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Obama’s Senior Swindle

May 7, 2012, Vol. 17, No. 32 • By JEFFREY H. ANDERSON
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The most politically brazen feature of Obamacare has always been its looting of Medicare. About half of Obamacare’s costs are to be covered with money taken from an already nearly bankrupt program for seniors. And the most politically perilous aspect of this ploy is Obama-care’s cuts in Medicare Advantage funding, which would cause many seniors to lose their preferred health plans. Under the implementation schedule stipulated in Obamacare, many seniors would either lose their plans, or learn that they are going to lose them, before the election that will likely decide Obamacare’s—and Obama’s—fate. 

Cartoon of a snake wrapped around a doctor's symbol


Anticipating a senior revolt, the administration took action. It ran millions of dollars’ worth of taxpayer-funded TV ads featuring Andy Griffith saying things like, “That new health care law sure sounds good for all of us on Medicare!” It mailed out full-color, taxpayer-funded propaganda brochures singing the same tune. It repeatedly claimed (and continues to claim) that money taken out of Medicare to fund Obamacare would—magically—also stay in Medicare and be used to extend its solvency. 

But the administration didn’t stop there. Instead, it launched an $8.35 billion “demonstration project” to postpone the vast majority of Obamacare’s Medicare Advantage cuts until after what Obama likes to call his “last election.” In truth, this isn’t really a demonstration project at all. It’s something closer to the opposite: an attempt to keep Obamacare’s effects from being demonstrated until it’s too late for voters to respond.

The Government Accountability Office (GAO) has identified this “demonstration project” as a sham. The GAO highlights the project’s myriad “design shortcomings,” including its excessive focus on 2012, its awarding “most” of its “quality bonuses” to average-performing plans, and its lack of a control group. The GAO, not known for its bluntness, concludes that the secretary of health and human services (HHS) “should cancel” the project and perhaps, sometime in the future, consider “conducting an appropriately designed demonstration.” The GAO also notes that the demonstration “does not .  .  . conform to the principles of budget neutrality.” The administration is running up the national debt by another $8.35 billion in order to boost Obama’s reelection prospects. 

So how much is $8.35 billion, anyway? It’s more than 40 times the $197 million that Obama had raised for his reelection bid as of April 1. It’s more than 90 times the amount that he and Mitt Romney are each eligible to receive in general election matching funds. In health care terms, it’s more than the combined annual profits of the nation’s two largest and most profitable health insurance companies. In other words, $8.35 billion is real money—real taxpayer money.

Moreover, it’s real money that’s quite possibly being spent illegally. After all, a president isn’t generally thought to possess the power to reallocate Americans’ resources to shore up his political vulnerabilities. In defense of its actions, the administration is relying on a 1967 law that says the HHS secretary can spend money without specific congressional approval on “experiments” aimed at improving the execution of current law. Obama’s $8.35 billion allocation, however, isn’t aimed at improving the execution of current law. It’s aimed at delaying the execution of current law and thereby masking the effects of that law until after Obama’s reelection bid. The only “experiment” the administration is conducting is whether it can pull the wool over seniors’ eyes until the election is over.

Even for a president who has appointed numerous “czars” to circumvent the confirmation process, issued “recess” appointments when the Senate wasn’t in recess, and declared that it would be “unprecedented” for the Supreme Court to strike down a federal law, such a move is eye-opening. It raises the question: Have other presidents similarly exploited this law to promote their own self--interest? The GAO responds that of the 85 other Medicare demonstration projects conducted in the 17 years since 1995, none has cost even one-seventh as much as Obama’s. In fact, according to the GAO, Obama’s $8.35 billion gambit will cost more than all 85 other Medicare demonstration projects combined.

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