Tuesday, October 4, 2011

The Definition of Insanity (from Wall St Journal)

This was published in the Review & Outlook section of the Wall St Journal this morning.  Reading something like this makes me furious about the current state of American politics.  ARRGGHHHH!!

"The Obama health-care plan passed 18 months ago, and its cynicism still manages to astonish. Witness the spectacle surrounding one of its flagship new entitlements, which is eliciting some remarkable concessions from its drafters. The Health and Human Services Department recently shut down a government insurance program for long-term care, known by the acronym Class. HHS also released a statement claiming that reports that HHS is shutting down Class are "not accurate." All HHS did was suspend Class policy planning, told Senate Democrats to zero out Class funding for 2012, reassigned Class's career staffers to other projects and pink-slipped the program's chief actuary. Other than that, it's full-speed ahead. HHS is denying what everyone knows to be true because everyone also knows that the Class entitlement was not merely created to crowd out private insurance for home health aides and the like. Class was added to the bill because it was among the budget gimmicks that Democrats needed to create the illusion that trillions of dollars of new spending would somehow reduce the deficit. Benefits in the Class program, which was supposed to start up next year, are rigged by an unusual five-year vesting period. So the people who sign up begin paying premiums immediately—money that Democrats planned to spend immediately on other things, as if the back-loaded payments to Class beneficiaries would never come due. The $86 billion or so that would have built up between 2012 and 2021 with the five-year lead is supposed to help finance the rest of ObamaCare. The Class program would go broke sometime in the next decade, but that would be somebody else's problem. 

Corbis Opponents warned about this during the reform debate, and people on HHS's lower rungs were telling their political superiors the same thing as early as mid-2009, according to emails that a joint House-Senate Republican investigation uncovered. In one 2009 note, chief Medicare actuary Richard Foster—a martyr to fiscal honesty in the health-care debate—wrote that "Thirty-six years of actuarial experience lead me to believe that this program would collapse in short order and require significant Federal subsidies to continue." He suggested that Class would end in an "insurance death spiral" because the coverage would only be attractive to sicker people who will need costly services. It could only be solvent if 230 million Americans enrolled, which is more than the current U.S. workforce. An HHS Office of Health Reform official, Meena Seshamani, rejected Mr. Foster's critique because "per CBO it is actuarially sound." But of course CBO only scores what is presented to it, no matter how unrealistic. Despite this false reassurance, later even one HHS political appointee took up Mr. Foster's alarms, writing that Class "seems like a recipe for disaster to me." In February of this year, Health and Human Services Secretary Kathleen Sebelius finally admitted the obvious, testifying at a Congressional hearing that, gee whiz, Class is "totally unsustainable" as written. By then Class had become a political target of vulnerable Senate Democrats looking to shore up their fiscal bona fides, despite voting for it when they voted for ObamaCare. Bowing to this political need, Mrs. Sebelius has repeatedly promised to use her administrative discretion to massage Class's finances until it is solvent. But given that the office doing that work has now been disbanded, this evidently proved impossible, as the critics claimed all along. 

All of this would seem to make repealing Class an easy vote for Congress, but, this being Washington, it isn't. Since the CBO says Class's front-loaded collections cut the deficit to the tune of that $86 billion, HHS has to pretend that the program is still alive to preserve these phantom savings. Some Republicans are also nervous about repealing Class because, under CBO's perverse scoring, they'll be adding $86 billion to the deficit. Others would prefer not to repeal any of ObamaCare until they repeal all of it, on grounds that some of it might survive if the worst parts go first. So an unaffordable entitlement that will be a perpetual drain on taxpayers may continue to exist because of a make-believe budget gimmick that everyone now admits is bogus. Congress can't reduce real future liabilities because it would mean reducing fake current savings. This is literally insane. It's rare to get a political opening to dismantle any entitlement, much less one as large as Class. House Republicans ought to vote to repeal it as soon as possible as an act of fiscal hygiene, forcing Senate Democrats to vote on it and President Obama to confront (even if he won't acknowledge) the fraud he signed into law."