Fraud Alert — 26 March 2012

Suppose you entered into a long-term contract with a company to provide certain services.  The price was steep, but given the benefits of the contract, justified. Then, before the ink is barely dry, you find out that the price you have to pay has nearly doubled, that the benefits you had expected were far less than advertised, and certain guarantees and protections you were promised had failed to protect you. What would anyone do? Call the authorities and charge fraud, naturally.

But suppose the fraudulent company was in fact the authorities, the Federal government, to be precise. Welcome to the Patient Protection and Affordable Care Act, or Obamacare for short.

This law is before the Supreme Court today, as the attorneys general of over half the States have sued over its constitutionality. Rather than weigh in on issues of constitutional law, I propose to examine the totally fraudulent case that was made for this law back in 2009 when it was being debated. The prosecution needs no further evidence than President Obama’s own words, from his speech to Congress on Sept. 9, 2009.

Exhibit A: “I will not sign a plan that adds one dime to our deficits — either now or in the future. I will not sign it if it adds one dime to the deficit, now or in the future, period.” This is the most flagrant fraud in the whole exercise. Because the President knew as he spoke those words that they were true only in the narrowest sense, exploiting Washington’s practice of using ten-year projections.

For this bill paired ten years of fees and revenue-generation with a mere six years of expenses, since the bulk of the subsidies don’t begin until 2014. The ten-year horizon allowed the White House to pretend that the finances of years eleven and beyond don’t matter. Sure enough, two years on and the CBO comes out with a new projection that the 10-year costs of Obamacare will be $1.6 trillion, nearly double the $900 billion that was quoted.  Next year, with the expenses one year closer, that number can be expected to swell further.

This, of course, is no surprise to anyone in the Administration.  And yet Obama vowed not once but twice that this was not going to happen.  Is it any wonder that his critics conclude this president doesn’t give a fig about deficits? 

Exhibit B:  “…nothing in this plan will require you or your employer to change the coverage or the doctor you have. Let me repeat this: nothing in our plan requires you to change what you have.”  This is a slightly modified formulation from earlier speeches, which are more general: “if you like your insurance, you can keep it.”  Again, the statement is literally accurate, in that the bill does not require anyone to opt for a different plan, but it is again willfully misleading. 

Companies will make the economical choice, and if that means cancelling an expensive health insurance policy and paying a fine, so be it.  Sure enough, McKinsey last summer released a study predicting that as many as a third of all employers will cancel their insurance policies.  So while PPACA does not require companies to shutter their plans, they will do so under the law’s clear incentives.

Exhibit C:  “I will make sure that no government bureaucrat or insurance company bureaucrat gets between you and the care that you need.”  Except, of course if the president’s  “independent commission of doctors and medical experts” determines that the procedure your doctor wishes to perform does not fall within its definitions of medical efficiency.  Indeed, the American Medical Association lobbied hard for the repeal of this commission.

Exhibit D:  “…not a dollar of the Medicare trust fund will be used to pay for this plan.”  I don’t know how Obama could make this statement, since he follows it immediately by saying that much of the plan will be paid for by “the hundreds of billions of dollars in waste and fraud” in Medicare, which of course come straight out of the Medicare trust fund.  

Now, if those hundreds of billions are currently being spent on waste and fraud that can be eliminated, any money that is retrieved ought to go back to the trust fund to ensure Medicare’s long-term solvency.  Instead, Obama is using it to pay for his PPACA.  By what contortions of logic does this mean not one dollar comes from the trust fund?  Can he possibly mean to say, “not one dollar that is spent on stuff we deem necessary and useful for Medicare will be spent on this plan”?

Exhibit E: “… federal conscience laws will remain in place.”  Well, the laws may be there, but as we have seen with the still-simmering controversy over contraception and Catholic institutions, the government bureaucracy will act on the authority contained in this law in ways that it sees fit, and will compel individuals to violate their conscience if that doesn’t conform with the bureaucratic writ.

Exhibit F:  “…you – America’s seniors – [will] get the benefits you’ve been promised.”  If, that is, you can find a doctor to provide those benefits.  Across the country, doctors increasingly fed up with the reduced reimbursement rates, increased bureaucratic hassle and administrative burdens are leaving the Medicare system, accepting few new patients, or stretching out the patient visits.  Who would have predicted otherwise?

There’s more, of course.  For instance, nobody seems to have reckoned with the natural impact on the cost of insurance premiums when the law’s many sets of mandates, controls, and “consumer protections” start to kick in; sure enough, Price Waterhouse released a study last May indicating that the pace of premium increases has accelerated under Obamacare. 

Moreover, what is likely to happen to the cost of medical treatment when 30 million previously uninsured patients demand their share of services from a physician corps that has not grown proportionately – but rather has shrunk as doctors leave the profession?

In so many of its key promises, Obamacare has not only fallen short of expectations but was deliberately deceptive at the outset.  Far from being self-funded, it will add hundreds of billions to the deficit; people who may have been content with their current medical coverage will find themselves having to seek another; bureaucrats will intervene to determine what care will be provided to whom, whether by wholesale cuts to Medicare and Medicaid or by more specific determinations of preferred practices; Medicare itself will be savaged by the execution of this law.

In normal circumstances when you’ve been defrauded, you can call on one of the government’s many consumer protection services, such as the SEC or the FTC.  When it’s the government itself that commits the fraud, it’s up to the voter to exact justice.

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