When Obama was president, we all shouted with one voice that it was unconstitutional to issue the “cost-sharing” insurance bailout funds without an appropriation from Congress. Yet, much as with the Iran deal and Obama’s amnesty, the Trump administration has once again continued an illegal policy of his predecessor, shelling out the cost-sharing subsidies for the insurance racket even though it is not only bad policy, it’s unconstitutional.
The bailout for insurance companies
Administration officials confirmed with Axios on Wednesday that they will continue paying the ransom to insurance companies known as cost-sharing subsidies. Thanks to the government-created monopoly for the few remaining insurers, along with the crushing regulations, the Obamacare consumer subsidies for premiums are not enough to sugar-coat the price inflation on health insurance plans. And in fact, those subsidies have themselves inflated the cost of the plans. Thus, the Obama administration reimbursed insurers for discounting co-payments and deductibles for low-income enrollees who earn below 250 percent of the poverty line.
The CBO projects that under current policy, this illegal program will cost $130 billion over 10 years. Never mind that UnitedHealth Group, the nation’s largest insurer, saw its profits increase 34 percent in the second quarter of this year.
The problem with this program, aside from inflating prices even further on those who are not subsidized, is that Congress never appropriated any money for such a program. In fact, this act of the Obama administration was so unconstitutional that even the courts gave Republicans a rare victory against the payments in federal court. Judge Rosemary Collyer sided with House Republicans in asserting that the cost-sharing subsidies were appropriated without consent of Congress. But the Trump administration is now overturning one of the few victories we secured in the judiciary.
There is a very profound lesson in health care economics to be learned from this. The insurance companies will always have a seat at the government table, and even if we successfully repealed Obamacare’s regulations and subsidies, they will always have the ability to extort the politicians into giving them more money or face the threat of higher prices. This is why I have proposed a free market health care plan to end-around the insurance cartel by directly addressing the cost of health care and promoting private sharing associations on an equal footing with insurance.
The reality is that government has tilted the entire playing field of health care towards medical insurance companies for over 60 years. The $275 billion tax exclusion for employers to offer pre-tax health insurance was Obamacare before Obamacare. Much as with the ethanol cartel, without this form of preferential treatment from government, insurance companies would never have been able to inflate the price of health care and twist the concept of insurance.
Even if we fail to repeal Obamacare, we should expand the exemption for cost-sharing associations to compete with insurance in a free market. Employers should be given the same tax benefits for offering to pay sharing premiums for their employee’s sharing associations as for traditional “insurance.”
Republicans ran on the promise to end Obamacare and end bailouts; now they are promoting both. If we are going to unconstitutionally spend money for parochial favors, why not hand the same cash to consumer HSAs or health-sharing ministries? The insurance companies lobbied for the very Obamacare regulations that engendered a need for subsidies; now it’s time to let them reap what they sowed and circumvent the need for corporate insurance altogether.
The bailout for Congress
It’s also troubling that the Trump administration used executive powers to bail out insurers but will not use his lawful executive power to end Obama’s order exempting members of Congress from paying the full Obamacare freight.
Under Section 1312(d)(3)(D) of Obamacare, members of Congress were no longer eligible for health subsidies through the Federal Employee Health Benefit Program. They were required, like every other resident of D.C., to purchase a plan on the exchange. And given that their income level is well above the subsidy line, they would have had to pay the full inflated price like the rest of us poor losers. Yet, in 2013, Obama’s Office of Personnel Management (OPM) wrote a rule treating Congress like a small business with less than 50 employees, which, under the D.C. Small Business Exchange, would be eligible for subsidies.
The irony of Congress and its employees being designated as a small business was brought out by the fact that, in 2014, all but 500 of the 12,907 people signed up in the D.C. Small Business Exchange were … from Congress! Subsequently, documents were uncovered via a Judicial Watch FOIA showing that members of Congress falsified applications by stating that the House had only 45 members and 45 staffers, while the Senate had only 45 employees total.
Consequently, while some of us are paying $15,000 a year for a $13,100 deductible, with the prices slated to skyrocket in November, members of Congress are shielded from much of the pain because up to 70 percent of their premiums can be covered.
Congressman Ron DeSantis, R-Fla., has been calling upon the president since January to repeal this exemption. So far … crickets.
Where is the leadership, Mr. President?
Daniel Horowitz is a senior editor of Conservative Review. Follow him on Twitter @RMConservative.