Thursday, May 14, 2015
Obamacare: A game of chicken coming up?
By Larry Levitt, writing for the AMA
The game of chicken, which was popularized in the 1950s movie Rebel Without a Cause, has many variants, but the basic design goes like this: players involved in a conflict of some sort try not to yield in the hope that the other player will yield first. But the worst and potentially catastrophic outcome is when no one yields.
After hearing oral arguments on March 4, the US Supreme Court (aka SCOTUS) is deliberating in King v Burwell, a case that has the potential to unleash a massive game of chicken around the Affordable Care Act (ACA).
The case centers (http://bit.ly/1FEWZu4) on circumstances related to premium subsidies under the ACA, which are now available to people with low and moderate incomes in all states. King v Burwell challenges the legality of subsidies in states where the federal government set up an exchange because the state declined to set up its own health insurance marketplace.
The consequences (http://bit.ly/1ERCica)of a decision in favor of the challengers would be swift and severe:
Subsidies would end—likely within a month of a decision, which is expected in late June—for about 7.5 million people who now qualify for them in the 34 states not running their own marketplaces (in the 17 state-based marketplaces, nothing would change and subsidies would continue).
The premiums these 7.5 million people pay for insurance, would rise from an average of $105 (after taking the subsidies into account) to $374 per month, an increase of 256%.
People who are sick and know they need insurance would likely work hard to find a way to keep it, but those who are healthy would likely drop it. The ACA’s individual mandate—which is the stick to get healthy people to enroll, working hand-in-hand with the carrot of the subsidies—would be largely ineffective. That’s because 83% of uninsured individuals who are currently eligible for subsidies would be exempt from the requirement to have coverage because it would be unaffordable without the subsidies.
The result in affected states would be a classic “death spiral.” Premiums would rise, more healthy people would drop their coverage, and that in turn would cause premiums to rise even more. This would destabilize the whole individual market in these states because insurers are required to set premiums within a state based on their entire individual market business, not just people buying through the marketplace.
No one will want to yield in this scenario. But the consequences of no one yielding are indeed dire.
The important thing to understand about the King v Burwell case is that it does not (at least as it’s been argued before the Court) involve the constitutionality of the ACA. Rather, it’s a matter of statutory interpretation: did the Internal Revenue Service have the authority under the law to provide subsidies in all states?
That means with just a few strokes on the keyboard, Congress could clarify that subsidies should be provided to people in state-based and federal marketplaces alike. Such a swerve would avoid a catastrophe quickly and easily. But with many Republicans in Congress adamantly opposed to Obamacare, no one expects such a yield.
Enter the 34 governors and state legislatures that have not set up their own marketplaces under the ACA. If they were to yield and create state-based marketplaces, they would render moot a possible Supreme Court ruling against subsidies in states without their own exchange. To be sure, there would be strong pressure on states to take this route. Many of their residents would lose insurance if they don’t, and they would be turning their backs on about $2 billion in federal aid (http://bit.ly/1BzrP11) each month. And they would avert a destabilization of their individual insurance market.
Some states have indicated they are considering this route (http://wapo.st/1E0fGrr) However, others have said they will not participate (http://reut.rs/1vB3FSs) in the implementation of Obamacare, which remains a controversial law.
There are also substantial logistical challenges involved in creating a marketplace quickly, even for those states that want to do so. The current state-based marketplaces took years to set up, and they benefited from federal start-up grants that no longer exist. The federal government would likely make it as easy as possible within legal constraints for states to qualify, including making healthcare.gov available as an enrollment and eligibility system, much as they have done for Oregon, Nevada, and New Mexico (http://bit.ly/1935uCu). But state-based marketplaces still couldn’t spring up in time, unless the Court issued a stay—which legal experts consider unlikely (http://bit.ly/19AKxzM)—or Congress temporarily extended the subsidies (http://on.wsj.com/1FC9Opo).
A temporary extension of the subsidies would also give Congress time to consider tweaks to the ACA that it might enact in exchange for continuing subsidies permanently, or more far-reaching replacement plans (as have been floated recently by Republican leaders in the Senate (http://wapo.st/1GEv7Fq) and House [http://on.wsj.com/1EIJIAp]).
If Congress musters the votes for one of these alternative strategies, it will be up to President Obama to decide whether to allow potentially significant changes to his signature domestic achievement or keep driving straight ahead in the hopes that Congress or the states yield.
The justices will be deliberating over the next several months, with a decision expected the end of June. In the meantime, outside the courthouse, all the interested parties undoubtedly will be working to frame what a court ruling would mean and who is to blame for the consequences, trying to get someone else to swerve away first. Given the unpredictability of how this might play out, we probably won’t know who (if anyone) is going to yield until they do it.
Are State ACA Exchanges Breaking the Law Just to Keep Afloat?
The 16 states with ObamaCare exchanges have each had access to hundreds of millions of dollars in grant money from the federal government to help establish a successful marketplace. And yet, many are finding themselves struggling with high deficits and low enrollment.
This has led the Inspector General of the Department of Health and Human Services (HHS) to issue a warning that states may be using the federal grant money illegally. Section 1311 of the Affordable Care Act not only requires state exchanges to be financially self-sustaining this year, but it also prohibits states from covering any operational expenses with the federal grant money. But since states are facing such dismal financial conditions, the Inspector General suspects that some states have no other alternatives to keep their exchanges afloat.
California, for example, received a whopping $1 billion in “Exchange Establishment Grants,” but still faces a huge deficit and low enrollment. In total, states with an exchange received $3.9 billion in these grants for the sole purpose of achieving self-sufficiency, but at least half of them are facing severe financial conditions.
In other words, it’s clear that some states will violate the law by failing to become self-sufficient this year. It’s also likely that many of them are currently violating the law by using federal grant money in order to keep their operations funded.
Given these facts, none of the 34 states currently using a federal marketplace should even consider setting up their own. After all, the law prohibits federal grants from being made available to states after January 1, 2015. So, whereas the other states had access to $3.9 billion in federal establishment grants just to get their flimsy marketplaces off the ground, these new states would have to do so with virtually nothing from Washington DC.
And yet, there are already people urging states to set up an exchange if King v. Burwell strikes down federal subsidies to enrollees in federal exchanges. They argue that these subsidies are essential for individuals and that the only way to keep them is for states to have their own exchange.
These arguments totally overlook the fact that state exchanges are likely resorting to illegal methods (knowingly or not) just to fund their exchange’s everyday operations. In other words, setting up an exchange hasn’t exactly been the stroll in the park that these proponents like to convey. For instance, Oregon's exchange was so terrible that they passed legislation to get rid of it, and several other states appear to be on the same exact path.
The best way to fix ObamaCare is to repeal it outright. If King v. Burwell results in more states establishing an exchange, then outright repeal will become virtually impossible.
Liberal Gun Control Ruins Another Life
I want to introduce you to Steffon Lamont Josey. He is a 24-year old New Jersey resident who aspires to become a police officer. He has excellent test scores that would easily qualify him to become a police officer and he is man of excellent character.
But on one fateful day two years ago, his future completely changed.
Steffon is owns a legal handgun. On September 30, 2013, he was checking his handgun in the garage when his younger sister surprised him. He instinctively put the pistol in his glove compartment so she wouldn’t see it. He always tried to keep the gun out of sight and locked away from his younger sister.
Later that day, he was driving to meet his fiancée and was pulled over by a police officer. When Josey reached to get his insurance and registration cards, he remembered: The handgun was still in the glove compartment.
In most states in the country, this wouldn’t be a huge problem. Yes, it is overall a bad idea to have a gun in the glove compartment and some states do have laws forbidding it. The last thing you want is for a police officer to see you reaching for a gun.
But in most states, it is completely legal for trained and qualified people to carry a loaded gun in the car.
At first, the police officer simply confiscated the weapon and issued Josey a summons. But when the young man went to the police station to pick up his gun, he had handcuffs slapped on his wrists. He was able to plead the charges down but Steffon Lamont Josey is still a felon and still barred from becoming a police officer. His life is ruined unless Chris Christie pardons him.
The Second Amendment is a crime in New Jersey, just like it is a crime in other liberal states.
This young man had a bright future ahead of him and because of one mistake, he is going to be a felon for the rest of his life. It’s time to put a stop to this madness. The Founders wrote that the right to “keep and bear arms shall not be infringed” and yet we continue to allow these liberal state legislatures to infringe on this fundamental right!
It may have taken 223 years, but in 2010, the Supreme Court ruled in McDonald v. Chicago that the Second Amendment applies to local and state governments just as much as the Federal government.
Yet today, more than 26.15% of all Americans live under a state regime that prohibits them from bearing arms for self-defense.
Imagine if we were talking about another Constitutional right. What do you think the reaction would be if 26% of Americans weren’t allowed to freely worship or were denied a trial by jury?
We would be up in arms. Yet when it comes to the Second Amendment, we have sat by and allowed liberal state legislators to pick away at it little by little until there’s nothing left.
New Jersey’s gun control laws resemble Nazi Germany more than they resemble Free America.
A predatory Federal bureaucracy in YOUR America
Federal agents stole $16,000 from a kid on his way to Los Angeles to make a music video
Joseph Rivers is a 22-year-old who has a dream of making a music video. With help from his supportive family, he persevered and saved, raising $16,000 in cash to leave his hometown in Michigan for Los Angeles to see his dream become reality.
Rivers' dream came crashing down on April 15 when federal agents seized the $16,000 based on the mere suspicion that it was connected to drug activity. Agents with the Drug Enforcement Administration (DEA) boarded the Amtrak train in Albuquerque, New Mexico and began quizzing passengers about their travel. Believing he had nothing to hide, Rivers, an African-American, answered their questions and consented to a search. Agents found the cash and seized it. Rivers tried to tell the agents his story, but his words fell on deaf ears.
"I even allowed him to call my mother, a military veteran and [hospital] coordinator, to corroborate my story," Rivers told the Albuquerque Journal. "Even with all of this, the officers decided to take my money because he stated that he believed that the money was involved in some type of narcotic activity."
Not only was his dream of making a music video destroyed by these overzealous DEA agents, the seizure of the cash left Rivers without any money to survive once he reached Los Angeles. "I told [the DEA agents] I had no money and no means to survive in Los Angeles if they took my money," said Rivers. "They informed me that it was my responsibility to figure out how I was going to do that."
Rivers was not arrested, he was never even charged with a crime. But in the eyes of the DEA agents, his money was connected to illicit activity. Although New Mexico recently banned civil asset forfeiture, requiring a criminal conviction before property can be subject to forfeiture proceedings, the law applies only to state and local law enforcement. The DEA is a federal agency, and it operates under federal civil asset forfeiture laws, a form of government overreach that often deprives innocent people of their property or cash.
The "presumption of innocence" is a bedrock principle of the American legal system. The government must prove beyond a reasonable doubt that an individual is guilty of a crime before meting out a punishment. This principle is reversed in civil asset forfeiture proceedings, property and cash accused of connection to a crime are presumed guilty. federal government need only meet a low standard of evidence, preponderance of the evidence. The property owner, however, must prove that the seized items are innocent to get them back. This involves a lengthy and costly legal fight from which most walk away, often allowing the government to keep a large portion of the cash as long as they can get a portion back.
Although he was defending seizures without a criminal conviction, an Albuquerque-based DEA official confirmed this perversion of the justice system. "We don’t have to prove that the person is guilty," he told the Albuquerque Journal in defense of the seizure. "It’s that the money is presumed to be guilty."
The Fifth Amendment guarantees that "[n]o person...be deprived of life, liberty, or property, without due process of law," but civil asset forfeiture violates this basic constitutional principle.
Rivers' lawyer, Michael Pancer, believes the actions of these overzealous law enforcement agents are predatory. "They have made a practice of doing searches without probable cause, convincing innocent people to give them consent [to search their bags],” Pancer told the ABQ Free Press. "If there is a fair amount of cash they seize it and wait to see what the person who lost it does. Some individuals they’ve taken money from are not acquainted with the legal system and they don’t know that they can try to get the money back."
Rivers' situation may not be an isolated incident for the DEA in Albuquerque. The ABQ Free Press reports that the DEA has seized nearly $1 million from Amtrak passengers over two years.
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Posted by JR at 12:35 AM