Tag Archives: health care

The Democratic Healthcare Debate

September 16, 2019 – 8:38 am

The differences are less stark and less consequential than either the candidates or the pundits would have you believe.

If you listened to the opening segment of Thursday’s Democratic debate, or the media discussion of it that followed, you might imagine that the ten candidates are sharply divided on healthcare. It’s easy to lose sight of the fact that the Democrats’ disagreements branch out from a fundamental agreement on two principles, both of which are wildly popular with the general public.

  • When Americans get sick, they should get the care they need.
  • Paying for needed care shouldn’t drive families into bankruptcy.

Republicans, by contrast, focus on cost rather than coverage, and plan to control costs by inducing money-conscious Americans to forego care. They envision a nation filled with people who over-use the healthcare system, and would do so even more if it weren’t so expensive (as if we all viewed a night in the ER as entertainment, and would happily schedule unnecessary colonoscopies just for kicks). And if those expenses result in hypertension patients trying to save money by doing without their prescriptions, or diabetics getting priced out of the insulin market … well, those are the sad-but-necessary results of keeping taxes low and profits high.

So the debate the Democrats are having, about how to achieve the twin goals of care without bankruptcy, just isn’t happening on the Republican side. [1] If you believe that sick Americans should get care that doesn’t bankrupt them, you should be a Democrat.

The debate. As you listen to the arguments among Democratic candidates, you need to bear that fundamental agreement in mind. The disagreements are all about how to achieve those goals: Go straight there with a massive expansion of Medicare to cover everyone, or move more gradually by adding a public option to ObamaCare? Replace the current private-insurance system (with its familiarity as well as its profiteering and inefficiency), or build on top of it?

The Trump administration, meanwhile, is backing a lawsuit that would declare ObamaCare unconstitutional and make all its provisions void. Insurance companies would once again be able drop coverage for people with preexisting conditions. [2]

Why the tax gotcha? One fundamental difference between Medicare-for-All and our current healthcare system is how it’s paid for: Many treatments that are currently paid for through premiums and co-pays would be paid by the government, i.e., through taxes. The taxes would be progressive, so the burden of payment would shift towards the wealthy.

I don’t fully understand why, but for some reason both the media and the candidates are treating this like a gotcha question: Interviewers are asking it in a challenging way and candidates are dodging it. I’m not sure why it’s so hard to say, “Payments you used to make through premiums and co-pays, you’ll now make through taxes, and unless you’re very rich you’ll probably pay a lot less.” If I were an MfA candidate, I’d back that up with a pledge: “By the time Congress has to vote on a package, independent analysts will have weighed in on the costs. And if it doesn’t save middle class households a substantial amount of money, we won’t do it.”

That said, there is one group of people who will pay more: Those who could afford to buy health insurance, but have been successfully betting that they won’t get sick. They’ll have to pay something in taxes rather than the nothing in premiums that they’re paying now.

How it will play out. The MfA vs. public-option debate comes down to two points.

  • The Medicare-for-All candidates (mainly Sanders and Warren) are right about efficiency. A universal healthcare system that covered everybody for everything would deliver better healthcare at a lower price than we’re paying now. That price would fall entirely on the government, so government spending would go up even as total healthcare spending went down.
  • The public-option candidates, who want to let the private health insurance industry keep running, but give people the option of a Medicare-like system, are right about the politics. Rightly or wrongly, large swathes of the public don’t trust the federal government enough to bet everything on a big government program with no alternatives.

Warren was right to point out that no one loves their insurance company. (Mine is Aetna right now, and no, I don’t love it.) But I think a lot of people like the idea of having another choice if MfA turns out not to be as great as advertised.

The problem is that some of the gains a universal MfA would produce depend on the universality: Doctors would only need to know one system. Public health programs with diffuse benefits could be instituted without worrying exactly who is going to pay what when. The public option would still be more efficient than private insurance, but not as good as it could be.

In the end, though, this debate is not going to make a difference, at least in the short run. Even if Sanders or Warren get elected, together with a Democratic House and Senate, the new president will still find that the votes aren’t there for Medicare for All. As we saw with ObamaCare, the program will be whatever it needs to be to get the last few votes. In other words, even with Democratic majorities and the elimination of the Senate filibuster, it is the 50th Democratic senator and the 220th Democratic representative who will call the tune. They will be moderates from swing districts.

So one way or the other, the program will get scaled back to a public option. If that program is allowed to go forward without sabotage (as Trump has been sabotaging ObamaCare), the public option will gradually gain public trust, setting up an eventual universal program that may well resemble Medicare for All.

[1] Given the wide popularity of the two fundamental Democratic points — sick people should get care without going bankrupt — Republicans generally avoid detailed discussions of healthcare. Block whatever the Democrats want to do and repeal ObamaCare, and then something will happen that solves everybody’s problems.

That came clear in the repeal-and-replace debate in 2017. The replace part was always vaporware whose details could only emerge after repeal.

That scam is still going on. WaPo’s Paige Winfield Cunningham reports that the White House has given up on the health care plan it said it was writing, to be released only after the 2020 election. “The Republican Party will become the Party of Great Healthcare!” Trump tweeted back in March. He promised “a really great HealthCare Plan with far lower premiums (cost) & deductibles than ObamaCare. In other words it will be far less expensive & much more usable than ObamaCare.”

Cunningham notes that there is no sign anyone is working on this. Groups that you’d expect to lead the charge for a Republican plan, like FreedomWorks, say they haven’t been told anything about it.

The problem is that there’s no Republican consensus for a plan to implement. RomneyCare was the only healthcare plan the GOP had, and their idea-pantry has been empty ever since Obama used Romney’s plan as the basis for his proposal.

The usual Republican answer, the free market, is a non-starter here. Private health insurance companies make money by insuring people who don’t get sick. Given its freedom, no company would insure sick people.

[2] Trump claims to want coverage for preexisting conditions, but has put forward no plan for how that would happen. BuzzFeed summarizes:

The GOP argument is that Obamacare disappearing would be so catastrophic — regulated markets would collapse, millions of low-income people would lose Medicaid, insurers could once again deny coverage to people with preexisting conditions — that Congress would have no choice but to set aside their differences and pass a replacement.

We saw something similar play out with the Budget Control Act of 2011. Supposedly, the automatic budget cuts (the “sequester”) that would set in if Congress couldn’t come to an agreement were so onerous that of course Congress would come to an agreement. We’ve been dealing with the sequester ever since.

In general, if somebody’s plan is so onerous that it can only be announced in the face of an emergency, I want no part of it.

By weeklysift | Posted in Articles | Also tagged , | Comments (8)

My Wife’s Expensive Cancer Drug

January 14, 2019 – 11:21 am

We’ve seen the good and bad sides of the American drug and insurance industries.

In 1996, my wife Deb was diagnosed with breast cancer. It had already spread to nearby lymph nodes, so the possibility that she would die (as her mother had just a few years before) was very real. We hit the cancer with everything the 1990s medical arsenal had to offer, on the theory that we would really only get one shot at it: If it came back, she’d probably die from it.

In 2003, it looked like it had come back. Or at least something was growing in the space between Deb’s stomach and liver. If it wasn’t a recurrence of the breast cancer, it was probably stomach or liver cancer, each of which was its own death sentence. A biopsy didn’t yield any definite results, and the tumor quickly grew to about the size of a soccer ball by the time a surgeon took it out. (It took 54 staples to close the incision.) I tried to stay as hopeful as I could, but deep down I was expecting her to die in a year or two.

The soccer ball turned out to be a gastro-intestinal stromal tumor (GIST), which only a year or two before would have been yet another death sentence. GISTs were impervious to standard turn-of-the-millennium chemotherapy, and they nearly always came back after surgery.

Fortunately for us, though, there was a new drug. Gleevec had been developed for treating leukemia, but it turned out to work on certain kinds of GISTs also, or at least the trials looked good. The short-term statistics were excellent, and the anecdotal reports were full of miracle stories where tumors just went away overnight. Long term … who knew? But long-term problems were things we could worry about in the long term. Deb’s oncologist Roger Lange (who we loved and she eventually outlived) said, “It looks like you haven’t used up your nine lives yet.”

That was the last we’ve seen of GISTs. For nearly 16 years, she’s been taking Gleevec or a generic equivalent. There are side effects (mainly a general loss of energy that exaggerates the effects of normal aging), but she can live with them. Literally.

So three cheers for modern drugs and the pharmaceutical industry that makes them! They save lives.

Wouldn’t it be great if that were the whole story? But in America, medical stories are never just about medicine. They’re also about money.

What’s your life worth to you? The economic aspect of Gleevec has always been controversial. It is made by Novartis, a private company whose purpose isn’t to save lives, but to make money for its shareholders. The drug presumably cost a lot to develop and has a small market, but for that small number of people it is literally the difference between life and death. So they should be willing to pay a lot of money, right?

That was the thinking when Novartis launched Gleevec in 2001, charging a hefty $26,400 per patient per year for the drug, a price that was then estimated to recoup development costs in two years, with profits accruing thereafter. And then something strange happened: The price kept increasing, year by year, even though alternative drugs began to hit the market. In fact, the alternatives seemed to draw Gleevec’s price upward: New drugs were introduced at even higher prices, so why shouldn’t Gleevec cost more too?

The result was that when its patent on Gleevec expired in 2015, Novartis was charging $120,000 per patient per year. (As I bounce from one reference article to the next, the prices quoted don’t line up exactly. I’m not sure why. All the articles I link to agree on the general direction of prices.) The original price was already profitable, but the increased price made Gleevec a blockbuster drug that brought in $4.7 billion a year.

Patents and generics. Outrageous as it sounds, from an investor’s point of view that’s how the system is supposed to work. Medical research is hard and costly, and a lot of it doesn’t yield any marketable products. So each successful drug has to pay not just for its own development costs, but also for all the once-similarly-promising drugs that failed. It’s precisely because blockbuster drugs can earn so much money that companies invest the resources to develop them. So I can claim that Gleevec shouldn’t cost this much, but if it didn’t, maybe it wouldn’t have been developed to begin with. And maybe Deb would be dead by now.

So OK: Big profits are a necessary evil that produces a greater good. At least that’s the theory.

If you develop a drug, you can get a patent on it that lasts 20 years from when you submitted the patent application. Typically you submit well before the drug comes to market, so you end up with 15 years or so of a monopoly on a marketable drug. As a monopolist, you can charge pretty much what you want. And if your drug is uniquely applicable to certain desperate patients, they’ll pay it if they can.

But eventually your patent runs out, and then your drug is just a chemical that any good chemical company should be able to synthesize, producing what is known as a generic drug. Generics still have to go through trials to prove that they work more-or-less as well as the original, but that process is nowhere near as risky, costly, or time-consuming as what the innovating company had to do: A generic-drug company begins with the knowledge that something like this works, and has a drug it can reverse engineer. So it’s an engineering problem, not a medical research problem.

In Gleevec’s case, the generic is known as imatinib mesylate. By now a number of companies make it, so you might expect the magic of market competition to take hold.

In the case of Lipitor (the anti-cholesterol drug that is the the drug industry’s all-time revenue champion), prices dropped about 80% after the patent expired. An even better example is aspirin: a 500 tablet bottle will cost you about $9, unless it’s on sale. Aspirin is so well understood and is produced by so many companies that the retail price is getting close to the cost of production. But a particularly bad example is insulin: It’s been around for a century or so, but lately its price has been skyrocketing. The Washington Post Magazine reports:

In the past decade alone, U.S. insulin list prices have tripled, according to an analysis of data from IBM Watson Health. In 1996, when Eli Lilly debuted its Humalog brand of insulin, the list price of a 10-milliliter vial was $21. The price of the same vial is now $275.

… The global insulin market is dominated by three companies: Eli Lilly, the French company Sanofi and the Danish firm Novo Nordisk. All three have raised list prices to similar levels. According to IBM Watson Health data, Sanofi’s popular insulin brand Lantus was $35 a vial when it was introduced in 2001; it’s now $270. Novo Nordisk’s Novolog was priced at $40 in 2001, and as of July 2018, it’s $289.

The insulin-producing companies don’t even have the excuse of a small market: About 7 million Americans need insulin.

Gleevec has been more like insulin than aspirin: The generic drug companies haven’t really tried to undercut Novartis’ price. When the first generic hit the market, Gleevec was going for about $9,000 a month; the generic was priced at $8,000. Additional generic manufacturers entering the market didn’t increase that gap much.

At least, that’s what happened in the United States. In 2016, a doctor predicted:

Today, health care is globalized, and there are more than 18 generic imatinib versions available worldwide, including 3 in Canada. Generic imatinib is sold at $8,800/year in Canada and at about $400/year in India. The cost to manufacture a 1-year supply of 400-mg imatinib tablets is $159. Two years from now, the price of generic imatinib in the United States (or purchased from abroad) will be significantly lower, hopefully less than $1,000/year.

But that didn’t happen. Instead, the price has remained in the $90K-$120K range.

If you’re surprised that a generic whose annual per-patient cost of production is $159 would sell for close to $100,000, you’re not thinking like an oligopolist. Sure, you could sell imatinib mesylate for $200 a year, but why would you? People are paying $8,000 a month. Why rock that boat?

At the moment 20 states, led by Connecticut, are suing a number of generic drug makers, accusing them of price-fixing. Imatinib mesylate was not named in the original suit, but the general practices described apply to a lot of drugs. Connecticut’s assistant attorney general Joseph Nielsen describes the generic drug industry as “most likely the largest cartel in the history of the United States“.

Insurance and Medicare. If you’ve been doing the math — between $30K and $120K a year for 16 years — you must be wondering what kind of plutocrats Deb and I must be (or at least must have been when all this started) that we’re not bankrupt yet. But in fact, for most of that time very little of that cost passed through to us. Deb worked at a company that had very good insurance. And when she retired, we were allowed to keep that insurance as long as we paid our own premiums.

So in the same way that I have to be thankful to the pharmaceutical industry, I also have to be thankful to the insurance industry. Over the years, they have spent a whole lot more money on us that we spent on them.

(I have, of course, wondered what happens to GIST survivors who don’t have good insurance. The effect of the drug is invisible — the evidence that it’s working is that nothing happens — so I can imagine the temptation to just stop taking it rather than bankrupt your family.)

Unfortunately, though, Deb’s company’s insurance only carried her until age 65, when she was expected to sign up for Medicare. That happened in October (though for reasons not worth getting into, she didn’t need to worry about it until the new coverage year started this month). But OK, Medicare has Part D, which covers prescription drugs. So we’ll be OK, right?

Signing up for Part D involves choosing among a bunch of plans that are underwritten by private insurance companies. Wikipedia describes the situation like this:

Because each plan can design their formulary and tier levels, drugs appearing on Tier 2 in one plan may be on Tier 3 in another plan. Co-pays may vary across plans. Some plans have no deductibles and the coinsurance for the most expensive drugs varies widely.

In short, if you expect to need an expensive drug, you need to do your research before you pick a plan. What if you’re old and never used the internet much, or just kind of confused in your thinking? Well, you might be out of luck.

But Deb is computer savvy and diligent, so she searched the various companies’ online pricing tools until she found a plan that quoted a good price on generic Gleevec:

Ignoring the details of the various $300-something monthly charges, the annual cost was estimated at $4069.55. Not cheap, but well below the what-is-your-life-worth level, and for some reason significantly cheaper than other plans from the same company.

Estimates are not promises. She did that research in November, when decisions for the 2019 coverage year had to be made. So imagine our surprise when she went to fill her first monthly imatinib prescription in January, and discovered that it cost $2,881.07!

Your first thought, like ours, might be that something drastic had happened to the imatinib market between November and January. But no: At the same time that SilverScript was charging us $2,881.07, their pricing tool was still showing prospective customers that the price would be $348.06.

Hours spent on the phone with a wide range of SilverScript employees yielded her nothing: Yes, there was a factor-of-8 gap between the pricing estimate (which they were still showing on their web site) and the price they were actually charging us. And no, this isn’t like Wal-Mart, where they usually honor the price they display, even if it’s a mistake. (And is it a mistake? They don’t seem to be in any hurry to correct it. Maybe it’s intentional deception.) The letter we got from the grievance department says:

Please note that copays are estimates only. We are unable to provide exact copays until such time as the prescription is processed.

And if they’re quoting you one price at the exact same moment that they’re charging a drastically higher price to someone just like you, that’s just the way it goes. Maybe you should pick a different insurance company next year, based on their (possibly inaccurate) pricing information.

What happens after next month? The people who weren’t still quoting the $348.06 price were telling Deb that $2881.07 was what we could expect going forward, or maybe even something higher. So we were looking at an annual cost in the neighborhood of $30,000.

Think about what that would mean: After generics, after insurance, we’d be paying the full price that Novartis originally charged for Gleevec.

But hey, what’s your life worth?

Fortunately, though, it turned out that the SilverScript people who were quoting those prices didn’t know what they were talking about either. (Again, though, I have to wonder what is a mistake and what is intentional. If the low-price information was intended to get us to commit to their program for 2019, maybe the high-price information was intended to make Deb reconsider whether she really wanted to keep taking this drug. Because the ideal health-insurance customer is somebody who pays premiums but doesn’t use services.) Or at least that’s how it appears right now.

For some reason, nobody at SilverScript mentioned the Medicare Donut Hole. (A Blue Cross person explained it when Deb was researching whether she could switch to another Part D plan after the year started.) Follow the link if you want a more complete explanation, but what it means for us is that after we spend $5,100, we hit the catastrophic coverage phase, where the insurance starts to cover 90% of the drug’s cost. If that’s really how things play out (we’re not fully believing anything we read at this point), our annual costs will wind up being something like what the SilverScript web site was predicting for the plans we didn’t choose: Around $10,000 rather than $4,000 or $30,000.

It’s weird: After you’ve spent a week or so wondering where you’re going to come up with an extra $30,000 each year, $10,000 sounds pretty good. It’s not pocket change, but we can afford it. It beats going off the drug and finding out for sure whether it is still necessary.

The lessons I draw. There are ambiguous lessons to learn from our experience. On the one hand, thanks to drug research and health insurance, Deb is alive and we’re not bankrupt. The most important stuff has turned out well, at least so far.

But on the other hand, it seems obvious to me that this system is full of waste and corruption. Novartis should never have been able to charge such a high price for Gleevec, and there was absolutely no reason why the generic drug companies should have been able to share in those windfall profits. In theory, once patents expire the free market will drive prices down. But in the real world that doesn’t happen. Instead, a few companies divide the pie among themselves. They know they have a good thing going, and they aren’t going to ruin it by undercutting each other’s prices.

The market will never fix this, so government needs to get involved.

And why exactly is health insurance still in the private sector rather than being part of the government? The justification I usually hear is that the profit motive will produce better customer service and more efficient delivery of services. I don’t see anything in our personal experience to support that notion. To me, it looks like companies are motivated to lie to us, and none of the insurance people we have dealt with seem to be oriented towards the mission of helping people and saving lives.

When Deb was dealing with the SilverScript grievance people, she reported that they appeared to be following a script rather than trying to understand her case. Nobody seemed to grasp the idea that they were participating in a bait-and-switch fraud, or to be particularly upset if they were. Listening to her account of the conversations, I found myself wishing she had asked, “In your job dealing with grievances, have you ever actually helped anybody?” That question wouldn’t have improved our outcome in any way, but I’d just like to know.

Personally, I’d rather take my chances with government bureaucrats. People in the government may be insulated from market forces, but often they identify with the mission of their office. For example, I recently had to change my drivers’ license from New Hampshire to Massachusetts. I ran into all sorts of unexpected bureaucratic problems; for some reason, none of my documents were the exact ones the system was looking for. Through it all, though, the clerk I was dealing with did her best to guide me through the labyrinth. In her mind, she was there to help people.

That’s not the impression Deb got from SilverScript. The company isn’t trying to provide healthcare or help its customers find ways to pay for it; it’s trying to make as much money off of them as it can. The grievance department isn’t there to respond to customers’ legitimate grievances, it’s there to mollify and divert people who have been conned by the company’s deceptive practices. The individuals who work there are probably no worse than the rest of us, so they can’t identify with that mission. Instead, they sink into their scripts.

My bottom-line conclusion is that the profit motive is not serving us in health care. There has to be a better way.

By weeklysift | Posted in Articles | Comments (19)

Taking Hostages

October 16, 2017 – 10:18 am

In one setting after another — DACA, Iran, ObamaCare — Trump has set a clock ticking towards disaster in hopes of getting concessions from Congress.

During the Obama years, I frequently found it necessary to explain the difference between negotiating and hostage-taking. If we’re negotiating, I push for what I want, you push for what you want, and we hope to meet somewhere in the middle. But if I demand that you give me what I want, under the threat that otherwise I’ll send us into a scenario that NO ONE wants, that’s hostage-taking. The defining mark of a hostage-taker is that the demand for cooperation unaccompanied by any positive offer: My proposed “compromise” isn’t that you’ll get some of what you want, but that I’ll remove a threat of my own making. “Do what I say and nobody gets hurt.”

The clearest examples of hostage-taking in recent American politics have been the debt-ceiling confrontations of 2011 and 2013, as well as the occasional posturing over the debt ceiling we still see from time to time. If Congress ever actually does refuse to raise the ceiling on the national debt, the country will be thrown into both a constitutional and an economic crisis that will benefit no one (possibly not even our enemies, who might get caught in the global economic downturn likely to follow the market’s loss of faith in U.S. bonds). In 2011 and 2013, Republicans wanted President Obama to agree to deep spending cuts and the end of ObamaCare. What they offered in exchange was nothing, beyond dropping their threat to set off a global crisis.

Recently, the Trump administration has brought us something I don’t think the U.S. has ever seen before: presidential hostage taking. American presidents usually assume that they’ll be blamed for whatever goes wrong, so they have nothing to gain from taking hostages; any catastrophe that spins out of the confrontation will ultimately be charged against them. But Trump has an unfortunate combination of character flaws that we’ve never seen in a president before:

  • He seems not to feel empathy for the people his policies might hurt.
  • He is convinced that no bad outcome can ever be his fault. If he sets up a confrontation that results in disaster, that just demonstrates that his enemies should have given in to him.

The failure of brute force. In the first half-year or so of his administration, Trump believed he didn’t need Democratic cooperation. With Republican majorities in both houses of Congress, he thought he could ignore Democratic resistance and win by brute force. In his first confrontation, that strategy worked: Nominating Neil Gorsuch to the Supreme Court gave Trump’s base what it wanted without offering Democrats any hint of compromise. A Democratic filibuster was defeated not by convincing any Democrats to support Gorsuch, but by eliminating the filibuster on Supreme Court nominations. Take that, Democrats!

But from spring into summer, right up to the September 30 reconciliation deadline, repeated attempts to win a brute-force victory on healthcare failed. Offered nothing, Democrats stayed united. But Republicans didn’t, so the small Republican majorities in both houses weren’t enough to push a bill through.

Trump’s current policy push, a tax-reform package centered on a major cut in corporate taxes, seems headed for a similar outcome. A proposal that reduces government revenue mainly by cutting taxes on corporations and the rich contains no provisions that a Democrat can take to his or her voters and say, “We got what we could out of the deal.” So Democrats will stay united. Republicans — each of whom represents a somewhat different configuration of interests — probably won’t.

Each of those efforts assumed the once-a-year reconciliation process that circumvents the filibuster in the Senate. Trump has urged the Senate to do away with the filibuster altogether, but there are enough traditionalists in the Republican Senate caucus to defeat that effort. For every other piece of legislation, Trump needs 60 votes in the Senate and only has 52 Republicans.

In short, Trump has already reached the limits of brute force in Congress. This is unlikely to change as the 2018 elections get closer, and if Republican majorities shrink (as seems likely, at least in the House), brute force is even less like to succeed in 2019 and beyond. So if Trump wants to get anything through Congress, he needs at least a small amount of Democratic cooperation. How to get it?

Start the time-bombs ticking. In the last couple of months we’ve seen a new tactic from Trump: Rather than propose even a framework of a policy and seek congressional approval, Trump unilaterally sets a clock ticking towards some outcome that hardly anybody wants. Congress is expected to do something to avert the looming disaster, though precisely what Trump wants it to do is usually unclear. This sets up the following possibilities.

  • If Congress does something popular, Trump can claim credit.
  • If Congress does something unpopular, Trump can save the country from it with a veto and/or a clock reset.
  • If Congress does nothing, he can denounce Congress for obstructing the “agenda” that he never actually proposed.

We’ve seen this set-up three times already in a fairly short time-period: DACA, ObamaCare, and Iran.

DACA. It’s not true that no one wants to deport the so-called Dreamers (the name derives from the DREAM Act — Development, Relief, and Education for Alien Minors, which Congress never passed; that’s what motivated Obama’s DACA — Deferred Action for Childhood Arrivals — executive order), but they are the most popular of America’s undocumented immigrants. A poll in September found that 58% of Americans want Dreamers to have a path to citizenship. Another 18% would let them be permanent residents without citizenship. Only 15% want them deported.

In the face of that public opinion, even Republicans say nice things about the Dreamers. Orrin Hatch, for example:

I’ve long advocated for tougher enforcement of our existing immigration laws. But we also need a workable, permanent solution for individuals who entered our country unlawfully as children through no fault of their own and who have built their lives here.

But on September 5, Trump started a clock running.

Under the plan, announced by Attorney General Jeff Sessions, the Trump administration will stop considering new applications for legal status dated after Tuesday, but will allow any DACA recipients with a permit set to expire before March 5, 2018, the opportunity to apply for a two-year renewal if they apply by October 5.

So after March 5, Dreamers will start becoming subject to deportation. And they’ll be easy to find, because the DACA program required them to register with the government.

At first, Trump himself seemed to share the public’s sympathy for the Dreamers, tweeting “Does anybody really want to throw out good, educated and accomplished young people who have jobs, some serving in the military?” His problem seemed to be mainly that DACA was established by executive order rather than by an act of Congress. Democrats briefly thought they had reached a deal with him to fix that. Nancy Pelosi and Chuck Schumer released a joint statement after a meeting with Trump:

We agreed to enshrine the protections of DACA into law quickly, and to work out a package of border security, excluding the wall, that’s acceptable to both sides.

At the time, Trump seemed to endorse the Democrats’ version:

“DACA now, and the wall very soon,” Trump told reporters on the south lawn of the White House in mid-September. “But the wall will happen.”

But this week he disavowed any such deal, and issued his ransom note of 70 demands. Not only did it include funding for his border wall, but it also had one giant poison pill: It criminalizes millions of immigrants who (under current law) have only committed the civil infraction of overstaying their visas.

Of the 11 million unauthorized aliens in the country, about two million are DREAMers [1] and 4.5 million are visa overstays who entered the country legally but whose visas expired (the rest entered the country without proper papers). Currently, these latter folks are guilty of a civil infraction akin to an unpaid parking ticket. They can be deported for it but can’t be thrown in jail.

Many of them are eligible for a visa renewal or for refugee status, but haven’t been able to navigate our byzantine process. [2]

But Trump’s proposals (according to the Cato Institute)

would create a new misdemeanor offense for overstaying a visa. Immigration fraud is already a crime. This would criminalize the technical violation, regardless of the reason.

If, for example, your application gets lost in the mail, or vanishes into some bureaucrat’s files, you become a criminal. But there’s more:

It would also create new criminal penalties for filing “baseless” asylum applications and increase penalties for those who recross the border after a deportation.

So if you are in danger in your home country, be sure you thoroughly document your situation and bring the paperwork with you when you run for your life. Otherwise you may go to jail in the U.S. for filing a baseless asylum application.

In short, Trump’s price for giving the Dreamers legal status (he still hasn’t said what kind) isn’t just to build a wall, but to criminalize at least twice as many people as he legalizes. “Does anybody really want to throw out good, educated and accomplished young people who have jobs, some serving in the military?” he asks. But he’ll start doing it on March 5 unless his demands are met.

ObamaCare. The Constitution says that a primary duty of the President is to “take Care that the Laws be faithfully executed”. It doesn’t say “unless they were passed under your predecessor and you don’t like them”. But that’s the spin Trump has been putting on the Affordable Care Act since he took office.

The initial sabotage was low-level and seemed like the grousing of teen-agers who complain about going to school as they go to school. For example, HHS took some of the money appropriated to publicize the program and used it to create videos that criticized ObamaCare instead. Somewhat more seriously, the Trump administration has also made it harder to sign up by cutting the open enrollment period.

But this week he made two direct attempts at sabotage: He ordered HHS to expand the role of interstate association healthcare plans, which provides a way to siphon off healthier, younger people into cheaper plans, leaving older, sicker people behind in a more expensive risk pool that is in greater danger of collapsing. And he announced that he will cut off the cost-sharing-reduction payments that help people just above the poverty line cover their deductibles and make co-payments.

It’s important to realize that this is not the main ObamaCare subsidy, the one that helps people pay their premiums. (If people get the impression that all ObamaCare subsidies have been eliminated, that will sabotage sign-ups beyond what the actual situation implies.) Eliminating it will actually not help anybody.

If the payments are stopped, insurers would still be required to give low-income consumers plans with small deductibles and co-payments. But insurers would no longer be able to get financial help for the costs they are bearing.

Some insurance companies would likely decide that it was no longer worth selling health plans on the marketplaces. Others might conclude that they have to raise premiums across-the-board to cover the additional losses.

Insurance regulators predict that premiums nationwide will go up an average of 12% to 15% because of Trump’s decision. But the increase in some areas could be much larger.

Many of the people hurt worst will be Trump voters.

An estimated 4 million people were benefiting from the cost-sharing payments in the 30 states Trump carried, according to an analysis of 2017 enrollment data from the U.S. Centers for Medicare and Medicaid Services. Of the 10 states with the highest percentage of consumers benefiting from cost-sharing, all but one — Massachusetts — went for Trump.

It won’t even save the government money. Increasing premiums increases the primary ObamaCare subsidies, which will cost the government money.The point of all this, then, isn’t to improve anything for anybody. (It’s worth pointing out that Trump still hasn’t put forward any healthcare plan at all. The Republican plans Congress has rejected were all constructed in Congress. So far, there is no reason to believe that Trump has any ideas for improving healthcare.) It’s to fulfill his promise to “let ObamaCare implode” so that Democrats will have to give in to a repeal-and-replace plan that throws millions of people out of the health-insurance system.

In other words: Agree to hurt a bunch of people, or I’ll hurt even more people.

Iran. The people in the Trump administration who are supposed to understand such things tell us that Iran is fulfilling the terms of the 2015 deal that keeps them from pursuing nuclear weapons. But Friday, Trump “decertified” the agreement.

When you first hear that, it sounds like the deal is kaput. But actually decertification just starts another clock running. Presidential certification actually isn’t part of the international agreement, it’s just part of an American law, the Iran Nuclear Agreement Review Act.

The immediate consequence of this is not that sanctions snap back into effect. Rather, it’s that the issue gets kicked back to Congress — giving them a 60-day window to reimpose Iran sanctions suspended by the deal using a special, extremely fast process.

The sanctions are part of the agreement, so if they go back into effect, we are in violation, even though Iran is not. So Congress has a special opportunity (again avoiding the Senate filibuster) to kill the deal.

Trump’s stated reasons for decertifying are that Iran continues to do bad things the deal doesn’t cover, like aiding Hezbollah and propping up the Assad regime in Syria. (Russia is also propping up the Assad regime, but Trump can’t criticize Russia.) Also, they are developing ballistic missiles (which the deal doesn’t cover). So they are violating “the spirit” of the agreement.

Trump wants Congress to do something (it’s not clear exactly what) that will re-open negotiations on the deal, not just with Iran, but with the United Kingdom, Russia, France, China, and Germany, who are also part of the agreement.  None of the other countries have expressed an interest in renegotiating, or in reimposing the sanctions that pushed Iran to make concessions. But

in the event we are not able to reach a solution working with Congress and our allies, then the agreement will be terminated. It is under continuous review, and our participation can be cancelled by me, as President, at any time.

Several administration officials say we want to remain in the deal. Just blowing it up sets Iran back on the path to nuclear weapons and the United States on the path to war. No one benefits. But Trump says he’ll blow it up if his demands aren’t met.

So far, no one is giving in. There’s no indication that Democrats will pay ransom for DACA or ObamaCare, or that Iran and the other signers of the Iran nuclear deal will pay ransom to preserve the agreement. Like any terrorist, Trump will have to shoot some hostages before his enemies start taking his threats seriously. What remains to be seen is what Trump supporters, both in Congress and in the general public, will do once they understand that the hostages include people they care about.

[1] You’ll see a fairly wide range of estimates of the number of Dreamers, with this one on the high end. The number of people who have registered for DACA is usually estimated between 700K and 800K. I’m assuming that two million represents a guess at the number of undocumented immigrants who qualify in the vaguest sense: They came to this country as children and so could apply for DACA. An undocumented family might have any number of reasons not to call attention to itself by registering its DACA-eligible child.

[2] The goal of the sanctuary movement in liberal American churches isn’t to shelter forever people who can’t legally stay in this country, but to prevent the government from deporting people who would be eligible to stay if some neutral court could examine their cases. Such people are given temporary sanctuary so that the bureaucratic process has time to work.

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Why Republicans Can’t Stop Trying to Repeal ObamaCare

September 25, 2017 – 11:44 am

Despite the troubles Republicans are having finding 50 senators to back the Graham-Cassidy bill, and despite the apparent deadline of midnight Saturday, I still don’t think we’ve seen the end of ObamaCare repeal. There’s a reason they can’t let it go, and I think I’ve finally found the right metaphor to explain it.

For years they’ve been telling their voters that they can replace the ObamaCare plow-horse with a unicorn: a plan with fewer taxes, fewer mandates, less regulation, less spending, but coverage as good or better than ObamaCare provides.

That worked really well on the campaign trail, but once they captured the White House and the Senate, Republicans suddenly found themselves on the spot to produce the unicorn, which they can’t because unicorns don’t exist. Of course they can’t admit that they’ve been bullshitting their voters all these years with unicorn fantasies, so they go round and round.

You could see this in all the various repeal-and-replace efforts we’ve seen so far this year: No one could explain what they accomplished or what problem they solved. No one could defend them in terms of healthcare policy. The entire justification was that voters had been promised a unicorn, so Republicans had to give them something, even if it bore no resemblance to a unicorn.

All through the process, Republicans have been saying that the unicorn was still coming: the current bill was just a placeholder to keep things moving. So the last few votes in the House were garnered by telling wavering moderates that the Senate had a unicorn. When the Senate tried to pass its “skinny repeal” in July, several senators were embarrassed that there was still no unicorn, and would only agree to vote for the bill if Paul Ryan would guarantee them that the House would change it again. Now, Graham and Cassidy are making a last-ditch promise that the states will provide the unicorn, once the federal government has block-granted the money to them.

Unsurprisingly, Republican governors like Nevada’s Brian Sandoval are reluctant to take responsibility for producing a unicorn. Sandoval sees that the people in his state will have the same needs they do now, but less money to fulfill them. Graham-Cassidy may give him the flexibility to decide who should go without, but not the resources to provide the care needed.

Flexibility with reduced funding is a false choice. I will not pit seniors, children, families, the mentally ill, the critically ill, hospitals, care providers, or any other Nevadan against each other because of cuts to Nevada’s health-care delivery system proposed by the Graham-Cassidy amendment.

So for now it may look like Graham-Cassidy is failing, but you can count on it: There will be another attempt somehow. Republican voters were promised a unicorn, and there must be one out there somewhere.

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Single Payer Joins the Debate

September 18, 2017 – 10:15 am

The U.S. spends far more on healthcare than any other country.

Bernie Sanders’ Medicare-for-All bill gets a different response this time.

The most frustrating thing about the national discussion prior to passing the Affordable Care Act in 2010 was that single-payer was out of the picture from the beginning. Some Democrats (I remember hearing presidential candidate John Edwards make this case explicitly during the 2008 campaign; at the time he and Obama and Clinton had very similar healthcare proposals) held out the hope that a public option would out-compete all the private plans in the exchanges, and so would evolve into a de facto single-payer program. But then the final version of the ACA didn’t include a public option, so even that straw of hope was gone.

Leaving single-payer out of the debate is particularly bizarre when you consider that most of the rest of the industrialized world organizes its healthcare that way, and gets better results than we do (i.e., longer life expectancy at lower per-capita cost — it’s hard to make out, but that tall bar at the far left of the graph at the top of the page represents the U.S.). When you find yourself struggling to keep up with the Joneses, you ought to at least consider doing what the Joneses do. We didn’t.

The Sanders bill. For years, Bernie Sanders has been a voice-in-the-wilderness on single payer. He introduced a single-payer bill in the Senate in 2009, and it got zero cosponsors. Again in 2011, he got zero cosponsors in the Senate, but a companion bill in the House had 12 sponsors. Both of Sanders’ bills died in committee and never reached the Senate floor.

This time it’s different. The New Yorker‘s John Cassidy explains:

In the end, there were sixteen co-sponsors. They included Tammy Baldwin, of Wisconsin; Cory Booker, of New Jersey; Al Franken, of Minnesota; Kirsten Gillibrand, of New York; Kamala Harris, of California; Jeff Merkley, of Oregon; Brian Schatz, of Hawaii; and Elizabeth Warren, of Massachusetts.

One thing all these politicians have in common is that they have been mentioned, with varying degrees of plausibility, as possible Presidential candidates in 2020. (So has Sanders himself.)

Six years ago, single-payer was something an ambitious Democrat wouldn’t want to be associated with. Now, an ambitious Democrat can’t afford not to be associated with it. But Democratic Senate leader Chuck Schumer and House leader Nancy Pelosi have been more cautious, neither endorsing or opposing it. The WaPo’s Aaron Blake quotes Pelosi:

“I don’t think it’s a litmus test,” she said. “I think to support the idea that it captures is that we want to have as many people as possible, everybody, covered, and I think that’s something that we all embrace.” She said she’s focused on protecting the Affordable Care Act.

He also explains her motives: She wants to be Speaker again, not President. That focuses her on a different audience.

If Democrats are going to retake the House (or even the Senate), they need to win in red territory where government-funded health care is a much, much tougher sell than in a Democratic presidential primary.

Gerrymandering is a factor in Pelosi’s thinking. Democrats can’t win control of the House just by getting the most votes. (They did that in 2012, and it didn’t work.) House districts have been drawn so that the majority of them lean Republican. So if Democrats can’t win in red districts, Paul Ryan keeps the Speakership.

What the Medicare for All Act of 2017 does and doesn’t do. Over a four-year phase-in period, the bill would extend something resembling Medicare to everybody: Children would be covered immediately, and the eligibility age for Medicare would drop each year: from 65 to 55 to 45 to 35 and then 0. During the transition, the ineligible could buy into Medicare as a public option on the ObamaCare exchanges.

But the plan would be more than just Medicare as we currently know it: Premiums and co-pays would be gone, and its coverage would be far more complete. It would, for example, pay for dental care, glasses, and hearing aids. The Secretary of HHS would have the option of including whatever “alternative and complementary medicine” seemed appropriate.

How serious is it? That depends on what you mean by serious. It is a real bill, and if it somehow got through the Republican-controlled Congress and President Trump signed it, it would be a real law. Four years later, everyone would be covered by something sort of like Medicare.

At the same time, the bill leaves out a lot of essential details. How it slims down to 96 pages (compared to the thousands in the Affordable Care Act) is that vast numbers of decisions are delegated to the Secretary of Health and Human Services and the Administrator of the Center for Medicare and Medicaid. The phrase “the Secretary” appears 88 times, in contexts like:

the Secretary shall establish a national health budget, which specifies the total expenditures to be made for covered health care services under this Act.

The Administrator (ten times) determines more-or-less everything about the buy-in provision, such as how much it costs.

The biggest hole, though, is how it would all be paid for. If you total up Medicare, Medicaid, the Veterans Administration, ObamaCare, the Children’s Health Insurance Program, and health insurance for federal employees — all of which would be subsumed — the government already spends well over a trillion dollars each year on healthcare, maybe as much as a two trillion. But that’s still not nearly as much money as would be needed.

There would undoubtedly be some cost savings: Medicare already has far lower overhead than private insurance, the enlarged Medicare would have enormous leverage for negotiating drug prices, and so on. There are, after all, reasons that other countries can spend less than we do without compromising care. But one important cost difference is that doctors in the U.S. make far more money than doctors in other countries. Nobody is proposing a Physician Pay Cut Act of 2017, so that probably won’t change. Other savings would take years to kick in. (Countries with a universal healthcare system do a better job of preventive care, and public health in general. In the long run that pays off, but maybe not in the short run.)

But there would also be cost increases: more people covered for more procedures with no co-pays. Also: What happens to the money states currently spend on Medicaid? The federal government can’t automatically sweep it into the new program, but there will be no reason for states to keep spending it once the federal government takes responsibility for all healthcare.

So even if you’re optimistic, you still need to come up with a large amount of new federal revenue, which would happen in a separate bill. Sanders admitted as much to the WaPo’s David Weigel.

Rather than give a detailed proposal about how we’re going to raise $3 trillion a year, we’d rather give the American people options. The truth is, embarrassingly, that on this enormously important issue, there has not been the kind of research and study that we need. You’ve got think tanks, in many cases funded by the drug companies and the insurance companies, telling us how terribly expensive it’s going to be. We have economists looking at it who are coming up with different numbers.

So in that sense, Sanders’ bill isn’t serious: He doesn’t have a proposal to raise the money to pay for it, or even a precise estimate of how much needs to be raised. Democrats are actually counting on Republicans not to pass this, because they’re not actually ready to implement it.

Given that it won’t pass, it’s not clear how seriously Sanders’ cosponsors are taking the bill. Senator Franken of Minnesota described it like this:

Establishing a single-payer system would be one way to achieve universal coverage, and Senator Sanders’ “Medicare for All” bill lays down an important marker to help us reach that goal. This bill is aspirational, and I’m hopeful that it can serve as a starting point for where we need to go as a country.

That’s a long way from “This is what we’re going to do.”

Revenue options. What Sanders does have are some suggestions about revenue: an increased payroll tax, paid either by employers or employees; eliminating the now-obsolete business deduction for employee health insurance (which the bill makes illegal: “Beginning on the effective date described in section 106(a), it shall be unlawful for a private health insurer to sell health insurance coverage that duplicates the benefits provided under this Act.”); significantly higher tax rates for people making more than $250K per year; dividends and capital gains taxed at the same rate as other income; limited tax deductions in the upper-income brackets; a higher estate tax; a wealth tax on households worth more than $21 million; taxes on corporate profits held offshore; a fee charged to large financial institutions; and a few others.

Sanders presents this as a menu of choices. But if you add up his numbers, you get $16.192 trillion over ten years, so we might need to do all of them to come up with money needed. (During the primary campaign, the Urban Institute estimated that a similar Sanders proposal would require an additional $32 trillion over ten years, but Sanders’ supporters called that analysis “ridiculous“.)

I also don’t trust Sanders’ numbers. Not that he’s being dishonest, but when it comes to taxes, the rich are always a moving target. New proposals to tax them always inspire new methods of evasion. It’s not that plutocrats and multinational corporations are impossible to tax, but proposals seldom raise quite as much revenue as their authors expect.

Public opinion. Polling on Medicare for All is highly variable. The phrase itself is popular, but as you give people more details their support starts to waver. In particular, when you tell them that their own taxes will go up, they begin to have doubts. (Kaiser didn’t poll the objection that you’d have to give up the employer-based health insurance that more than half the country has now, but I’ll bet it changes minds also. If you’re satisfied with how your health insurance is working, you may look skeptically on a proposal to change it.)

Sanders’ counter-argument, which I believe, is that public health insurance is just more efficient than private health insurance, so most people would pay far less in new taxes than they currently pay to insurance companies. But that relies on trusting various experts to do some fairly sophisticated calculations. I’m skeptical that the public will maintain the needed level of trust when insurance and drug companies start funding massive doubt-raising advertising campaigns (like the one that killed HillaryCare in the 1990s), or Republicans start spreading outright lies (like the death panels supposedly established by the Affordable Care Act).

In general, I think many of us maintain a too-flattering image of swing voters: We picture them as judicious people who weigh their options and make up their minds slowly, rather than blindly following a party or an ideology. In reality, I believe most of them have no party or ideology because they just don’t think about politics or public issues very much or very deeply. Many are low-information voters whose choices can depend on a turn of phrase or who they talked to last. It’s not that hard for a slick campaign to scare them enough that they want to keep what they have rather than leap to something new.

The repeal-and-replace parallel. Several pundits (Josh Barro, for one) have noted the resemblance to Republican calls to repeal-and-replace ObamaCare. Like “Medicare for All”, the “repeal-and-replace” slogan is much more popular (especially within the base of one party) than any specific plan to carry it out. The Republican problem is that they let the phrase stay “aspirational”, to use Senator Franken’s word, for too long. When they suddenly had the power to implement it, they didn’t have an implementable plan.

Barro describes a more evolutionary approach to the goal of universal coverage, something closer to the public-option-wins-out vision of 2008: Medicare Available to All. Rather than one big change that asks Americans to pay higher taxes and trust that a big government program will meet their needs better than whatever they’re doing now, Barro pictures a more gradual change:

There is a version of “Medicare for All” that Democrats could operationalize effectively and popularly: opening a version of Medicare or Medicaid up to any individual who wants to buy coverage under it, and to any employer who wants to buy coverage for its employees under it.

Such a program could build on the existing system of subsidies and exchanges created by Obamacare, as well as the existing system of tax-preferred employer-provided health insurance. It could reduce costs for consumers by using the government’s bargaining power to bring down the prices paid for drugs and medical services.

… In practice, the cost advantage of the Medicare or Medicaid system might lead most individuals and most employers to decide they’d rather buy the public plan than a private one. But that would be a voluntary change — one that consumers would welcome because of the cost savings — not a mandatory one.

… The big political advantage of a public-option approach is it makes it possible to take on providers and drug companies directly, on the issue of costs, without simultaneously fighting on many other fronts. With a public option, you don’t need to simultaneously convince doctors to take a pay cut and convince workers and employers to accept a tax increase and convince consumers to give up their existing insurance plans.

In Barro’s vision, features like better subsidies to the less-well-off and a better benefit package could be added over time, ultimately resulting in a plan not that different from what Sanders pictures.

Complementarity. I think it would be a mistake if Democrats got into an either/or battle between better-coverage-for-more-people and great-coverage-for-everybody. It’s important to have goals well beyond the things that you know how to achieve today or tomorrow. But it’s also important to go into the battle you face today with a plan you can implement today. There is no inherent contradiction between those two ambitions.

Republicans seem to understand this. It’s totally within the Republican mainstream for a presidential candidate to announce that he’d like to eliminate the IRS or pay off the national debt, even if he has no credible plan to do so. In the meantime, just about everybody will be happy if he manages to cut taxes or propose a balanced budget. Republicans understand that having a big dream keeps you marching in the right direction, even if you don’t actually get wherever you say you’re going.

But Democrats responded to their landslide losses in 1972, 1980, 1984, and 1988 by cutting their dreams down to size. Smarting under the Reagan-era charge that they were too liberal, they played it cautious: I don’t want to turn America into Sweden, I just want to do this one little thing.

What the popularity of the Medicare-for-All slogan indicates is that it’s time for the one-little-thing era to be over. One-little-thing didn’t just limit Democrats’ horizons, it made us sound untrustworthy. If we wouldn’t say where we wanted to go in the long run, our enemies could say it for us.

A political party that actually means something has to want Big Things, things that might take decades to achieve, like racial justice, gender equality, an end to a constant state of war, the elimination of poverty, a sustainable relationship with the rest of the biosphere — and healthcare for everybody. At the same time, wanting Big Things someday can’t be enough. We need to be achieving something today that takes us closer to those Big Things.

There’s no contradiction between envisioning a journey of a thousand miles and taking a single step. They’re part of the same whole.

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How to Fix ObamaCare

July 31, 2017 – 9:38 am

It needs a number of wonky adjustments, not a dramatic overhaul.

Other than a fairly vague “we know it’s not perfect”, elected Democrats have been reluctant to criticize ObamaCare while it was facing the prospect of a full repeal. Even fairly mild criticism, they feared, might lead to “Even Democrats Hate ObamaCare” headlines and feed the repeal movement. Worse, if Democrats settled on a fix-ObamaCare plan, McConnell and Ryan might take one or two minor ideas from it and claim that their new repeal plan was bipartisan, even as it gutted the larger purpose of ObamaCare.

But even though ObamaCare repeal keeps rising from the dead, maybe the its most recent defeat leaves an opening for an honest effort to improve the system. That will be tricky, because it means putting aside an enormous amount of widely believed lies and focusing on what the real problems are.

What ObamaCare was supposed to do. One reason all the Republican repeal-and-replace bills have been so unpopular is that no one could say exactly what they were supposed to accomplish, other than fulfill the promise to repeal ObamaCare. Repeal has become an end in itself, independent of anything it might do to help or hurt the American people.

By contrast, all Democratic healthcare plans are based on a simple principle: Sick or injured people should get the care they need, and they shouldn’t have to go bankrupt paying for it. Large majorities of Americans believe in that vision, and Democrats have been trying for decades to make it real. ObamaCare has always been an imperfect implementation, but it was a significant step in the right direction.

Why not single-payer? The most direct (and, in my opinion, the most efficient) way to implement that principle is some kind of single-payer, Medicare-for-all system like just about every other advanced country already has. It’s been tested in nations all over the world, and it works. Germany or Australia, for example, spend far less per capita than we do on healthcare, and their people live longer. [Update: See the comments for a correction. I have used “single-payer” as a synonym for “universal health insurance”, which is not accurate. In particular, Germany achieves universal coverage differently.]

I suspect that in their hearts, all the Democrats running for president in 2008 would have preferred a single-payer system, but most of them believed Congress would never pass it. So Obama and his main competitors (Hillary Clinton and John Edwards) all proposed very similar systems, roughly based on the program that Republican Governor Mitt Romney had already started in Massachusetts. Dennis Kucinich had the single-payer supporters all to himself in the New Hampshire primary, where he got 1.35% of the vote.

Single-payer advocates find this kind of timidity mysterious — or they attribute it to bribery by the big insurance companies — because if you poll single-payer by itself, it does pretty well. So why not go for it?

What makes even honest politicians nervous is that lots of things poll well until a campaign begins, when the negative ads and outright lies start to fly. HillaryCare polled well at first too, until Republicans and insurance companies started going after it. In no time it all, it morphed from an unstoppably popular proposal to the reason the Democrats lost the House in 1994.

Whenever a proposal fails, you can point to plenty of mistakes its backers made. (Supporters of successful proposals also make a lot of mistake, which are quickly forgotten.) But it also seems to be true that the American people harbor a deep well of distrust for politicians and their promises. If a negative ad tells people you’re going to take something away from them, they believe it. If you respond that you’re going to give them something better, they don’t.

Nobody wants to believe that this applies to them as well as their opponents, but it does. Republicans, I’m sure, have been shocked these last six months to discover that many of the same people who distrusted ObamaCare now distrust their replacement plans even more. (ObamaCare repeal as an abstract idea has long polled in the 40s. All the specific repeal bills discussed recently have polled in the teens.) As soon as Republicans gained enough power to implement actual changes, they became the new owners of the well of distrust.

Single-payer supporters on the Democratic left are making a similar mistake today, I believe, when they imagine that the wave of public distrust they’ve helped raise against establishment Democrats won’t wash back on them if they ever take power.

Three options. When you come down to it, there are really only three ways government can handle the problem of the uninsured.

  1. Ignore it. When the uninsured get sick, either private charity will take care of them or they’ll die.
  2. Have one system that covers everybody.
  3. Have a crazy-quilt of different programs that all have their own rules and justifications, and hope that not that many people slip through the gaps.

ObamaCare is a type-3 plan. TrumpCare failed because it could never decide whether it was a type-1 plan or just another type-3 plan with more gaps.

The ObamaCare Rube Goldberg machine. Public distrust of change is one major reason ObamaCare was designed to minimize the number of people facing significant disruption. If you got your healthcare through Medicare, Medicaid, the VA, or your employer’s group plan (like my wife and I did and do), you probably didn’t notice much difference. Obama’s “If you like your health plan you can keep it” may have been Politifact’s Lie of the Year, but it was actually more of an exaggeration than a lie. After the ACA passed, the vast majority of people with good health insurance just kept doing whatever they’d been doing.

Maintaining all those legacy programs guaranteed that covering the uninsured would be complicated. So ObamaCare covered uninsured people like this:

  • The poor continue to get Medicaid.
  • Those just above the poverty line — who presumably can manage day-to-day expenses like food and rent, but have nothing left over to insure against emergencies — get covered by extending Medicaid (though the Supreme Court allowed states to opt out of this).
  • Low-to-middle working-class people whose jobs don’t include health insurance can get a subsidy to buy individual insurance on an ObamaCare exchange. (The subsidies phase out as incomes increase.)
  • Better-off people whose jobs don’t include health insurance can buy policies on the exchanges at full price.

Gaming the system. In addition to the complexity of how you got covered, there were changes in the rules of coverage. Mostly, this is about keeping players from gaming the system.

When insurance companies compete on price and service, the public benefits. But prior to ObamaCare, a lot of insurance competition was about something else: making sure that their own insurance pool was healthier than the other companies’. So insurers got really good at figuring out who was a bad risk and cancelling their polices. That helped the company’s bottom line, but was bad for public health. (And if your wife is a cancer survivor, it’s terrifying.)

So the biggest (and most popular) rule change was that insurance companies have to offer coverage to everybody, no matter how unhealthy they are or might get. Nobody is uninsurable any more.

But that created a new opportunity to game this system: Healthy individuals might go without insurance, figuring that they could pick it up later if they ever needed it. Taking healthy people out of the insurance pool ruins the whole idea of insurance — imagine if you could put off buying fire insurance until after your house burned — so that had to be prevented somehow. That’s where the individual mandate comes in: Even if you’re healthy, you either carry insurance or pay a tax.

So

  1. no discrimination against pre-existing conditions,
  2. a mandate for individuals to carry insurance, and
  3. subsidies so that even individuals just above the poverty line can afford the insurance they’re obligated to carry

is sometimes called the “three-legged stool” of ObamaCare. The system is unstable unless you have all three.

Where there are problems. The problems with ObamaCare have been wildly exaggerated by Republican talk of a “meltdown” or “collapse” or “death spiral“. But ObamaCare has run into three main problems:

  • The Supreme Court allowed states to opt out of Medicaid expansion, and a number of the red states have, at great cost to their citizens and hospitals. Policies on the ObamaCare exchanges are not designed for households near the poverty line; the deductibles on the cheapest (bronze) plans are far too high for them, and they may not qualify for the subsidies. The Medicaid-denied people who do sign up on the exchanges tend to be the very sick, whose expenses raise premiums for everyone.
  • Not enough healthy people are signing up to keep premiums low. The original projections didn’t anticipate that HHS would use its PR budget to undermine ObamaCare [1], that private sources would launch a well-funded advertising campaign against signing up, or that refusing to sign up would become part of a political identity.
  • Not enough insurance companies are participating (particularly in rural areas [2]) to keep the exchanges competitive.

The last two should not be all that surprising. If you look at the description of ObamaCare above, it depends on inducing people to cooperate, not forcing them. (That’s why it’s ironic that it’s been attacked as an assault on “freedom”.) For the program to work smoothly, the inducements — subsidies to individuals, reinsurance for insurance companies, the income level where Medicaid expansion ends and private-sector policies begin, the tax on the uninsured — have to be calibrated right.

Healthcare experts made their best estimates when the law was written, but everyone expected to make adjustments as the real-world results started coming in. This is not unusual with big new social programs. Social Security, Medicare, and Medicaid all required some fine-tuning as they got off the ground, and still get re-jiggered periodically.

But no one foresaw that Republicans would immediately gain control of the House, and then take the attitude that the only acceptable adjustment was complete repeal. It’s hard to grasp now how big a change this is from all previous American history. Typically, opposition parties in America have not tried to sabotage programs they disapprove of. Until the current era, small changes that improve the working of an existing program have been uncontroversial, even among congresspeople who voted against the program originally.

The sabotage problem has gotten worse since Trump became president. He gleefully talks about letting ObamaCare implode, and creates uncertainty in the insurance markets by threatening to delay or withhold payments. Insurance is all about managing risk, so adding any new uncertainties to the system is monkey-wrenching.

How to fix them (if you want to). It should go without saying that the first step in fixing something is to stop trying to break it. But beyond that, there are some obvious things to do.

Ten House Democrats — including my NH-2 rep, Annie Kuster — have put out a plan to stabilize the individual insurance markets. The main planks are:

  • a permanent reinsurance program to protect insurers against unexpectedly high claims. This would encourage insurers to compete in more markets. ObamaCare had such a program initially, but it has expired.
  • reduce deductibles and co-pays for people with low incomes. There’s already a program in the ACA that does this: The government is supposed to make “cost sharing reduction” payments to insurance companies that keep these costs low. But there’s a dispute working its way through the courts about whether Congress has to appropriate this money year-by-year (which it hasn’t done) and Trump is threatening to withhold the payments.
  • market better. HHS needs to start spending its advertising budget to promote ObamaCare rather than denigrate it. One simple suggestion: Make the ObamaCare open enrollment period line up with the April 15 tax deadline, so that people who have just seen how the tax subsidies and the individual mandate affect them could immediately take action for next year.
  • enforce the individual mandate, which the IRS is currently not doing.
  • let people over 55 buy into Medicare. This will shift some of the most expensive people out of the ObamaCare risk pools, lowering premiums for everyone else.
  • give bigger subsidies to older people in rural areas.

Other ideas are out there as well. Saturday’s NYT listed at least two (in addition to some of the ideas already mentioned).

  • reduce drug prices. If there’s real competition, then anything that makes healthcare less expensive makes health insurance less expensive. At the very least, lower drug prices would help people who have high deductibles and co-pays. And everyone agrees that the current system — which lets drug companies with patents dictate a price which the government and insurance companies are obligated to pay — is rigged in drug companies’ favor. Part of the Democrats’ “Better Deal” proposal is a federal agency that guards against price gouging.
  • extend ObamaCare-exchange subsidies to people in the Medicaid gap. It’s crazy that many states still haven’t accepted Medicaid expansion, but that seems to be the way it is.

538 passes on something clever Nevada is doing: Insurers who offer plans on the ObamaCare exchange in Nevada are more likely to be chosen to manage the state’s Medicaid plan. A similar idea (which I didn’t invent, but can’t remember where I saw it) is to force insurers who want to compete in lucrative urban markets to also cover rural areas.

Mending is boring, but insurance ought to be boring. None of this is the kind of sweeping change that inspires people. It’s more like when a football team works on blocking and tackling better, rather than coming up with new trick plays.

But it also shouldn’t scare people. The original structure of the plan is still sound. It just needs some adjustments.

The question is whether congressional Republicans want to make those adjustments, or the Trump administration wants to implement them. They can, if they want, make ObamaCare collapse.

If they do that, though, they may convince the public that type-3 crazy-quilt plans don’t work. And if the public has to choose between a type-1 let-them-die program and a type-2 Medicare-for-all plan, I don’t think Republicans will like how that decision comes out.

[1] The Daily Beast reports:

To date, [HHS] has released 23 videos. A source familiar with the video production says that there have been nearly 30 interviews conducted in total, from which more than 130 videos have been produced.

Each testimonial has the same look, feel, and setting, with the subjects sitting before a gray backdrop and speaking directly to camera about how Obamacare has harmed their lives. They were all shot at the Department’s internal studio, according to numerous sources who worked for or continue to work at HHS.

The videos openly suggest Congress repeal ObamaCare. The one featuring Robert Dean ends like this:

I really hope that the Trump administration and the U. S. Congress, Republicans in the Senate and House, can get their act together and deliver relief to the American people.

Given this openly political — and even partisan — message, I suspect that spending public money to produce and distribute these videos is illegal. If HHS Secretary Tom Price knew about this and condoned it, he should resign.

[2] As the liberal Center for Economic Policy and Research think tank notes, lack of competitive exchanges is particularly a problem in Republican states that have done their best not to cooperate with ObamaCare. It provides the following chart:

In part this is a coincidence caused by the fact that largely rural states tend to have Republican governors. But so is the frequently cited statistic that 1/3 of counties have only one insurer: Those counties tend to be sparsely populated, so the number of people they represent is far less than 1/3 of the country.

The are lots of reasons why rural areas are especially hard hit. Most obviously: Having fewer people makes them a less robust insurance pool, increasing risk to the insurer. Also, healthy young people tend to seek opportunity in the bigger cities, leaving older, sicker people behind.

By weeklysift | Posted in Articles | Comments (14)

Three Misunderstood Things, 7-17-2017

July 17, 2017 – 8:38 am

This week: healthcare costs, the “Biblical” view of abortion, and sanctuary cities.

I. Cutting healthcare costs.

What’s misunderstood about it: Liberals and conservatives both talk about cutting costs, but mean different things. Liberals are usually talking about cutting the cost to society as a whole, while conservatives focus on cutting the cost to the federal government. Either side might be talking about cutting the cost to certain individuals.

The right follow-up question: When a proposals claims to “cut healthcare costs”, are those costs going away, or just being passed on to someone else? Or did that money pay for some needed care that someone is now going to do without?

*

Nearly everyone agrees that American healthcare is too expensive. Americans spend far more on healthcare, both per capita and as a percentage of GDP, than any other country in the world. That might be fine if our extra money bought us better health, but in fact the reverse is true: Our life expectancy at birth is similar to much poorer countries like Costa Rica and Cuba, and on average Americans die four years sooner than the Japanese or the Swiss.

So cutting healthcare costs is a sure applause line for a politician. But what does it mean?

An win/win outcome would be to deliver the same or better care more efficiently and effectively: Hospitals make fewer mistakes and produce fewer unnecessary complications. Treatment gets targeted better, so that no one has to suffer through (or pay for) a test or treatment had no chance of helping. Drugs replace surgeries, and diet/exercise regimens replace drugs. Preventive care catches conditions before they become serious (and expensive). Environmental and job-safety and product-safety standards expose people to fewer health-threatening risks.

Admittedly, it’s not always obvious how to get those win/win results. ObamaCare made some small steps in this direction, but we really don’t know yet whether they’re working, and those changes may not survive the ObamaCare repeal process.

So most cost-cutting proposals are not about those win/win solutions. Liberals often try to offer the same treatment for less money by squeezing providers: cutting insurance companies out of the loop via single-payer plans, capping the prices that drug companies or hospitals can charge, or paying doctors less. Those are great ideas unless you’re an insurance company, a drug company, a hospital, a doctor, or a lobbyist for one of those powerful vested interests.

Conservatives often cut costs by getting somebody to do without healthcare they would otherwise want, usually rationing by cost: Everything is available if you can pay, but you might “choose” not to pursue some treatment that would bankrupt your family. Perhaps Americans (especially poor and working-class Americans) really do seek massive amounts of unnecessary treatments, and they would stop if only they had more “skin in the game“, but I haven’t seen that in my own life. What I have seen is my wife taking monstrously expensive drugs to keep her cancer from coming back. If we were poor and had to pay for them ourselves, it would be really tempting to cross our fingers and hope.

And finally, both sides talk about cutting costs by transferring those costs to somebody else. For liberals, “somebody else” is usually the government, or (passing the buck one step further) the taxpayer. For conservatives, it’s the individual — especially if he or she is unhealthy. Capping what the government is willing to put into Medicare or Medicaid, for example, may help the government control its budget deficit, but it doesn’t do anything to lower the need for treatment or the cost of providing it.

Similarly, letting individuals design their own (cheaper) health insurance — letting people opt out of insurance for care they won’t need, like prenatal care for men or geriatric care for young people — may lower some people’s individual expenses, but the total number of pregnancies and old people hasn’t changed. The cost of caring for them hasn’t gone away, it has just shifted to somebody else.

II. Christianity and abortion.

What’s misunderstand about it: The belief that a newly fertilized ovum has the full moral worth of a baby (or an adult) is often described as the “Christian” or even “Biblical” position.

What more people should know: The Bible says nothing about conception, and what it does say about fetuses and souls points in a different direction. The current ensoulment-at-conception dogma didn’t solidify among conservative Protestants until well after Roe v Wade.

*

Religiously, the question of whether abortion is murder comes down to when the fetus acquires a soul. Souls, after all, are the difference between murder and what butchers have done for millenia. (If you believe a chicken has an immortal soul, you really should be a vegetarian.) Anti-abortion arguments often (and usually inaccurately) point to the number of weeks before a fetus has a heartbeat or can feel pain, but such physical traits are just placeholders for a metaphysical trait that can’t be recognized in a secular setting like a legislature or a courtroom: the presence of a soul.

Unfortunately, microscopes and ultrasound machines didn’t exist when the Bible was being written, so scripture never mentions the miraculous moment when a sperm enters an ovum, nor gives a detailed description of fetal development. The observable sequence at the time was: sex, the woman shows signs of pregnancy, the fetus begins to move on its own, and birth. No one knew how to break the process down much finer than that, and apparently God never whispered His superior knowledge into anybody’s ear.

But anti-abortion Christians really, really want Biblical support for their position, so they thrust an enormous amount of interpretation onto a handful of texts that are either vague or really about something else. For example, Jeremiah 1:5, which you will occasionally see on billboards: “Before I formed you in the womb I knew you.” That might be a lyrical way of saying that God had been planning Jeremiah’s mission for a long time, or it might more literally say that Jeremiah’s soul existed before his conception, but it actually doesn’t say anything about precisely when that soul entered the body that was forming in his mother’s womb.

Which is not to say that the Bible is silent about souls entering bodies. There is a text — I believe it’s the only one — that quite explicitly describes a soul entering a body. But it doesn’t say what anti-abortion folks want to believe, so it seldom gets mentioned in abortion arguments. I’m talking about Genesis 2:7, which describes the creation of Adam.

And the Lord God formed man of the dust of the ground, and breathed into his nostrils the breath of life; and man became a living soul.

In other words: God formed Adam’s body completely, and then his soul entered that body with the breath. The obvious implication is that a fetus is soulless until it breathes. The Christian Left blog does a more detailed discussion of how this view aligns with other places where the Bible mentions pregnancy and miscarriage.

From the early Christian era through the Middle Ages, many Christian thinkers identified the soul with motion, and so held that it entered the fetus at the quickening, which was variously identified at anywhere from 40 to 120 days.

The Catholic Church has been against abortion in any form at least since the 1600s, when it began hoping for Catholic families to outpopulate Protestant families. But Protestant opinion varied widely, even among theological conservatives, until after abortion became a unifying conservative political issue in the late 1970s: The theology appears to have followed the politics, rather than leading it. The history of this discussion has been completely written over in the ensuing years. Slacktivist characterizes this process with a line from George Orwell’s 1984: “We have always been at war with Eastasia.”

As for why this corruption of church history and biblical interpretation is necessary, I believe the root issue is female promiscuity. Pregnancy is a great blessing to families that are ready to raise children, but traditionally it has also been the ultimate comeuppance for unmarried women who think they can have sex without consequences. When abortion is freely available, pregnancy becomes a much less effective threat for keeping women in line. That’s what social conservatives are really worried about, and why they don’t see effective birth control as a solution to the abortion problem.

III. Sanctuary cities

What’s misunderstood about them: What they are. In no American city, whether it identifies as a “sanctuary city” or not, do local officials actively prevent federal immigration officials from detaining or deporting undocumented immigrants. The issue is entirely about the extent to which local officials help ICE.

What more people should understand: Federalism. Under the Constitution, state or local government officials can’t block federal agents from enforcing federal laws, but they don’t have to help.

*

The word sanctuary evokes the idea that once you get there, you’re safe. That’s certainly how it worked for Esmeralda in The Hunchback of Notre Dame.

No city in the United States is a sanctuary for undocumented immigrants in that sense. Federal agents of Immigration and Customs Enforcement (ICE) can go anywhere in the country and arrest anyone they believe has broken federal immigration laws. Local officials can’t stop them, any more than they could stop the FBI from arresting terrorists or the Secret Service from arresting counterfeiters. (Legally, churches aren’t sanctuaries either, even though many of them — including the one I belong to (that’s me in the back, under the chandelier) — are supporting a sanctuary movement. So far ICE hasn’t been willing to break down church doors to haul somebody away, but fear of public opinion is all that stops them.)

However, unlike in some other countries, American state and local governments are not divisions or departments of the national government. The system we know as federalism prevents the national government from simply issuing orders to state and local officials. In particular, cooperation between various levels of law enforcement is mostly voluntary. (This is not an entirely liberal or conservative thing; conservatives want local police not to cooperate with federal gun laws.)

Vox has a pretty clear video explaining the situation.

Whenever local police arrest somebody, fingerprints are taken and submitted to the FBI, which then shares them with ICE. If ICE recognizes those fingerprints as belonging to someone they want to deport, they can send the local police a request to hold the person for an additional 48 hours, which gives ICE time to send out its own agents to make an arrest. But local police don’t have to comply.

Depending on where you live, local police might respond on a case-by-case basis, or the local government might establish a policy. The extent to which that policy refuses cooperation is what defines a sanctuary city.

A separate issue is whether the national government can cut off funds to uncooperative cities. (Again, this is a not a strictly liberal/conservative issue. The Affordable Care Act said that states that didn’t expand Medicaid in the way the law described would lose all federal Medicaid money. But the Supreme Court ruled against that kind of strong-arming.) In January, Trump issued an executive order threatening to pull federal funding from sanctuary cities, but, a judge blocked the enforcement of this order, writing:

Federal funding that bears no meaningful relationship to immigration enforcement cannot be threatened merely because a jurisdiction chooses an immigration-enforcement strategy of which the president disapproves.

In May, the Trump administration appeared to back off. Attorney General Sessions issued a definition of sanctuary cities that applied to very few places, and the restricted funds were only law enforcement grants from the Departments of Justice or Homeland Security.

[BTW: If you show a Trump supporter the Vox video, they’ll likely respond with this video from 1791L. However, that video does not actually identify any mistakes in the Vox video.]

By weeklysift | Posted in Misunderstood | Also tagged , | Comments (22)

Three Misunderstood Things

July 3, 2017 – 9:59 am

This week: the anti-gay baker, why the Senate can’t move on, and whether raising the minimum wage kills jobs.

I. The Masterpiece Cakeshop case (which the Supreme Court will hear in the fall).

What’s misunderstood about it: People think it has free-speech implications.

What more people should know: The baker objected to the whole idea of making a wedding cake for two men, and cut off the conversation before the design of the cake was ever discussed. That makes it a discrimination case, not a freedom-of-speech case.

*

Defenders of Masterpiece Cakeshop owner Jack Phillips frequently portray him as a martyr not just to so-called “traditional marriage”, but to the freedom of tradespeople not to say things they object to. For example, one conservative Christian tried to demonstrate a double standard like this:

Marjorie Silva, owner of Azucar Bakery in Denver, said she told the man, Bill Jack of the Denver suburb of Castle Rock, that she wouldn’t fill his order last March for two cakes in the shape of the Bible, to be decorated with phrases like “God hates gays” and an image of two men holding hands with an “X” on top.

Is this cake gay or straight?

But the Colorado Civil Rights Commission ruled against Jack, because the two cases are very different: Silva objected to the message Jack wanted on the cake, not to anything about Jack himself or the situation in which the cake would be served. If the government had demanded that Silva make that cake, it would have been an example of forced speech, which there is already a long legal history against.

Do conservatives also have a right to refuse forced speech? Yes. A Kentucky court recently ruled in favor of a print-shop that refused to make t-shirts for a gay-pride festival.

So liberals must have howled in rage, right? Not me, and not philosopher John Corvino, who defended the Kentucky decision on the liberal news site Slate:

the print shop owners are not merely being asked to provide something that they normally sell (T-shirts; cakes), but also to write a message that they reject. We should defend their right to refuse on free-speech grounds, even while we support anti-discrimination laws as applied to cases like Masterpiece Cakeshop. … Free speech includes the freedom to express wrong and even morally repugnant beliefs; it also includes the freedom for the rest of us not to assist with such expression.

The reason the baker has lost at every stage so far — the administrative court and state appeals court ruled against him, and the Colorado Supreme Court refused to hear his appeal, letting the lower court ruling stand — is that he wasn’t objecting to putting some particular message or symbol on the cake, like a marriage-equality slogan or a rainbow flag. For all he knew when he refused, the men might have wanted a cake identical to one he had already made for some opposite-sex couple. In short, he objected to them, not to the cake they wanted.

Corvino explains:

One might object that Masterpiece Cakeshop is similar: “Same-sex wedding cakes” are simply not something they sell. But wedding cakes are not differentiated that way; a “gay wedding cake” is not a thing. Same-sex wedding cakes are generally chosen from the same catalogs as “straight” wedding cakes, with the same options for designs, frosting, fillings and so forth. It might be different if Masterpiece had said “We won’t provide a cake with two brides or two grooms on top; we don’t sell those to anyone.” But what they said, in fact, was that they wouldn’t sell any cakes for same-sex weddings. That’s sexual orientation discrimination.

II. Mitch McConnell’s agenda.

What’s misunderstand about it: If the Senate is stuck on its ObamaCare replacement, why can’t it move on to the next items on the Republican agenda: tax reform and the budget?

What more people should know: McConnell is trying to exploit a loophole in Senate rules. As soon as a new budget resolution passes, his ability to pass both TrumpCare and tax reform goes away — unless he changes the proposals to get Democratic votes.

*

During the Obama years, we often heard that “it takes 60 votes to get anything done in the Senate”, as if filibusters that can only be broken with 60-vote cloture motions were in the Constitution somewhere, and the minority party had always filibustered everything. (That’s why even the weakest gun-control bills failed, despite 54-46 votes in their favor.) But the Senate recognized a long time ago that budgets have to get passed somehow, and so the Budget Control Act of 1974 established an arcane process called “reconciliation” that circumvents the filibuster in very limited circumstances.

That’s how the Senate’s 52 Republicans can hope to pass bills without talking to the Democrats at all. But there’s a problem: Reconciliation is a once-a-year silver bullet. Fox Business explains:

Reconciliation allows Congress to consider just three items per fiscal year, whether they pertain to one bill or multiple. Those items are spending, revenue and debt limit. Since the GOP also wants to pass its tax reform agenda using reconciliation, it cannot statutorily do that under this budget blueprint because the two policy measures overlap.

And NPR elaborates:

The budget resolution for the current fiscal year dictates that any reconciliation measure must reduce the deficit, which the GOP’s Obamacare repeal was designed to do. Republicans then could draft a new budget resolution for the upcoming fiscal year with easier deficit targets, allowing for more aggressive tax cuts.

Under the most commonly accepted interpretation of the reconciliation rules, as soon as Congress passes a budget resolution for Fiscal Year 2018 (which begins this October), the window for passing TrumpCare under the FY 2017 resolution closes. So the only way to get them both done before facing another election campaign is to do them in the right order: first TrumpCare, then a new budget resolution, then tax reform.

Otherwise, McConnell’s options become less appealing: He can get rid of the filibuster completely, which several Republican senators don’t support. He can scrap either TrumpCare or tax reform for the foreseeable future. Or he can start envisioning the kinds of proposals that might get eight Democratic votes, plus a few to make up for Republican defections.

III. The minimum wage.

What’s misunderstood about it: Both supporters and critics of an much-higher minimum wage think they know what effect it will have on jobs.

What more people should understand: The effect of a minimum-wage increase on jobs is an empirical issue, not something you can deduce from first principles. And the data we have only covers small increases.

*

There is a certain kind of conservative who thinks he learned everything he needs to know about this issue in Econ 101: Every commodity, including unskilled labor, has a demand curve; if you raise its price, demand for it falls.

The right response to that analysis is maybe. Imagine that you own a shop with one machine, run by your sole employee. The machine produces some high-profit item. To make things simple, let’s ignore counterfeiting laws and imagine that the machine prints money. Cheap paper and ink go in, $100 bills come out.

Obviously, you could afford to pay your employee a lot more than the $7.25-per-hour federal minimum wage. But you don’t, because the machine is simple to operate and you could easily replace him, so he doesn’t have any bargaining leverage.

Now what happens if the minimum wage goes up to $15? Do you fire your guy and shut the machine down? Do you abandon your plan to buy another machine and hire a second worker? No, of course not.

Admittedly, that’s an extreme example, but it points out the right issues: Whether an increase in the minimum wage causes you to employ fewer people depends on how much you’re making off those people’s work. If you have a razor-thin profit margin, maybe a higher wage makes the whole operation unprofitable and you lay workers off. But if you could actually afford the higher wage, and the only reason you don’t pay it already is that your workers lack bargaining leverage, then you don’t.

In fact, if a minimum-wage increase gives your customers more money to spend on whatever you make, then you might have to hire more people to meet the demand.

Which situation is more typical? One reason to think the second situation is, is that sometime in the 1970s wages stopped tracking productivity: Workers have been producing more, but not getting comparable pay raises, presumably because they lack the bargaining power to demand them.

During the same era, the minimum wage has not kept pace with inflation. An increase to around $11 would just get it back to where it was in 1968. If it wasn’t causing massive unemployment then, why would it now?

Supporters of a higher minimum wage also point to studies of past increases, which don’t show big job losses.

But there’s a problem on that side, too: Past hikes haven’t been nearly as big as the proposal to go from $7.25 to $15. I was a minimum-wage worker myself in the 1970s when it increased from $1.60 to $1.80. I suspect my employer was not greatly inconvenienced. But larger increases might have a shock value that makes an employer say, “We can’t afford all these workers.”

That’s why the new data coming in from Seattle is so important: Seattle was one of the first cities to adopt a much-higher minimum wage, so we’re just beginning to see the results of that. The headlines on that initial study were that the higher wage is costing jobs, but that early conclusion is still debatable.

So in spite of my own preference for a higher minimum wage, I find myself in agreement with minimum-wage skeptic economist Adam Ozimek: This is an empirical question, and both sides should maintain more humility until we see more definitive data.

By weeklysift | Posted in Misunderstood | Also tagged , | Comments (30)

Yes, TrumpCare Will Kill People

July 3, 2017 – 8:32 am

Up until now I’ve been unwilling to make this claim,
but not because I didn’t believe it.

From the beginning, it seemed like common sense to me: Losing health insurance increases your risk of dying. Uninsured people get less care, and medical care saves lives, so lack of care logically would cost lives.

Big-picture statistics backed up that intution: Other industrialized English-speaking countries provide universal healthcare, and people live longer there. (Life-expectancy-at-birth: Australia 82.15 years, Canada 81.76, United Kingdom 80.54, United States 79.68.) None of those countries is an exact duplicate of the US, but is Canada so different that its people should live two years longer, or is their healthcare system just better than ours?

I knew that people have denied this. Back in May, Republican Congressman Raul Labrador bluntly stated “Nobody dies because they don’t have access to health care.” During his 2012 campaign, Mitt Romney pointed to emergency rooms and asserted that everyone gets life-saving care when they really need it. “If someone has a heart attack, they don’t sit in their apartment and die.”

But that argument didn’t impress me: Yes, the uninsured get life-saving care when they’re in car accidents or having heart attacks, but a lot of the treatable things that kill people more slowly, like high blood pressure or diabetes, aren’t emergencies. And while an ER might take out the tumor that’s blocking your intestine and threatening to kill you in a matter of hours, it won’t provide the follow-up chemotherapy or radiation that you’ll need if you plan to keep on living for more than a few months.

So I kept being tempted to say that TrumpCare would kill people. Other people have: Democratic politicians like Senator Bernie Sanders and Congressman Ruben Gallego, journalists like ThinkProgress‘ Ian Millhiser, and doctors like Christy Duan and Andrew Goldstein. They based their claims on solid scientific studies like this one and this one.

But every time I got ready to repeat that claim, I’d google “lack of health insurance kills people” and run into articles claiming to prove the opposite or just debunk the idea that we know one way or the other. Chasing the links in those articles always led me to different scientific studies, like this one or this one.

In other words, it looked like one of those my-bubble-versus-your-bubble arguments that I try to stay out of. Liberals cherry-pick the studies they want to believe, conservatives do the same, and we all talk past each other. Yes, I think of myself as a liberal, but my true allegiance is to the reality-based community. Like Fox Mulder, I believe that the truth is out there, and I would rather find it than just go on believing whatever I’m inclined to believe anyway.

So it’s been on my to-do list for months to devote some serious time to this issue, until I could feel confident that I really understood what is actually known. But given how much hard work would be involved and the possibility that I still might not arrive at a clear conclusion, that project never rose to the top of my stack. So I never boldly wrote, “TrumpCare will kill people.”

Fortunately, people better equipped than myself have taken the challenge on. Benjamin Sommers, Atul Gawande, and Katherine Baicker recently published an article in The New England Journal of Medicine acknowledging the controversy and comparing the studies quoted by each side. Weighing it all, they came to this conclusion:

The body of evidence summarized here indicates that coverage expansions significantly increase patients’ access to care and use of preventive care, primary care, chronic illness treatment, medications, and surgery. These increases appear to produce significant, multifaceted, and nuanced benefits to health. Some benefits may manifest in earlier detection of disease, some in better medication adherence and management of chronic conditions, and some in the psychological well-being born of knowing one can afford care when one gets sick. Such modest but cumulative changes — which one of us has called “the heroism of incremental care” — may not occur for everyone and may not happen quickly. But the evidence suggests that they do occur, and that some of these changes will ultimately help tens of thousands of people live longer lives. Conversely, the data suggest that policies that reduce coverage will produce significant harms to health, particularly among people with lower incomes and chronic conditions.

If the name Atul Gawande rings a bell, it’s probably because (in addition to being a doctor and public health researcher) he’s the author of popular books like Complications, Better, and Being Mortal. He also writes about health issues for The New Yorker, making him that rare researcher who’s able to popularize his own work, as he did this week in “How the Senate’s Health-Care Bill Threatens the Nation’s Health“.

To understand how the Senate Republicans’ health-care bill would affect people’s actual health, the first thing you have to understand is that incremental care — regular, ongoing care as opposed to heroic, emergency care — is the greatest source of value in modern medicine. There is clear evidence that people who get sufficient incremental care enjoy better prevention, earlier diagnosis and management of urgent conditions, better control of chronic illnesses, and longer life spans.

… Insurance expansions have made people more likely to get primary and preventive care, chronic-illness care, and needed medications — including cancer screenings, diabetes and blood-pressure medicines, depression treatment, and surgery for cancer before it is too late.

These improvements in care help explain why people who have health insurance are twenty-five per cent more likely to report being in good or excellent health. It also explains why they become less likely to die. Proper health care saves lives, and the magnitude of the reduction in deaths increases over time.

… Conservatives often take a narrow view of the value of health insurance: they focus on catastrophic events such as emergencies and sudden, high-cost illnesses. But the path of life isn’t one of steady health punctuated by brief crises. Most of us accumulate costly, often chronic health issues as we age. These issues can often be delayed, managed, and controlled if we have good health care — and can’t be if we don’t.

The incremental nature of most medical interventions — the drugs I take to keep my cholesterol low might or might not prevent a heart attack in 2030 — explains why the life-saving effect of insurance is hard to find in many studies, especially ones that only examine a few years. (Sometimes a decrease in mortality is noticed, but isn’t reported as a conclusion because the difference detectable within the time frame of the study isn’t statistically significant yet.) For the health crises that threaten to kill you in short order, Mitt Romney is right: The ER will help you whether you are insured or not. (You may have to go bankrupt when their bill comes, but that’s a different issue.)

But emergency care is far from the only way that medical care saves lives. Having watched both my parents grow old and die, I understand that many — perhaps most — deaths in this era aren’t caused by a sudden crisis out of the blue. Instead, dozens of problems that are not immediately life-threatening have a way of building on each other until people get encircled by them. A sudden crisis may kill you, but only because you have gradually lost all your room to maneuver. One problem limits your mobility, another makes it hard to sleep or enjoy food, your long-time interests and activities become hard to maintain, you become feeble, and then you get depressed and stop even trying to regain your lost abilities. Whether that encirclement happens to you at 50 or at 90 depends largely on what kind of care you get.

The difficulty of measuring these kinds of outcomes and attributing them to specific causes means that precise estimates of the number of such deaths should be taken with a grain of salt. An article in Vox on Wednesday claimed that 208,500 additional people might die over the next ten years if the Senate TrumpCare bill passes. That’s speculative, as the authors acknowledge. Maybe it will only be 50,000 people, maybe 400,000. Current research isn’t sharp enough to be precise.

But people will die, probably quite a large number of them.

By weeklysift | Posted in Articles | Comments (10)

Can We Get Real About Opioids?

April 3, 2017 – 11:02 am

The problem isn’t in Mexico or on our southern border. It’s here, and it’s us.

All my life I’ve been hearing about the drug problem, but mostly what I’ve heard are attempts to dodge responsibility. Those attempts have taken two main forms:

  • It’s not my problem. The middle-aged, middle-and-upper-class whites who run the country project the problem onto inner-city blacks or white-trash teens, who can be written off. In other words: I don’t need to do anything, they just need to shape up.
  • The solution is to punish somebody else. The problem isn’t the American demand for drugs, it’s the supply chain. If we just extend the death penalty to pushers, or seal the border, or launch para-military operations against drug cartels, or spray enough herbicide on the poppy fields of Afghanistan or the coca fields of Columbia, that’ll fix it.

In recent years, though, that first dodge has been breaking down. The opioid problem has started to climb up the national agenda not just because the overall number of deaths has increased, but because drug abuse has increasingly begun to affect whites, rural and suburban communities, and people who are both over 30 and above the poverty line. In cynical political terms: people who matter.

Let’s review a little: Drug overdoses killed 52,000 Americans in 2015. That’s more than car accidents (35K) or gun deaths (36K). The National Institute of Health estimated that in 2013, 1.9 million Americans were dependent on pain relievers, with another million or so dependent on heroin, sedatives, and tranquilizers.

That’s such a big deal that it’s pushing down the national life-expectancy-at-birth numbers, which in 2015 fell for the first time since 1993, from 78.9 to 78.8. (That’s the National Center for Health Statistics number. For cross-country comparisons, the World Health Organization figures slightly differently. It rates the U.S. at 79.3, well below Japan at 83.7 and culturally similar Canada at 82.2.)

But what makes this a politically serious problem is that it’s hitting white people: The 2015 national life expectancy decline might turn out to be a statistical anomaly, but white life expectancy has barely budged since 2010.

That doesn’t just change the importance of the problem, it changes the rhetoric. If drugs aren’t just a problem for “those people”, then we can’t solve it by telling them to shape up. The rhetoric has to soften, and lean more towards empathy than tough love. During the campaign, Trump said this about the opioid problem:

We’re going to take all of these kids — and people, not just kids — that are totally addicted and they can’t break it. We’re going to work with them, we’re going to spend the money, we’re gonna get that habit broken.

But so far that’s been a shaky promise. The for-now abandoned TrumpCare plan would have eliminated the ObamaCare mandate that insurance policies cover addiction treatment, not to mention the millions of people it would have left without insurance entirely. He claimed to increase funding for addiction prevention and treatment by $500 million, but apparently that was just him taking credit for the 21st Century Cures Act passed under Obama.

But Wednesday was opioid abuse day at the White House, so Trump appointed a commission that will issue a report in October. That’s some real action for you.

While he waits for that report Trump continues to use the second dodge: He’s spinning drugs as a border-protection issue that the Wall will solve. Wednesday, after listening to several people’s stories of addiction that began with prescription drugs, he said:

So it’s been really — it spiked over the last eight to ten years.  Would that have anything to do with the weakening of the borders? Because a lot of it comes from the southern border.

Like so many Trump statements, this presents a thicket of misperceptions that you have to hack your way through. First, the border hasn’t “weakened” in recent years. We’ve had more fences and border agents than ever, and fewer people crossing illegally.

And then we get to the reality of the drug problem: About a third of the 52,000 opioid overdose deaths in 2015 were from prescription drugs, and many of the illegal-drug ODs are simply the end of a story that began with legal drugs. Even if we could shut off all the heroin and fentanyl coming from overseas — it’s mostly from Mexico right now, but that doesn’t mean drug importers would give up if we capped that particular pipe — the problem wouldn’t be solved.

And then there’s the assumption that the Wall would stop Mexican drugs cold. Even granting the shaky assumption that Mexico lags behind in crucial ladder technology, bags of pills or powder are not that hard to throw. Fill a football with them, and any high school quarterback could complete the pass.

In short, the only real way to attack this problem is on the demand side, not the supply side. We have to prevent people getting addicted to prescription opioids, and help current addicts (to both legal and illegal drugs) quit. The Great Wall of Mexico won’t do that.

What would? Three things:

  • Finding ways to manage chronic pain without addictive drugs.
  • Reducing the overall level of despair among people that the 21st-century economy is leaving behind — over-50 folks in rural areas as well as non-white inner-city youth.
  • Funding effective rehab programs for everybody who wants to quit.

None of those is a just-do-it thing. We know how to build walls, but chronic pain and despair and effective rehab are much harder questions. The difference is: They’re the right questions, rather than just new ways to dodge the problem.

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