America, “We’ve Lost a Pod”: What Romney and Obama Didn’t Say…

While polls immediately following Wednesday’s Presidential debate in Denver suggested that Mitt Romney came out of the contest way ahead of Barack Obama, the real winners were clearly America’s fact-checkers and policy wonks. Sure, Romney may see a bump in his poll numbers after his performance, but it’s the detail-oriented folks—some might say experts—that really get to delve into the content as they aim to correct and rationalize the multitude of competing arguments and “data”. By contrast, the evening’s losers were: Michelle Obama, who spent her 20^th wedding anniversary watching the debacle; everyone on Twitter disinterested by politics; and moderator, Jim Lehrer, who “lost a Pod” due to poor facilitation. That’s right. After a full 90-minutes of debate, Lehrer was unable to keep the candidates’ comments concise enough and we missed out on what might have been the most exciting part of the debate: an open back-and-forth between Obama and Romney.

Nevertheless, health care comprised a large portion of the debate with both candidates touching on everything from the origins of ObamaCare—a label for the Affordable Care Act that Romney apologized to Obama for using, but one which Obama said he actually welcomed—to insurance premiums and a discussion of the Medicare Independent Payment Advisory Board, or IPAB. Still, given all the misinformation put forth by both Romney and Obama during the second Pod, it appeared by the end that neither had actually read the Affordable Care Act and that both needed new accountants.

But perhaps we should give the candidates the benefit of the doubt. Maybe, just maybe several important and highly anticipated topics were not simply forgotten or purposefully overlooked by the candidates, but were rather innocent victims of the last, lost Pod. Had the last Pod not become a casualty of debate, we might have heard about the following:

The Supreme Court Decision on the Affordable Care Act. Given the numerous amicus briefs, intense public emotions and extensive media coverage surrounding the President’s signature bill, it was shocking that neither President Obama nor Romney touched on the case. With the next four years offering an enormous opportunity to dramatically alter the landscape of the Court, and the highly partisan spin taking place during the debate, it was surprising that we didn’t hear either candidate discuss the case. Obama could have pointed to the ruling to give more credibility to health reform, while Romney could have capitalized on the close 5-4 decision arguably rewritten by Chief Justice Roberts to make the claim that ObamaCare— particularly the unpopular individual mandate—isn’t the best way to implement reform. We could have heard that, but we didn’t.

Then there was the diabolical 47 percent. Seriously. This was a softball lobbed right down the middle for President Obama. It hung there in the air in front of him for a full 90 minutes, untouched, while he took swings at several other topics and missed. Obviously, this gaffe isn’t one that Romney would be expected to draw attention to himself, but why on earth didn’t Obama go after the low-hanging fruit? Was he worried that he’d come off as too attacking? Perhaps. But the President never brought it up, and he should have. You can bet that Romney was ready with a prepared response on the topic. Too bad we never got to see him use it.

Reproductive rights. This past year has seen monumental coverage of reproductive rights as the Affordable Care Act and state legislatures have gone head-to-head over funding. Planned Parenthood and Susan G. Komen Foundation have clashed over support, Plan B became a battleground for HHS and the FDA, and politicians have made one gaffe after another (think “putting an aspirin between your knees for birth control” and “legitimate rape” for starters). Yet, once again, President Obama didn’t bring up a topic where he enjoys a lot of popular support for his position on the issues. Romney and the GOP have been behind most of the chaos and it would have been very easy for Obama to associate Romney with Todd Akin and the lack of women’s rights many women associate with the GOP. This was certainly a missed opportunity for Obama as women will undoubtedly be the deciders of this election.

A humanizing glimpse of Mitt Romney. It’s well known that Romney’s wife, Ann, has Multiple Sclerosis.It’s also been pointed out repeatedly that the Romney campaign has shied away from discussing the disease and its impact on their family. However, in last night’s debate, Governor Romney spent a lot of time and effort to come across as compassionate and in touch with the average American. In fact, he essentially led off his comments talking about health care and the economy, telling personal narratives about the impact of our broken system and the Great Recession on Americans. He focused on others, but he never focused on himself. Although I’m sure many would advise him to stay away from any topics that associate him with money, disease and his personal experience would have endeared him to so many. In a recent interview Ann said her husband’s response to the disease had been, “He said to me, ‘I don’t care how sick you are. I don’t care if you’re in a wheelchair. I don’t care if I never eat another dinner in my life. I can eat cereal and toast and be just fine. As long as we’re together, everything will be OK.’” That paints the picture of a man who actually cares about others, which is an image Romney desperately needs to convey to undecided voters. Perhaps he was just waiting to be accused of his comments about the 47% before unleashing this most personal secret weapon. Alas, America, we lost a pod, and the world may never know.

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How the Supreme Court’s Decision Saves Money, Leaves People Uninsured

At the end of July, the Congressional Budget Office (CBO) released a report that revised estimates of insurance coverage under the Affordable Care Act to reflect the Supreme Court’s decision, particularly letting states opt-out of the Medicaid expansion without penalty. Reading the document (pdf here) really provides a wonderful example of the multiple moving parts affected by a single policy change, but since most of you probably won’t do that, here’s a very brief summary.

The Supreme Court’s ruling has removed the teeth from the ACA’s Medicaid expansion efforts, allowing states to opt-out without penalty. At last count, seven states have decided not to participate. Result number one? Uninsured individuals with incomes below 138 percent of the federal poverty level (133% plus the 5% income disregard) will not gain coverage in these states as once expected. That effect will be more significant in larger states with a significant proportion of uninsured residents (e.g., Texas and Florida) than in smaller states with a lower uninsurance rate (e.g., Iowa and Nebraska). Overall, CBO estimates that 6 million people who would have qualified for Medicaid won’t get the chance. If more states refuse to participate, that number could rise substantially. That saves the federal government about $6,000 per person at the expense of each person’s health.

Things don’t stop there, though. While two-thirds of the uninsured (4 million) will have incomes too low to be eligible for federal subsidies, the other one-third (2 million) will qualify for federal assistance to help them purchase private insurance coverage. The CBO conservatively estimates that they all will, while acknowledging that many won’t. If that sounds confusing, it’s really not. They’re just saying, we don’t expect the number to be higher than 2 million, we’re not sure how much lower it will actually be than that, but to be cautious we’re assuming everyone eligible for a subsidy gets insurance through the exchanges.

Putting it all together, the federal government is expected to save $289 billion because 6 million fewer individuals will be covered by Medicaid, while spending an additional $210 billion to provide subsidies to the 2-3 million of those individuals who are expected to buy private coverage through the exchanges. Toss in another $5 billion in savings for various odds and ends, and the CBO expects the net result of the Supreme Court’s decision to be something in the neighborhood of $84 billion less expensive over the next decade, with an additional 3 million Americans remaining uninsured. And that’s how the Supreme Court’s decision saves money, but leaves more people uninsured.

 

Understanding John Roberts

Chief Justice John Roberts was the deciding vote in the Supreme Court’s recent ruling on the Affordable Care Act. In fact, he authored the majority opinion outlining that the law was not a valid use of the Commerce Clause, but was a valid use of Congress’ ability to tax and spend. While I am not a lawyer, I did read the opinion, and I think it was a pretty cogent argument. It hinged on how one chose to define the market, but I agree that if the broad definition was used, things like food and shelter are universal markets in the same way that health care is, and that does present a somewhat slippery slope. The power to tax makes much more sense.

On the one hand, then, I think that Roberts simply allowed his opinion to be shaped by a sound interpretation of the law, legal precedent, and his understanding of the Constittuion. Another part of me, though, doubts this. While it’s sad to admit, ever since the Supreme Court ended the Florida recount early and basically appointed George W. Bush as the King in Chief, I’ve been dubious. All the more so when the Roberts court granted corporations the rights of persons, free to give unlimited campaign contributions. I don’t think I’m alone in this view. After all, most of the pre-ruling chatter had Justice Kennedy as the deciding swing vote. For the record, he voted to strike down the individual mandate. No one seemed to consider for a moment that Roberts would align with the more liberal judges to uphold the law. So why did he?

As I said, he may simply be a great chief justice, unswayed by politics and guided solely by the law. On the other hand, his motives may be less pure. Maybe he just wanted to cement his place in history. After all, this has been described as a landmark case and the case of the century, so it wouldn’t be surprising that he would want to be the deciding vote and the author of the majority opinion. Of course, he could have gone either way, and both of those things still would have happened, which suggests that he truly does care about the outcome.

While the outcome certainly upholds a liberal law on the surface, I think that there’s more to it than that. For instance, the fact that the majority placed limits on the interpretation of the Commerce Clause is actually a conservative ruling. So Roberts is being true to form there. The limitations on penalties to the states regarding the Medicaid expansion is also a limit to federal power, which is another victory for conservatives. Upholding the law under Congress’ ability to tax and spend may actually have an ulterior motive as well. For starters, had the court struck down the law, the right would have lost one of its key rallying cries in the months leading up to the November election. Instead, the decision has incited further revolt from the far right and the ranks of the Tea Party. People who, for whatever reason, are adamantly opposed to the Affordable Care Act, now see electing Mitt Romney and other conservatives in the House and Senate as the only remaining path to repealing the law. This solidifes the base and the fringe and likely increases voter turnout on the right. At the same time, the left may relax a little in the wake of the ruling, causing support for Obama to slip at the polls.

This scenario is compounded by the fact that the law was upheld under the notion that the penalty for remaining uninsured is to be considered a tax. Conservatives (and, well, most of us) hate taxes, so giving them ammunition in this regard might actually have been Roberts’ way of giving Republicans some good talking point material as the election heats up. It’s also important to note that Roberts writes several times about the role of the court versus the role of Congress, in which he makes clear that he doesn’t necessarily think that the Affordable Care Act is good policy. Instead, he says, that is for the people to decide by voting for their representatives and voting out those who pass policies that the public doesn’t support. That seems to be Roberts’ way of saying “Mitt 2012.” But, like I said at the outset, I’m not a lawyer.

 

Medicaid and Red State Governors: A Love/Hate Relationship

In addition to the much discussed individual mandate, a central element of the Affordable Care Act designed to increase insurance coverage is the expansion of the Medicaid program to cover anyone with an income up to 138% of the federal poverty level. To put that into context for those who might not know, Medicaid eligibility currently has two requirements: income eligibility and categorical eligibility. Income eligibility means that your income has to fall below a certain level, which varies by state within certain federal guidelines. Categorical eligibility, which also varies somewhat by state, means that you have to be a certain “type” of person. For example, pregnant women and children are typically eligible for Medicaid, whereas very few childless adults are eligible. The Affordable Care Act changes that, making anyone who is low-income (again, 138% of poverty, or $30,843 a year for a family of four) eligible regardless of what other “category” they might belong to.

The odd thing about the ACA, though, is that it will actually be more generous to conservative states that have not previously established more generous Medicaid limits. Here’s why: Starting in 2014, the federal government will pay 100% of the difference between what states are currently covering and the new 133% of poverty threshold. This amount is gradually reduced over time, reaching 90% by 2020, where it is slated to remain indefinitely. While Medicaid is currently jointly financed by the federal and state governments, this new arrangement has the feds picking up the bulk of the costs of the new coverage. The thing is, some states, like Massachusetts, are already providing coverage of parents up to 133% of poverty. These states that are already quite generous will not receive much in the way of new federal money. By contrast, other states, like Texas, only provide coverage for parents up to 26% of poverty (that’s less than $3,000 a year). When they opt-in to the Medicaid expansion, the federal government will pay the full difference in cost of expanding eligibility up to 138% of poverty. That’s a lot of federal money to states like Texas. Generally, the more conservative states are the ones with the most uninsured persons and the strictest Medicaid eligibility requirements. Therefore, they are also the ones who will gain the most under the ACA.

Of course, this depends on their willingness to participate in the Medicaid expansion, which is optional. The ACA did include a provision that said that if states didn’t participate in the Medicaid expansion, the federal government could also withdraw their funding for the existing Medicaid program. The Supreme Court, however, said that this was coercive and unconstitutional. The result is that states are free to participate in the program or not, without fear of repercussions. Politically, republican governors are adamant about resisting implementation of the Affordable Care Act. Louisiana’s Bobby Jindal has already proclaimed that his state, whose health statistics place it squarely in the bottom of the country (50th in 2008, rising to 49th by 2011), will not be creating an insurance exchange and will not be participating in the Medicaid expansion. It’s unfortunate, because the people in these states are the ones who desperately need help the most.

Of course, the politically-motivated decision not to play ball will only hurt these states further, as they walk away from literally billions of dollars in federal assistance that would boost their economies and improve the health of their residents. There will also be pressure from organized health care interests to participate, because that money will reduce their uncompensated care costs. So, I’m not sure if the rhetoric we’re hearing today will hold true in the end. If it does, though, it will be a great example of bad politics dominating good policy, and the people it will hurt the most are the ones who are already wounded.

Update: As Nicole points out in the comments, the actual threshold is even higher than I originally stated. Medicaid eligibility goes up to 138% of poverty, not 133% as I had written. I have updated the text to indicate this.

 

What the Supreme Court’s ACA Ruling Means for You

As promised, I digested the Supreme Court’s opinions on the Affordable Care Act over the weekend. I also read the opinions of several health policy and health law scholars, watched cable news, and a bit of Jon Stewart and the Colbert Report. From all of this, the court’s ruling is quite clear (although CNN and Fox News both struggled with that initially): The Affordable Care Act is being almost entirely upheld. The one thing that didn’t get the okay from the Supremes was a provision related to the Medicaid expansion. More on that later this week. Today, I want to give you a summary of what the court’s ruling means for you as it relates to the individual mandate. After all, this has been the lightning rod element of the law, and the one that, in my interactions with others, is the least understood. My hope is that you’ll share this with everyone you know–especially if they seem to have their facts wrong.

As I (and many others) have said before, the individual elements of the Affordable Care Act are overwhelmingly popular. People like the idea that young adults can remain on their parents’ coverage until age 26. They like the idea that no one can be denied coverage because of a pre-existing condition. They like the reduction in their Medicare Part D costs for prescription drugs. The proof that they like these things is that even Mitt Romney–who is distancing himself from “Obamacare” despite having signed its precursor into law in Massachusetts–has simultaneously gone on record in support of these provisions. You can see the video here.

The catch is the individual mandate. That’s the one part where people’s feelings seem to turn sharply negative. These people will say that this is “socialized medicine” or a “government takeover” although they cannot even begin to accurately describe to you the differences between the Canadian, German and UK health care systems. What is happening, I believe, is that people are scared of the unknown, and are hearing that they are going to be required to spend money to buy something, at a time when our economy is struggling and people are hard pressed to pay the bills they already have. If one looks at this problem from the individual household level, rather than at a system level, it seems a legitimate–albeit still misguided–concern.

I have had people tell me that they had to buy a government insurance plan to avoid being taxed. In fact, quite the opposite is true. This plan was designed to encourage individuals to obtain insurance on the private market. It is, in that sense, the antithesis of socialized medicine. If you doubt this point, you should realize that this is why there was even a court case in the first place. As both sides made clear during oral arguments, if the government wanted to create a single-payer “Medicare for all” insurance program and require you to pay taxes to support it, there was no question that it would be lawful under the Constitution. At odds was the notion of whether the government can incentivize you to purchase a private product. The ruling was that, yes, they can. In fact, they already incentivize behavior to avoid certain purchases. For example, sin taxes on cigarettes and alcohol exist not only to raise revenue, but to discourage the use of these products which are harmful to individuals and the public’s health. However, people are still free to buy these products. Similarly, people are free to NOT buy health insurance. However, the government is encouraging them to do so by implementing a tax for individuals who do not purchase coverage. People don’t like taxes, generally, so it’s worth looking at that in more detail as well.

How much is the tax and who will have to pay it? The best, most concise overview of those details can be found here. Some of the basics are that the penalty will be phased-in beginning in 2014, when individuals who go without coverage will pay a nominal penalty of $95. I’m not sure if you’ve ever purchased insurance, but even in the most generous employer-sponsored plans, you’re likely to spend more than that in 2 months. So this is not a stiff penalty. That said, it does increase to $325 in 2015 and $695 in 2016. This is still cheaper than the cost of insurance in most cases. For families, the minimum penalty is three times the per person minimum, regardless of family size. So, that’s $2,085 per family in 2016. Still, much cheaper than a family insurance policy, which routinely costs more than $15,000 per year, of which the employee pays more than $4,000 according to the Kaiser Family Foundation.

The above amounts are minimums. For those who earn higher incomes, the amount of the tax they pay will be higher–up to 2.5% of their total annual income–although the amount of the tax can never exceed the average national cost of the lowest level of coverage (i.e., “bronze” plans). That means, that it will always be as much, or more expensive to buy insurance than to pay the tax, but with employers picking up the tab in most cases, the tax will be more expensive to individuals than their monthly premiums. Still, paying the tax doesn’t provide you with any tangible benefit in the way that having insurance coverage does, so it makes sense to get the coverage. I do think that if the penalty exceeded the total cost to buy insurance that would be coercive. Fortunately, that’s not the case.

Finally, there are several groups that are exempt from having to pay the tax. These include low-income individuals who do not file tax returns, those who are granted a hardship waiver by the Department of Health and Human Services, those without affordable coverage options (defined as coverage exceeding 8% of household income), and those with certain religious objections.

As a practical exercise, I think it’s worth considering several different groups of people and how they are likely to be affected by the individual mandate. First, there are those of us who already have employer-sponsored insurance. That’s about two-thirds of the U.S. population. For us, very little changes except that our employers will now have an incentive not to drop coverage, because doing so will subject them to a tax of their own. We have coverage, and therefore will not be subject to the penalty. There has been a focus on small employers who say the law will cause them not to hire additional staff, but I think those claims are mostly overblown. With an accountant and a lawyer, it is easy enough to get around the provisions that concern them by simply splitting their single business into two smaller businesses on paper.

For those who are enrolled in Medicaid or Medicare, nothing changes–except that drug coverage and preventive care in Medicare has become more affordable. Moreover, the Medicaid program will be expanding, which leads to the next group, the low-income uninsured. These individuals who are below 133% of the poverty level–many of whom are unlikely to be subject to the penalty anyway–will be able to obtain Medicaid coverage at no cost to them. So to recap, those with insurance through their employers, those who are elderly and/or disabled, and the low-income will keep the coverage they have or be able to newly obtain very affordable coverage.

That leaves those who are not offered insurance through their job and those who are otherwise uninsured. If these individuals aren’t quite poor enough to qualify for Medicaid, but aren’t quite wealthy enough to pay for all of their medical care with cash out of their own pocket, they will have the opportunity to purchase health insurance through the exhanges, which I like to think of as a Priceline.com for health insurance. Private insurance plans will compete with each other in a format that is more transparent and this is expected to rein in costs somewhat. These individuals will have their insurance purchase subsidized through tax credits. So, rather than the old way in which a person who bought individual coverage had to fork out the whole premium with after-tax dollars, they will only be responsible for paying a portion of the premium. It’s kind of like the government is playing the role of the employer in subsidizing the bulk of the cost for coverage for those whose employers can’t or won’t play that role themselves. For this group, it will become an unquestionably better deal for them to buy subsidized coverage than to pay the tax and get nothing in return. Right now, these are the people who are the most likely to decide that they can’t afford and don’t need insurance. They’re also the people who often turn out to be wrong and turn up at the emergency room seeking “free” care that the rest of us subsidize. So, it makes sense that they are the ones most averse to the penalty and most averse to the mandate.

Finally, there is the group of wealthy individuals who pay for their own care out of their pocket. Think Mitt Romney, who refused to enroll in Medicare on his 65th birthday. Why bother when you can just buy the hospital where you’ll be having your surgery if you happen to need it? I have little sympathy for this group, because whether they buy the insurance or just pay the tax, it’s not going to cost them much. Remember, there is a cap on the penalty not to exceed the national average for bronze plans. So Mitt pays an extra $15,000 in taxes each year. I don’t think he’ll go hungry.

So how many people does the individual mandate and the accompanying penalty really hang out to dry? Very few, I would argue. The low-income are exempt from the penalty and will be covered by Medicaid anyway. The very wealthy have it covered either way. The elderly and disabled have Medicare coverage and won’t have to worry about the penalty. The majority of us in the middle, who have insurance through our work won’t have to pay a penalty, and those of us who don’t have insurance through our work will find that, thanks to generous government subsidies, we will be able to buy insurance through the exchanges that is rather more affordable than it has been in the past.

Of course, if we don’t want to take advantage of that opportunity, it only seems fair that we should be penalized for our irresponsible decision-making. It just isn’t right for people to make a decision not to buy insurance knowing that there will be a safety net to catch them if they happen to need it. It’s called personal responsibility, and if that sounds like a Republican concept, it’s because it is. After all, they’re the ones who came up with the individual mandate in the first place. They just stopped liking it when the Democrats agreed with them. So you see, partisan politics have played to Americans’ emotions and have construed the individual mandate as something that it is not. It is not a burden on those who can least afford it to have to purchase yet one more thing. Rather, it is an incentive to motivate those who can afford it to stop acting irresponsibly.

 

The Supreme Court Ruling Is Finally Here

After many months of speculating on the outcome of the Supreme Court’s ruling on the Affordable Care Act, the decision was finally announced today. The ruling essentially upholds the entire Affordable Care Act as constitutional. While this is certainly the outcome that I had been hoping for, I am also convinced that it is the correct one. I haven’t read the dissenting opinions yet, but I’m anxious to see how they justified that. I, for one, am glad to have this piece of the puzzle put in place, because it helps us to move forward with the goal of improving our health care system. Call it the ACA or call it “Obamacare” it is the constitutional law of the land, and there is no appealing that, so perhaps it’s time to get used to it, and figure out how to make it work for you.

That said, while Supreme Court majority and dissenting opinions are not terribly complex, they do have to be read rather carefully to be well understood. Perhaps that explains why CNN made me nauseous with its incorrect headline proclaiming “Breaking News: Supreme Court Strikes Down Individual Mandate” for about 10 minutes before it got the story straight. I just printed out the opinions, all 193 pages of them. I’m not surprised that someone skimming got it wrong in their attempt to be first, but they should have sensed something when they saw Chief Justice Roberts aligning with Justice Ginsburg.

Rather than exercise a similar rush to judgment, I’m planning to spend the weekend reading through everything and formulating my thoughts, which I will post here on Monday. For now, I’m going to go bask in the glow that comes from a conservatively appointed chief justice putting the law before partisan politics. This has renewed my faith in America a little bit.

 

The Supreme Court and the Affordable Care Act – Day 1

What has been billed as the court case of of the century is almost so ridiculous that I am tempted to begin this entry with “The Supreme Court, the Affordable Care Act, and the Obama Administration walk into a bar association….” but the sad fact of the matter is, that no matter how many brilliant legal minds have weighed in on this issue, it ultimately comes down to the five who make up the majority opinion. So, I’m going to give you my take on the oral arguments in a series of posts. I’ve waited, because I wanted to have time to reflect on what I read in the transcripts from the Court. A decision is still months away, so I figured I had some time to gather my thoughts.

The first day of oral arguments was concerned with whether or not the state of Florida had legal standing to bring this case before the Court. That hinged on whether the penalty associated with the individual mandate was a “penalty” or a “tax.” You see, if it is a tax, then the law says that no one can go to court over it yet, because no one has yet had to pay the tax. This stems from laws designed to ensure that the federal government is able to collect tax revenues without having to prove that payment is owed in court. Instead, people are required to pay their taxes, and may seek subsequent legal action to have their taxes returned to them. You have to admit, it makes sense. So, if the penalty in the ACA for those who don’t obtain insurance under the individual mandate is a “tax” then the whole case gets tossed out. If it’s a “penalty” it goes forward.

The funny thing is, neither the Obama Administration nor the state of Florida viewed the penalty as a tax, so the Court had to assign someone–Robert A. Long–to argue that the penalty was actually a tax. Another funny thing is that no one is arguing that the penalty is unconstitutional. Opponents are only upset over the individual mandate to buy insurance. They don’t think that the federal government can compel people to do that, but if the Court says they can, then the penalty is seen as coming along for the ride.

For me, this was the most telling exchange between several Justices and the counsel for the state of Florida, Gregory Katsas:

KATSAS: I’m happy to focus on currently eligible people who haven’t enrolled in Medicaid. That particular class is the one that gives rise to, simply in Florida alone, a pocketbook injury on the order of $500 to $600 million per year.

JUSTICE KAGAN: But that does seem odd, to suggest that the State is being injured because people who could show up tomorrow with or without this law will–will show up in greater numbers. I mean, presumably the State wants to cover people whom it has declared eligible for this benefit.

KATSAS: They–they could, but they don’t.

Translation: The state of Florida (and others like it) are concerned that people who are eligible for Medicaid, but currently unenrolled, might actually show up and ask for their benefits because of the mandate. They have estimated this to cost hundreds of millions of dollars–a “pocketbook injury”–that they wish to avoid in favor of the “no-cost” alternative of leaving these folks uninsured.

Now, this makes perfectly good sense from the State’s point of view, because they have to balance their budget, and adding substantially to the Medicaid rolls is a daunting prospect. In fact, it might push them to do things like raise taxes or cut other programs. It would be far better to let this play out “off the books” and pass the costs on to the insured in hidden ways that they can’t perceive nearly as readily as they could a tax increase. And that is precisely what they’ve done for decades.

Here’s hoping things get better on day 2…..

 

 

Will We Get to Watch the Supremes on TV?

The Supreme Court is a fancy place. They do things with a strong sense of tradition and that most definitely applies to how they hand down their opinions and what information is made available to the public. It is relatively recently that they began releasing time-delayed audio recordings of oral arguments. Television cameras remain a no-no. I suppose the idea is that they want to be able to hear cases and deliberate without feeling scrutinized. Introducing the real-time effect of television could produce some sort of Hawthorne Effect. If the Justices know that America’s watching, perhaps they’re worried that they’ll rule differently than they otherwise would.

I have mixed feelings about this. On the one hand, I believe in preserving traditional institutions, and I don’t think that anything and everything needs to be televised. On the other hand, the outcome of this case has the potential to affect many Americans who are unlikely to ever read a majority opinion from the Court, but would certainly catch snippets on the tube.

Perhaps that’s why so many groups are asking the Court to allow television cameras in the courtroom for the first time. There’s the Association of Health Care Journalists, C-SPAN, the Radio Television Digital News Association, the New York Times, and most interestingly, Iowa Republican Sen. Chuck Grassley. My hunch is that their requests will be denied, but I hope I’m wrong, because I’d watch this case around the clock like it was the Casey Anthony trial.

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Supremes to Hear Case on Affordable Care Act

The legal challenges to the Affordable Care Act commenced just as soon as the bill became law in 2010. There have already been a number of lower courts that have ruled on the constitutionality of the law’s individual mandate, and I have written fairly extensively about these cases here, here, here, here, here, here, here, and here. Those links are in chronological order, and I’d suggest reading them if you need to get up to speed quickly on the issue.

More recently, the Court of Appeals for the D.C. Circuit ruled in favor of the individual mandate, and the decision is notable in that a conservative judge and Reagan appointee broke with the precedent of conservative judges ruling against the law. In fact, he was the second judge to do so. Jonathan Cohn has more of the details over at The New Republic as does Timothy Jost at the Health Affairs blog.

This decision was the prelude to the Supreme Court’s decision to hear the Affordable Care Act case early next year. In fact, they’re not only going to hear it, they’ve set aside a record amount of time for oral arguments–5 1/2 hours to be exact. The New York Times’ Adam Liptak has more.

Meanwhile, voters in Ohio passed a meaningless referendum rejecting the individual mandate. Why is it meaningless? Because if the Supreme Court finds the individual mandate unconstitutional, the Ohio amendment won’t be necessary, and if the Court upholds the mandate, federal law trumps state law, rendering the amendment useless. Which will it be? We’ll have our answer just in time for the election in 2012.

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What If The Supreme Court Strikes Down the Individual Mandate?

Any ruling by the Supreme Court on the constitutionality of the Affordable Care Act’s controversial individual mandate isn’t likely for at least another several months, but it’s worth thinking about what might happen after the case is decided. The first scenario is easy: If the Court upholds the mandate, the ACA goes forward as planned to the continued objections of many conservative Americans and politicians. The second scenario is less clear: If the Court finds the mandate unconstitutional, do they find it severable from the rest of the law? If not, they’ll strike the whole ACA down. This seems like the least likely outcome. If, on the other hand, they do invoke severability, the ball is back in the White House’s court. The decision at that point would be whether or not health reform can be successful without the individual mandate.

The concern here is the death spiral first described by Nobel Prize-winning economist Joseph Stiglitz. In essence, if we don’t require everyone to buy insurance, then insurance will be disproportionately purchased by the sick, making it more expensive and leading many to discontinue coverage in a continuous cycle that drives the price higher and higher until no one can afford insurance any more and the system collapses. By contrast, getting everyone into the pool is seen as the only way to keep costs down and maintain the insurance system. So the question is: What happens if the Supreme Court strikes down the individual mandate? Does the Obama adminsitration wash its hands of health reform, proclaiming that it can’t be done without the individual mandate because costs will rise too rapidly and the insurance system will collapse, or does it forge onward and see what happens?

Option one is the safe bet if you believe that a bad status quo is better than a potentially worse change, but it’s absolutely terrible politics. It would be admitting defeat on one of the defining aspects of the Obama presidency. Moreover, it would have tremendous negative implications for the future of health reform initiatives generally. Option two looks good politically for all of the opposite reasons, but it could destroy the health insurance market and hurt Americans in the process. That’s bad leadership. While such action might lead to the type of catastrophic collapse necessary to precipitate true change, it would be incredibly painful.

New evidence suggests, however, that the pain might not be as great as many–myself included–fear. John Sheils and Randall Haught of the Lewin Group ran a simulation model to see what might happen to coverage and costs if reform went forward as planned with the exception of the individual mandate. Remember, the concern is that fewer people would be covered and health insurance premiums would increase. What they found is that, yes, compared to estimates under health reform with an individual mandate, health reform without the individual mandate would mean fewer people would be covered and insurance premiums would increase, but things would still be better than if we did nothing at all.

How much better? Well, without reform, they estimate that 51.6 million Americans would be uninsured. With reform, that number drops to 20.7 million. With reform, but without the mandate, their estimate stands at 28.5 million. Not too shabby. As for premiums, the authors estimate that eliminating the individual mandate will mean a 12.6% increase. Not a welcome increase, but not necessarily the kiss of the death spiral.
That said, other estimates by the Congressional Budget Office and MIT health economist Jonathan Gruber have not been as optimistic. The CBO expects that axing the individual mandate will mean 16 million fewer insured persons and a premium increase between 15 and 20%. Gruber puts the figures at 24 million fewer insured and premium increases on the order of 27%. Because of the sheer volume of people involved and the uncertainty of their decision making processes, it’s really hard to know who’s calculations are the most reasonable.

What you can count on is this: If the Court finds the individual mandate unconstitutional, the White House will have more actuaries and health economists crunching numbers than you can imagine. These latest results from Lewin suggest that even if the Court says no to the individual mandate, it shouldn’t necessarily mean the Obama adminsitration should give up on health reform.

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