Oregon Leaders Must Reject ACA’s Medicaid Expansion

By Eric Fruits, Ph.D.

Despite an eight percent increase in general fund revenues, Governor Kate Brown and some lawmakers say the State of Oregon is facing a $1.7 billion budget shortfall in the 2017-19 biennium. In her inaugural address, the governor blames more than $1 billion of the shortfall on the state’s choice to expand Medicaid and other taxpayer-funded insurance. The Census Bureau estimates that about one in four Oregonians are in the state’s Medicaid program.

In addition to the expansion provided by the Affordable Care Act, the governor seeks new state money to expand single-payer public insurance to those who are not “lawfully present” in the United States, under a program called Cover All Kids.

Although the federal government pays a large portion of the costs of Medicaid expansion, the state’s share of the costs is growing under the ACA. The huge costs of Medicaid mean even a small increase in Oregon’s share has big impacts on the state’s budget. State Senator Elizabeth Steiner Hayward, incoming co-chair of the Ways and Means Committee for Human Services indicates that about one-third of the deficit at the Oregon Health Authority comes from what she called a “minuscule” reduction in the federal match. This deficit is certain to grow as federal support for expansion shrinks over time, as outlined in the ACA.

The state has massively underestimated the costs of Medicaid expansion in Oregon. A 2013 report prepared for the state estimated that the Medicaid expansion would cost Oregon’s general fund $217 million in the upcoming 2017-19 biennium. Janelle Evans, budget director for the Oregon Health Authority, now estimates a cost to the state’s general fund of at least $353 million. For the federal government, the cost of Oregon’s Medicaid expansion will cost more than $3.5 billion over the next two years.

Oregon simply cannot afford the ACA’s Medicaid expansion and Governor Brown’s expensive new entitlement. Nationally, expansion costs and enrollment have grown much faster than projected. Previous expansions of the Medicaid program have resulted in crowding out, the process by which taxpayer funded Medicaid replaces private health insurance. These earlier expansions have seen crowd-out rates ranging from 15 percent to 50 percent, depending on the type of expansion. Not only does the expansion crowd out private insurance, government spending on the expansion crowds out funding for other state and national priorities, such as education, infrastructure, and defense.

In Congress, repeal of much of the ACA is imminent. Oregon Congressman Greg Walden, incoming chairman of the House Energy and Commerce Committee, is working on a timeline for repealing major provisions of the health care law, including the expansion of Medicaid. In the absence of repeal, Congress should consider an enrollment freeze approach. A freeze would halt new enrollment while allowing current enrollees to stay in the program until their incomes climb above eligibility limits. It would be an intermediate step towards repeal with immediate benefits for taxpayers and current enrollees.

However repeal of the ACA rolls out, Oregon’s congressional delegation should be at the forefront of ending the Medicaid expansion as soon as possible. While Congress works through the details, Oregon can take steps in the upcoming legislative session to protect the state’s fragile finances. One first step would be to opt out of the ACA’s Medicaid expansion and reject Governor Brown’s proposal to expand coverage even further. As noted in the governor’s inaugural address, the state’s choice to expand Medicaid is the single largest source of the impending budget deficit. Rejecting the health care law’s expansion is the clearest path to fiscal solvency and financial responsibility.


Eric Fruits, Ph.D. is president and chief economist at Economics International Corp., an Oregon based consulting firm specializing in economics, finance, and statistics. He is also an adjunct professor of economics at Portland State University, an Academic Advisor to Cascade Policy Institute, and author of Cascade’s report, The Oregon Health Plan: A “Bold Experiment” That FailedThis article originally appeared in The Oregonian on January 27, 2017.

What Would Jefferson Advise Today’s Supreme Court About the Little Sisters of the Poor?

In 1804 an Ursuline nun in New Orleans asked Thomas Jefferson to clarify in writing her religious community’s right to retain their property and to continue their ministries without government interference following the Louisiana Purchase. As French Catholic Louisiana was being incorporated into the Anglo-Protestant United States, the nuns were concerned about the status of their institutions under U.S. law. President Jefferson assured her that the government would not interfere with the sisters’ property, ministries, and way of life. In a letter dated May 15, 1804, he wrote:

“I have received, holy sisters, the letter you have written me wherein you express anxiety for the property vested in your institution….The principles of the constitution and government of the United States are a guarantee to you that it will be preserved to you, sacred and inviolate, and that your institution will be permitted to govern itself according to its own voluntary rules, without interference from the civil authority.”

Jefferson confidently promised that the American Constitution would protect the nuns and that the government would leave them alone. So why don’t Catholic sisters today even qualify for a religious exemption from ObamaCare’s insurance mandate that requires contraception and abortion coverage? It may seem unbelievable, but according to the Obama Administration’s definition of “religious employer,” sisters are not included.

On March 23 the U.S. Supreme Court will hear oral arguments on behalf the Little Sisters of the Poor (and other religious clients of the Becket Fund for Religious Liberty) in a historic religious freedom case. The Little Sisters are a nearly 200-year-old religious community dedicated to caring for the elderly poor. They run 30 homes in the U.S. (four in the West) and care for nearly 13,000 people in 31 countries.

During implementation of the Patient Protection and Affordable Care Act (ObamaCare), the Department of Health and Human Services (HHS) directed most employers to include coverage of contraceptives and abortion-inducing drugs in their employee health insurance policies, or else pay a fine of $100 per employee, per day. The Sisters subsequently filed suit against the federal government, saying “they cannot, according to their faith, include contraceptives in their employee health plan.”

The Becket Fund, which represents the Sisters and other religious clients in their lawsuit, explains:

“The Court’s decision will finally resolve the crucial question of whether governmental agencies can, wholly without legislative oversight, needlessly force religious ministries to violate their faith….The [HHS] mandate forces the Little Sisters to authorize the government to use the Sisters’ employee healthcare plan to provide contraceptives and abortion-inducing drugs—a violation of their faith—or pay massive fines, which would threaten their religious mission.”

The “HHS Mandate” has a narrow conscience exemption that applies only to organizations whose purpose is solely to inculcate religious values and which employ and serve primarily members of their own faith. The exemption does not include religiously affiliated or faith-based institutions which serve all people without discrimination (like hospitals, colleges, schools, and social service agencies). And it doesn’t apply to communities of nuns.

“The Little Sisters should not have to fight their own government to get an exemption it has already given to thousands of other employers, including Exxon, Pepsi Cola Bottling Company, and Boeing,” said Becket Fund Senior Counsel Mark Rienzi. “Nor should the government be allowed to say that the Sisters aren’t ‘religious enough’ to merit the exemption that churches and other religious ministries have received….It is ridiculous for the federal government to claim, in this day and age, that it can’t figure out how to distribute contraceptives without involving nuns and their health plans.”

Thomas Jefferson explained to the Ursuline nuns of 19th-century Louisiana that American law would protect them and their institutions, regardless of the differences among American citizens:

“Whatever the diversity of shade may appear in the religious opinions of our fellow citizens, the charitable objects of your institution cannot be indifferent to any; and its furtherance of the wholesome purposes of society, by training up its younger members in the way they should go, cannot fail to ensure it the patronage of the government it is under. Be assured it will meet all the protection which my office can give it.”

We can only imagine what Jefferson might think of American women having to sue the Obama Administration to defend their First Amendment rights. But can we doubt he would be dismayed by how intrusive and coercive the federal government has become since the day he wrote so cordially to a group of French nuns about the safeguards of the American Constitution?

 

How Washington Is Disinheriting American Kids

By Jared Meyer and Kathryn Hickok

Is Washington, D.C. disinheriting America’s kids? You bet. Achieving the American Dream will be more difficult for the next generation because policies and programs created by politicians and bureaucrats in Washington restrict economic opportunity for the young.

The expansion of entitlement benefits and government services places a major future financial burden on the young. The federal government’s $18 trillion debt is only the tip of the iceberg. Unfunded liabilities driven by Social Security and Medicare push the total federal fiscal shortfall to more than $200 trillion.

The Affordable Care Act has raised health insurance premiums for younger adults. While people under 30 only spend an average of $600 a year on health care, young people cannot pay less than one-third of what older people pay.

And these are only two examples of the financial burden our government is placing on the next generation.

Many think a larger government, and higher taxes to pay for it, would benefit young people. This isn’t true. The key to restoring Millennials’ lost economic opportunity is for government to get out of people’s way.

Washington is robbing America’s young. Our country is facing a crisis, and change is essential for young people to achieve the kind of future their parents and grandparents worked hard to build. Otherwise, the bill will eventually come due, and the next generation will pick up the tab.

Jared Meyer is a fellow at the Manhattan Institute for Policy Research and the coauthor with Diana Furchtgott-Roth of Disinherited: How Washington Is Betraying America’s Young (Encounter Books, May 2015). Cascade Policy Institute will host Meyer to speak on this topic in Portland on October 22, 2015. Kathryn Hickok is Publications Director at Cascade Policy Institute.

Taxpayers Ultimately Get the Bill for Oregon’s Medicaid Expansion

By Thomas Tullis

Thirty states have already undertaken the Medicaid expansion encouraged by the Affordable Care Act. In Oregon, more than one in 4 people are now enrolled in Medicaid. Enrollment is nearly twice as high as originally thought, and now lawmakers are looking at a half-billion-dollar state deficit after grossly miscalculating the projection.

In an attempt to reconcile the $300 million Cover Oregon fiasco, the Kitzhaber administration had centered in on fast-track Medicaid enrollment. Oregonians were incentivized and encouraged to sign up for Medicaid, with ObamaCare extending the eligibility requirements to adults earning up to 138% of the federal poverty level.

With the expansion’s 76% increase in monthly enrollment, Oregon’s growth is second only to Kentucky. While many states have not expanded and have seen little to no growth in enrollment, Oregon boasts some of the highest percentages of average annual growth in Medicaid spending over the last few years.

As the federal government will soon require Oregon and other states to be responsible for part of Medicaid costs, lawmakers are already talking about increasing the nearly two-billion-dollar bipartisan hospital tax that Governor Kate Brown signed in March.

Health insurance policy is in desperate need of market-based reforms. A competitive free market can ensure quality and affordability. Government handouts and regulations simply drive up costs that in this case will be borne by taxpayers.

Thomas Tullis is a research associate at Cascade Policy Institute, Oregon’s free market think tank. He is a student at the University of Oregon, where he is studying Journalism and Political Science.

Press Release – Statement on the Supreme Court’s King v. Burwell Decision

June 25, 2015

FOR IMMEDIATE RELEASE

Media Contact:

Steve Buckstein

503-242-0900

steven@cascadepolicy.org

Cascade Policy Institute Statement on Today’s Supreme Court King v. Burwell Decision: More Oregonians will lose rather than win

PORTLAND, Ore. – The U.S. Supreme Court decision today in the King v. Burwell case is a sad reminder that the President of the United States and his Administration can arbitrarily interpret laws passed by Congress to suit their own purposes.

In this case, the Affordable Care Act clearly states multiple times in its text that federal subsidies to offset insurance premiums can only be granted to individuals purchasing policies through an exchange “established by the state.” When most states failed to establish such exchanges, the IRS arbitrarily decided to grant subsidies to individuals who purchased insurance through the federal exchange, healthcare.gov, as well. By a six to three vote, the Court told us that the President and his Administration need not follow the language of the law because in the Court’s opinion that could cause harm to the intent of the law which was to make insurance more affordable.

How this decision will affect Oregon is fairly clear. Oregon originally set up its own state-established exchange, Cover Oregon. But when that $305 million project failed to sign up one person for insurance on its flawed website, the Cover Oregon board voted to scrap the exchange and migrate Oregonians over to the federal exchange, healthcare.gov. Board members didn’t seem to care how this decision might impact subsidies for Oregonians, and after the fact said they were relying on federal assurances that they considered this arrangement a “supported state based marketplace”—meaning that it would still qualify for subsidies even if the Court were to rule opposite of how it ruled today.

What is clear now is that today’s decision could actually harm more Americans, and more Oregonians, than it helps. According to a March 3rd press release by Michael Cannon of the Cato Institute and Cascade Policy Institute’s Steve Buckstein, “If subsides are denied under a King ruling, Oregon will join the majority of states in reaping benefits.” Now that the King ruling has found for the government, the Cato Institute believes that “approximately 157,000 [Oregon] individuals likely will continue to be subject to the law’s individual mandate requirement,” and 890,000 working Oregonians “also will continue to be subject to the employer mandates that are putting downward pressure on our economy.” These negative results stem from the ACA’s provisions that as long as subsidies make insurance somehow “affordable,” then the act’s mandates to purchase it remain in place.

Cascade Senior Policy Analyst Steve Buckstein says, “Today’s Court decision does not end the discussion about who should control your health care and who should decide what, if any, insurance you must purchase at what price; but it does push that discussion farther into the future. It unfortunately postpones our ability to move toward a more individual, patient-centered health care and health insurance world. Oregonians who watched their state government bungle an expansive insurance exchange project using other people’s money should be a big part of this discussion.”

Looking at ObamaCare, Five Years On

By Sally C. Pipes

ObamaCare turned five years old March 23. But don’t break out the cake and candles. There’s not much to celebrate. When he signed his signature piece of legislation into law, President Obama guaranteed lower health costs, universal coverage, and higher-quality care. Five years later, the health law has failed to fulfill those promises.

“In the Obama administration,” candidate Obama boasted in 2008, “we’ll lower premiums by up to $2,500 for a typical family in a year.”

A recent report by HealthPocket, an online insurance marketplace, has revealed that premiums for individual Americans skyrocketed after ObamaCare became law.

Drug costs have jumped, too, despite promises to the contrary from the Obama administration. The majority of health plans offered on the exchanges have shifted costs for expensive medications onto patients, according to a study by Avalere Health. In 2015, more than 40 percent of all “silver” exchange plans―the most commonly purchased―charged patients 30 percent or more for specialty drugs. Only 27 percent of silver plans did so last year. Part of the problem is that the health law has quashed market competition.

The president promised in 2013 that “this law means more choice, more competition, lower costs for millions of Americans.” But that hasn’t turned out to be true. According to the Heritage Foundation, the number of insurers selling to individual consumers in the exchanges this year is 21.5 percent less than the number that were on the market in 2013―the year before the law took effect.

The Government Accountability Office reports that insurers have left the market in droves. In 2013, 1,232 carriers offered insurance coverage in the individual market. By 2015, that number had shrunk to 310.

With competition in the exchanges on the decline, quality is going down, too―just like President Obama said in 2013: “Without competition, the price of insurance goes up, and the quality goes down.”

Consumers who purchase insurance on the law’s exchanges have fewer options than they had pre-ObamaCare. The consulting firm McKinsey & Co. noted that roughly two-thirds of the hospital networks available on the exchanges were either “narrow” or “ultra-narrow.” That means that these insurance plans have refused to partner with at least 30 percent of the area’s hospitals. Other plans exclude more than 70 percent.

Patients may also have fewer doctors to pick from. More than 60 percent of doctors plan to retire earlier than anticipated―by 2016 or sooner, according to Deloitte. The Physicians Foundation reported in the fall that nearly half of all doctors―especially those with more experience―considered ObamaCare’s reforms a failure.

While more Americans may have insurance thanks to ObamaCare, they may not be able to find a doctor to see them. That’s a recipe for waiting lists and de facto rationed care.

Finally, five years on, President Obama’s declaration that he would not sign a plan that “adds one dime to our deficits―either now or in the future” looks more ridiculous than ever. In 2010, the Congressional Budget Office anticipated ObamaCare’s decade-long cost was $940 billion. This year, the CBO more than doubled that price tag, with a new estimate of $2 trillion.

The U.S. Supreme Court will rule this June on King v. Burwell, a case that threatens to negate the law’s subsidies. If the court rules against the administration, ObamaCare would unravel.

Obama has been proven wrong about what his health law would accomplish. Quality hasn’t improved, and costs continue to grow. That’s ObamaCare’s five-year legacy.


Sally C. Pipes is President, CEO, and Taube Fellow in Health Care Studies at the Pacific Research Institute in San Francisco. She is a guest contributor for Cascade Policy Institute. A version of this article was originally published by The Orange County Register.

Are ObamaCare’s Insurance Subsidies Legal?

Today the U.S. Supreme Court hears oral arguments in a case challenging the implementation of the Affordable Care Act (ACA). Plaintiffs in King v. Burwell claim the Internal Revenue Service (IRS) does not have the authority to circumvent the actual text of the ACA. According to the law, federal insurance premium subsidies can be allotted only if plans are purchased “through an Exchange established by the State.” When 36 states chose not to create their own exchanges, the IRS essentially rewrote this portion of the law to give subsidies anyway.

Oregon did set up a state exchange―Cover Oregon. But Cover Oregon never worked as planned; and now Oregon is contracting with the federal exchange, HealthCare.gov. The federal government and Oregon state officials claim this will guarantee Oregonians continued access to federal subsidies, but the King decision may not allow such subsidies to continue.

The King v. Burwell case could have a major impact on the future of ObamaCare. If the Court strikes down the IRS rule, the government would withhold subsidies for those living in states that chose to protect their citizens from the law’s employer mandate, the individual mandate, and the high costs of operating their own state-based exchanges. The Court’s decision could provide an important opportunity for states to reform health care in a meaningful way that respects taxpayers, provides for the truly needy, and addresses health care costs.

A ruling is expected by June 30.

Event Video – The Man Who Could Bring Down Obamacare




On February 26, 2015 at a co-sponsored event presented by Cascade Policy Institute and Washington Policy Center, Michael Cannon, Director of Health Policy Studies at the Cato Institute, spoke before a packed house at the Multnomah Athletic Club in Portland, OR.

After the passage of the Affordable Care Act (ObamaCare), critics noticed that subsidies for health insurance purchases would be available only through “an Exchange established by the State,” such as the ill-fated Cover Oregon. The IRS actively ignored this part of the law and offered subsidies to those using the federal exchange, healthcare.gov, as well. Four legal challenges were filed to stop those illegal subsidies – and the illegal taxes they trigger. One of those challenges, King v. Burwell, goes before the U.S. Supreme Court on March 4, 2015 with a ruling expected by June 2015.

Michael F. Cannon is considered “ObamaCare’s single most relentless antagonist” and an “intellectual father” of the legal strategy that would expose how ObamaCare doesn’t work simply by requiring the Obama administration to follow the letter of the law. He will speak in Portland just six days before the U.S. Supreme Court hears oral arguments in King v. Burwell. “The man who could bring down ObamaCare” will discuss the case, what it means for Oregonians and Washingtonians, and how Congress should reform health care after ObamaCare.

The Man Who Could Bring Down ObamaCare

Would you like to meet the man the media says could bring down ObamaCare? You’ll have that opportunity on Thursday evening, February 26, when Michael Cannon of the Cato Institute speaks in Portland.

Cannon is an architect of the legal strategy that could force the Obama Administration to follow the letter of its own Affordable Care Act and stop subsidizing insurance unless it is purchased through a state-established exchange. Cover Oregon was established by the state, but its website was so flawed that it couldn’t sign up a single person.

If Oregonians lose their subsidies because Cover Oregon failed, they will quickly find out just how unaffordable the Affordable Care Act really is.

To make this even more interesting, on the day Governor Kitzhaber resigned, the U.S. House Oversight Committee sent him a letter telling him not to destroy any documents that might shed light on the Cover Oregon fiasco.

And the U.S. Supreme Court will hear oral arguments in the case orchestrated by Michael Cannon on March 4.

Don’t miss your chance to meet The Man Who Could Bring Down ObamaCare on Thursday evening, February 26, in Portland.

For details and to RSVP, call Cascade Policy Institute at 503-242-0900, or visit cascadepolicy.org.

No Death Panels Here―Yet

ObamaCare mastermind Dr. Ezekiel Emanuel recently published an Atlantic magazine essay explaining why he hopes to die at age 75, which for him is eighteen years away.

He won’t kill himself, but plans to refuse any medical treatment other than palliative care for pain or disability. He says that like death, “…living too long is also a loss. It renders many of us, if not disabled, then faltering and declining, a state that may not be worse than death but is nonetheless deprived.”

Psychotherapist Michael Hurd explains that Emanuel takes his position from “the oldest, most primitive creed of ethics in human history: Self-sacrifice….Like all self-conscious advocates of selflessness, he seems proud of his willingness to hurt his family by proclaiming his wish to die. ‘Hey, look at me. I’m so selfless I don’t even wish to live. It hurts my family, but that shows how willing I am to be sacrificial.’”

Hurd notes, “This is what passes as the standard of sophisticated, high-end, state-of-the-art ethics, at least among the sophisticates and elite whom we have given permission to run our lives.”

Of course, Emanuel leaves himself an out: “I retain the right to change my mind and offer a vigorous and reasoned defense of living as long as possible.”

So there you have it: Emanuel’s 57-year-old self making the sacrificial case for not wanting to live more than 18 more years, but admitting that his 75-year-old self might very well make a different choice. Who would have guessed?

Steve Buckstein is founder and Senior Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.

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