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Sunday, April 11, 2010

Fraud Begets Fraud in ObamaCare Land

Health and Human Services Secretary Kathleen Sebelius has issued a fraud alert - apparently, the passing of ObamaCare has unleashed a torrent of miscreants peddling fake insurance policies. The Associated Press reports:
After Obama signed the law March 23, a proliferation of scams involving bogus health-insurance policies has been reported. Some hustlers are going door-to-door, claiming there's a limited open-enrollment period to buy health insurance now. Not so. Moreover, even after new marketplaces open for business in 2014, door-to-door salespeople are unlikely to be part of the outreach. Scam artists also have set up toll-free lines.
Secretary Sebelius has gall indeed to issue a fraud warning - the entire ObamaCare edifice is itself a fraud, perpetrated on the American people by a duplicitous governing class. Almost nothing that the administration has promised about the health bill is true. To take but a few glaring examples:

The Claim - ObamaCare will reduce the deficit. The President even hailed his bill as "the most significant step" toward deficit reduction in years."

The Truth - Administration officials and Congressional leaders were given cover for this ruse by the Congressional Budget Office (CBO), which estimated that the bill as written would reduce the deficit by over $100 billion for the first decade.

However, that estimate assumes that cost control provisions, such as the nearly half a trillion in Medicare cuts, will actually materialize - which hardly anyone believes. As former CBO director Douglas Holtz-Eakin writes in the New York Times, the CBO "is required to take written legislation at face value and not second-guess the plausibility of what it is handed. So fantasy in, fantasy out." Holtz-Eakin concludes that "if you strip out all the gimmicks and budgetary games [from the health care bill] and rework the calculus, a wholly different picture emerges: The health care reform legislation would raise, not lower, federal deficits, by $562 billion."

The Claim - ObamaCare will "bend the cost curve down," reducing health spending in the United States and saving us money.

The Truth - Oops. Obama's own Medicare actuary Richard Foster warned that ObamaCare would bend the cost curve up, increasing health spending nationally by $222 billion over ten years.

The Claim - ObamaCare will reduce health insurance premiums.

The Truth - By what economic logic does flooding the insurance pool with a new wave of sick individuals who cannot be turned away lower insurance premiums? Fantastical logic, of course. As the Associated Press recently reported, according to their analysis, under the new health care regime: "Beginning in 2014, most Americans will be required to buy insurance or pay a tax penalty. That's when premiums for young adults seeking coverage on the individual market would likely climb by 17 percent on average." The effect? "The higher costs will pinch many people in their 20s and early 30s who are struggling to start or advance their careers with the highest unemployment rate in 26 years." You don't say. Larry Levitt of the Kaiser Family Foundation concurs, saying that under ObamaCare, "There's no question premiums are still going to keep going up...it would be miraculous if premiums actually went down relative to where they are today."

In addition to serial and flagrantly false fiscal promises, the very method of ObamaCare's passing - bribery and backroom deals with lobbyists and special interest groups - undermines the administration's moral authority to chastise alleged health insurance hucksters. Politico helpfully lists some of the more flagrant carve outs made during the year-long health care negotiations with key interest groups:
PhRMA, the drug industry's powerful Washington lobbying group, cut a $90 billion deal with the White House and Senate Democrats. The AHA and the hospital industry cut a $155 billion deal with Democrats to help pay for reform. The union AFSCME successfully lobbied the White House to soften the tax on high-end insurance plans.
No wonder Secretary Sebelius is angry at con artists who are selling phony health insurance plans based on false promises - clearly, she feels, that's the job of the Obama administration.

This post was written by Matt Patterson, policy analyst at the National Center for Public Policy Research.

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Posted by Matt Patterson at 12:02 AM

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