WHAT AETNA’S WITHDRAWAL MEANS FOR OBAMACARE
by James Suroweicki - The New Yorker
Few companies are as unpopular as insurance companies, and no tears were shed for the insurance giant Aetna when, a couple of weeks ago, it announced that it had lost more than four hundred million dollars on Obamacare policies since the Obamacare exchanges were set up, in 2014, and was going to pull out of most of them. The news, which followed similar announcements by United Healthcare and Humana, was greeted with talk of “whining” insurers who “put profits before patients’ health” and are “willing to deny care to make a few extra dollars.” But the recriminations are misplaced. Aetna’s decision reflects an awkward reality: the jerry-rigged, politically compromised nature of Obamacare has made the program unstable, and unable to live up to its lofty promises.
It’s not that Obamacare has failed. As Larry Levitt, a health-care analyst at the Kaiser Family Foundation, told me, “The main goal of the law was to reduce the number of uninsured people, and twenty million more people are covered today because of it. It’s hard to call that a failure.” The reforms that Obamacare put in place have guaranteed access to insurance for people with preëxisting conditions, and have done away with caps on how much insurance companies will spend. Access to health care is less precarious than it used to be.
Still, we’re a long way from the future that Barack Obama envisaged when, in 2009, addressing the American Medical Association, he called for “comprehensive reform that covers everyone” and provides “affordable health insurance to every single American.” Some thirty million Americans remain uninsured. Participants in the A.C.A. marketplaces are less numerous, and sicker, than anticipated: 8.3 million fewer people enrolled through the exchanges this year than the Congressional Budget Office had projected. As a result, insurers in much of the country are fleeing the marketplaces. Kaiser estimates that between twenty and twenty-five per cent of U.S. counties may have only one insurer offering coverage in 2017; there’s already a county in Arizona with no Obamacare insurer at all. And the insurers that remain in these markets tend to offer an increasingly narrow network of health-care providers.
Lack of competition is a recipe for high premiums or low benefits (or both), further deterring younger, healthier people from buying policies. Which means that the risk pool gets still older and sicker, which means that more insurance companies lose money and leave the market, which means that competition is reduced even further, which means: see above. The U.S. could well end up with a two-tier insurance market, in which people lucky enough to get insurance through their employers will get much better coverage and wider options than those on the individual market, even when both groups are paying the same amount in premiums.
Obamacare is being hobbled by the political compromises made to get it passed. The program’s basic principles were the right ones: everyone would be able to get insurance, regardless of preëxisting conditions, and everyone would pay the same price for a given policy, with upward adjustments made only for older people and smokers. In short, insurance companies were prohibited from managing risk by charging healthy, low-risk people less than frailer, high-risk people. Since managing risk is typically key to how insurers make money, it would have made sense to leave them out and just enroll everyone in a government-run program like Medicare. Politics, of course, ruled that out. Shoring up the private-side approach would require penalties stiff enough to get young, healthy Americans to buy health insurance, but politics ruled that out as well.
Conservatives point to Obamacare’s marketplace woes as evidence that government should stop mucking around with health insurance. In fact, government hasn’t mucked around enough: if we want to make universal health insurance a reality, the government needs to do more, not less. That doesn’t require scrapping the current system: the Netherlands and Switzerland both demonstrate that you can get universal coverage through private insurers. But their examples also show that to do so we’d need to make it much harder to avoid buying insurance, and we’d need to expand subsidies to consumers.
Alternatively, we could implement the public option, which Obama himself called for in that 2009 speech: a federal program, modelled on Medicare, open to anyone on the individual market. The public option would guarantee that there was always at least one good choice available in the marketplace, and would provide competition for private insurers. If it used the government’s bargaining power to hold down costs and expand access, it could offer good benefits at a low enough price to attract younger, healthier patients.
There are solid arguments for both of these models. Either would work, if there were a shift in the political mood and it were given a shot. Even if nothing is done, Obamacare will continue to limp along, probably turning into something akin to Medicaid. But the departure of big insurers like Aetna has made it clear that, if we don’t do more to help cover people in the individual market, the program will never make good on its original promise of truly comprehensive reform. So don’t hate the players; fix the game. ♦
As Obama’s term wanes, Obamacare needs checkup
Associated Press
WASHINGTON — With the hourglass running out for his administration, President Obama’s health care law is struggling in many parts of the country. Double-digit premium increases and exits by big-name insurers have caused some to wonder whether “Obamacare” will go down as a failed experiment.
If Democrat Hillary Clinton wins the White House, expect her to mount a rescue effort. But how much Clinton could do depends on finding willing partners in Congress and among Republican governors, a real political challenge.
“There are turbulent waters,” said Kathleen Sebelius, Obama’s first secretary of Health and Human Services. “But do I see this as a death knell? No.”
Next year’s health insurance sign-up season starts a week before the Nov. 8 election, and the previews have been brutal. Premiums are expected to go up sharply in many insurance marketplaces, which offer subsidized private coverage to people lacking access to job-based plans.
At the same time, retrenchment by insurers that have lost hundreds of millions of dollars means that more areas will become one-insurer markets, losing the benefits of competition. The consulting firm Avalere Health projects that seven states will only have one insurer in each of their marketplace regions next year.
Administration officials say insurers set prices too low in a bid to gain market share, and the correction is leading to sticker shock. Insurers blame the problems on sicker-than-expected customers, disappointing enrollment and a premium stabilization system that failed to work as advertised. They also say some people are gaming the system, taking advantage of guaranteed coverage to get medical care only when they are sick.
Not all state markets are in trouble. What is more important, most of the 11 million people covered through HealthCare.gov and its state-run counterparts will be cushioned from premium increases by government subsidies that rise with the cost.
But many customers may have to switch to less comprehensive plans to keep their monthly premiums down. And millions of people who buy individual policies outside the government marketplaces get no financial help. They will have to pay the full increases or go without coverage and risk fines. (People with employer coverage and Medicare are largely unaffected.)
Because the spigot of federal subsidies remains wide open, an implosion of health insurance markets around the country seems unlikely. More than 8 out of 10 HealthCare.gov customers get subsidies covering about 70 percent of their total premiums. Instead, the damage is likely to be gradual. Rising premiums deter healthy people from signing up, leaving an insurance pool that’s more expensive to cover each succeeding year.
“My real concern is 2018,” said Caroline Pearson, a senior vice president with Avalere. “If there is no improvement in enrollment, we could see big sections of the country without any plans participating.”
If Republican Donald Trump wins the White House, he’d start dismantling the Affordable Care Act. But Clinton would come with a long list of proposed fixes, from rearranging benefits to introducing a government-sponsored “public option” as an alternative to private insurers. Not all her ideas would require congressional action.
“She is going to find it important to continue to expand health care,” said Joel Ario, a former Obama administration official who’s now with the consulting firm Mannatt Health.
People in the Clinton camp say she recognizes that as president she’d have to get Obama’s law working better, and is taking nothing off the table.
Slamming 'Absurd' US Healthcare, Sanders Backs Single-Payer in Colorado
"It's hard to imagine a figure whose support of ColoradoCare is more meaningful than Senator Sanders"
by Nadia Prupis - Common Dreams
Sen. Bernie Sanders (I-Vt.) this week endorsed a Colorado ballot measure that would create single-payer healthcare in the state, urging his supporters to rally around the amendment and stating, "If that proposal can win in Colorado, I believe that idea will spread around the country."
"It is absurd, it is beyond belief, that here in America we remain the only major country on earth not to guarantee healthcare to all people," Sanders said at an event in Vermont on Wednesday, where he offered his official endorsement.
As the Denver Post reports, Colorado Amendment 69—known colloquially as ColoradoCare—would create a universal healthcare system funded by payroll taxes that would largely replace private health insurance. People could still choose to keep their own, although they would still be required to pay the tax.
Support for the measure from Sanders carries a lot of political weight; not only was universal healthcare a cornerstone of his presidential campaign—one of the signature issues that endeared him to progressive voters—but he also won the Colorado caucus in March.
Owen Perkins, a spokesperson for the ColoradoCareYES campaign, said in a statement this week that "It's hard to imagine a figure whose support of ColoradoCare is more meaningful than Senator Sanders."
"No one has done more to elevate the idea of Medicare-for-all in the United States in recent years, and by bringing the notion of universal healthcare into stadiums, auditoriums, town halls, and living rooms throughout the country, Senator Sanders has helped create the ideal environment for passing ColoradoCare," Perkins said.
If Colorado approves the amendment, it will be the first state in the nation to implement single-payer healthcare. And as Health Care for All Colorado executive director Donna Smith told Common Dreams in November, that could have national implications, because "we are not relying on the elected officials to advance universal healthcare."
"This may be a way for other states to learn from our work in Colorado and also pursue single-payer reform at the ballot as a way to overcome some of the political inertia that settles in when so many powerful, monied interests hold court over the legislative process," Smith said at the time. "The ballot measure...is about much more than achieving healthcare justice. It is also about citizens coming together and using the democratic process to successfully achieve healthcare justice."
http://www.commondreams.org/news/2016/08/26/slamming-absurd-us-healthcare-sanders-backs-single-payer-colorado
Health-care exchange sign-ups fall far short of forecasts
Health-care exchange sign-ups fall far short of forecasts
by Carolyn Y. Johnson - Washington Post
Enrollment in the insurance exchanges for President Obama’s signature health-care law is at less than half the initial forecast, pushing several major insurance companies to stop offering health plans in certain markets because of significant financial losses.
As a result, the administration’s promise of a menu of health-plan choices has been replaced by a grim, though preliminary, forecast: Next year, more than 1 in 4 counties are at risk of having a single insurer on its exchange, said Cynthia Cox, who studies health reform for the Kaiser Family Foundation.
Debate over how perilous the predicament is for the Affordable Care Act, commonly called Obamacare, is nearly as partisan as the divide over the law itself. But at the root of the problem is this: The success of the law depends fundamentally on the exchanges being profitable for insurers — and that requires more people to sign up.
In February 2013, the Congressional Budget Office predicted that 24 million people would buy health coverage through the federally and state-operated online exchanges by this year. Just 11.1 million people were signed up as of late March.
Exchanges are marketplaces where people who do not receive health benefits through a job can buy private insurance, often with government subsidies.
Aetna, the nation's third largest health insurer, announced that it will pull back from Obamacare exchanges citing losses of more than $430 million since January 2014.(Daron Taylor/The Washington Post)
“Enrollment is key, first and foremost,” said Sara R. Collins, a vice president at the Commonwealth Fund, a nonpartisan foundation that funds health-care research. “They have to have this critical mass of people so that, by the law of averages, you’re going to get a mix of healthy and less healthy people.”
A big reason the CBO projections were so far off is that the agency overestimated how many people would lose insurance through their employers, which would force them into the exchanges. But there have been challenges getting the uninsured to sign up, too.
The law requires every American to get health coverage or pay a penalty, but the penalty hasn’t been high enough to persuade many Americans to buy into the health plans. Even those who qualify for subsidized premiums sometimes balk at the high deductibles on some plans.
And people who do outreach to the uninsured say the enrollment process itself has been more complex and confusing than Obama’s initial comparison to buying a plane ticket.
“This exchange will allow you to one-stop shop for a health-care plan, compare benefits and prices, and choose a plan that’s best for you and your family,” Obama said in a speech in 2009. “You will have your choice of a number of plans that offer a few different packages, but every plan would offer an affordable, basic package.”
In some markets, a shortfall in enrollment is testing insurers’ ability to balance the medical claims they pay out with income from premiums. In an announcement curtailing its involvement in the exchanges this month, Aetna cited financial losses traced to too many sick people signing up for care and not enough healthy ones.
The health-care law has been a political lightning rod from the beginning, and Republican legislators have used insurance companies’ withdrawals from the exchanges to reignite calls for the law’s repeal.
Kaiser tracks public data on insurer participation in the exchanges to project how many options counties will have, but the numbers are not final. This year, exchanges in about 7 percent of counties had just one insurer. Earlier this month, Aetna announced that it will pull out of 11 of the 15 states where it offers coverage on the health-care exchanges. Humana made a similar decision weeks earlier, planning to exit several states. And last spring, UnitedHealth Group said it would remain in three or fewer exchanges next year.
Obama has used the health-care law’s challenges to issue a new call for a public insurance option.
“Congress should revisit a public plan to compete alongside private insurers in areas of the country where competition is limited,” he wrote in an essay published in the Journal of the American Medical Association. “Adding a public plan in such areas would strengthen the Marketplace approach, giving consumers more affordable options while also creating savings for the federal government.”
Chicago resident Eva Saur, 32, is exactly the kind of healthy person insurers would like to have on their rolls. Saur hasn’t had coverage in nearly a decade, but she takes good care of her health. For the handful of times she’s been sick, a walk-in clinic at a pharmacy has been sufficient.
“I was raised — not against the system — but we had a doctor who would prescribe us herbs before a prescription” medication, Saur said. “For me, monetarily, it makes way more sense to do this.”
Saur’s tax penalty for being uninsured was a bit more than $600 last year, while the cheapest health plan she examined cost about as much for three months in premiums — and came with a $7,000 deductible.
The penalty for not signing up is increasing. Still, some policy experts insist it is not enough motivation to buy insurance.
“It was basically no stick at all. This is the classic case of where Johnny marked crayon on the wall, his mother said, ‘Don’t do that,’ and then slapped his hand a day later,” said Joseph Antos, a resident fellow at the American Enterprise Institute. “The connection between the offense and the penalty is a little remote.”
The health-care law has had unequivocal successes. In some areas, lots of insurers compete on the exchanges, which helps keep premiums low. In Cleveland and Los Angeles, the average premium for a benchmark health plan actually declined in 2016. The number of uninsured Americans continues to shrink, hitting 9.1 percent last year — the lowest level ever.
The average premium for the people who receive tax credits – 85 percent of the people signed up through the exchanges — is just $106 per month. People who qualify for the income-based tax credits are largely sheltered from premium increases.
The first people to sign up for insurance through the exchanges were expected to be those with chronic diseases and high medical costs. Because insurers could no longer discriminate against those people, the law built in three mechanisms for the government to redistribute money from plans with healthier patients to those with sicker ones. Two of those programs expire at the end of the year. The third, called the “risk adjustment” program, transferred $4.6 billion between insurers in 2014.
Critics say there’s a fundamental problem with the system, and the risk-adjustment program needs to be fixed. But supporters of the law argue that the problem is temporary, the natural evolution of a nascent free-market system. Some of the first companies to enter the market made bad bets on how healthy customers would be, resulting in unprofitable health plans. Proponents say it’s natural for new entrants to replace them, with better information and more competitive plans.
Cigna, for example, has said it has filed to enter exchanges in three new states next year.
“There’s no bottleneck, this is just the natural growth pains of a new market,” said Jonathan Gruber, an economist at the Massachusetts Institute of Technology. “What happened is they set up this new market where insurers didn’t have experience; insurers made an estimate as to what people would cost and their estimate turned out to be too low.”
Supporters point to a recent government analysis that suggests the “risk pool” — the number of high-cost sick customers relative to healthy ones — is not worsening and could even be improving. Medical costs per enrollee in the marketplaces fell by 0.1 percent in 2015, while medical costs for people in the broader health-insurance market grew by at least 3 percent. In states with strong enrollment growth, there were greater reductions in members’ costs.
Everyone agrees that more healthy people need to sign up.
In June, the Obama administration unveiled its plan to target younger and healthier adults, including direct outreach to individuals and families who paid the penalty. It also released new guidance, encouraging insurance companies to communicate more with young adults being kicked off their family’s plan when they turn 26 years old.
Even older adults are taking their chances without health-care coverage.
Donte Fitzhugh, 55, of Charlotte was laid off last year from a job as a call-center operations manager. COBRA, which allows former workers to extend their employer-provided health insurance if they pay the full premium, was expensive, and Fitzhugh didn’t sign up for the exchanges for very human reasons: He figured he’d find a job faster than he did. He thought every penny counted when he was unemployed. He didn’t have major health problems, and he got a coupon to help cover the costs of his hypertension medicine.
As the window to sign up for health insurance passed without a new job, he kept procrastinating. Although health insurance from a new job will begin in October, he faces a penalty that will cost him hundreds of dollars.
“I believe in Obamacare. As an American, it’s my responsibility to have health insurance,” Fitzhugh said. “Since I didn’t have it, it’s going to impact me financially.”
Such are the barriers to insurance: Remaining uninsured can be more attractive or just easier than signing up to pay hundreds of dollars a month for something that many people don’t think they need.
Judy Robinson, a health insurance support specialist at the Charlottesville Free Clinic, has counseled hundreds of patients who are eligible for subsidized insurance on the exchanges but ultimately decide not to sign up. She said the subsidized insurance on the marketplace tends to be a good deal for those who make between 100 and 150 percent of the poverty level. But those who make more often are faced with large deductibles that don’t seem like a good deal to many people.
Beyond the sticker price, she said it can require a lot of paperwork to demonstrate the annual income required to qualify for tax credits if people are juggling multiple part-time jobs. And sometimes, people are simply mistrustful.
“There’s a lot of people that live sort of off the grid, sort of semi-off the grid and they just don’t go to the doctor,” Robinson said. “The hospital is the place where you go to die, and doctors are just going to try and make you do procedures and get money out of you. That’s how they think.”
There are also those who want insurance but are struggling — and find themselves trapped by the high cost of health care.
Donna Privigyi, 49, of Charlottesville has looked into insurance through the exchanges a few times. But over the past few years, much of her modest child-care salary and effort went toward trying to help support her adult son, Mark, who hadn’t been the same since the death of his younger brother. Donna was focused on trying to support her son. Health insurance — even rent — was an afterthought.
“With supporting my son, it didn’t matter,” Privigyi said. “I was just like, I can barely get by, just juggling the bills and taking care of him.”
Late last year, Mark died of a drug overdose, and Privigyi — consumed by grief — wasn’t thinking about insurance when the window to sign up opened and closed.
Then, in June, she got appendicitis. Her bills from two hospitals were $33,000.
The argument for having health insurance is the pile of bills she has been collecting — now with late fees added. The obstacle to getting health insurance is that same stack of bills.
“It’s such a gamble, you know, until I figure out what to do with these medical bills,” Privigyi said. “They’re just adding on late fees. How can I even afford to sign up?”
Painted as EpiPen Villain, Mylan’s Chief Says She’s No Such Thing
by Katie Thomas - NYT
America has a new pharmaceutical villain. Her name is Heather Bresch.
As the chief executive of Mylan, the owner of the severe allergy treatment EpiPen, Ms. Bresch is at the center of the latest public outrage over high drug prices, excoriated for overseeing a fourfold price increase on EpiPen while taking a huge pay raise.
From talk shows to Twitter, her name is being mentioned alongside Martin Shkreli, the so-called Pharma Bro who ignited anger last fall over raising the price of the drug Daraprim, and J. Michael Pearson, the onetime McKinsey consultant who took over Valeant Pharmaceuticals International and sharply raised prices on lifesaving drugs.
But Mr. Shkreli and Mr. Pearson were outliers trying to upend the industry. At one point, the pharmaceutical industry’s main lobbying group disavowed them.
Not so with Ms. Bresch. In many ways, she is an ultimate insider. Her father is a United States senator. She runs one of the largest generic drug companies in the world. She also oversees the Generic Pharmaceutical Association — the generic industry’s lobbying group.
Now the question is whether her different position will give her a different result. Both Mr. Shkreli and Mr. Pearson were forced out of their companies.
Already, Ms. Bresch, 47, has moved more quickly than they did to quell public furor over prices. On Thursday, she announced that the company was increasing financial assistance to patients to reduce their out-of-pocket costs. But the company did not say it would lower the list price — which has risen to about $600 for a pack of two EpiPens, from about $100 when Mylan acquired the product in 2007.
In an interview, Ms. Bresch said the price increases on EpiPen weren’t even in the “same hemisphere” as what Mr. Shkreli did when he raised the price of Daraprim by 50 times overnight.
Over the years, her brash leadership style has bruised egos but also, some say, improved access to drugs and raised quality standards. Her company, Mylan, also has a reputation for bare-knuckled tactics that have angered competitors and investors alike.
“I think we mean what we say: You can do good and do well, and I think we strike that balance around the globe,” Ms. Bresch said. Still, she was unapologetic that Mylan’s actions were driven by profit. “I am running a business. I am a for-profit business. I am not hiding from that.”
How the company, and Ms. Bresch, strikes that balance seems to be quickly changing. Generic drug companies once dealt almost exclusively in making cheap copies of pills and railed passionately against the anticompetitive tactics of brand-name competitors. Now, through a series of acquisitions and mergers, the handful of large generic companies that are left are increasingly investing in expensive brand-name drugs, and in doing so, are embracing many of the tactics they once scorned.
“It’s like talking out of both sides of your mouth,” said Dinesh Thakur, an advocate for generic drug quality. “To me, I think, it’s opportunistic.”
In the interview, Ms. Bresch said the company’s latest actions would do the most to help patients where it mattered, by reducing their out-of-pocket costs. And she said that the $600 list price was necessary for the company to recoup its investment in the EpiPen, which includes raising awareness for severe allergic reaction and making improvements to the way the product works.
But she also sought to shift blame away from Mylan, saying that patients are feeling the pain in part because insurers have increased the amount that customers must pay in recent years.
“What else do you shop for that when you walk up to the counter, you have no idea what it’s going to cost you?” she said. “Tell me where that happens anywhere else in the system. It’s unconscionable.”
To some, the company’s response seemed to ring hollow. “It’s a real challenge to understand how a management team sits around a board table and makes a decision to raise the price of a lifesaving medication over and over and over, and when the P.R. storm hits, decides to blame someone else for that price increase,” said David Maris, an analyst for Wells Fargo. He had warned investors in June that Mylan’s price increases on EpiPen and other drugs could soon draw unwanted media scrutiny.
The company is not a stranger to controversy. Robert J. Coury, Mylan’s chairman who served as chief executive until 2011, came under scrutiny in 2012 for using the company’s corporate jet to travel to his son’s music concerts. And last year, The Wall Street Journal reported that one of the board members had undisclosed ties to the land where the company built its new Pittsburgh offices.
Ms. Bresch has also weathered her share of controversy, like when it was discovered that West Virginia University awarded her a business degree 10 years after she had attended the school, even though she had completed only about half of the coursework. A report by the university later concluded that officials wrongly awarded her the degree because she was the daughter of the then-governor Joe Manchin, now a Democratic senator representing West Virginia. Mr. Manchin and Ms. Bresch have said they did nothing wrong.
The company also angered shareholders when it switched its headquarters to the Netherlands, and then used a little-known provision in Dutch law to block a takeover by the pharmaceutical giant Teva, which many investors had favored. The move to the Netherlands in 2014, called an inversion, also reduced the company’s tax rate. Mylan is one of a string of pharmaceutical companies that have done inversions in recent years, prompting outcry in Washington and calls to limit the practice.
Ms. Bresch’s rising salary has also fueled anger over the EpiPen price increase. Since 2007, when EpiPen was acquired and she was the company’s chief operating officer, she earned about $2.5 million in total compensation. In 2015, her compensation was nearly $19 million. Mylan’s board has said in company filings that it believes her pay is justified because she has contributed significantly to the company’s growth in recent years.
Ms. Bresch, who has worked at Mylan for 25 years, said her West Virginia upbringing had informed her approach to serving as chief executive. “There is a work ethic and grit about that that allows me to help make a difference,” she said.
Some of the chafing at her style, she said, is because people are resistant to change. Her top accomplishments, she said, include getting a federal law passed that required more inspections of overseas drug manufacturers, and improving access to AIDS drugs for patients overseas. “To make change happen, to make a difference, mediocrity doesn’t get you there,” she said.
Even as they have ruffled feathers within the industry, Ms. Bresch and Mylan have earned measured praise from consumer advocates, who said she wielded her influence in ways that helped consumers.
James Love, director of the consumers group Knowledge Ecology International, said Ms. Bresch opened doors at the Office of the United States Trade Representative when his group and others were working to change provisions in the proposed Trans-Pacific Partnership that they said would have limited access to drugs by people overseas. Mylan, as a seller of generic drugs, shared their interest, he said.
“They came in with some very talented people in the negotiations, and they knew what was going on politically,” Mr. Love said.
Still, he said, he opposes their position on the EpiPen and said his group was composing a letter of complaint to the Federal Trade Commission.
“I’m appalled at the price increase,” he said. “I don’t want to sugarcoat that.”
States of Cruelty
by Paul Krugman - NYT
Something terrible has happened to pregnant women in Texas: their mortality rate has doubled in recent years, and is now comparable to rates in places like Russia or Ukraine. Although researchers into this disaster are careful to say that it can’t be attributed to any one cause, the death surge does coincide with the state’s defunding of Planned Parenthood, which led to the closing of many clinics. And all of this should be seen against the general background of Texas policy, which is extremely hostile toward anything that helps low-income residents.
There’s an important civics lesson here. While many people are focused on national politics, with reason — one sociopath in the White House can ruin your whole day — many crucial decisions are taken at the state and local levels. If the people we elect to these offices are irresponsible, cruel, or both, they can do a lot of damage.
This is especially true when it comes to health care. Even before the Affordable Care Act went into effect, there was wide variation in state policies, especially toward the poor and near-poor. Medicaid has always been a joint federal-state program, in which states have considerable leeway about whom to cover. States with consistently conservative governments generally offered benefits to as few people as the law allowed, sometimes only to adults with children in truly dire poverty. States with more liberal governments extended benefits much more widely. These policy differences were one main reason for a huge divergence in the percentage of the population without insurance, with Texas consistently coming in first in that dismal ranking.
And the gaps have only grown wider since Obamacare went into effect, for two reasons. First, the Supreme Court made the federally-funded expansion of Medicaid, a crucial part of the reform, optional at the state level. This should be a no-brainer: If Washington is willing to provide health insurance to many of your state’s residents — and in so doing pump dollars into your state’s economy — why wouldn’t you say yes? But 19 states, Texas among them, are still refusing free money, denying health care to millions.
Beyond this is the question of whether states are trying to make health reform succeed. California — where Democrats are firmly in control, thanks to the GOP’s alienation of minority voters — shows how it’s supposed to work: The state established its own health exchange, carefully promoting and regulating competition, and engaged in outreach to inform the public and encourage enrollment. The result has been dramatic success in holding down costs and reducing the number of uninsured.
Needless to say, nothing like this has happened in red states. And while the number of uninsured has declined even in these states, thanks to the federal exchanges, the gap between red and blue states has widened.
But why are states like Texas so dead-set against helping the unfortunate, even if the feds are willing to pick up the tab?
You still hear claims that it’s all about economics, that small government and free markets are the key to prosperity. And it’s true that Texas has long led the nation in employment growth. But there are other reasons for that growth, especially energy and cheap housing.
And we’ve lately seen strong evidence from the states that refutes this small-government ideology. On one side, there’s the Kansas experiment — the governor’s own term for it — in which sharp tax cuts were supposed to cause dramatic job growth, but have in practice been a complete bust. On the other side there’s California’s turn to the left under Jerry Brown, which conservatives predicted would ruin the state but which has actually been accompanied by an employment boom.
So the economic case for being cruel to the unfortunate has lost whatever slight credibility it may once have had. Yet the cruelty goes on. Why?
A large part of the answer, surely, is the usual one: It’s about race. Medicaid expansion disproportionately benefits nonwhite Americans; so does spending on public health more generally. And opposition to these programs is concentrated in states where voters in local elections don’t like the idea of helping neighbors who don’t look like them.
In the specific case of Planned Parenthood, this usual answer is overlaid with other, equally nasty issues, including — or so I’d say — a substantial infusion of misogyny.
But it doesn’t have to be this way. Most Americans are, I believe, far more generous than the politicians leading many of our states. The problem is that too many of us don’t vote in state and local elections, or realize how much cruelty is being carried out in our name. The point is that America would become a better place if more of us started paying attention to politics beyond the presidential race.
