Tag: Obamacare

King Denied

The Supreme Court has just ruled 6-3 that the Obamacare subsidies apply to states that do not run their own exchanges, thus upholding a major provision of the law. I’ll post more when I have time. Discuss.

One thing I’ll note: I was not surprised. The Roberts Court really hates to overturn legislation. They prefer to let legislators do that. The theme from Roberts in the two Obamacare decisions is basically this: if you want to repeal, repeal the law. We’re not going to do it for you.

Update: The more I think about it, the more I think the Court reached the right decision here, much as it pains me to say so. I don’t think King’s case was “ridiculous” as many liberal pundits opined. It’s never ridiculous to argue that a law should be interpreted as it was written. But I do think it was the language was ambiguous enough and the intent of Congress during the debates plain enough for the Court to defer to them. The message from the Court, as I noted above is “we’re not going to repeal Obamacare for you”.

(And I think the GOP is secretly grateful. As Thrill pointed on Twitter, this decisions basically saved them from having to repair the law.)

The way forward is pretty clear: replacing Obamacare becomes the key GOP electoral issue in 2016. The law, as Justice Roberts noted in his majority opinion, is still a mess. While the number of insured has been reduced, there has been no improvement in overall health. It’s saving some people from crippling financial bills but at enormous cost. And we are still in very real danger of an insurance “death spiral” that will destroy the individual market.

The shape of that replacement is up in the air right now. I prefer a bill that eases the link between insurance and employment, allows insurance to be sold across state lines and encourages the kind of high-deductible insurance that has been shown to reduce healthcare costs with little impact on overall health. But we’ll see what happens. The Court has put the ball into the GOP’s court. Let’s hope they don’t step on it and fall on their ass.

Update: You should read Scalia’s blistering dissent. It’s vintage Scalia, complete with saying the law should now be called “SCOTUScare”. It makes good points, I think, and shouldn’t be dismissed.

Update: Doug Mataconis explains the Court’s reasoning:

As Chief Justice Roberts noted, Courts have always been deferential when it comes to statutory interpretation in order to ensure that Judges are not substituting their judgment for elected representatives. The fact that there is a drafting error, or that language in a bill that was more than a thousand pages long is inexact in some way should not necessarily mean that a Court must interpret a law in a manner that brings down an entire statutory scheme. The alternative would be a world where the lack of a single word, or an in-artfully drafted sentence, would bring down an entire law, and that’s never been the way the Courts have interpreted statutes. In my past comments about this subsidy issue, I’ve been somewhat sympathetic to the argument of the Plaintiffs in this case, but reviewing the pleadings and the oral argument in this case have caused me to reconsider that position. I’m still not a fan of the PPACA, and I think that it’s going to create long-term economic incentives that will make health care more expensive rather than less expensive, but that is a policy matter not a legal one. As it stands, it seems clear to me that the Justices in the majority got it right.

Court Season

The Supreme Court is set to issue a number of landmark ruling this month (saving them for the end of the session, as usual). You can read Doug Mataconis or Evan Bernick for good conservative takes. I’ll do quick hits with how I think the Court will rule and how I think the should rule. And, of course, as each ruling comes down, I’ll put up a post.

The thing about the Roberts Court is that they are very conservative. Not in the political sense, but in the temperamental one. They prefer not to make broad sweeping decisions that upend masses of law and precedent. They tend to defer to legislatures. They like to rule narrowly and specifically. Roberts works very hard to build consensus (see last year’s slew of 9-0 decisions). They have been slow to defend civil liberties except for the First Amendment. So while I expect some landmark decisions, I don’t expect any that will radically reshape the law.

I do expect, however, to hear the losing side of several cases scream that the Court has exercised unprecedented power, set fire to the Constitution and brought plagues of locusts. Whichever side they oppose will be acting in a purely partisan fashion while their side are zealous defenders of the faith. You can decide if that hysteria is warranted.

Read more… »

Insurance is Not Healthcare

For a long time, conservatives and libertarians have been pointing out that Obamacare has come at a steep price for the insured. Not only are health insurance premiums rising, but the new plans cover less, demand healthcare within ever-shifting networks of approved providers and foist larger out-of-pocket expenses on patients.

Well, looks like the New York Times finally figured this out:

A study by the Commonwealth Fund this month found that the rise in health insurance premiums in employer-based plans had slowed in 31 states since the passage of the Affordable Care Act (good news, right?). But premiums were still rising faster than median incomes (hmm). More important, perhaps, the researchers found that patients were paying more in health care expenses than ever before, during a time of stagnant wages (not so great). In fact, nearly 10 percent of median household income now goes to pay premiums and deductibles, the study found. And that does not include other kinds of health payments that patients now encounter, such as co-pays and uncovered drugs or services.

A recent New York Times/CBS poll found that 46 percent of Americans said they had trouble affording health care, up 10 percentage points in just one year. Some of the cost problems may ease as patients — now known as health care consumers — learn what to expect and how to choose and navigate their plans.

In other words, premiums slowed down … but only because out-of-pocket expenses increased. On balance, that might not be such a bad thing. I’ve long advocated high-deductible plans as a way to bring the healthcare consumer back into the picture. David Goldhill once pointed out that if we replaced Medicaid with a high-deductible plan, we’d save enough money to give every poor person a voucher to cover their deductible.

But this isn’t the high-deductible idea. This is creating a hyper-regulated marketplace in which insurers are expected to provide “reasonably priced” health insurance to everyone, no matter how sick they may be. So doctors flit in and out of approved networks. Out-of-state clinics come to be preferred over in-state ones. And all of this is enforced with the threats of massive bills if you don’t do the insurance company’s bidding. And if you do their bidding, you’re still facing far larger healthcare bills than you were dealing with before Obamacare.

All of this was predictable of course. You simply can not expand health care coverage to ten million people — many of whom couldn’t get coverage because of expensive medical conditions — and not have it make insurance more expensive. We warned people about this for years. We had concrete examples of this in places like New York and Massachusetts. And yet everyone is acting all surprised when they discover that healthcare isn’t free.

Note one thing the story leaves out: the increasing number of doctors who are refusing to see Medicaid patients. Medicaid expansion is a big reason the Obama Administration can claim that they’ve insured ten million people. Only a couple of million have gotten private insurance thanks to Obamacare; most are in the Medicaid gulag.

Given the media’s lag, I expect we’ll start seeing stories about that in about 2019, at which point it will be blamed on President Walker.

Addendum: You may remember that a big pillar of Obamacare was that it would be paid for, in part by the savings from Electronic Healthcare Records. Yeah, that’s not working out either. Again, this was predicted. The one thing we all knew going into this was that EHRs are very expensive.

They’re Lying. Again.

Wow:

The Obama administration included as many as 400,000 dental plans in a number it reported for enrollments under the Affordable Care Act, an unpublicized detail that helped surpass a goal for 7 million sign-ups.

Without the dental plans, the federal government would have had 6.97 million people with medical insurance under the law known as Obamacare, investigators for the House Oversight and Government Reform committee calculated, using data they obtained from the U.S. Centers for Medicare and Medicaid Services.

Federal officials said in September they had 7.3 million people enrolled in coverage through new government-run insurance exchanges. They didn’t distinguish between medical and dental plans, breaking from previous practice without notice.

Blending dental and medical plans let the administration assert that enrollment remained greater than 7 million, the original projection of the Congressional Budget Office. The move also partly obscured the attrition of more than 1 million in the number of people enrolled in medical insurance.

The Administration is saying this was a mistake and the liberal bloggers are spinning, spinning spinning. The main talking point is that Obamcare basically met its goal (6.97 million vs. 7 million) and that, hey, lots of people are now insured. But saying that you met your goal (almost) is a huge political difference from saying you exceeded your goal, especially in … wait for it … the run up to an election.

They’re lying. They always lie. They’re just getting caught now.

The Gruber Chronicles

No doubt, you’ve heard a bit about the Jonathan Gruber videos emerging this week. Gruber came to light earlier this year for videos in which he argued that the supposed “scribal error” in Obamacare was intentional — i.e, that states that do not build exchanges shouldn’t get Obamacare subsidies. These new videos show him slagging the American voter, boasting about how they deceived the public on aspects of Obamacare and basically acting like an arrogant twerp.

There’s been a small wellspring of sympathy for him, since he’s now caught up in an unexpected controversy. Personally, I find it difficult to find a lot of sympathy for a man who was paid $400,000 to help deceitfully foist Obamacare on us, but whatever.

I don’t think Gruber’s comments, however angering they are, are going to make much difference. Obamacare passed and has survived at least one SCOTUS challenge. His comments on the subsidies are a good talking point on Halbig but SCOTUS is going to base their decision on Congressional intent, not the post-facto comments of some MIT windbag. No matter how involved he was in writing Obamacare, it is the intent of the legislators that matters.

But there is one aspect of the Gruber videos that is important. It proves that not only were critics of the law right, but that the Administration knew they were right and lied and obfuscated about the law. It’s not a “scandal” in the sense that anyone broke the law. But it’s a scandal in what it reveals about Obama, the Democrats and the so-called fact-checkers.

Take the CBO scoring. One of the big selling points of Obamacare, from day one, was that it would decrease the federal deficit. Critics pointed out that it only did this because of gimmicks — the taxes penalties fines taxes phased in a little faster than the subsidies. Critics pointed out that it depended on unlikely money-saving events, such as not enacting a “doc fix” (said doc fix having been promised to the AMA in return for their support of the bill). Critics pointed out that while it was technically balanced over the ten years, by year ten, Obamacare was running a deficit, a deficit that would only increase over the years. Critics also pointed out that CBO analysis, if you dug deep, made exactly these points. While they were required by law to score it the way they did, they noted, numerous times, the flaws in their projection.

When we pointed this out, we were called liars and tools of the insurance industry. Fact-checkers rated this claim as false. Of course, time has born out our complaints. But what the video shows is that the Administration was well aware of their deceit — how could they not be? This wasn’t a quirk; this was an act of deliberate deception. And they were laughing about it all the way back to their comfy positions in academia and industry.

Another big point is the so-called “cadillac tax”, which enacts a fee on healthcare plans that cost more than a certain amount (at least, for some people). When this plan was rolled out, critics pointed out that it was indexed to inflation, not healthcare costs. This would mean that, over time, more and more plans would qualify as “cadillac plans”. The result would be to effectively eliminate the tax deduction for health insurance.

Now one can make the case that the tax deduction is bad law. But that’s not the case the Obama Administration made because they knew eliminating the tax deduction for health insurance would be extremely unpopular and likely scuttle the entire bill. So they came up with a convoluted and tangled way of doing it. And when critics pointed this out, they were called liars and tools of the insurance industry (the insurance industry having written much of Obamacare).

Now that everyone is admitting to what Obamacare does, the President’s supporters are … blaming the stupidity of the voters for making these lies necessary. We’re being told this is standard operating procedure in Washington (it isn’t), that everyone does it (they don’t) and that the critics are being hypocrites (for … um, being right all along?)

We see this over and over again with this Administration. Here is my own attempt a one-act play that encapsulated the last six years:

Obama: My law does X.

Critics: The law also does Y and Z and it doesn’t do X very well.

Obama Supporters: Tea Partiers! Extremists! How dare you come here with your astroturf talking points!

“Fact Checkers”: Obama says the law does X. We rate your claim as false.

[Three years pass]

“Fact Checkers”: Actually, the law also does Y and Z and does’t do X very well.

Critics: We told you!

Obama Supporters: Shut up! Y and Z are great policies! Obama had to lie about it because you’re so fucking stupid!

The gripping hand here is that this will not make any difference. Most of the vast American public could give two shits about Jonathan Gruber. This will not have any impact on the Halbig case or any other legal challenges nor will it play a role in any attempts to fix or repeal Obamacare. It will persuade few to repeal the bill who don’t already want to. It’s mostly Washington insider stuff. I find myself agreeing with Tyler Cowen: let’s put all this energy into explaining why these policies are so bad rather than whether Gruber is an arrogant prick or the devil incarnate.

Gruber is nothing. Obamacare is everything. We can do something about the latter. And now we can use the Administrations own words to help make it happen.

Hoist By Their Own Petard

Let’s remember, for just a moment, how Obamacare was passed. It was cobbled together by a team of industry insiders to cater to all the special interests. It was then sent to Congress, where it would be honed and passed. But when Scott Brown won the election in Massachusetts, they suddenly did not have a filibuster-proof majority. So they rushed it through on a budget reconciliation. As a result, the bill contains a lot of bad language, poor wording and unclear statutes. Nancy Pelosi famously said we had to pass it find out what was in it. And now we’re finding out that what’s in it could destroy it.

Earlier this week, the DC Circuit Court ruled that the Obamacare subsidies could not be given to people whose states had not set up insurance exchanges because the law did not specify it. Liberals screamed blue murder about activist courts and people losing insurance and other arguments from the “Oh Come On!” school of jurisprudence. They said that Michael Cannon and Cato and other people arguing that the subsidies were meant to be withheld to force states to set up exchanges were “sociopaths” who would say anything to take insurance away from the poor. They’re livid that Obamacare might be overturned by what they’re calling “a typo”:

his week, Jonathan Gruber appeared on MSNBC to assert that the DC Circuit appellate court got the ObamaCare statute all wrong in its Halbig decision. Gruber, one of the key architects of the ACA and of the Massachusetts “RomneyCare” law that preceded it, insisted that the state exchange requirement for subsidy payment was purely accidental. “It is unambiguous this is a typo,” Gruber told Chris Matthews. “Literally every single person involved in the crafting of this law has said that it`s a typo, that they had no intention of excluding the federal states.”

Even if that were true, these kind of typos are what you get when you shove a law through without reconciliation. And while “everyone” might agree that Congress intended the mandates to be universal, it’s difficult to tell what Congress intended because Congress barely debated the fucking thing.

But is it true that Congress intended the subsidies to be universal? For that, we should ask one of the architects of Obamacare such as … um … Jonathan Gruber?

Two years ago, though, Gruber gave a much different explanation for this part of the ObamaCare statute. Speaking at a January 2012 symposium for a tech organization that this was no typo. It was, Gruber said, a deliberate policy to twist the arms of reluctant states to set up their own exchanges — and that a failure to do so would mean no subsidies for their citizens.

You can go to Hot Air and watch the video, including the full video that shows this was not taken out of context. Gruber has since said his words were a “speak-o” and he was mistaken. If so, this Obamacare architect — who was paid a cool $400,000 for his contribution — now appears to have made that “speak-o” multiple times.

As Ed Morrissey points out, this doesn’t really matter for the court case. The Court will be considering Congressional intent not consultant intent. And to be perfectly frank, Gruber is a hack who will say whatever the Obama Administration wants him to say. If he got a memo saying that Obamacare was actually French Toast, he’d be handing out eggs and butter at these meetings.

But it does make for some great entertainment to watch these guys flounder around trying to explain what the bill really means.

Dueling Obamacare Decisions

Obamacare is dead!

This morning the U.S. Court of Appeals for the D.C. Circuit released its much awaited opinion in Halbig v. Burwell. In a 2-1 opinion, the Court held that the Internal Revenue Service regulation authorizing tax credits in federal exchanges was invalid. Judge Griffith, writing for the court, concluded, “the ACA unambiguously restricts the section 36B subsidy to insurance purchased on Exchanges ‘established by the State.”

Oh, wait. It’s merely pining for the fjords:

Within hours, a unanimous three-judge panel of the United States Court of Appeals for the Fourth Circuit, in Richmond, Va., issued a ruling that came to the opposite conclusion.

The Fourth Circuit panel upheld the subsidies, saying the I.R.S. rule was “a permissible exercise of the agency’s discretion.”

The language of the Affordable Care Act on this point is “ambiguous and subject to multiple interpretations,” the Fourth Circuit panel said, so it gave deference to the tax agency.

What the what?

These two rulings concern a very specific piece of wording in Obamacare. The law calls for the states to set up Obamacare exchanges. It then specifies that subsidies will be made available to people who enroll through the state exchanges. It then sets up a Federal exchange for people whose states do not set up an exchange. The plaintiffs in this case argue that because it does not specifically mention subsidies for the Federal exchange, those subsidies are illegal. The government’s case is that the wording indicates that the Federal exchanges will be the equivalent of the state ones and that the subsidies are legal. These debates over verbiage tend to happen when you pass a law hastily and through a budget procedure because Ted Kennedy died.

If the subsidies disappear, individuals who have insurance through the federal exchange — about five million of them — will suddenly be paying the full price of their insurance. It is likely that many of them will choose to pay the Obamacare penalty instead. Only sick people will stay in the individual insurance market because even unsubsidized insurance is cheaper than no insurance if you’re sick. This is precisely the “death spiral” that many have feared.

Of course, it’s unknown how the states will react if the DC Circuit’s decision is upheld. It’s possible that there will be considerable pressure on some to set up exchanges so that their citizens can get the same subsidies citizens in 14 other states are getting. It’s also possible further lawsuits will follow alleging that the citizens of the 36 unsubsidized states are being treated unequally under the law.

Given that two courts have issued opposite ruling, I expect the Supreme Court to take this up. And, gun to my head, I expect it to side with Obama.

Doug Mataconis argues that the ambiguous wording and precedent may cause the Court to rule against Obama. However, I have to disagree. The Roberts Court has a track record of deferring to lawmakers when their decisions are not blatantly unconstitutional (which makes it all the more shocking that Obama has suffered a dozen unanimous defeats in the last two years). They have taken the paeans against activist judges to heart and have explicitly said that laws should be repealed through legislatures, not through courts. I can’t see them, given the decision they made two years ago on the mandate, throwing out one of the most massive sets of laws in American history because of a disagreement over literally a single word.

Still, we’ll see what happens when this moves up.

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.

Shifting the Numbers

We’ve gotten used to the numbers game this Administration plays with Obamacare. It was going to ensure thirty million. No twenty million. No ten million. We have seven million signed up! Well, they haven’t all paid. And five million previously had insurance. And insurance rates are going down! Well, they’re actually going up. And the number of uninsured is the lowest in five years! Well, that just brings us back to pre-recession levels — a level that meant people were dying in the streets when Bush was President but means progress now that Obama is.

Still, even with all that, this is pretty blatant:

The Census Bureau, the authoritative source of health insurance data for more than three decades, is changing its annual survey so thoroughly that it will be difficult to measure the effects of President Obama’s health care law in the next report, due this fall, census officials said.

The changes are intended to improve the accuracy of the survey, being conducted this month in interviews with tens of thousands of households around the country. But the new questions are so different that the findings will not be comparable, the officials said.

An internal Census Bureau document said that the new questionnaire included a “total revision to health insurance questions” and, in a test last year, produced lower estimates of the uninsured. Thus, officials said, it will be difficult to say how much of any change is attributable to the Affordable Care Act and how much to the use of a new survey instrument.

The Census Bureau estimates this will reduce the number of estimated uninsured by two percentage points — from 12.5% to 10.6%. That’s basically six million people — which is about two-thirds of what Obamacare is supposed to accomplish. In other words, a real decline in the uninsured of 9 million could look like 15 million or even more simply because the changes in the way the Census does things.

To be fair, these changes have been needed for a while and are driven by technical experts at the Census Bureau, not the Administration. Conservatives have long complained that the methodology overestimates the number of uninsured. But to quote Megan McArdle, it doesn’t matter if these changes are coming from elves at the north pole. It would be well within the President’s authority to delay the changes so we can get a clear read on the effects of PPACA.

Do you think any liberal pundits will take note of this? A few years ago, both the NCVS and FBI changed their methodology when calculating rape statistics. This didn’t stop feminists from jumping on the “shocking rise” in rape rates.

If the Obama Administration were confident in their program, they wouldn’t be tinkering with the definition of uninsured. If they were even curious about how well their program was working, they’d delay this. What does it tell you that they’re happy to let the waters get muddied like this?

The Triumph of Obamacare

I think it’s time for us on the blog to finally admit that Obamacare has been a roaring success, far in excess of what even the most optimistic supporters projected. I mean, just check out the numbers:

  • At least six million people have signed up for insurance on the exchanges, close to the seven million Obama hoped for. Now granted, only two million of those were previously uninsured; the rest were people who were already insured but had their plans — some of which they really liked and were much cheaper — cancelled because they weren’t compliant. And, granted, nine million previously insured people have bought policies by ignoring the marketplaces and dealing with insurance companies directly (which was a fairly typical number prior to Obamacare). But two million people! All we need is 24 more Obamacares and there will be no uninsured!
  • Actually, Obamacare is even better than that. About 4.5 million people have been swept into Medicaid. Now granted, Medicaid is not a very good insurance system. Many of the best doctors refuse to see Medicaid patients and Medicaid-intensive hospitals are some of the worst in the country. But still, that means only nine more Obamacares and we’ve got this uninsured problem licked!
  • Something less than a million people are uninsured right now because their insurance was cancelled by Obamacare regs. Meh. Serves them right for having jobs.
  • The CBO projected in February that 13 million more people would have insurance thanks to Obamacare. And here we are, two months later, and it’s looking we may actually have a whole third of that! A third! And almost all of that is by expanding the glorious Medicaid system!
  • We’ve gotten all this for the bargain basement price of, depending on who you believe, somewhere between $1 trillion and all the money in the world plus all the money on other planets that will be discovered by the James Webb Telescope. Now, granted, for that price, we could probably have bought high-deductible plans for all of the newly insured and given them a $5000 HSA to cover the deductible. That wouldn’t have disrupted anyone else’ insurance either. But then what would the poor bureaucrats do?
  • I think we all know the conclusion to draw from this: we need to now move to single payer. The success of Obamacare tells us that we need single payer. And the failure of Obamacare tells us that we need single payer. The canceling of perfectly legitimate insurance plans tells us we need single payer. The massive premium increases tells us we need single payer. Actually, when Venus is in the house of the ram, it tells us that we need single payer. When the sun rises in the east, we need single payer.

    We just need single payer dammit ‘cuz REASONS!