Consumer Power Report #412
Earlier this week the Supreme Court heard oral arguments in the most significant lawsuit to be brought against Obamacare since the challenges to the individual mandate and the Medicaid expansion: the challenge brought by craft store Hobby Lobby against the contraception mandate, which once again pit attorney Paul Clement against Solicitor General Donald Verrilli. A recap of the oral arguments is here, and the complete transcript is here.
On its face, this is an argument about the extent to which religious freedom applies to corporate for-profit entities. The Obama Administration already has widely exempted religious non-profit organizations from the contraception mandate – though that could be temporary, of course – but it has refused to budge against Hobby Lobby’s objection to just four of the 20 mandated forms of contraception deemed essential health benefits by HHS. Though you might not know this if you paid attention to the traditional media:
To survive a challenge under RFRA, the government must demonstrate a “compelling governmental interest” and employ the “least restrictive means” of furthering that interest. That’s why a great deal of coverage, and indeed the government’s own briefing, is devoted to claiming that birth control is an unmitigated good and direly needed by women who will somehow be unable to get it if religious businesses aren’t forced to provide it.
This claim is complete bunk. First, the vast majority of businesses provided contraception coverage for their employees before the mandate became effective and continue to do so now that it has. Only a small number of businesses, most of which are not very large, are seeking an exemption based on their religious belief. Second, Sec. Sebelius has already exempted 190 million people from the contraception mandate, either because they work for non-profit corporations or because their plans were “grandfathered” when Obamacare became effective.
In short, when 190 million people are purposefully exempted from a law, there can be no argument that it is aimed at a compelling purpose. Providing broad exemptions intended to go on in perpetuity demonstrates that the contraception mandate is the opposite of compelling.
Cato’s Ilya Shapiro writes on the frustrating challenges involved here:
Despite the parade of horribles invoked by Justice Sotomayor regarding religious objections to blood transfusions and vaccines, at least five justices seemed to recognize that religious-liberty claims are meant to be adjudicated on a case-by-case basis – maybe six given Breyer’s lukewarm and infrequent interjections.
The government fared even worse on its position that for-profit corporations can’t assert religious-exercise interests in the first place. Even Justice Kagan recognized that under certain circumstances, for-profit enterprises may engage in religious activity. While Cato’s amicus brief argued that this “standing” issue is purely academic anyway – the individual corporate owners feel the mandate/fines regardless of who is exercising religion or bringing lawsuits – I count seven votes for getting past this threshold issue.
As I left the argument, I had a bit of spring in my step, even as the snowstorm that greeted me lacked any spring whatsoever. The Court is likely to stop this callous, arbitrary, and needless bending of the will of a small religious minority to the federal grindstone. But alas that’s just this case; the more that the government expands and takes over areas properly left to civil society, the more clashes of conscience will result. Today it’s religious belief, tomorrow something else, but all these liberty-destroying mandates come with the collectivized territory.
The Hobby Lobby case and the results of other challenges to the contraception mandate could be legally and politically significant in determining the level of protection offered by religious freedom post-Obamacare. But they also could be significant in another arena: the ability of businesses run by religious people or families to offer insurance coverage. The easiest path for Hobby Lobby to escape this mandate is to simply drop coverage for its tens of thousands of employees and shift them to the subsidized exchanges or to Medicaid coverage, where taxpayers will pay for the contraceptives their employers have moral objections to providing. In the long run, this could lead to a situation where religious employers choose to become non-profit organizations to avoid the mandate, or choose to not offer health insurance coverage in order to avoid compromising their deeply held moral views.
— Benjamin Domenech
IN THIS ISSUE:
HOBBY LOBBY ISN’T THE MOST IMPORTANT CASE
Tuesday, all eyes will be on a high-profile Obamacare case before the Supreme Court. But just a few blocks away, a lower court will hear a lesser-known Obamacare case that could have a far greater impact on the future of the law.
The Supreme Court hears oral arguments Tuesday in Sebelius v. Hobby Lobby, a case challenging the Obama administration’s attempt to force private companies to purchase contraceptives for their employees contrary to the owners’ religious beliefs. A ruling for Hobby Lobby would restore the religious freedom of potentially millions of employers and workers.
Just down the street, the Court of Appeals for the D.C. Circuit will hear oral arguments in Halbig v. Sebelius. Obamacare supporters call Halbig “the greatest existential litigation threat to the Affordable Care Act.”
That description, while colorful, is not quite accurate. Halbig does not ask the courts to strike down any part of the law. It merely asks the court to force the administration to implement the law as Congress intended, a prospect that absolutely terrifies Obamacare supporters.
The issues in Halbig are simple.
Obamacare authorizes the IRS to provide health-insurance subsidies (nominally, tax credits) to consumers who purchase health insurance “through an Exchange established by the State.” That’s not a drafting error. The subsidy-eligibility rules employ that language a total of nine times, without deviation. The rest of the statute is fully compatible with this language.
The statute is therefore clear and unambiguous: the IRS may issue subsidies in the 14 states that established an exchange, but not in the 34 states that left the job of establishing and operating their state’s exchange to the federal government. Congress’ purpose is likewise clear. It wanted states to operate the exchanges, so it conditioned subsidies on state cooperation. Medicaid and countless other federal programs do the same. The IRS’s philosopher-kings have decided to issue subsidies in those 34 states anyway.
SOURCE: USA Today
GRACE PERIOD FOR OBAMACARE SHOPPERS
The White House hinted Friday that consumers who begin their ObamaCare enrollment before March 31 might be given a grace period to finish their applications.
“As was the case for the December deadline, we’re going to want to make sure that people who are already in line can finish their enrollment,” White House press secretary Jay Carney said. “But for how that process works, I would point you to what happened in December and how that played out.”
In December, the Obama administration gave consumers an additional day to finish signing up for their plans in order to secure coverage by Jan 1.
A representative for the Centers for Medicare and Medicaid Services, the agency facilitating the federal exchange, said the grace period was offered to accommodate people from different time zones and to account for any technical problems the site might incur.
Traffic to the site rapidly increased ahead of the December deadline, increasing fivefold from the previous Monday. Administration officials are predicting a similar surge ahead in the final days of March. If consumers don’t buy insurance on the exchange then, they’ll be unable to do so until enrollment reopens in November.
SOURCE: The Hill
For the past 40 years real, per capita health-care spending has been growing at twice the rate of growth of real, per capita income. That’s not only true in this country; it is about the average for the whole developed world. Clearly, this trend cannot go on forever. So what does ObamaCare do about that? It limits the government’s share of the costs while doing nothing to protect individuals or their employers.
The law restricts the growth of total Medicare spending, the growth of Medicaid hospital spending and (after 2018) the growth of federal tax subsidies in the health-insurance exchanges to no more than the rate of growth of real GDP per capita plus about one half of 1%. This means that as health-care costs become more and more of a burden for the average family, people will get less and less help from government–to pay for insurance the government requires them to buy!
Unworkable subsidies. A family of four at 138% of poverty level is able to enroll in Medicaid in about half the states and obtain insurance worth about $8,000. Since the coverage is completely free, that’s an $8,000 gift. If they earn $1 more, they will be entitled to join a health-insurance exchange and obtain a private plan that costs, say, 50% more in return for an out-of-pocket premium of about $900. That’s a gift of more than $11,000.
At the same time, the employees of a hotel who earn pretty much the same wage as in the two previous cases will be forced to have an expensive family plan and they and their employer will get no new government help. The only assistance is the long-standing tax break that exempts employers’ premium payments from federal income and payroll taxes. Even so, the ObamaCare mandate amounts to about a $10,000 burden on these businesses and by extension their employees. These are only a few of the many ways in which ObamaCare’s treatment of people is arbitrary and unfair.
SOURCE: Wall Street Journal
INSURERS SEE DOUBLE-DIGIT PREMIUM HIKES COMING
U.S. consumers eligible for Obamacare health plans could see double-digit price hikes next year in states that fail to draw large numbers of enrollees for 2014, including some states that have been hostile to the healthcare law, according to insurance industry officials and analysts.
The early estimates come as insurance companies set out to design plans they intend to sell in 2015 through the state-based health insurance marketplaces that are a centerpiece of the Affordable Care Act, President Barack Obama’s signature domestic policy achievement that is widely referred to as Obamacare.
WellPoint Inc, which sells plans on 14 Obamacare exchanges, expects health insurance rates nationwide to be higher. Increases for the Obamacare market that has signed up about 5 million people to date [are] expected to outpace those in the employer-sponsored market, which serves about 170 million people.
“Looking at the rate increases on a year-over-year basis on our exchanges, and it will vary by carrier, but all of them will probably be in double digit plus,” Ken Goulet, president of WellPoint’s commercial business, told investors in New York on Friday.
The cost of health insurance is already a political hot potato in this year’s election campaign for control of Congress, with Republicans warning of the potential for sky-rocketing rates in their attempt to turn the ballot into a referendum on Obamacare.
VIRGINIA GOVERNOR FAILS TO GET DEAL ON MEDICAID
Virginia’s Democratic governor, Terry McAuliffe, and the state’s Republican-dominated House of Delegates on Monday failed to reach an agreement over Medicaid expansion during the first day of a special session called in hopes of reaching a budget deal.
The impasse over Medicaid, the federal health care program for the poor, is holding up passage of a two-year, $96 billion budget. If the two sides fail to reach a deal by July 1, the state government could grind to a halt. Legislators deadlocked over the budget during a 60-day regular session that ended March 8.
McAuliffe, a former Democratic Party fundraiser, proposed on Monday a two-year pilot expansion of Medicaid, which could be terminated if it is unsuccessful, but the proposal was rejected by the House Appropriations Committee.
“I am disappointed that House Republicans voted today to continue Washington-style gridlock instead of accepting a budget that includes a responsible proposal to bring billions of federal dollars back to Virginia to close the health care coverage gap and invest in core priorities like education and mental health,” McAuliffe said in a statement …
Under the current Medicaid proposal, the federal government would pay the full cost of Virginia’s expansion through 2016, then pare its contribution to 90 percent by 2020.
McAuliffe has argued that accepting $2 billion in federal funds to expand Medicaid under the Affordable Care Act would release money that could be used to create jobs, raise state salaries, bolster pensions and come up with health reforms. But Republicans have called the move unaffordable.
FLORIDA SENATOR’S PLAN TO EXPAND MEDICAID
Florida is one of 24 states that hasn’t joined Obamacare’s Medicaid expansion, which would cover about 1.3 million uninsured adults in the state and bring in about $51 billion in federal funds over the next decade. Only Texas stands to benefit more from the Medicaid expansion.
Florida Sen. Bill Nelson said he’s talking with federal health officials on a plan to go around the state legislature, which strongly opposes expanding Medicaid. But federal officials say their hands are tied.
The Florida Current reported on Wednesday that Nelson told state lawmakers that he met with Health and Human Services and Medicaid officials in Washington to see if there’s a way for Florida to get Medicaid expansion funding anyway. Nelson reportedly hopes to release some details on the plans in two weeks, the Current reported.
“We are trying quietly to encourage, between the Department of HHS, CMS – that’s Medicaid, Medicare – to see if they can come up with some kind of fix so that all this money is not going to be left, and penalize over a million people,” Nelson said, according to the paper. “I’m not prepared to talk about this thing that I’m urging CMS to do, because all the details are not there, but within the next couple of weeks, hopefully, it’s going to be there and I’ll let you know as soon as I get a green light from CMS.”
The only problem is that CMS can’t give Nelson that green light. A proposal to access Medicaid expansion funds has to come from the state itself, said CMS spokeswoman Emma Sandoe.
SOURCE: Washington Post
COVER OREGON EXPLAINS BIZARRE NEW ENROLLMENT PROCEDURE
“At Cover Oregon we’re committed to helping you get the health insurance you need” the video uploaded to Youtube yesterday starts. It then explains that those seeking health insurance coverage through the Obamacare exchange can “enroll online” by entering their information through the Cover Oregon website. However, instead of being sent to the next section of the website to browse and select a plan, the video explains that “in about ten days” applicants will “get a packet” in the mail from the government-run exchange.
At this point the packet will either inform the applicant that they qualify for, and have been enrolled in, the state Medicaid system or that they need to purchase a private plan through the exchange. Those who need to purchase a private plan must then go back to the website and enter the information from the packet they got in the mail in order to actually look through the available plans and pick one. After that, if the site works properly, they’ll then be sent a bill and an insurance card through the mail. At that point they will be covered, the video promises.
The ten-day waiting period between applying online and receiving the Cover Oregon packet in the mail makes today effectively the last day that Oregonians can apply for coverage in 2014 as the website claims the deadline for enrollment is March 31st. After the 31st, individuals and families can continue to apply for coverage but cannot actually enroll in a plan.
SOURCE: Capitol City Project
STUDY: OBAMACARE COSTS EXCEED BENEFITS BY TWOFOLD
After four years of implementation, countless delays, a website disaster, and constant litigation, the Affordable Care Act (ACA) celebrates its inauspicious birthday this week. From a regulatory perspective, the law has imposed more than $27.2 billion in total private sector costs, $8 billion in unfunded state burdens, and more than 159 million paperwork hours on local governments and affected entities. What’s more troubling, the law has generated just $2.6 billion in annualized benefits, compared to $6.8 billion in annualized costs. In other words, the ACA has imposed 2.5 times more costs than it has produced in benefits.
At more than 159 million paperwork hours, the ACA is in a class by itself. To date, Dodd-Frank, an equally transformational law, has imposed “only” 60 million hours of paperwork. Sarbanes-Oxley financial reform legislation, passed in 2002, imposed 11.4 million hours.
To put the ACA’s paperwork burdens in perspective, it would take 79,518 employees (more than the population of Napa, California) working 2,000 hours annually to complete the ACA’s paperwork mandates. These burdens obviously cost states and private entities time and money, which could otherwise be devoted to productivity, not regulatory compliance.
These burdens have had a notable impact on the paperwork budgets of the Department of Health and Human Services (HHS) and the Department of Treasury. When President Obama signed the Affordable Care in 2010, HHS’s total paperwork burden was 541 million; today, HHS imposes more than 631 million hours of paperwork, an increase of roughly 90 million hours. Perhaps more remarkably, Treasury, which has had to implement several of the most burdensome mandates and penalties, has undergone an even more profound jump in regulatory requirements. In 2010, it imposed 6.3 billion hours of paperwork; today, it imposes more than 7.8 billion hours of paperwork, an increase of 23 percent.
SOURCE: American Action Forum