Memorandum

To: Tea Party Patriots From: Shonda Werry Date: August 31, 2011 Subject: ObamaCare Background for TPP Website Part I: Talking Points ObamaCare puts America on the same failed path of socialized medicine that England, France, Cuba, and Canada have experimented with. The American public increasingly disapproves of the healthcare overhaul. ObamaCare relies on a series of budget gimmicks to mask the real costs associated with the bill and its impact on the deficit. ObamaCare will impose significant costs on state Medicaid budgets. ObamaCare will lead to less competition in the health insurance and health care industries. ObamaCare will necessarily lead to higher prices for health insurance and health care services. ObamaCare, to keep costs from escalating, will ration care the same way that Englands and Canadas healthcare systems ration care. ObamaCare represents the largest tax increase in American history. ObamaCare will cripple the economy, burdening small business owners. ObamaCare will lead to massive doctor shortages across the country and in every medical specialty. There is no Constitutional basis for the individual mandate the provision in ObamaCare that requires every American citizen to carry approved health insurance, or otherwise pay a punitive fine.

PART II: Brief Overview of ObamaCare On March 23, 2010, President Barack Obama signed into law the Patient Protection and Affordable Care Act (commonly referred to as ObamaCare). The law radically transforms the relationship between individuals and the federal government, and gives the federal government unprecedented powers. The laws stated purpose is to expand health insurance access to millions of Americans, but the primary vehicle through which ObamaCare expands coverage is by expanding Medicaid, an entitlement program that fails to deliver quality care and is an unsustainable burden on all fifty states budgets and the federal budget. Some of the main features of ObamaCare are: The Individual Mandate: ObamaCare requires every U.S. citizen and legal resident to purchase approved health insurance. The Department of Health and Human Services decides which plans are approved. Those American citizens who choose not to carry health insurance will be forced to pay a punitive fine on their annual income tax return. Expansion of Medicaid: ObamaCare significantly expands Medicaid enrollment. Expansion of the federal government: ObamaCare gives the federal government unprecedented authority to regulate new activities. A misuse of the Constitutions Commerce Clause: ObamaCare uses the Commerce Clause as the basis for the federal governments authority to require Americans to purchase health insurance. However, the Commerce Clause only gives Congress the authority to regulate interstate commerce, not the authority to require Americans to engage in commerce. New taxes: ObamaCare contains a series of new taxes and fees that will be levied against both individuals and corporations. A complete list of taxes can be found here: http://healthcare-coalition.org/tax_burden Gradual implementation: ObamaCare was signed into law 18 months ago, but the Democrats designed it to go into effect slowly, in part to avoid some of the fallout during the 2012 election. Here is a timeline of the dates for implementation: http://healthcare-coalition.org/timeline

PART III: A Collection of Articles

ObamaCare: The Year in Review

On March 23, 2010, President Barack Obama signed into law the Patient Protection and Affordable Care Act (ObamaCare). In its first year, ObamaCare has created several embarrassing moments for the Administration and for Democrats in Congress, as many of the promises they made to the American people have already proven false. Public opposition to ObamaCare remains high and reports indicate that the new law will bankrupt all 50 states. Adding insult to injury for the Obama Administration, a majority of the states have joined together to challenge the constitutionality of ObamaCare in federal courts. As the one-year anniversary of ObamaCare approaches, it is worth examining the full impact of the new law and the challenges it has encountered over the past twelve months. ObamaCare Timeline: A Year of Failures, Disappointments, and Lackluster Results March 2010: March 23, 2010: President Obama signed ObamaCare into law. April 2010: In April, nineteen states filed a lawsuit against the Obama Administration over the new healthcare law, challenging the law's individual mandate. The bad news for the Obama Administration in April was not limited to the legal challenges; the healthcare overhaul also faced serious political challenges. On April 23rd, the Centers for Medicare and Medicaid Services (CMS) reported that the nation's health care costs will increase by $311 billion due to ObamaCare. Further adding to the negative news, Obama's chief actuary reported on April 26th that ObamaCare will cause 50% of seniors to lose their Medicare Advantage plans. Only one month after becoming law, ObamaCare was already forcing millions of Americans to find new health insurance options. May 2010: In May medical device companies across the country announced that they will be forced to cut jobs because of ObamaCare's burdensome taxes on their industry. June 2010: In June the Obama Administration sent 4 million postcards to small businesses, announcing that they would be eligible for an ObamaCare "tax credit." (The postcards, it should be noted, were fully financed with taxpayer funding.) However, an AP article later revealed that very few businesses will actually qualify for these tax credits (for example, only businesses with fewer than 10 people at salaries of less than $25,000 are fully eligible for the tax credits).

 Amidst growing concerns about doctors leaving their practices because of ObamaCare's many regulations, President Obama on June 8th promised the American public: "If you like your doctor, you can keep your doctor." The President failed to explain how the government will compel doctors to continue seeing patients (especially Medicare and Medicaid patients) when ObamaCare is fully implemented. July 2010: In July the Justice Department finally admitted what conservatives had warned all along that the individual mandate is actually a tax on all Americans. Also in July, the Administration failed to meet at least seven key ObamaCare deadlines. New Mexico and Pennsylvania both announced this month that they intended to use ObamaCare funding for abortions, which had been one of conservatives' chief objections to this new federal healthcare spending. Under pressure from conservative Members of Congress, Sec. Sebelius was forced to issue a directive to these two states, informing them that they will not be permitted to pay for abortions with taxpayer funds. August 2010: In August, the voters of Missouri dealt the Administration a serious blow when they voted overwhelmingly (70%) against the ObamaCare individual mandate. September 2010: Twenty-three thousand seniors in Massachusetts lost their Medicare Advantage plans this month because of ObamaCare's cuts to the program. Several health insurance companies across the country stopped selling their "child-only" health policies due to the restrictions and extra regulations contained in ObamaCare, forcing tens of thousands of families in 33 states to find other health insurance plans for their children. October 2010: Throughout the month of October, the Obama Administration spent three million dollars of taxpayer money on advertisements to promote the unpopular law. The Department of Health and Human Services issued 171 waivers to companies and labor unions to allow them to keep their current health insurance plans, exempting them from ObamaCare's elimination of healthcare policies that have annual and lifetime limits. The need for these waivers illustrated that ObamaCare was already violating the President's promise that Americans would be able to keep their health insurance plans. November 2010: November's election was a clear referendum on President Obama's agenda, particularly the government takeover of healthcare. Several Senators and dozens of House Members across the country lost their re-election bids because of their vote in favor of ObamaCare.

December 2010: On December 13th, Judge Henry Hudson of the Federal District Court for the Eastern District of Virginia ruled against the Obama Administration, ruling that the individual mandate was an inappropriate expansion of the Commerce Clause. Also in December, HHS was forced to issue another round of waivers to protect millions of low-wage workers from losing their health insurance because of ObamaCare's new rules. January 2011: On January 31st, Judge Roger Vinson in Florida ruled decisively against the Obama Administration, saying that the individual mandate is unconstitutional, and because that particular provision is not severable from the law as a whole, the entire new healthcare law is unconstitutional. Also during this month, health insurance premiums in Georgia reached a five-year high, thanks in large part to ObamaCare. February 2011: On February 2nd, the Senate voted overwhelmingly to rescind the unpopular 1099 provision in ObamaCare. Also in February, 20 governors wrote a letter to Secretary Sebelius, detailing the ways that ObamaCare will bankrupt their states. This month, the number of waivers granted by HHS grew to more than 1000, as more companies across the country realized their health insurance plans were in jeopardy because of ObamaCare. March 2011: In March, The New York Times published an article about escalating health insurance premiums in the past year, despite the Democrats' promises that the new law would lower Americans' premium costs. The House voted to repeal ObamaCare's 1099 provision in March. Given the mounting bad news about ObamaCare, it is no wonder that Americans oppose the law. The promise that ObamaCare would lower health insurance costs for American families has proven false. Similarly, the promises that Americans would be able to keep their current health care plans and that ObamaCare would enhance Medicare solvency have both turned out to be fantasies dreamed up by the Left. Most alarmingly, ObamaCare will cause U.S. healthcare costs to skyrocket, both for private consumers and for the taxpayers. Moving into the 2012 election cycle, it will be important for the public to remember the growing list of ObamaCare's failuresand then to vote accordingly.

Article available at: http://alineofsight.com/policy/obamacare-the-year-in-review? A=SearchResult&SearchID=627798&ObjectID=1480872&ObjectType=35

ObamaCare: Handing the Bill to the States

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President Obama and his Administration are experiencing a series of blowbacks against ObamaCare, the Democrats' signature piece of legislation. Unfortunately for the President, it does not look like this trend will end anytime soon. In November, Democrats lost their majority in the House of Representatives in an election cycle that largely focused on ObamaCare. The new Members of the Republican majority are fully committed to repealing the President's healthcare law and the Republican Leadership immediately scheduled a vote on ObamaCare repeal - H.R. 2 "Repealing the Job-Killing Healthcare Law Act." ObamaCare also received a major setback on December 13, 2010 when federal judge Henry Hudson issued a decision on the lawsuit brought by Virginia's Attorney General challenging the law's individual mandate. Judge Hudson ruled that this provision - which requires every American to carry a health insurance policy - is unconstitutional, and, further, that Congress exceeded its Constitutional powers by enacting this provision. Meanwhile, a similar case is also making its way through a federal court in Florida. Florida is one of 20 states (in addition to Virginia) suing the federal government over the constitutionality of ObamaCare. Several newly-elected Republican governors, including Gov. Matt Mead in Wyoming, have promised to join the lawsuit this year. While the constitutionality of the individual mandate has drawn the bulk of the media attention surrounding the states' opposition to ObamaCare, several new cost-analysis studies reveal that the states have additional reasons to oppose the new law. Each of these studies concludes that the provisions of ObamaCare that expand Medicaid eligibility will bankrupt the states. ObamaCare requires states to expand Medicaid eligibility up to 138% of the Federal Poverty Level (FPL), which will cause states' Medicaid programs to swell, as millions of new enrollees sign up for benefits nationwide. One of the major problems for states is that ObamaCare employs a deceptive funding gimmick to lure states to expand Medicaid eligibility. The new healthcare law promises federal funding to cover three years of the additional Medicaid costs that states incur, beginning in 2014. In 2017, however, the federal funding decreases (and continues to decrease each year between 2017 and 2020). The result will be a massive hole in many states' budgets, which will yield either further deficit spending or drastic tax increases for state residents. Further exacerbating the funding burden for the states is the fact that the federal government does not pay for the additional overhead and administrative costs related to the expansion of Medicaid. A survey of the available of information about the impact of ObamaCare's Medicaid expansion and its impact on the states reveals a bleak budget forecast for the next decade. Florida: Florida's Agency for Health Care Administration predicts that ObamaCare will

cause the state to experience a $1.1 billion increase in Medicaid expenses in 2017 alone. Indiana: Indiana estimates that the between 388,000 and 522,000 new enrollees will apply for benefits under the state's Medicaid program with almost half of these enrollees (248,000) moving over to Medicaid after dropping out of their prior (mostly private sector insurance) to receive taxpayer-funded healthcare. Providing this expanded coverage will cost an additional $2.59 billion to $3.11 billion over a 7-year period. Mississippi: Milliman, Inc., which performed an outside analysis for the State of Mississippi on the costs for the expanded Medicaid program, estimates that Mississippi will add between 206,000 and 415,000 people to its Medicaid rolls due to ObamaCare. The cost of this expansion will be more than $2.59 billion over 10 years. Nebraska: ObamaCare will cause nearly 20% of all Nebraskans to be covered by Medicaid. Nevada: The cost for Nevada's Medicaid program is expected to increase by nearly 50% by 2020 because of ObamaCare. Ohio: According to a new study from the Buckeye Institute, Medicaid expansion under ObamaCare will bankrupt the state in the next decade. A family of four in Ohio currently pays nearly $2,000 in taxes each year to finance the state's Medicaid program. The new healthcare law dramatically increases that burden for Ohio taxpayers. Texas: In Texas, the state government has concluded that ObamaCare could add up to an additional 2,000,000 new people to the Texas Medicaid program, which would cost state taxpayers nearly $27 billion over the coming decade. In light of these startling facts, Texas Governor Rick Perry (R) is currently investigating the possibility of withdrawing his state from the federal Medicaid program, and instead putting in place a more efficient program that Texas would administer and oversee. Washington: According to a new study by the Washington Policy Center, the State of Washington is faced with a decision to either opt out of Medicaid or eliminate its state-based healthcare programs for low-income residents. Wyoming: This Medicaid expansion even threatens Wyoming, which is one of the most fiscally responsible states in the United States. The state recently conducted

a study on the burden of expanding Medicaid, which concluded that Wyoming will have to consider dropping out of Medicaid. Wyoming is in a particularly vulnerable position because ObamaCare provides for even more Medicaid funding for "frontier states" (including Wyoming). This funding declines precipitously after 5 years, leaving the frontier states to shoulder all of the new costs associated with the ObamaCare programs that are being implemented in the state. Even before ObamaCare was enacted, most states were struggling to afford their Medicaid expenses. ObamaCare's Medicaid expansion accelerates the states' budget crises. State legislators and governors now must make a difficult decision: reject ObamaCare's temporary funding for Medicaid expansion, or go down the reckless path of expanding an already-untenable entitlement program that will inevitably lead to massive tax increases.

Article available at: http://alineofsight.com/policy/obamacare-handing-the-bill-to-the-states? A=SearchResult&SearchID=627798&ObjectID=4190472&ObjectType=35

ObamaCare Waivers and HHS Hypocrisy

On December 1st, the Senate Committee on Commerce, Science, and Transportation held a hearing entitled Are Mini Med Policies Really Health Insurance? The hearing provided a platform for Democrats to vilify corporations that provide limited-coverage health insurance policies. These so-called mini-med health insurance plans are an attractive way for employers to offer affordable coverage to low-wage workers who otherwise would not be able to afford a healthcare plan. Insurers estimate that close to one million Americans have mini-med health plans. While these plans do not cover major health costs, they do provide adequate medical, dental, and vision coverage. Unfortunately, Congressional Democrats overlooked the benefits of these mini-med plans when they wrote ObamaCare. The new healthcare law dictates that no health insurance policy can have an annual or lifetime limit on coverage, which effectively kills minimed plans because of their limited coverage. ObamaCares ban on annual and lifetime limits went into effect in September of 2010 and caused companies across the country to suspend their mini-med health plans. Because of ObamaCare, employers have lost the ability to provide practical healthcare coverage to low-wage workers. As Tom Schroder in Universal Orlandos Public Relations office noted, The new legislation [ObamaCare] would have left our part-time workers without their medical coverage." When hundreds of companies across the country realized that their mini-med health insurance plans were under attack, they appealed to the Health and Human Services Department (HHS) to receive one-year waivers. In order to avoid a political disaster, HHS Secretary Kathleen Sebelius has been

quickly approving waivers for more than 200 companies, unions, and other organizations, including McDonalds and the Teamsters. At the Senate Commerce Committee hearing, the Democrats questioned the Executive Vice-President of McDonalds about his companys policy of offering mini-med plans to hourly workers. Sen. Barbara Boxer (D-CA) railed against the injustice of giving low-wage workers plans that do not provide any catastrophic coverage. At one point in her theatrical questioning, she said her heart was beating fast because she was so incensed by the injustice of these plans. Conspicuously absent from the hearing witness list was anyone representing the unions, which offer the same plans that McDonalds and many other corporations provide. Sen. Boxer made her position clear that corporate mini-med plans were an affront to her moral code, but she failed to even mention the unions identical plans. The debate surrounding mini-med plans raises several questions. First, is it better for some employees (and their families) to have the option to purchase limited-coverage plans than not to have any health insurance at all? The answer, it would seem, is yes, as even the Obama Administration has had to concede this point by offering waivers to extend these types of plans. The Administration is now in the uncomfortable position of having to explain why waivers are being granted to extend mini-med plans, which undermines their argument that ObamaCare would not cause anyone to lose his or her current health insurance coverage. The second question that inevitably arises from this debate is: Do Democrats have any understanding of how to spur job creation? Unfortunately, the answer here is no. With the national unemployment rate hovering around 9.8%, the Democrats choice to harangue employers for their limited health insurance coverage is misguided. As Richard Floersch, the Executive Vice President of McDonalds, noted at the hearing, corporations during a recession are under a great deal of pressure to provide competitive employee packages that will not cause the company to go bankrupt. Sen. Boxer and her liberal colleagues appear completely disconnected from the realities of the tough economic environment when they talk about the immorality of providing limited-coverage health insurance policies. For conservatives, this hearing represented a wasted opportunity. Republican Senators missed a valuable opportunity to highlight the hypocrisy of HHS and the Obama Administration for quietly granting waivers to their union friends. The unions heavily lobbied Democrats to pass ObamaCare and are now seeking shelter from the consequences of this new law. Republicans in Congress should be holding Democrats accountable for their vote in favor of ObamaCare, and Democrats in Congress who voted for ObamaCare should have to explain why close to one million Americans are currently at risk of losing their current health insurance because of the new law. Democrats in the Senate scheduled this hearing with the hopes of showing

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how corporations provide inadequate health coverage and why ObamaCare is therefore necessary. In reality, the hearing demonstrated what conservatives have argued all along that ObamaCare would rob American families of their current health insurance plans. These mini-med waivers are the Achilles Heel of ObamaCare. The new Republican majority in the House would be wise to schedule hearings on this issue and all of the other unintended consequences of ObamaCare.

Federalism at Work: How the Governors are Resisting ObamaCare

President Obama's healthcare overhaul, ObamaCare, faces numerous legal and Constitutional challenges - many of them emanating from the states. That the states are taking such an active roll in opposing ObamaCare demonstrates the advantages of America's federalist system and the benefits of divided power. In a concerted effort to protect individual liberty, America's founding fathers constructed the system of federalism, whereby the power that individuals surrender to the government is shared between the national government and the state government. The Tenth Amendment to the Constitution states: "The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the States respectively, or to the people." ObamaCare's individual mandate and the financial burdens the new law places on the states are both examples of the federal government's usurpation of power that rightly belongs to the states. It is appropriate, then - under our Constitution's framework - that many of the Republican governors have decided to actively resist ObamaCare's expansion of the powers of the federal government in ways that undermine individual liberty. By 2014, ObamaCare will impose significant costs on the states and will drive the states into deep financial crises, as they are forced to expand their Medicaid rolls and increase their spending on government-run healthcare programs. As one example, ObamaCare forces states to expand Medicaid eligibility to 138% of the Federal Poverty Level (FPL), which will inevitably cause states' Medicaid programs to increase dramatically both in size and cost. In response to the federal government's intrusion into health care matters,

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republican governors across the country have taken a variety of approaches to protect their states from the full impact of ObamaCare. Lawsuits Twenty-seven states are currently suing the federal government over ObamaCare. In many of those states, the attorney general is leading the fight, but in some states, the governor has worked hand-in-hand with the attorney general to pursue legal action. These states are challenging ObamaCare for two primary reasons ObamaCare forces their residents to purchase expensive health insurance policies or otherwise pay a punitive fee, and the new law forces states to shoulder a large financial burden. Virginia's governor Bob McDonnell and Attorney General Ken Cuccinelli are working together to oppose ObamaCare. As the basis of their argument, they challenge the Obama Administration's claim that the federal government has the authority to impose the individual mandate under the Commerce Clause. As Attorney General Cuccinelli explains: "We argue that if someone isn't buying insurance, then by definition he is not participating in commerce. How, then, can the government use the Commerce Clause to regulate non-commerce, i.e. regulating inactivity?" Another governor who recently joined the lawsuit was Wisconsin's Scott Walker. As soon as he assumed office this past January, Gov. Walker immediately gave Attorney General J.B. Van Hollen the authority to join the lawsuit against ObamaCare. Declining ObamaCare Funding Beyond the legal battle, some Republican governors have determined that the best way to shield their states from ObamaCare is to simply refuse to accept ObamaCare funding. Last summer, Minnesota's thengovernor, Tim Pawlenty, led the way with this approach. In late August he issued an executive order, which directed state agencies to forego applying for ObamaCare grants and from accepting ObamaCare funds. Gov. Pawlenty argued that he had an obligation to preserve Minnesota's autonomy. In his executive order, he wrote: "The boundary between state and federal government must be maintained to prevent an unwise and unsustainable federal takeover of health care in our state." Another republican governor who has recently renounced federal ObamaCare funds is Gov. Mary Fallin of Oklahoma. While Gov. Fallin had initially accepted a $54 million ObamaCare grant, under pressure from conservative groups, she announced in April that Oklahoma "will not accept the $54 million Early Innovator Grant." She said that returning the money helped to accomplish her "goal from the very beginning: stopping the implementation of the president's federal 12

health care exchange in Oklahoma." Refusing to Implement ObamaCare An additional group of Republican governors has decided that the most efficient way to block ObamaCare in their states is to not implement the new law or initiate any of the new programs. In February of this year, Alaska Governor Sean Parnell announced that his state would not move forward with ObamaCare's implementation. He cited the recent decision of U.S. District Court Judge Roger Vinson who ruled that the individual mandate was unconstitutional, and thus, the entire law was unconstitutional. Gov. Parnell explained his decision on Fox News: "In my view, Alaska is bound by the decision. I mean, it's a longstanding notion of judicial review: The federal courts rule they have said this is unconstitutional. We're not going to go forward and implement it at this point." Florida governor Rick Scott also halted ObamaCare's implementation in his state after the Florida ruling. He explained his decision to block ObamaCare in his state: "I personally have always believed that [ObamaCare] was going to get repealed or declared unconstitutional because I think it's a significant job killer. So one thing we're doing here [in Florida] is we are not going to spend a lot of time and money [to] implement [the law]." More recently, last month Idaho's Gov. Butch Otter signed an executive order that blocks ObamaCare, prohibiting the executive branch agencies from establishing new programs, amending programs, or in any way promulgating rules to implement ObamaCare. Seeking Autonomy from Federal Government A large group of governors, led by Indiana's Mitch Daniels, decided to directly petition to the Obama Administration and seek waivers and flexibility. In February, twenty-one Republican governors from across the country jointly signed a letter to Health and Human Services Secretary Kathleen Sebelius. The letter first detailed their objections to ObamaCare, including their belief that the new healthcare law is unconstitutional, and then described the governors' requests. The governors said they do not wish to be "the federal government's agents in this policy" and that they therefore would like complete flexibility and autonomy in establishing the state exchanges. The founding fathers correctly understood that the real threat to liberty in America would come from the swelling of the government into private areas of individual and personal matters. James Madison wrote, "I believe that there are more instances of the abridgment of the freedom of the people by the gradual and silent encroachment of those 13

in power than by violent and sudden usurpations." The republican governors' commitment to fighting back against the Obama Administration's silent encroachment into Americans' healthcare is a healthy and necessary reaction to ObamaCare, and it represents the best of American federalism.

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