom Watch newsletter.

Leave a comment

Filed under Policy - National

Obamacare Medicaid mandates are unconstitutional

Rob Natelson of the Independence Institute writes:

Deep within the Patient Protection and Affordable Care Act [HR 3590] are little-noticed provisions allowing federal bureaucrats to force huge tax increases on states deemed insufficiently cooperative.

The Obamacare rules — referred to as the “Medicaid mandates”— have not attracted as much attention as the mandate forcing individuals to buy government-approved health insurance. Both are now under review by the U.S. Supreme Court.

What few people know is that the Medicaid mandates are, if anything, even more constitutionally dubious than the individual mandate. That’s why Colorado’s Independence Institute has taken the unusual step of filing a brief urging the court to overturn them.

Read the rest of the article at Health Policy Solutions: Obamacare’s Medicaid mandates are unconstitutional.

Leave a comment

Filed under Medicaid/Medicare/SCHIP