Congress, Constitutional Law, Politics

Obama Administration Moves To Unilaterally Make Billions Available To Insurance Companies Under The ACA

President_Barack_ObamaI recently testified (here and here and here) and wrote a column on President Obama’s increasing circumvention of Congress in negating or suspending U.S. laws. Obama has repeated suspended provisions of the health care law and made unilateral changes that were previously rejected by Congress. He has also moved hundreds of millions from one part of the Act to other parts without congressional approval. Now, his administration is reportedly changing key provisions of the ACA to potentially make billions of dollars available to the insurance industry in a move that was never debated, let alone approved, by the legislative branch. Ironically, I just ran another column this month listing such incidents of executive over-reach that ideally would have included this potentially huge commitment under Obama’s claimed discretionary authority.

The new regulations have been called a “bailout” of insurance companies providing coverage under the healthcare law. The changes would allow companies to get the money if they control increases in their rates — for a couple of years. That just happens to put increases on the other side of the elections.

The Administration insists that it is hopeful that no bailout is needed but “we want to be clear that in the highly unlikely event of a shortfall, HHS will use appropriations as available to fill it.” That is all fine and good except for the fact that it puts billions to a use not approved by Congress. Even with over 8 million people registered, the ACA is not attracting the younger citizens who are needed to bear the brunt of the new costs by paying in significantly more than they will be taking out of the system. As a result, companies are moving to increase rates even further at a time when roughly half of Americans want the ACA repealed and Democrats are fearing significant losses in the next election. Moreover, as rates increases, more consumers are likely to bolt from the already unpopular program — risking a cascading failure.

The regulation states that “[i]n the unlikely event of a shortfall for the 2015 program year, HHS recognizes that the Affordable Care Act requires the secretary to make full payments to issuers. In that event, HHS will use other sources of funding for the risk corridor payments, subject to the availability of appropriations.” That suggests another shift of hundreds of millions or even billions to the new purpose.

Of course, insurance companies and lobbyists applauded the move but it is not the purpose but the means that remains problematic. I view this as another end-run around Congress in violation of the Separation of Powers. As I said many months ago, we are seeing the emergence of an uber-presidency that is fundamentally changing our system of government. Liberals and Democrats will rue the day that they supported such a destabilizing and dangerous aggregation of power in the Executive Branch. With polls showing Democrats more unpopular than their opponents, we could be looking at a Republican presidency. That individual may use the same unilateral powers to suspend environmental or discrimination laws. The Administration, and its allies, are once again discarding key principles for short-term gains. What is missing is an element of adult supervision to remind everyone that this is not our last president and these powers will remain long after Obama has joined his predecessors on the speaking circuit.

It is not enough to argue that Congress will not act the way you want it to act. We are a divided nation and Congress is divided. That is no license for unilateralism in a tripartite system of government. There is no room for “going it alone” in this system. What President Obama is suggesting is precisely the type of imperial presidency model once advocated by the likes of Richard Nixon. The fact that some may agree with this policy should not blind us to the fact that this type of unilateralism is creating a dominant and destabilizing branch in our system.

Source: LA Times

75 thoughts on “Obama Administration Moves To Unilaterally Make Billions Available To Insurance Companies Under The ACA”

  2. Obama illegally delayed the employer mandate until after the election, because if it affects them the way it did us in the individual market, Democrats would not win an election again for the foreseeable future. But the price was that all those healthy people currently insured by their employer did not lose their plans yet and move over to Obamacare policies, mitigating the risk pool.

    In order for the plan to work, everyone needed to lose their insurance and pay more to cover all those subsidies. (Contrary to what politicians repeatedly told us.)

    So, once again he is illegally acting for political gains. But his party will refuse to check him until we have given the Executive Office some pretty alarming precedents. Which will obviously not be discarded by anyone else coming to office.

  6. I don’t believe adherence to so-called constitutional strictures are the missing element here. We are in a crisis of legitimacy of government brought about by the wholesale adoption of the welfare of corporations and the primacy of market fundamentalism as the first and last justification of every decision by government, including invasions, wars, drone bombings, ignoring the health and welfare of citizens, weakening and eventually destroying the social safety net. In a phrase, a corporate coup d’etat.

    The antidemocratic (as in anti democracy) counterrevolution begun on the right by the neoliberal economists and right-wing politicians is now the modus operandi of both legacy parties. The relentless obstructionism of the Republican Party to any program or strategy of the Democratic Party, which obstructionism by the Republicans can turn on a dime depending on the needs of the moment, opposing at one moment what in another was put forth as a legitimate program of government in simply one of a long number of endless coups de gras–e.g., the ACA which, as you know, is in the main the same program developed by the Heritage group and the Republican Romney administration in Massachusetts–is the predictable outcome of such a philosophy where anything goes in pursuit of hegemony of a corrupt ideology and desire for profit.

    Most Americans are ignorant of history, even our own, and in the main ignorant of the methods used by elites to get their way, including relentless propaganda (= lies) and lobbyist inspired legislation in behalf of the wealthy and corporations and to the detriment of the rest of us. The ACA is a very poor program that is designed to answer the needs of a corrupt health care establishment. Single payer is the only way to meet the needs of our citizens and reform the practices of a corrupt system. Interestingly, in other ACA news, the pharmaceutical companies are beginning to feel the sting of the insurers’ maneuvering for themselves to achieve the greatest gains from the legislation, designed to be a windfall for all the major players at the expense of patients.

    This latest move by Obama is corrupt, to be sure. It isn’t just that he, the Dems and the Repubs are circumventing laws and constitutional principles sui generis. It is that what they are doing is the natural outcome of a corrupted system and a system that, by its nature, can be nothing but corrupt: capitalism. Even our vaunted Constitution is truly a document for the oligarchy, not for the common citizenry. It is almost impossible to amend and in this time when the oligarchs have cemented in place legislation and practices that meet their needs and not those of anyone else, we need a new constitution as well as a new economic order. We are well past the time when we can input a few Keynsian techniques and “restore” constitutional principles to achieve balance. It can’t be done any longer. The victims of both capitalism and the constitution that supports it must take control. Even the irrational disagreements that rend the country and prevent that happening are the natural outcome of the corrupt system I have just described.

  15. Good work, feyman. Thanks for finding that information about the ACA’s spending requirements.

    The point I was making about that earlier is that the Repubs will use the ACA as a rallying cry, promising to replace with a healthcare plan of their own. Whatever they promise, it will look astonishingly similar to Obamacare, without the limitations on “overhead”, and a few other minor provisions, like being unable to turn down someone for pre-existing conditions.

    In other words, the republican healthcare plan, which they will insist they have to come up with, now that Americans have seen the other side of the mountain, will essentially require us to hand over the last of whatever the banksters left us with. Book it.

  16. Bill H: “I never fail to be astonished by the number of people who say, in effect, that the way to solve expensive banking abuse is to make bank robbery legal.”

    Who, besides the banksters and their govt cronies, is saying this?

  17. all the people need to understand is the ultimate plan is for obama to be the last single potus.. after him its a one world corporation. they no longer care what the people do or dont know.. the hiding as a government is over for them. and they feel there is nothing that can be done to stop them!! and apparently its true because the people aren’t fighting back no matter what happens.. all the drugs, and micro waves cant have made the whole world lethargic only those who refuse to accept and acknowledge the truth.

    hundreds of billions for military weapons for spy buildings, 4 billion dollars a year to israel, 100’s of millions to iraqi criminals along with israeli criminals. 23 billion disappeared on 9/11 along with 3 buildings built to withstand anything one of them not even being hit with a airplane is gone…

    cops allowed to rob, steal, rape and kill with immunity! prosecutors and defense attoneys lying, withholding evidence.. our kids being raped, killed, bullied, drugged up, and snatched for nothing more then the psycho sexual nature of elites..

    the justice system is a joke. judges sitting on the benches committing crimes in full view of civilians.

    unnatural storms coming from no where to destroy countries, islands and states..

    no jobs, no food were forced to eat genetically modified foods
    our youth sent off to fight wars which makes the pols rich but maims, kills, and destroy them our children arent old enough to drink or smpoke at 17,18,19, or 20 but they damn sure can go to foreign countries and kill innocent men, women and children..

    flase flag so called terroroist attacks in which no one has died the shows are performed with crisis actors with many of the actors showing up over and over after their supposedly dead..

    come on give it a break until the people wake up and they wont. it only gets worse../.

  18. This is interesting. It is from Prof. Turley’s link – The LA Times:

    “Proposed increases in a few states where insurers have already filed 2015 rates have been relatively low, with several major carriers seeking just single-digit hikes. But insurers in closely watched states, such as Florida, Pennsylvania, North Carolina and Arkansas, are still preparing their filings.”
    ____________________________________________________–

    According to the above article, actual filings for proposed increases have been low.

    Maybe it would be a good idea to wait and see what actually happens in Florida, Pennsylvania, NC and Arkansas?

  19. This is from Kaiser on insurance company profits and rate increases:

    Require health plans to report the proportion of premium dollars spent on clinical services, quality, and other costs and provide rebates to consumers for the amount of the premium spent on clinical services and quality that is less than 85% for plans in the large group market and 80% for plans in the individual and small group markets. (Requirement to report medical loss ratio effective plan year 2010;
    requirement to provide rebates effective January 1, 2011)
    •
    Establish a process for reviewing increases in health plan premiums and require plans to justify increases. Require states to report on trends in premium increases and recommend whether certain plan should be excluded from the Exchange based on unjustified premium increases. Provide grants to states to support efforts to review and approve premium increases. (Effective beginning plan year 2010
    _____________________________________________________

    Here is the link to Kaiser Family Foundation summary on ACA:

    http://kaiserfamilyfoundation.files.wordpress.com/2011/04/8061-021.pdf
    ________________________________________________________________

    I’m not suggesting that this is sure to box in the insurance companies. It’s just something that should be part of the conversation.

  20. Isn’t there something in ACA about limiting the profits of insurance companies?

    Here’s a link that talks about it.

    http://thehealthcareblog.com/blog/2012/02/04/does-obamacare-limit-profits-for-health-insurance-companies-in-your-state/

    I wonder if Kaiser has something on it…

    However, this ‘grab’ hasn’t taken place yet. Also, I’m not aware that insurance companies are moving to increase their rates. I had read that they were pretty happy with the signups. Have the figures for age breakdowns been published? Again, I thought more young people had signed up than had been forecasted by those who want the law to fail.

    Generally, it is my opinion that we just have to wait and see. There will need to be fixes. Let’s hope we have a Congress who can govern and will fix ACA – not blow the whole thing up.

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