Trump Administration Wins Key Obamacare Lawsuit

Federal appeals court rules that insurers aren’t entitled to risk corridor subsidies.

A federal appeals court has handed the Trump administration a major victory by ruling against an insurance company whose lawyers claimed the taxpayers owed it $214 million in Obamacare subsidies. Moda Health Plan had sued the government, claiming that it was owed the money pursuant to the law’s “risk corridor” program. The Trump administration argued that it couldn’t legally disperse the funds because doing so would have violated an explicit congressional requirement that this particular subsidy program remain budget neutral. A three-judge panel of the U.S. Court of Appeals for the Federal Circuit agreed with the Trump administration.

Yesterday’s appeals court ruling reversed a summary judgment handed down by Judge Thomas C. Wheeler of the U.S. Court of Federal Claims wherein he ordered the government to reimburse Moda for losses it incurred on coverage sold via Obamacare exchanges. That Wheeler’s ruling was reversed shouldn’t be surprising, however. He was the only judge to find for the plaintiffs in any of several risk corridor lawsuits — and for good reason. Article I of the Constitution is not ambiguous about which branch of our government is authorized to appropriate funds from the U.S. Treasury. Judge Wheeler evidently skipped the high school class where the rest of us learned these things:

There is no genuine dispute that the Government is liable to Moda. Whether under statute or contract, the Court finds that the Government made a promise in the risk corridors program that it has yet to fulfill. Today, the Court directs the Government to fulfill that promise. After all, “to say to [Moda], ‘The joke is on you. You shouldn’t have trusted us,’ is hardly worthy of our great government.

The problem with Judge Wheeler’s “reasoning” is, of course, that it wasn’t the government that made the promise involving the risk corridors program. It was the Obama administration and its congressional accomplices. Insurers were told that this subsidy program would force insurers enjoying big profits via Obamacare to pay into a pool from which less profitable plans would be subsidized. It evidently never occurred to the people who run Moda that their competitors would also lose their shirts and find themselves unable to pay into the pool. But this is exactly what happened. The amount paid into the fund was a mere fraction of the reimbursement claims.

In late 2015 the Centers for Medicare & Medicaid Services (CMS) announced that profitable insurers had paid in a mere $362 million while their far more numerous unprofitable counterparts had requested $2.87 billion to cover their losses. In other words, more insurers lost their bets on Obamacare than won. And the latter, having been gullible enough to believe the promises of the Democrats, expected the taxpayers to fund their stupidity. But Congress passed, and former President Obama signed, a bill requiring the risk corridors to remain budget neutral. Consequently, losers like Moda Health Plan were able to recover only 12.6 percent of their Obamacare losses.

But the problem here isn’t the legislation that imposed budget neutrality on the risk corridor program. It is that Obamacare was so poorly designed that insurers were doomed from the moment they bet on it. The authors of the law provided no source of reimbursement beyond the “excess funds” contributed by “highly profitable” carriers. When the excess funds failed to materialize, the insurers sued. Health Republic filed a class action lawsuit against the government for $5 billion, Highmark Health sued for $223 million, Blue Cross & Blue Shield of North Carolina filed a $129 million lawsuit, Land of Lincoln Health sued for $70 million, and Moda Health filed its suit.

This by no means exhausts the list of insurers who want the taxpayers to bail them out, which is why yesterday’s decision is so important. The ruling will set a precedent for the other pending cases. Although Moda and the insurers listed above made a half-hearted statutory argument for full payment of the risk corridor “obligations,” the real foundation upon which they built their case was the claim that the congressional rider requiring the risk corridor to be budget neutral didn’t relieve the government of its duty to pay the subsidies. They claimed that the program created an implied-in-fact contract requiring full payment. The Appeals Court rejected that argument out of hand:

Moda asserts an independent claim for breach of an implied-in-fact contract that purportedly promised payments of the full amount indicated by the statutory formula in exchange for participation in the exchanges.… Here, no statement by the government evinced an intention to form a contract.… Accordingly, Moda cannot state a contract claim.

The reality is that, like most of the arguments made in court by attorneys burdened with the unenviable task of defending Obamacare, the statutory and implied contract claims of Moda’s lawyers were post hoc confections meant to appeal to the liberal palate of Judge Wheeler. There was never any chance that an honest Appeals Court would swallow such muck. That doesn’t necessarily mean we’ve seen the last of Moda Health Plan v. United States. The insurance company may seek an en banc review, or even petition SCOTUS. But it’s unlikely that either will bite. Rack up another Trump win. This winning thing is starting to become a habit.

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Trump Is Reorganizing The Federal Government And Interior Secretary Zinke Loves It

President Donald Trump signed an executive order Thursday to reorganize the federal government, a welcome move for Secretary of the Interior Ryan Zinke as he attempts to restructure the Department of the Interior (DOI).

Trump’s order directs the Office of Management and Budget to suggest ways to consolidate the federal government, streamlining agencies and repositioning some under departments more closely aligned with each agency’s responsibilities, according to a White House statement.

“President Trump is a businessman who knows that an effective operation needs to be organized for success, which is exactly why he is leading this commonsense reorganization of the executive branch,” Zinke said in a statement commending Trump’s move. “By merging agencies that handle similar, if not the same, functions we would be able to greatly improve services to the American people and better protect the land and wildlife under our care.”

Zinke is currently making plans to reorganize his own department, but those plans have been complicated by agencies that he has no control over.

For example, the National Marine Fisheries Service (NMFS) regulates many areas in tandem with the DOI agencies in rivers and lakes but falls under the National Oceanic and Atmospheric Administration.

The U.S. Forest Service (USFS), under the Department of Agriculture, governs millions of acres that cross over DOI-managed lands or habitats.

Zinke’s plans involve a massive reorganization that sets DOI agencies in charge of areas of the U.S. rather than breaking down responsibilities by habitat or animal.

He can only go so far streamlining responsibilities, however, without help from the White House. Trump’s reorganization of the executive branch could fix many of those issues.

“At Interior, we are leading the government reform and modernization by consolidating dozens of regional bureau boundaries into twelve common unified boundaries — down from 61 for the nine bureaus — and pushing more assets and decision-making out into the field,” Zinke said.

Some of the moves suggested involving both the NMFS and USFS, as well as the Army Corps of Engineers, which falls under the direction of the Department of Defense.

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An Apology to David Horowitz: He Was Right about Bill Kristol

SPENGLER

The odious Bill Kristol tweeted today, "Obviously strongly prefer normal democratic and constitutional politics. But if it comes to it, prefer the deep state to the Trump state." For those who are not aware of the term "deep state," it refers to the secret services in a dictatorship who overthrow governments, manipulate the press, and otherwise eliminate opponents. I first heard the term in reference to Turkey, whose military and intelligence services overthrew governments they didn't like with depressing regularity during the postwar period. To speak of a "deep state" in an American context is to say that the United States is turning into a banana republic.

This is no joking matter. I am confident that President Trump and the tough guys in his cabinet will root out the saboteurs, leakers, manipulators, and liars who infest the intelligence services and who conspire with the liberal media to invent fake-news charges against a duly elected administration. But the danger is real, and the fact that the intelligence community is playing games with domestic politics is a danger to our liberties.


Last May 15, the perspicacious David Horowitz denounced Kristol in Breitbart as a "renegade Jew." Of course, the headline was employed later to show that Breitbart was anti-Semitic--even though Horowitz was arguing that Kristol had betrayed critical Jewish interests. I responded with a note in this space to the effect that Kristol wasn't a "renegade Jew," just a sore loser throwing a tantrum. It was "churlish," I said, to attack a man's religion in that way.

'Renegade Jew'? No, Just Wrong About Everything
Horowitz was right and I was wrong, and I herewith offer him my apology.

Kristol is a renegade Jew, and an apologist for anti-Constitutional, illegal manipulation by America's self-designated "deep state." His hatred for Donald Trump has unhinged him. Decent people should cross the street to avoid walking too close to him.

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Chain Migration Turned This Small Penn. Town of 25,000 Upside Down

With the sudden interest of the national media in the families-separated-at-border storyline, the American immigration narrative is currently wound up in what’s happening to children caught crossing illegally with their families on the southern border.

But a look at a town in northeastern Pennsylvania, where immigrant families staying together have completely overhauled the population and atmosphere might have more lessons for country in the long term.

And they don’t paint the rosy picture immigration activists are trying to sell the American public.

During the 2016 campaign, Hazleton, Pennsylvania, and surrounding Luzerne County were occasionally in the national news because of the power of immigration as an issue. In October, The New York Times analyzed the area under the headline: “In a City Built by Immigrants, Immigration Is the Defining Issue.”

After Donald Trump’s unlikely victory in November, Newsweek published a December piece headlined, “Why did Donald Trump win? Just Visit Luzerne County, Pennsylvania.”

The premise still holds.

A lengthy piece published last week by the City Journal, a quarterly magazine of the conservative Manhattan Institute for Policy Research, is headlined “Chain Migration Comes to Hazleton.”

It describes how in less than 20 years – barely the space of a generation – a town with a population of 25,000 has “been radically transformed since the early 2000s by secondary chain migration, principally driven by Dominicans — immigrants, both legal and illegal, as well as second- and third-generation citizens arriving from the New York metropolitan area.”

The numbers tell the story:

In 2000, Hispanics made up less than 5 percent of Hazleton’s population; they now account for more than 50 percent. Such rapid and dramatic demographic shifts are rare in U.S. cities. For Hazleton, the consequences have been profound, and the city is struggling to cope.”

That might be something of an understatement.

The changing demographics have changed the physical appearance of the Luzerne County town, which was incorporated as a borough in 1857 and became a city in 1891.

City Journal reported:

  Vinyl banners with loud graphics soon came to dominate the facades of sober nineteenth-century retail buildings. Pentecostal and evangelical congregations now fill former Catholic and Protestant churches. Blocks of duplex homes, uniformly encased with aluminum siding, crowd with families living in Section 8 housing or in subdivided rental units.

The public school system has been radically altered:

  In 2007, the district was 28 percent Hispanic and 69 percent non-Hispanic white. As of 2014, the district was 45 percent Hispanic and 51 percent non-Hispanic white… But Hazleton’s budget can’t keep pace with all the new arrivals, many of whom need special services. A district that had need for only one ESL teacher in the 1990s, for example, now has 2,298 English-language learners, nearly 20 percent of its student body; more than half the student body today live in low-income households. By 2017, the school district—encompassing over 250 square miles of southern Luzerne County, northern Schuylkill County, and western Carbon County—faced a $6 million deficit, in part driven by the demographic change.

And then there’s crime. As the City Journal reported, the town’s location near the intersection of Interstates 80 and 81 makes it an “ideal location” for cocaine and heroin operations run by drug rings dominated by immigrants from the Dominican Republic or their families.

When the town eventually tried to take action, it ended up on the losing end of a court case that went all the way to the Supreme Court (and also made Hazleton a national headline name for a time).

As the City Journal reported:

  For many Hazletonians, the city reached a grim tipping point in 2006, when two illegal immigrants from the Dominican Republic were charged with murdering a 29-year-old father of three. The killing shocked the community. Hazleton’s then-mayor, Lou Barletta, responded by introducing an ordinance, soon passed by the city council: the Illegal Immigration Relief Act, which fined and penalized employers and landlords for hiring and renting to illegal immigrants. The ACLU challenged the act, and the fight went to the Supreme Court. In 2014, the Court declined to review two federal appellate decisions that struck down the measure. The following year, a U.S. district court judge ruled that Hazleton had to pay $1.4 million to the attorneys who had sued the city over the act. The judge’s order was devastating for a cash-strapped city struggling to provide adequate services to its growing Hispanic population.

None of that is good news for the Democrat Party, or activists on the side of unchecked immigration.

And there’s a reason: Donald Trump won Luzerne County with 77 percent of the vote, according to the City Journal.

However, Hazleton shouldn’t be seen as an example of why immigration should be opposed as a rule. One thing the liberals are right about is that immigrants have always played a key part of building the United States.

What Hazleton does show is the danger of unchecked immigration, based solely or even largely on the “chain” of relations to those immigrants who are accepted into the country.

America should be a nation that welcomes immigrants who are willing to assimilate into the country as a whole, not bunker themselves in ethnic enclaves for generations.

While liberals try to stage a tear-jerking soap opera about separating families in the Southwest part of the country, it might behoove the rest of us to look at a town in northeastern Pennsylvania for a bit, like Fox News host Tucker Carlson did in March.

Unchecked, chain immigration is not always a pretty picture.

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