THE HEALTH-CARE DEBACLE WAS A FAILURE OF CONSERVATISM
by John Cassidy - The New Yorker - March 24, 2017
Let the recriminations begin! Actually, the health-care-failure finger-pointing got under way well before Friday, when Donald Trump and Paul Ryan cancelled a House vote on the American Health Care Act. A day earlier, aides to the President let it be known that he had come to regret going along with Ryan’s idea of making health care his first legislative priority.
In the coming days and weeks, there will be more of this blame shifting, and, in truth, there is plenty of blame to go around. Ryan failed to unify the House Republican caucus. Trump’s staff allowed him to endorse a bill that made a mockery of his campaign pledge to provide health insurance for everybody. And Trump himself blundered into a political fiasco, apparently believing he could win over recalcitrant Republican members of Congress simply by popping over to Capitol Hill.
But this is just politics. The larger lesson here is that conservatism failed and social democracy won. After seven years of fulminating against the Affordable Care Act and promising to replace it with a more free-market-oriented alternative, the House Republicans—who are in the vanguard of the modern conservative movement—failed to come up with a workable and politically viable proposal. Obamacare survived, and that shouldn’t be so surprising. When it comes to health-care policy, there is no workable or politically viable conservative alternative.
Of course, that isn’t how conservative lawmakers, pundits, and policy wonks will spin this. They will argue that Trump and Ryan betrayed free-market principles: if only they had proposed the outright repeal of Obamacare, and put forward a bill that genuinely liberated the health-care industry from federal intervention, everything would have worked out well. That will be the story—and it is a fairy tale.
The fact is that the health-care industry, which makes up about a sixth of the American economy, isn’t like the market for apples or iPhones. For a number of reasons (which economists understand pretty well), it is riven with problems. Serious illnesses can be enormously costly to treat; people don’t know when they will get ill; the buyers of health insurance know more about their health than the sellers; and insurers have a strong incentive to avoid providing their product to the sick people who need it the most.
Since the days of Otto von Bismarck, most developed countries have dealt with these problems by setting up a system in which the state provides medical insurance directly, or else mandates and subsidizes the purchase of private insurance, setting strict rules for what sorts of policies can be sold. Obamacare amounts to a hybrid model. It supplements employer-provided insurance, the traditional American way of obtaining health care, with a heavily regulated (and subsidized) individual insurance market and an expanded Medicaid system.
It is far from perfect. But, in combining mandates with subsidies, regulation, and access to a state-administered system for the poverty-stricken and low-paid, it is intellectually coherent. (Many of the problems it has encountered arose because the mandate to purchase insurance hasn’t been effectively enforced, and not enough young and healthy individuals have signed up.) Since it leaves in place the basic structure of private insurance and private provision, Obamacare is also conservative. As is well known, parts of it resemble a proposal that the Heritage Foundation put forward in 1992.
Today’s conservatives act as if they can simply wish away some of the problems that Obamacare was created to deal with. The original version of the American Health Care Act left in place many of the A.C.A.’s regulations but cut back the subsidies and gutted its Medicaid expansion. Had it been enacted, it would have led to higher premiums, at least in the short term, and a huge drop in coverage—twenty-four million people over ten years, according to the Congressional Budget Office. As these implications of the G.O.P. proposal became known to the public, the plan’s approval rating fell and fell. In the end, according to a Quinnipiac poll, only nineteen per cent of Americans supported it.
The Freedom Caucus, a group of right-wing conservatives in the House, wanted a bill that stripped away more regulations, which they claimed would enable insurers to offer cheaper and more flexible plans. On the eve of the vote, Ryan agreed to change a clause defining the “essential health benefits” that insurers are required to provide if they sell policies on the Obamacare exchanges—benefits including maternity and mental-health services. But this change would have created two insurmountable problems.
Once insurers were able to craft individual policies without adhering to any list of required benefits, buyers would self-select. Young, healthy people would choose cheap, crappy policies, and older, sicker people would choose more comprehensive policies. Insurers, knowing this, would raise the prices of the good policies. “Worthless policies would get really cheap, but comprehensive policies would get astronomically expensive,” Mother Jones’s Kevin Drum pointed out. “Virtually no one would be able to afford them.”
The other problem was political. Americans need maternity coverage, mental-health benefits, prescription drugs, pediatric services, lab tests, and the other things included on the list of essential health benefits. When moderate Republicans in places like New York, New Jersey, and Pennsylvania heard that these services might be eliminated under the amended legislation, they abandoned it in significant numbers. It was their desertion that ultimately killed the bill.
O.K., you might say: The American Health Care Act was a disaster, but what about all the other Republican health-care proposals that are out there? Maybe one of themprovides a workable alternative to Obamacare. Let’s briefly look at a few of them.
When he was in Congress, Tom Price, the Secretary of Health and Human Services, who supported the A.H.C.A., put forward a bill of his own. But it was basically a less generous version of the bill that just died: in gutting Medicaid and strictly limiting federal funding for high-risk pools to insure sick people, it would surely lead to a big rise in the number of uninsured. Something similar applies to a bill put forward by Senator Orrin Hatch, who chairs the Senate Finance Committee.
There are a few other plans kicking around conservative think tanks, some of which, like Obamacare, tie the level of subsidies to income. But all of these plans have other serious problems. In eschewing purchasing mandates, they run into the issue of younger people being unlikely to sign up for coverage. In giving insurers more freedom to offer different plans and different pricing structures, they encourage self-selection and undermine the risk-pooling that is at the heart of successful insurance schemes. And in cutting federal support for Medicaid, they dismantle the element of Obamacare that has been the most successful at insuring more people at a reasonable cost.
Another Republican plan that may now attract some attention is the proposal put forward by Senators Bill Cassidy, of Louisiana, and Susan Collins, of Maine. But, far from dismantling Obamacare, the Cassidy-Collins plan would allow big, populous states like New York and California to keep the current system in place, including the Medicaid expansion and the surtaxes on high earners. Red states that don’t like Obamacare would be able to take federal money and design their own systems to provide basic, catastrophic coverage plans to everybody.
Because it retains so much of Obamacare, this proposal seems unlikely to receive majority support inside the G.O.P. In the coming weeks, Republicans in the Senate and the House will be trying anew to come up with an alternative that they can unite around, portray as a big break from the A.C.A., and sell to the American public. The lesson of the past few weeks is that they are likely to fail. As a novice to the subject noted recently, health care is complicated. Too complicated for ad-hoc policymaking and simplistic conservative nostrums.
Bernie Sanders, Top Progressives Announce New ‘Medicare For All’ Push
by Daniel Marans - The Huffington Post - March 25, 2017
Lowering the Medicare age could be a starting point.
These lawmakers and grassroots leaders have long believed that the problems plaguing the Affordable Care Act, also known as Obamacare, are rooted in the original health care law’s attempt to accommodate, rather than gradually replace, the private, for-profit health insurance system.
Now that efforts to eliminate the law wholesale are effectively dead, they are again arguing that the best way to improve the country’s health care system is to confront the power of corporate health care providers more directly.
“We have got to have the guts to take on the insurance companies and the drug companies and move forward toward a ‘Medicare for all,’ single-payer program,” Sen. Bernie Sanders (I-Vt.) said on MSNBC’s “All In with Chris Hayes” on Friday night. “And I’ll be introducing legislation shortly to do that.”
“Don’t just be satisfied with defeating Trumpcare ― set your sights on creating real Medicare for all!” he told a cheering crowd of hundreds of activists. Ellison is a co-sponsor of a “Medicare for all” bill in the House.
Representatives of several major progressive organizations ― the Working Families Party, the Progressive Campaign Change Committee, Credo, Social Security Works and the National Nurses United ― all echoed this push in conversations with The Huffington Post on Friday and Saturday.
“The problem is the insurance companies, Big Pharma ― they’re gonna come back and use the chaos to their advantage,” predicted Social Security Works executive director Alex Lawson. “If Democrats go with a half-a-loaf policy, Republicans are going to blame them for the failures of Big Pharma. They have to immediately pivot to expanding Medicare.”
During the debate over repeal, Rep. Ro Khanna (D-Calif.) used some of his time during a Budget Committee hearing to note that if Trump wanted to follow through on his campaign promise to repeal Obamacare and replace it with something “terrific,” he could fall back on an idea Trump himself endorsed in a 2000 book: single-payer.
On Monday, Khanna said that now is the moment to drive the single-payer message home. “To resist Trump, we need to play offense and not just defense,” he told HuffPost.
“As I pointed out in the Budget Committee hearing on Trumpcare a few weeks ago, Donald Trump supported a single payer system modeled after Canada in 2000 in his book [The America We Deserve],” Khanna went on. “He knows that is the only system that would fulfill his promise of more benefits, more coverage, and less costs. We should have every Democrat quoting Trump on a single-payer system as a mantra, and support Senator Sanders and Congressman Welch in their vision for Medicare for All, or at least, a public option. Senator Sanders is the leader of the Democratic Party currently in offering a conviction-based, affirmative vision. We should follow his direction.”
Notwithstanding the support of the influential groups for the proposal and ― according to a May 2016 Gallup poll ― even a majority of the American people, Medicare-for-all legislation is a non-starter in the current Congress. Single-payer health insurance still lacks support from many, if not most, Democrats, let alone from the Republican lawmakers who control both chambers.
But the proactive strategy speaks to increasing confidence among progressives that if they stick to their ideals and build a grassroots movement around them, they will ultimately move the political spectrum in their direction.
“It does take time for social change,” said Chuck Idelson, communications director of National Nurses United, a 150,000-person labor union that has long advocated for a single-payer health insurance system.
“We didn’t end slavery overnight,” Idelson said. “It took from Seneca Falls in 1848 ’til 1920 until women won the right to vote. But they only won it by building a movement.”
The Washington Post reported Sunday that activists around the country urged their representatives over the weekend to get behind a single-payer program.
In the meantime, a potential benefit of this ambitious approach is what’s known as shifting the “Overton Window” ― a political science term for the narrow range of acceptable political views at a given moment in time.
By adopting a position that is considered extreme by contemporary standards, politicians and activists can make more attainable policy goals start to seem reasonable by comparison.
That phenomenon already seems to be working in progressives’ favor.
Sen. Jeff Merkley (D-Ore.), the only one of Sanders’ Senate colleagues to endorse his presidential bid, discussed the possibility of lowering the Medicare eligibility age or empowering Medicare to negotiate drug prices in his statement on the Republican bill’s collapse.
“There are plenty of ideas already on the table that would make health care more affordable for working families, from a public option, to prescription drug negotiations, to offering older Americans the chance to buy into Medicare,” Merkley said on Friday. “I’m happy to work with anyone, from either side of the aisle, to explore these or any other ideas that would improve health care for working Americans.”
Lowering the Medicare eligibility age from its current level of 65 is a “very interesting” idea, because of the positive financial effect it would have on the Obamacare insurance exchanges, said Austin Frakt, a health economist for the Department of Veterans Affairs.
By allowing the oldest exchange participants to enroll in Medicare, lowering the Medicare age would relieve the health insurance marketplaces of some of their costliest customers, said Frakt, who also has academic posts at Boston University and Harvard.
“It would reduce the premiums in those markets,” he predicted. (Frakt noted, however, that absent measures to offset the cost of the additional beneficiaries, the change would increase Medicare’s financial burden.)
Social Security Works’ Lawson praised the idea as an incremental step toward Medicare for all.
“Start by lowering the age to 62 and get it down to zero,” he said.
Republicans, meanwhile, believe they can score points against Democrats on the issue.
“We aren’t even 3 months into the 2018 cycle and House Democrats have already begun calling for a single-payer healthcare system,” said Jesse Hunt, a spokesman for the National Republican Congressional Committee, in an email to reporters Monday.
“Obamacare is collapsing as a result of [its] top-down, government centered approach and the Democrats’ only answer is more government,” Hunt went on. “The question remains, how many other Democrats will join the chorus to appease the activist base of the Party that’s clamoring for far-left policies?”
If Democrats go with a half-a-loaf policy, Republicans are going to blame them for the failures of Big Pharma. Alex Lawson, Social Security Works
Another progressive policy gaining mainstream traction is legislation permitting the importation of prescription drugs from Canada, where the existing single-payer system keeps prices lower. Sen. Cory Booker (D-N.J.) was one of several Democratic senators to endure heavy criticism in January for helping block a resolution supporting drug importation. In late February, Booker became a co-sponsor of legislation Sanders introduced that would legalize prescription drug importation from Canada and other countries.
Trump talked about getting tough with pharmaceutical companies over the price of prescription drugs as recently as early January.
But he has remained silent on the matter since his inauguration, including the 17-day period when he was trying to pass House Republicans’ Obamacare repeal bill. What’s more, the ordeal cast serious doubt on Trump’s willingness to take on the GOP’s ultraconservatives, who no doubt would oppose any form of government intervention to reduce drug prices.
Trump now claims he is counting on Democrats to negotiate over Obamacare on his terms, since, in his telling, the law is on the brink of collapse.
Obamacare’s insurance exchange markets have major problems in some states and regions, but the nonpartisan Congressional Budget Office characterized them as stable overall.
Still, Senate Minority Leader Chuck Schumer (D-N.Y.) suggested in a CNN interviewon Friday night that Democrats would be open to working with Trump and congressional Republicans on reforming the law.
“We’re not gloating that they failed. We’re sad that they won’t work with us to improve Obamacare,” he said.
Murshed Zaheed, political director of Credo, warned Democratic leaders that any Democratic efforts to work with Republicans would not get any help from grassroots groups like his.
“If Democrats want to push their version of so-called moderate proposals ― good luck to them,” Zaheed said. “I don’t think anybody should be under any illusion that Schumer or [House Minority Leader Nancy] Pelosi will get anything from collaborating with the right-wing extremists that control Congress.”
Ryan Grim contributed reporting. This story was updated Monday to include comments from Khanna and Hunt.
Some Lawmakers Now Look to Bipartisanship on Health Care
by Robert Pear and Michael D. Shear - NYT - March 26, 2017
WASHINGTON — The sudden death of legislation to repeal the Affordable Care Act has created an opening for voices from both parties to press for fixes to the acknowledged problems in President Barack Obama’s signature health law, as lawmakers and some senior White House officials appealed for bipartisanship.
But the White House, still smarting from a disastrous defeat on Friday, appeared uncertain on the path forward. President Trump predicted that “Obamacare will explode” and offered no plan to stop it, but his was not the only voice from the White House.
The president “wants to make sure that people don’t get left behind” in the search for affordable, quality health care, Reince Priebus, the White House chief of staff, said on “Fox News Sunday.”
“I think it’s time for our folks to come together,” Mr. Priebus said, adding that it is time to “potentially get a few moderate Democrats on board, as well” as they try to bring down premiums and stabilize insurance markets.
That appeal was echoed by Senator Susan Collins of Maine, a moderate Republican who opposed the House Republicans’ health bill and has also worked with Democrats to explore changes to the Affordable Care Act without repealing it.
“With the demise of the House bill, there’s a real window of opportunity for a bipartisan approach to health care,” she said.
In the wake of the Republican failure to make good on the seven-year-old promise to repeal the Affordable Care Act, Mr. Trump and congressional leaders find themselves at a political crossroads.
They could sabotage the Affordable Care Act’s insurance markets, betting that Democrats would be blamed for collapsing coverage choices and spikes in insurance premiums and would then come to the negotiating table ready to toss the law and start fresh. Or they could work with Democratic lawmakers and moderate Republicans, who for years have discussed improvements to the Affordable Care Act, which, unlike many social welfare programs, has not been significantly updated or revised.
Speaker Paul D. Ryan has said he wants to move on to other issues, and indicated that Democrats would have to come to him if they want to cooperate on health care. After insisting that the health law had to be eradicated “root and branch,” Senator Mitch McConnell of Kentucky, the majority leader, has been remarkably quiet since Friday’s debacle.
The messages from the White House, so far, have been mixed. “You cannot fix a broken system,” the White House budget director, Mick Mulvaney, said on NBC’s “Meet the Press.” “You are never going to fix that. This system must be removed.” Mr. Trump appeared to endorse the crash-and-burn strategy on Saturday morning, saying on Twitter: “ObamaCare will explode and we will all get together and piece together a great health care plan for THE PEOPLE. Do not worry!”
But Mr. Priebus’s softer vision gave some in Congress hope that a bipartisan approach could be found — possibly to alleviate the health law’s burdens on small business, repeal some of its more unpopular taxes, give employers more leeway on which employees they have to offer insurance to, and foster more competition among insurance companies. “I believe that there is a group of centrist Democrats who recognize that the Affordable Care Act has flaws that must be fixed,” Ms. Collins said. “Until there was a repudiation of the House bill, they felt constrained from negotiating. Now that the House bill has died, I hope they will feel free to come to the table.”
Representative Don Young, Republican of Alaska, also called for bipartisanship. His state has benefited from its expansion of Medicaid under the health law, and would have been punished under the House Republican bill because its high premium costs would not have been offset by larger tax credits, as they are under current law.
“The reason why Obamacare failed was because it wasn’t a bipartisan bill,” Mr. Young said. Republicans, he said, made the same mistake, writing their bill without Democrats. “We were very frankly guilty of that,” he said.
Democrats also sounded more conciliatory.
“Until now, we haven’t talked at all about compromise on the Affordable Care Act,” said Representative Diana DeGette, Democrat of Colorado. “From the moment it passed, Republicans started their mantra of ‘repeal and replace.’ Now that repeal seems to be off the table, I think it’s in everybody’s interest to make the law work better for our constituents.”
Representative Jim Cooper, a centrist Democrat from Tennessee who has often worked with Republicans, said: “We need to fix the flaws in Obamacare. I hope Republicans are willing to do that, instead of just destroying Obamacare.” But, he added, “before we can work with them, the Republicans have to bargain in good faith and stop sabotaging Obamacare.”
Mr. Obama’s health care law may not be imploding, as President Trump says. But in states as diverse as Alaska, Arizona, Minnesota, North Carolina and Pennsylvania, the public insurance marketplaces — a central innovation of the Affordable Care Act — are in trouble. Consumers have seen big premium increases for health plans sold by a shrinking number of insurers. “People will have to come to the bargaining table sooner rather than later,” said Chris Jacobs, a health policy analyst.
Within a few weeks, insurers must decide whether they will participate in the marketplaces in 2018. Insurance markets could quickly unravel if the House wins a court case challenging the legality of subsidies paid by the government to insurers on behalf of low-income people.
“The comments by President Trump and Speaker Ryan predicting the collapse of the A.C.A. and health insurance exchanges could become a self-fulfilling prophecy,” said Kevin J. Counihan, who was the chief executive of the federal insurance marketplace, HealthCare.gov, under Mr. Obama.
Mr. Counihan said he saw a risk that some counties might not have any insurers on the exchange next year as major insurers like Aetna, Humana and UnitedHealth pull back from the program. Republicans in Congress, especially those from rural areas, share that concern. The Obama administration worked hard to keep insurers in the market, and to promote sign-ups during open enrollment season. Whether the Trump administration will do so is unclear.
Mr. Counihan suggested several areas where Republicans and Democrats in Congress could work together. They could, he said, give insurers more discretion to charge higher premiums for older adults, reflecting their medical costs. Under the Affordable Care Act, insurers can charge older adults no more than three times the rates for young adults. The House Republican bill would have allowed them to charge five times as much, or more if states wanted. A ceiling somewhere between those numbers might be appropriate, Mr. Counihan said.
In addition, he said, Congress could shorten the length of “grace periods” during which insurers must provide coverage to consumers who fail to pay their premiums. Lawmakers from both parties have also expressed a desire to give states more freedom to pursue their own ideas for expanding coverage, controlling health costs, reducing premiums and stabilizing insurance markets. Giving states more flexibility is consistent with Republicans’ federalism philosophy. It also has potential appeal to Democrats because many states, including some with Republican governors, are to the left of the Trump administration on health policy.
One section of the Affordable Care Act, added at the behest of Senator Ron Wyden, Democrat of Oregon, already allows waivers for innovations in state health policy. But states say the requirements are so stringent that the waivers are of limited use.
“As Republicans, we know that one-size-fits-all works for no one and certainly did not work for the individual markets,” said Representative Michael C. Burgess of Texas, the chairman of the Energy and Commerce subcommittee on health. Lawmakers of both parties also support legislation to help small businesses get insurance. As a possible model for bipartisan cooperation, they point to a bill signed by Mr. Obama in 2015 that changed the definition of “small employer” to protect such companies against increases in health insurance premiums.
The possibility of bipartisan cooperation may not last long. Some conservative Republicans like Senator Rand Paul of Kentucky and Representative Sean P. Duffy of Wisconsin said they would redouble their efforts to undo the Affordable Care Act. “Rip it all out by the roots!” Representative Steve King of Iowa said Friday in a Twitter post.
But other Republicans said that Democrats should be involved in efforts to rewrite the law. Representative Mark Sanford, Republican of South Carolina, opposed the House bill and said its demise could “prove to be a catalyst” for forging a consensus. “Seeming stopping points can ultimately prove to be beginning points in life,” he said.https://www.nytimes.com/2017/03/26/us/politics/bipartisanship-health-care-congress-trump.html?
How to Build on Obamacare
by Paul Krugman - NYT - March 27, 2017
“Nobody knew that health care could be so complicated.” So declared Donald Trump three weeks before wimping out on his promise to repeal Obamacare. Up next: “Nobody knew that tax reform could be so complicated.” Then, perhaps: “Nobody knew that international trade policy could be so complicated.” And so on.
Actually, though, health care isn’t all that complicated. Basically, you need to induce people who don’t currently need medical treatment to pay the bills for those who do, with the promise that the favor will be returned if necessary.
Unfortunately, Republicans have spent eight years angrily denying that simple proposition. And that refusal to think seriously about how health care works is the fundamental reason Mr. Trump and his allies in Congress now look like such losers.
But put politics aside for a minute, and ask, what could be done to make health care work better going forward?
The Affordable Care Act deals with the fundamental issue of health care provision in two ways. More than half of the gains in coverage have come from expanding Medicaid — that is, collecting taxes and using the revenue to pay people’s medical bills. And that part of the program is working fine, except in Republican-controlled states that won’t let the federal government aid their residents.
But Medicaid only covers the lowest-income families. Above that level, the A.C.A. relies on private insurance companies, using a combination of regulations and subsidies to keep policies affordable. This has worked well in some places. For example, in California, which has tried hard to make health reform work, the number of people with health insurance has soared, while premiums are still well below expectations.
Overall, however, too few healthy people have purchased insurance, despite the penalty for failing to sign up; this is partly because many of the policies offered have high deductibles, making them less attractive. As a result, some companies have pulled out of the market. And this has left some areas, especially rural counties in small states, with few or no insurers.
No, it’s not a “death spiral” — subsidies keep insurance affordable for most people even if premiums rise sharply, and the Congressional Budget Office believes that markets will remain stable. But the system could and should be improved. How?
One important answer would be to spend a bit more money. Obamacare has turned out to be remarkably cheap; the Congressional Budget Office now projects its cost to be about a third lower than it originally expected, around 0.7 percent of G.D.P. In fact, it’s probably too cheap. A report from the nonpartisan Urban Institute argues that the A.C.A. is “essentially underfunded,” and would work much better — in particular, it could offer policies with much lower deductibles — if it provided somewhat more generous subsidies. The report’s recommendations would cost around 0.2 percent of G.D.P.; or to put it another way, would be around half as expensive as the tax cuts for the wealthy Republicans just tried and failed to ram through as part of Trumpcare.
What about the problem of inadequate insurance industry competition? Better subsidies would help enrollments, which in turn would probably bring in more insurers. But just in case, why not revive the idea of a public option — insurance sold directly by the government, for those who choose it? At the very least, there ought to be public plans available in areas no private insurer wants to serve.
There are other more technical things we should do too, like extending reinsurance: compensation for insurers whose risk pool turned out worse than expected. Some analysts also argue that there would be big gains from moving “off-exchange” plansonto the government-administered marketplaces.
So if Mr. Trump really wanted to honor his campaign promises about improving health coverage, if he were willing to face up to the reality that Obamacare is here to stay, there’s a lot he could do, through incremental changes, to make it work better. And he would get plenty of cooperation from Democrats along the way.
Needless to say, I don’t expect to see that happen. Improving Obamacare requires doing more, not less, moving left, not right. That’s not what Republicans want to hear.
And the tweeter-in-chief’s initial reaction to health care humiliation was, predictably, vindictive. He blamed Democrats, whom he never consulted, for Trumpcare’s political failure, predicted that “ObamaCare will explode,” and that when it does Democrats will “own it.” Since his own administration is responsible for administering the law, that sounds a lot like a promise to sabotage Americans’ health care and blame other people for the disaster.
The point, however, is that building on Obamacare wouldn’t be hard, and wouldn’t even be all that complicated.
U.S. vs. Nordic Health Care
Letters to the Editor - NYT Sunday Review - March 25, 2017
To the Editor:
Re “The Fake Freedom of American Health Care” (Sunday Review, March 19):
Anu Partanen’s observations about the cost and value of American health care are right on target. Very few Americans understand how health care gets paid for. Even fewer know that we in the United States spend about twice as much per capita on health care as other developed nations, yet fewer people are insured and our outcomes tend to be worse. Ignorance of these basic facts is at the root of our stalemate about health care reform.
Ms. Partanen is right to call out the bogus freedom being peddled by the current administration. The only freedom the current proposal protects is freedom of the market. That kind of freedom may be appropriate for buying a new toaster, but it is not appropriate for health care.
CHARLES E. BOUCHARD
The writer is senior director, theology and ethics, Catholic Health Association.
To the Editor:
The chief problem with President Trump’s and most Republicans’ approach to health care is that it lacks a conscience. So-called free-market health care really just means profit-based health care. Such a system has no qualms about letting someone who lacks access to health care die and is indifferent if someone hesitates to seek treatment because it’s too expensive. The only value is the bottom line, assessed annually at stockholders’ meetings.
Thankfully, since Franklin Delano Roosevelt, Democrats (primarily) have stepped in to provide a collective conscience to supplant the profit motive; that collective conscience has demanded that old people have a minimum income, hence Social Security; that old people have health care, hence Medicare; that poor people should have some health care, hence Medicaid and the Affordable Care Act.
The American people are gambling with their lives if they put their health in the hands of Mr. Trump, other Republicans and big business.
JOHN E. COLBERT
ARROYO SECO, N.M.
ARROYO SECO, N.M.
To the Editor:
Anu Partanen makes a cogent case for universal health care. This would be a no-brainer if it weren’t for the fact that Republicans are worried that without the huge contributions they receive from pharmaceutical and health insurance interests, their re-election prospects would be dimmed. It’s always disturbing to see how they rationalize their support for “free market” solutions in an industry devoid of meaningful competition and rife with inherent conflicts of interest.
TOM RYAN, TUCSON
To the Editor:
Thank you for a very informative, first-person account of the differences between our slapdash corporate for-profit health care system and the Scandinavian model. As someone who has spent a lot of time in Northern Europe and has friends who work in the Swedish health care system, I found the essay spot on. I received medical attention free of charge when I needed it, even though I was not a resident, and the hospitals there are just as competent as ours here in the New York area.
All this political posturing about “socialism” as a dirty word shows how uninformed our leaders are. The social democratic societies have the best interests of their citizens as a priority. How do they pay for it? Payroll taxes and high taxes on alcohol and cigarettes, the very root of many of our health problems.
I wonder how many of our representatives in Washington have actually visited Scandinavia? Perhaps a field trip to spend at least two weeks in a Nordic country could open some eyes for our tunnel-visioned members of Congress.
To the Editor:
You don’t have to go so far afield as Finland to find a more efficient health care system than that of the United States. I can speak from experience about the much-derided Canadian system.
Since coming to Canada in 1974, I have probably seen my family doctor 50 times (with no co-payment). I have been to the emergency room at least 20 times; I have had several M.R.I.s, X-rays, sonograms and stress tests; and I’ve had a stent put in and cataract surgery in both eyes.
And what have I had to do for all this? Pay my taxes and show my health card. No voluminous forms to fill out or invasive questions to answer. For us the vocabulary of health care in the United States — co-payments, deductibles, pre-existing conditions — is as foreign as that of those aliens in “Arrival.”
Of course our system is not perfect. But I’ll take ours over the American nightmare of choices any day.
TIM SCHOBERT, OTTAWA
To the Editor:
There are many differences between the United States and Finland. Finland has a population of about 5.5 million, while that of the United States is about 325 million. So the size of a bureaucracy to support a centralized health care system in the United States would be staggeringly large. And there is nothing in our current centralized medical care systems (Veterans Affairs, Medicaid) that would inspire confidence in the efficiency or lack of fraud.
Another difference is that Finland is very homogeneous; the United States is not. According to a 2007 study by Steffen Mau of the University of Bremen, the more mixed the population, the less the people trust or support state welfare. And all this is aside from questions of freedom or rights.
KIM ENDRES, SAN ANTONIO
To the Editor:
The free market has a way of working itself out for most products and services. A person of means can shop for a Cadillac Escalade and not worry much about the cost. Others who are struggling to find a way to get to work can shop for a used Toyota. The wealthy suburbanite can hire a landscaper to tend to the yard, while others will mow the lawn themselves.
The free market does not work as well with medical care. While a wealthy person may be in great health and use medical services for nothing more serious than a tummy tuck, the struggling family across town might be seeking treatment for a sickly child without the means to do so.
When Paul Ryan says, “Freedom is the ability to buy what you want to fit what you need,” this may apply when buying a home entertainment system, but it fails to meet many needs for health care.
RICK MALWITZ, SOMERSET, N.J.
To the Editor:
Anu Partanen is correct that the Republican idea of health care is grounded in “fake freedom.” For women, this pretense of freedom is especially offensive. The “freedom” and “choice” that Representative Paul Ryan and his male Republican colleagues highlight as the greatest pillars of their plan do not extend to women seeking reproductive freedom and reproductive choice.
Instead, the G.O.P. bill seeks to eliminate funding for Planned Parenthood, and to prevent the use of tax credits to purchase health plans that include abortion coverage. Beyond fake, the G.O.P. “freedom” is sexist hypocrisy.
PAMELA J. GRIFFITH, BROOKLYN
To the Editor:
Choosing not to purchase health care coverage when you can afford it is not freedom but rather gross irresponsibility. Everyone is at risk of becoming ill or injured and needing expensive care to recover. To forgo insurance is to leave to others the responsibility of dealing with the costs of your illness or injury — or, worse, to force others to turn a blind eye while you suffer or die without care.
Certainly there are people who foolishly delude themselves into believing they are invincible or choose not to think about the consequences of not having coverage. But the majority of people who fail to purchase health coverage do so not because they don’t want coverage, but because they can’t afford it. Only the most cynical would call this inability to afford coverage freedom.
What Comes Next for Obamacare? The Case for Medicare for All
by Robert H. Frank - NYT - March 24, 2017
Republicans are in a bind. They’ve been promising to repeal Obamacare for seven years, and having won control of the White House and Congress, they had to try to deliver. But while their bitter denunciations of the Affordable Care Act may have depressed its approval numbers, they didn’t make replacing it any easier.
On the contrary, the repeal-and-replace bill designed by House Speaker Paul D. Ryan drew withering criticism from the left and the right. Liberals condemned its use of reductions in health coverage for the poor to pay for large tax cuts for the wealthy, while conservatives bemoaned its retention of many subsidies adopted under Obamacare.
In the end, the repeal effort’s biggest hurdle may have been loss aversion, one of the most robust findings in behavioral science. As numerous studies have shown, the pain of losing something you already have is much greater than the pleasure of having gained it in the first place. And the nonpartisan Congressional Budget Office estimated that Mr. Ryan’s American Health Care Act (A.H.C.A.) would have caused more than 14 million people to lose coverage in the first year alone, with total losses rising to 24 million over the next decade. Many Republicans in Congress were nervous about the political firestorm already provoked by the mere prospect of such losses.
Loss aversion actually threatened the repeal effort on two fronts: voters’ fear of losing their coverage, and lawmakers’ fear of losing their seats. Like the first fear, the second appeared well grounded. Republican voters wouldn’t have been the only ones losing coverage, of course, but early studies suggested that losses would have been concentrated among people who voted for President Trump. The Congressional Budget Office estimated, for example, that the A.H.C.A. would have caused premiums to rise more than sevenfold in 2026 for 64-year-olds making $26,500.
Now that Republicans have withdrawn Mr. Ryan’s bill from consideration, attention shifts to what comes next. In an earlier column, I suggested that Mr. Trump has the political leverage, which President Obama did not, to jettison the traditional Republican approach in favor of a form of the single-payer health care that most other countries use. According to Physicians for a National Health Program, an advocacy group, “Single-payer national health insurance, also known as ‘Medicarefor all,’ is a system in which a single public or quasi-public agency organizes health care financing, but the delivery of care remains largely in private hands.” Christopher Ruddy, a friend and adviser of the president, recently urged him to consider this option.
Many Republicans who want to diminish government’s role in health care view the single-payer approach with disdain. But Mr. Trump often seems to take pleasure in being unpredictable, and since he will offend people no matter which way he turns, he may want to consider why liberals and conservatives in many other countries have embraced the single-payer approach.
Part of the appeal of Medicare for all is that single-payer systems reduce financial incentives that generate waste and abuse. Mr. Ryan insisted that by relegating health care to private insurers, competition would lead to lower prices and higher quality. Economic theory tells us that this is a reasonable expectation when certain conditions are met. A crucial one is that buyers must be able to compare the quality of offerings of different sellers. In practice, however, people have little knowledge of the treatment options for the various maladies they might suffer, and policy language describing insurance coverage is notoriously complex and technical. Consumers simply cannot make informed quality comparisons in this industry.
In contrast, they can easily compare the prices charged by competing insurance companies. This asymmetry induces companies to compete by highlighting the lower prices they’re able to offer if they cut costs by degrading the quality of their offerings. For example, it’s common for insurance companies to deny payment for procedures that their policies seem to cover. If policy holders complain loudly enough, they may eventually get reimbursed, but the money companies save by not paying others confers a decisive competitive advantage over rivals that don’t employ this tactic. Such haggling is uncommon under single-payer systems like Medicare (though it is sometimes employed by private insurers that supplement Medicare).
Consider, too, the mutually offsetting expenditures on competitive advertising and other promotional efforts of private insurers, which can exceed 15 percent of total revenue. Single-payer plans like Medicare spend nothing on competitive advertising (although here, also, we see such expenditures by supplemental insurers).
According to the Kaiser Family Foundation, administrative costs in Medicare are only about 2 percent of total operating expenditures, less than one-sixth of the rate estimated for the private insurance industry. This difference does not mean that private insurers are evil. It’s a simple consequence of a difference in the relevant economic incentives.
American health care outlays per capita in 2015 were more than twice the average of those in the 35 advanced countries that make up the Organization for Economic Cooperation and Development. Yet despite that spending difference, the system in the United States delivers significantly less favorable outcomes on measures like longevity and the incidence of chronic illness.
But advertising expenses and administrative costs are not the most important reason the United States spends so much more. The main difference is that prices for medical services are so much lower in other countries. In France, for example, a magnetic resonance imaging exam costs $363, on average, compared with $1,121 in the United States; an appendectomy is $4,463 in France, versus $13,851 in America. These differences stem largely from the fact that single payers — which is to say, governments — are typically able to negotiate more favorable terms with service providers.
In short, Medicare for all could deliver quality care at much lower cost than private insurers do now. People would of course be free to supplement their public coverage with private insurance, as they now do in most other countries with single-payer systems, and as many older Americans do with Medicare.
As a candidate, Mr. Trump repeatedly promised that everyone in the country would be covered at reasonable cost under an amazing new health plan. But it is now clear that the A.H.C.A. could not have delivered on that promise. The president, who has not always had a close relationship with Mr. Ryan, may consider changing course and working across party lines to develop support for universal access to Medicare.
Then again, he may fear that move would be seen as a sign of weakness or defeat. But the research findings on loss aversion make one thing clear: Any setback from that change in strategy would pale in comparison to the damage he would have suffered if the A.H.C.A. had actually become law.
The Obamacare Fight Is About Way More Than Health Care
by Patty Bacon - NYT Five Thirty Five - March 23, 2017
The Affordable Care Act is a small part of the broader American health system. In a nation of more than 320 million people, 24 million to 30 million are covered under the law, both through its marketplaces and expansion of Medicaid. That’s less than a tenth of all Americans. Most Americans who have insurance are covered through their employers, and that system did not change much under the ACA and would remain largely the same under the GOP bill to replace the ACA.
If you view the ACA, aka Obamacare, as a health care bill that changed coverage for a relatively small share of Americans, the intense debate over it during the last seven years — culminating with a renewed GOP push to repeal it — may seem disproportionate. Why have the Republicans, holding control of both houses of Congress and the presidency for the first time since 2006, made rolling back Obamacare the party’s first big legislative priority? And why have left-leaning groups organized events across the country to defend the ACA the last few weeks, instead of focusing their attention on, say, stopping Neil Gorsuch, President Trump’s Supreme Court nominee, who is positioned to block liberal goals for decades if he is confirmed?
Because the Obamacare debate is really about much more than health care. In many ways, the two parties, while focusing on the technical details of health care, are also debating fundamental questions about the role of government, work, income redistribution, race, class and Barack Obama. This is not just a debate about health care premiums or your ability to choose your doctor, no matter how often Nancy Pelosi or Paul Ryan talks about those things. Health care, more than almost any other issue, hinges on real, deep values and ideals that divide the two parties in Washington and, more importantly, Blue America and Red America.
The Affordable Care Act is the kind of policy that unites Democrats and animates the party.
Democratic voters overwhelmingly believe that the rich aren’t taxed enough and that the government should tax them more to redistribute some of the wealth of higher-income people. Obamacare takes money from upper-income Americans, adding two taxes on people with incomes above $200,000 a year. It uses those taxes (and other federal dollars) to fund tax credits that are more generous to people with lower incomes.
Democratic voters are passionate about reducing racial and income inequality, and Obamacare — through its subsidies and Medicaid expansion — disproportionately benefits people who are poor, black and Latino, because they are more likely to be uninsured than whites and upper-income people.
Democrats are a racially diverse coalition (exit polls suggest that about 45 percent of Clinton voters in 2016 were nonwhite), and there are conflicts between those in the party who say it caters too much to ethnic minorities and ignores whites and those who say it takes nonwhite votes for granted. Obamacare helps low-income whites and low-income people of color. It has, for example, dramatically reduced the number of uninsured people in Kentucky, which has a higher percentage of whites than the U.S. overall. It has also cut the number of uninsured people in ethnically diverse California.
Finally, the law is known as Obamacare, linking it closely to the man Democrats rankas their favorite modern Democratic president. And Obamacare builds on a tradition of entitlement programs enacted by Democratic presidents that include Social Security, Medicaid and Medicare, and the state Children’s Health Insurance Program.
Obamacare is the exact kind of program Republicans hate.
Republicans have long opposed creating new federal entitlements. Ronald Reagan, before he formally entered politics, was an influential voice in the 1960s opposing the creation of Medicare. Obamacare entitles nearly all low-income adults to inexpensive, government-funded health insurance if their state expands Medicaid. The law has helped put an estimated 17 million people on Medicaid, either those who enrolled in the expansion of the program through Obamacare or who were already eligible but enrolled with the increased attention and outreach efforts over the last several years.
Obamacare essentially says you can stay on Medicaid as long as your income is below a certain threshold. Republicans argue that this approach keeps people dependent on government help. Obamacare provides a disincentive to work or get a higher-paying job, Republicans say, because its subsidies for marketplace insurance are reduced as your income increases. House Speaker Paul Ryan consistently criticizesanti-poverty programs that are set up this way.
In interviews, conservative-leaning voters will tell reporters (see here and here) that they think people on Medicaid are freeloaders. Talking about Obamacare also seems to trigger some conservative voters’ stereotypes about black people getting government benefits that they don’t deserve.
But it’s not just about entitlements; Obamacare is full of tax increases, including what the Supreme Court defined as a tax on individuals who do not buy insurance. Opposition to higher taxes may be the defining feature and central source of agreement of the modern Republican Party, and many Republican members of Congress have signed a pledge not to vote for tax increases.
Finally, Obamacare was the brainchild of a man who was opposed by Republicans more intensely than any other modern president. Trump’s comments about health care, from his initial promises to cover everyone to his recent admission that he didn’t realize how complicated health care reform is, suggest that he’s less interested in the details of health care policy and more determined to get rid of a law that bears a political rival’s moniker.
In other words, if you love Obama and think Republicans are mean and kind of racist (as some liberals do), the Obamacare fight is a debate for you. (Remember when Clinton called some Trump supporters “racist, sexist, homophobic, xenophobic, Islamophobic”?)
If you hate Obama and think Democrats give money to freeloaders who want to sit on their couches and collect government benefits (as some prominent conservativeshave all but said), the Obamacare fight is a debate for you. (After his defeat in the 2012 election, Mitt Romney said in a private phone call with donors that Democratic-leaning voters like “gifts” from the government, such as free health care.)
That’s why health care, more than other hot-button issues, is so polarizing:
You don’t need to understand risk corridors, reinsurance or the woodwork effect to have a rooting interest in the battle.
In short, Obamacare is a fight about health care. But it’s a fight about nearly everything else in politics, too.
Trump’s Choice on Obamacare: Sabotage or Co-opt?
by Margot Sanger Katz - NYT - March 24, 2017
President Trump and a Republican-led Congress tried and failed to repeal the Affordable Care Act. Now, they have to decide whether they want to work with it or sabotage it.
Both Mr. Trump and congressional leaders acknowledged on Friday that they would not bring their repeal bill back for a vote any time soon. That means that, as Speaker Paul Ryan said, “we’re going to be living with Obamacare for the foreseeable future.”
Mr. Ryan and Mr. Trump reiterated their criticisms of the law and set the stage for watching it collapse and blaming the Democrats for the aftermath. “I’ve been saying for the last year and a half that the best thing we can do politically speaking is let Obamacare explode,” Mr. Trump said from the Oval Office. “It is exploding now.”
Mr. Ryan said that Obamacare’s architects would be sad that the bill was allowed to live on, given what he described as its inevitable failure.
In fact, Obamacare is not on the verge of “explosion.” Enrollment in its insurance marketplaces is steady, and several independent analyses suggest that insurance prices have stabilized after a sharp market correction this year. But the structures it set up to provide health insurance to middle-income Americans are vulnerable. Insurance companies have struggled to make money in the early years of the new markets, and many have backed out. Others remain tentatively committed and skittish.
Mr. Trump will need to decide, quickly, whether his goal is to knock over the still-functioning markets, or help prop them up. If he decides to topple them, next year could be very messy.
Insurers are making their decisions right now about whether to enter the markets for next year and about how much to charge their customers. Signals from the administration in the next few weeks about whether he will help or hurt them will almost certainly guide insurers’ choices.
Fight a court case on subsidies?
The biggest immediate decision concerns a court dispute between the House and the administration over subsidies to help low-income insurance buyers pay their deductibles and co-payments. The House has argued that the money for those subsidies was not properly authorized. The Obama White House fought the case. It is not clear whether Mr. Trump’s lawyers will do the same. The availability of those subsidies, used by a majority of Obamacare customers, is critical for insurers in the markets.
Without the subsidies, all the insurers will lose some money, and many smaller carriers will face bankruptcy. If Mr. Trump does not fight the court case, the Obamacare markets in most states will unravel quickly, leaving millions without insurance options on his watch. Many of the beneficiaries are Trump voters.
Encourage insurance companies in wobbly markets?
There are smaller decisions ahead, too, about how to administer programs, whether to enforce the law’s individual mandate, and whether to recruit insurers to participate in markets where competition is thin.
So far, Mr. Trump’s secretary for health and human services, Tom Price, has taken every opportunity to gloat about the health law’s setbacks, even as he is administering its programs.
Mr. Price, perhaps more than Mr. Trump, has long been committed to the Affordable Care Act’s demise. But now he will have to manage the law’s many programs. Obama administration officials called insurers, cajoling and reassuring them. If Mr. Trump wants the markets to be vigorous, he could use his self-described deal-making skills to woo insurance companies into the stabilizing markets.
Make the system more conservative?
If Mr. Trump and Mr. Price can make peace with the health law, there are opportunities to steer it in a more conservative direction. The law gives broad authority to the executive branch to shape health care policy. So far, the health law has been driven by Obama administration priorities, but that could change.
A few early regulatory changes have begun that process. The Trump administration plans to make it harder for people to sign up for plans midyear. It has given insurers more wiggle room to raise their deductibles. It may be able to make alterations that loosen up benefit requirements — though it won’t be able to completely eliminate them, as Republicans sought to do at the last minute in the failed bill.
Offer states maximum flexibility?
The administration will also have enormous power to allow states to reshape their Medicaid programs — and even their local insurance markets — through waivers to existing law. Seema Verma, the just-confirmed administrator of the Centers for Medicare and Medicaid Services, was a consultant who helped states writepathbreaking conservative proposals for their Medicaid programs. She is ideally positioned to approve many more such waivers from Republican-led states, allowing them to impose premiums, cost-sharing and even work requirements for Medicaid beneficiaries.
A new Obamacare waiver program has just gone into effect: It would allow states to overhaul their entire health insurance markets if they can show that their revised plans would cover as many people. That process could allow Ms. Verma and Mr. Price to approve state plans that hew more closely to the Republican vision for health care.
Change Medicare policy?
New powers granted under the Affordable Care Act allow the Department of Health and Human Services to make major changes to the Medicare program, through demonstration projects meant to lower costs and improve patient care. The Obama administration set a precedent of imposing “mandatory” projects on large portions of the country to test policy ideas. So far, Mr. Price has looked askance at such efforts. But the provision could give him power to reshape what Medicare pays for and how seniors receive their care.
Nicholas Bagley, a law professor at the University of Michigan, has criticized the Obama administration for stretching its legal authority with some of its Obamacare choices. But those choices have created a precedent for the Trump administration to stretch the health law in its own direction. “If you think Congress is done, and you don’t want to provoke a reaction anymore, then you own this,” he said. “You will be judged as an executive on the performance of Obamacare.”
For years, opposing Obamacare has been a rallying cry for Republicans. But if Republicans can’t repeal Obamacare, they could instead co-opt it. There are opportunities for Trumpcare yet.