Government & Constitution

Sebelius and the death spiral

On Tuesday, Congressman Peter Roskam (R-Ill.) of the House Ways & Means Committee had the chance to ask Health and Human Services Secretary Kathleen Sebelius about President Obama’s infamous promise that “if you like your existing health care coverage, you can keep it.”  Roskam noted that certainly doesn’t seem to be the case under ObamaCare, where a rising tide of businesses have chosen not to offer medical coverage to their employees.  You can’t keep a plan that no longer exists, no matter how much you might have liked it.

Sebelius replied, “Well again, Congressman, what you’re seeing…  It wouldn’t have mattered if we had passed the Affordable Care Act or not. The private market is in a death spiral.”

As Daniel Halper of the Weekly Standard noted, this is objectively untrue, and while a mere 9 percent of businesses might have blown their ejector seats to escape from ObamaCare thus far, it’s going to get a lot worse.

Sebelius’s testimony directly contradicts a McKinsey study released last year. “At least 30 percent of employers are likely to stop offering health insurance once provisions of the U.S. health care reform law kick in in 2014, according to a study by consultant McKinsey,” Reuters reported. “McKinsey, which based its projection on a survey of more than 1,300 employers of various sizes and industries and other proprietary research, found that 30 percent of employers will ‘definitely’ or ‘probably’ stop offering coverage in the years after 2014, when new medical insurance exchanges are supposed to be up and running.”

(Emphasis mine.)  Well, at least we’ve got that to look forward to.  We can mitigate the economic damage a bit, if we’ve got President Obama’s algae-based fuel refineries and car engines up and running by then.

Sebelius is a fine one to talk about “death spirals.”  ObamaCare has been in one since the moment of its passage.  Quite a few of its tentacles have rotted and fallen away.  Remember the 1099 reporting requirement, designed to squeeze extra tax revenue out of the private sector by compelling small businesses to fill out oceans of tax paperwork for all of their purchases?  It would have increased the number of 1099 forms filed each year by two thousand percent.  It was killed with a bipartisan vote that collected a 70 percent majority in the House.  There went $17 billion of ObamaCare funding!

What about the Independent Payment Advisory Board, aka the “death panel?”  That’s the unaccountable bureaucracy designed to keep ObamaCare’s costs down by rationing medical care.  A bill to abolish the IPAB just cleared the House Energy and Commerce Health Subcommittee on a 17-5 vote, with two Democrats voting in favor.  The subcommittee chairman, Rep. Joe Pitts (R-Penn.), described the IPAB as “the exact opposite of transparency and accountability.”  But how is ObamaCare supposed to function without its rationing bureaucracy?  You rip out the death panel, sparks fly, and the whole damn contraption goes into a tailspin.

Or how about the CLASS Act?  That was a ridiculous accounting trick, designed to make ObamaCare look less expensive by front-loading premiums for long-term care, and just sort of pretending the immense ongoing costs didn’t exist.  It masked ObamaCare’s impact on the deficit by raking in five years’ worth of income before paying out any benefits… and then it would have turned into a fiscal H-bomb.  The House just voted to repeal it a couple of weeks ago, 267-159, including 28 Democrats.  Over in the Senate, Democrat Budget Committee Chairman Kent Conrad called the CLASS Act “a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of.” 

Even the Administration eventually had to admit the program would be unsustainable unless absurd numbers of healthy people bought into it.  “Despite our best analytical efforts, I do not see a viable path forward for CLASS implementation at this time,” said none other than Kathleen Sebelius.  There went $70 billion of ObamaCare’s “cost savings!”

Speaking of Our Lady of the Death Spiral, she’s the one who was compelled to admit, under intense Congressional grilling, that ObamaCare double-counted half a trillion dollars in Medicare funding.

“There is an issue here on the budget because your own actuary has said you can’t double-count,” Rep. John Shimkus (R-Ill.) told Sebelius, in reference to a hefty sum that was simultaneously supposed to prop up Medicare and fund ObamaCare.  “What’s the $500 billion in cuts for? Preserving Medicare or funding the health-care law?”  Sebelius replied, “Both.”

In fairness to the HHS secretary, that sort of accounting trickery is fairly common in the cobwebbed halls of the Big Government haunted house.  It becomes more common as the government grows.  But ObamaCare is a particularly powerful mixture of exploding costs, allegedly unanticipated consequences, and unsustainable open-ended commitments.  At the time of its passage, it was supposed to reduce the deficit by a few hundred billion; now the projected ten-year costs are well over a trillion dollars, according to very conservative Congressional Budget Office estimates. 

And that’s just one part of the government’s trillion-dollar deficit portfolio, as we soar past $16 trillion in accumulated debt, and make a strong bid to blow past $20 trillion long before the end of this decade.  Interest on that debt currently consumes nearly half of the government’s revenue from personal income taxes, and those outlays will more than triple over the next ten years, even assuming interest rates don’t explode. 

When House Budget Committee Chairman Paul Ryan recently discussed national debt projections with Treasury Secretary Tim Geithner, he had to point out that according to current CBO projections, the entire U.S. economy simply “shuts down in 2027” under the weight of government debt.

Now that’s what I call a death spiral!

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