Civitas Review

Obamacare Fix Will Blow Up on Insurers


fireballThe state's insurance commissioner is joining the Obama administration's plan to browbeat/lure/trick insurance companies into ignoring federal law and offering insurance plans that don't meet the minimum requirements for policies under Obamacare.

They'll probably be sorry if they fall for this one.

WRAL reported:

Insurance Commissioner Wayne Goodwin vowed Friday that his agency would speed the approval process for insurers to offer 2014 health plans that don't meet the minimum requirements of the Affordable Care Act. President Barack Obama on Thursday granted a one-year exemption for such plans ….

First, this will be fiendishly difficult to implement, and insurers will be left holding the bag if it flops as badly as Obamacare has done so far.

Second, as many have noted, the Affordable Care Act is law — settled law, as Democrats were so quick to remind us mere weeks ago. It was passed by Congress, signed with much ado by the president, then specifically validated by the Supreme Court.

It's the law. What happens, then, if an insurer disregards it, as President Obama and his fellow Democrat, Goodwin, are telling them they should do?

As journalist Megan McArdle mused, "If those policies end up in court, will a judge go along with their creative approach? And if a judge doesn’t go along with it, what sort of chaos will envelop the insurance market?"

The insurance companies would be leaving themselves wide open to a lawsuit by anyone who has any grievance that even touches on these issues. To repeat: the companies would be knowingly breaking a federal law.

And would Obama help them? Sure, just as much as he helped the Syrian rebels, the Americans attacked at Benghazi, and the groups targeted by the IRS.

Back in NC, insurers should understand they are being played for suckers. Trying to rewrite policies in a huge hurry invites major mistakes. And Goodwin seems ready to pounce. According to WRAL:

Insurers will still face consequences if plans are later deemed overpriced, Goodwin said.

"Then, there will be appropriate repercussions against those insurance companies," he said.

So if the insurers go along with the state, they are lining up to be smacked later if the policies are "deemed overpriced."

As he told the N&O:

"Where we would normally catch things on the front end, we will catch things on the back end,” N.C. Insurance Commissioner Wayne Goodwin said Friday. “If upon later review we discover they’re overcharging and they’re not compliant with the law, insurers will be subject to administrative action.”

The "fixes" are a ticking time bomb. And anyone who gets involved is going get caught in the blast.

Obamacare Trainwreck: The Week in Review


This was a rather eventful week for the unfolding train wreck of Obamacare. To recap some of the highlights lowlights:

  • Numbers come out showing the dismal number of people signing up for insurance through the insurance exchanges. Here in NC, it was reported that only about 1,700 successfully signed up
  • Compare that to the more than 470,000 North Carolinians who lost their insurance plan – even though the President repeatedly promised "if you like you plan, you can keep it"
  • Speaking of keeping…err losing…ummm keeping your insurance plans: the President yesterday announced that those losing their plans will be able to keep them for another year. No mention was made by what authority he can unilaterally change the legislation, but this is far from the first time Obama has tinkered with "the law of the land."
  • As I warned yesterday, such a major reversal in the status of millions of people's insurance plans could create havoc in the insurance industry. As reported yesterday, there is great uncertainty over what will happen with the nearly half a million North Carolinians who received notices that their plans were cancelled." It's not clear whether state Insurance Commissioner Wayne Goodwin would approve an insurance company's plan to reverse its policy cancellations. Goodwin did not respond when asked through a spokeswoman whether reversing policy terminations are practical now that notices have gone to policyholders. Goodwin said he is studying the issue and hopes to decide soon."
  • The state insurance commissioner of Washington has already decided that it would be too chaotic for insurance providers to now extend the recently cancelled policies in his state. “I do not believe his proposal is a good deal for the state of Washington,” Kreidler’s statement continued. “We will not be allowing insurance companies to extend their policies.”

All this, and the employer mandate has not yet kicked in. What a disaster.

Obama: If You Like Your Plan, You Can Keep It (For One More Year)


Earlier today Pres. Obama held a press conference to announce that those people losing their insurance plans due to Unaffordable Care Act regulations will be able to "extend" or buy back into their previously cancelled plans. From

"The bottom line is insurers can extend current plans, that would otherwise be canceled, into 2014," the president said in a hastily announced statement in the White House briefing room. " And Americans whose plans have been canceled can choose to re-enroll in the same kind of plan."

Hmmm, allowing people to keep their plans into 2014….I wonder if that has anything to do with those mid-term elections? Naw, couldn't be.

Why not allow people to keep their plans as long as they like?

The president didn't make any reported comments about the mess he just dropped in the lap of insurance companies, who may now have to re-enroll millions of people back into insurance plans from which they were just recently dropped.

In addressing the lie he repeatedly told about people being able to keep their insurance plans if they like it, Obama eeked out this laughable defense:

"There is no doubt that the way I put that forward unequivocally ended up not being accurate."

That make's Clinton's "It depends on what the meaning of the word is, is" to shame.

Author Devine Explains the American Crisis


Author and Reagan administration veteran Donald J. Devine yesterday reviewed how the nation got to where we are now, and provided a glimpse of how we can get back on track.

The success of America is based on the synthesis of freedom and tradition, he said Wednesday at a Civitas event in downtown Raleigh.reagan

He was head of the federal civil service under President Reagan, and noted that the president charged him with cutting 100,000 non-defense jobs from the federal payroll. "We actually did it," Devine said, adding that Reagan also cut entitlement spending as a share of the gross national product.

But Reagan didn't cut spending just to save money, Devine said. Reagan proclaimed, "I'm cutting spending so I can reduce the power of the central government and return it to the states and people."

Stock-Market-DropMuch of our crisis is caused by federal action that oversteps the Constitution's separation of power. For example, too few of us appreciate the things Reagan didn't do, Devine said. There have been three times the Dow Jones Average has dropped 20 percent abruptly: in the Crash of 1929, the Wall Street meltdown in 2008, and in 1987. The first two sparked economic crises lasting years. Why don't we hear much about the 1987 slump? Certainly the experts told President Reagan he must step in to save the economy, as presidents did after the 1929 and 2008 crashes. Reagan's response: We have to let the market hit the bottom. "People have to see things have leveled off."

Devine recalled hearing Michael Reagan say of the incident: "My father did nothing — and it worked!" The economy quickly rebounded.

Yet, of course, today the challenges are immense. Devine noted that when the federal debt is added to other liabilities, the nation owes at least $76 trillion. "This can't last," he said. "We can't pay it."

Government seems more dysfunctional than ever. NYU Professor Paul Light summed it up, and echoed the Constitution, when he observed that "the federal government can no longer guarantee the faithful execution of our laws."

"We have a government that can't work," Devine said. Moreover, he added, "We didn't get into this by mistake. It was planned."

He traced the problem back to the Progressive Era, when Woodrow Wilson and other liberals decided that the Constitution had to be bypassed, because it divided power among the different branches of the government.

Our current plight shows how well progressive politics work in the long run. Can America come back?

One conclusion is that we must return to the synthesis of freedom and tradition Devine cited at the beginning of his talk. More of the answers will be found in his latest book, America's Way Back, which we will discuss soon in this blog.

NC's Day Care is Least Affordable in Southeast


An interesting article in the Atlantic examines the rising cost of day care and provides a state-by-state comparison of the relative affordability of day care. Surprisingly, even the Atlantic author has to point the finger of such rising costs at government regulation. A snippet:

So who's to blame for higher child-care costs? The government, I suspect.

Child care is a carefully regulated industry. States lay down rules about how many children each employee is allowed to watch over, the square footage centers need per child, and other minute details. And the stricter the regs, the higher the costs. If a center is required by law to have 25 square feet of space for every kid in a program, it can't ever downsize its building when rents rise. If it has to hire a care giver for every two children, it can't really achieve any economies of scale on labor to save money when other expenses go up.

The article also includes an infographic showing where states stack up in terms of average daycare costs as a percent of median household income for married couples. North Carolina sticks out as the most expensive in the Southeast, joining more expensive states like California, New York and Massachusetts.

The Atlantic article, however, looks only at the supply side of the equation to explain the expensive nature of day care. A few years ago I highlighted information from a state legislative task force examining day care in North Carolina. The information from the committee meeting shed light on the demand side of the day care equation as well. More than $1 billion of government money (state and federal) is being pumped into the state's day care industry. The funding came in various forms, including day care subsidies and government-funded programs like Smart Start and More at Four (now NC Pre-K).

So thanks to heavy government intervention both restricting supply and inflating demand, basic economics tells us that prices will rise. Many North Carolinians brag about our state's heavy "investments" in early childhood education programs – but the results are clear: day care is less affordable in NC than any other SE state.

Did you ever notice that whenever government gets involved to make things more "affordable," that they inevitably become far more expensive (think: housing, college, day care, health care)?