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CCHF Health Freedom eNews

November 28, 2012

President's Commentary

Can you opt out of Obamacare? Two weeks ago, I pointed out Section 1555, one of the  major  chinks in PPACA's armor according to an attorney at the Goldwater Institute. Section 1555 is in the law under "Subtitle G - Miscellaneous Provisions." Since bringing this up, I've heard from some who believe that this section is limited solely to those who sell ("issue") health insurance.

Here again is Section 1555: "No individual, company, business, nonprofit entity, or health insurance issuer offering group or individual health insurance coverage shall be required to participate in any Federal health insurance program created under this Act (or any amendments made by this Act), or in any Federal health insurance program expanded by this Act (or any such amendment), and there shall be no penalty or fine imposed upon any such issuer for choosing not to participate in such programs."

I've contacted Goldwater Institute's attorney, Nick Dranius, and other attorneys for more information and opinions. I've also transcribed Mr. Dranius's  webinar comments so you can read them for yourself. See "News to Know" below.

Here is a summary of what I've heard so far:

1) Because of the rush to passage, no Congressional history exists that would describe the meaning or explain the purpose of this section, thus no one is sure why it's in the law, who put it there, or what it means.

2) The language is ambiguous. There are two possible interpretations of the language:

Interpretation #1: The placement of the comma before the word "or" means that the words preceding it ("individual, company, business, nonprofit entity") are not modified by the words,"issuer offering group or individual health insurance coverage."

Interpretation #2: If you disregard the placement of the comma, or otherwise disagree with the above interpretation, the entire opt-out section applies only to entities "offering group or individual health insurance coverage" -- including individuals, companies, etc.

3) Final interpretation may be left to judges if Section 1555 is used in a legal challenge.

4) Given all the mandates in the rest of the law (the totality of the law), some judges may dismiss this section, but others may not.

5) For states with health care freedom acts that challenge Obamacare in court, Section 1555's ambiguity may have to be considered and a legal interpretation made.

But regardless of the interpretation of this section, the fact remains that states, employers and individuals can opt-out of compliance -- and in some cases may be able to avoid the penalties for doing so (read Michael Cannon in Quotes below).

Individuals and employers still have power. As Justice Roberts ruled, no one can be forced to buy insurance. Likewise, no one has to sell insurance and no one is required to provide insurance. There are penalties for refusing to buy or provide insurance, but they are significantly less than the cost of buying or providing insurance. As the price of insurance skyrockets under Obamacare, expect more and more individuals and businesses to choose penalties rather than insurance.

States can refuse in two ways. States can refuse to expand Medicaid, as the U.S. Supreme Court ruled. And states can refuse to establish the federally-controlled state-based exchanges. The law doesn't require it. 

Refusing to cooperate -- which starves Obamacare of the dollars, machinery, and manpower needed for implementation -- may be our best protection until the law is repealed.

Now on to the news . . .

News to Know:

Goldwater Attorney Explains "Opt Out" 

Nick Dranius, a constitutional attorney at the Goldwater Institute said the following during a  webinar:

"The bottom line is this. The federal health care law is very poorly drafted. Surprise. Surprise. And one of the things that remains a mysterious inkblot into which you can read anything you want is this curious provision that says, 'No individual, company, business, nonprofit entity, or health insurance issuer offering group or individual health insurance coverage shall be required to participate in any Federal health insurance program created under this Act.' It goes on to repeatedly emphasize essentially that nothing is mandatory in Obamacare, depending on how you understand what is meant by the term 'federal health insurance program.' 

"And the reason why this is important is it's an obvious ambiguity. It, in one sense clearly cuts against most of the mandates that are in Obamacare, and it can be leveraged under current case law to vindicate state sovereignty under Health Care Freedom Acts such as Tennessee's and the 14 other states that have versions either at the constitutional or statute level....

"This provision, because it is so ambiguous, undercuts any claim that the -- a federally established exchange would preempt [Tennessee's] health care freedom act. Because this language clearly says that no one's required to participate in any federal health insurance program and as [Cato Institute's] Michael Cannon pointed out, a key aspect of any exchange is to do just that, to facilitate and effectuate various mandates to ensure that everybody's participating in a federal health insurance program, namely PPACA's. ...So do not lose faith just yet in the various challenges to PPACA..."

Obama's Exchanges to Dictate Medical Care

Last week, CMS issued a request for comments, including a list of questions, on how to redesign health care through the Exchanges. It's under the rubric of Obamacare's "National Quality Strategy" (Section 3011) and it follows the Section 1311 requirement that Exchanges pay health plans more if they improve health outcomes through government reporting, case management, care coordination, chronic disease management, medication and care compliance initiatives, health IT, wellness activities, and reduction of "health disparities." The questions hint at the federal plans for tracking physicians and controlling treatment decisions.

  • How do health insurance issuers currently monitor the performance of hospitals and other providers with which they have relationships?
  • What challenges exist with quality improvement strategy metrics and tracking quality improvement over time (for example, measure selection criteria, data collection and reporting requirements)?
  • Are there any gaps in current clinical measure sets that may create challenges for capturing experience in the Exchange?
POLITICO Propaganda
With a minority of states saying they'll set up Obama's state-based Exchanges, Politico Pro published a major propaganda piece (11/16/12): "Bobby Jindal's got a funny way of showing how much he hates Obamacare and Washington bureaucracy: The Louisiana governor's about to invite the feds to set up a health insurance exchange right in his backyard. So is Rick Perry in Texas. Ditto for John Kasich in Ohio. And Scott Walker in Wisconsin. These Republican governors, and more than a dozen others in red states around the country, have decided it's better to have Obamacare forced on them than to legitimize it by setting up their own exchanges, even if that means empowering the federal government at the expense of the states."

This is hogwash. The federal government is empowered either way. Governor Rick Perry said it best: "It is clear there is no such thing as a state exchange. Instead, this is a federally mandated exchange with rules dictated by Washington....the notion of a state exchange is merely an illusion."  That said, if the state sets up the Exchange (or accepts the "state-federal partnership" illusion), the state pays the full cost ($10 - 100 million/yr). If the feds set it up, the feds pay -- but only if they can actually set it up. They gave themselves no money to do so, and the U.S. House refuses to fund it. It may never happen. Thus, if states refuse to set up exchanges, the Obamacare takeover is in serious danger.

Arrest the Feds?

Nine Wisconsin GOP legislators "have said they back a bill to arrest any federal officials who try to implement the health care law,"  reports the Milwaukee Journal Sentinel. The group includes Sen. Mary Lazich (New Berlin) and Reps. Chris Kapenga (Delafield), Don Pridemore (Hartford), Erik Severson (Star Prairie), Tom Larson (Colfax), Scott Krug (Wisconsin Rapids) as well as three Representatives-Elect: Rob Hutton (Brookfield), Mark Born (Beaver Dam) and Dave Murphy (Greenville). According to the news report, Kapenga says he, "believes the health care law is unconstitutional, despite the U.S. Supreme Court's ruling..." and says, "Just because Obama was re-elected does not mean he's above the Constitution."

Does U.S. "Waste" $750 Billion/Year?

A recent Institute of Medicine report claims that the U.S. health care system wastes $750 billion each year.  Here is how the  Christian Science Monitor explained it: "More than 18 months in the making, the report identified six major areas of waste: unnecessary services ($210 billion annually), inefficient delivery of care ($130 billion); excess administrative costs ($190 billion); inflated prices ($105 billion); prevention failures ($55 billion), and fraud ($75 billion). Adjusting for some overlap among the categories, the panel settled on an estimate of $750 billion. Examples of wasteful care include most repeat colonoscopies within 10 years of a first such test...and brain scans for patients who fainted but didn't have seizures."

What if the test you need is ruled "unnecessary"? What if efficiency means you can no longer see a physician? The report recommends paying doctors for "quality results" not for doing treatment procedures. What if not paying for procedures means you improve by 5% ("quality result,") instead of by 50% (quality life)? Waste comes from middlemen (health plan executives, government bureaucrats) who do nothing to improve quality of care. Time to switch to cash, catastrophic coverage, and charity care for the needy.

Quotes of the Week:

"[D]efaulting to a federal exchange exempts a state's employers from the employer mandate - a tax of $2,000 per worker per year (the tax applies to companies with more than 50 employees, but for such companies that tax applies after the 30th employee, not the 50th). If all states did so, that would also exempt 18 million Americans from the individual mandate's tax of $2,085 per family of four. Avoiding those taxes improves a state's prospects for job creation, and protects the conscience rights of employers and individuals ... -- Michael Cannon (Cato Institute),  National Review Online , November 9, 2012, on the Federal Exchange being prohibited from providing premium subsidies, thus exempting many individuals from the mandate (on the basis of affordability - see  exemption #5).


"We need death panels. Well, maybe not death panels, exactly, but unless we start allocating health care resources more prudently - rationing, by its proper name - the exploding cost of Medicare will swamp the federal budget. ...Many countries whose health care systems are regularly extolled - including Canada, Australia and New Zealand - have systems for rationing care...At the least, the Independent Payment Advisory Board should be allowed to offer changes in services and costs. We may shrink from such stomach-wrenching choices, but they are inescapable." - Steven Rattner (Obama's "Car Czar"), The New York Times, September 16, 2012.


"[O]nce the physicians surrendered and became employees [of hospitals] the EMR would be the remote control of those doctors and their practices. No longer would  the physicians be able to send their patients to the best surgeon, for example. They would have to send their patients to the surgeon the hospital had hired. No longer would the physicians be able to order this or that test, or more importantly, not order this or that test. They would order the tests or not order the tests as the hospital wished...If a doctor employee fails to comply, a flip of a switch can remove him from the grid. He is not a competitor; he is out of business." -- G. Keith Smith, M.D. discussing the electronic medical records (EMR) mandate in ARRA ("stimulus"), Jrl Am Physicians/Surgeons, Summer 2012.



Stats of the Week:

$54 million - operating cost of Minnesota's Obamacare Exchange in 2015.

$64 million - operating cost of Minnesota's Obamacare Exchange in 2016.

38 - percent of people who supported Obamacare pre-election (Kaiser poll).

200 - deaths from "alarm fatigue" from 2005 to 2010.

150 - collaborative groups that launched Medicare ACO ("HMO on Steroids") in 2012.

News Release of the Week:

CCHF Applauds Governor Walker's Refusal to Implement a State Health Insurance Exchange

ST. PAUL, Minn. - Wisconsin Governor Scott Walker recently refused implementation of a Wisconsin owned and operated health insurance exchange, citing lack of design freedom and potentially undisclosed costs to taxpayers as impetus for his refusal. His decision letter to U.S. Department of Health and Human Services Secretary Kathleen Sebelius noted that Wisconsin is already able to provide healthcare to 90 percent of its citizen population without an exchange, and the new system would not improve coverage for state citizens.

The Citizens' Council for Health Freedom (CCHF) applauds Walker's judgment on this issue. Continue reading

Featured Health Freedom Minute:

Partnership Exchange is Trojan Horse

Bureaucrats can be very sneaky. Obamacare allows state-run exchanges funded by the state or a federal exchange run by and funded by the Federal government. But federal officials have no money to build the federal exchange, so to get state taxpayers to fund it, they just made up something out of thin air and called it a "state-federal partnership" exchange. Continue reading

Twila Brase broadcasts a daily, 60-second radio feature, Health Freedom Minute, which brings health care issues to light for the American public. Health Freedom Minute airs on the entire American Family Radio Network, with more than 150 stations nationwide in addition to Bott Radio Network with over 80 stations nationwide.

Click here to listen to this week's features.

Citizens' Council for Health Freedom
161 St. Anthony Avenue, Ste 923
St. Paul, MN 55103
Phone: 651.646.8935 • Fax: 651.646.0100

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