Squashed

Imaginary Medicare “Cuts”

sds quotes James Taranto:

People on both ideological sides may be vexed by Ryan’s defense of Medicare. But those on the right should take comfort that it shows the limits of the entitlement state. In the political world the left dreams of, ObamaCare would have raised taxes on everyone with the assent of conservative deficit hawks. Instead, the Republican Party re-embraced small-government conservatism, and the Democrats had to cannibalize a popular existing entitlement to pay for an unpopular new one. It’s hard to see how this ends well for the left, whether or not it ends this November.

I’m a bit perplexed by intelligent people echoing some really flimsy arguments. The “Medicare cut” in the Affordable Care Act was essentially a decrease in certain over-payments to providers and insurers. In other words, some of the high cost payments that are driving increases in healthcare spending are reduced. This is generally the sort of waste reduction Republicans like. No benefits are cut. This isn’t the sort of thing that would be controversial …

… if the Republicans hadn’t chosen a VP nominee who was clearly on the record as wanting the kind of radical changes to Medicare that would drastically shift costs to seniors. (Yes, I know, it wouldn’t do it for the current seniors because they’re all the greatest generation that votes all the time. But it would functionally eliminate Medicare as we know it for the rest of us. We’d essentially get a voucher to cover part of the cost of buying insurance and a “Good luck, grandpa.”)

So now the Republicans are suddenly in favor of wasteful spending in Medicare because it helps them try to draw a false equivalency between Obama’s waste elimination and Ryan’s proposed gutting. We all know that’s what’s going on, right? Even if you don’t like Obama, you’ve got to know that this whole Medicare thing is disingenuous. Why repeat it. If you like Ryan’s Medicare plan—and a lot of people do—why not defend it rather than peddling this sort of distraction? Are we so angry with the Obama administration that we want to trick old people to get their votes?

Uncool.

Did Romney deliberately court the NAACP’s scorn?

So Mitt Romney was booed at the NAACP. A lot of people on the left are arguing that he deliberately drew the scorn of the NAACP to shore up support from the more racist part of his base. Initially, I was inclined to disagree. Isn’t speaking to a group you know is likely to oppose you the principled thing to do?

Except … when has Romney ever done the principled thing? Romney is the sort of guy who likes every kind of music—particularly the kind you like. It is a bit weird that the only people Romney seems inclined to voluntarily alienate are the NAACP. And the alienation was definitely voluntary.

If you’re speaking to the NAACP—you’ve got to know that Obama is personally popular. You could make a pitch that says you think Obama just hasn’t gotten the job done and it’s time to give somebody else a chance. That makes sense. But Romney threw out the term “Obamacare” when he could have used any of a dozen alternatives that didn’t directly and deliberately tie Obama to the thing he was trying to disparage. If he was trying to make friends, that was a pretty serious blunder.

Of course, maybe Romney just wanted to avoid the accusation that he had refused to speak to the NAACP. Maybe he knew he wouldn’t win anybody over but wanted to make a gesture at trying.

Except, then there was this:

By the way, I had the privilege of speaking today at the NAACP convention in Houston and I gave them the same speech I am giving you. I don’t give different speeches to different audiences alright. I gave them the same speech. When I mentioned I am going to get rid of Obamacare they weren’t happy, I didn’t get the same response. That’s ok, I want people to know what I stand for and if I don’t stand for what they want, go vote for someone else, that’s just fine. But I hope people understand this, your friends who like Obamacare, you remind them of this, if they want more stuff from government tell them to go vote for the other guy-more free stuff. But don’t forget nothing is really free.

I really don’t want to jump to the convenient conclusion that Romney’s campaign is now doing open race-baiting. But … the only part of the Affordable Care Act that Romney has really criticized (recently) is the mandate. When that suddenly switches into “more free stuff from the government” when it’s specificall in the context of the NAACP, I have trouble giving Romney the benefit of the doubt. This looks really bad to me.

If you disagree, please let me know. I’d be happy to post thoughts in either direction. We can call it an open thread or something.

Building a Healthy and Just Society

Barton Hinkle of Barticles (and the Richmond Times-Dispatch) has taken a stab at the question previously posed by Political Prof. How is opposition to a national health care system the right way to build a healthy and just society?

To avoid talking at cross-purposes, I would note that when referring to a “national system” for healthcare, I’m not referring to any specific implementation scheme. So long as we have functionally universal access to health services, we’ve agreed on the goal. The who pays, how, for what questions are, of course, important. But those are a lot easier to answer if we agree that we want everybody in the country to have access to medical care and that we’re willing to do what it takes to make it happen.

Mr. Hinkle offers three points. First, he argues that looking at other basic necessities suggests that a national system for healthcare might not build a healthy and just society. He mentions education, housing, and food, asserting that we lack national systems for housing and food and that we’re not happy with public education system. I think he is wrong on all three.

Housing and food are both largely private industries—but in both cases we have federal policies in place to cover the gaps in the private system. We have both project-based and Section 8 housing subsidies. Between VA, USDA, FHA, and now FNMA and FHLMC loans, the lending industry is dominated by public players as well. (For those who don’t want to Wikipedia all those acronyms: the bulk of U.S. mortgages have some level of implicit or explicit government guarantee.) Food has less government involvement—though we subsidize it on both the production end with farm subsidies and the consumption end with SNAP and [WIC](http://www.fns.usda.gov/wic/aboutwic/ “Women Infants and Children).

Education is an even more interesting example. We’re not happy with our public education system. But … (virtually) nobody wants to eliminate it. There are a wide variety of proposals for reform—some of which include greater privatization through vouchers. But that’s still a government payment system. (It’s a bit like medicare, but for schools.) When we’re unhappy with our education system, we’re unhappy because we don’t think it’s good enough. We want to fix or improve it—not eliminate it. I don’t think anybody is seriously proposing we just shut down every school in a struggling district and see what happens.

Mr. Hinkle’s second point is that there is no guarantee that a national system will produce a healthier society. As he points out, we can cherrypick statistics all day long to support our preconceptions. Or we could delegate the question to a slew of healthcare professionals who can present us with a set of proposals that are likely to lead to a healthier society.

That’s a deal I’m willing to make. (And I’ll happily sell it to anybody left of center.) If we can agree on the goal of a healthy society, agree that we’re willing to invest some resources to make it happen, agree that we care about everybody’s health, and agree that we want to take a fact-based approach, I’m happy to set aside ideological preferences. And if the People Who Understand Public Health better than you or I come back and say a completely hands-off, free market approach is the best thing for the nation’s health, I’ll feel a bit embarassed, but I’ll vote for it. With that said, I don’t think Mr. Hinkle would be willing to shake on that deal. Because we pretty well know that things like increasing access to preventative care is an all-around-win for public health.

Mr. Hinkle’s third point is that justice is a fuzzy concept. we haven’t been able to definitively nail down exactly what a just society looks like in thousands of years of philosophical debate.¹ He mentions the Aging Violinist hypothetical as an example of a sticky question of medical ethics.

Speaking of fuzzy things, my parents have a very, very fluffy cat. He’s pictured below, in a box. Carolyn and I have long suspected the cat is obese. My parent insist that he just looks that way because of the insane quantity of very long hair. There is something to that. He is so fluffy it’s hard to tell how big the actual cat is. He’s the embodiment of a playful yet blurry line.

The cat is in Illinois. I’m in Massachusetts drinking my coffee. And while any spot within a foot of the gravitational center of the cat may be a liminal zone between Cat and Not Cat, I am very confident that my coffee cup is firmly in the Not Cat category. In this case, it’s not a difficult question.

Similarly, while the line between justice and injustice can be difficult—particularly in carefully constructed hypotheticals—it’s not always hard. Should I feed somebody who is starving (AAINH²)? Yes. Should we care for somebody who is sick? Yes. If a kid got hit by a car and we can set the bone in ten minutes so his arm isn’t screwed up for the rest of his life, should we do it? Yes. These generally aren’t close questions. Nor is the question of whether a just society will ensure that the basic needs of its members are met.

If you don’t believe that a just society is a worthwhile goal, I disagree but understand that you’ve reached that conclusion. Similarly, I can understand if you believe that a just society is a worthwhile goal but don’t think it is incumbent on you to advance it. Finally, I can understand if you think the consequences of things like caring for the sick would lead to a less just society. (I think it’s a bit silly when people argue that, say, a 10% tax on artificial tans is a greater injustice than medical insecurity. But I respect bold stands.) But emphasizing that justice is a difficult concept and arguing that the philosophy is still out seems like a way of avoiding an inconvenient question.

Mr. Hinkle’s fourth point is here. I’ll leave it largely untouched—because I think he implicitly concedes an important point. An argument for federal preemption of state health consumer protection laws to advance accessibility and afforability both concedes the importance of accessibility and affordability and acknowledges a comfort with subrogating traditional state prerogatives to do so. So long as we’re doing that, we shouldn’t have any concerns about talking about the data on how that’s likely to work. We’re back in the same deal discussed above. If the goal is the best and most widely accessible healthcare system possible, we can put everything on the table. That includes Medicare, Medicaid, and every variety of deregulation. But once your onboard, you can’t just grab your party’s favorite goodie and bail.

Edit: Mr. Hinkle responded to this post here.

Notes on the Individual Mandate

Health Politics responded to my post on the individual mandate. It’s a great post—but I want to add a bit of background.

The Federal Poverty Level (FPL) for a one person family is $10,830 per year. You get to add $3,740 for every person after that. Unfortunately, that number is a fairly stupid number. It was calculated as a multiple of the cost of food for a year. Since then, food has gotten cheaper and housing has gotten more expensive. But it’s the number we have—and a number we can use until we agree on a better one.

If we’re doing poverty-connected math, we should generally divide all the annual numbers by twelve to look at monthly expenses. After all, bills tend to arrive monthly. That way we can compare the same sized numbers. So 133% of poverty for a single person is around $1,200.

Oh. One more thing. For those who are concerned about things that discincentive marriage, do you see how this creates a mess? There are a whole lot of people who aren’t getting married because one or both of them would lose health coverage if they became a family of two instead of two families of one.

I should also give everybody a fair warning that we’re about to do some math. DON’T PANIC!

Health Politics writes:

I recently asked Squashed why he was so optimistic about coverage expansion in the absence of a mandate. It’s a disagreement we’ve had before.

What he said made a lot of sense, as it often does, so I went and checked the most recent figures on the uninsured.

Here’s the thing. The uninsured is a demographically diverse group in a lot of ways. Many are poor, and the vast majority are at least near-poor. About 10 million have lost employer-sponsored insurance in the last three years due to the economic crisis, either because they moved down to part-time work and it isn’t offered, they got laid off, or insurance is offered but they can’t afford the employee share of the premium.

The ACA expands coverage by about 40 million over several years. It does this in part by expanding Medicaid. Medicaid right now covers poor individuals who fall into certain categories — children, pregnant women, some parents (depending on the state). Some states cover these categories for near-poor individuals above the poverty line. Some states have expanded the categories, giving more comprehensive coverage to parents. Childless adults are pretty SOL at the moment. The ACA effectively eliminates the category requirements and mandates that all Medicaid programs cover nearly all nonelderly individuals up to 138% FPL. That’s not bad. CBO estimates it’s about 16 million people by 2019.

However, the bulk of the coverage expansion isn’t through Medicaid. It’s through the Exchanges, and that’s where the mandate is critical. 9 in 10 uninsured right now are people under 400% FPL — near-poor, mostly in working families, ineligible for or unable to afford employer-sponsored plans. These are the people who are eligible for subsidies under the ACA, which lowers the cost of premiums for them on a sliding scale as a percentage of income. The mandate forces those with access to affordable care (premiums less than 8% of income) to buy it, or face yearly penalties. Between the subsidies and the mandate, CBO estimates we get 24 million newly-covered people through the Exchanges.

Without the mandate, many more of the working poor or ESI ineligible may choose not to buy insurance in the Exchanges. And with good reason — 8% of your income is still damn expensive, especially if you’re already poor by definition. But we need them to buy insurance. And more importantly, they need themselves to buy insurance. Nearly 30% of uninsured individuals spent down their entire savings on medical costs in 2010. A premium, even a subsidized one, can seem prohibitively expensive, but these individuals can’t afford not to be covered. It’s easy to think the idea of someone strategizing and deciding not to buy insurance is laughable, but if you instead think of a childless manual laborer at 250% FPL deciding not to buy insurance so he can save up for something else, it seems a bit more realistic.

I hope Squashed is right. I fear that he isn’t.

I think the single manual laborer at 250% of the FPL is a good example. He’s bringing in $2,256.25 per month. If his premiums are over $180.50, he has to pay the penalty of 2.5% of income (once it’s fully phased in in 2016) or $56.40 per month. Since that comes out to $676.87 per year, he’s awfully close to the $695 individual limit. So the mandate is as strong an incentive to him as it is to anybody. Of course, there is an exemption for financial hardship, so some struggling people may be able to get out of this cost. (But not this guy. Because if he doesn’t have to pay the penalty the whole hypothetical is pointless.) He’s also in the spot where the subsidy won’t cap his premium unless it goes above 8.4% of his income. Of course, he also gets a 72% premium subsidy, so unless this guy is beastly expensive to insure, he’ll have an option available for much less than $180.50. But since we’re designing this guy to be maximally screwed, let’s make him the sort of elderly smoker and cage fighter with a family history of spontaneous combustion that nobody wants to ensure. So his options are to pay a $180.50 per month premium or to pay a $56.40 per month penalty. So he can have health insurance with a net cost of $123.10 if you pull out the mandate. Without the mandate, it will have a cost of $180.50. I have three thoughts.

1. This case is custom-designed to be a worst-case scenario. I don’t know whether anybody would actually fall into this category. We’d be talking about somebody with an individual monthly premium of nearly $650. For pretty much anybody else, coverage would be either more affordable or the mandate would be less burdensome. If we’re going to feel sympathy for anybody, we should feel sympathy for him.
2. This is still a pretty good deal for the guy. He’s getting a very expensive insurance policy for $180.50 per month. If he’s able to do it, he probably should. After all, he’s in a high-cost bracket and there’s a decent chance he’ll need at least that much medical care.
3. If the guy isn’t going to buy insurance at $180.50 per month, he’s not likely to buy it at $123.10 per month. He’d probably just pay the penalty.
4. In the unlikely event that the presence of the mandate would influence him one way or the other, he’s the guy who it is most likely to influence. A less-rigged example is going to be even less likely to be influenced by the individual mandate. If he decides to stay uninsured until he gets sick, he’s just one guy. The system can easily absorb one free-rider who decides not to get coverage until he gets sick. It can easily absorb 100,000 free-riders. In fact, it already absorbs a lot more than that. Or rather, it already absorbs a huge number of uninsured folk who run up massive emergency care bills they’ll never be able to afford to pay.

Of course, there are two additions I should mention. First, this guy isn’t going to actually run the math. Most people don’t think like that. If he thinks about it at all, he’ll probably either decide that he wants health insurance or that he’d rather have an extra hundred bucks in his pocket at the end of the month. It’s unlikely that he’ll think as far ahead as tax day. If we can find a way to get this guy insured unless he opts out, we’re in a much better spot. He can still opt-out if he wants—but the sensible decision is also the default.

Second, this guy isn’t actually going to run the math. The penalty would be $56.40 per month. That’s not a whole lot compared to the cost of insurance—or the probable cost of not having insurance. But few people are even going to break that down into a monthly cost. They’ll probably just get to the spot where “the government is forcing us to buy insurance” and buy the darned insurance. The mandate will have little, if any, effect on rational actors. But rational actors are in short supply. People may catch on eventually—but at first the threat of the mandate and the implicit government disapproval might do more to spur action than the actual details. For once, misinformation could work to our national advantage.

In the context of all that, I don’t think stripping out the individual mandate would do much damage to the Affordable Care Act’s overall scheme. It certainly wouldn’t break it.

(Source: )

(Updated) Pros and Cons of the Healthcare Reform Bill

My previous list of pros and cons of healthcare reform has gotten a bit dated. I’ve updated it. Once again, I’ve attempted to keep it as simple and non-partisan as I can manage. Let me know if you think I have misrepresented anything or left out anything crucial.

Pros:

• A lot of people who don’t have health insurance will now have health insurance.
  • 95% coverage of legal U.S. residents under 65 will be covered. Compare this with 83% and dropping now. This is an increase of 32,000,000 people. (Those over 65 are already covered by Medicare either way.)
  • Insurers will not be able to stop paying for people who are sick, even if they lose their jobs.
  • People who cannot afford health insurance won’t have to pay as much money for it. If you are particularly poor, insurance will be very cheap or even free.
  • People who are already sick will be eligible for healthcare.
  • Medicaid availability will expand significantly
  • Children will be able to stay on their parents’ insurance plan until they are 26.
• Insurers must spend at least 80% of premiums on actual medical care.
• There will be a federally regulated insurance marketplace that should make health insurance more portable.
• The bill will reduce the deficit.
• Medicare fraud will be cracked down on.
• The prescription drug “donut hole” will be closed. (If you don’t know what that is, you will now never have to worry about it.)

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