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.
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.
As Ben Sasse, HHS’s assistant secretary for planning and evaluation until early 2009 and now the president of Midland University, says, “If a presidential administration can simply make up the authority to make law and give itself the power of the purse to implement its new law—which not only isn’t designed to make existing law work but is actually against the purpose of existing law—why do we need a Congress?” Sasse adds, “In scope and intention, this is something completely new, and if it’s allowed to establish precedent, the only limit on what future administrations could spend money on, or how much they could unilaterally spend, would be their own electoral calculations about what they could get away with.”
Obama’s calculation appears to be that he can get away with a lot. But that may be wrong. Obamacare would be unpopular enough if it were simply a 2,700-page affront to Americans’ liberty and their country’s fiscal solvency. However, the overhaul’s reputation has been further sullied by the Cornhusker Kickback, the Louisiana Purchase, Gator Aid, and the rest of the shady backroom deals the Democrats struck to secure its passage. By now initiating the Senior Swindle, Obama risks tarnishing Obama-care’s reputation even further.
Given the president’s mindset—his singular desire to impose Obamacare coupled with his frequent disregard for legal forms—he presumably felt he had no choice. Seniors wouldn’t just sit quietly while their Medicare Advantage plans went away. You can’t siphon $204 billion (the amount projected by the Congressional Budget Office) out of a popular program in just eight years’ time (and far more in the years to follow), spend it on your unpopular health care overhaul, and have no one notice.
Roughly 12 million seniors have chosen to carry Medicare Advantage. Most like it and want to keep it. They surely don’t want the funding for their plan cut by an average of $17,000 per senior over the rest of this decade, as would happen under Obamacare. They similarly don’t want to see the Medicare chief actuary’s prediction come true: that by 2017, enrollment in Medicare Advantage will decrease by half from what it would have been without Obamacare.
But it’s not just Medicare Advantage beneficiaries who have cause for concern. Under Obamacare, other Medicare enrollees would struggle to find doctors, as (according to the Medicare chief actuary) Medicare reimbursement rates would drop below even Medicaid reimbursement rates by the end of this decade. Also by the end of the decade, the CBO suggests, Obama-care will cause 5 million people to lose their employer-sponsored insurance—almost certainly a lowball estimate. Joel Ario, Obama’s initial head of the Office of Health Insurance Exchanges, said that if Obama-care’s “exchanges work pretty well, then the employer can say, ‘This is a great thing. I can now dump my people into the exchange, and it would be good for them, good for me.’ ” This doesn’t quite have the same reassuring ring as, “If you like your health care plan, you can keep your health care plan.” But it does have the benefit of sounding true.
The Senior Swindle provides a further reminder of the unseemliness of Obamacare, a preview of the politicizing of medicine that Obamacare would spawn, and an example of the unprincipled side of our politics. But mostly it offers a testament to the Founders’ wisdom in making our government leaders accountable to the people. The American people have now been living under the looming specter of Obamacare for more than two years. In the fall, they will finally get to issue their verdict on its architect. The bet here is that $8.35 billion in unscrupulously—and perhaps illegally—allocated diversionary funds won’t be enough to keep the citizenry from voting Obama out of office in November and insisting on the repeal of Obamacare in January. In fact, it might serve as a catalyst.