Obamacare State Exchanges Continue to Perform Poorly

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Posted by Alexander Hendrie on Monday, September 21st, 2015, 1:02 PM PERMALINK

Earlier this month, the Centers for Medicare and Medicaid Services (CMS) released updated 2015 Obamacare enrollment numbers. 29 states and the District of Columbia lost enrollees leading to a net loss of over 238,000 Obamacare enrollees across the country between March and June. The majority of this loss was accounted for by enrollees lost by state exchanges – enrollees on these exchanges fell from 2.9 million to 2.7 million in that time period.

This outcome is bad news for the long-term sustainability of state exchanges. While both federal and state exchanges rely on paying enrollees to meet costs, the 37-state federal system has the scale to absorb lost enrollees. In comparison, state exchanges have just a fraction of enrollees to pool resources, yet face similar costs.

Poor performing state exchanges include Rhode Island and Vermont, which enrolled 32,451 and 33,306 individuals respectively. This poor performance means each state spent over $5,000 in federal funds for each enrollee on their state exchange. Given the low potential marketplace in both states, it appears certain to be an uphill battle to meet ongoing expenses.

Other poor performing states include failed exchanges Hawaii and Oregon.

Oregon received $305 million in taxpayer funds, but has since defaulted back to the federal system. Currently, the state has over 102,000 enrollees, meaning the state wasted almost $3,000 in taxpayer funds for each Oregonian currently enrolled on the federal system. The state is now under investigation for misuse of taxpayer funds and allegations that decision making was given to political consultants who were more concerned about the governor’s tough 2014 reelection campaign than the wellbeing of healthcare enrollees.

Similarly, Hawaii received over $205 million in federal grant money and the state enrolled just 8,802 individuals this year, meaning it spent a remarkable $23,329 on its failed system per enrollee this year. Unsurprisingly, this level of spending was not sustainable - the exchange recently announced it had no way of meeting operational costs and would transition its enrollees to the federal exchange.

Below is an analysis of the performance of each state exchange:


Total Federal grant $ for exchange[1]

2015 Enrollment[2]

Total spent constructing exchange per enrollee for 2015













































New Mexico




New York








Rhode Island

















State Exchanges underlined have returned to the federal exchange


[1] http://www.gao.gov/assets/680/672565.pdf

[2] https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2015-Fact-sheets-items/2015-09-08.html

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ATR Supports RSC’s “Responsible Spending and Accountability Act”

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Posted by Alexander Hendrie on Monday, September 21st, 2015, 12:55 PM PERMALINK

Republican Study Committee (RSC) Chairman Bill Flores (R-Texas) last week introduced the “Responsible Spending and Accountability Act,” a fiscally responsible blueprint to fund the federal government for fiscal year 2016. ATR supports this legislation and urges all members of Congress to vote for and support this plan.

Most importantly, this legislation adheres to discretionary spending caps as required by the Budget Control Act (BCA). BCA spending caps have already saved taxpayers $670 billion since being implemented in 2011, and will save an additional $1.79 trillion in savings through 2021, according to the non-partisan Congressional Budget Office. Implementing and enforcing the BCA spending caps have been a key victory for advocates of limited government in past years, and Congress must continue to hold the line. By adhering to these budget caps, the RSC’s spending blueprint will keep Washington’s chronic over-spenders reined in.

In addition, the RSC plan respects regular order and responsible governance by allocating spending levels using the six appropriations bills that have been debated and passed by the House earlier this year. The legislation also incorporates spending levels from the six appropriations bills reported out of the House Appropriations Committee.

The RSC’s spending plan is a fiscally responsible, pro-taxpayer proposal to fund the government that will keep spending restrained within the BCA caps and lead to trillions of dollars in savings. ATR urges all members of Congress to fully support the Responsible Spending and Accountability Act.


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The American Energy Renaissance

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Posted by Matthew Benzmiller on Friday, September 18th, 2015, 11:57 AM PERMALINK

Federal Affairs Manager Justin Sykes joins ATR President Grover Norquist to discuss the current state of American energy regulations. Fracking has been spreading across the country, and it is one of the biggest factors affecting the state of affordable energy today. In episode 27 of the Grover Norquist Show, Norquist and Sykes discuss fracking, Obama’s recent attempts to take credit for the success of fracking, the US oil embargo, and the prospects for removing this unnecessary restriction. Do people own the resources under their property? Listen in and tell Grover what you think by tweeting him or leaving a comment.


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Legislature Succumbs to Pressure: California Assembly Kills Forfeiture Reform

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Posted by Caroline Anderegg on Thursday, September 17th, 2015, 5:24 PM PERMALINK

Last week, California legislators succumbed to pressure from state and local law enforcement officials by failing to pass SB 443, which would have drastically improved the state’s civil asset forfeiture law. Lawmakers in Sacramento will now have to explain their controversial vote to voters across the Golden State; voters who are hostile to forfeitures by a massive 76 percent to 14 percent.

The bill had overwhelming bipartisan support when it was introduced earlier this year, and would have required a conviction in either a state or federal court before property could be permanently forfeited to the government. However, seeing the new reforms as a threatening to their budgets, the California District Attorneys Association (CDAA), as well as other state law enforcement agencies, launched a pro-forfeiture campaign aimed at dissolving support for the bill.

Currently, California’s asset forfeiture law is sorely lacking in protections against asset forfeiture abuse. The state’s forfeiture requirements protect property owners more than some states by enforcing a “clear and convincing evidence” standard for cash forfeitures; requiring “beyond reasonable doubt” standard for real property forfeitures; and eliminating profit incentives for law enforcement. However, one loophole negates any protections the state forfeiture law provides Californians.

Like many other states with weak asset forfeiture laws, California allows state and local law enforcement to participate in equitable sharing programs with the federal government. Equitable sharing programs allow state law enforcement to skirt state law by using federal forfeiture rules to take a person’s assets. Through the practice of equitable sharing California was able to collect over $305 million in seized assets between 2000 and 2008—averaging nearly $34 million each year.

Law enforcement agencies and the CDAA rely heavily on the revenue from asset forfeiture to line their coffers, so these reforms pose a serious threat. Rather than reforming their budget practices, they used intimidation tactics and personal cell phone calls to legislators in order to kill the bill.

Similar fear-driven campaigns by local law enforcement agencies in other states have cropped up in response to asset forfeiture reforms. The Departments of Justice and Treasury threatened New Mexico with ending it equitable sharing program if reforms were passed. In response, New Mexico not only passed asset forfeiture reform, but abolished it entirely. In May of this year, Montana passed asset forfeiture reform that requires a criminal conviction prior to permanent forfeiture, as well as several other requirements that beef up protections for property owners. Other states making strides in asset forfeiture reform are Minnesota, North Carolina, and Michigan.

California should use the momentum of these states to revisit its weak asset forfeiture laws. Demanding a conviction is the only way to ensure due process is administered in forfeiture cases. Moreover, local law enforcement should not be able to skirt state law by using the lax federal rules to make an end-run around the legislature.

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Report Finds Hawaii’s Obamacare Exchange Wasted At Least $11 Million

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Posted by Mireille Olivo on Thursday, September 17th, 2015, 4:09 PM PERMALINK

Hawaii’s Obamacare state exchange misused at least $11 million in federal taxpayer funds due to insufficient oversight of a $21.6 million contract, according to a recent report by the State Auditors office. As the report notes, Hawaii’s exchange, known as Hawaii Health Connector failed to select the most qualified vendor for the best price, awarded a flawed, poorly written contract, and failed to monitor the contract:

“We found that instead of taking steps to ensure it [Hawaii Health Connector] selected the most qualified vendor at the best price, the Connector awarded Mansha a multi-million dollar contract based on personal recommendations…The Connector also failed to sufficiently analyze Mansha’s proposed fees to ensure contract amounts were reasonable, as required by federal procurement standards. Furthermore, the Connector executed vague, poorly written contracts with flawed terms and conditions that prevented it from effectively monitoring and evaluating Mansha’s performance.”​

Since 2011, the Obama administration has given almost $5.4 billion in taxpayer funds attempting to plan and create the foundation of state exchanges across the United States. Although Hawaii received $205 million, the system ultimately failed because it was unable to raise enough funds to meet expenses. 

This was not the first time that the State Auditors office raised concerns with the project. An audit released in January reported similar findings. Though Hawaii Health Connector was provided a variety of solutions, nothing had changed, as the report notes:

“During our previous Audit of the Hawai‘i Health Connector (Report No. 15-01), we encountered an area of concern that we were unable to follow up on and which warranted further study. Specifically, we could not determine whether or not fees paid to Mansha Consulting LLC (Mansha) were reasonable because the Hawai‘i Health Connector was unable or unwilling to provide requested information for these contracts, which totaled $21.6 million.”

Since 2010, multiple states including Oregon have misused funds and failed to create a working state exchange program.  According to the House Committee on Oversight and Government Reform, Oregon received over $305 million in federal grant money.  Similar to Hawaii, the state run exchange failed due to the misuse of public funds and oversight of contracts.

By next year Hawaii Health Connector will cease to exist and the state will rely on the federal health system. When the dust settles, it is likely that far more than $11 million will be wasted. But the findings in the report demonstrate the ineptness of state officials. Given their repeated failure to manage an important contract for their exchange, it should come as no surprise that the exchange ultimately failed.

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Smoke Clears on Real Reason for Chicago E-Cig Tax

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Posted by Hal Smith on Wednesday, September 16th, 2015, 1:59 PM PERMALINK

After recently cementing its status as the highest-taxed cigarette city in the United States, lawmakers in Chicago are now targeting products used as a healthier alternative to traditional tobacco. Reeling from declining tobacco revenues and faced with a massive budget hole as a result of overspending and lack of local reform, some Democrats have decided to go after e-cigarettes with a new massive tax hike.

For those don’t simply purchase cigarettes in other jurisdictions, many tobacco consumers in Chicago have switched to the more affordable and healthy nicotine-delivering alternative: electronic cigarettes and vaporizers. However, this option may also become too expensive as one tax proposal will attempt to tax tobacco-free technology products at the same level of traditional combustible tobacco.

Alderman Proco “Joe” Moreno wants to bring a plan to the City Council to institute an excise tax on electronic smoking: $1.25 for each e-cigarette and 25 cents per mL of liquid to fill the cartridge. Misconstruing this effort as anything other than trying to compensate for the city’s unwillingness to reform government, he’s neglected to even attempt to reform the city’s pension woes.

Moreno’s proposal would do very little to fill the budget hole – it is projected to bring in less than $1 million, compared to the hundreds of millions of dollars needed to balance the budget and make public employee pension payments.

Instead of celebrating historic declines in adult and teen smoking rates in Chicago, Democrats have scrambled to find alternative revenues to compensate for a declining tax base. Instead of pretending the effort to raise taxes on e-cigarettes were about “public health,” lawmakers should admit that this is about nothing more than tax dollars.

Chicago lawmakers should not be looking to excise taxes on volatile new industries for revenue sources. These legislators should be focusing their energy on reforming citywide spending, most importantly the pension payouts.

Public health officials, agencies, and studies are concluding that tobacco-free e-cigarettes are at least 95% less harmful as traditional tobacco. Effort to tax them the same, like Alderman Moreno’s are misguided and represent a slap in the face to decades of efforts to curb smoking through cessation and harm reduction methods.  

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Perhaps the purpose of a Chicago EC tax is to create a black market that will give kickbacks to city officials. Legislate a brand new crime and get paid by the criminals. Clever. In the mean time eliquid can be made at home by combining some commonly available ingredients in a bottle and giving it a shake. Daily cost for home made eliquid? About 25 cents a day. The Tobacco Age is over, ahead of schedule.

Mister Blog Dog

Of course they wouldn't dream of hiking taxes on 'legitimate' smoking cessation products (You know, the products that don't help 95% of smokers quit...) But e-cigs are seen as a soft target because of all the junk science and misinformation that has been churned out by vested interest groups to demonize a life-enhancing product for countless long-term smokers. Vested interest groups such as: big tobacco, big pharma and those cuddly tobacco control demigods who are worried that they will soon have nothing to control, and will have to look for alternative employment!

Forget about sin taxes. Welcome to the era of premature death taxes...


Ray P. G.Yeates

Need we say anything more......? Now on the matter of taxe$ $hame comes to mind and so does $tigma! Health care, Mental health care, Addiction$ care don't come with extreme taxe$ attached, such as has been past history with the smokers. Tobacco Control i$ " Out of Control" ! Smokers have been TAXED as punishment greater than any other group whom a civilized social structure has for decades classed as " discriminatory, unjust and simply wrong" WTF happend? We DON'T SMOKE! It's vapour! It also happens to be embraced by millions of smokers worldwide.....because it works! This is nothing short of " foul play " and not acceptable.....period!

ATR Supports H.R. 3442, “The Debt Management and Fiscal Responsibility Act”

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Posted by Alexander Hendrie on Wednesday, September 16th, 2015, 12:32 PM PERMALINK

Earlier this month, H.R. 3442, “The Debt Management and Fiscal Responsibility Act of 2015” was introduced by Congressman Kenny Marchant (R-Texas). This legislation reforms the debt limit framework to ensure that when the debt limit is increased, the administration has a clear plan to reduce the nation’s debt, rather than continuing to kick the fiscal can down the road. ATR supports this important legislation and urges all members of Congress to vote for this bill.

H.R. 3442 requires the Treasury Secretary to appear before the House Ways and Means and the Senate Finance Committee between 21 and 60 days before it is anticipated that the debt limit will be reached. Specifically, the Secretary will be required to present a detailed report outlining the nation’s financial state while also proposing substantive reforms.

Firstly, the Secretary will be required to report on the current state of the debt (including historical levels of debt, current composition of debt, and future debt projections).

Secondly, this bill will require the administration to propose detailed proposals to reduce the debt in the short-term, medium-term, and long-term.

Thirdly, the legislation requires the administration to project how increasing the debt limit will affect future spending, debt service, and the strength and stability of the U.S. dollar as the international reserve currency.

Lastly, the Secretary will be required to report projections of the long-term sustainability of mandatory entitlement programs including Social Security, Medicare, and Medicaid. 

In addition, the legislation requires the Treasury Secretary to present progress reports on efforts to reduce the debt when returning to Congress to ask for future debt ceiling increases.

The Debt Management and Fiscal Responsibility Act creates a clear, yet comprehensive framework that any administration must follow to reduce federal debt when requesting a debt limit increase. By requiring the submission of a detailed report and comprehensive plan before Congress, H.R. 3442 ensures that increasing the debt ceiling only occurs as part of a framework of serious proposals to reform the nation’s finances and chart a pathway toward fiscal responsibility.


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Update: Electronic Communications Privacy Amendments Act

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Posted by Eric Seum on Wednesday, September 16th, 2015, 10:58 AM PERMALINK

Today, September 16, in a letter to the Senate Judiciary and an OpEd in Roll Call, Grover Norquist urges Senators to consider American’s Fourth Amendment protection against unwarranted search and seizure while discussing reforms surrounding the Electronic Communications Privacy Act.

With the rapid advancement of the Internet, unintended loopholes have been left open in the 1986 Act, turning it into a tool that could be used by the government to gather private information of American citizens without just cause. With reform to the ECPA, citizens’ rights can be ensured, while still allowing law enforcement effectively serve and protect.

"By going to a third party email provider with a subpoena rather than a warrant, the FBI, DEA, IRS, SEC, FTC and other government agencies are free to look into citizen’s information stored on the Internet without judicial oversight."

[For the Full Letter, click here.]

The OpEd, co-authored by Grover and Naula O'Connor, President & CEO of Center for Democracy & Technology, emphasizes how important it is to act now on this breach of trust. This form of search and seizure with oversight is against American values, yet not all Americans have come to a consensus on this issue.

"Almost all Americans can agree on the basic principle that government should obtain a warrant before searching our records. Not every bill has the support of hundreds of members of Congress.

But as is often so, opponents of reform — in this case, government agencies that want to add to their legal authority – know that the broadest political coalitions and largest bipartisan majorities in Congress can be undone by adding even seemingly innocuous provisions to the basic consensus."

For the full text of the OpEd, click here.

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Hillary Clinton's 25% National Gun Tax

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Posted by Joseph Deverian on Tuesday, September 15th, 2015, 4:42 PM PERMALINK

Hillary Clinton was asked if she supported a 25% national sales tax on guns, her reply was “I am all for that.” That was over 20 years ago and the media has not covered the topic since. Clinton’s positions are consistent with longstanding progressive goals on gun taxation, gun registration, and other forms of gun control. Hillary’s 25 percent gun tax would discourage gun ownership and be a backdoor route to gun registration. Tune into “The Grover Norquist Show” to learn more about Clinton’s long history of attacking gun owners.

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Charles Dickerson

"...the right of the people to keep and bear Arms, shall not be infringed." Let's not pretend that because it's called a tax somehow that is NOT an infringement on our right to bear arms via the 2ndAmendment. Just the same as if ammunition for firearms was banned would be an infringement; making firearms ultimately unaffordable is the same thing. If 25% were ok, who's to say 125% or 325% is NOT ok? This is the slippery slope in full living color!

Contracts for Obamacare’s Healthcare.gov Failed to Comply with Federal Law

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Posted by Alexander Hendrie on Tuesday, September 15th, 2015, 4:30 PM PERMALINK

The Centers for Medicare and Medicaid Services (CMS) failed to follow regulations governing contracting management and oversight for at least 20 critical contracts related to the construction of the federal Obamacare website, Healthcare.gov, according to an audit by the Health and Human Services Office of Inspector General (HHS OIG).

The audit focused on 20 contracts worth over $605 million that were deemed “critical to the development, implementation, and operation” of Healthcare.gov.

The report concluded that in many cases, government officials failed to properly manage and conduct oversight over contracts. One reason for this was many officials had not received “Level-III certification” which the agency required of any employee that handled contracts over $10 million:

“Not all contracting officer’s representatives who managed contracts valued at $10 million or more had obtained Level-III certification.”

According to the report, CMS employees will not be fully certified until October 1, 2016.

As a result of inadequate training, officials failed to prepare contractor past performance evaluations as required by federal law, failed to authorize specific details of contracts in writing, and inadvertently created significant delays and performance issues. In one case, an unauthorized employee added work to a contract, which resulted in a $28 million cost overrun.

The poor management and oversight of contracts was a contributing factor in the disastrous performance of Healthcare.gov when it launched in 2013. In fact, a Government Accountability Office (GAO) report released in July 2014 concluded that CMS did not have “effective planning or oversight practices” over the project, despite billions of dollars of taxpayer money being spent.

CMS’s failure to competently complete the federal Obamacare website is still being felt by taxpayers today:

  • An August 10, 2015 report by HHS OIG found that Healthcare.gov is failing to verify applicant's Social Security numbers, citizenship, and household income in order to properly distribute tax credits.


  • A July 16, 2015 audit released by GAO found that 11 of 12 test fake applicants received coverage for the entire 2014 coverage period despite many using fraudulent documents, and others providing no documentation at all. From these 11 test applicants alone, erroneously Healthcare.gov paid $30,000 in tax credits.


  • A June 16, 2015 report released by HHS OIG found that $2.8 billion worth of subsidies and payments had been made in 2014 without verification.


  • A May 11, 2015 report by the Treasury Inspector General for Tax Administration (TIGTA) found that the IRS was failing to verify whether individuals had even bought health insurance before distributing tax credits.


In the most recent audit, HHS OIG issued a series of recommendations to improve management and oversight of contracts, including that CMS “comply with federal regulations and contract terms.” The agency agreed with these recommendations. 

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