Friday, November 15, 2013

Obama's Illusory Fix

Obama (and top congressional Democrats) have promised for years that "if you like your health care plan, you can keep your health care plan." It was a lie and he knew it was a lie, but he needed the lie to sell the legislation. I've compared Obama to Hitler before, and this is another situation where Obama seems to follow his fellow socialist's advice in Mein Kampf:
All this was inspired by the principle--which is quite true within itself--that in the big lie there is always a certain force of credibility; because the broad masses of a nation are always more easily corrupted in the deeper strata of their emotional nature than consciously or voluntarily; and thus in the primitive simplicity of their minds they more readily fall victims to the big lie than the small lie, since they themselves often tell small lies in little matters but would be ashamed to resort to large-scale falsehoods. It would never come into their heads to fabricate colossal untruths, and they would not believe that others could have the impudence to distort the truth so infamously. Even though the facts which prove this to be so may be brought clearly to their minds, they will still doubt and waver and will continue to think that there may be some other explanation. For the grossly impudent lie always leaves traces behind it, even after it has been nailed down, a fact which is known to all expert liars in this world and to all who conspire together in the art of lying.
 Obama is the master of the "big lie," so it is only par for the course that in attempting to deflect blame and outrage over the debacle that ObamaCare has become, Obama resorts to another big lie. As Forbes summarizes:

Yesterday, President Obama announced that his administration would unilaterally decline to enforce the provisions of Obamacare responsible for millions of insurance policy cancellations around the country. “The bottom line is insurers can extend current plans that would otherwise be canceled into 2014,” he said.
Of course, that was lie as well:
The real bottom line is this. If you like your plan, you might be able to keep it for another year. But after the midterm elections are over, non-Obamacare-compliant plans will get canceled yet again. Because, if the delay continues past 2014, one Obamacare architect believes it “could be the beginning of a death spiral” for the law’s insurance exchanges.
Unfortunately, for the President and for the rest of us, Obama can't utter his proclamation and return things to where they were several months ago (in fact, his pronouncement would only apply to plans in affect on October 1, so if you lost your plan before that, you are SOL) because insurance companies have already priced their plans based on healthier people being forced to purchase insurance they don't want or need in order to make insurance less expensive for the really sick. Megan McArdle explains:

Now Obama is saying that those healthier folks who already had insurance can keep buying their old policies, presumably at cheaper rates. But if insurers go along, that means that the average person on the exchange will be somewhat sicker than previously expected. Because the insurers already priced those policies for 2014 and cannot change their rates, they could very well lose money.
At least for one year. Come next year, what do they do? Rates for the next open-enrollment period will be set sometime between February and June. Should they assume that there will not be a repeat of this year’s drama during next year’s midterms? Or should they assume that their exchange policies will be purchased mostly by the sick and previously uninsured, then price them accordingly? It’s a pretty bold move for Obama to hang the insurers out to dry like this, considering that he reportedly needs their technical help to get the exchanges working and some cooperation to keep rates low prior to next year’s midterm elections. 
And that doesn’t even touch on the legal problems. The administration is not changing the rules, just declining to enforce them against the insurers. This is becoming a pattern: Obama’s position on the law seems to be that it’s his law, and therefore the law is whatever he and his appointees say it is. That’s dangerous for all sorts of reasons, not least because it makes them vulnerable to court action. 
Presumably they will also not enforce the mandate against people who have grandfathered plans. But that raises an interesting legal issue. Remember that in 2012, the Supreme Court ruled that the mandate was a tax. And as a lawyer of my acquaintance points out, taxes have to be enforced uniformly; the Internal Revenue Service can pick and choose who it audits, but it cannot pick and choose who has to obey the law. If it declines to enforce the mandate against grandfathered consumers, it's conceivably opening itself up to a bunch of legal challenges. 
This is not, in other words, a good solution if your desire is to make Obamacare work as planned. It is not even a very good solution if you are genuinely moved by the plight of people losing insurance policies they liked. At best, it solves only one real problem: the administration’s plummeting poll ratings. And that's only for the short term; it’s hard to see how we avoid going through this drama again next year.
Going back to the Forbes article above, it explains why Obama chose this questionable path:

Why the focus on unilateral action? The President and his supporters fear that allowing Congress to pass legislative fixes to the law would set a dangerous precedent. “Once Congress reopens Obamacare, no one knows where they stop,” observes Ezra Klein. “You’re opening Pandora’s box with Congress and insurers,” said Drew Altman to Klein.

Again, this contradicts the President’s assertion that Republicans in Congress are opposed to improving the law. “I’m willing to work with Democrats and Republicans to fix problems as they arise,” Obama averred. But the fact is that the President would much rather enact a regulation of his own choosing than to let Congress pass legislation to that effect.
And, as both these articles note, it is unlikely that the insurance companies will be able to unwind everything in order to reinstate all these plans in time.

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