Contempt for consumers in Frankfort

A decade-long legal battle between the Kentucky Department of Insurance and Christian Care Medi-Share took another weird turn today when a judge announced he would ignore a year-old contempt of court petition and expects the state to file another one.

Franklin Circuit Court Judge Thomas Wingate said through a spokesperson he now expects the state to re-file against Christian Care Medi-Share soon, after saying last week he was waiting for a meeting between the two parties.

The original contempt of court filing by the state was dated July 27,  2011 after Christian Care Medi-Share, a health sharing organization, was found to be continuing operations in the state despite a 2010 Kentucky Supreme Court ruling ordering them to stop.

Under ObamaCare, members of religious-based health sharing organizations are exempt from the federal insurance mandate. Kentucky’s official hostility to this free market activity has received very little media attention, but the uncertainty caused by this case keeps consumers locked into a health care financing system increasingly overrun by arbitrary and autocratic bureaucracy.

Fear the government

On Friday July 6, a federal jury in Covington convicted a local lawyer on three counts of filing false tax returns.  The charge was that he had under-reporting his income.

The convictions came after four years of prosecution following an armed raid on the lawyer’s offices in April 2008.  At that time agents of the IRS, FBI and DEA along with other law enforcement officials, armed with machine guns, burst into the attorney’s offices and while holding his staff at gunpoint seized his records and computers.

At the same time other groups of armed government agents raided his home and went to his bank seizing records and several hundred thousand dollars in cash.

In the last four years, the government returned all of the cash to the lawyer. Why?  Well, for starters it is no more illegal to hold hundreds of thousands of dollars in cash than it is to hold one hundred dollars in cash.

You might ask, “why would the attorney have so much cash on hand”?  His explanation at trial was that his grandfather had lost everything he had during the depression when his bank failed and he couldn’t withdraw his life savings in time.  The lawyer admitted that he kept some of his money in bank accounts but that he had been slowly putting away his savings in cash for nearly 30 years as his “nest egg”.  He explained that while others had put their money in retirement accounts only to see those accounts lose half their value in recent years, this was his retirement.  He was preparing for an uncertain future.

There being nothing illegal about his cash holdings, the IRS returned all of the cash they seized cash to him.

But for four year they kept up the prosecution which reportedly cost the government perhaps as much as $2 million in taxpayer money. And what was the result?

The result is that the lawyer will likely be sentenced to serve time in a federal prison, which you might note will also be at taxpayer expense. 

In addition he will likely lose his license to practice law which means that he will no longer be the high wage earner he has been for thirty plus years which will cost the government even more money in lost revenue on his earnings.

According to various reports the lawyer asked the government how much they claim he owed them and yet they never supplied him with a figure. 

The government could have charged the lawyer for back taxes, levied a substantial penalty and of course since they already had their hands on more than enough cash to obtained payment, could have settled the matter pretty much on their own terms.  But they did none of these things. Why?

What could possibly have been the purpose of this four year prosecution which was obviously very expensive in more ways than one?

For the answer to this question, go back to where I asked you to stop a minute and assess your reaction to this case and how it made you feel.  Over powering prosecutions like these serve only one purpose, to make an example out of people for the rest of us to see.  In other words, cases like this make us fear our government.

Of course the lawyer denied that he had failed to report any of his income.  In addition to his law practice he ran several businesses and his books were handled by a book keeper, his tax returns prepared by a CPA and he testified that he trusted these professionals to do things right.   But of course the government stood firmly on the law that says no matter who prepares your taxes, your signature means that you have affirmed the accuracy of everything reported on those returns and if any of it is wrong you have committed perjury. 

It is hard to tell how much money this lawyer spent defending himself, but one thing is clear; we have all now been taught to shudder at the thought of the government coming after any of us.

What is the solution?  A lot of politicians these days like to say they favor a “fairer/flatter tax”.  But things don’t seem to be getting any better.

In fact things have just gotten a whole lot worse. The Supreme Court has declared that the penalties under ObamaCare are really a tax which of course will be enforced by the IRS.  The IRS has just added thousands of new agents.  We hear annual reports how the IRS is ramping up its enforcement efforts and with thousands of new agents and a whole new set of laws to enforce things just got a whole lot scarier. 

Is there a plan is to make American citizens fear the government more and more each day?  It should be the other way around.  As Thomas Jefferson said "When governments fear the people, there is liberty. When the people fear the government, there is tyranny."

The time has come to eliminate the IRS, to pass “The Fair Tax” thus removing the need for citizens to file burdensome tax returns under penalty of perjury.  The “Fair Tax” would streamline collection, eliminate loopholes, spread the tax burden equally over the entire population and result in a steady stream of revenue to the government throughout the year.

And the fair tax would eliminate the fear of government agents bursting into your private property wearing bullet proof vests, carrying machine guns aimed at your head and shouting orders at you.  That’s how this case of lawyer, Larry Lawrence started and it will end with him going to prison.

And after considering that he is headed to prison, isn’t it fair to ask “for what”?  Was all of this really worth a few dollars in unpaid taxes?  No matter how much he owed it had to be a drop in the bucket compared to the federal budget. 

Taxes are the tools of tyranny and it should be painfully obvious that this latest criminal case wasn’t about money, it was, as Jefferson warned, all about making citizens fear the government.

Kentucky's bogus Medicaid talking point

Just as Kentucky House Minority Leader Jeff Hoover started pushing last week for Gov. Steve Beshear to avoid the massive unfunded Medicaid expansion option under ObamaCare, media reports of a study showing the state stood to benefit more than any other suddenly appeared.

The report, issued by Kaiser Commission on Medicaid and the Uninsured, saw immediate statewide distribution primarily through public news sites (here and here) and business publications (here and here) and at least one newspaper (here).

Only one tiny problem with that: the report was dated May 2010. These numbers are ridiculously outdated and and the ranking is meaningless, released now as a clumsy attempt to score political points. The fact Kentucky media outlets seem to have swallowed this whole should be incredibly embarrassing for them.

The truth is the massive Medicaid expansion under the Affordable Care Act would very likely result in significant numbers of privately insured low-income people dropping coverage and signing up for Medicaid, according to another old report.

Hope this changes the conversation in Frankfort this week as Beshear weighs whether or not to drive the state to insolvency faster with this easily avoidable government expansion.

Frankfort GOP coming around on ObamaCare

A video released by Kentucky House Republican Leader Jeff Hoover shows the first real sign of life from Frankfort's GOP leadership in support of health freedom in the Commonwealth.

The striking lack of any mention of health insurance exchanges in the video was cured by House Republican Director of Communications Michael Goins, who pointed to a press release mentioning the need to opt out of the exchange at the end of its last sentence.

The effort fits in the "better late than never" category, but not by much. Most Republican legislators voted to give Beshear $50 million to expand Medicaid under ObamaCare. Forcing Beshear and the Democrats to fight on the record for ObamaCare during budget negotiations would have been campaign gold this fall, at the very least.

We need to hear more from Rep. Hoover and other GOP legislators about specific steps to get out from under ObamaCare. A very easy move with a big payoff for consumers would be to expand the Religious Publications Exemption in the Kentucky Insurance Code so Kentuckians could be more confident in the option provided by religious-based health sharing organizations, which are exempted from federal mandates under ObamaCare.

Is Beshear reconsidering ObamaCare?

Within moments of the U.S. Supreme Court ruling upholding ObamaCare, Kentucky Governor Steve Beshear announced he would issue an executive order creating a health insurance exchange under the law. Further, he said he was considering whether to accept the law's attempt to expand Medicaid.

That was a week ago. What's the hold up?

Kentucky can't afford Medicaid now. Indeed, we need fewer people on Medicaid rather than signing up more. Even Beshear, who campaigned on expanding dependency on Medicaid in 2007 and has actively fulfilled that promise since, has to understand this fact.

Frankfort Republicans already gave Beshear $50 million on paper in the 2012 budget bill to expand Medicaid. They did nothing to stop him from setting up the bureaucracy to support an exchange. All he has to do is sign a paper and it is all over. So what is he waiting for?

Could the November elections for nervous House Democrats have something to do with it?

I sure hope so. It would be great to see Greg Stumbo lose his position as House Speaker because Beshear/Obama overreach on health insurance. But it would be better for the state if Beshear admitted that we can't afford it and removed this one piece of uncertainty from the dark clouds blocking Kentuckians' ability to see brighter days ahead.

Judge Wingate flip-flops on health freedom

Less than two weeks ago, Franklin Circuit Judge Thomas Wingate said he would rule soon on the Kentucky health freedom case. Now he says he is waiting for the state and health sharing group Christian Care Medi-Share to meet first.

They aren't likely to meet soon.

The Beshear administration has the people of Kentucky in an ObamaCare headlock and intends to keep us there. Governor Beshear and his minions in the legislature don't want a public discussion about this, so they are pulling all the strings to keep it quiet.

Will we let them succeed?

Kentucky most important health reform state

The health freedom effort in Kentucky got a boost last week with coverage in BusinessWeek and the Christian Broadcasting Network (click the links to read), but all everyone wants to talk about is the U.S. Supreme Court ruling. Go figure.

All kidding aside, it will take a huge effort to rein in the Kentucky Department of Insurance and help create an environment for free market health care in Kentucky. And the federal effort for real reform won't mean anything if we don't get it right in Frankfort.


But if we can make headway in Kentucky, we can help the rest of the nation get out from under government control of healthcare. Kentucky is unique in its constitutional protection of citizens from absolute and arbitrary government. (See Section 2 of the Kentucky Bill of Rights.)


Insurance regulation in the states is almost universally arbitrary in that the laws are too broad and then are applied haphazardly. This chaotic regime is much like having a crazy despot who lets his friends get away with murder but attacks his enemies on a whim. That's no way to regulate anything, much less an industry which such an important impact on the lives of all citizens.


If we can overturn insurance regulation in Kentucky, we can show what a waste of resources government regulation of insurance is. That's because prices will do down and quality of service will go up. When Kentucky does this, people in other states will want to follow suit.


This effort can snowball quickly, but it will take a lot of people spreading the word. Will you help?

If John Yarmuth is only source, you're biased

A pretty important ObamaCare story over the weekend in the Louisville Courier Journal failed the smell test.

The article described a program through which the federal government provided $58 million to fund a scheme created by the "Affordable Care Act" to create a new health insurance co-op in Kentucky.

With supposedly independent programs like this, who needs government run insurance or the so-called public option?

But when the Courier Journal had time last week to talk to anyone with a point of view on this very controversial approach, it seems they could only manage to reach ObamaCare cheerleader John Yarmuth.

Needless to say, he is in favor of it.

In other news, certainly unrelated to bad, unbalanced journalism, the Courier Journal on Sunday pulled down their pay wall that had been telling readers to subscribe or face being shut off from their quality news source.

Kentucky regulators hunting more Christians

The Kentucky Department of Insurance has now received responses from two Christian health sharing companies under investigation for operating as illegal insurance companies. A state official this morning described the late responses as incomplete and said he would send follow-up questions  early next week.

The two companies, Christian Healthcare Ministries and Samaritan Ministries, can't win a cat-and-mouse game with state insurance regulators. Changing Kentucky law to better follow our constitutional protection against arbitrary government power is the only way for this health insurance alternative to escape black market status in Kentucky.

Just letting these companies off the hook is no solution. In fact, doing so would only make the situation worse by increasing the sense of uncertainty in an environment with no fixed rules.

Christians should band together quickly to ensure Kentuckians have unfettered access to greater choices as ObamaCare destroys the more traditional ones. Non-Christians clearly have a stake in this too. They should push state government to restrict the definition of "insurance" in state law to better allow for the creation of a vibrant market in alternative financial products for them as well.

Beshear wants Tea Party rematch

Back on May 7, Governor Steve Beshear's ObamaCare road show started in Frankfort. It ended abruptly the same day when a crowd of tea partiers showed up to ask questions about this government takeover of health care.

Governor Beshear's Health Cabinet Secretary Audrey Haynes told CN2's Ryan Alessi today they are going to give it another shot.

Stay tuned for updates. It will be on their turf again, on their terms. But they still can't answer the tough questions.

What's that in Mitt Romney's punch bowl?

Presidential candidate Mitt Romney might want to talk at length, clearly and forcefully, about the Supreme Court's ObamaCare ruling. Especially given that this is still on his campaign web site under the heading "Courts and the Constitution."

Justice Roberts' vote to uphold ObamaCare can be explained, but that's not the end of the story.

I think Romney's biggest problem isn't with the constitutionality of ObamaCare, which he has already addressed substantially. His problem is in the philosophical details of any kind of government takeover of healthcare and in the implementation of this one through health care "exchanges," a heinous bureaucracy capable of doing much more damage than even the individual mandate.

Federal funding has already been distributed to the states to set up these exchanges, of which Romney has gone on record in support. Don't think the Obama campaign will fail to let that detail slip out a few times before November.

Beshear burns us in ObamaCare fire

Kentucky Governor Steve Beshear is about to announce his executive order throwing the Bluegrass State into ObamaCare via a health insurance exchange.

Avoiding a state-run exchange is the surest option left to prevent the Affordable Care Act from bankrupting us with unfunded mandates. Despite what Beshear will say, federal law explicitly allows states to opt out of setting up an exchange. The law also clearly gives the federal government control of so-called state health insurance exchanges, so the line he will give us about maintaining local control should be ignored.

Make sure you get your legislative candidates on the record for or against ObamaCare. In Jessamine County, House Democratic Caucus Leader Bob Damron is for ObamaCare and his Republican opponent Matt Lockett is opposed to it.

Kentucky Christian health story takes off

ObamaCare survived the U.S. Supreme Court, so now the focus turns to ways for citizens to survive in the brave new world of federally-controlled health care.

Religious-based health sharing should be the first stop for a lot of us.

Unfortunately, the states are not ready for this. And the Christian health sharing groups aren't either.

Kentucky must immediately change its Insurance Code to allow health sharing groups to help Kentuckians escape ObamaCare. No state does a good job of allowing this to happen, but Kentucky is unique in its hostility toward health sharers and in its constitutional protections that should allow them to escape our arbitrary laws prohibiting them from helping us.

"Kentucky versus Christians" escalates

Two illegal Kentucky health insurance companies failed today to respond to a state Department of Insurance inquiry about their activities. Letters dated June 12, 2012 from the Public Protection Cabinet required an explanation or justification to be made to the Commonwealth of Kentucky by today.

At issue is the marketing of health sharing plans by Christian HealthCare Ministries and Samaritan Ministries in conflict with state law. Both entities fail to meet the extremely narrow "Religious Publications Exemption" in Kentucky's Insurance Code that would allow them to operate here. This Code also defines "insurance" so broadly as to make nearly anyone fall under its jurisdiction.

The Commonwealth has been battling a third health sharing group, Christian Care Medi-Share for more than a decade. Their case has come to an odd standstill.

Given that health insurance consumers' interests would be better served by more competing firms in an open and transparent marketplace, a solution would be to expand the "Religious Publications Exemption" to allow any church or religious organization to act as an unregulated health insurer.

A better solution would be to change the definition of "insurance" in state law from anyone engaged in shifting risk to anyone who voluntarily signs up with the Insurance Department to be regulated as an insurance company.

That way, we could have two insurance markets: one with direct government oversight and one without in order to maximize consumer choice and also to gauge the efficacy of alternative regulatory schemes.

The Public Protection Cabinet is expected to send out a second round of letters tomorrow, demanding a response and threatening fines and further legal action.

Extreme Frankfort inaction leaves us hanging

Wednesday marks eleven months since Kentucky's last official action on the rights of Kentuckians to protect themselves from excessive healthcare regulation in the case of Christian Care Medi-Share. This unacceptable delay wastes precious healthcare dollars we can not afford to throw away.

July 27, 2011 was the day Kentucky's Department of Insurance filed a contempt of court motion against Christian Care Medi-Share for operating in the state despite a March 1, 2011 Franklin Circuit Judge's permanent injunction against their continued operation here.

Medi-Share is still actively operating in Kentucky and falsely telling potential members there is no legal issue preventing them from doing so. The Kentucky Department of Insurance continues to ignore other such organizations operating in similar violation of state law. Continued official silence in this matter fails to serve the public interest regarding the pursuit of reasonable health coverage just as government is moving swiftly to otherwise limit our choices.

Please call Franklin Circuit Judge Thomas Wingate at 502-564-8382 and ask him to rule on the contempt motion in Commonwealth v. Reinhold without further delay.  

What's your health regulation tax?

A full analysis to compare health insurance policies usually involves looking at premiums, deductibles, co-insurance, maximum coverage amounts and exclusions.

One very important element in the cost of health insurance that doesn't usually come up is the cost of regulation. The point seems moot because we think of health coverages all being regulated the same way, so there is no reason to consider what those costs are.

But there is more to the story.

No matter how the U.S. Supreme Court rules on ObamaCare, the nearly certain shake-up in the health insurance market that results may send you hunting for a new way to pay for your medical needs. If you are a Christian, you might want to take a long look at Christian health sharing plans.

And that's where the cost of regulation comes into the equation in a big way.

Christian health sharing plans (Christian Care Medi-Share, Samaritan Ministries and Christian Healthcare Ministries to name three) don't fall completely under state regulation. Also, they are mostly exempt from regulation under the Affordable Care Act -- the part of the law most likely to survive even if the individual mandate is thrown out.

The relative lack of government regulation results in dramatically lower pricing for the sharing plans. That's not to say that they are automatically superior to government-approved plans, though. And this distinction is extremely important.

State regulators across the country, probably without exception, hate Christian health sharing organizations and have taken pains to keep us from flocking to them. I'd love to be proven wrong on this point, but I'm not holding my breath waiting for it to happen.

Every state law I have seen that mentions them takes pains to limit the ability of health sharing organizations to operate to their full potential. The standard approach requires them to state explicitly that there is no promise claims will be paid. That could seem pretty scary, but really only if you haven't done much research into health sharing plans or government-regulated plans.

"Regular" health insurance is just a one year contract. That should be horrifying for anyone on one as well as motivating for anyone who learns health sharing plans are not limited as to their terms.

The lack of legal support for health sharing plans is the only thing really holding them back. Kentucky's schizophrenic approach to them may be worse than any state's in the nation, but they all appear to be pretty bad.


Christian health sharing organizations are alternatives to health insurance that are barely, if at all, legally permissible in Kentucky. The problem has much more to do with bad law than with the organizations and their health plans.

A bill to expand the Religious Publications Exemption to the Kentucky Insurance Code would be a big help. Specifically, striking all of KRS 304.1-120(7) except for (c) would get the government off the backs of these good organizations and allow a strong self-regulating market to develop to benefit Christians all over Kentucky who would otherwise be victimized by the coming exploding costs in government-regulated health insurance.

What amounts to a "health regulation tax" really just benefits government health regulators. We can't afford their taxes anymore.

Judge to rule against Kentucky Christians

A Kentucky judge is about to send thousands of Christians scrambling for new health coverage when he finds a religious health sharing group in contempt of a court order.

Franklin Circuit Judge Thomas Wingate said through a spokesperson that his ruling on a Department of Insurance motion to find Christian Care Medishare in contempt of court will come soon.

Wingate has no choice but to rule against Kentucky Christians under state law and despite an exemption for such groups in the federal ObamaCare law.

The solution to this mess is to change Kentucky law in favor of health care freedom right away.

Indiana could have Christian health problem, too

Christian health sharing organizations, exempt from ObamaCare, have put on a full-court press across the country in recent years to gain exemption from regulation by state governments.

Effective July 1, Indiana joins a collection of mostly conservative states who have taken legal steps to secure the rights of Christians to gain private healthcare regardless of federal government actions.

Kentucky has completely missed this opportunity so far, possibly because health sharing lobbyists mistakenly thought they had already changed Kentucky law.

But Indiana Christians may be operating under a false sense of security. You can look at the language of the new Indiana law here.

A court could very easily rule that any of the major health sharing organizations violates Sections 4 or 5 of the law if the organization takes possession of any member sharing funds at any point or if the court views penalties against failure to make timely payment between members as a form of breach of contract and, therefore, part of a failed "promise to pay" that puts the organization back under Indiana Department of Insurance regulation.

Christians really are going to have to look beyond little legislative tweaks and narrow exemptions if they really want to protect their health care freedoms at the state level.

Kentucky can lead on this issue by calling a special legislative session and changing the definition of "insurance" to include only companies that are registered as such with the Department of Insurance.

Health sharing group responds, but still incorrectly

The fight for health care freedom in Kentucky still faces odd resistance from marketers of the closest thing to Liberty-oriented health coverage available to Kentuckians.

It's time for that to stop.

As of yesterday, the Alliance of Health Care Sharing Ministries had posted on their web site false information justifying their exemption from Kentucky state insurance regulation. Today, the information is changed but it is still false.

The statute referenced above is the Religious Publications Exemption which would exclude health sharing organizations from regulation if they did not in any way act as a financial intermediary between customers and health care providers. The organizations I have looked at all function as intermediaries.

Again, the problem is with the law. Kentucky's definition of insurance is so overly broad it essentially means whatever insurance regulators want it to mean. This exemption is so narrow as to apply to only extremely small organizations. In fact, if your church ever pays medical bills for needy members, it could be shut down by state government under current law.

Additionally, Kentucky has a unique constitutional provision that turns this whole mess on its head potentially for the benefit of all Americans. Section 2 of the Kentucky Bill of Rights prohibits government at any level from exercising arbitrary power.

Kentucky's Insurance Code is the poster child for arbitrary power because it is authorized to exercise control over people without clearly defined limits on the scope of that power.

Fixing this problem involves a simple approach which would serve Liberty for Kentuckians right away and then spread like wildfire over the rest of the country. The approach involves decriminalizing the selling of "unauthorized" insurance in the state. 

Look at it this way: the Commonwealth of Kentucky has been burning public resources for a decade trying to chase Christian Care Medi-Share out of the state. Today the company still operates here and the Department of Insurance is still claiming to care about consumer protection.

Let the legislature define "insurance" to mean only companies who voluntarily request government regulation. Some actually might. The big insurers have grown accustomed to the government protection; let them have it if they wish. 

But a shadow economy in insurance need not be a black market. We could have a "free" market to go alongside the "government" market and let the people decide which works better. Kentucky's Constitution specifically creates this opportunity for us, we just have to invoke it.

Alliance of Health Sharing Ministries, that means you. Your member organization, Christian Care Medi-Share is already in a legal battle for its ability to serve customers in this state. Stop screwing around with your web site and come to their aid with the Kentucky Constitution as the only weapon you need.

A 9 year old mistake in Christian health debate

Resistance from Christian health sharing organizations has stymied what should be easy collaboration to battle Kentucky's unconstitutional insurance regulatory regime.

I just figured out what the problem is.

The Alliance of Health Care Sharing Ministries reports on its web site that Kentucky passed a law in 2003 to allow health sharing entities to act as a conduit for funds. Such a change in the law might clear up a major problem regulators and the Kentucky Supreme Court have with these organizations.

The only problem with this is the bill failed to pass. Never even got a floor vote in the House, where it originated.

This mistake appears to be what is causing the Christian health sharing organizations to think they are on solid ground in Kentucky. They would do well to check the facts and reconsider their failing strategy right away. It's an embarrassing screw up, to be sure, but the best solution is to join in and fight against the flawed reasoning of insurance regulation.

Given the substantial uniformity of state insurance regulation, making Kentucky a focal point for reform could yield fantastic results.

The ObamaCare U.S. Supreme Court decision coming any day now is really just the beginning of the health care freedom battle in America. Getting with the program, therefore, presents a very powerful opportunity for marketers of Christian health sharing programs.