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Flashback: Rhetoric Vs. Reality Revealed Obamacare Train Wreck
Posted By: Curtis Kalin - 11/13/13

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. obamacare

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.

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Ballot Results, plus John R. Graham Offers Insight on Shifting Healthcare Landscape - Speaking of Taxpayers, Nov. 8
Posted By: Douglas Kellogg - 11/11/13

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!

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Top Five Head-Scratching Quotes by Secretary Sebelius
Posted By: Brandon Arnold - 10/30/13

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.”

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Obamacare’s Website Flop Stirs up D.C. with Seton Motley - Speaking of Taxpayers, Oct. 24
Posted By: Douglas Kellogg - 10/26/13

Subscribe to NTU's podcast "Speaking of Taxpayers" via iTunes!

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! 

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Obamacare website’s terrible, horrible, no good, very bad week
Posted By: Curtis Kalin - 10/18/13

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.

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The Late Edition: October 10, 2013
Posted By: Curtis Kalin - 10/10/13

Government ‘Shutdown’: Day 10

Website waste: The now infamous and floundering government website for Obamacare cost taxpayers over $634 million to create.  Despite knowing the October 1st deadline was coming for months, the site has been marred by poorly written code, glitches, and crashes.  Read more at Digital Trends.

Overbuilt Courts: A new Government Accountability Office report reveals that most federal courthouses built from 2000-2010 were built larger than Congress authorized.  The GAO found 3.56 million square feet of unneeded space costing taxpayers $835 million.  More details at USA Today.

Extravagant charges: The director of a Washington state educational group for low income children has been using taxpayer money to buy “expensive meals, unnecessary flights and a hotel stay in a presidential suite.”  To this day, Loueta Johnson remains on the job. KIMA TV has more details.

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The Late Edition: September 23, 2013
Posted By: Curtis Kalin - 09/23/13

Today’s Taxpayer News!

Not so Affordable Care Act: A new report by CMS says that Obamacare will increase overall healthcare spending by a whopping $621 billion, a cost taxpayers will have to front.  Read more at Heritage.

Ineligible receivers: An audit of Tennessee’s state health plan shows taxpayers lost $1.5 million due to officials failing to recognize a number of ineligible citizens who are participating in the program.  Watchdog.org has more.

To the dogs: The city of Nashville has spent $30,000 on waste bags for dog refuse. Although, the metro area is attempting to find more cost effective solutions. Find out the details at Fox17.

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Repeal and Replace
Posted By: Brandon Arnold - 09/18/13

Today, the Republican Study Committee released a health care bill that would repeal the Affordable Care Act, or “Obamacare,” and replace it with a number of market-based reforms and improvements to the tax code.  You can read more about the legislation here and read NTU’s supportive letter to the bill’s author, Rep. Phil Roe (R-TN), here.

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Ac-“customed” to Waste?
Posted By: Pete Sepp - 08/05/13

All too many federal agencies can be cited for having budgetary skeletons in their closet, and U.S. Customs and Border Protection (CBP) is no exception. From poorly managing a drone fleet purchase, to making questionable demands for more employees, CBP has raised fears for the security of taxpayers’ wallets in the past. Yet, Congress has an opportunity to ease future fears, over a controversial new CBP project, before it can cause a fiscal fright.

Two years ago, the U.S. Department of Homeland Security (DHS) concluded a letter of intent with the United Arab Emirates to build a “pre-clearance” facility at Abu Dhabi airport which would allow travelers to the U.S. to clear customs before arriving on American soil. So far, so good: pre-clearance can not only save time and reduce congestion at U.S. points of entry, it can also help ease the way for tourists who contribute to economic activity while visiting here.

Now for the not-so-good:

  • According to Airlines for America statistics, Abu Dhabi airport accounted for less than 600 passenger arrivals per day to the U.S. in 2012, ranking it #80 on the list of top origin points to our country.
  • Right now, no U.S.-based carriers even fly from the Abu Dhabi International Airport back to here.  All other CBP pre-clearance zones in Canada, Ireland, and the Caribbean serve many airlines, including U.S.-flagged ones.
  • The primary beneficiary of the deal would be Etihad Airways, the state-owned airline of UAE. Thanks to this status Etihad enjoys an advantage over private airlines around the world that are subject to corporate profit taxes of their home countries. Which brings us to …
  • Another advantage conferred by the United States under the auspices of the Export-Import Bank (Ex-Im), whose risk-taking and subsidization have long been a concern for taxpayer advocates such as NTU. Etihad snagged $593 million in loan guarantees from Ex-Im last year for aircraft purchases, and could qualify for preferential financing that our own airlines (by definition) can’t get through Ex-Im.
  • Meanwhile, The Wall Street Journal is reporting that over the preceding year (before overblown sequester scare tactics), the wait times for getting through customs at stateside airports have “increased dramatically.”

All these drawbacks lead to one long question: Given CBP’s service challenges at existing airports, is it really a good idea to plow ahead with a facility whose use will be comparatively scarce in the near term, and give another leg-up to an airline backed by its own government as well as ours, at the expense of an already overtaxed flying public?

And “overtaxed” is an understatement. As NTU has often noted, the typical overall government tax and fee burden of 20 percent on a $300 domestic airfare is higher than the average effective rate a middle-class American is likely to pay on his or her 1040 income tax return. International air travelers can have it even worse, with impositions such as separate departure and arrival taxes along with a passenger agricultural inspection fee (which the Obama Administration ill-advisedly considered raising in 2009) and a customs fee.

Proponents of the CBP station at Abu Dhabi argue that the investment of U.S. tax dollars will be minimal since UAE will pick up 85 percent of the project’s expense under the current agreement. But that’s little comfort to tax-weary travelers in America (see above), who remain worried that whatever share they will be forced to commit could escalate if construction or operating costs are not contained. Meanwhile, there’s that pesky matter of how best to apply CBP’s fee collections as well as appropriations from general funds – should they be used to expedite higher-priority passenger and cargo entry-exit services?

Many Members of Congress seem to think so. In June, the House of Representatives passed an amended FY 2014 DHS Appropriations Bill specifically blocking the Abu Dhabi pre-clearance scheme. In May, a bi-partisan group of 11 Senators echoed the sentiment of their House colleagues in a separate letter to DHS Secretary Janet Napolitano, questioning whether the agency’s “decision was made as a result of a risk based analysis.”

Alas, earlier this month DHS announced it was moving forward with a data-sharing agreement that could pave the way for the facility’s activation, even as it faces a concerted petition effort from interested industry groups with considerable clout.

Regardless of the politics involved, the taxpayer aspects of the issue deserve further exploration – that goes not only for the Abu Dhabi pact but also the ever-troubling direction of the Ex-Im Bank. Allowing the free market and fiscal responsibility to sort out needs from niceties would provide some badly-needed bone-rattling for those accustomed to budgetary business as usual in Washington.

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Winning the Medicaid Expansion Fight
Posted By: Sharon Koss - 07/25/13

With summer recess under way for the majority of state legislatures, taxpayers can claim an important victory: less than half of states have opted into the outlandish Medicaid expansion scheme. Many legislators already recognize that Medicaid is already embroiled with fraud, waste, and abuse. Understanding that expanding the system augments the flaws, they want reforms before tying their state to a sinking ship.  But we shouldn’t celebrate for too long—the fight for smaller government rages on as a handful of states have emerged as battlegrounds and others are attempting to craft their own versions of Medicaid expansion.

Tax-and-spenders are trying to paint Medicaid as an ideal program which gives everyone “free” healthcare. A writer at MSNBC portrayed expansion almost as a mandatory policy, stating that “It’s been exactly one year since the Supreme Court ruled that the Affordable Care Act was the law of the land, but Republicans continue to reject it.” This statement fails to acknowledge that the Supreme Court gave states, on that exact same day, the right to opt out of expanding the program. Even beyond this misguided assessment, a growing number of Republican governors have thrown their support behind expansion. Jan Brewer (AZ), Chris Christie (NJ), Rick Scott (FL), Rick Snyder (MI), John Kasich (OH), Susana Martinez (NM), Terry Branstad (IA), Brian Sandoval (NV), and Jack Dalrymple (ND) all have turned their backs on fiscal responsibility. 

The good news is that out of the fifty states and Washington D.C., only  twenty-four (less than half!) have agreed to take part in Medicaid expansion, and twenty-one are not moving forward at this time. Some states, such as Arkansas, Indiana, Iowa, and Tennessee are also pursuing alternative state versions. At the end of the day, there are still a handful of battleground states that could go either way. Because one vote, purposeful or mistaken, can impede the creeping expansion of this immense policy, grassroots communication to state officials has been and will continue to be essential to keep lawmakers from supporting the expansion. 

The following details the current status of battleground states where debate continues:

  • Indiana – Governor Mike Pence has opposed “traditional” Medicaid expansion but has said he would consider an alternative that gives the state more control over the program’s operations and demands more responsibility of the enrollees.
  • Michigan – A Senate workgroup is currently preparing a Medicaid expansion proposal supported by Governor Rick Snyder and is considering an August vote on expansion. Additionally, a “free market solution” counterproposal emerged this week.  
  • Missouri – Democratic Governor Jay Nixon supports the expansion, but the strong Republican majority in the General Assembly is opposed. Debate continues in interim panels designed to look into “transforming” Medicaid.
  • Montana – Medicaid expansion failed by one accidental vote but will be reconsidered in 2014, necessitating strong voter opposition.
  • Nebraska – Governor Campbell and some influential senators are pushing for expansion, but the legislature adjourned in June.
  • Ohio – Governor Kasich is pushing  for expansion because, in his view, God wants Ohio to expand Medicaid. The legislature could go either way. 
  • Utah – Governor Herbert has stated that he won’t decide until December after the budget is released. He is also considering an alternative to the federal expansion plan.  
  • Virginia – By establishing the Medicaid Innovation and Reform Commission (the Medicaid expansion super committee), Governor McDonnell and the General Assembly kept open the possibility of expanding Medicaid. However, the committee appears to be in no hurry to make a decision. The outcome could be influenced by the gubernatorial race between Ken Cuccinelli (opposes expansion) and Terry McAuliffe (approves expansion), who currently holds a slight edge.

Recent events lend credence to the hesitancy of states to fully commit to Medicaid. The administration’s delay of the employer mandate, announced over a Treasury blog post, may shift the balance in the conservatives’ favor. President Obama has framed the delay as an allowance for states to have more time to comply with the mandate; however, it can easily be seen as an acknowledgement of the intricate difficulties involved in widespread enrollment in the entire ACA program, including Medicaid. Michael Cannon at the Cato Institute explains that the “purpose of the employer mandate was to reduce the economic and political upheaval that the rest of ObamaCare will unleash.” Medicaid will be much more burdened without that stabilizing factor for at least the first year of implementation. If an employer mandate is too complex for businesses to carry out, then why think that Medicaid expansion is manageable? Why spare businesses and not individuals? Avik Roy also pointed out that:

Effectively, states no longer need to expand Medicaid, because this newly Medicaid-eligible population can now sign up for the exchanges, at no cost to the state, and know that their incomes won’t be verified by the IRS…The feds will also allow people to gain means-tested subsidized coverage on the exchanges without having to…test their means.

Despite grassroots opposition to the program, some lawmakers and governors continue to be tempted by the promise of “free” federal dollars to expand Medicaid. But that money isn’t free. The Kaiser Family Foundation acknowledges that federal Medicaid spending would increase by 26 percent, or $952 billion, as a result of expansion. State lawmakers should bear in mind that everything that government funds is actually footed by their constituents’ hard-earned tax dollars. Additionally, by rejecting the expansion, state legislators have an opportunity to slow Washington’s reckless borrowing binge.

States’ actions over the next year may determine the future of Medicaid expansion and the Affordable Care Act as a whole. Some legislators propose temporarily trying it out and withdrawing if necessary. This fallacious argument is possibly the most disappointing; as Ronald Reagan cautioned, “governments' programs, once launched, never disappear.” With this in mind, taxpayers should continue to encourage legislators and governors to keep up the good, responsible fight. Otherwise, Medicaid expansion—and an onslaught of tax hikes to pay for it—could be here to stay.

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