Tag: Healthcare reform

The Health Care Implosion

The Republican attempt to repeal Obamacare is in deep deep trouble. It does not have support from the conservative wing and has fierce opposition from moderates and liberals. It is polling at 57-16 against and has majority opposition from conservatives. The most recent CBO analysis indicates that it will reduce the deficit less while still leaving 24 million uninsured. And Trump, demonstrating the great deal-making ability he boasted about, has told the GOP that if they don’t pass it, he’s done with healthcare reform and will just leave Obamacare in place.

Why is this going so wrong? After passing dozens of repeals over the last eight years, why is the GOP in this morass of pushing a healthcare that no one likes? I think the answer is that they’re trying to deal with 2012’s problems instead of 2017’s.

Let me take a step back. As the Iraq War went south and many people demanded that we leave, I pointed that leaving Iraq was not the same as not having invaded it to begin with. Whether the invasion was right or wrong, there was a mess there that was going to get worse if we left. And indeed, our departure set the stage for the rise of ISIS.

We’re in the same place now. Repealing Obamacare is not the same as not having passed it in the first place. The last chance the GOP had for that, realistically, was 2012. Now that Obamacare is ingrained into the system, simply repealing it — even if that were possible — would be a nightmare. Insurance companies have planned out for Obamacare being there. So have individuals. We’d be talking about a major disruption of a two trillion dollar economy.

As a result, the AHCA finds itself trying to serve too many masters: giving the GOP base the instant gratification of an Obamacare repeal while not getting rid of the Obamacare provisions people like; cutting Obamacare taxes while not exploding the deficit; enacting a long-overdue Medicaid reform while trying to cut Medicaid expansion; putting together something that can pass by reconciliation. And the result is this unpopular, unconservative, hastily-revised Frankenstein mess of a proposal. It will only accelerate the collapse of Obamacare while giving the Democrats the ability to blame Republicans for the collapse of their Frankenstein bill.

The GOP needs to let the AHCA die. Maybe just pass the Medicaid reform, which they could probably get the votes for. The short-term political hit will be fierce. But then they could take a year to put together a reform package that deals with the healthcare system we have now, Obamacare and all, not the system we had before Obamacare. The end result would be a package that is much more palatable to conservatives, addresses the damage Obamacare has done to the system and makes insurance more affordable.

Put it together, have hearings, go through the normal process. And then dare the Democrats to filibuster it. At the very least, they’ll have something to run on in 2018 or 2020. And at best, they’ll pass it and fix the mess Obama handed to them.

Thoughts on the CBO Scoring

I haven’t written much about the Republican healthcare plan because it’s fairly obvious that it’s never going to happen. Another nail was put in the coffin yesterday when the CBO released their analysis of the Republican healthcare plan. The bottom line is that it would cut spending by $800 billion over ten years, cut taxes by $500 billion over ten years but increase the number of uninsured by about 24 million through both cuts to Medicaid and the elimination of the insurance mandate. The reaction has been about what you’d expect: conservative touting the deficit reduction and downplaying the uninsured numbers; liberals doing the opposite and accusing Republicans of literally murdering people to get “tax cuts for the rich”.

A few thoughts on this:

First of all, I would take any projections about the number of insured with several large helpings of salt. This number is infamously difficult to project. The CBO previously overestimated how many people were going to enroll in the Obamacare exchanges to the tune of 8-10 million. A lot will depend on what’s happening with the economy, what the states do, etc.

In many ways, the GOP is being more honest here with their CBO analysis. As McArdle reminds us, the Democrats heavily gamed the CBO projections of Obamacare:

During the process of passing the Patient Protection and Affordable Care Act, or PPACA, many of us complained that Democrats were gaming the CBO process, tossing out desperate cuts and pay-fors over and over until they got the score they wanted, in much the way video-gamers try to kill a hard boss. They ended up jamming in a bunch of provisions that made Obamacare’s finances look sturdier than they were, but realistically, had no hope of ever taking effect (among my favorites: a never-never long-term care program, and a requirement that everyone in the country had to issue 1099s to anyone who sold them more than a few hundred dollars worth of stuff). We certainly can’t accuse Republicans of that!

They also phased in the tax hikes years ahead of the spending hikes so that it appeared to balance over ten years even though it was running a deficit by the end of the window.

Second, if you want to know why so many people despise the Left, check out the verbiage being used to describe this. The Republicans are “taking away” people’s health insurance and “giving” money to the rich. They are “stealing from the poor and giving to the rich”. This is “class warfare” of the rich against the poor. This is high-grade horse manure but unfortunately what passes for thought in Left Wing circles. You can’t “take away” something that you’re giving to people free of charge. And you can’t “give” money to people that is already theirs. A more accurate description is that the Republicans are taking less from the rich to give to the poor. That’s fair enough and if you think that it is the government’s job, fine. But please stop with this “taking from the poor and giving to the rich” line. It’s nonsense and a mangling of the English language.

Third, ignore any claims that the Republicans are literally killing people here. We were told, when Obamacare passed, that lack of health insurance killed 100,000 Americans every year. If that had been the case, we should have seen a big drop in mortality since the bill was passed. We haven’t (in fact, mortality has ticked up a bit). The benefits of Medicaid, in particular, are highly disputed.

Fourth, I have no idea, given the inevitable lashing the GOP will endure, why they’ve written the bill this way. Since they’re going to be accused of murdering people anyway, why go with Obamacare Light?

Finally, let’s not forget something important. It’s not like the Republicans are fixing a problem that doesn’t exist. The ACA is teetering, with insurance rates skyrocketing, insurers pulling out of the exchanges and the beginnings of a death spiral in the individual insurance market. The problem with the ACA is that it did nothing whatsoever to make insurance “affordable”. All it did was shift the burden around, taking money from one group of people to make insurance “affordable” for another. But the price of health insurance remained what the price of health insurance is. And since numerous people are deciding they would rather pay the fine than astronomical insurance rates, the system is on the brink of collapse.

The Republican plan, however, does not address this problem at all. If anything, it makes it worse, replacing the Obamacare tax with higher insurance premiums for those currently uninsured, thus making the death spiral even steeper. It’s simply a terrible idea, both financially and politically. Because if the Republicans pass this law and the Obamacare markets collapse, they will take the blame for it.

Many are suggesting that the Republicans should just let Obamacare collapse so that the Democrats take the blame. I’m dubious about this. First of all, I don’t like using millions of people’s healthcare coverage as some kind of political tool. Second, the Republicans will almost certainly be blamed anyway. In fact, many liberals are blaming Republicans right now for eliminating the risk corridors — the subsidies paid out to insurance companies to keep the exchanges afloat. That’s how bizarre politics has gotten — Democrats accusing Republicans of killing poor people by their refusal to subsidize some of the largest businesses in America. Either way, Republicans are going to be blamed for the mess that Obama has created. I don’t see that there’s a good option here. But passing the AHCA is certainly a worse option than doing nothing.

Ultimately, our efforts at healthcare reform continue to founder on the same rocks: Americans can’t make up their minds what they want. Every healthcare system in the world balances tradeoffs. Ours gives up universal coverage and affordability for quick response and rapid technological innovation. Socialized systems are universal and “free” but sacrifice availability and demand heavy taxation. What the voters seem to want is insurance where they can get all the care they want, see any doctor they want but not have to pay any money for it. That’s simply not going to happen. And until someone — Republican or Democrat — acknowledges that, we will continue to stumble from bad plan to bad plan.

The Follies Begin

Last night, the Senate passed a budget resolution. This budget included the first step in repealing Obamacare: setting the situation so that key parts can be repealed by reconciliation. Contra the Left, this did not repeal any part of Obamacare; it set the stage for repeal.

The budget has significant issues, mainly in that it adds $9 trillion in debt over the next ten years, with no significant cuts to spending or entitles and no tax increases or changes. That’s just the baseline right now. If Trump is serious about enacting a giant tax cut when he gets into office, we could be staring down $20 trillion in debt over the next decade, a budget hole that makes Obama and Bush look like models of fiscal rectitude.

As for the Obamacare repeal, I am against a naked repeal of the bill without a replacement in place. Simply repealing the law would throw insurance markets into chaos, throw at least 20 million people off of insurance and roil a sixth of our economy. Indeed, a number of people — including hospitals, insurance companies and state governors — are lining up against a naked repeal for just this reason.

The model I prefer is repeal and replace, enacting a new healthcare reform act. There are several proposals out there but the problem here is getting it passed as one bill. Democrats will oppose and while Obamacare can be repealed with a simple majority, a new bill can not be enacted without a supermajority.

That brings us to the current strategy which is called “repeal and delay”. The idea is that the GOP would repeal Obamacare now, sunsetting it in two years. That would give them two years to come up with a replacement and put Democrats in the position of either supporting the GOP bill or letting Obamacare die.

It’s also one of the most reckless things I can imagine.

Look, we’ve been here before. We have seen Congress enact laws to try to force future Congresses to make tough choices. And it always been a disaster. Because there is no reason to think that future Congress will be any bolder or smarter than present Congress. So we enact tax cuts hoping to “starve the beast” — a trick akin to eating a huge slice of cake to try to force yourself to go the gym. And deficits explode because Congress decides massive debt is politically easier than spending cuts. We enact a sequester thinking that such a dumb way of cutting spending will force Congress to do it more wisely. And the sequester is enacted anyway because choices are hard. “Repeal and delay” is simply shoving 20 million people out of an airplane with a vague promise that you’ll get a parachute to them at some stage.

Trump appears opposed to “repeal and delay” as do many key members of Congress. But they can only delay so long as we are already seeing the beginning of a death spiral in individual insurance markets. This is a problem I have been shouting about ever since Obamacare passed: the GOP needed an alternative. Not a bunch of conflicting vague plans, but an actual plan that the entire caucus had agreed to.

My prediction? I think Trump isn’t so dumb as to think “repeal and delay” is a great idea. I suspect what will happen is that the GOP will pass a series of fixes to Obamacare to gradually repeal and replace it with a sounder and more market-oriented system (step one: allow insurance to be sold across state lines). And as long as it gets rebranded “Trumpcare”, I expected the President to go along with it.

Update: There’s a great tweetstorm from Justin Amash — rapidly becoming one of my favorite members of Congress — about why he voted against the bill.

To read it, click on the date at the bottom of the tweet and then scroll down through the points he makes.

The Public Option Returneth

With the collapse of the Obamacare exchange markets imminent, the Left Wing is calling for the return of the “public option”. The public option would be a single-payer system run by the government that would “compete” with private insurance, supposedly without subsidies to make things fair. According to the Left Wing, this is “only way” to return competition to the Obamacare exchanges, many of which have shrunk down to a single insurer.

It’s all lies. They know it’s all lies. That entire paragraph above can be exploded with two words: state lines.

For years, the Republicans have advocated that health insurance be sold across state lines, rather than within fifty restricted markets. The reason is very simple: in many states, there is no competition for insurance. In Alabama, for example, Blue Cross is a virtual monopoly, controlling 90% of the private insurance market. Allowing insurance to be sold across state lines would allow at least the big insurers and preferably dozens to compete in every market in America. It would destroy the virtual monopoly many insurance companies enjoy. It would not be a silver bullet — establishing networks of doctors and hospitals is arduous. But it would help.

Democrats have opposed this, claiming that it would cause a “race to the bottom” as employers sought the worst insurance possible. Apart from the bald cynicism, this is hysterical bullshit. We already have established federal guidelines for minimal insurance standards.

But the public option talk exposes several lies at once. The Democrats claim that the public option would not be subsidized. But the public option has a built in subsidy which is … the ability to be sold across state lines. And I would expect other non-subsidy subsidies to follow suit: forcing doctors to accept it; hiding administrative costs in other parts of the government (as Medicare does); exemption from federal and state regulations that drive up the cost of private insurance.

Obamacare was Stage One of moving us toward a single payer healthcare system. Obama said as much himself. The public option is simply Stage Two. If the Democrats wants single payer, then they should advocate for single payer. I’ll oppose them, but at least that would be honest. The public options is simply an attempt to sneak single payer in through the back door.

Sunday Triple Play

Three thoughts on unrelated topics:

Brexit:

When it came to the Brexit vote, I was partial to Remain, mainly because I am an avid supporter of free trade. And I’m worried that the departure of the UK could trigger an eventual dissolution of the EU, with bad economic consequences and an empowerment of Russia. I still worry about this but … I think the reaction of the Remain faction has been hysterical. Vox alone has run a few dozen articles rending their garments and gnashing their teeth over this. To borrow a thought from Greg Guttfield, this is about ten times as many articles as they’ve run on Venezuela, which is having an actual economic meltdown right now, with severe shortages of good, medicine and power. For Americans to go into hysterics because the UK’s economy might be a little weaker going forward while ignoring the Lord of the Flies situation developing in our own hemisphere is insane. McArdle argues they are lamenting the decline of this idea that we will no longer be citizens of nations but “citizens of the world” — a notion that has a lot of sway in elite circles.

Warren Meyer has a great post up, contrasting the “it was racism!” explanation that is now the default on the Left against the real regulations coming down on things like tea kettles. It’s worth a read but here’s a critical point:

The real crime from a US perspective is the actions of our President. Mr. Obama has told the British that by voting for Brexit, they go to “the back of the line” for trade negotiations with the US. This is, amongst a lot of stupid things politicians say, one of the stupidest I have ever heard. My response as president would have been to move Britain to the front of the line, offering them a free trade treaty with the US the day after the Brexit vote. Like most politicians, unfortunately, President Obama does not view trade as a vehicle for the enrichment of individuals but as a cudgel to enforce his whims in the foreign policy arena. Why on Earth has President Obama threatened to undermine America’s strong interest in trading with the UK merely to punish the UK for not staying in the EU, a transnational body this country would certainly never join?

The UK would be one of the most logical countries in the world for us to have a free trade agreement with. I have little hope that our next President will grok this.

Orlando:

The FBI has said that they have no evidence that the Orlando shooter was gay. That doesn’t prove he wasn’t, as the FBI notes. There are still indications from his friends and wife that he might have been. But the narrative that he was actively dating men and a regular at the club appears very unlikely.

The FBI is currently saying “they may never know” his motive, given some of the ambiguity around his sexuality. But given that he called 911 to specifically pledge allegiance to ISIS and Abu Bakr al-Baghdadi, the slightest thought might begin to speculate about the merest possibility of crossing our minds that this was Jihadist terrorism. Especially as Jihadism and killing gay people are not exactly incompatible ideas.

Honestly, theres enough blood to go around. We don’t have to confine ourself to one motive.

Obamacare:

Blue Cross has announced that they are pulling out of the Minnesota individual insurance market. The Kaiser Foundation is projecting steep hikes in insurance premiums. The longer this goes on, the more Obamacare is faltering, slowly destroying the individual market. We’re barely two years into this thing and we are now at the point where it’s not if, but when, Obamacare is going to face a massive overhaul. I don’t know that the insurance market can be repaired after this. But I know that if we dick around for much longer, we’re going to see uninsured rates spike drastically to the point where individual insurance may cease to exist.

Makes you kind of wonder if that was the point.

Pelosi Watch: Poor Hospitals

Nancy Pelosi once said we had to pass Obamacare to find out what was in it. And boy are we finding out:

An Obamacare program that aims to improve American health care may have an unintended side effect: penalizing hospitals that serve the sickest and poorest patients.

The Affordable Care Act penalizes hospitals that have high readmission rates, where patients come back within 30 days to deal with some complication of the initial procedure. The aim of that program was to encourage doctors to do the best job possible on the first hospital visit, improving patients’ experience and saving money by preventing a second trip.

But a new paper from three Harvard health-care experts suggests that the readmission program is penalizing hospitals for the type of patients they see. Hospitals that have high readmission rates tend to see patients who are less educated, more disabled, and more likely to suffer from depression — factors the Obamacare program doesn’t account for.

I suspect that you, like me, are shocked SHOCKED that a bill designed by politicians and wonks to exert control over a massive and complicated system didn’t work precisely as advertised. Keep in mind … this is one of Obamacare’s supposed big successes. They’ve touted the “huge” drop in readmissions (all of … 1%) as a sign of how awesome their reform is.

To be fair, penalizing hospitals for readmissions is not a completely stupid idea. Several insurance companies have been trying out programs to encourage better care. But the Obama people didn’t care for this kind of free-market innovation. To them, providers were greedy monsters doing poor care so they could charge more (remember Obama’s comment about amputating diabetic legs?) So they applied a ham-fisted program that has, on balance, made things work.

Well … at least we’ve seen insurance rates come down, right? Right?

Oh, yeah.

Video Monday: Takei and Hobby Lobby

I bookmarked these two video over the weekend. The first is a TED talk from George Takei. While I’m not fond of TED talks — they often cross me as smug and overly confident in their points — this one explains why George Takei still loves the country that interred him during the war:

(I’ve found this embed tends to hang. If someone has a better link, I’ll update the post.)

This comes close to my view of America. The United States, like all human institutions, is flawed and capable of doing awful things. But the principles on which our nation is founded are a beacon to humanity. And I would take the achievements of America, its role in the world and its history over any other nation on Earth. Takei’s story sounds familiar to me — and probably to many of you as well. Both of my paternal grandparents fled the “Jewish crescent” of Eastern Europe in the early 20th century. Despite the virulent anti-semitism they encountered — they vividly remembered the Leo Frank lynching — they still believed there was nowhere else in the world they would rather be.

The second I couldn’t resist. Takei is calling for a boycott of Hobby after the Supreme Court’s narrow decision last week. This completely useless gesture would accomplish little except making liberals feel better (how many liberals actually go to Hobby Lobby?) Reason, by contrast, proposes some changes to the law that would actually do some good:

The amazing thing about Obamacare is that many liberals believed — many still believe — that Obama “stood up” to the special interests and the healthcare industry. This could not be more false. He “stood up” to the insurance industry by forcing everyone to buy their product, outlawing the cheaper versions of their product and refusing to break the intra-state cartels. He “stood up” to healthcare providers by mandating coverage of expensive procedures and not even considering obvious cost-reducing measure like making birth control available over the counter.

All three of Reasons’s suggestions would be diametrically opposed by the healthcare industry lobbyists who wrote and campaigned for Obamacare. Insurance companies don’t want to offer cheap catastrophic plans. They certainly don’t want to compete across state lines. And providers don’t want more competition And so we can expect the liberal wing to “stand up for the little guy” by continuing to acquiesce to every demand of the industry they supposedly hate.

The Bill Comes Due

Remember all that talk about how Obamacare was going to save us all this money? Evil uncaring heretics like me pointed out that this was impossible. You can not insure more people and you can not outlaw cheap insurance without increasing healthcare costs. Romneycare saw costs soar after implementation because … funny story … when people have insurance they see the doctor more often. Even the dreaded ER visits went up.

But no, we just didn’t understand. We were letting our hatred of poor people cloud our vision. Why the cost curve bent down in 2009-2013, which was proof that Obamacare was keeping costs down even before it was implemented!

Um … oops:

As I reported earlier this month, there were already signs of growing health care spending in the fourth quarter of 2013, when it jumped 5.6 percent, which had been the fastest clip since 2004.

But the 9.9 percent jump (on an annualized basis) came in the quarter from January through March, which was the first three months in which individuals who gaining coverage through the law were able to use it. That was the fastest rate recorded since health care spending grew at a 10 percent rate in the third quarter of 1980.

The data released on Wednesday, as part of the government’s report on gross domestic product, is preliminary and subject to revision in the coming months.

Note that first quarter GDP growth came in at 0.1%, so the non-healthcare section of the economy shrank by 1% last quarter.

So … are the Obamacare supporters admitting that they were wrong? Uh, not exactly:

But let’s be very clear about what’s happening here: an improving economy is allowing Americans to now spend more on health care, while people who have previously been uninsured are finally getting insurance and are using their care. In the meantime, health care prices are still continuing to grow at low rates, reducing Americans’ health costs.

ThinkRegress goes on to say that, in the long run, healthcare costs will come down because the IPAB will force changes in healthcare reimbursement. Therefore we should be celebrating because the first half of the CBO’s prediction — healthcare costs will rise — has come true!

There are many many problems with this. The biggest is history. IPAB is not the first effort by the government to reign in healthcare spending. There is a whole alphabet soup of programs — RBRVS, GRH, SGR, etc. — that have completely failed in this regard. And that leads to the bigger point. Those of you who have followed the budget debates for the last twenty years know how this plays out: we get spending increases today with the promise of spending cuts tomorrow to balance them out. And those spending cuts never happen. Because tomorrow we are told that spending needs to go up because of the economy, the uninsured, the homeless or Venus being in Taurus.

So what will the Democrats and their apologists say when health care costs continue to rise? Well, besides blaming Republicans, I expect they will claim that this “proves” how much we need single-payer. To prepare for that, read McArdle today. Over the last twenty years, uber-controlled monopsony single-payer healthcare systems have restrained their spending growth to … about what we’ve had in the United States. The big growth in US healthcare spending occurred forty years ago and is now baked into the system. So … no, Virginia, socialized medicine will not cure what ails us.

Buckle your seat belts, friends. The ride’s only going to get bumpier.

Physician, Heal Nothing

It finally seems to have sunk into the Obama Administration how badly this Obamacare thing is going. There have been rumblings that the system will not be fixed by the end of the month (color me surprised). The total enrollment is something like 100,000 (only a quarter from the federal exchange). And millions of people are livid over having their policies cancelled.

If you’ve followed Obama for the last five years, you know what comes next: rewriting the law on his own:

The White House has its own idea to stop the bleeding: Allow insurers to renew existing plans in 2014 (which means they could continue into 2015) while forcing them to send Landrieu-like letters explaining why their plans don’t conform to the Affordable Care Act’s standards.

(I’m tired from baby stuff and I first read that sentence as “Landru-like” letters … as in Landru the computer from the classic Star Trek serial “Return of the Archons”. Funny thing is that, now that I’m awake, a letter from a fictional crazed computer still sounds a lot better than one coming from Mary Landrieu of Louisiana.)

This doesn’t really ensure anyone can actually keep their plan — which means it also doesn’t affect premiums in the exchanges. But it makes it easier for Democrats to blame insurers for canceling these plans. And it perhaps makes it easier for the White House to stop congressional Democrats from signing onto something like Landrieu or Udall.
The insurance industry is furious. They’ve been working with the White House to get HealthCare.Gov up and running and they’ve been devoting countless man hours to dealing with the problems and they’ve been taking the heat from their customers over canceled plans, and now the Obama administration wants to make them into a scapegoat.

In other words, this changes the wording to, “If you liked your plan, you could have kept your plan if it weren’t for those greedy insurance companies.”

The problem is that the machinery of canceling plans and creating new ones is already moving. The insurance industry has put a million piece in motion anticipating that the exchanges would, you know, work. Stopping it at this point is like slipping you car into reverse on the highway. It’s such a bad idea that the state of Washington has already said they will not implement it.

So why is Obama trying to sell this snake oil? Well, as McCardle points out, there really isn’t a Plan B. The process has advanced so far and the individual market is so delicate right now, that we really don’t have a good option. Obama has driven us into a ditch with no way out.

No matter what happens from now on, I think we are witnessing the beginning of the end of individual insurance policies. By the time Obama leaves office, your choices will be Medicaid or employer insurance. And maybe that was the intention all along.

The Exemption

I think all of us — liberal, conservative and otherwise — can unite in saying “No Fucking Way“:

Congressional leaders in both parties are engaged in high-level, confidential talks about exempting lawmakers and Capitol Hill aides from the insurance exchanges they are mandated to join as part of President Barack Obama’s health care overhaul, sources in both parties said.

The talks — which involve Senate Majority Leader Harry Reid (D-Nev.), House Speaker John Boehner (R-Ohio), the Obama administration and other top lawmakers — are extraordinarily sensitive, with both sides acutely aware of the potential for political fallout from giving carve-outs from the hugely controversial law to 535 lawmakers and thousands of their aides. Discussions have stretched out for months, sources said.

A source close to the talks says: “Everyone has to hold hands on this and jump, or nothing is going to get done.”

Yet if Capitol Hill leaders move forward with the plan, they risk being dubbed hypocrites by their political rivals and the American public. By removing themselves from a key Obamacare component, lawmakers and aides would be held to a different standard than the people who put them in office.

Gee, politico, ya think so? One thing to note in the article: there seems to be a lot of confusion on Capital Hill about what, exactly, implementing the bill will entail for Congress. That is, Congress isn’t clear on what their own healthcare reform is going to mean to them. How do they expect the rest of us to keep up?

When this whole process started, I said that a keystone had to be that Congress got the same plan the rest of us did. Several Republicans made sure that got into Obamacare. We can’t back down now. If Congress exempts themselves from this, we really will end up with one system for the rich and power, and one system for the rest of us.