Relevance

Some of you may recall that the Supreme Court is due to issue its ruling on the Obamacare case of whether the Federal government is allowed to pay health coverage plan premium subsidies to citizens who bought their health plans through ObamaMart instead of State-built and –run exchanges.

Health and Human Services Secretary Sylvia Mathews Burwell on Thursday defended the landmark 2010 US health law as sharply lowering the rate of uninsured Americans, improving health-care quality and making it more affordable.

The Wall Street Journal paraphrased her additional remarks:

Directly addressing the possibility that the US Supreme Court later this month will overturn a central provision of the law, she said such an event would mean “the number of uninsured would jump,” that “affordability goes away” and that a “death spiral” would ensue in the health insurance systems in some three dozen states.

Never mind that the law is quite explicit: it authorizes the subsidies only for those who bought their plans through exchanges established by the States and not through the Federal government’s ObamaMart. Obamacare also is completely silent about costs if the subsidies are, in fact, limited those State exchanges’ plans.

Burwell’s argument is a typical Democratic Party aargument: it’s a good idea, therefore ignore the law, do what we want.

It may be a good idea. If it is, change the law. In the meantime, do what the law says, not what you wish it to say. William Howard Taft, an earlier Chief Justice, had this to say on doing the “right” thing rather than obeying the law:

It is the high duty and function of this court…to decline to recognize or enforce seeming laws of Congress, dealing with subjects not entrusted to Congress, but left or committed by the supreme law of the land to the control of the States. We cannot avoid the duty even though it require us to refuse to give effect to legislation designed to promote the highest good. The good sought in unconstitutional legislation is an insidious feature because it leads citizens and legislators of good purpose to promote it without thought of the serious breach it will make in the ark of our covenant or the harm which will come from breaking down recognized standards.

Taft wrote that in finding a law unconstitutional, but it applies just as clearly to any regulation or procedure purported to be on the highest grounds but that contradicts a law.

I hope today’s Supremes still understand this and don’t fall for the irrelevant blandishments.

Update: An earlier iteration of this post said that Taft had found a law unconditional; in fact he had found unconstitutional.  A sharp-eyed reader caught that.

All the more Reason

…to speed reform of the way in which our economy produces medical care services and in which we pay for them.

[A] 66-year-old couple retiring this year with average Social Security benefits can expect medical costs to consume 67% of the Social Security they will receive in retirement.

A 55-year-old couple who plan to retire in 10 years can expect to devote about 90% of their lifetime Social Security benefits to healthcare costs.

There’s more:

Social Security benefits typically grow by approximately 2% a year—the overall rate of inflation. But medical costs in general tend to rise by more, 5% to 7% a year[.]

There’s this graph, too, that illustrate cost change trends since 1960:HealthCostTrends

Since Obamacare was enacted and has started to take effect (since 2010), the then-eight-year-old trend of decreasing costs has been completely stopped. That’s the effect of government intervention into a free market.

If we’re to correct this, if we’re actually to hold down, not just the rise in costs, but the actual costs themselves, we need to get government out of the way and use free market solutions: get rid of the health welfare that is Obamacare, allow insurance companies—which would sell true insurance policies—to charge premiums based on the actual risk transferred from customer to company, and allow insurance policies to be sold across state lines—that is nationwide.

All government intervention succeeds in doing is preventing competition and market forces from reducing and then holding down costs. Which hits hardest the very people these government programs are claimed to help.

Costs of Obamacare

The Washington Health Benefit Exchange…has enrolled 160,000 paying customers in ObamaCare exchange health plans but that’s more than 50,000 short of goal, which has led to an extension of the enrollment deadline and a request that the Washington State Legislature fork over $125 million to fund the exchange.

There’s a hint there.

Republicans are angry because they were told the exchange would be self-sufficient by the end of this year.

Leading Democrats were also skeptical. They were expecting a much lower subsidy as the exchange bridges from federal seed money to being able to fund itself through premium taxes and fees paid by insurance companies and customers.

There’s a hint there, too.

And

New York’s governor wants a $69 million tax on non-exchange health insurance policies while Vermont has projected a $20 million shortfall by the end of 2015. There also is a bill in Rhode Island to scrap the state exchange and go with the federal exchange to avoid a $24 million hit to taxpayers.

Wait—is there a pattern emerging?

Off Ramps

That’s the cool, new buzz phrase. Congressmen John Kline (R, MN), Paul Ryan (R, WI), and Fred Upton (R, MI), Chairmen of the House Education and Workforce Committee, Ways and Means Committee, and Energy and Commerce Committee, respectively, used it Monday in The Wall Street Journal to propose alternatives to Obamacare should the Supreme Court strike down Federal subsidies related to health care coverage plans bought through ObamaMart rather than through the State exchanges that the Obamacare law requires for Federal subsidy eligibility.

In the main, their alternatives are good ones, but there are a couple points with which I wholeheartedly disagree, and it’s disappointing that three men who know better would propose them.

We would allow parents to keep children on their plan until age 26.

That’s fine, but 26-year-olds aren’t children; they’re grown adults. They stopped being children at 18, or 20, or 21 depending on the jurisdiction. They stopped being children when they became eligible to make their own binding decisions on legal documents. Retaining sons and daughters on parents’ plans should be a matter of negotiation between the plan seller and buyer; government shouldn’t be involved in magnanimously granting permission—which carries with it the authority to rescind that permission later.

We would prohibit insurers from imposing lifetime limits on benefits.

This is especially disappointing. This, too, should be a matter of negotiation between the involved parties. Mandating an expense to the company, which this plainly does, forces a cost on the customer. There is a greater cost for paying out over an indefinite lifetime than there is for paying out over a known and fixed interval. Denying the company the option to offer either forces the company to pass on the greater cost to the customer, whether the customer wants that much coverage or not. It’s also an unacceptable denial of market choice to the customer.

[W]e would offer those in the affected states a tax credit to buy insurance.

This comes from the false premise that government should be the default source of welfare, and not the last resort. From that, it jumps the gun: the magnitude of the need is not at all established, especially given the initial fluid market environment that would be created were the competition across state lines part discussed in their op-ed actually passed. Only after private sources of aid have been exhausted, in that stabilized environment of lower basic cost for health plans, should government aid become available. (It’ll also be interesting to see how these guys propose to pay for these tax credits, but perhaps that’s for a later op-ed.)

One More Nail

…in what should be Obamacare’s coffin. Even if repeal will take some years and a Republican President.

More than half of tax filers who received subsidies for health insurance premiums may owe hundreds of dollars because they got tax credits that were too large, complicating an already messy tax season that has seen about 800,000 incorrect tax statements sent to consumers who obtained coverage via the federal HealthCare.gov exchange.

Almost six weeks into tax filing season, 52% of people who enrolled in insurance through state or federal exchanges are finding they must pay back a portion of their tax credits, according to a report Tuesday by tax preparation firm H&R Block Inc. and based on their clients. The average amount paid back is $530….

This isn’t even a sort-of funny parody, anymore.