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PA’s Insurance Hypocrisy

I saw a commercial during an episode of Jeopardy from the Pennsylvania Insurance Fraud Prevention Authority. It warns people against trying to buy car insurance after an accident — which is illegal and represents insurance fraud. Here is the ad:

The law makes perfect sense — being able to receive an insurance claim settlement without having paid into the system drives up costs for those who have insurance. It also creates incentives to go without insurance until something bad happens.

In a nutshell, higher costs for insurance combined with no penalties for lack of insurance results in more uninsured drivers.

Oddly enough, the same government that polices auto insurance fraud will soon be working to encourage people to buy health insurance after they get sick. The new federal health care law forces insurance companies to cover people who sign up only after becoming ill or injured, and even prevents them from charging these folks more. The result will be higher costs and more uninsured residents.

Repeal It? Wouldn’t be the First Time

National Review has a good story of how Kentucky passed health care mandate like those contained in the new federal law, including guaranteed issue and community rating, in 1994. As in New York and Massachusetts, the cost of insurance skyrocketed.

But Kentucky learned from its mistakes, changing many of the new regulations in 1998, and fully repealing them in 2003.

Yet another example of how Congress can learn from the failed health care experiments of the states.

Health Care and the Constitution

Constitutional questions have dogged the health care bill since its introduction. But rather than address these issues head on, supporters of the legislation have shrugged them off. Speaker Nancy Pelosi, when asked where the Constitution grants the power to impose an individual mandate to buy insurance, famously replied, “Are you serious?”

This is the same tactic being used by defenders of the federal takeover of health care in response to the lawsuit against the new law. Pennsylvania Attorney General Tom Corbett, after announcing that he would join a dozen other state attorneys general in a class action challenging the constitutionality of the law, has been attacked by Gov. Ed Rendell, state House and Senate Democrats and newspapers across the commonwealth.

Continue reading at Pittsburgh Live.

ALEC/CAHI Publish Guide for State Legislators

The Council for Affordable Health Insurance and ALEC have released their 2010 State Legislators Guide to Health Insurance Solutions. Here is a PDF version of the full report.

Appropriations Chair Threatens to De-Fund PA Attorney General

In a response to Pennsylvania Attorney General Tom Corbett’s decision to join 13 other states in filing a lawsuit against the federal health care legislation, PA House Appropriations Chairman Dwight Evans threatened to “do whatever it takes” to thwart the AG’s efforts. Incensed, Evans even went so far as to say he would be willing to cut off all state appropriations to the Office of the Attorney General to prevent Corbett from fighting this legislation. Here is probably the most priceless quote of his response:

We are accountable to the voters of this state. He cannot think that he can do whatever he wants with taxpayer money. No one can protect him from being accountable.

For starters, Evans should think about following his own advice, as he is one of the most notorious proponents of “WAMs” in the Legislature, using taxpayer dollars going to fund his own community group and a failed nightclub venture.

Second, President Obama, Gov. Rendell, and others used far more taxpayer funding – with no objection from Evans – on their public relations campaign on  health care reform than any lawsuit by the AG would cost. Tax dollars were used for everything from rallies to newsletters to press conferences.

Furthermore, Evans’ threat seems a clear violation of the separation of powers, and threatens the independence of the Attorney General. Indeed, it seems particularly curious, coming a mere two days after Corbett secured a conviction against Evans’ former House Democrat colleague Mike Veon, and is continuing his investigation and prosecution of House Democrats.

Lastly, the lawsuit being filed isn’t over some flippant issue. There are legitimate Constitutional concerns over the legality of this legislation. Not only does the legislation violate the 10^th Amendment, but the fiscal impact of the health care bill will assuredly cost Pennsylvanians billions of dollars.

Gov. Rendell Calls Out AGs Lawsuit

Commenting about Pennsylvania Attorney General Tom Corbett joining AGs in 10 other states in a lawsuit against the federal health care bill, Gov. Rendell had this to say

Because any lawyer worth their salt will tell the governors [sic], that there’s something called the federal supremacy clause and this controls

By implication, the Attorneys General – all of whom are not only lawyers, but the highest ranking attorneys in their states – aren’t worth their salt.

The AGs are suing on the grounds that the federal mandates violate the 10th Amendment to the Constitution, and the supremacy clause doesn’t play a role here. Gov. Rendell may be confused by state legislation that would protect individuals against federal mandates…but he’s still wrong.

Kanjo Gets Sweetheart Deal in Health Care Bill

Like previous deals given to Senator Ben Nelson (Nebraska) and Mary Landrieu (Louisiana), Speaker Pelosi and President Obama offered reluctant House Democrats more favors in exchange for their support on health care legislation. One Democrat from Northeast PA, Rep. Paul Kanjorski (PA-11), received special tax exemptions for Geisinger Health, one of the largest insurance companies in the region.

According to the bill, tax-exempt insurers, such as Geisinger Health, now only have to pay half of the tax levied on insurance premiums. Geisinger Health, based out of Kanjorski’s district, has offices scattered throughout the Northeast corner of the state.

In addition, Kanjorski secured an extension on the deadline on new doctor-owned hospitals to apply for Medicare program eligibility. Insiders have said this will benefit only 13 facilities in the nation; not surprisingly, Scranton Orthopedic Specialists (again, based in PA-11) is one of them.

Will the Health Care Bill Hold Up?

Ronald Reagan once said, “Nothing is so permanent as a temporary government program.” Last night’s vote on health care reform was heralded by supporter as a “historic vote” which will dramatically change American health care. Assuming that the Senate passes the bill using reconciliation (i.e. the nuclear option), will it actually become a permanent program?

There is reason to think it might not. For starters, none of the major spending provisions – the subsidies for insurance or the additional Medicaid provisions – will take place until 2014, four years from now. Likewise, while some of the tax hikes occur immediately, the major ones, including the individual mandate, employer mandate, tax on high income earners, and tax on “cadillac” health care plans won’t begin for several years either. That is, there is a lot of time between the passage of the bill and an actual government program.

The first set of challenges the legislation will face are Constitutional. There are a number of issues in the health care legislation, in particular the individual mandate, that would seem to be unconstitutional. Indeed a number of state attorneys general are already preparing legal challenges to the bill. Previously, a number of AGs threatened to sue over mandates that would pass costs on to the states. Additionally, some attorneys generals are preparing a suit over the individual mandate.

The second challenge to the health care bill will come from state legislators. Thirty-eight states have some version of a Freedom of Choice in Health Care bill introduced, which would effectively work to undermine any federal (or state) mandate placed on individuals to buy insurance products. Indeed, Virginia has already signed into law a Health Care Freedom Act which reads,

No resident of this Commonwealth, … shall be required to obtain or maintain a policy of individual insurance coverage.

Idaho has also has passed a law to similar effect, and Arizona voters will have the opportunity to vote on a state constitutional amendment supporting health care freedom in November. Similar legislation has been introduced in Pennsylvania, including both a statute (HB 2053) and constitutional amendment (HB 2179). The Economist gives a quick synopsis of the legal precedent in which state protections of individual rights have trumped federal laws.

Finally, there is the opportunity for popular repeal. The House passed the bill only with the slimmest of margins, and with only bipartisan opposition – every Republican, along with 34 Democrats – voted against the packaged. The latest Rasmussen poll shows that 54% of voters oppose the latest health care bill, while only 41% support it.

Health care is undoubtedly going to be an election issue in November — and remember, there will be two election cycles (2010 and 2012) before the health care provisions go into law. Larry Sabato’s latest projections forecast Republican gains of 7 Senate seats and 27 House seats. And many organizations, including the Club for Growth, are pushing Repeal It! as a campaign issue.

The battle over health care reform is far from over.

Obama and the Slacker Mandate

In his health care rally in the Philadelphia area earlier this week, President Obama touted a proposed regulation that insurance companies would have to allow children up to age 26 on their parents’ plans – i.e. a slacker mandate – designed to appeal to the college crowd.

I wonder however, if President Obama realized the Pennsylvania already has a slacker mandate (in fact, up to age 29); state lawmakers enacted it in 2008.

In testimony to both the state House and Senate Appropriations Committees in February, Pennsylvania Insurance Commissioner Joel Ario noted that very few young adults have been enrolled under the new mandate. Ario commented, as summarized by Pennsylvania Legislative Services (subscription), that:

• The cost to insure young adults on their parents’ plan was about the same as if they bought their own plan.
• “Low-risk” young adults would buy their own plan (or remain uninsured), leaving only high-risk cases looking to the slacker mandate–and insurers were naturally unwilling to give coverage to high-risk young adults as the same rates as children.
• The failure of the slacker mandate to reduce the number of uninsured is “generally symptomatic of the greater healthcare problem.”

That is pretty much what  in the Commonwealth Foundation predicted two years ago:

SB 1453 [the slacker mandate], however, ignores the primary reason why young adults often go without insurance—the high cost of coverage. This is especially true considering that most young adults use very little health care. …

Instead of more mandates, lawmakers should adopt reforms that allow individuals to purchase low-cost, mandate-lite insurance. Another alternative would be to allow individuals to opt out or waive certain coverage mandates to reduce the cost of their insurance. … The only way to substantially reduce the cost of health care is to put individuals in charge, not government bureaucrats. This means eliminating many of Pennsylvania’s costly health insurance mandates, not adding to them. Eliminating the burden of health care mandates will lower the cost of health care, provide more insurance to more individuals, and restore personal choice to citizens.

State Attorneys General Challenge Health Care Bill

Pennsylvania Attorney General Tom Corbett is joining with a number of other state AGs (latest count is 10 attorneys general) to challenge the “Nebraska Compromise” in the latest US Senate health care bill. This compromise exempts Nebraska from the additional Medicaid costs imposed on other states, including Pennsylvania, one of the hardest-hit states. Of course, there are a number of giveaways for other states in the heath care bill – from higher Medicaid reimbursements in Massachusetts and Vermont, to exempting Florida residents from Medicare Advantage cuts, to a grant to the UConn medical center.

A number of state lawmakers have already started to push back against the federal mandates imposed on the states in the health care bills.

Richard Epstein addresses some of the other reasons “Why the Reid Bill is Unconstitutional” in a post on PointofLaw.com