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Obama Administration Backs Away from Costly Proposed Rule Change
Taxpayers dodged a multi-billion-dollar bullet this week when the Centers for Medicare and Medicaid Services (CMS) indicated that it no longer intends to implement a costly package of changes to Medicare Part D.
The decision by CMS came just hours before the House of Representatives planned to vote on H.R. 4160, the Keep the Promise to Seniors Act, sponsored by Congresswoman Renee Ellmers (R-NC). This bill, which NTU enthusiastically supported, would have blocked the proposed rule.
I blogged about the issue last week and noted the strong opposition that was mounting against the rule changes:
[A] bipartisan group of 20 Senators led by Finance Committee Chairman Ron Wyden (D-OR) and Ranking Member Orrin Hatch (R-UT) recently expressed very strong objections to the proposed rule in a letter to CMS Director Marilyn Tavenner.
Though NTU has had our fair share of concerns about Medicare’s prescription drug program, we were very pleased to see CMS reverse course on a plan that would have cost taxpayers an additional $1.6 billion per year, according to the Milliman actuarial firm. However, as I noted in my earlier post, taxpayers must remain vigilant, as this was “yet another example of the Obama Administration’s over-utilization of the rulemaking process.”0 Comments | Post a Comment | Sign up for NTU Action Alerts
Changes to Medicare Part D Could Cost Taxpayers Billions
Since Medicare Part D’s creation in 2003, National Taxpayers Union has expressed concerns about its impact on the federal budget. The program, which instituted a prescription drug benefit for Medicare, cost $55 billion in 2012 – a hefty price tag, yet much less than original projections that suggested it would saddle taxpayers with a $123 billion burden.
It’s encouraging (and extremely rare) to see a federal program defy the trend and actually come in well below the cost forecasts. Unfortunately, recent actions by the Obama Administration could take Part D in the wrong direction. In approximately 700 pages of text, the Centers for Medicare and Medicaid Services (CMS) has proposed wholesale changes that could reduce options within the program, increase premiums, cancel or significantly alter millions of existing plans, and force taxpayers to shell out more. In fact, a study by the Milliman actuarial firm concluded that Part D would cost an additional $1.6 billion per year if the rules are adopted.
Thankfully, a bipartisan group of 20 Senators led by Finance Committee Chairman Ron Wyden (D-OR) and Ranking Member Orrin Hatch (R-UT) recently expressed very strong objections to the proposed rule in a letter to CMS Director Marilyn Tavenner. Similarly, a letter to Director Tavenner from House Ways & Means Chairman Dave Camp (R-MI), House Energy & Commerce Chairman Fred Upton (R-MI), and Senator Hatch asks her to “reject these harmful changes to the Part D program and withdraw this proposed regulation.”
The CMS proposal is yet another example of the Obama Administration’s over-utilization of the rulemaking process. As strong bipartisan opposition to the rule continues to grow, NTU hopes CMS will be mindful of taxpayers as well as seniors, and abandon it altogether.0 Comments | Post a Comment | Sign up for NTU Action Alerts
The whole gang is seemingly in the house this episode: Vice President Brandon Arnold explains why Congress needs to pass legislation to prevent an insurance company bailout through "Obamacare"; State Affairs Manager Lee Schalk updates on state issues to start the year; and NTUF's Dan Barrett talks about this year's Price the Proposals State of the Union game!0 Comments | Post a Comment | Sign up for NTU Action Alerts
Obamacare features a fund which pays out to insurance companies when their costs exceed targets (read more about this in NTU's letter to the Hill).
The reason this particularly matters to taxpayers is the administration seems willing to "stretch" this power - meaning taxpayers could be bailing out insurance companies when whatever is banked in this fund (otherwise known as squat) runs out as Health and Human Services pays off those insurers because Obamacare is forcing them to offer excessively costly plans.
Make some noise on this issue by contacting your Representative and Senators and telling them to support that legislation! This is yet another way Obamacare is finding to hurt taxpayers, and we cannot afford it.2 Comments | Post a Comment | Sign up for NTU Action Alerts
We’ve addressed this before, but claims about “Obamacare” being deficit neutral are STILL heard to this day. In an effort to once again diffuse this misconception, let’s examine how the Patient Protection and Affordable Care Act (ACA) has been scored over time – for anyone citing old numbers, this should put to bed any “deficit-neutral” talk.
For those inclined to believe the President, its understandable why they might echo his original claims on the subject. In September 2009 the President claimed "I will not sign a plan that adds one dime to our deficits — either now or in the future."
While budget gimmickry allowed for Congressional Budget Office scores that backed these statements, anyone paying attention over the last three years should know better – there’s that word again!
Just before the law was passed in March 2010, the Congressional Budget Office estimated that the law would save $130 billion over its first decade.
We started the saga of these Affordable Care Act claims with that CBO estimate, yet when picked apart, it was revealed to be rather concocted for a number of reasons.
First, the package given to the CBO ignored what’s dubbed the “doc fix”. This $371 billion Medicare reimbursement cut for doctors is routinely delayed or “fixed”, meaning Medicare habitually ignores it and spends the ever increasing sum anyway. Not including this hefty price in government healthcare artificially lowers its total cost by compartmentalizing the spending in multiple bills.
The law also double counted about $70 billion in savings from the CLASS Act, along term care program. Finally, the CBO is forced to assume that Congressional projections for health spending will be abided by and not dumped out of political convenience, another dubious notion.
As the law came ever closer to implementation, the delay in the employer mandate happened. This will cost as much as $10 billion as expected fines are not collected over the year-long postponement, according to CBO. The mandate delay is also expected to push additional Americans into the federally subsidized exchanges, which would push costs up by as much as $5 billion more.
Now, CBO has revised its ten-year cost estimate for Obamacare to upwards of $180 billion.
The CBO report is paired with a Government Accountability Office report from January which maintains most of the supposed savings from the ACA are contingent on cost saving mechanisms and assumptions that place the political burden on Congress to maintain. The GAO “expressed concerns” about the will of Congress in this regard. That same report calculated the ACA would add an additional $6.2 trillion to America’s long term deficit.
This information should preclude any claims that Obamacare is deficit-neutral or even reduces the deficit. Unfortunately, we have to keep saying “should”, which means the parties guilty of continuing these claims are likely to continue, and we can keep calling them on it.1 Comments | Post a Comment | Sign up for NTU Action Alerts
Flashback: Rhetoric Vs. Reality Revealed Obamacare Train Wreck
The rhetoric on healthcare reform has stayed remarkably similar ever since July 2009. Even at the beginning of the Obamacare saga, we exposed the wide gulf between how reform was described and what the actual details of reform would mean for taxpayers.
Four years later, rhetoric has morphed into a cruel reality for millions of Americans who now must deal with the real life consequences of the penalties, taxes, and regulations associated with this law.
The healthcare oratory of 2009 featured words like “choice” and “options” which now ring hollow as millions of Americans are dropped from insurance plans they already liked. The much vaunted 2009 “marketplace” has been reduced to a simple, yet profound website error message. The “competition” that was promised, failing along with the site.
A lot has changed in America since 2009, and Obamacare’s rhetorical realities are now much clearer. A plan that promised so much has delivered precious little. All of it proving that the critics may have been right all along.0 Comments | Post a Comment | Sign up for NTU Action Alerts
Independent Institute's John R. Graham lends his healthcare expertise to the podcast as we examine "Obamacare" and more. Plus, a ballot initiative rundown and the Outrage of the Week!0 Comments | Post a Comment | Sign up for NTU Action Alerts
Top Five Head-Scratching Quotes by Secretary Sebelius
Today, Health and Human Services Secretary Kathleen Sebelius testified before the House Energy and Commerce Committee on the disastrous implementation of Obamacare. Here are five direct quotes from the Secretary that have left us puzzled to say the least.
#5: “Contractors had never suggested a delay.”
Secretary Sebelius seems to suggest that the Administration was blindsided by the numerous problems of HealthCare.gov. A story in the Washington Post suggests otherwise. According to the article, a group of about 10 insurers were convened to test out the website before its release and “about a month before the exchange opened, this testing group urged agency officials not to launch it nationwide because it was still riddled with problems, according to an insurance IT executive who was close to the rollout.” It appears that the Administration was at least partially aware of the serious technical issues associated with the website.
#4: “The assessment we have made is that it will take the end of November for an optimally performing website.”
No one can predict the future, but given its track record and the analysis of various IT experts, the Secretary’s claim is hard to believe. An article in the New York Times noted, “Some specialists working on the project said the online system required such extensive repairs that it might not operate smoothly until after the Dec. 15 deadline for people to sign up for coverage starting in January, although that view is not universally shared.” The article also states that, “One specialist said that as many as five million lines of software code may need to be rewritten before the Web site runs properly.”
A blog post by Clay Johnson, President Obama’s former innovation advisor, suggests the issues with the website run much deeper: “Healthcare.gov got this way not because of incompetence or sloppiness of an individual vendor, but because of a deeply engrained and malignant cancer that’s eating away at the federal government’s ability to provide effective online services. It’s a cancer that’s shut out the best and brightest minds from working on these problems, diminished competition for federal work, and landed us here — where you have half-billion dollar websites that don’t work.”
#3: “The website has never crashed. It is functional but at a very slow speed and very low reliability.”
Perhaps she is using a nonconventional or extremely technical definition of “crashed,” but there have been numerous reports of the website crashing or being completely unavailable to users since its October 1st launch. In fact, on its very first day, the website crashed according to an article by Josh Archambault at Forbes.com. Embarrassingly enough for Secretary Sebelius, HealthCare.gov appeared to be down during the hearing, as illustrated by a CNN split-screen.
#2: “I am not eligible for the exchange, because I have coverage in an employer plan.”
This was perhaps the most bizarre statement by Secretary Sebelius during the hearing. According to Healthcare.gov, this appears to be completely false. A page on the website titled, “What if I have job-based insurance?” specifically states, “If you'd like to explore Marketplace coverage options you can.” As long as an individual lives in the United States, is a citizen or legal resident, and is not presently incarcerated, he or she is permitted to utilize the Obamacare exchanges. As far as I know, Secretary Sebelius meets all of those requirements.
#1: “Yes, he is.”
Some context is needed here. This was a response to Congresswoman Marsha Blackburn, who during the hearing asked, “the president kept saying if you like your health care plan, you can keep it, so is he keeping his promise?” So Secretary Sebelius is standing by the President’s frequently cited claim that people could keep their health insurance. She does so despite numerous stories and reports of millions of Americans losing their insurance as a result of the law – not to mention the recent analysis of Washington Post’s “Fact Checker,” who judged Obama’s claim false and issued it a whopping “Four Pinocchios.”1 Comments | Post a Comment | Sign up for NTU Action Alerts
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In an extended podcast, Seton Motley of Less Government talks about the latest developments in the Obamacare debut catastrophe. NTUF's Demian Brady kicks off the podcast with an update on Congress' Florida excursion, and the Outrage of the Week!0 Comments | Post a Comment | Sign up for NTU Action Alerts
Obamacare website’s terrible, horrible, no good, very bad week
Quite possibly the most prominent news story obscured by the government ‘shutdown’ was the awful technological week for the new healthcare exchanges. The consequences of the early crashes, bugs, and errors that marred the first week of enrollment have grown into a full fledged tsunami of malfunction in week two.
First came the revelation that out of the 9.5 million visitors to healthcare.gov, just 36,000 were able to successfully navigate the sites difficulties and fully enroll. A success rate of less than one percent. This prompted Health and Human Services (HHS) to take down parts of the site for repairs.
The cause of these errors raised another series of unflattering answers. The website forces an individual to sign up and provide all sorts of information before allowing them to view their coverage options and prices. The website creators knew this would slow down operations on the site but insisted on it being done. “An HHS spokeswoman said the agency wanted to ensure that users were aware of their eligibility for subsidies that could help pay for coverage, before they started seeing the prices of policies.” Either HHS was attempting to hide the cost of coverage plans, or perhaps trying to push subsidies as quickly as possible.
Even more worrisome is a USA Today article citing tech experts that advocate for the site’s “total overhaul” because, “The federal health care exchange was built using 10-year-old technology that may require constant fixes and updates for the next six months and the eventual overhaul of the entire system. ”On top of the old technology, the site was reportedly not tested until a week prior to launch.
That begs the question of why industry experts were not brought in to aid HHS. The answer is the administration’s fear that “those companies could be subpoenaed by Hill Republicans”. A stark politically motivated move that would hurt the end users of the exchanges, who one might imagine are the point of Obamacare. Plus, the only IT firm that worked on the site has deep connections to the failed Canadian healthcare site in Ontario. All of this while the financial tab for the site has tripled. No wonder the site’s designer has wiped all reference of it from the company website.
This massive comedy of errors that has unfolded over the last two weeks was months in the making, and raises real concerns as to the viability of the government’s effort to direct the healthcare insurance market.0 Comments | Post a Comment | Sign up for NTU Action Alerts