The "architect" of the Affordable Care Act recently revealed the big lie at the heart of President Obama's signature health care reform legislation.
Despite being in effect for over a year, the Affordable Care Act (ACA) is still riddled with problems stemming from badly designed rules and regulations, a flawed technical design, and poor implementation of the HealthCare.gov website and associated systems. Add in large expected insurance cost increases due to higher rates and deductibles for many consumers, and the obvious prognosis is one of chronic disaster.
This state of affairs comes as little surprise in the wake of recent remarks by Jonathan Gruber, an MIT economist who served as a major technical consultant to the Obama administration and Congress during the drafting of the ACA and who has been referred to as “the architect of Obamacare.”
Speaking last year at the 24th Annual Health Economics Conference at the University of Pennsylvania’s Leonard Davis Institute (LDI) of Health Economics, Gruber basically admitted that the ACA was a fraud from the beginning, and the law’s complexity and lack of transparency purposeful, the goal being to deceive the American public about just how expensive and invasive the ACA was going to be.
According to Gruber, “[The ACA] was written in a tortured way to make sure [the Congressional Budget Office] did not score the mandate as taxes. If CBO scores the mandate as taxes, the bill dies. OK? So it’s written to do that. In terms of risk-rated subsidies, if you had a law which said healthy people are going to pay in—you made [it] explicit that healthy people pay in and sick people get money—it would not have passed. OK? Lack of transparency is a huge political advantage. And basically, call it the stupidity of the American voter or whatever, but basically that was really, really critical to get the thing to pass.”
What the American public got out of that deceitful process was a Frankenstein’s monster of a law—a hideously expensive and complex patchwork of rules, regulations, mandates, and exemptions that is in danger of collapsing under its own weight due to poor (some would say fraudulent) design. Hopefully, the incoming Republican congressional majorities can repeal or revise portions of the law until the Supreme Court weighs in (it recently announced it will review an appeals court ruling that said patients are eligible to receive federal subsidies when they purchase health insurance on federally run health exchanges).
In the meantime, let’s take a look at some of the problems that continue to plague the ACA.
Garbage In, Garbage Out
The ACA rollout was plagued from the start by problems in data handling and collection, evidenced by the countless reports of lost or incorrect data on the federal marketplace website (HealthCare.gov) operated by the Centers for Medicare &Medicaid Services (CMS). Even after spending additional millions of dollars to fix these glitches, the system doesn’t work properly.
A report from Reuters notes that more than 100,000 people in 36 states could lose their private health insurance under Obamacare this year because of “unresolved data problems involving their citizenship or immigration status.” Further, the Obama administration itself estimates that “363,000 people could see their insurance costs change, due to problems involving income data that is used to determine whether enrollees qualify for federal subsidies to help pay premiums on health plans obtained through the federal insurance marketplace.” Amazingly, administration officials “could not rule out the possibility of further problems, noting that 430,000 income-related discrepancies are still in the process of being resolved.”
The Reuters piece dryly notes that there is no word from CMS or the administration on “how many more people might have data mismatches after enrolling for Obamacare coverage through 14 other insurance marketplaces operated by individual states.”
Security Issues Remain
According to the Government Accountability Office’s (GAO’s) September report on the security and privacy of the Healthcare.gov website and related systems, although protections are in place, “Weaknesses exist that put these systems and the sensitive personal information they contain at risk.” The GAO’s specific criticisms include CMS’ failure to:
The report further identifies several weaknesses in specific technical security controls that jeopardized Healthcare.gov-related systems, including the fact that certain systems supporting the Federally Facilitated Marketplace (which facilitates eligibility and enrollment, plan management,and financial management) were not restricted from accessing the Internet. The report also identifies inconsistent implementation of security patches as an ongoing problem. Failed leadership, which led to poor planning and project management, is the chief reason for these unacceptable technical problems. If they are not addressed, the systems and the information they contain “remain at increased risk of unauthorized use, disclosure, modification, or loss,” according to the GAO.
More Complicated Tax Returns for 1040EZ Users
During a conference call with reporters in September, H&R Block president and CEO Bill Cobb said that due to the ACA-related changes recently enacted by the IRS, many taxpayers would face “additional complexity on their tax returns next tax season.”He said that the IRS forms for the ACA are “complex and time-consuming” and that new rules put in place will mean that many taxpayers who used to be able to file simple tax forms such as the 1040EZ will no longer be able to do so. According to Cobb, depending on the situation, “There are instances where filers may need to file multiple new tax forms and complete additional worksheets. Second, while 1040EZ filers may not necessarily be the primary demographic impacted by the ACA, those that received an advanced tax credit will no longer be eligible to file their returns on a 1040EZ. Third, many filers who did not have qualified health insurance coverage for the full year will either face a tax penalty or will be eligible for an exemption. Depending on the type of the exemption, the process to claim it could be quite cumbersome and time consuming.”
Inevitable Insurance Price Increases
Even The New York Times (usually quite supportive of this administration) has predicted that the second year of the ACA will feature “upheaval in insurance markets, with new carriers entering and the price of plans changing significantly.” The Times article noted that “Just as there was an uproar when some people found out last year that their policies had been canceled, individuals this year may be surprised to find that they could be asked to pay much more for the same plan because their carrier is raising its prices or the amount of the federal tax credit they will receive is changing.”
Problems With Medical Device Tax
The Central Penn Business Journal recently reported that “Lower-than-expected filings and revenue, erroneously assessed penalties, and inability to identify manufacturers subject to the tax are among the reasons cited in a new report that says the IRS needs to improve its strategy on Obamacare’s medical device excise tax.” It seems that according to a report from the Treasury Inspector General for Tax Administration, the IRS “needs to improve its strategy to ensure accurate reporting and payment of the Medical Device Excise Tax.” Apparently the IRS expected “between 9000 and 15,600 tax returns with excise tax revenue of $1.2 billion for the quarters ending March 31 and June 30, 2013.” What it actually got was “5107 returns with reported excise taxes of $913.4 million.”
Although the ACA has some merit, such as the elimination of insurance caps and preexisting condition exclusions, many of the current flaws in the system remain unresolved and are causing real harm to millions of Americans. Consumers who participate in the ACA may lose their health care insurance or be subject to significant premium increases following the loss of government subsidies due to flaws in the law’s wording and construction. Recent “hackings” of “secure” credit card databases make it obvious that the security-impaired ACA network is extremely vulnerable to attack. Add in the anticipated increased tax return complexity for participants in the ACA and a projected overall increase in insurance premiums and deductibles, and you have a nightmare scenario.
The ACA was deceptively crafted to hide its true cost and effects and sold to the public by President Obama through a series of false promises. Not only has Americans’ choice of physicians and plans been compromised, but now the system has ensnared millions of Americans in an increasingly expensive maze of rules and regulations. If the Supreme Court rules that people who bought insurance on federal exchanges are ineligible for tax credits to help pay for that insurance, the whole system will come crashing down. And, once again, the American people will be the ones who have to clean up the president’s mess.