GRUBER ACKNOWLEDGES SUPREME LETDOWN

Those who haven’t yet appreciated the recently released statements by Jonathon Gruber should know that the chief architect of the Affordable Care Act (a.k.a. ObamaCare, or the ACA) testified that law could only be passed by means of fraud, deception, and “the stupidity of the American voter.”

How Gruber’s provocative admission isn’t plastered all over every media outlet is not only a travesty to We the People, but also negligent, corrupt, and criminal. His short form statement can be found here; and a long form statement can be found here.

Indeed Gruber is partially right. Some Americans are, in fact, stupid; these are people capable enough to be well read and independently minded but instead choose to be led by media propaganda and political pressure. Then there are those who are illiterate; these are people without the ability to read and understand the most basic dynamics of the market economy.  And sadly, yes, people from those two groups can cast a ballot and vote.

But not all American voters fit that bill.

It should not be forgotten that more than 60% of Americans polled at the time of ACA passage were against the law, and outraged by the shenanigans Congress pulled to force that law through the system. Remember, Scott Brown promised not to deliver the 60^th vote Democrats needed to pass the law if he won Ted Kennedy’s Senate seat, which he did. That was when Senate Majority Leader Harry Reid changed longstanding protocol and forced the bill through a process called reconciliation, which requires only 51 senatorial votes. Up until the passage of the ACA reconciliation had been reserved only for budgetary items. That makes ACA passage through reconciliation a clear breach of standard operating procedures for the U.S. Senate.

This is not to mention the breakneck speed in which the bill was forced through congressional chambers, leaving little to no time for members to actually read the bill that was put to vote. That was when Speaker of the House Nancy Pelosi attempted to calm the controversy by notoriously stating, “we have to pass the bill so that you can find out what is in it.”

I’m not so sure that’s what the Founders had in mind when they established congressional protocols.

So there was a lot of outrage and dissent for ObamaCare, then and now, by a majority of voting Americans. And while there might be some truth behind Jonathon Gruber’s statements – heck, some people are still stupid enough to think the ACA is actually good law, good protocol, and good for the market – the fraud he reveals in the law’s passage is most stunning.

In a presentation given at the Annual Health Economics Conference in 2013, Gruber and his cohorts actually poke fun at Chief Justice John Roberts for transforming ObamaCare’s penalties into taxes. The law, he said, was written in a “tortured” way to fleece the Congressional Budget Office and sway the Supreme Court, which it did. And just to make that point clear, Gruber’s elitist position places Justice John Roberts in, and at the top of, the “stupid American voter” group.

Gruber has picked a major fight.

The way I see it: Gruber’s statements, the most recent election results – and the Supreme Court’s recent decision to review another major threat to the ACA’s constitutionality – completely reopens the national debate on ObamaCare.

In a blog posted just a few days after the Supreme Court held that the individual mandate was constitutional, my blog Supreme Letdown highlighted the main reasons why the High Court’s decision was flawed (that entire blog follows this one).

In short, the Supreme Court held that the individual mandate was constitutional because it considered the law’s stated penalties as taxes – a clear constitutional power authorized to Congress – and because of precedent. After all, Americans are already mandated to purchase a national retirement program (Social Security) and senior citizen health insurance (Medicare).

And while Supreme Letdown provides a salient argument on the tax issue, it didn’t vividly address the obvious problem with the mandate issue. Never before in American history has Congress mandated American citizens to purchase a product or service from a private organization. Social Security is purchased from the U.S. central government. Ditto for Medicare. Their according taxes are collected by the IRS with specific tax rates on specific activity (wages).

ObamaCare mandates people to purchase services from private healthcare insurers – not yet a government entity – and according taxes are collected by insurance companies. The tax rates are unknown to consumers and are dictated each year when policies renew. In other words, the healthcare tax rate is a moving target and can change without voter repercussion – and it has nothing to do with the level of activity. For instance, taxes paid by workers into Social Security and Medicare increase as their wages increase. Not so with health insurance taxes, which can rise or fall without any change in consumer activity. Instead, and without little doubt, the healthcare tax will be driven by central government deficit and the ruling Party’s political agenda.

Doesn’t that make you feel warm and fuzzy – especially when considering all the persistent incompetence displayed in Washington DC?

The fact of the matter is this: if ObamaCare could pass with only 51 Senate votes it can be repealed with the same number. Republicans have that number. But they will need 67 Senators to overturn Obama’s veto. The only chance they have in getting those votes is to pass a replacement that will efficiently and effectively achieve the objective – to lower healthcare costs and increase individual enrollments.

Here are some rallying points to compromise:

• 1.  Cut Corporate Tax Rates – if insurance companies pay less federal taxes they will pass less of those taxes onto consumers, which will lower healthcare prices. Or if that can’t pass then how about making the amount a company pays for healthcare insurance premiums double or triple tax-free (this to encourage enrollment).
• 2.  Cut Personal Tax Rates – many doctors make a lot of money; their profession costs a lot of time and money, and the cost of malpractice insurance is outrageously high. They deserve a robust return on investment. If doctors pay less personal taxes they will pass less onto their customers – and consumers will have more money to pay for services.  Or if that can’t pass then provide a tax credit to those enrolled in an insurance program (again, to encourage enrollment.)
• 3.  Allow Health Insurance companies to Compete Across State Lines – prices fall when competition increases. The federal government must breakdown State boundaries to make it easier for healthcare businesses to compete nationally.
• 4.  Mandate all Insurances companies offer Healthcare Insurance – prices fall when competition increases. By offering multiple lines of coverage insurance companies will be better able to diversify risk across business units (i.e. health care, property & casualty, life, etc. etc.)
• 5.  Make Pre-Existing Exclusions Illegal – common sense, prices fall when more consumers (a.k.a. demand) contribute to overall expense. Besides, a free market is an open market.
• 6.  Increase Grants for Nurses and Doctors – prices fall when Supply (a.k.a. healthcare professionals) increases. We need more doctors and nurses; investing in them is a worthwhile government investment.
• 7.  Increase Grants for Immediate HealthCare Clinics – again, we need more Supply to help prices fall – especially where dense populations exist. This will help inner cities and the poor, a worthwhile government investment.
• 8.  Mandate that Immediate HealthCare Clinics Stay Open until 10PM – All too often a sickness happens after office hours of doctors expire – when people return home from work. Emergency rooms are the most expensive providers of healthcare services. They should be reserved for emergencies and unfortunate circumstances in odd hours.
• 9.  Impose a Healthcare Penalty on any employed person over 26 years of age and Not Enrolled in a major medial insurance program.
• 10.   Limit the Amount of Malpractice claims to $10 million – Indeed, there is no way to appropriately value human life. My life is priceless to me, so any amount would be too low. But we need to address this out of control cost element; limiting damages will help do that. (Mandating malpractice insurers to also cover major medial insurance will also help.)
• 11.  Maintain that Medical Decisions are made Strictly between Doctor and Patient – whether it’s the government or a panel of doctors paid by some insurance company – no one knows better about appropriate care than doctors and their patients. Government and insurance company bureaucracies need to stay out of the decision making process; they can’t be trusted with our well-being.
• 12.  Expand Medicaid until Supply catches up with Demand and reasonable prices exist in the marketplace.

Such a bill can be written in just a few pages, some 2,475 pages less than the ACA; and it will be much more effective in achieving the stated objectives. Yeah, it’ll take some time.  But it’d be worth it.

I have one more quick point to make before leaving you with SUPREME LETDOWN; at the end of that blog I say, “The “healthcare boom” begins today – and that includes price inflation…”

For those who believe the stock market is a leading indicator of the economy, consider that since SUPREME LETDOWN was written the Dow Jones Industrial Average (a.k.a. “the market”) is up 36% and United Healthcare is up almost double that, 68%.

As a side note, my group insurance policy is up 27% in the same time.

So contrary to the pompous ass that Jonathon Gruber is, some of us American voters had ObamaCare figured out from the very beginning.

And I do hope, truly, that Chief Justice John Roberts has the last laugh.

Stay tuned…