Obamacare Website Has Hidden Code


Probable Violation of HIPAA Regulations

This is a BOMBSHELL !!!

If this doesn’t prove what a scam this whole ObamaCare thing is – – –

Watch this short video with Texas Rep. Joe Barton grilling an ObamaCare Contractor during a House Hearing on why hidden source code on the ObamaCare Website says “Users have no reasonable expectation of privacy” on information they enter.

Published on Oct 24, 2013

10/24/13 – More News and Video at http://freedomslighthouse.net
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Obamacare Website Hidden Code

Obamacare Website Fiasco


Are We Being Scamed?

Obamacare Website Cost = $600 Million ?

We would have built it for $10,000 !!!

Maybe it wouldn’t have been quite so pretty – but at least it would work.

Hey by the way – what happened to the pretty smiling girl on the home page?

From the roll-out day we smelled a rat. There is no way you can spend that much on a website and not have it work perfectly.

Sure you can try to say they are just incompetent, but we don’t buy that. These guys are smart – but you must understand what’s the true agenda (“Single Payer”).

It’s nice to see the “Mainstream Media” saying this. Now we don’t have to be called “Conspiracy Nuts”.

Check this article in Forbes:

Obamacare’s Website Is Crashing Because It Doesn’t Want You To Know How Costly Its Plans Are

Avik Roy Avik Roy, Contributor 10/14/2013 @ 11:39AM

The Healthcare.gov website requires that individuals looking for coverage enter personal information before comparing plans. IT experts believe that this requirement is causing the website to crash.

A growing consensus of IT experts, outside and inside the government, have figured out a principal reason why the website for Obamacare’s federally-sponsored insurance exchange is crashing. Healthcare.gov forces you to create an account and enter detailed personal information before you can start shopping. This, in turn, creates a massive traffic bottleneck, as the government verifies your information and decides whether or not you’re eligible for subsidies. HHS bureaucrats knew this would make the website run more slowly. But they were more afraid that letting people see the underlying cost of Obamacare’s insurance plans would scare people away.

HHS didn’t want users to see Obamacare’s true costs

“Healthcare.gov was initially going to include an option to browse before registering,” report Christopher Weaver and Louise Radnofsky in the Wall Street Journal. “But that tool was delayed, people familiar with the situation said.” Why was it delayed? “An HHS spokeswoman said the agency wanted to ensure that users were aware of their eligibility for subsidies that could help pay for coverage, before they started seeing the prices of policies.” (Emphasis added.)
Now She Tells Us: Sebelius Says Obamacare’s Exchange Website Needed Six Years of Development, Instead Of Two Avik Roy Avik Roy Contributor
After Insurance Industry Pow-Wow, White House Delays Obamacare’s Individual Mandate By Six Weeks Avik Roy Avik Roy Contributor
How Obamacare’s Exchanges Turned Into A ‘Third World Experience’ Avik Roy Avik Roy Contributor
Double Down: Obamacare Will Increase Avg. Individual-Market Insurance Premiums By 99% For Men, 62% For Women Avik Roy Avik Roy Contributor

As you know if you’ve been following this space, Obamacare’s bevy of mandates, regulations, taxes, and fees drives up the cost of the insurance plans that are offered under the law’s public exchanges. A Manhattan Institute analysis I helped conduct found that, on average, the cheapest plan offered in a given state, under Obamacare, will be 99 percent more expensive for men, and 62 percent more expensive for women, than the cheapest plan offered under the old system. And those disparities are even wider for healthy people.

That raises an obvious question. If 50 million people are uninsured today, mainly because insurance is too expensive, why is it better to make coverage even costlier?

Political objectives trumped operational objectives

The answer is that Obamacare wasn’t designed to help healthy people with average incomes get health insurance. It was designed to force those people to pay more for coverage, in order to subsidize insurance for people with incomes near the poverty line, and those with chronic or costly medical conditions.

But the laws’ supporters and enforcers don’t want you to know that, because it would violate the President’s incessantly repeated promise that nothing would change for the people that Obamacare doesn’t directly help. If you shop for Obamacare-based coverage without knowing if you qualify for subsidies, you might be discouraged by the law’s steep costs.

So, by analyzing your income first, if you qualify for heavy subsidies, the website can advertise those subsidies to you instead of just hitting you with Obamacare’s steep premiums. For example, the site could advertise plans that cost “$0″ or “$30″ instead of explaining that the plan really costs $200, and that you’re getting a subsidy of $200 or $170. But you’ll have to be at or near the poverty line to gain subsidies of that size; most people will either not qualify for a subsidy, or qualify for a small one that, net-net, doesn’t make up for the law’s cost hikes.

This political objective—masking the true underlying cost of Obamacare’s insurance plans—far outweighed the operational objective of making the federal website work properly. Think about it the other way around. If the “Affordable Care Act” truly did make health insurance more affordable, there would be no need to hide these prices from the public.

Subsidy verification created a traffic bottleneck

Comparable private-sector e-commerce sites, like eHealthInsurance.com, allow you to shop for plans and compare prices simply by entering your age and your ZIP code. After you’ve selected a plan you like, you fill out an on-line application. That substantially winnows down the number of people who rely on the site for network-intensive tasks.

The federal government’s decision to force people to apply before shopping, Weaver and Radnofsky write, “proved crucial because, before users can begin shopping for coverage, they must cross a busy digital junction in which data are swapped among separate computer systems built or run by contractors including CGI Group Inc., the healthcare.gov developer, Quality Software Services Inc., a UnitedHealth Group Inc. unit; and credit-checker Experian PLC. If any part of the web of systems fails to work properly, it could lead to a traffic jam blocking most users from the marketplace.”

Jay Angoff, a former federal official at the agency that oversees the exchange, told the Journal that he was surprised by the decision. “People should be able to get quotes” without entering all of that information upfront.

Weaver and Radnofsky say that the core problem stems from “the slate of registration systems [that] intersect with Oracle Identity Manager, a software component embedded in a government identity-checking system.” The main Healthcare.gov web page collects information using the CGI Group technology. Then that data is transferred to a system built by Quailty Software Services. QSS then sends data to Experian, the credit-history firm. But the key “identity management system” employed by QSS was designed by Oracle, and according to the Journal’s sources, the Oracle software isn’t playing nicely with the other information systems.

Oracle hotly denies these claims. “Our software is the identical product deployed in most of the world’s most complex systems…our software is running properly,” said an Oracle spokeswoman in a statement.

‘It’s awful, just awful’

Robert Pear and colleagues at the New York Times have a piece up today detailing the serious problems with the federal exchange, problems that may get worse, not better. They confirm what we already knew: that the Obama administration refused to delay the implementation of the exchanges, despite the well-known problems, because they were afraid of the political blowback. “Former government officials say the White House, which was calling the shots, feared that any backtracking would further embolden Republican critics who were trying to repeal the health care law.”

As I documented last week, IT and insurance experts have been saying for at least eight months that implementation of the exchanges was going badly, that as early as February officials were warning of a “third world experience.” The Times’ sources are just as blunt. “These are not glitches,” said one insurance executive. “The extent of the problems is pretty enormous. At the end of our [conference calls with the administration], people say, ‘It’s awful, just awful.’”

“We foresee a train wreck,” said another executive in a February interview with the Times. “We don’t have the IT specifications. The level of angst in health plans is growing by leaps and bounds. The political people in the administration do not understand how far behind they are.” Richard Foster, the former chief actuary at the Centers for Medicare and Medicaid Services, said last week that “so much testing of the new system was so far behind schedule, I was not confident it would work well.”

Henry Chao, the deputy chief information officer at CMS who made the “third world experience” comment, was told by his superiors that failure to meet the October 1 launch deadline “was not an option,” according to the Times.

White House knowingly chose to court disaster

Think about it. It’s quite possible that much of this disaster could have been avoided if the Obama administration had been willing to be open with the public about the degree to which Obamacare escalates the cost of health insurance. If they had, then a number of the problems with the exchange’s software architecture would never have arisen. But that would require admitting that the “Affordable Care Act” was not accurately named.

The White House knew that its people on the front lines, people like Henry Chao, were worried that the exchanges would get botched. They saw the Congressional Research Service memorandum detailing that the administration has missed half of the statutory deadlines assigned by the law. But they were more afraid of the P.R. disaster of disclosing Obamacare’s high premiums than they were of the P.R. disaster of crashing websites. What you see is the result.

*    *    *




How To Avoid Obamacare Penalty

How To Avoid Obamacare Penalty

Legally Avoid The Obamacare Penalty

It is the opinion of The Survival Team that Obamacare is very close to tyranny and a violation of the constitution.

So avoid this massive, planned, destruction of the best health care system in the world today with any means you can find.


Check out this article on the subject:

The Obamacare Penalty: Yes, It Can Be Avoided
By Lisa Scherzer | Yahoo Finance – Fri, Oct 25, 2013 1:13 PM EDT


The Obama administration this week said it is delaying the enforcement of the Affordable Care Act’s mandate, extending until March 31 how long Americans can go without insurance before facing a penalty.

But how strict is the Affordable Care Act’s individual mandate to begin with? It’s a question that’s floated around since the mandate was first mentioned: Can the government – and more specifically, the IRS – really enforce the mandate penalty? The answer is yes, but only up to a point. Whichever political side of the ACA you are on, it is a technical question that’s piqued the curiosity of consumers and pundits alike.

Consumers don’t have to report on whether they have coverage or are exempt from the mandate until they file their 2014 income tax return, which are due April 15, 2015. (Insurers will be required to provide everyone they cover with information that will help them demonstrate they had coverage.)

As it stands now, the individuals who don’t obtain health coverage in a given year (and are not exempt from the mandate) are subject to a fine of $95 for an individual or 1% of family income, whichever is greater. In 2015, the penalty increases to $325 per adult, or 2% of family income, whichever is greater.

How exactly will the penalty be assessed? If you don’t have sufficient health coverage by the deadline, the “IRS will hold back the amount of the fee from any future tax refunds,” according to HealthCare.gov, the government’s marketplace website.

But what if you don’t get a tax refund? Conservative radio talk show host Rush Limbaugh picked up on this subject on his show this week, telling listeners: “The only way that they can collect the penalty or the fine is by taking money from your refund. If you are not owed a refund, they cannot get money from you.”

We asked Mark Luscombe, principal analyst at CCH Tax & Accounting North America, about that. Turns out Limbaugh is essentially right. If you don’t get a refund next year, the “IRS could carry over the sum due and apply it against any refunds in future years. On a joint return, the penalty of one joint filer could be applied against the refund due to the other joint filer,” Luscombe says.

“If you don’t pay it, all they can do is wait until they owe you some money and take that. Or probably just send you a letter every now and then reminding you that you owe money to the IRS,” says Timothy Jost, a professor at the Washington and Lee University School of Law and coauthor of the casebook “Health Law.”

And by the way, once the IRS assesses the penalty, they’ve got 10 years to collect, says Bryan Camp, law professor at Texas Tech University.

The law also prohibits the IRS from using liens or levies to collect any “payment you owe related to the law, if you, your spouse or a dependent included on your tax return does not have minimum essential coverage,” according to the IRS. That means the IRS cannot go into someone’s “checking accounts anyway and just take the money,” as one of Limbaugh’s callers suggested the Obama administration might just do.

One other possible way for the government to recover the penalty owed is by suing you, says Camp. “It’s a difficult process because it’s the Department of Justice that has to file the suit, and they’ll only do that if the IRS asks and begs them to do it… The IRS can’t sue anyone for failure to pay taxes,” says Camp. If the government sues you for other tax debts, they can add this penalty to the amount. But “if it’s such a small amount, it’s unlikely the government would sue for the same very practical reasons you wouldn’t sue someone for $25,” he says.

Perhaps most important, there are no criminal penalties for not paying up. “You can’t go to jail – that’s not an option,” Jost says.

As Limbaugh explained on his show, “If you structure your taxes so that you do not get a refund, you do not have to buy insurance and you do not have to pay a fine ’cause they can’t collect it from you if you don’t have a refund due.  And that is just another nail in the coffin of Obamacare imploding on itself.” (That might be tough, however – most Americans get tax refunds. The IRS said about 75% of taxpayers got a refund last year.)
As Jost says, unless the law boosts the IRS’s power to collect these fines, it is, indeed, possible for one to go on without obtaining health coverage and never be financially penalized.

Obamacare Sign Up – What Is Hiding Behind The Curtain

The Affordable Care Act – “Obamacare” Lumbers Out To Disastrous Debut

While the cost of the web site, whether it be 90 million or 650 million is truly breathtaking, it’s lack of functionality makes the shocking waste in the federal government very apparent. But wait – there is more to the story.

Check out this article on Forbes.

What Broke The Obamacare Web Site? The Need to Hide The Costs Of The Health Plans

Scott Gottlieb, Contributor – Forbes

The Obama Administration may take their healthcare website offline again, for another major renovation. This time, the plan is to make it easier to browse plans without first registering for the site, according to news reports.

Why require registration just to browse among the health plans?

When the Medicare’s Part D drug website launched in 2005, it had no similar requirement. Consumers were able to view plans, evaluate the benefit designs, see what drugs were covered, and even know the underlying price of plans before any discounts or subsidies were applied.

In the case of Obamacare, the registration process helps determine someone’s eligibility for the health plans, but more important, how much in subsidies they are eligible for. The reason the administration didn’t allow unfettered access to information on the plans (without first registering) was to hide the true cost.

Without first collecting a person’s financial data, there is no way to know how much the government credits will subsidize the cost of a plan.

What consumers would be left to judge is the actual price of the coverage. And in most cases, that’s quite high.

When Part D launch, a deliberate decision was made to report not only the price that the consumer would pay for coverage, but the actual cost to the government. The clearness around this data has enabled consumers to evaluate how much the plans are actually worth, and how much in profits go to various middlemen.

In the case of Obamacare, the web site was made needlessly complex just in order to avoid this sort of transparency. There was probably fear in the White House that if consumers browsed plans and saw the list cost (without first knowing how much the government would subsidize their plan) many people would not return.

Lifting the registration requirement won’t solve all the woes. The fact is that the registration process is still systemically flawed. Lifting the initial requirement to register will simply mean fewer people have to go through this broken portal.

The biggest problem remains the middleware that allows different government agencies to talk with one another, in order to determine someone’s eligibility for subsidies. These problems are likely to take weeks and probably months to sort out.

In the meantime, lifting the initial registration requirement will help unburden some consumers from the initial problems. It’s a band aide, at best.

But now people will also see the real costs (if the Administration leaves these numbers visible to unregistered users). The hardest thing about Obamacare all along has been the need for its architects to conceal its painful truths.

Obamacare Wipes Out Existing Health Care Plans

10 States Already Suffering Obamacare Damage

Many health Insurance carriers are exiting Obamacare like rats jumping overboard from a sinking ship.

Ten states where Obamacare wipes out existing health care plans

The Daily Caller

By Sarah Hurtubise

President Barack Obama famously promised, “If you like your health care plan, you can keep your health care plan.” He later got even more specific.

“If you are among the hundreds of millions of Americans who already have health insurance through your job, or Medicare, or Medicaid, or the VA, nothing in this plan will require you or your employer to change the coverage or the doctor you have,” Obama said.

But as Obamacare’s rollout approaches, we have learned this is not true. Here are the ten states where consumers may like their health care plans, but they won’t be able to keep them.

1) California: 58,000 will lose their plans under Obamacare. The first bomb dropped in California with a mass exodus from the most populated state’s Obamacare exchange. Aetna, the country’s third largest insurer, left first in July and was closely followed by UnitedHealth. Anthem Blue Cross pulled out of California’s Obamacare exchange for small businesses as well.

Fifty-four percent of Californians expect to lose their coverage, according to an August poll.

2) Missouri: Patients of the state’s largest hospital system — which spans 13 hospitals including the St. Louis Children’s Hospital — will not be covered by the largest insurer on Obamacare exchanges, Anthem BlueCross BlueShield. Anthem covers 79,000 patients in Missouri who may seek subsidies on Obamacare exchanges, but won’t be able to see any doctors in the BJC HealthCare system.

3) Connecticut: Aetna, the third largest insurer in the nation, won’t offer insurance on the Obamacare exchange in its own home state, where it was founded in 1850. The reason? “We believe the modification to the rates filed by Aetna will not allow us to collect enough premiums to cover the cost of the plans and meet the service expectations of our customers,” said Aetna spokesman Susan Millerick.

4) Maryland: 13,000 individuals covered by Aetna and its recently-purchased Coventry Health Care won’t be able to keep their insurance plans if they want Obamacare subsidies on the exchanges. Aetna and Coventry canceled plans to offer insurance in the exchange when state officials wouldn’t allow them to charge premiums high enough to cover costs.

5) South Carolina: 28,000 people were insured by Medical Mutual of Ohio, SC’s second-largest insurance company, until it decided to leave the state entirely in July due to Obamacare’s “vast and quite complex” new regulations. Company spokesman Ed Byers said Medical Mutual’s patients would be switched over to United Healthcare plans instead.

6) New York: Aetna pulled out of New York’s exchange in late August in an effort to keep their plans “financially viable,” said Aetna spokeswoman Cynthia Michener.

7) New Jersey: 1.1 million Aetna customers are at risk in New Jersey, where the leading insurer also won’t be a part of the exchange. Just 2,600 patients purchase individual plans with the company, but any looking to take advantage of subsidies on the exchange for unaffordable employer-based insurance won’t be able to do with Aetna.

8) Iowa: Wellmark Blue Cross and Blue Shield, Iowa’s largest health insurer, decided not to offer plans in the Obamacare exchange. It sells 86 percent of Iowa’s individual health insurance plans.

9) Wisconsin: Two of the three largest insurers in the state won’t offer plans on the exchange. United Healthcare and Humana patients will have to get a new health insurer to buy insurance on Obamacare exchanges.

10) Georgia: Just five insurers are participating in Georgia’s Obamacare exchange. Medical Mutual of Ohio left Georgia and Indiana as well as South Carolina, due to Obamacare regulations. Aetna, along with Coventry, also decided against participating in the George health exchange.

Obamacare Sign-up Delayed for Small Business – Spanish Speakers

Latest Glitch in Obamacare Rollout

Here is an article from The Daily Caller re-posted here to keep small business owners up to date on the latest news.

Obamacare online sign-up delayed for small businesses, Spanish speakers

Caroline May
Political Reporter

The Obama administration is delaying online Obamacare enrollement for small businesses and people who primarily speak Spanish, according to an Associated Press report.

The online exchanges are scheduled to open Oct. 1. However, the AP reports that while small businesses can go online and shop around, they will not be able to finalize any insurance plans until November.

“We wanted to make sure this was going to work properly and be effective for small businesses,” Gary Cohen, the Health and Human Services Department official overseeing the rollout, told the AP. “We just felt like taking the additional time to make sure everything was functioning the way we wanted was the right thing to do.”

Additionally, the AP reports, the Obama administration notified Hispanic groups Wednesday that the Spanish language version of HealthCare.gov will not be able to enroll people for weeks after the exchanges open on Oct. 1.

Republicans, who have been hammering the administration over the slew of Obamacare roll-out stumbles jumped on the delay.

“Unbelievable. Did anyone tell the president that his administration is delaying another piece of Obamacare before he tried swindling the American people again?” Republican National Committee Chairman Reince Priebus said in a statement. “It’s clear all Americans deserve a delay from this trainwreck. Maybe even more Democrats will get on board with Republican efforts now.”

“ObamaCare’s been delayed for big businesses, for some state exchanges and now for small businesses.  But where’s the American people’s ObamaCare delay?  Where’s the concern for the privacy and security of the American people’s personal information?” Orrin Hatch, Ranking Member of the Senate Finance Committee, said in a statement. “This law is a disaster, but the exchanges — the heart of the law — are supposed to go live in just five days?  Give me a break.”

“This law will never be ready for primetime, because this is what happens when Washington takes over health care,”  Hatch added.

According to the AP, Cohen said they do not expect anymore delays.

“The individual market will open on time Oct. 1 with full online enrollment and plan shopping,” Cohen said.

The delays will affect the 36 states in which the federal government is operating the exchanges. Coverage will still begin on Jan 1.

ObamaCare – Small Business Action Before Oct. 1st

Small Business Owners Need To Act Before ObamaCare Deadline

Don’t get caught napping – check out the article re-posted here from Bloomberg Business Week.

What Small Businesses Need to Do for Obamacare Before Oct. 1  By Karen E. Klein September 03, 2013

The health insurance marketplaces created by the Affordable Care Act will open on Oct. 1. Most small employers—those with 50 or fewer full-time employees—are not required to offer health insurance coverage under the Affordable Care Act. Even businesses with more than 50 full-time employees have gotten a one-year reprieve from penalties if they don’t offer insurance. But all companies, regardless of size, are required to notify their employees about the Obamacare marketplaces.

The state and federal insurance exchanges are websites on which individuals and small businesses can shop for health plans. Though the deadline is less than a month away, many small businesses don’t know they have to notify employees, says Keith McMurdy, a benefits partner in the law firm of Fox Rothschild in New York. He has spoken to dozens of small business groups around the country in the past year and says most small business owners are unaware of the requirement or are under the misconception that it doesn’t apply to them because they’re too small to be governed by the health-care reform law’s mandate. McMurdy says it’s not clear how the requirement will be enforced, but penalties for businesses that don’t comply could reach $100 per worker per day.

“An employer with 10 employees typically says, ‘I don’t have to worry about it, because I don’t have to offer insurance.’ A lot of them are going to miss the deadline and be unpleasantly surprised when they do,” he says. The notification requirement applies to any business regulated under the Fair Labor Standards Act, which covers all companies with at least one employee and $500,000 in annual revenue. “There are no exceptions for small employers, which means nearly everybody has to get out this notice to their employees. We have been getting a lot of questions about it from small business owners,” says John Barlament, a lawyer in the employee benefits group at Quarles & Brady in Milwaukee.
STORY: Obamacare Still Lets Employers Discriminate—for Now

The U.S. Department of Labor has posted information about the notification requirement on its website and has provided model notices that can be used both by employers who offer insurance (PDF) and by those who do not offer insurance (PDF).

The one- to three-page model notices can be downloaded, filled out, and printed, either for distribution in the office or for mailing to employees’ homes, McMurdy says. Employees who come on board after Oct. 1 must get the notice within 14 days of their start date with the company. “People ask me what’s the safest way to do this, and I always say, if the government gives you a model, use it. Or make yourself a comparable form, modified the way you need it, and use that. The safest route is to put it in the U.S. mail or follow the instructions for distributing it electronically,” he says. “The employer obligation is met at that point. I don’t see any requirement that you have to get signatures saying your employees have received it or maintain proof of the fact that you gave it out.”

The second and third pages of the model notices are optional, Barlament says. He is encouraging his small business clients to include the upper portion of page 2, which describes the insurance coverage provided by the company, but to leave off the rest of that page and page 3, which he feels could be confusing.

ObamaCare By Another Name

By Any Other Name – It’s Still The Same

Is this what it takes to move this disaster along?

Here’s an interesting update from Fox News –

States marketing ‘ObamaCare’ with other names to bolster enrollment

States running their own insurance programs as part of the Affordable Care Act have marketing and enrollment strategies that are sidestepping references to the words “ObamaCare,” a term that has largely come to be associated with the unpopularity of the plan.

In Minnesota, state employees are promoting their health insurance marketplace as MNsure — even going to the annual state fair to hand out fans imprinted with pictures of Paul Bunyan and Babe the Blue Ox, according to The Wall Street Journal.

The grassroots effort is part of a larger, $9 million marketing effort that includes billboards and TV ads.

Minnesota, one of 13 states and the District of Columbia that is running its own health insurance marketplaces, thinks its marketing efforts will increase enrollment, which begins Oct. 1.

ObamaCare was designed to provide coverage to Americans who don’t have it from their employer or elsewhere. However, the rollout of the program, which begins January 1, has had some setbacks, including the delay of the provision requiring businesses to provide insurance.

And a small but vocal group of congressional Republicans are trying to “defund” ObamaCare before next month.

Vermont is scheduled this week to run radio and TV ads touting its exchange, Vermont Health Connect, as being “For Vermonters, By Vermonters.”

Oregon’s program features local musicians singing songs including “Long Live Oregonians.”

National polls show the public is wary about ObamaCare, including a Kaiser Family Foundation poll released last week that showed 42 percent of Americans disapprove of the law, compared to 37 percent favoring it.

ObamaCare Poised To Destroy 40 Hour Work Week

ObamaCare is poised to “destroy the foundation of the 40 hour work week

An excellent article posted on FoxNews.com Opinion originally posted by Edmund F. Haislmaier 08/15/2013. Edmund F. Haislmaier is a senior research fellow in The Heritage Foundation’s Center for Health Policy Studies.

We’d better prepare for some major changes to our way of life with the roll out of ObamaCare.

It seems that a lot of people are not too happy about this including some of the same that originally pushed it through.

A look at ObamaCare’s significant, widespread and very real problems

By Edmund F. Haislmaier
Published August 15, 2013

ObamaCare is poised to “destroy the foundation of the 40 hour work week that is the backbone of the American middle class.” And that’s the president’s supporters talking.

The dire warning came last month in a letter from three of the nation’s most influential union bosses to Democratic leaders in Congress.

“The unintended consequences of the ACA [Affordable Care Act] are severe,” the labor leaders bemoaned. “Perverse incentives are already creating nightmare scenarios.”

Specifically, they noted, “the law creates an incentive for employers to keep employees’ work hours below 30 hours a week, and many of them are doing so openly. The impact is two-fold: fewer hours means less pay while also losing our current health benefits.”

With an ObamaCare “train wreck” heading down the track it is still not too late for those who originally voted for the law to repent.

The White House maintains that such concerns, originally raised by analysts at The Heritage Foundation and elsewhere before ObamaCare was signed into law, are purely chimerical.

Those news reports of employers cutting workers’ hours to escape the ObamaCare mandate?  Not to worry, the administration says soothingly, it’s merely “anecdotal.”

Yet anecdotal reports are becoming increasingly frequent—indicating that a wave of reductions in workers’ hours may well be in the offing.

For example, reporters from NBC recently interviewed nearly 20 employers around the country, from fast-food franchises to colleges, and found that “almost all said that because of the new law they’d be cutting back hours for some employees.”

This is just the latest piece of evidence indicating that ObamaCare is unfair, unaffordable and unworkable. Consider some other recent news items:

Far from “bending the cost curve down,” consumers in many states will find coverage offered through the ObamaCare insurance exchanges stick them with average premium prices next year that are 30% or 40% higher than what they would have paid last year.
The federal government’s new “data hub” that the state insurance exchanges will use to screen applicants won’t be fully functional in time. Thus, the exchanges won’t be able to verify some applicant’s incomes when determining how big a subsidy they get.  They also won’t be able to verify if the applicant has employer coverage, and thus is ineligible for subsidies.
The federal government may also be unprepared to protect ObamaCare’s information technology system from hackers and identity thieves. Security testing is months behind schedule, Reuters reports. Writing in The Weekly Standard, former HHS General Counsel Michael Astrue warned that &quotunless delayed and fixed&quot the ObamaCare exchanges will &quotinflict on the public the most widespread violation of the Privacy Act in our history.&quot

The problems with ObamaCare are very significant, very widespread, and very real. The president can remain in denial if he wants, but the stakes are too high for Congress to bury its collective head in the sand. With an ObamaCare “train wreck” heading down the track it is still not too late for Congressmen and Senators who originally voted for ObamaCare three years ago to now repent and repeal.

Edmund F. Haislmaier is a senior research fellow in The Heritage Foundation’s Center for Health Policy Studies.

Feds Coming After Your Retirement?

Is Your 401K Safe From The Government?

The cat is now out of the bag.

We heard rumors of this a couple of years ago.

We are not in the business of giving financial advice, but we are looking at ways to protect ourselves, and to head off this potential threat. 

February 22, 2013

The Feds Want Your Retirement Accounts

By John White

Quietly, behind the scenes, the groundwork is being laid for federal government confiscation of tax-deferred retirement accounts such as IRAs. Slowly, the cat is being let out of the bag.

401 Low HangingLast January 18th, in a little noticed interview of Richard Cordray, acting head of the Consumer Financial Protection Bureau, Bloomberg reported “[t]he U.S. Consumer Financial Protection Bureau [CFPB] is weighing whether it should take on a role in helping Americans manage the $19.4 trillion they have put into retirement savings, a move that would be the agency’s first foray into consumer investments.”  That thought generates some skepticism, as aptly expressed by the Richard Terrell cartoon  published by American Thinker.

Days later On January 24th President Obama renominated Cordray as CFPB director even though his recess appointment was not due to expire until the end of 2013.

One day later, in the first significant resistance to President Obama’s concentration of presidential power, a three judge panel of the U.S. Court of Appeals in Washington DC unanimously said that Obama’s Recess Appointments to the National Labor Relations Board are unconstitutional.  Similar litigation testing the Cordray appointment to the CFPB is in the pipeline.

The Consumer Financial Protection Bureau (CFPB) created by the 2,319 page Dodd-Frank legislation is a new and little known bureau with wide-ranging powers.  Placed within the Federal Reserve, a corporation privately owned by member banks, the CFPB is insulated from oversight by either the President or Congress, its budget not subject to legislative control.  It is not even clear that a new President can replace the CFPB director on taking office.

Unusual legal and political environments have a significant impact on the CFPB. With Cordray’s recess appointment in doubt several questions remain unanswered.

1) What will become of the CFPB when Cordray’s appointment is found invalid?  An indicator comes from the NRLB, which operated unconstitutionally for years without a quorum.  In 2007 the Senate threatened no NLRB nominations reported out of committee.

The NLRB continued operating with two members.  Then a Supreme Court ruling in June of 2010 invalidated the NLRB decisions for lack of a quorum.  Fisher & Phillips give the details about what was done next.

But recovery from the Supreme Court’s sting was quick, with Liebman and Schaumber still on the Board and with two new Members confirmed, … the suddenly full-strength Board simply added a new Member to the “rump panel” of the original decisions and managed to rubber-stamp many of the disputed Orders – at a record-setting pace – with the same result…

This may explain why President Obama renominated Cordray a year early.  Once confirmed Cordray can rubber-stamp decisions made while he was unconstitutionally appointed.  Otherwise those decisions will be invalidated.

2) What will the CFPB do with your money?  The CFPB incursion into individual personal savings, in order to control how you invest your money, isn’t a new idea. Current proposals grew from a policy analysis as disclosed by Roger Hedgecock.

On Nov. 20, 2007, Theresa Ghilarducci, professor of economic policy analysis at the New School for Social Research in New York, presented a paper proposing that the feds eliminate the tax deferral for private retirement accounts, confiscate the balance of those accounts, give each worker a $600 annual “contribution,” assess a mandatory savings tax on every worker and guarantee a 3 percent rate of return on the newly titled “Guaranteed Retirement Accounts,” or GRAs.

How would that be accomplished?  The Carolina Journal reported Ghilarducci’s 2008 testimony to Nancy Pelosi’s House.

Democrats in the U.S. House have been conducting hearings on proposals to confiscate workers’ personal retirement accounts “including 401(k)s and IRAs” and convert them to accounts managed by the Social Security Administration.

Your Government universal GRA investment savings account is an annuity managed by Social Security.  Hedgecock noted ‘[m]ake no mistake here: Obama is after your retirement money. The “annuities” will “invest” not in the familiar packages of bond and stock mutual funds but in the Treasury debt!’

By 2010 Bloomberg published an article titled  “US Government Takes Two More Steps Toward Nationalization of Private Retirement Account Assets.” In that article Patrick Heller observed that, with Democrat control of Congress and the Presidency:

[I]n mid-September 2010 the Departments of Labor and Treasury held hearings on the next step toward achieving Ghilarducci’s goals. The stated purpose was to require all private plans to offer retirees an option to elect an annuity. The “behind-the-scenes” purpose for this step was to get people used to the idea that the retirement assets they had accumulated would no longer be part of their estate when they died.

So the Government would get the money, not the estate or family of the people who saved the money during a lifetime of work.  That’s a one hundred percent death tax on savings.  Worse, the most responsible and poorest families will be penalized.

Democrats had a blueprint for diverting people’s savings from private investment to government debt.  Then in 2010 the Tea Party won the house…

3) Why should the Government intervene in people’s savings decisions?  The justifications for Government intervention in private financial decisions are varied.  Panic over the economy, Wall Street, mandating savings equity, eliminating investment risk, financial crisis losses, retirement security, much-needed oversight, your 401K becomes a 201K, shoddy financial products, and predatory investment bankers are just a few.

If the financial industry is so predatory, how is it possible that savers keep any money?  More importantly, we have all those government agencies, FDIC, FINRA, SEC, Labor Department, Treasury Department, NCUA, Office of Thrift Supervision, FHFA, NCUSIF, Comptroller of the Currency, Office of Foreign Assets Control, Pension Benefit Guaranty Corporation, hundreds of criminal penalties, and state level regulators.  Are we admitting the Government is incapable of policing criminal and predatory behavior?  Do we have invincible predators plundering the people, or do politicians Cry Wolf?

And about that crisis in the economy.  Former Congressman Barney Frank, one of the authors of Dodd-Frank, admitted to Larry Kudlow that Government was to blame for the housing crisis.

Professor Ghilarducci said “humans often lack the foresight, discipline, and investing skills required to sustain a savings plan.”  Professor Ghilarducci tells us that people are flawed, no argument there.

Her solution, substitute Government decisions for the judgment of the millions of people who actually earned and saved the money.  She fails to mention the government bureaucrats wielding the power to compel you to comply are themselves imperfect.  Which is preferable, one faulty Government solution or millions of individual free choices?

4) Are there other forces pushing Government to confiscate people’s savings?  With $16 trillion in debt the short answer is yes.  When governments embark on a path of spending money they don’t have, they resort to financial repression.  According to Wikipedia:

Financial repression is any of the measures that governments employ to channel funds to themselves, that, in a deregulated market, would go elsewhere. Financial repression can be particularly effective at liquidating debt.

Do we have any evidence that the US Government is pursuing financial repression?  Yes we do. Jeff Cox at CNBC.  “US and European regulators are essentially forcing banks to buy up their own government’s debt-a move that could end up making the debt crisis even worse, a Citigroup analysis says.”

An Investors Business Daily article, Banks Pressured to Buy Government Debts, notes that “[b]anks can’t say no. They fear the political fallout. So they meekly submit to the government’s dictates.”

Meanwhile the Wall Street Journal reports that “[i]n 2011, the Fed purchased a stunning 61% of Treasury issuance.”  Then a CNS News article revealed that  “[s]o far this calendar year [2013], the Federal Reserve has bought up more U.S. government debt than the U.S. Treasury has issued.”

5) Is the health of Social Security (SS) a factor? There are several potential measures of when Social Security retirement goes broke.  One measure is when FICA tax income doesn’t cover the cost of retirement checks.  We have passed that point already.  Others say that SS is fine until the lock box runs out of special issue bonds (IOUs).

Even though the SS bonds in the lock box cannot be sold on the open market, the Treasury Department remains under political pressure to honor that obligation by borrowing real cash to redeem the IOUs.   At least until the IOUs in the lock box are gone.  How long is that?  Based on a credible source, Bruce Krasting at Zerohedge suggests not long.

SS consists of two different pieces. The Old Age and Survivors Insurance (OASI) and Disability Insurance (DI). Both entities have their own Trust Funds (TF). OASI has a big TF that will, in theory, allow for SS retirement benefits to be paid for another 15+ years. On the other hand, the DI fund will run completely dry during the 1stQ of 2016.

So Krasting expects the President and Congress will soon be forced to choose between 4 solutions:

1 Increase Income Taxes

2 Increase Payroll Taxes

3 Cut disability benefits by 30%

4 Kick the can down the road and raid the retirement fund to pay for disability shortfalls.

Krasting predicts Congress and Obama will be behind door number four. His credible source is the Congressional Budget Office report Social Security Trust Fund–February 2013 Baseline.  In the footnotes it projects a $1 Trillion drain on the retirement fund which currently holds $2.8 Trillion.  That’s a loss of approximately one third of the retirement IOUs.

Krasting however omits another possible solution, politicians can raid private retirement savings to put more IOUs in the lock boxes and more real money in the Treasury.  Other people’s money is a temptation and $19.4 Trillion is a very large temptation.

Social Security is the largest entitlement program with a trust fund of $2.8 Trillion IOUs, soon to be reduced by another $1 Trillion.  Can any politician, addicted to spending, resist that temptation of $19.4 Trillion?  That’s real people’s real money that will be spent by Government in exchange for IOUs given to the SS lock box.

Meanwhile newly minted Senator Elizabeth Warren has entered the debate.  Conservatives and Republicans have challenged the CFPB in the wake of the unconstitutional recess appointment.  Bloomberg speculates that Warren might agree to trim the CFPB powers in a compromise. Bloomberg reported:

“A strong independent consumer agency is good for families and lenders that follow the rules and good for the economy as a whole,” Warren said yesterday in an interview. “I will keep fighting for that.” [snip]

Some observers have suggested that Warren’s original support for a commission-led bureau might mean she would be amenable to compromise on that issue. Warren spokesman Dan Geldon said such speculation is mistaken.

“Senator Warren thinks the single director structure makes sense and that CFPB should continue to be able to operate, like every other banking regulator, without relying on appropriations for its funding,” Geldon said.

Bloomberg also notes that soon “the Senate will have to decide whether to vote to confirm director Richard Cordray in his post, which would make a legal challenge pointless.”

Conservatives and Republicans challenge the surrender of legislative power to the bureau, the concentrated power of a single director, the unconstitutional recess appointments, and the violation of constitutional separation of powers.  The Republican position is the constitutional questions and litigation presently underway should be resolved prior to approving a director of CFPB.

The constitutional issues surrounding Dodd — Frank and the CFPB are beyond the space for this article.  For those interested in the legal issues, a good synopsis can be found at the Mark Levin Radio Show podcast for February 18th.  Mark is an attorney and his Landmark Legal Foundation has argued many cases before the Supreme Court.  He can explain complex legal issues in straightforward language.