A new poll released by the Taxpayers Protection Alliance (TPA) shows that voters want serious reforms to Medicare and Social Security. The poll shows that 87 percent of respondents believe that policymakers should begin implementing changes as soon as possible to extend the life of Social Security, avoid benefit cuts, and ensure that future participants have enough benefits to support their retirement. Similarly, 89 percent of respondents believe policymakers must act to ensure Medicare’s solvency and avoid painful cuts. Other key polling highlights show that 93 percent of voters say that Congress and the President should work together now to find solutions to Medicare’s long-term financial challenges in order to avoid benefit cuts and reduced health care access for retirees; 90 percent of voters believe Presidential and Congressional candidates running for elected office in 2024 should discuss the financial challenges facing the Medicare program and outline their solutions to ensure it
remains solvent. Only 5 percent of voters say Congress and the President should do nothing and allow scheduled cuts to Social Security benefits to take effect once we reach the funding shortfall. The full results are here. ([link removed])


Jumping the Regulatory Shark at the FTC

Much has been made of Federal Trade Commission (FTC) Chair Lina Khan’s willingness to import a European regulatory agenda to the U.S. It is no small secret that today’s FTC admires the tough antitrust stances European regulators take towards big businesses – especially those in the technology sector. However, with Microsoft’s recent acquisition of gaming studio Activision Blizzard, Khan and the FTC seem poised to stand alone in the fight against this transaction. The companies closed the $69 billion deal a few weeks ago. The FTC initiated its push to stop the deal from going through late last year, and the agency is vowing to continue to move forward with their complaint despite the acquisition. Setting aside the flimsy foundation on which the FTC’s complaint rests, success on the FTC’s part here would be economically disastrous — there’s a reason FTC remains on a regulatory island for this crusade. Given how long the complaint process normally takes for proceedings like these, the FTC may
not get full resolution of its case against Microsoft until the middle of 2024. At that point, Activision will be far more integrated with Microsoft’s products and services than it is right now. Were the FTC to emerge victorious, the companies would have to undergo the expensive process of unwinding their merger – throwing millions – if not billions – of dollars down the drain with no economic benefit or improved consumer experience. The looming FTC complaint process is the final hurdle for the companies to clear. The European Commission – the executive arm of the European Union – approved the acquisition in May. Regulators in the UK did the same shortly before the closure of the deal. However, the FTC remains resolute in ensuring the U.S. is the highest regulatory denominator when it comes to the gaming sector.

The reason the U.S. has most of the world’s big tech companies is because light-touch regulation has allowed entrepreneurs to innovate, thrive, and grow. This environment has also allowed tech companies to make strategic acquisitions to revolutionize their offerings and better compete as the market develops and demand changes. Other than satisfying a newfound affinity for populism amongst some talking heads, there is little upside to pursuing the European approach. Americans can only hope this is a clarifying moment for how far the FTC has gone. The other option is that the agency intends to continue attempting to outdo its European counterparts and a new era of restriction and uncertainty for American businesses is on the horizon. As the world approaches new and exciting opportunities in the realm of artificial intelligence and virtual reality, this would be a mistake. No one knows what vital innovations are just on the horizon. Products and services that are indispensable today were once
thought to be unthinkable just a few years ago. Regulatory strong-arming of the kind the FTC is pursuing would choke these ideas out before they see the light of day. Even if the efforts end fruitlessly in a courtroom, the threat of millions in legal costs will surely be enough to deter many from even trying, knowing it may not be worth the effort.

This is a moment to see just how unhinged the new aggressive school of antitrust (which just harkens back to a failed approach over a century old) has become. America ought not become more restrictive than a continent that has willfully destroyed its own tech sector.

Prices Controls Still NOT the Answer

Inflation has been eating away at Americans’ bank accounts, and healthcare costs are no exception. The annual cost of the average, employer-provided healthcare plan is now more than $6,500, an 8 percent hike since 2022. One rare reprieve has been surprise medical bills, which have sharply declined since the passage of the No Surprises Act (NSA) at the end of 2020. The bipartisan legislation encouraged the use of market-based arbitration to ensure that patients never have to worry about the financial consequences of a surprise bill in the mail days, weeks, or even months after being discharged from the hospital. While implementation has been rocky, new rules from the Department of Health and Human Services (HHS) provide a less painful process for patients, providers, and payers. Under the NSA, patients are held harmless for out-of-pocket costs beyond their contractual, in-network responsibility. Lawmakers wrote the bill after hearing testimony from countless patients who purchased a pricey
insurance policy, only to receive a $10,000 bill (or more) from an out-of-network provider. Unfortunately, landmark legislation is only as good as the agency rules implementing it. The independent dispute resolution (IDR) process established under the NSA has been undermined by reckless rulemaking that has undermined the impartiality of the system in favor of insurers through backdoor federal rate-setting. Instead of having arbitrators consider a variety of factors in determining proper compensation to providers, Biden administration regulations have focused disproportionately on the median in-network rate, creating de-facto price controls on healthcare services. According to one analysis, payors slashed reimbursements for out-of-network care provided by emergency medicine groups in 2022 by $1 billion (or 32 percent) under the shadow of HHS rulemaking.

Fortunately, the judicial system has served as a useful check on the administration’s dubious interpretation of the NSA. In August, the U.S. District Court for the Eastern District of Texas ruled that the administration needed to set aside rules prioritizing the in-network rate over other sensible factors that arbitrators must also take into account. Bureaucrats at HHS went back to the drawing board and have recently released new proposed rules (re)-implementing the NSA. While critical issues about rate-setting and median in-network rates remain in flux, proposed rules are at least offering certainty about arbitration timelines and communications. The new rules clarify the information that payers (i.e., insurers) need to provide at the beginning of the process and specify the required steps leading to a payment determination. For example, the rules put some flesh on the bones of the NSA by giving a timeframe for conflict-of-interest and service qualification reviews by arbitrators. In
addition, providers and payers now have more flexibility in “batching” various related medical services into a single arbitration dispute instead of having several, costly individual disputes. The agency also proposes revamping the administrative fee structure to fund arbitration services while ensuring that low-cost disputes don’t break the bank for all parties involved. These rulemaking provisions are welcome first steps toward implementation, but the Biden Administration and HHS must address the elephant in the room, price controls. Absent needed clarification that the median, in-network rate is not the “central” issue for arbitrators, price controls will continue to wreak havoc on the healthcare system. Regulators must send a clear message that arbitrators can and should focus on a variety of factors in mediating disputes between payers and providers.

The NSA has already come a long way in shielding patients from costly surprise medical bills. With the right implementing regulations, policymakers can keep the healthcare system working for everyone while giving doctors their due. Now is not the time to handicap the healthcare system with onerous and misguided regulations.

BLOGS:

Monday: State Bill of the Month - October 2023 ([link removed])

Tuesday: Taxpayer Tricks and Treats 2023 ([link removed])

Wednesday: Taxpayer Watchdog Group Releases New Poll on Entitlement Reform ([link removed])

Friday: Taxpayers Protection Alliance Statement on Biden’s AI Executive Order ([link removed])

Media:

October 30, 2023: WBFF Fox45 (Baltimore, Md.) interviewed me about the 2023 Taxpayer Tricks and Treats.

October 30, 2023: RealClear Markets ran TPA’s op-ed, “The FTC's Opposition to Microsoft/Activision Jumps the Regulatory Shark.”

October 30, 2023: Filter.org ([link removed]) ran TPA’s op-ed, “Trashed Cigarette Packs Highlight Failure of California’s Flavor Ban.”

October 30, 2023: The Center Square ran TPA’s op-ed, “How blatant self-interest continues to drive trade policy.”

November 1, 2023: The Federalist ran TPA’s op-ed, “Supreme Court Should Rein In The Rogue Regulators At The Unconstitutional CFPB.”

November 1, 2023: Reason.com ([link removed]) quoted TPA in their story, “87% of Americans Want Politicians To Do Something Before Social Security Runs Out of Money.”

November 1, 2023: The Daily Caller ran TPA’s op-ed, “Democrats’ Latest Drug Cost Reduction Plan Will Result In A Healthcare Nightmare.”

November 1, 2023: The Washington Examiner (Washington, D.C.) quoted TPA in their story, “Huge majority favors changes to save Social Security and Medicare: Poll.”

November 1, 2023: The Epoch Times quoted TPA in their story, "Poll: Large Majority of Americans Want Changes to Save Social Security."

November 2, 2023: I appeared on WBOB 600 AM (Jacksonville, Fla.) to talk about the economy and deficit.

November 2, 2023: WBFF Fox45 (Baltimore, Md.) interviewed me about the White House executive order on artificial intelligence.

November 2, 2023: TPA Executive Director Patrick Hedger appeared on American Radio Journal to discuss TPA’s new polling on entitlement reform.

November 3, 2023: The Washington Examiner (Washington, D.C.) ran TPA's op-ed, "The stakes are high as Supreme Court considers this obscure, unconstitutional tax"

November 3, 2023: Issues & Insights ran TPA's op-ed, "Increasing The Availability of Spectrum Is An Economic and National Security Imperative."

Have a great weekend!

Best,
David Williams
President
Taxpayers Protection Alliance
1101 14th Street, NW
Suite 1120
Washington, D.C. xxxxxx
www.protectingtaxpayers.org ([link removed])

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