By Paul Levy

If you read only one book about state and federal health care policy, it should be The Great Experiment: The States, the Feds and Your Healthcare.  Published by the Boston-based Pioneer Institute, it is the most articulate and rigorous presentation of issues that I have seen, a stark contrast from many papers, articles, and speeches that slide by as “informed debate” in Massachusetts and across the country.  I learned more about health care policy from this book than from anything else I have read in the last decade.

While the book is constructed as a number of chapters by experts in field, it has a consistent voice and and is highly readable.  There is an engaging explanation by Jennifer Heldt Powell of the politics and substance of how the Massachusetts health care reform bill came into being; and there is also a data-rich analysis by Amy Lischko and Josh Archambault of how it is working.  But the book is quick to point out that what has happened in Massachusetts is unlikely to be an appropriate model for the nation.

Continue reading “The Great Experiment”

By Peter Ubel, MD

“How can the government make us buy health insurance?  What gives them that right?”

Sitting on my left while our airplane raced above the clouds, Elizabeth was clearly upset about Obamacare.  She wondered why the bill had to be so long, and why Obama would endorse a plan that doubled her health insurance costs.  But nothing vexed her more than the individual mandate.

At least that’s what I though until I spoke with her at greater length, and she revealed a profound truth to me about people’s attitudes towards the mandate and towards Obamacare more generally: she showed me that deep down she liked the idea of the mandate, once she realized its important role in accomplishing goals people on all sides of the political spectrum care about deeply.

We were flying towards North Carolina the day before the Supreme Court held its oral arguments on Obama’s healthcare plan.  Elizabeth had heard a great deal about the mandate.  She read The Wall Street Journal regularly, in part because it was so relevant to her work in banking.  And she enjoyed watching Bill O’Reilly on Fox News, but not Hannity, who she thought was “too extreme”.  She was by no means a conservative extremist.  She had major concerns about the banking industry for example, and as a Christian felt strongly that income inequality is a moral problem that neither party was addressing in an effective manner.  But she was solidly Republican, no doubt about that, and she agreed with most people in that political party that Obamacare was hurting the economy.  And above all she believed the health insurance mandate was “un-American.”

Continue reading “The Psychology of the ObamaCare Debate”

By Michael L. Millenson

While it’s comforting to just blame the GOP for the unhappiness with health reform threatening the president’s re-election, the truth is that Barack Obama repeatedly botched, bungled and bobbled the health reform message. There were three big mistakes:

The Passionless Play

While Candidate Obama proclaimed a passionate moral commitment to fix American health care, President Obama delved into legislative details.

When a Baptist minister at a nationally televised town hall asked in mid-2009 whether reform would cause his benefits to be taxed due to “government taking over health care,” Candidate Obama might have replied that 22,000 of the minister’s neighbors die each year because they lack any benefits at all. Instead, President Obama’s three-part reply recapped his plans for tax code fairness.

While Republicans railed about mythical “death panels,” and angry Tea Party demonstrators held signs showing Obama with a Hitler moustache, the president opted to leave emotion to his opponents. The former grassroots organizer who inspired a million people of all ages and ethnicities to flock to Washington for his inauguration never once tried to mobilize ordinary Americans to demand a basic right available in all other industrialized nations. In fact, he hasn’t even mobilized the nearly 50 million uninsured, who have no more favorable opinion about the new law than those with health insurance!

Continue reading “How Obama Botched and Bungled the Health Reform Message”

By John Irvine

In its wisdom, the Supreme Court of the United States may decide to overturn the Obama administration’s health reform legislation.

The Supreme Court of the United States may decide not to.

Mitt Romney may unseat Barrack Obama and wrest the Presidency away from the Democrats. Or he may not.

In a way, these things may not actually matter.

There may be uncertainty on Wall Street and in the media about the fate of the Affordable Care Act (ACA) and the upcoming presidential election, but the mood in the crowd gathered at the 9th session of the World Health Care Congress last week in Washington was  curiously upbeat.

There was a sense that health care is making progress.

And that is a good thing.

Innovations like accountable care organizations (ACOs), scientific management principles like cost containment and quality improvement and the movement for better health information technology will make their presence felt, regardless of what happens in the courts and on Election Day.

Unlike TEDMED, which brought together official Washington, the tech industry, entertainment and medicine — at the Kennedy Center last week, the World Health Care Congress is a meeting pretty much limited to health care industry insiders at larger firms.

As is generally the case, the speakers list read like a who’s who of very important healthcare names. Kaiser Permanente CEO George Halvorson, Intermountain CEO Charles Sorensen, Aetna CEO Mark Bertolini, Economists Ezekiel Emanuel and Jonathan Gruber, former OMB Director Peter Orzag, TEDMED curator (Priceline.com) Jay Walker talked about the power of the Internet to fundamentally rewire the way people think. Verizon CEO and NantWorks Founder Patrick Soon-Shiong were on hand to talk up a new collaboration. Xerox CEO Ursula Barnes introed the tech giant’s push into healthcare. Journos like Health Affairs Editor Susan Dentzer and NBC correspondent Nancy Snyderman provided media star power.

Continue reading “Dispatch from Washington”

By John R. Graham

There is no doubt that the campaign to “repeal and replace” ObamaCare will have its weakest standard bearer if Mitt Romney becomes the Republican candidate for President. His embrace of an “individual mandate” to buy health insurance or pay a penalty, as legislated in his 2006 Massachusetts health reform, is anathema to those faithful to the ideal of limited government. When Mr. Romney declares that he will issue a universal waiver from ObamaCare’s regulations as his first executive order, the people who should be voting for him fear that such action would be a substitute for repeal, instead of a preparation for it. (Do these folks really think a clean repeal bill, like the one passed by the House of Representatives in January 2010, will be on the president’s desk on inauguration day?)

But maybe we should look at it another way: If Mitt Romney had never signed his 2006 law (which was motivated, as the president’s men are so fond of telling us, but an idea generated at The Heritage Foundation), those of us committed to defeating ObamaCare would never be in the fortunate position we are today – the whole, ungodly mess hanging by a thin thread after a brutal hazing in the Supreme Court last week.

Without Massachusetts’ 2006 law, there is almost no likelihood that the Democrats would have written an individual mandate into the bill. Instead, they would have just hiked taxes. The only reason they painted a thin varnish of so-called “individual responsibility” onto the bill was so that they could pin some of the blame on Mitt Romney and certain conservatives who had embraced it. As noted by Avik Roy, the individual mandate was traditionally anathema to liberals, who prefer straight-forward tax hikes.

Continue reading “If the Supreme Court Kills ObamaCare, Should We Thank Mitt Romney?”

By Jim Stergios and Joshua Archambault

Americans believe in second chances. The oral arguments before the Supreme Court last week were a rare opportunity to dispassionately re-examine the divisive healthcare debate of two years ago. What happens if, after the smoke clears, we get a second chance at healthcare reform?

We’ve long known that healthcare will be a central theme in the 2012 presidential contest. The High Court’s deliberations and June decision only reinforce that reality for President Obama and Governor Romney.

Unlike with the Patient Protection and Affordable Care Act (PPACA), the constitutionality of Governor Romney’s Massachusetts law has never been seriously questioned. States, not the federal government, have police powers, allowing them to require purchases (car insurance, taxes and licensure) and to pass wide-ranging public health laws and public safety laws. The Bay State law enjoys broad popular support.

In contrast, the case before the Supreme Court was brought by the majority of states. Regardless of what the Court decides, the PPACA will continue to polarize the country.

President Obama may cite Romney’s Massachusetts reform as inspiring his efforts, but there are profound differences in the size, reach and financing of the two laws. Elected just six months after the law’s passage, Romney’s successor, Democratic Governor Deval Patrick, has obscured some of those differences by taking a big government approach to implementation.

Where Romney sought an open marketplace for individuals to purchase benefit plans ranging from catastrophic to generous, Patrick has drastically limited choices and mandated minimum coverage levels beyond private-market norms.

Continue reading “Romney’s Second Shot at Healthcare Reform”

By Richard Reece, MD

In politics, a month is a lifetime, and 7 months is an eternity. It’s four months from now to late June when the Supreme Court issues its ruling on the health law, and it’s several months until the election.

No one knows what will happen between now and the election. But whatever occurs, it will be a psychological and political time.

Democrats will put on a brave face. They will say it’s not over until it’s over, that the individual mandate was originally a Republican and Romney idea, that the justices will come to their senses, that this is a moral not a constitutional issue.

Republicans will say that the health law is a train wreck, that it was rooted in ego and arrogance of an overly ambitious president, that Democrats poisoned the whole politics process by completely ignoring the other party and the American public, and that the whole idea of individual and Medicaid mandates is toast.

If they are smart, and there is no guarantee of that, the GOP will issue a detailed alternative plan resting on incremental market reforms with proper government oversight.

“Inaction “ on Massive Scale

Over the next seven months, we are likely to have “inaction,” if I may borrow a term from the hearings, on a massive scale.

Continue reading “The Long Road From March to November”

By JD Kleinke

“The only constant in health care is change.”

It’s one of those clichés peddled at health care industry conferences by consultants who charge by the hour for helping attendees brace their organizations for all those terrifying changes just over the horizon. Not only is this cliche not true, but it is exactly untrue. The only constant in health care is gnawing anxiety about change that never actually occurs.

The Obama Administration’s health care reform plan – we can all call it “ObamaCare” now that the Administration finally owns the label it should have from the outset – is the motherlode of anxiety over change about to storm through the health care system. That is, unless you happen to cover your ears and block out all the partisan screaming, along with the political ideology dressed as legal arguments in the Supreme Court this week, and look at the actual plan and its numbers.

Yes, ObamaCare is expected to cram 30 million uninsured people into the current non-system. Complementary elements of the law make it illegal for health insurers to kick any of us out if we get too sick or stop paying our bills if we get too expensive. And if an insurer makes too much money in the process, it needs to refund a portion. Aside from these four economically intertwined health insurance market reforms, most everything else about ObamaCare is business as usual.

To wit: access to commercial health insurance for most of us will still run through the workplace; our employers will still, for better or worse, be charged with money-managing the system they love to hate, a messy, intrusive, difficult role foisted on them as an accident of history in the 1940s and enshrined in the tax code ever since. Health insurers will continue to operate half their book of business on a state-by-state basis, and the other half nationwide for self-insured employers, thus maximizing complexity, confusion and administrative cost for everyone involved.

There will be no new public health care plan for hard-pressed households – just a huge expansion of the nation’s 50 broke and broken Medicaid plans, plus subsidized coverage for the luckier among the working poor to purchase (at the fountain-pen gunpoint of the IRS) a plan from commercial health insurers. Those insurers will continue to design and sell their plans based on the crazy-quilt of local standards and state benefit mandates, along with a few new federal mandates for preventive services – including things like the economically trivial but culturally explosive birth control pill.
Continue reading “ObamaCare and the End of Nothing”

Many opponents of Obamacare claim that large employers will drop employee health coverage in droves. The Wall Street Journal has made this argument a centerpiece of its opposition to the health exchanges. The argument has some face validity – employers that drop coverage can save about $10,000 per employee in insurance costs but only have to pay fines of $2000 per employee. What employer would not want to save $8000 per employee?

Supporters of Obamacare argue that if employers do not pay for insurance, they will have to increase wages. This will temper the incentives of employers to drop coverage. This follows from a classic model in labor economics that says that employers have to give workers a competitive wage/benefits bundle, and that the mix of wages and benefits is largely fungible. Thus, if benefits fall by $10,000, wages will increase by about the same amount. The theory is well accepted.

While it has been difficult to construct empirical tests of this theory, the available evidence is largely supportive (though the evidence of 1:1 fungibility is less compelling than the evidence of some degree of fungibility.) This may explain why the Congressional Budget Office predicts that only a few million workers will lose their employer sponsored coverage and get pushed onto the exchange. Even so, the Wall Street Journal and others have dismissed this theory and evidence, arguing that employers who drop coverage will pocket the full savings and therefore than tens of millions of workers will be affected.

I want to propose a simple test of the naysayers’ position. The test relies on evidence that the Wall Street Journal and others should find unimpeachable –stock market valuations. This is a quick and dirty test but the results are so compelling that I think it is sufficient.

Continue reading “Will Obamacare Drive Out Employer-Sponsored Insurance?”

By Isabel Sawhill

I once called an older version of Paul Ryan’s budget plan “voodoo economics.” But you have to admire him. He has just released a new plan that slashes the deficit from 8 percent of GDP to around 1 percent by the end of the decade while simultaneously keeping revenues at 18 percent of GDP over the decade, very close to their historical average. To be sure, the specific policies required to get there are not well specified and there is much that I don’t like, such as the assumption that we don’t need new revenues to close the fiscal gap; still, after reading the “Path to Prosperity” I came away with a sense that there is food for thought, worthy of further discussion and debate, in this document.

I came to this conclusion after reading the section of the document called “repairing the safety net.” I had figured out that a lot of the savings in this plan had to come from slashing programs for the poor so I expected to be horrified by what I read. I am not in favor of cutting programs for the poor, especially in a plan that reduces taxes for the wealthy and leaves Social Security virtually untouched. Instead, I found myself at least intrigued with the arguments that I found in this section of the plan. They are thoughtful, well-articulated, and worthy of further debate.

One argument is that federal subsidies for safety net programs encourage states to spend more than they otherwise would. Another argument is that federal dollars come with federal prescriptions and paperwork that stifle state innovation and efficiency. A third argument is that these programs undermine efforts by civic or faith-based groups to play a stronger role. A fourth argument is that some of these subsidies (for example, Pell grants) simply bid up prices (for college tuition). A fifth argument is that we have too many overlapping and complex programs with similar purposes (job training being a great example). A sixth argument is that assistance should be made conditional on personal responsibility—for example, being engaged in work or job training if you are receiving government assistance. This model of conditional assistance was a key element in the largely successful 1996 welfare reform law and could be expanded to other programs. Finally, the plan emphasizes the importance of upward mobility—a goal which I think many can embrace.

Continue reading “In Defense of Paul Ryan’s Budget Plan”