Crimes Against Liberty Read online

  Other evidence refuted Obama’s inflammatory claims. Fortune 500’s annual ranking of America’s largest corporations for 2008 showed “Health Care: Insurance and Managed Care” to be ranked 35th in profitability, with a modest profit of 2.2 percent for 2008 .22 The AP’s “Fact Check” likewise threw cold water on Obama’s contentions. Obama, according to Fact Check, attacked insurers “as rapacious profiteers making ‘immoral’ and ‘obscene’ returns while ‘the bodies pile up.’ Ledgers tell a different reality. Health insurance profit margins typically run about 6 percent, give or take a point or two. That’s anemic compared with other forms of insurance and a broad array of industries, even some beleaguered ones. Profits barely exceeded 2 percent of revenues in the latest annual measure.” 23 Yahoo’s industry browser also contradicted Obama’s claim. It showed in August that “Health Care Plans” ranked 86th in terms of profit margin with 3.3 percent. In other words, eighty-five industries were more profitable.”24

  In early August 2009, the New York Times reported that Obama and congressional Democrats were preparing for “an August offensive against the insurance industry as part of a coordinated campaign to sell the public on the need for reform.” It would be “a campaign of increasingly harsh rhetoric against the insurance industry” designed “to drive home the message that revamping the health care system [would] protect consumers by ending unpopular insurance industry practices, like refusing patients with preexisting conditions.”

  Obviously the administration was unable to sell Obama’s plan through the magic of his silver tongue, because facts are stubborn things—facts that he was misrepresenting, as people could easily discover through the Internet and the new media. The public knew he couldn’t reduce costs while expanding coverage. They knew he couldn’t increase patient choice with a “public option” and government bureaucracies and an official health care czar (“Health Choices Commissioner”) who would have control over treatments based on their “cost effectiveness.” People also rightfully doubted Obama’s promise that they could keep their own insurance, since his plan would eventually drive private insurers out of business.

  Obama had to demonize the insurance companies to divert attention from the facts and replace them with the divisive rhetoric of class warfare. Obama adviser David Axelrod unleashed a harsh salvo, saying, “This is going to give people who have insurance a degree of security and stability, the protection they don’t have today against the sort of mercurial judgments of insurance bureaucrats.” Despite drawing first blood against the insurance industry, the administration and its congressional allies portrayed insurers as the aggressor in the media battle. House Speaker Nancy Pelosi said there would be a “drumbeat across America” to hit back at the health insurance industry for its “shock and awe, carpet-bombing . . . to perpetuate the status quo.”25

  In a New York Times op-ed, Obama said the “system” often works better for health insurers than for millions upon millions of Americans. He cited a 2007 national survey that, in his words, showed insurance companies had “discriminated against more than 12 million Americans in the previous three years because they had a pre-existing illness or condition.” (emphasis added) Thus, Obama used civil rights language to slander private insurance companies simply for enforcing lawful provisions in their contracts excluding coverage for pre-existing conditions. In Obama’s America, to enforce a contract is to “discriminate.”26

  Obama soon sharpened his rhetoric, accusing insurers of “denying coverage” to sick people and holding America “hostage. It’s wrong. It’s bankrupting families. It’s bankrupting businesses. And we are going to fix it when we pass health insurance reform this year.”27 Turning up the heat even further, Obama threatened legal action against insurance companies for ostensibly trying to scare seniors into believing they would lose coverage benefits under his reform.28 The Centers for Medicare and Medicaid sent a notice to Humana and other companies saying, “As we continue our research into this issue, we are instructing you to immediately discontinue all such mailings to beneficiaries and to remove any related materials directed to Medicare enrollees from your Web sites.”

  Consider the sheer magnitude of this abuse of power: the government threatening legal action against a company for informing policyholders about the likely effect of an administration policy. It would be like the administration threatening a private company for telling its clients that Obama’s stimulus package wouldn’t create jobs. Surely we haven’t strayed so far from our constitutional roots that we find it acceptable for the government to criminalize speech.

  The administration’s warning came just as ObamaCare was reaching a critical phase in a Senate committee and as public polls revealed seniors were skeptical of the plan. With ObamaCare’s fate in doubt, Obama’s congressional allies joined the attack on the insurers. Democratic senator Max Baucus proclaimed, “It is wholly unacceptable for insurance companies to mislead seniors regarding any subject—particularly on a subject as important to them, and to the nation, as healthcare reform.”29 Indeed, how dare insurance companies try to get their side of the story out when Obama wanted to dominate the debate with charges of their villainy!

  Under criticism that Obama’s government was trampling free speech, the administration was forced to back off. It announced private insurers could send seniors information on health-related issues—so long as they permitted recipients to opt out of receiving the communications. Medicare official Teresa DeCaro wrote, “While we feel it is important to protect Medicare beneficiaries from potentially unwelcome marketing and other communications, we also recognize the plan’s interest in contacting their enrollees on issues unrelated to the specific plan benefit that they contract with CMS [Centers for Medicare and Medicaid Services] to provide to those enrollees.”

  But some Republicans were not satisfied with the administration’s qualified retreat. Congressman Dave Camp, the senior Republican on the House Ways and Means Committee, stated, “I remain concerned that CMS overstepped in issuing its gag order as a result of undue political pressure to penalize anyone who dare speak out against the Democrats’ healthcare bill. We still need to get the answers to how and why this gag order was issued.”30

  The administration was hardly repentant for its Stalinist tactics. At a townhall event in New Orleans, Obama gloated over falling health insurance stocks, declaring, “This is when the insurance companies are really going to start gearing up. Their stock went down when the Senate Finance Committee voted out that bill. Now they’re getting nervous and, by the way, they have been wildly profitable over the last decade.”31

  Moreover, in a weekly radio address in October 2009, Obama accused insurers of resorting to “smoke and mirrors” in their “last-ditch” effort to defeat healthcare reform. “There are still those who would try to kill reform at any cost,” he said, suggesting insurance companies were unfairly earning extraordinary profits while “enjoying a privileged exception from our anti-trust laws, a matter that Congress is rightfully reviewing.”32 He accused them of “filling the airwaves with deceptive and dishonest ads” and funding “phony studies” to “mislead the American people.”33 “This is the unsustainable path we’re on, and it’s the path the insurers want to keep us on,” he claimed. “In fact, the insurance industry is rolling out the big guns and breaking open their massive war chest—to marshal their forces for one last fight to save the status quo. But what I will not abide are those who would bend the truth—or break it—to score political points and stop our progress as a country.”34 Progress toward socialism, that is.

  First lady Michelle Obama joined the assault. In a White House event marking National Breast Cancer Awareness Month, she said, “We have a health care system in this country that simply is not working for too many people with breast cancer and too many people who are surviving with breast cancer. And I’m not just talking about women without insurance . . . I am talking about people in this country who have insurance who have breast cancer—folks who all too often f
ind themselves also paying outrageous out-of-pocket costs.”

  The Washington Examiner’s Byron York noted Mrs. Obama was implying “the insurance companies make life miserable even for those with coverage.” She said there are “those annual lifetime caps that insurance companies set,” with “one recent survey show[ing] that ten percent of all cancer patients report hitting a cap on their benefits.” Furthermore, a patient in remission gets stuck “with a target on your back for the rest of your life with a ‘preexisting condition, ’ which means that insurance companies can deny you coverage or charge you higher rates for coverage—sometimes much higher.” Women, she said, “are living in fear of losing their jobs or changing jobs or even moving, because they worry they won’t be able to find affordable insurance.” But of course, she assured her audience, all these problems would be eliminated under ObamaCare. There would be “no more denying coverage to people like women we heard from today because of so-called preexisting conditions like having survived cancer.” “But first,” she said, “we have to get it passed.”35

  In January 2010, President Obama employed combative language similar to that he would soon use against “Wall Street fat-cat bankers.” While scolding Democratic House members who were concerned over the political price they would pay for supporting ObamaCare, he said, “If Republicans want to campaign against what we’ve done by standing up for the status quo and for insurance companies over American families and businesses, that is a fight I want to have.”36

  In February he unveiled his plan to give the federal government broad authority to restrict “excessive” health insurance rate increases. Politico reported that Obama was “seeking to play off voter anger toward recent double-digit increases by Anthem Blue Cross of California.” Of course, much of the anger toward insurers was obviously caused by Obama persistently vilifying them.37

  In his weekly radio address on February 20, 2010, Obama said some Californians buying individual plans from Anthem Blue Cross are “likely to see their rates go up anywhere from 35 to 39 percent.” He used the same rhetoric on March 8 at a health reform rally at Arcadia University in Glenside, Pennsylvania. “How much higher do premiums have to rise before we do something about it?” asked Obama. “We can’t have a system that works better for the insurance companies than it does for the American people.”38

  The Cato Institute’s Alan Reynolds noted Obama was using these figures to justify preempting state regulation “by ensuring that, if a rate increase is unreasonable and unjustified, health insurers must lower premiums, provide rebates, or take other actions to make premiums affordable.” So, it was a twofer: Obama demonized the insurers and the state governments that failed to crack down on them, thus justifying his intervention on behalf of the wonderfully omniscient federal government to protect consumers.

  Reynolds also provided another tidbit about Obama’s ploy. “So, how many Californians have actually been faced with a 39 percent increase in their premiums?” Reynolds asked. “Exactly zero. How many are really ‘likely’ to be faced with even a 35 percent increase after state insurance regulators have their say? My forecast: Zero.” As Obama continued to suggest insurers were extorting exorbitant profits from their customers, Reynolds pointed out the profits of Anthem’s parent company WellPoint were close to 3 percent—hardly excessive by any standard.39

  The administration tried, with less and less restraint, to dictate the rates and policies of private insurers. Twice in February, Obama’s Health and Human Services secretary Kathleen Sebelius wrote insurance company executives asking them to justify their rate hikes. In a letter to WellPoint, she attacked the company for proposing a 39 percent premium increase in California when the company had taken in more than $2.7 billion in the final quarter of 2009. She said the “extraordinary” proposal would be fifteen times higher than the rate of inflation.

  Insurance companies blamed the increases on the recession and fewer insurance purchasers—simple supply and demand. Later in the month Sebelius “asked” top insurance company CEOs to come to Washington to explain their planned premium increases. “I’m concerned about these increases, which make it harder for people to access the health care they need, and eager to hear the justification for these increases and steps we can take to create a more stable system that keeps premium costs down for all Americans,” she wrote .40

  In early March, Obama crashed a meeting between Sebelius and executives from five of the largest insurance companies to intimidate the executives again—this time with more anecdotes about alleged health insurance victims whose premiums went up dramatically in their time of need. Obama told the CEOs, “This clearly is unacceptable and unsustainable.”41 Treating the insurers as if they’d already been reduced into public utilities, Sebelius asked the executives to “follow up with an official letter that they file online their rate requests along with the actuarial data that supports those rate requests: what they’re paying out, what they are collecting for overhead costs, what they’re collecting for administrative costs.” After the meeting, apparently forgetting the administration’s betrayal of its own promises for transparency, Sebelius said she wanted “to shine a bright light and hop[ed] that the CEOs respond to the call for putting their information up in public. Put it on a website.”42

  A few weeks later Obama took another swing at the insurers. Two days before the House was planning to vote on the Senate bill—or some modified version of it—Obama warned the bill’s failure would allow the insurance industry to “continue to run amok.”43 “At the heart of this debate,” he intoned,is the question of whether we will continue to accept a health care system that works better for the insurance companies than it does for the American people. Because if this vote fails, the insurance industry will continue to run wild in America. They will continue to deny people coverage. They will continue to deny people care. They will continue to jack up premiums 40% or 50% or 60% as they have in the last few weeks without any accountability whatsoever. They know this. That’s why their lobbyists are stalking the halls of Congress as we speak. That’s why they’re pouring millions of dollars into negative ads. That’s why they’re doing everything they can to kill this bill.44

  Shortly after ObamaCare was signed into law, the New York Times reported that insurance companies were claiming the law, as written, did not require them, prior to 2014, to write insurance for children, including those with pre-existing conditions. No problem for this administration. If there was a loophole in the law, why bother fixing it with an amendment when you could just browbeat insurance companies into submission? Accordingly, Sebelius fired off another letter—this one to Karen Ignagni, chair of America’s Health Insurance Plans—warning, “Now is not the time to search for nonexistent loopholes that preserve a broken system.”

  After denying any loopholes existed, Sebelius immediately announced she planned on issuing regulations that would close the loopholes so that no later than September 2010, children with preexisting conditions could not be denied access to their parents’ health insurance plan.45 Revealingly, House and Senate staffers on the committees that drafted the bill acknowledged the loophole, though House leaders issued a statement saying it was inadvertent. But Obama doesn’t have to concern himself with such trifles. If he can ignore the Constitution and Senate rules on such procedures as “reconciliation,” he can certainly use his bully pulpit to write into the law any missing stipulations. And Obama’s bullying worked, as health insurers wrote Sebelius the very same day saying they wouldn’t resist his efforts to fix the loophole.46

  Obama’s campaign against insurance companies was not simply meant to facilitate passage of his woefully unpopular bill. He wanted to stoke the public’s anger enough that they would swallow his scheme for the government ultimately to subsume the private insurance industry. His plan—that the government would assume broad regulatory control over premium increases and preclude insurers from denying coverage based on pre-existing conditions—can only be achieved by turning insurance comp
anies into public utilities.

  Of course, this was supposed to occur alongside the introduction of the public option—a measure Obama only dropped from his plan after it became clear it couldn’t pass the Senate. But Obama denied his overall goal was to displace private insurers, asking rhetorically, “Why would (the public option) drive private insurance out of business?” If private insurers “tell us that they’re offering a good deal, then why is it that the government, which they say can’t run anything, suddenly is going to drive them out of business? That’s not logical.”47

  What Obama’s snarky analysis omits is that the government will stack the deck against private insurers to the advantage of its public plan. If a private insurance company is prohibited from excluding coverage for individuals with pre-existing conditions, it ceases to be a risk management evaluator and becomes a business ward of the state. When it is forced to keep its premiums below a level that would allow it to earn profits, it is a government utility, not an insurer. ObamaCare will force insurance companies to act as welfare agencies, which will eventually drive them out of business. At that point, Obama or his acolytes will ride in on a white horse and save the day with the public option.

  Our foot-in-mouth vice president, Joe Biden, let the cat out of the bag in an interview with ABC’s Jake Tapper, saying,Some of them . . . say, well, Joe, look, man, I mean, you know, you guys haven’t massaged this very well. And, you know, this thing has gone on so long, I don’t know. And my response is, hey, man, the proof of the pudding is in the eating. I’m telling you, you know, pre-existing, they’re going to be covered. You know we’re going to control the insurance companies. You know people aren’t going to lose their health care with their employer like is being advertised. So you’ve got to if you really want to make sure that you get the benefit of what you’ve already done, vote for the bill.48 (emphasis added)