Testimony on Fiscal Consequences of PPACA

Richard Foster, Chief Actuary, Center for Medicare and Medicaid.
1/26/11 Testimony before the House Committee on the Budget


McCLINTOCK: “True or false: The two principle promises that were made in support of Obamacare were one, that it would hold costs down. True or false?”

FOSTER: “I would say false, more so than true.”

McCLINTOCK: “The other promise… was the promise that if you like your plan, you can keep it. True or false?”

FOSTER: “Not true in all cases.”

A Tale of Two Emails on repeal of the PPACA

I recently received two emails. One is from the White House with the Orwellian title, "Protecting Your New Freedoms Under the Affordable Care Act." The other, "What Repeal Really Means" was from Chris Jacobs of the Republican Policy Committee.

Read both releases carefully.

Our President claims he can offer people the chance to be free from the demands of reality by making others pick up the tab.

But no one can be free from the requirements of reality---the necessity of creating the values you need to sustain your life. Freedom is not a metaphysical concept but a political one, one whose true meaning is to be free from the coercive acts of others.

If allowed to stand, the PPACA will extend the power of government, further depriving us of the freedom we need to sustain our lives: the freedom to use our own minds, set our our values and priorities, and to act on our own choices. The PPACA will extend the current erroneous legal precedent that government can rightfully dictate the contents of private contracts and exchanges, along with regulating items we produce for our own private use as "interstate commerce" (see Wickard v. Filburn.) In addition, the government will be allowed to dictate what we must and must not purchase, and with whom, and for what price.

The PPACA is one of the biggest intrusions into our economic freedom in recent years. No individual or business will be left unaffected--and few, if any, restrainsts will be left on the power of government over our economic lives. And since freedom is of a piece, loss of economic freedoms will eventually require the erosion of freedom in all other realms.

What does repeal of ObamaCare really mean? It means resurrecting the Rule of Law and reasserting the Constitution as a limit on government power, and the purpose of government as the protector of individual rights.

The main issue is not whether or not repeal will add to the deficit, or if repeal will save jobs.

The main issue is that repeal will restore essential freedoms and take a step in the right direction of limiting the intrusion of government into our private lives.

ObamaCare must go so we can live our lives in freedom.

A solution which destroys freedom, is no true solution at all.

.

Federal Judge Rules Individual Mandate Unconstitutional

U.S. District Judge Henry E. Hudson ruled today that the individual mandate of the ACA (a.k.a. ObamaCare) is unconstitutional.

“Neither the Supreme Court nor any federal circuit court of appeals has extended Commerce Clause powers to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market. In doing so, enactment of the (individual mandate) exceeds the Commerce Clause powers vested in Congress.” from newsok.com

I have previously read that due to the lack of a severablity clause, if any part of the law is ruled unconstitutional, the whole bill will have to be thrown out. Unfortunately, it turns out to be more complicated than that.

Here is the best explanation I have yet come across:

A Guide to Severability and ObamaCare

[T]he lack of a severability clause wouldn’t necessarily result in the overrule the rest of the legislation, which mostly have to do with spending and rationing — the expansion of Medicaid, Medicare cuts, and sweeping regulatory authority — and isn’t wrapped up in the mandate. This has been the Court’s approach to other issues, such as the recent Sarbanes-Oxley ruling, another law which lacked a severability clause, where they invalidated a portion of the law and allowed the rest to stand.

Some proponents of the ACA believe that the health of the individual mandate would move us closer to implementing a single payer system. (See Ezra Klein's article in today's Washington Post.) The danger of this is only too real.

The best way to prevent that from happening is to continue to speak out against ObamaCare as a whole.

Even a Supreme Court ruling that the individual mandate is unconstitutional will not save us from the multitude of other violations of life, liberty and property intimately woven throughout the ACA.

Preservation health care freedom and the sanctity of the doctor-patient relationship requires the complete REPEAL of the ACA, and the extraction of government from the business and practice of medicine.

For more analysis on today's reading see:

Individual Mandate in Heath Reform Law Ruled Unconstitutional by Federal Judge on Medscape.com

ObamaCare Is Unconstitutional by Grace-Marie Turner

Full Text of the Opinion

Health Reform Will Survive it Legal Fight by Eric H0lder and Kathleen Sebelius

.

Debt Reduction and Health Care Freedom

Two for the price of one.

With the national debt rising to dangerous levels, serious cuts to government spending are paramount. President Obama’s debt commission has made some interesting recommendations–but even better are the following proposals…

Read more here.

Regulations and Arbitrary Rule

Last month, federal officials granted dozens of one-year waivers that were aimed at sparing certain employers, including McDonald’s, insurers and unions who offer plans that sharply limit the coverage they provide...

Concerned about the potential disruption that would be created by enforcing the new rules, the administration has granted dozens of additional waivers and also made clear that it would modify other rules affecting these policies. Last week, the Department of Health and Human Services issued more guidance, saying it would use a different method of calculating spending for these plans so they would be able to meet new regulations dictating how insurers should use the premium dollars they collect. NYT 11/9/10

This is what was meant when Speaker Pelosi infamously informed us "We have to pass the bill so we can see what is in it." So many details have been left up to regulatory rule making, even if Congressmen had read the bill, there would be no way to know its actual meaning. Far too much was left up to the discretion of yet-to-be-created agencies, and the Secretary of HHS.

And that is the way it has to be. It is the nature of central planning.

Command and control economic planning can not function through legislating. Legislative reaction time is too slow and the decision making process to cumbersome and contentious. The only way to allow for the necessary responsiveness and flexibilit is to delegate a significant portion of the decision making power to regulatory agencies. The broader the regulatory mandate, the more the decisions become sway to special interests and the arbitrary whims of the regulators and rule-makers.

One of the first casualties of regulation is Rule by Law--which is replaced with Rule by Men. The second casualty is usually Equality Before the Law--which is replaced with Rule by Special Favor. This is the nature of central planning, and of the regulatory behemoth which it spawns. Everybody has to follow the rules...except those who Sebelius decides to let off the hook.

Special waivers are now up to 111.

UpDate: Here is the current waiver list.

.

White House Healthcare Stories Ignore Hazlitt's Lesson

The ink is barely dry. The electrons have barely been tallied. The lessons of the election have yet to be learned.

Yet, the White House continues blindly down the path of promoting its unwanted, hopelessly flawed health care law by committing the economic fallacy of ignoring what is unseen. (But I guess that goes hand-in-hand with being blind.)

Today I received the following in an email from Nancy-Ann DeParle, director of the Office of Health Reform:

Health Care Updates

Health care is an issue that’s important to all of us and the new health care law is already helping Americans across the country. Visit the 50 States/50 Stories map to find stories of how the new law is affecting people in your area -- people like Jim Houser, who will be receiving a small business tax credit that will enable him to continue providing health insurance to his employees or Adrienne Lowe who can now stay on her parents’ plan after graduating from college. You can also watch as the President makes a surprise phone call to Gail O’Brien who was without insurance when she was diagnosed with lymphoma and has been able to get coverage through the newly established Pre-Existing Condition Insurance Plan.

These are just a few of the examples of Americans who are benefitting from the Affordable Care Act. Across the nation, the new law is making health care better for millions of Americans.

The Fifty Stories are only the tip of the ice berg--and unless Obama et al start paying attention to what lies below the surface, our country's finances and health care are headed for the same fate as the Titanic.

What is NOT mentioned, of course, are all the jobs which will NOT be created because labor costs will be too high due to the tax and regulatory burdens the law places on employers and businesses.

Or the medical devices, medicines and cures that will NOT be invented.

Or the aspiring young adults who will NOT choose medicine as a career because of decreasing incomes and job satisfaction---caused by government price fixing, paperwork and billing hassles, --to say nothing of the repeated vilification of physicians as greedy and incompetent (in need of ever more practice guidelines and government oversight.)

Or employers who respond to the law's strong financial incentives to drop health insurance coverage for their employees.

Also not mentioned are the number of insurance companies which must either discontinue significant benefits, (unless they get a waiver) raise premiums or go out of business due to the PPACA.

So don't be fooled when the White House tells stories.

Be sure you understand the lesson that Obama, DeParles and the rest of the White House gang either refuse to understand, or worse, understand but choose to ignore:

This is the persistent tendency of men to see only the immediate effects of a given policy, or its effects only on a special group, and to neglect to inquire what the long-run effects of that policy will be not only on that special group but on all groups. It is the fallacy of overlooking the secondary consequences.

In this lies the whole difference between good economics [or politics] and bad. The bad economist [or politician] sees only what immediately strikes the eye; the good economist looks beyond. the bad economist sees only the direct consequences of a proposed course; the good economist looks also at the longer and indirect consequences. The bad economist sees only what the effect of a given policy has been or will be on one particular group; the good economist inquires also what the effect of the policy will be on all groups.

The distinction may seem obvious...Yet when we enter the filed of public economics, these elementary truths are ignored."

--Henry Hazlitt, Economics in One Lesson

.

Health Care Rights and Wrongs