AAPS and many others predicted the destructive effects of the Affordable Care Act (ACA or ObamaCare) from the outset. MIT economist Jonathan Gruber has provided incontrovertible evidence that the bill’s architects also knew that Obama’s promises were lies. They are not stupid.
Gruber is now “the avatar not only of Obamacare, but of liberal paternalism, a caricature of the snotty, know-it-all technocrat who will make decisions for people without consulting them,” writes David Dayen (Fiscal Times 11/21/14). Of the two types of advocates that Milton Friedman said were needed to promote bad policy, Gruber is a “two-fer”: both a do-gooder and a special-interest rent-seeker who personally profits. Gruber has so far pocketed $6 million advising federal and state governments on the law he helped design (Larry Elder, Townhall 11/20/14).
Some states have done well too. In 2012, Gruber explained how Massachusetts pulled off RomneyCare: Sen. Ted Kennedy and smart people in Massachusetts figured out how to “sort of rip off the feds” for $400 million a year (ibid.).
The key admission: “Look, I wish…that we could make it all transparent, but I’d rather have this law than not” (ibid.). In other words, the end justifies the means.
The means included Gruber’s failure to disclose his consulting work to The New York Times, despite a contract obligating him to do so, and to NEJM, despite a formal disclosure requirement (Dayen, op. cit.). He deliberately used “tortured” language to force the Congressional Budget Office (CBO) to score ACA in a deceptive way that could pass. He designed a deal he thought the states couldn’t refuse—tax subsidies flowing through state exchanges only. Now that he has blown the Administration’s cover about this being a drafting error, we’ll see whether the U.S. Supreme Court, in King v. Burwell, will permit the Executive to re-write the law. Gruber boasted that the “Cadillac tax” was a “very clever…exploitation of the lack of economic understanding of the American voter” (see summary by AAPS director Marilyn Singleton, M.D., J.D.).
Keeping Americans ignorant is also part of the means—and one in which the mainstream media is complicit. ABC and NBC embargoed the Grubergate story as long as they could (John Hayward, Human Events 11/14/14).
Yet “in spite of the media’s best efforts, the truth was out there,” writes Derek Hunter. “The only way to avoid exposure to the truth was willful blindness” (Townhall 11/29/14).
Many Americans, probably more than half, are net beneficiaries of the redistributive state—as “providers,” contractors, and managers, not just as welfare mothers and food stamp recipients.
Those who are dependent on the state have a powerful incentive to remain willfully blind.
“To Gruberize”
Gruber’s tactics are memorialized in a new verb denoting the executive branch’s bypass of Congress, the Constitution, and sound science and economics, in order to achieve its goals. All three of the Administration’s legacy programs to “transform” America are being implemented by executive fiat: uncontrolled immigration, control of CO2 emissions, and control of medicine.
In the Gruberization of environmental and energy policy, the Obama Environmental Protection Agency (EPA) exploits lack of transparency and Americans’ lack of scientific understanding. “EPA bureaucrats and their hired scientists, pressure groups and PR flacks are getting rich and powerful by implementing costly, punitive, dictatorial regulations,” writes Paul Driessen (Townhall 11/28/14).
Obama appears to share the pre-Magna Carta attitude of King John: “The law is in my mouth.” With ACA, breaches have been strategic. Because those who suffer are injured only in very generalized ways, no one has had standing to sue except those challenging the IRS rule on federal Exchanges (Blumstein and Tolbert, Forbes 4/30/14).
EPA rules often arise from collusive lawsuits that violate the Separation of Powers, and EPA actions routinely violate the Information Quality Act. Epidemiologic data apparently fall into the same black hole as Lois Lerner’s IRS emails, Driessen suggests.
Obama’s constitutional law professor, Laurence Tribe, calls the post-modern Executive-Branch-trumps-all system the “curvature of constitutional space” (Harvard Law Review, November 1989), Driessen points out. The law shapes society, Tribe says.
What Is the End?
In her rather perceptive honors thesis at Wellesley, Hillary Rodham discussed the Alinsky model. His basic premises were “the primacy of power and the unavoidability of a relative morality.”
To those trying to create the Alinskyite perfect society, the Constitution is merely an 18th century barrier. Bad science, and bad economics that leads to poverty and dependency, are useful tools for building the Progressives’ (Marxists’) power, writes Peter Ferrara (Forbes 8/2/12). “Progressivism is not just wrong, but evil,” he concludes.
“Only force can be the deciding factor,…” said Trotsky. “Whoever aims at the end cannot reject the means.”
Key Facts on ACA Kept from Public
- “Cadillac” Tax Will Apply to All: Gruber admitted that the aim was to get rid of the tax exclusion for employer-provided insurance—a politically impossible goal. But eventually, the tax on the most generous benefits, which hits only 8% now, will apply to nearly all in 20 years. And if employers avoid the tax by shifting compensation from benefits to wages, workers will pay more taxes on the same amount of compensation. The creeping reach from wealthiest to middle class is like the Alternative Minimum Tax (Tevi Troy, WSJ 11/17/14). The tax is indexed to overall inflation, not premium cost inflation (http://tinyurl.com/oc3lke8).
- Phantom Savings: Gruber identifies the trick used by CBO director Peter Orszag to move much of ACA’s real spending off the books. In 1994, then CBO director Robert Reischauer reasonably concluded that if federal law compels people to purchase something, those transactions are no longer part of the private economy and belong on the U.S. balance sheet. This bit of honesty helped to kill HillaryCare (WSJ 11/15/14).
- Deductibles: The average deductible for individual coverage in employer-sponsored plans was $1,217 in 2014. In bronze Exchange plans it was $5,081 ($10,386 for a family), and in silver plans $2,907 ($6,078) (http://tinyurl.com/l84puhh). Despite higher deductibles, premiums in the entire non-group market grew by 24.4% compared to what they would have been without ACA (Chris Conover, Forbes 10/23/14).
Illegal Immigration Order
- $3,000 incentive to prefer illegals: Obama’s temporary amnesty declares that up to 5 million illegal immigrants are eligible for work permits, but deems them ineligible for buying ObamaCare insurance. This means businesses will not have to pay a $3,000 penalty for not providing health coverage (Washington Times 11/25/14).
- “Gruber Speech”: Obama’s actual policy is not just a plan to prioritize deportation as he portrayed it but a 17-point plan to create new programs without spending authority. The “deferred action program” will require thousands of bureaucrats, says Newt Gingrich (CNN Opinion 11/21/14).
- Paying Taxes: Illegals who file tax forms and report income below poverty level may collect earned income tax credit for children both in and outside the U.S., costing taxpayers about $4 billion yearly (Canada Free Press 11/26/14).
Gruber: Lies and Glue
Neither Gruber nor his audiences seem to feel any guilt about the lies, observes Michael Peroutka. This is very dangerous because “reliance on truth-telling is the glue that holds a society together.” When the authorities show contempt for truth, respect for lawful authority cannot long survive. Then only despotic force will keep people obeying the law. Obama is transforming America by tearing it apart, Peroutka says.
♦ ♦ ♦
“Political arguments at the level of ideology are seldom won. As Jonathan Swift wrote, ‘it is useless to attempt to reason a man out of something he wasn’t reasoned into.’” —Joseph Epstein, WSJ 11/5/14
Gruberization of Energy Policy
- Dictatorship Applauded: It makes a lot of sense for Obama to take a “dictatorial” approach on climate change, writes reporter Lucia Graves of National Journal. A Democrat-controlled Congress failed to pass the Waxman-Markey energy bill in 2009 (WSJ 6/9/14). Moreover, only 11% of Americans are “very worried” about climate change, and more than half don’t want the EPA to regulate greenhouse gases. “The public is wrong on climate change, as it was on slavery, women’s rights,” says Brentin Mock (Grist 11/21/14), so Obama has to “do the right thing,” just as on immigration and healthcare.
- “Not a Treaty”: In the “historic” Obama-Xi Jinping CO2 emissions (“climate”) pact, Obama traded near-term U.S. security and prosperity for distant promises. There is no chance of getting ratification by a two-thirds majority in the Senate. Christopher Horner explained that Obama is “trying to get a treaty by calling it not a treaty to avoid a loss in the Senate.”
- Cost: Obama is keeping his promise that energy prices would skyrocket. Energy Ventures Analysis estimated $284 billion per year in extra electricity and natural gas costs in 2020, vs. 2012, as a result of the Clean Power Plan.
- Torturing the Law: The entire sweeping EPA power grab, using means rejected by Congress, is based on a short, obscure provision of the 1970 Clean Air Act (Section 111-d), that was never intended to regulate CO2, according to Larry Bell (Newsmax 6/9/14).
Gruber: Abortion Improves the Average
In a 1997 paper, Gruber et al. concluded that the legalization of abortion in the 1970s “altered young adult outcomes through selection…. It increased the likelihood of college graduation, lower rates of welfare use, and lower odds of being a single parent .” Researchers asked: “What are the characteristics of the marginal children who were not born due to abortion legalization?” The average circumstances of their “would-be peers” based on “measures of disadvantage” was better when “marginal children” were selected out, and governments saved $14 billion on welfare between legalization in 1973 and 1994. Gruber also influenced later work that argued that legalized abortion accounted for a decreased crime rate (CNS News.com 11/25/14).
Gruber is also linked to efforts to provide ACA benefits to illegals, despite their generally lower socioeconomic status (ibid.).
AAPS Calendar
Jan 9, 2015. Thrive, Not Just Survive XXI and
Jan 10, 2015. Board of directors meeting, New Orleans, LA.
Oct 1-3, 2015. 72nd annual meeting, St. Louis, MO.
ACTION OF THE MONTH
Thrive Not Just Survive XXI, New Orleans, Jan 9. Help a student attend; nominate one for a scholarship, and/or make a tax-deductible contribution: http://aapsonline.org/scholarships.
IRS Rule on ACA Subsidies Goes to SCOTUS
The U.S. Supreme Court has granted certiorari in the case of King v. Burwell, which challenges the IRS rule that allows ACA subsidies to flow through federally run Exchanges in states that did not establish their own Exchange.
Because of this rule, more than 50 million individuals and employers are subjected to taxes related to the employer mandate, not by act of Congress, but by administrative fiat, writes Michael Cannon (Forbes 9/29/14).
If the Court invalidates the rule, it would block $650 billion in subsidies over 10 years. Insurers have demanded a contingency plan that permits withdrawal from agreements to participate in the federally facilitated marketplaces, subject to state law, if federal subsidies cease to flow. The IRS is currently subsidizing 5 million individuals in 36 states without state Exchanges (Forbes 10/21/14).
In an amicus brief, AAPS argues that even if it is permissible for the IRS to redefine words, the IRS is still prohibited from promulgating the Exchange Regulations without a valid statutory grant of authority from Congress.
AAPS quotes the comment: “it is one thing from Congress to tax a good or service into extinction. It is entirely another for an independent regulatory entity to do so.”
The IRS rule is the “functional equivalent of legislation because it affects the legal rights, duties, and relations of many persons including ‘applicable taxpayers,’ employers, insurance companies, and the state and federal governments,” AAPS argues.
A case filed by the U.S. House of Representatives on Nov 21
(House v. Burwell) claims the president cannot issue “cost-sharing subsidies” in any state, because Congress never appropriated funds for those subsidies. Spending federal dollars not pursuant to a congressional appropriation is a federal crime. This would affect $3 billion in subsidies this year, and $175 billion over the next 10 years. House also claims the president violated the law by unilaterally delaying the employer mandate past the date specified in the statute (Forbes 11/21/14).
IRS Spoliation of Evidence
The IRS targeting scandal involved hundreds of conservative groups and at least five pro-Israel groups. Of the 501(c)(4) groups subjected to audit, 100% were conservative. Lois Lerner did, however, grant tax-exempt status to the Royal Order of Jesters, an underage prostitution ring, and classified its headquarters as a museum. Her “missing” 30,000 emails were discovered right after the mid-term elections.
The frequent disappearance of evidence also affects other agencies, including the EPA and CMS (USA Today 8/29/14).
Given the Department of Justice’s reluctance to appoint a special prosecutor to investigate potential criminal violations, civil litigation may be the only way to pierce the IRS veil of secrecy, writes Thomas Lifson. The “sleeper case” could be Z Street v. Koskinen, brought by a pro-Israel group whose application for a tax exemption was referred to a to a special unit in the D.C. office to determine whether the organization’s activities contradict the Administration’s public policies. The filing of the suit in August 2010 placed the IRS under a legal obligation to affirmatively retain all documents related to the litigation. Failure to do so is “willful spoliation,” an independent, actionable tort. The litigation hold also applied to vetting of organizations for tax-exempt status (American Thinker 6/27/14).
Z Street alleged “viewpoint discrimination,” a violation of the First Amendment. In May 2014, Judge Ketanji Brown Jackson of the D.C. District Court threw out all the government’s defenses, including sovereign immunity, so the case could proceed to discovery. In 4 years the IRS has not filed a single substantive response (Jerusalem Post 6/5/14).
Former Department of Justice attorney Andrew Strelka was suddenly removed from the case when it was revealed that he had previously worked for Lerner.
Collective Ownership and the Law
Can we “sue ourselves over climate change?” asks James Conca. State appellate courts have allowed Atmospheric Trust Litigation lawsuits and administrative petitions brought by students to go forward in several states, and petitions are pending in the Philippines, Ukraine, Uganda, and the Netherlands.
The public trust doctrine is an innovative legal theory holding that: Certain resources are owned by and available to all citizens equally. The atmosphere is an asset in that trust. The government as trustee has a restorative duty, which means not just preventing future damage, but repairing past harms. Courts could rule, for example, that the government must do its best to control the atmosphere, Conca explains.
One precedent is the 2011 Pennsylvania Supreme Court decision (Robinson v. Pennsylvania), which overturned the State’s pro-fracking regulatory statute based on public trust theory (Forbes 11/23/14).
This doctrine allows the judicial branch to override Congress and the executive branch—and all individual property rights.
Alliances to Promote the Perfect Society
Charles van der Horst, M.D., boasts of being arrested for civil disobedience as he protested at the door of the North Carolina Senate chamber over the state’s failure to expand Medicaid.
The rally, he noted, was carefully planned by a coalition of “environmentalists, voting-rights advocates, leaders in reproductive health, educators, workers, and immigrants, all led by the North Carolina NAACP.” He continues to protest, because “as health care providers, we know we have an obligation to protect our patients not only from harmful diseases but from the harmful policies and toxic politics of the current leadership in our state” (NEJM 11/20/14).
Congress Provides False Information to Exchange
In its applications to participate in D.C.’s Small Business Exchange, obtained through a Freedom of Information Act (FOIA) request, the House and Senate each claimed to have fewer than 50 full-time employee equivalents. In fact Congress employs more than 20,000 people, and more than 12,000 members of Congress, staffers, and dependents receive coverage through the Exchange. On behalf of taxpayer Kirby Vining, Judicial Watch filed suit against the executive board of the exchange to stop unlawful use of taxpayer funds.
Correspondence
Insurers Leaving Medicaid Managed-Care Market. Millions of federal and state tax dollars poured into the expansion of Medicaid, yet insurers are choosing to leave the Medicaid managed-care market. Why? Because the “good intentions” trumpeted by socialists don’t pay the bills. Citing losses in excess of $40 million over the past three years, Blue Cross Blue Shield of Western New York announced in July that it would be leaving the Medicaid managed-care market. Other local insurers have admitted to experiencing similar losses. A spokesman for the insurance company stated that: “This really is not driven by the Affordable Care Act.” The massive expansion of Medicaid under ObamaCare, however, could only lead to increased losses by insurers. So, although insurers may desire to remain loyal to ObamaCare, which was supposed to provide them with more customers despite disingenuous statements to the contrary, that loyalty ends when financial losses begin to threaten the financial viability of the company. Insurers who remain in this will likely shift the financial losses to their private product lines, causing further premium increases.
Lawrence R. Huntoon, M.D., Ph.D., Lake View, NY
Medicaid Expansion May Worsen Care. Hundreds of thousands of people who have signed up for Medicaid have waited months to obtain coverage. In California, nearly 160,000 are in the queue. Can states timely process 17 million new applications? And more importantly, where will the new enrollees receive care? According to the 2012 Kaiser Family Foundation Medicare and Medicaid Fee Index, across the country Medicaid payments are 66% of Medicare for all services, and 59% for primary care. Medicaid needs more reforms, not more beneficiaries.
Jason Fodeman, M.D., Tucson, AZ
Medicaid in Disguise. Florida Wellcare repeatedly denied that their Stay-Well product was a Medicaid product, until I persistently interrogated them about a patient’s plan. They also admitted that whenever Wellcare was accepted, the Medicaid part was mandated also. I dropped all Wellcare.
Michael Riesberg, M.D., Pensacola, FL
Gruber Reveals Obama Trick Plays. Most Americans did not know about the built-in insurance-company bail-out in ACA. “Private” insurance plans bought through Exchanges are not private. They are subsidized by government if the bill goes over $45,000. Also, the Risk Corridor program limits overall losses by the insurance industry to 2.4%.
Stanley Feld, M.D., Dallas, TX
Too Honest for Washington. If one believes in the virtue of the noble lie, you have to stick to that lie. You can’t raise your hand and say, “This is why we told you all those things we don’t believe to help get a bunch of people to buy insurance or sign up for Medicaid,” as Jonathan Gruber has been doing for a year, at every event where someone sticks a microphone in his face. Why? Could it be his eight parrots? He has one sitting on his shoulder as he remakes American medicine with an Excel sheet and a PowerPoint deck (Transom 11/14/04).
Benjamin Domenech
Interoperability with Privacy. Sharing health information through a Health Information Exchange (HIE) can be complex, and it may be impossible to delete information. Also HIEs keep going broke and closing. A new technology, Zoeticx, combines records on the fly. When the hospitals or doctors are done, the connection closes and the patient’s medical records never leave their domicile. There’s no HIE at all in this process, and patients are assured their records are not sitting out there on servers somewhere.
Barbara Duck, http://ducknetweb.blogspot.com/
Misleading Cost Comparisons. Comparing U.S. healthcare costs with other OECD (Organization for Economic Cooperation and Development) countries is misleading for reasons of accounting, legal systems, and demographics. The expense of collecting money by taxes, as opposed to premiums, is not attributed to the health system. Every OECD country except the U.S. has some form of a loser-pays tort system. The biggest difference is demographics. Eight percent of Americans, vs. less than 1% of others, are military veterans, who may have expensive medical or psychiatric disease. Minorities make up 30% of Americans, vs. less than 1% of many others. Blacks and Hispanics suffer an up to 50% higher risk of cardiac or metabolic illness. Illegal entrants, many with expensive illnesses, are 10% of the U.S. population, vs. less than 1% of many others. Then there is much more inner-city, drug-related violence in the U.S. (Medical Economics 9/25/14).
Calvin S. Ennis, M.D., Pascagoula, MS
In Defense of the Uninsured. The entire premise of ACA is that every single person must have health insurance coverage at all times. So Congress passed a law requiring people to buy what the elite thinks they should. Given their contemptuous attitude toward the helpless, it is not surprising that the would-be helpers are not getting the response they want. No wonder the elite wants to ban the word “bossy.”
Greg Scandlen, Consumers for Health Care Choices
