Research Briefing

Obama’s Health And Human Services Secretary Has A Lot Of Explaining To Do About Obama’s Government-Run Health Care Experiment

“Secretary Kathleen Sebelius Will Deliver A Speech Entitled, ‘Health Reform And You: How The New Law Will Increase Your Health Security’ At The National Press Club...” (U.S. Department Of Health And Human Services, “HHS Secretary Sebelius To Speak At National Press Club,” Press Release, 4/1/10)

WAS IT A WISE DECISION TO ADD NEW TAXES DURING A TIME OF RECESSION?

When Asked To Justify New Health Care Taxes, Obama Rambled For 17 Minutes. “He then spent the next 17 minutes and 12 seconds lulling the crowd into a daze. His discursive answer - more than 2,500 words long -- wandered from topic to topic, including commentary on the deficit, pay-as-you-go rules passed by Congress, Congressional Budget Office reports on Medicare waste, COBRA coverage, the Recovery Act and Federal Medical Assistance Percentages (he referred to this last item by its inside-the-Beltway name, “F-Map”) … Even Obama seemed to recognize that he had gone on too long. He apologized -- in keeping with the spirit of the moment, not once, but twice. ‘Boy, that was a long answer. I’m sorry … I hope I answered your question.’” (Anne Kornblut, “Obama’s 17-Minute, 2,500 Word Response To A Woman’s Claim Of Being “Over-Taxed,” The Washington Post’s “44” Blog, 4/2/10)

Obama’s Bill Has $570 Billion In New Taxes, Much Of It On Small Businesses. “The reconciliation bill’s changes to the Medicare tax represent the largest single revenue raiser in the health reform package. The CBO estimates the provision would raise $210 billion over 10 years. Currently, the Medicare payroll tax is 2.9% on all wages -- with the worker and his employer each paying 1.45%. The reconciliation bill, like the Senate bill, would raise the percentage paid by high-income individuals by 0.9 percentage points, so an individual would pay 2.35% on his wages. The reconciliation bill, however, also would subject the investment income of high-income households, such as dividends, interest and rent, to a 3.8% Medicare tax.” (Douglas W. Elmendorf, Letter To Speaker Nancy Pelosi, 3/20/10; Jeanne Sahadi, “Health Reform: Where The Money Will Come From,” CNN Money, 3/18/10)

DO YOU ENDORSE CONGRESSIONAL DEMS’ HARDBALL TACTICS

AGAINST BUSINESSES WHO REPORT HOW MUCH OBAMA’S BILL WILL COST THEM?

Rep. Henry Waxman (D-CA) Tells CEOs Who Reported New Health Costs That He Doesn’t Believe Them, Demands Them To Provide Proof. “Representative Henry Waxman called the chief executive officers of AT&T Inc., Verizon Communications Inc., Caterpillar Inc. and Deere & Co. to provide evidence to support costs the companies plan to book related to the new health-care law. Waxman … and subcommittee Chairman Bart Stupak of Michigan released letters they wrote to the executives, saying their plans to record expenses against earnings as a result of the law contradict other estimates. The lawmakers requested the executives appear at hearing Stupak plans on April 21.” (Viola Gienger, “AT&T, Deere CEOs Called By Waxman To Back Up Health-Bill Costs,” BusinessWeek, 3/27/10)

• After 15 Companies Said They’ll Lose Over $2.85 Billion Because Of Prescription Drug Provision In Obama’s Government Takeover Of Health Care. “New health care legislation is going to cost companies billions of dollars, according to internal projections and public announcements from a range of corporations including the bluest of the Blue Chips to small local outfits. So far, companies have announced they will take at least $2.854B in one-time charges after health care legislation became law, thanks to a provision that will no longer allow companies to deduct subsidies it receives to provide seniors with prescription drug benefits. In total, at least 15 companies have announced they will take charges to offset future costs of the health care measure.” (Reid Wilson, “Companies Take Billions In Health Care Charges,” National Journal’s “Hotline On Call” Blog, 4/2/10)

Denver Post Editorial: “Instead Of Acknowledging That Top-Down Economic Planning Usually Brings With It Some Unintended Costs, Rep. Henry Waxman, D-Calif., Immediately Politicized The News By Attacking Industry.” (Editorial, “Health Care Hit Didn’t Take Long, The Denver Post, 3/31/10)

California Management Professor: New Health Law Is “Begging Firms Not To Create Jobs.” “Firms are scrambling to find out the implications for their firms so they can begin to make intelligent decisions to prepare for those changes starting next year, she said. Jack Kyser, founding economist of the Kyser Center for Economic Research at the Los Angeles County Economic Development Corp., said his organization’s regional managers report that some small businesses in the Los Angeles region are seeing a small uptick in orders, but are holding off on hiring or expansion as they watch how health care reform unfolds. Prag said that coming out with health care reform at a time when businesses are trying to gauge the economy is ‘begging firms not to create jobs.’” (Jim Steinberg, “Rate Hikes Likely With Health Care Reform,” The Redlands Daily Facts, 4/5/10)

HOW CAN YOU SAY “THE MOTHER OF ALL UNFUNDED MANDATES” IS “STATE-FRIENDLY?”

Sebelius On CNN: “This Is One Of The Most State Friendly Pieces Of Legislations That I Certainly Have Seen In A Long Time.” (CNN’s “John King USA,” 3/29/10)

Yet Gov. Phil Bredesen (D-TN) Calls Obama’s Health Care Experiment “Mother Of All Unfunded Mandates.” “[Bredesen] feared Congress was about to bestow ‘the mother of all unfunded mandates.’ ‘Medicaid is a poor vehicle for expanding coverage … It’s a 45-year-old system originally designed for poor women and their children. It’s not health care reform to dump more money into Medicaid.’” (Kevin Sack & Robert Pear, “Governors Fear Medicaid Costs In Health Plan,” The New York Times, 7/19/09)

• Texas Puts Cost Of ObamaCare At $27 Billion During First Decade It Is Fully Implemented. “[Texas Health And Human Services] Commissioner Tom Suehs estimates that health care reform’s top-dollar items … will cost the state more than $27 billion between 2014 and 2024, up $3 billion from his most recent estimate.” (Emily Ramshaw, “The $27 Billion Question,” Texas Tribune, 4/1/10)   
• Indiana Medicaid Program Estimates It’ll “Lose Some $400 Million In [Prescription Drug] Rebates Alone” Over 10 Years. “The new federal health care reform legislation increases the minimum rebate level for most brand name and generic prescription drugs. Unfortunately for Indiana, the savings we achieve now will be confiscated by the federal government at a cost to Hoosier taxpayers. ... In state fiscal year 2011, our estimates show an immediate impact of $25 million, and this figure will grow each year. Over the next 10 years, we’ll lose some $400 million in rebates alone because of the federal health care reform legislation.” (Indiana Family & Social Services Administration Secretary Anne W. Murphy, Letter To Indiana OMB Director Ryan Kitchell, 3/26/10)

Former Governor Howard Dean Says States Are Already Bankrupt And Will Need To Raise Taxes.  “Look, the states are in a terrible, terrible bind. It really is a problem for them. Places like California are virtually, virtually bankrupt. I mean I think their bond rating is junk. You know, New York is in big trouble. So they’ve got to do something and there’s just so much you can cut. I think you got to cut, cut, cut, cut but at some point they’re going to have to raise taxes. It is true, whether you like it or not, that the biggest untapped source of taxes for states that makes any sense, is taxes on services.” (CNBC’s “Squawk Box,” 3/29/10)

WHERE IN THE CONSTITUTION IS THE FEDERAL GOVERNMENT EMPOWERED TO FORCE AMERICANS TO BUY HEALTH INSURANCE?

“Sebelius Said Administration Lawyers Have Assured Her The Bill Is On ‘Strong’ Legal Ground, So She Said She Was Going To Let Lawyers Worry About The Constitutional Challenges By 14 State Attorneys General.” (Mike Allen, “Kathleen Sebelius: ‘Important Changes Coming,” Politico, 3/25/10)

But Obama’s Bill Makes Americans Purchase Government-Approved Insurance Or Pay A Tax, Face Criminal Penalties. “Democracy for America, the successor to the Dean campaign … is out today with an email attacking health care legislation on a vulnerable point: The individual mandate. ... ‘[T]hey say that even without a public option, the bill still “covers” 30 million more Americans. [The bill] requires every single American buy health insurance or break the law and face penalties and fines. So, the bill doesn’t actually “cover” 30 million more Americans - instead it makes them criminals if they don’t buy insurance from the same companies that got us into this mess.’“ (Ben Smith, “Dean Group Attacks Mandate,” Politico’s “Live Pulse” Blog, 12/16/09)

Georgetown Law Professor Calls Individual Mandate Unprecedented. “Georgetown University law professor Randy Barnett … maintains Congress would be overstepping its powers enumerated in the Constitution if it required people to buy health insurance. ‘Never in the history of the United States has the federal government ever required someone to engage in an economic activity with a private party ...’” (David Welna, “Opponents Threaten Court Battle On Health Mandate,” NPR, 1/18/10)

WILL YOU TAKE AWAY AMERICANS’ CHOICE TO HAVE HEALTH SAVINGS ACCOUNTS?

President Obama Pledged That If You Like Your Insurance You Can Keep It. “Mr. Obama has said repeatedly, as he told the American Medical Association in June: ‘If you like your doctor, you will be able to keep your doctor, period. If you like your health care plan, you’ll be able to keep your health care plan, period. No one will take it away, no matter what.’ These assurances reflect an aspiration, but may not be literally true or enforceable.” (Robert Pear and David Herszenhorn, “A Primer On The Details Of Health Care Reform,” The New York Times, 8/09/09)

Yet ObamaCare Restricts High Deductible Health Plans (HDHP) Combined With A Health Savings Account (HSA). “[T]he reform law requires that small-group plans cannot have deductibles exceeding $2,000 (self) and $4,000 (family), with an exception allowing higher deductible policies for people under age 30. That’s roughly one-third the level that has been allowed for HDHPs linked to HSAs. ‘Many people today would choose a $5,950 individual deductible over a $2,000 deductible and place the premium savings in an HSA,’ but they will no longer be given that choice, writes Ron Bachman, president and CEO of Healthcare Visions Inc. and a senior fellow with the conservative National Center for Policy Analysis. Bachman adds that some health benefit plans’ high deductibles are offset by sizeable employer contributions to HSAs that are intended to promote employees’ cost-effective selection of medical services (because employees can keep and save unspent funds), but that option, too, will be limited by the new deductible ceiling.” (Stephen Miller, “Reform Creates Opportunities, Uncertainties For Consumer Directed Plans,” Society For Human Resource Management’s “HR News,” 3/23/10)

And HHS Has Complete Latitude To Determine Whether An HSA Policy Would Qualify As Approved Coverage. “To be offered in an exchange, and in the individual and small group markets outside of an exchange, plans must offer the essential benefits package. The Senate bill delegates the authority to define what benefits are considered essential to the Secretary of Health and Human Services (HHS). In defining essential benefits, the Secretary is instructed to ensure that the scope of the essential benefits package is equal to the scope of benefits provided under a typical employer plan. Because a high deductible health plan may not be what the Secretary considers as a ‘typical’ plan, there is a risk that the essential benefits package may be defined in such as way as to discourage or prohibit the use of high deductible health plans inside and outside of an exchange.” (American Benefits Council, “Proposed HSA Clarifications In Proposed Health Reform Legislation,” Report, 3/16/10)

• “One Of The Most Common Phrases In The Health Reform Bill Is, ‘The Secretary Shall.’” (Mike Allen, “Kathleen Sebelius: ‘Important Changes Coming,” Politico, 3/25/10)