The ObamaCare Insurance Fraud Scandal

With all the discussion, no one in the media is explaining why insurance companies supported ObamaCare. The progressive-socialist vision is of a health care system without "greedy" insurance companies. The president on many occasions called ObamaCare a "transitional step" toward government run "single payer" health care. So, why did insurance companies support a law designed to destroy their industry?

They were promised an unaccountable system ripe for massive fraud.

The U.S. Government Accountability Office estimates that $1 out of every $7 spent on Medicare is fraud.

GAO has designated Medicare and Medicaid as high-risk programs, in part due to their susceptibility to improper payments—estimated to be about $65 billion in fiscal year 2011

ObamaCare was sold to insurance companies as a medicare-like direct payment system. A system where the IRS determines an individual's tax credit at the end of the year...after ObamaCare subsidies have been directly payed to insurance companies. If an individual claims too large of a subsidy, the IRS goes after the individual, not the insurance company, to recoup the money.

Let's walk through this. (As we do, imagine President Obama explaining this to insurance executives with a deceptive "come on guys, this is free money" tone.)

John Insurance Consumer signs up for ObamaCare Silver Plan with ACME Insurance Company. John is not eligible for Medicare, but will get $1000 per month in tax credits through ObamaCare for a plan that costs $1400 per month. ACME Insurance Company bills John $400 per month and Uncle Sam is directly billed $1000 per month.

ACME Insurance Company is directly billing ObamaCare $1000 per month for John. If the IRS determines at the end of the year that John is only eligible for $750 per month in subsidies, they go after JOHN not ACME for the difference.  If John is an illegal immigrant, he is exempt from ObamaCare fines.

Notice, if you will, no one in the media is explaining who pays the $1400 per month premium. A $1400 per month premium is a massive out-of-pocket bill. This is where, remember this term, ADVANCEABLE TAX CREDITS come in.

Per Kaiser Family Foundation:

How will premium subsidies be provided? 

Premium tax credits would be refundable and advanceable. A refundable tax credit is one that is available to a person even if he or she has no tax liability. An advanceable tax credit allows a person to receive assistance at the time that they purchase insurance rather than paying their premium out of pocket and waiting to be reimbursed when filing their annual income tax return

The advanceable tax credits are determined by a series of income percentages. It is impossible to know precisely an individual's income at the beginning of the year or when they sign up for ObamaCare. So, insurance companies must ESTIMATE the amount of subsidy they receive directly from ObamaCare.

Do we need to say more?

No, but to spell it out. Medicare is exposed to massive fraud because its direct payments compensate billed claims. The claims are paid up front and are seldom held accountable.  ObamaCare eliminates the fraudulent claims by making them estimates. They are estimates of advanceable premiums. The insurance company being paid the advanceable premium is not liable for bad estimates, individuals are held accountable by the IRS. This incentivizes individuals to report less income and rely more upon government subsidies AND it promises an unaccountable, uncapped fire hydrant of government payments to ACME insurance.

ObamaCare, aka the PPACA, expands medicaid/medicare fraud from over billing by individuals and doctors to over billing by insurance companies. ObamaCare redefines "Insurance Fraud."

How big is the ObamaCare insurance fraud market as promised to insurance industry?  Per Kaiser Family Foundation:

The Congressional Budget Office (CBO) estimates the direct cost of premium and cost-sharing subsidies to be $350 billion from 2010 to 2019, and $8 billion in indirect costs. The cost of the subsidies is a function of the number of people that are eligible for subsidies, and how generous the subsidies are. 

Consider this...An undocumented or even fictitious health consumer named Jose has never filed a tax return. ACME insurance signs him up with a massive advanceable tax credit...

In the best case, ACME insurance is vilified in an "Insurance Fraud" Sting. The more likely outcome is that the fraud would succeed. Jose would be exempt from fines and the tax payer would pay. The corrupt system would continue until it becomes politically expedient to demonize insurance in favor of Single Payer.

This deception strategy was used in the Fast & Furious scandal. The U.S. Department of Justice & ATF sold machine guns, sniper rifles, grenades and other small arms to Mexican drug gangs. The ensuing crisis was intended to push gun control legislation by blaming "gun proliferation" on American gun owners. The ability to blame opponents for progressive policies was also used during the shutdown to blame Republicans for President Obama's shutdown of the government by refusing to delay the ObamaCare mandate.

The Obama Administration Also Committed Fraud in the Inducement Against Insurance Companies

 OSHA standard 1910.1030(e)(2)(ii)(F)
 “lab coats, gowns, smocks, uniforms, or other protective clothing
shall not be worn outside of the work area…”

Insurance companies were swindled along with the American public. The administration appealed to their greed through fraud. President Obama lied about Americans keeping their health insurance under ObamaCare. This lie is causing the loss of tens of millions of insurance customers according to estimates based on the (Un)Affordable Care Act, page 34,552.

Per a deleted and then revised NBC news expose on ObamaCare (pdf of original story): Obama admin. knew millions could not keep their health insurance

That means the administration knew that more than 40 to 67 percent of those in the individual market would not be able to keep their plans, even if they liked them. 

...

George Schwab, 62, of North Carolina, said he was "perfectly happy" with his plan from Blue Cross Blue Shield, which also insured his wife for a $228 monthly premium. But this past September, he was surprised to receive a letter saying his policy was no longer available. The "comparable" plan the insurance company offered him carried a $1,208 monthly premium and a $5,500 deductible.
And the best option he’s found on the exchange so far offered a 415 percent jump in premium, to $948 a month.

"The deductible is less," he said, "But the plan doesn't meet my needs. Its unaffordable."
"I'm sitting here looking at this, thinking we ought to just pay the fine and just get insurance when we're sick," Schwab added. "Everybody's worried about whether the website works or not, but that's fixable. That's just the tip of the iceberg. This stuff isn't fixable." 

This suggests why healthcare.gov does not work. It is intended to be a scapegoat when dealing with insurance companies. When insurance executives question why customers are not materializing as promised, the administration points to the Youtube video...oops... the website.  

So what does this all mean?

Between 15 and 93 million Americans will suffer the loss of health coverage. That doesn't matter to the progressive movement because the ideological ends justify the means. Individuals do not matter in ObamaCare because it is not a health care plan. It is an empty promise designed to fail and swindle us into government controlled "single payer" or "universal medicaid" health care.

ObamaCare is NOT a train wreck. It is a jumbo jet crashing into a skyscraper.

Additional San Diego Local Order of Bloggers articles exploring related topics:

• The ObamaCare Bait and Switch- October 30, 2013
• The Coming Obamacare Recession
• It's pretty clear what this is all about
• Obamacare rolls on
• Socialism is a Euphemism for...
• The Party of No...
• ObamaCare Denied for Gun Owners

Standing Ovation for Hearing On IRS Terrorizing Obama Opponents

5/17/2013 11:00 AM:
I am a political geek. CSPAN is on a lot when everyone else is asleep or away. This is the first time that I have seen a Congressional hearing include a standing ovation requiring a call to order. The investigation into the IRS terrorizing President Obama's opponents has opened the eyes of Americans. The question is if our eyes will stay open.

For those of you familiar with this blog, it includes some analysis, theories, breaking stories and occasionally speculation. However, to find truth, we endeavor to provide in-context information. We often include source footage and try to keep it short. Today, we must ask you to watch a 4 and a half minute clip summarizing much of today's congressional hearing.

For those of you who cannot spend the time here is the money quote by Representative Mike Kelly (R-Pennsylvania 3rd): (3:30)

 You know what? There is a heck of a lot more that has to come out in this.

As anybody that sits here today and listen to what you have to say. I am more concerned today than I was before and the fact that you all can do just about anything you want to anybody, you know you can put anybody, out of business, that you want anytime you want.

I got to tell you, you talked about horribly-run organization?

If you're on the other side of the fence, you're not given that excuse.  And when the IRS comes in,  you're not allowed to be shoddy.  You're not allowed to be run horribly. You're not allowed to make mistakes.   You're not allowed to do one damn thing that doesn't come in compliance.

 If you do you're held responsible right then.

I just think the American people have seen what is going on right now in their government.  This is absolute overreach and this is outrage for all America.

 [applause] >> all right.   Mr. Griffin is recognized for five minutes.

Thank you -- [applause]

The IRS is President Obama's Internal Retaliation Service.

Old Glory Petraeus On Benghazi

America is about to get a new adjective for Patriot, Petraeus.

After turning the tide in Iraq and improving the situation in Afghanistan, David Petraeus retired from the Army as a four-star General. He then took over as C.I.A. Director from Leon Panetta in September 2011.

Despite left-wing name calling during the "General Betray Us" Move-On.org campaign in 2007 and questions about his ability to lead the shadowy C.I.A., the General has consistently supported his country and his Commander-in-Chief honorably. Recent revelations about an affair have forced David Petraeus to step down.

General Petraeus's departure is an example of honor and service. He protected his Commander-in-Chief and waited until after a close election to fall on his sword. Revelations about his indiscretions may have reflected upon President Barack Obama's reelection.

Honorably parting from a position of power was a staple of American honor beginning from George Washington until Democrat President Franklin Delano Roosevelt.  George Washington's example of not seeking a third term was seen as a bulwark against monarchy and dictatorship. King George III., famously commented incredulously that Washington was "...the greatest man in the world" for stepping down from power. Upon FDR's successful violation of Washington's example, by remaining president until his death, the Twenty-Second Amendment was passed in March 1947. The amendment formally requires a two-term limit for the President.

Recent American history has seen Republican President Richard M. Nixon step down due to dishonoring the office, while Democrat President William Jefferson Clinton remained in office after a famous sex scandal and impeachment by congress.

While Doo Doo Economics is opposed to the policies of the Obama administration, we are mindful of honorable service by a military leader dedicated to serving his country. For reducing the size of the cover-up and freeing our intelligence agency from the possibility of blackmail, we declare David Petraeus to have honorably served the American people.

That is just the beginning of the story.

David Petraeus is scheduled to meet The House Intelligence Committee in a closed door meeting about the attack on the U.S. consulate in Benghazi, Libya. Former C.I.A. Director Petraeus, Director of National Intelligence James Clapper and the director of the National Counterterrorism Center, Mathew Olson are scheduled for the November 15th hearing. The Hill described the hearings prior to the Petraeus resignation:

A half-dozen committees are probing the issue, including the Senate Intelligence Committee, which is planning to hold a closed hearing on the same day as its House counterpart is set to look at the intelligence community’s knowledge and activity leading up to the attack.

Ahead of both intelligence hearings, the committees have reviewed scores of documents, including cables and communications on how the threat to the consulate arose, what actions were taken in response and who is responsible.

The panels are also expected to probe the level of funding dedicated to intelligence-gathering operations in the region and whether they have the resources they need to defend U.S. personnel and interests.

Chris Mark Heben, a former Navy SEAL who worked with the C.I.A. and trained with Glen Doherty, commented on Fox News:

We stayed, and as a matter of fact, nothing was emboldened [at the Benghazi consulate], actually security was probably reduced. It is actually ridiculous.
...
He [Tyrone Woods] was told to stand down before he even left to go to respond. He was told to stand down while they were still at the annex, and he completely disregarded it. So, within twenty minutes of the siege occurring they were on-site defending the consulate.
...
So, they had a total of nine guys. They disregarded orders. They were told to stand down and I think that stuff is going to come out in the [House Intelligence Committee] proceedings.
...
The fact that these guys were hung out to dry. Basically, exposed like a set of dog balls, pisses me off! They had no support!
...
The request for heavy weapons were ignored. I am baffled by that.

Mr. Heben continues to the point of this article:

I don't really believe much that comes out of her mouth [Secretary of State Hillary Clinton], ya know. The good thing about this, [although] it sucks for General Petraeus but, there is now a sex scandal attached to this story [Benghazi]. So, sex sells. I think, the fact that there is a sex scandal, this story is going to get front line, front and center press, even in the main stream media.

Fellow members of the San Diego Local Order of Bloggers have compiled information and analysis of Benghazi. Blogger In Chief: Sex Lies and Benghazi and we began the reporting with Killing Stevens: The Obama Scandal. The big questions center around whether Barack Obama used Ambassador Stevens as a go between while selling heavy weapons to Al Qaeda. The Ambassador was then the sole witness who could testify that the president intentionally armed anti-American and anti-Israeli terrorist groups in Libya. Such a revelation would tie attacks on Israeli aircraft to shoulder fired anti-aircraft missiles known as MANPADS. The facts could also tie the president to major loses of U.S. VTOL aircraft in Afghanistan.

General Petraeus, as Director of the Central Intelligence Agency, may have important information regarding these questions. David Petraeus, an Honorable and patriotic American, has just watched the president relieve General Ham, Rear Admiral Charles M. Gaouette and the death of Ambassador Chris Stevens, all related to Benghazi.

Rep. Trey Gowdy (R-SC) told Greta Van Susteren that David Petraeus will be questioned despite his resignation via subpoena.

The fact that he’s resigned and had an affair has nothing to do with whether he will be subpoenaed to Congress. I hope we don’t have to subpoena a four star general and a former CIA director. I would hope he would come voluntarily but if he won’t he will be subpoenaed. And none of what happened today is an offense to a subpoena… He’s either a witness in our case in chief or he’s gonna be a rebuttal witness if Susan Rice and others blame him for their failure of intelligence and failure of information. But there is no way we can get to the bottom of Benghazi without David Petraeus.

Petraeus has positioned himself with little to lose but politically everything to gain by telling the truth.The subpoena allows David Petraeus to testify reluctantly to protect his political left flank.  His political right flank will be protected by conservatives who appreciate his honor and service. 

His legal position will be behind a closed door with Congressional leaders. Congress members are automatically granted security clearance due to vetting by the public in gaining public office. Further Petraeus will be required to tell the truth under subpoena by the government he has spent his life in service of.

The media, due to his sex scandal, will be focused on the story of his testimony as he is dragged before congress. If he blows the lid off of Benghazi, he will be sitting in the position of patriotic American hero.

P.S.
Do not forget that David Petraeus loved his C.I.A. position:

Why did Petraeus take the job after finishing his military career? The answer is suggested by a comment he made to a senior colleague considering retirement in 2013. “You have to ask yourself if you’re really ready to be out of the arena.”

Petraeus might well have been talking about himself. He wasn’t ready to leave the arena, and after learning the peculiar culture of the CIA, he seems increasingly confident in what he calls the best job in government.