NATIONAL REVIEW ONLINE
November 23, 2013 4:00 AM
The Scheme behind the Obamacare Fraud
Lies smooth the transition to a fundamental transformation of our health-care system.
By Andrew C. McCarthy
Fraud can be so brazen it takes people’s breath away. But for a prosecutor tasked with proving a swindle — or what federal law describes as a “scheme to defraud” — the crucial thing is not so much the fraud. It is the scheme.
To be sure, it is the fraud — the individual false statements, sneaky omissions, and deceptive practices — that grabs our attention. As I’ve recounted in this space, President Obama repeatedly and emphatically vowed, “If you like your health-insurance plan, you can keep your health-insurance plan, period.” The incontrovertible record — disclosures by the Obama administration in the Federal Register, representations by the Obama Justice Department in federal court — proves that Obama’s promises were systematically deceitful. The president’s audacity is bracing, and not just because he lies so casually while looking us in the eye. Obama also insults our intelligence. It is one thing to tuck evidence of falsehood into a few paragraphs on page 34,552 of a dusty governmental journal no one may ever look at. It is quite something else to announce it in a legal brief publicly filed in a case of intense interest to millions of Americans aggrieved by Obamacare’s religious-liberty violations. To be so bold is to say, in effect, “The public is too ignorant and disengaged to catch me, and the press is too deep in my pocket to raise alarms.”
Still, to show that politicians lie is like pointing out that it gets dark at night. The lie, the fraud, does not tell us why they lied in this instance. The fraud does not tell us what the stakes are. To know that, we must understand the scheme — the design.
The point of showing that Obama is carrying out a massive scheme to defraud — one that certainly would be prosecuted if committed in the private sector — is not to agitate for a prosecution that is never going to happen. It is to demonstrate that there is logic to the lies. There is an objective that the fraud aims to achieve. The scheme is the framework within which the myriad deceptions are peddled. Once you understand the scheme, once you can put the lies in a rational context, you understand why fraud was the president’s only option — and why “If you like your plan, you can keep your plan” barely scratches the surface of Obamacare’s deceit.
In 2003, when he was an ambitious Illinois state senator from a hyper-statist district, Obama declared:
I happen to be a proponent of a single-payer universal health-care program. I see no reason why the United States of America, the wealthiest country in the history of the world, spending 14 percent of its gross national product on health care, cannot provide basic health insurance to everybody. . . . Everybody in, nobody out. A single-payer health care plan, a universal health care plan. That’s what I’d like to see. But as all of you know, we may not get there immediately.
That is the Obamacare scheme.
It is a Fabian plan to move an unwilling nation, rooted in free enterprise, into Washington-controlled, fully socialized medicine. As its tentacles spread over time, the scheme (a) pushes all Americans into government markets (a metastasizing blend of Medicare, Medicaid, and “exchanges” run by state and federal agencies); (b) dictates the content of the “private” insurance product; (c) sets the price; (d) micromanages the patient access, business practices, and fees of doctors; and (e) rations medical care. Concurrently, the scheme purposely sows a financing crisis into the system, designed to explode after Leviathan has so enveloped health care, and so decimated the private medical sector, that a British- or Canadian-style “free” system — formerly unthinkable for the United States — becomes the inexorable solution.
Once you grasp that this is the scheme, the imperative to lull the public with lies makes sense. Like all swindles, Obamacare cannot work if its targeted victims figure out the endgame before it is a fait accompli.
The president is a community organizer in the Saul Alinsky tradition. He is trained to adopt the language and co-opt the sensibilities of the masses in order to become politically viable; then, once raw power is acquired, the Alinskyite uses every component of it to thwart opposition in patient but remorseless pursuit of the given “social justice” goal. Consequently, in pursuit of health-care statism, Obama moderated his rhetoric over the years, but not his ideological goals. He stressed pragmatism: a gradual campaign that kept the ultimate prize in sight. “I don’t think we’re going to be able to eliminate employer coverage immediately,” he told his hard-Left base at a 2007 SEIU health-care forum. “There’s going to be potentially some transition process. I can envision a decade out or 15 years or 20 years out.”
There’s that word: transition. It’s the route “change” takes to reach its final destination: “fundamental transformation.” If you’re paying attention, you’ll hear the word transition a lot in Obama’s health-care speeches. You’ll also find it in that Justice Department brief the administration no doubt wishes Eric Holder’s minions had edited more furtively:
The [Affordable Care Act’s] grandfathering provision’s incremental transition does not undermine the government’s interests in a significant way. Even under the grandfathering provision, it is projected that more group health plans will transition to the requirements under the regulations as time goes on. [Officials of the Department of Health and Human Services] have estimated that a majority of group health plans will have lost their grandfather status by the end of 2013 [emphasis added].
Understand what this studiously unthreatening, gradualist gobbledygook means. A “group health plan” is employer-provided insurance; the phrase thus blithely refers to the “transition” of 156 million Americans who get health insurance for themselves and their families through work. It does not mention the so-called individual market, consumers who buy health insurance on their own. That’s because the administration assumes the “transition” of those 25 million Americans from their preferred plans to Obamacare will already have progressed well toward completion. And indeed it has, as we have seen in the millions of cancellation notices reported in the last six weeks.
The Justice Department’s assertion, based on the administration’s internal analyses, conveys that by the third year of Obamacare’s implementation — “the end of 2013,” which has since been extended by a year due to Obama’s “waiver” of the employer mandate — more than half of those 156 million group policies will have lost their “grandfather status.” “Grandfathering” is the mirage Obama projected for his illusory “if you like your plan, you can keep your plan” guarantee.
You couldn’t keep your plan because Obamacare mandates made it impossible for private insurers to offer it. The mandates essentially require that everything and everyone be covered — even though you do not need coverage for everything (e.g., 23-year-old men do not need birth-control pills, neo-natal care, and periodic colonoscopies), and even though mandatory coverage for preexisting conditions is not insurance but welfare. The mandates are simply cost-shifting from the young and healthy to the older and sicklier — just as you would find in any universal, single-payer system. But Obamacare is camouflaged to make it look like the insurers are deciding not to offer your plan anymore, rather than that the government is forcing their hand.
Of course, that’s not the half of the deceit — not in a program the president publicly insisted was not a tax even as his Justice Department insisted to the Supreme Court that it was one. Obama also said, “If you like your doctor, you will be able to keep your doctor, period.” As Hot Air’s Ed Morrissey noted this week, that promise too is fraudulent. If your doctor is not part of the network offered on the plans in your exchange, you will lose your doctor. To keep costs down, exchanges will limit their provider networks. Top doctors and hospitals are already being cut out. Moreover, the onerous regulations, reporting requirements, and constant threat of fee-slashing are beginning to drive doctors out of the profession.
Then there is the Independent Payment Advisory Board. Stanley Kurtz described the IPAB in all its frightening detail in a 2011 National Review cover story: “An unelected and unaccountable bureaucratic entity with nearly limitless power over federal Medicare spending, [it] will have the power to effectively ration health care through price controls.”
Put aside that the IPAB, which Obamacare insulates from judicial review, is an unconstitutional delegation of Congress’s legislative power — a model that, if adopted in spheres of activity beyond health care, would effectively end popular self-governance. As the rising costs driven by our health-care system’s suffocating regulations compound our astronomical debt, pressure is mounting for the IPAB to oversee cost-cutting — i.e., rationing — not only in Medicare but across the whole Obamacare framework. In fact, as Stanley recounts, the bipartisan Simpson-Bowles commission appointed by Obama made just such a recommendation — giving the president political cover to push hard for IPAB expansion. “Once IPAB’s rules govern America’s health-care system as a whole,” Stanley concludes, “we will be most of the way down the road to a British-style single-payer system.”
So how does Obama get all the way down that road? That is where the scheme’s manufactured crisis comes in. Obamacare commands that all Americans purchase health insurance, whether they want it or not. This is essential: If young healthy people refused to buy overpriced, largely superfluous coverage to underwrite the cost of insuring older and sick people, premiums would further skyrocket. As Powerline’s John Hinderaker explains, insurance companies would either have to fold or shift the costs to whatever employer plans still remained. This, in turn, would spur employers to cancel plans, dumping ever more people into the government exchanges.
The individual mandate is what is supposed to prevent that death spiral. There’s just one thing: The individual mandate is legally unenforceable.
Yes, there is a penalty for failing to purchase insurance — starting at $95 or 1 percent of income the first year and rising sharply thereafter. But the designers of Obamacare went out of their way to prohibit the IRS from using its usual array of civil and criminal processes (fines, liens, etc.) to confiscate it. The government may only collect the penalty by deducting it from tax refunds — meaning people who prudently structure their tax withholding so that no refund accumulates can avoid paying with impunity.
Obviously, it would be far less expensive for young people — who are already disproportionately strained by Obama’s no-growth, high-unemployment economy — to opt for a penalty they are not actually required to pay than to purchase prohibitively costly coverage. After all, under Obamacare, they can wait until they are sick to buy “insurance.” That is, Obamacare’s architects consciously created the incentive to destroy the program’s own insurance exchanges.
By the time that problem erupts, private insurance will already be gutted. Coverage requirements will already be dictated by government, as will pricing, with a subsidy structure that builds in progressive wealth redistribution. And doctors will already be beholden to government for patient access, treatment options, record-keeping requirements, and payment. That is, much of the single-payer infrastructure will be in place.
The manufactured financial crisis will be portrayed as a demonstration that exchanges based on the assumption that individuals will take responsibility for their own “private” insurance arrangements do not work. It will be time to solve the crisis by a seamless transition — there’s that word again — to a fully socialized health-care system, now overtly controlled by the government. “Free” health care for everyone — with all the substandard treatment, absurd wait times, and rationing that entails — will be supported by a few “tweaks” to our progressive tax system . . . no more unwieldy, unpredictable premium payments.
That’s the scheme. Or maybe you still believe that if you like your private medical system, you can keep your private medical system, period.