Tag Archives: Department of Health and Human Services

The Obamacare Recession

The sequester’s $85 billion dollar slowing of federal spending isn’t what’s going to stall the economy this year – that will come from the President’s healthcare reform.

The White House and congressional Democrats have been hard at-work spinning the March jobs slowdown as an effect of sequestration even though the details of the report show no slowdown in government hiring. As sequestration would first impact government jobs, the correlation is non-existent.

The true culprit in the coming recession is not George Bush, Republican filibusters or slightly slower government spending – its Obamacare.

The President’s marquee healthcare reform law is taking its toll on business owners and families as it is directly causing premiums to skyrocket – some by more than double – and the toll on the economy is just beginning.

An exhaustive study by three congressional committees delivers startling news about the dire effects of Obamacare: President Barack Obama’s signature legislation could increase health insurance premiums by over 200 percent and render insurance coverage unaffordable for millions of Americans.

Insurance companies, states and the federal government have been frantically trying to implement the complicated and costly healthcare law.

Insurance companies have spent millions of dollars installing new software, designing integration with state/federal exchanges and changing their processes to deal with the concept of premium subsidies and premium cost-sharing – two major components of Obamacare. That money has to come from somewhere and its coming in the form of skyrocketing premiums.

States that chose to either implement their own exchanges or work in a state-federal partnership to form exchanges are seeing their costs balloon as well. State taxpayers will bear the brunt of those expenses.

The federal government, realizing that the Affordable Care Act (Obamacare) is too complex, is planning to hire Obamacare Insurance Navigators at a cost of $29-$49.00 per hour. When the government hires, the costs come from taxpayers. Increasing costs mean increasing taxes – just as the President has proposed in his budget plan.

The revenue needed to fund the expense is coming out of the pockets of consumers and going to a massively-expanding federal bureaucracy. More taxpayer money is going to fund Department of Health and Human Services regulation, State and Federal exchanges and now more federal employees – expensive ones.

Consumers are getting hit from another side as premiums affect their paychecks and their employers.

As employers are forced to pay increasing premiums, more revenue must be directed away from pay and hours. Many employers are converting full-time positions to part-time or eliminating them altogether to avoid the overwhelming costs associated with healthcare reform.

Skyrocketing premiums mean less money for workers. As employer-provided health insurance usually splits the cost between the employee and employer, the worker will see a shrinking paycheck as premiums increase.

According to a Milliman Consulting Group study on insurance rates, the pain will be substantial for the middle-class:

the poor are likely to pay significantly less than they do now while middle-class families dig deeper into pocketbooks.

President Obama told the American people that this law would bend the healthcare cost curve down. In just its first few years of implementation it has done the opposite.

Even Department of Health and Human Services Secretary Kathleen Sebelius admitted that “there may be a higher cost associated with getting into that market.” When asked about rapidly-increasing premiums.

Some proponents of the healthcare law have made the case that premiums are rising due to increasing healthcare costs. White House deputy press secretary Josh Earnest countered that claim saying that “I would actually point to the results that we’re already seeing from the Affordable Care Act, which is a savings of $2.1 billion.”

So if healthcare costs are not causing insurance premiums to rise – there’s only one culprit left and the drain on the economy will likely push the country back into recession.

Did Obama Gut Welfare Reform?

Last Thursday, the Obama Administration issued a memo that stated that it would issue waivers to states on work requirements for participation in the Temporary Assistance for Needy Families act (TANF).

President Clinton signed “Welfare Reform” into law in 1996 as part of one of the most bi-partisan actions in recent government history. The reform replaced Aid to Families with Dependent Children, the Job Opportunities and Basic Skills Training (JOBS) program, and the Emergency Assistance (EA) program with TANF as the nation’s welfare program. The lynch pin in TANF is the work requirement which requires recipients to be working or engaged in work-related activities in order to continue to receive welfare assistance from tax payers. President Obama’s memo would grant waivers to states so that the definition of work can be watered down.

What is the Welfare “Work Requirement”

According to a Department of Health and Human services website, the work requirement is as follows:

  • With few exceptions, recipients must work as soon as they are job-ready or no later than two years after coming on assistance.
  • To count toward a State’s work participation rate, single parents must participate in work activities for an average of 30 hours per week, or an average of 20 hours per week if they have a child under age six.  Two-parent families must participate in work activities for an average of 35 hours a week or, if they receive Federal child care assistance, 55 hours a week.
  • Failure to participate in work requirements can result in a reduction or termination of a family’s benefits.
  • States cannot penalize single parents with a child under six for failing to meet work requirements if they cannot find adequate child care.
  • States must engage a certain percentage of all families and of two-parent families in work activities or face financial penalty.  These required State work participation rates are 50 percent overall and 90 percent for two-parent families; however, States can reduce the targets they must meet with a caseload reduction credit.  For every percentage point a State reduces its caseload below its FY 2005 level (without restricting eligibility), the credit reduces the States target  participation rate by one percentage point.

As it stands, recipients could be on welfare for up to two years without a job or satisfactory “work participation”. After the two year maximum delay, they would have to participate in a work-related activity to avoid a reduction or termination of the payout.  The activities that count towards work are as fair as can be expected and aren’t simply holding a job. As HHS’s website summarizes, satisfactory activities include:

Work Activities – Activities that count toward a State’s participation rates are (some restrictions may apply):

  • unsubsidized or subsidized employment
  • work experience
  • on-the-job training
  • job search and job readiness assistance – not to exceed 6 weeks in a 12-month period and no more than 4 consecutive weeks (but up to 12 weeks if a State meets certain conditions)
  • community service
  • vocational educational training – not to exceed 12 months
  • job skills training related to work
  • education directly related to employment
  • satisfactory secondary school attendance
  • providing child care services to individuals who are participating in community service.

The Memo that Guts Welfare Reform

Last week, the administration directed HHS to offer waivers that would allow states to redefine what constitutes work as was the case prior to 1996. Before TANF, states included things such as hula dancing and attendance of weight watchers programs as activities that would meet the requirements in order to receive welfare payouts.

The Fallout

Commonly referred to as an “80% issue”, Welfare Reform is incredibly popular as it appeals to Americans’ sense of fairness. Citizens pay taxes from their hard-earned income and would expect that anyone receiving a portion of those taxes does something productive to deserve the assistance. America does not want to pay people to go to dancing lessons or diet classes.

Mitt Romney’s campaign released an ad calling Obama’s memo an effort to “gut Welfare reform”. The former governor has also commented that he believes that is exactly what the administration’s recent actions has done. In response, the Obama administration hurriedly added a 20% work increase requirement that would force states to report a 20% rise in Welfare work participation in order to continue receiving their block grants from the federal government.

White House Spokesman Jay Carney came out to defend the administration’s actions against the Romney attacks citing the 20% work rule as proof that the administration isn’t gutting the work requirement. Saying that the claims are a “drastic distortion” of the facts, Carney did his level-best to turn Romney’s criticism of the President into a positive for the administration.

A train of Democrat pundits have come out slamming the Romney campaign claims in an effort to help the President escape a growing storm of voter discontent with Obama’s actions on welfare.

The Problem with the 20% Work Increase Requirement

By requiring states to increase Welfare work participation by 20% and removing the federal definition of what constitutes work, the administration is encouraging states to add non-work activities so they can hit the increased target. Getting 20% more recipients to perform activities will require states to get creative in order to receive their share of more than $16 Billion in federal subsidies. One can expect art classes, group therapy and workouts at the gym to be included before long.

The Legality of Obama’s actions

Section 1115 of  TANF does give the Secretary of Health and Human Services the ability to grant waivers to states for requirements in the law. The hitch is that HHS may only waive requirements listed in section 1115, which the work requirement is not. The work requirement and definitions are listed in section 407 which means that waivers may not be granted under the section 1115 authority.  The administration contends that since the work reporting requirements are listed in 1115, that also gives authority over the section 407 work provision. These requirements were put in a separate section specifically to prevent this kind of maneuvering.

What this all means

By dictatorial edict, President Obama has illegally gutted President Clinton’s Welfare Reform. He hasn’t directly redefined the work requirements, but by granting the states waivers and demanding higher participation, he has guaranteed that states will game the system and individually weaken existing work requirements directly in contradiction to the intent of the law.