Facing a presidential veto pen blocking repeal of ObamaCare, the House is working to defund, dismantle, and delay implementation of the unpopular health overhaul law to avert at least some of its damage in the near term.
The Fiscal Cliff deal chipped away at ObamaCare, eliminating one of its programs completely and cutting funding for another.
Farewell, CLASS: The CLASS Act, a long-term-care insurance program that had been championed by late Sen. Edward Kennedy, was blessedly eliminated. The administration had said last year it couldn’t figure a way to assure the program would be financially solvent for 75 years before it was put into place – as the law requires. Health Secretary Kathleen Sebelius wrote in a 2011 letter to Congress that “Despite our best analytical efforts, I do not see a viable path forward for CLASS implementation at this time.”
Monthly premiums could have been as high as $3,000 under some scenarios, the administration said, making it unlikely there would be widespread enrollment. Sen. Max Baucus (D-MT) had called the CLASS program “a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of.” A commission on long-term care was authorized to take another look at the problem and potential solutions.
Goodbye, Co-ops. Funding also was struck for another liberal favorite — non-profit health insurance “co-ops.” The Fiscal Cliff deal eliminated most of the $1.4 billion in remaining funding for these health plans.
The ObamaCare health insurance co-ops were created to compete with the major insurance companies, but they would have been run by people who basically know nothing about health insurance – but with billions of dollars in government money at their disposal.
Initially, the health law allocated $6 billion to help start the co-ops. In 2011, Congress reduced that funding to $3.4 billion as part of broader budget cuts.
In the past two years, the Department of Health and Human Services has awarded nearly $2 billion in loans to 24 proposed state co-ops. Those loans won’t be affected by the cut.
“We were blindsided by the elimination of funds,” said John Morrison, president of the National Alliance of State Health Cooperatives. “The health insurance industry is getting its way here by torpedoing co-ops in the 26 remaining states.”
But those running the co-ops had little or no experience with the complexities of health insurance, and some House Republicans said co-op funding was being funneled to the administration political friends, such as the Freelancers Union in New York. Getting rid of additional co-op funding is another good call by Congress.
No freeze for physician pay – for now: The fiscal cliff deal also restores payments to doctors who faced a 27% cut in Medicare reimbursements this year.
One of the ways that Congress purported to pay for ObamaCare was through these cuts in Medicare physician payments. We warned the cuts wouldn’t happen and that the “deficit reduction” aspect of ObamaCare therefore was fictional. But postponing these cuts yet again, Congress has proven us right: ObamaCare isn’t paid for.
Goodbye, 1099. The whittling away at ObamaCare didn’t start with the fiscal cliff deal. Early on, Congress eliminated the 1099 reporting provision. The burdensome ObamaCare mandate would have required small businesses to track and report all transactions with vendors totaling $600 in a year. Compliance would have cost many times the amount the government could have expected to collect in unpaid taxes.
Another provision that has been struck would have allowed people to cash-out their health benefits at work. The “Free-Choice Voucher” was removed in 2011 after employers convinced legislators that it would destabilize their health plans if younger, healthier workers could leave, with older, sicker – more expensive — workers left behind.
The dismantling of ObamaCare is taking many other forms. Governors are balking at setting up the huge bureaucracies required to implement ObamaCare – the State Health Exchanges – and many are refusing to expand Medicaid to millions more people.
So there’s not much left to worry about, right? Oh yes there is!
- Costs already are spiraling due to ObamaCare’s regulations and requirements, hitting young people and small businesses the hardest.
- The employer mandate is crippling job recovery.
- The individual mandate is widely despised, and compliance will be a serious problem that could destabilize the ObamaCare Exchange risk pools.
- The new health insurance entitlements will mean at least $2.6 trillion in new spending – when we can’t pay for the entitlement programs we have now.
- More than $1 trillion in ObamaCare taxes hit our struggling economy that can ill afford the added burden.
- Massive new federal regulation of the health sector will further drive up costs and drive out competition.
- Threats to religious liberty are being challenged as dozens of lawsuits make their way through the courts.
- The Independent Payment Advisory Board – the unaccountable, unelected rationing board for Medicare – hangs like an anvil over our health sector.
The inequities in this sloppily-written health overhaul law will become clearer as workers with good family coverage find they could lose their employer-based coverage and maybe their job and the quality of coverage and care deteriorate. The law is not fiscally sustainable, and the budget gimmicks used to shove it through will not withstand real world implementation.
Congress would be well advised to continue to dismantle and defund the law. The next target should be the $29 billion tax on medical devices that threatens to cripple a dynamic new industry that employs 400,000 people in 12,000 factories around the country.
Posted on Forbes: Health Matters, January 20, 2013.