Michael Cannon gives the game away

Cato's Michael Cannon, a mastermind behind Halbig, has made much of video clips in which ACA architect Jonathan Gruber seems to suggest that states that do not build their own exchanges might forgo their citizens' access to the tax credits subsidizing coverage. Gruber has since claimed that the assertion was a verbal slip, and that he probably meant to suggest (at a time when no one expected states to abstain from building their own exchanges) that a federal "backstop"  might not be in place in time for the first open season.

That's how I understood Gruber when I listened to the first unearthed clip (at minute 31). But Cannon isn't buying it. He's going for the perceived jugular,  claiming proof that the ACA's framers (with whom Gruber worked closely) intended to make the whole ACA machinery dependent on state action:

The problem with his explanations is that Jonathan Gruber doesn’t “flake.” He knows this law in and out. He knew what his words meant, with all their implications, when he spoke them. He knew the feature he was describing essentially gave each state a veto over the PPACA’s exchange subsidies, employer mandate and to a large extent its individual mandate. He knew that could lead to adverse selection. To claim Gruber didn’t know what he was saying is as absurd as saying a conductor might fail to notice that the brass section suddenly stopped playing.

As Cannon asserts, if only the state exchanges can grant subsidies, the individual mandate is all but inoperative in states relying on the federal exchange, because insurance will be unaffordable for most of the state's uninsured, exempting them from the mandate.

If that is the case, the flagship suit against the ACA's constitutionality decided by the Supreme Court in June 2012, NFIB v. Sebelius, is moot, because the ACA effectively imposes no federal individual mandate, only state ones.

What's the web got to do with it? -- the uninsured need human help

I have an article forthcoming elsewhere (I hope) that examines why many people who visited healthcare.gov remained unaware that they were eligible for subsidies to defray the cost of health insurance. That article is mainly focused on website design, e.g., getting a quick subsidy calculation in front of site visitors.

A new Urban Institute report* drawing on information from Health Reform Monitoring Survey data collected this June spotlights a different aspect of reaching the uninsured: For many, access to expert human assistance is vital.

The report compares the experience of those who were insured in June 2014 but had been uninsured for all or part of the twelve months prior with those who remained uninsured at the time of the survey. While a higher percentage of the still-uninsured used a website as a source of information than of the newly insured (60.3%** vs. 51.1%), "the insured were more likely to use direct assistance assistance than the uninsured" (45.9% vs. 32.1%).  The newly insured were likelier than the still-uninsured to use navigators and application assisters (11.2% vs. 6.4%) or agents and brokers (12.4% vs. 5.1%).***

Those who gained coverage were less likely to use websites exclusively than those who remained uninsured. While that's unsurprising, it is perhaps surprising that 35.5% of those who gained coverage looked for information without using a website at all, compared with only 22.2% of the still-uninsured.

Would you kill the Boys from Brazil?

Professing himself a lifelong Zionist, Roger Cohen proclaimed a kind of apostasy yesterday:

Jews, above all people, know what oppression is. Children over millennia were the transmission belt of Jewish survival, the object of what the Israeli novelist Amos Oz and his daughter Fania Oz-Salzberger have called “the intergenerational quizzing that ensures the passing of the torch.” No argument, no Palestinian outrage or subterfuge, can gloss over what Jewish failure the killing of children in such numbers represents.

I am reminded of the conflict dramatized in Ira Levin's terror novel, The Boys from Brazil (spoiler alert).  In it, a relentless Jewish Nazi hunter gets a tip from a caller in Brazil and tracks down a final life project set in motion by Nazi doctor Josef Mengele: cloning dozens of little Hitlers around the globe and placing them with elderly, authoritarian adoptive fathers. Ultimately the protagonist, Liebermann, obtains a list of the (literal) Hitler youth and their locations. A militant "never-again" rabbi, Gorin, demands the list, determined to have the clones killed.  That leads to a final confrontation:

The ACA provision that should have killed Halbig

Ever since a three-judge panel of the D.C. Circuit Court found in Halbig v. Burwell that the ACA only authorizes subsidies to be paid for health insurance bought in state-run exchanges, not in state exchanges set up by the federal government, progressive reporters have been ransacking the record to prove what they always knew: that the law's creators never intended to exclude federally run exchanges from the subsidy regime.  Today, Greg Sargent and Jonathan Cohn both published compelling circumstantial evidence to that effect.

It seems to me, though, that such circumstantial evidence should be unnecessary. The ACA includes a provision that ought to settle the issue -- on that the majority in Halbig egregiously misread. Health law scholar Timothy Jost highlighted the dispositive provision back in September 2011, two months after the IRS issued a rule spelling out that subsidies would be available through the federal exchange (at which point the brains behind the Halbig suit, Michael Cannon and Jonathan Adler, immediately began arguing in print that the IRS rule contradicted the ACA's text). With reference to the drafting error stipulating only that subsidies be credited through an exchange "established by a state," Jost asserted:

 we do not need to rely on the courts to correct this error. Congress corrected it itself.

Four days after Congress passed the Patient Protection and Affordable Care Act, it enacted the Health Care and Education Reconciliation Act of 2010. Section 1004 of HCERA amended section 36B(f) of the IRC to impose on exchanges established under section 1311(f)(3)—that is, state exchanges—and under section 1321(c)—that is federal exchanges, the obligation to report to the IRS and to the taxpayer information regarding tax credits provided to individuals through the exchange. In this later-adopted legislation amending the earlier-adopted ACA, Congress demonstrated its understanding that federal exchanges would administer premium tax credits.

In a subsequent post, Jost noted, "As a later-adopted statute, HCERA would take precedence over PPACA if there were a contradiction."

If I forget thee, O Buffalo

But how could we, when there's the Garden Walk to draw us back every year? Pro tip: the city of legendary winters has delightful summers.  And gardening fever spreads block by block, year by year. Now there's almost 400 gardens to tour ( here's a few of them). No competition, and no admission fee, though donations are solicited.

SCOTUS: Federal government can't *deny* subsidies to refusenik states?

Yesterday, I suggested that if the conservative justices of the Supreme Court wanted to uphold the D.C. ruling in Halbig, denying the federal government the right to provide subsidies to people who buy health insurance on  healthcare.gov, they might deflect reluctance to upend the law by recourse to states' rights. That is, Roberts in particular  might actually approve on principle leaving it up to the states whether to fund subsidies offered on the ACA exchanges, as he did with respect to the Medicaid expansion. By email, TNR's Brian Beutler responded:

Here's a fun thought. What if Roberts determines that an unambiguous reading of the statute denies subsidies to states that do not set up their own exchanges, but that this constitutes YET ANOTHER unconstitutional exercise of the spending power, a la the Medicaid expansion, and that the subsidies must flow everywhere.

Could the ACA exchanges go the way of the Medicaid expansion?

If the D.C. Circuit panel ruling in Halbig stands, and the state exchanges currently run by the federal government are deemed unable to grant subsidies to health plan buyers who qualify for them under the ACA's criteria, Nicholas Bagley posits that "the states with federally established exchanges will come under enormous pressure to establish their own exchanges." The federal government could make it easy for them, Bagley suggests, essentially allowing them to decree that they've "established" exchanges while letting Healthcare.gov continue to run them.  Thus the ACA would likely prove indelible after all:

True, not every state would accept the invitation to establish its own exchange, even if doing so were more or less a formality. But lots of states would, especially as voters started to howl about losing their tax credits. If so, even a bad outcome in Halbig might not matter that much in the end.

That quasi-forecast recalls the argument that all states will ultimately come round to accepting the ACA Medicaid expansion, albeit in their own sweet time (Arizona, the last state to implement Medicaid itself, did so 17 years after Congress established the program).

While this thought might be expected to soothe ACA proponents, for me it had the opposite effect. The Medicaid scenario might provide cover for the Supreme Court to uphold the D.C. Circuit panel in Halbig.

When Chief Justice John Roberts held in June 2012 that the ACA's individual mandate exceeded Congress's power under the Commerce Clause but was a legitimate exercise of Congress's taxing power, he justified the recourse to "the Government's alternative argument" by citing SCOTUS precedent that “every reasonable construction must be resorted to, in order to save a statute from unconstitutionality.” He would not thwart Congress's intent by destroying the law's ability to function if he could avoid it.

He showed no such reluctance, however, with regard to the ACA's requirement that states expand Medicaid eligibility to a new class of beneficiaries or else stand to lose federal funding for their existing Medicaid programs. He deemed that requirement coercive, and was joined by six other justices in striking the requirement down and making the Medicaid expansion voluntary for the states.

Let them all in? Laying a thought experiment on top of a thought experiment

Jeff Spross of ThinkProgress thinks we should give all kids who arrive on our borders immediate legal status. Josiah Neeley of the Texas Public Policy Foundation responds (on Twitter) by dangling a bit of bait: "why not let in anyone who wants come? Spross suggests that the U.S. could handle the influx if it had to or wanted to. Neeley then asks, "How many do you think would come if we accepted anyone who wanted to come?"

This recalled me to a thought experiment that seems apropos, though I'm not sure why -- maybe because it suggests, indirectly, how much running room we have. Courtesy of James Fallows:

I mentioned yesterday that Thomas Barnett had given a realistic brief appraisal of China's strengths and weaknesses in an NPR interview. A point I particularly liked was this tip for comparing American and Chinese scale:

If Americans wanted to imagine what it would take to be "strong" in the way China currently is, he said, all we'd have to do is think of moving the entire population of the Western Hemisphere into our existing borders. Every single Mexican. (Rather than enforcing the southern border, we'd require everyone to cross it, headed north.) Every Haitian, Cuban, and Jamaican. Everyone from Central America. All 190 million from Brazil. And so on. Even the Canadians. China, by the way, is just about the same size as the United States, though a larger share of its land area is desert, mountain, or otherwise nonarable.

Winning asylum in the U.S.: imminent danger of death is not enough

Reading about the flood of children now arriving on U.S. shores from Guatemala, Honduras and El Salvador, those of us not well versed in immigration law might assume that children who can demonstrate that they will be in imminent danger of death from gangs terrorizing their home towns if deported will be granted asylum. That is probably not so.

Determinations of refugee status or asylum in the U.S. are governed by the Refugee Act of 1980, which derives its criteria from the Convention Relating to the Status of Refugees approved by the U.N. in 1951. To be granted asylum, an applicant

"must prove that he or she would be persecuted on account of one of five protected grounds: race, religion, nationality, political opinion, and social group."  

If the gangs in question are equal opportunity terrorizers, it's hard to see at first glance how those criteria would be met.

The U.S. healthcare system, up my nostrils

If you'll bear with a brief personal medical narrative, I think it holds some lessons about overutlization and economic incentives in our healthcare system, though I'm not entirely sure what they are yet.

I've been plagued with nasal allergies all my life, and almost twenty years ago I also developed nasal polyps. The worst of the allergy symptoms moderated at about the same time, except when the polyps flared up, which would happen when I had a cold. On three separate occasions, I took steps to have the polyps removed surgically, which entailed taking the steroid spray Nasonex for a few weeks and the scheduling an operation. On each occasion I backed out of the operation. On each occasion, too, the Nasonex vastly improved my breathing, but I always went off it because I was under the impression it's bad to inhale a steroid indefinitely.

The last time I put this process in motion, in February 2012, I got some straight talk from the ENT doctor. Polyps and allergies require constant maintenance, he said. If I got the polyps removed, I'd have to stay on the steroid, and the polyps would likely grow back and have to be removed again. He convinced me that using Nasonex indefinitely would not be dangerous.

"Every time I go on Nasonex the polyps disappear," I said. "If I need to stay on the drug after I get the operation, what do I need the operation for?" He allowed that I had a point at wrote me a prescription refillable for a year.

Bypassing healthcare.gov, revisited

Just a brief teaser here, as I work to finish a reported story about different approaches to improving the shopping experience at healthcare.gov and getting essential information to users.

I have caught up again with HealthSherpa, which began life as one of the first ACA comparison shopping sites to spring up while Healthcare.gov was dysfunctional last fall, then went on to become a licensed broker and go live last February as one of the first third-party sites to start enrolling people in subsidized ACA plans. As I reported at the time (or rather, added some explanation to an initial report by the Washington Post's Brian Fung), HHS licensed a number of brokers to develop "web-based entities" -- that is, their own dedicated interfaces on the government site -- and HealthSherpa did so.

Now, co-founder Ning Liang tells me that the company has completed almost 2,000 applications and  continues to streamline the process. Liang claims that a solo applicant can now complete an application in 3-5 minutes --  and a family plan applicant in 10-15 minutes.  HealthSherpa has made this possible partly by reducing the lag time following each completed question, and partly by eliminating redundancies. One key streamlining is that a user goes directly from the shop-around process, where one enters personal info and gets price quotes with plan summaries, to the application process, rather than starting over as on healthcare.gov. The info entered in the shop-around process is ported into the application process.

Whaddaya mean, you didn't know about the subsidy? --Improving healthcare.gov

Once healthcare.gov stopped crashing, how successful was it in transmitting the most basic information to most users -- how much they'd be likely to pay in monthly premiums, and how much in out-of-pocket costs they'd be on the hook for?

My sense from late December on was that the website's shop-around feature, enabling a user to get that basic information without registering or applying, worked reasonably well. I used it all the time to check premiums, deductibles and maximum out-of-pocket (OOP) costs for different ages, income levels and locations. You need to enter about eight pieces of information, including state and county, household size, household members' ages, and household income, to get a listing of available plans, ranked lowest premium to highest, and sortable by metal tier. Each plan summary clearly lists what you'll pay in premium, deductible and OOP max (if your income estimate is accurate). Cost Sharing Reduction (CSR) subsidies lowering deductibles and OOP, available to those earning under 250% of the Federal Poverty Level, are figured in.

And yet, many people who tried to use the site came away with no idea how much they would need to pay -- that is, how big a premium subsidy they eligible for, let alone CSR, or even that they were eligible for subsidies at all. A McKinsey study found that 72% of the respondents who reported that they shopped but did not buy were subsidy-eligible, and that 66% of subsidy-eligible respondents who cited perceived affordability as the reason they stopped shopping were aware of neither their eligibility nor the amount for which they were eligible. Their plight is illustrated by the tale of a newly retired Philadelphia cop who went online and concluded that insurance would cost her $800 per month, -- missing the subsidy that reduced the premium to $135.

One more Jewish Voice for Peace

Update 7/7: Haaretz, voice of what's left of the Israeli left, published an astonishing indictment of Israeli society and culture in a staff editorial today:

No less responsible for the murder are those who did not halt, with an iron hand, violence by Israeli soldiers against Palestinian civilians, and who failed to investigate complaints “due to lack of public interest.” The term “Jewish extremists” actually seems more appropriate for the small Jewish minority that is still horrified by these acts of violence and murder. But they too recognize, unfortunately, that they belong to a vengeful, vindictive Jewish tribe whose license to perpetrate horrors is based on the horrors that were done to it.

Prosecuting the murderers is no longer sufficient. There must be a cultural revolution in Israel. Its political leaders and military officers must recognize this injustice and right it. They must begin raising the next generation, at least, on humanist values, and foster a tolerant public discourse. Without these, the Jewish tribe will not be worthy of its own state.

That makes me feel moderate in my little manifesto, originally posted on July 4, below.
 ----
A personal note here that I have joined Jewish Voice for Peace, which "seeks an end to the Israeli occupation of the West Bank, Gaza Strip, and East Jerusalem; security and self-determination for Israelis and Palestinians; a just solution for Palestinian refugees based on principles established in international law; an end to violence against civilians; and peace and justice for all peoples of the Middle East."  JVP campaigns to induce organizations and investors to divest from companies that profit from the Israeli occupation of the West Bank.

As a Jew, I feel a vital chord is struck by the JVP assertion that "we are among the many American Jews who say to the U.S. and Israeli governments: 'Not in our names!'" Not in my name the land theft, the caging of people in cantons via roads to which they're barred access, the legal codification of second class citizenship, the rampant housing discrimination, the mass arrests and consequence-free killings, the disproportionate assaults and bombardments, and the enablement of all of the above by obscene amounts of military aid showered on a first-world country by a U.S. Congress and executive branch forever in the pocket of a toxic combination of Jewish and Evangelical Christian lobbies.

I note that JVP is noncommittal as to the form of a just resolution of the conflict between Israelis and Palestinians, and that's as it should be. If conditions change to a degree almost unimaginable at the moment, and an Oslo-type two-state solution becomes acceptable to both sides, who would gainsay it?  I have come to believe, though, that a just state in which citizenship is defined by religion and ethnicity is impossible. Ultimately, by course of nonviolent evolution -- perhaps in a hundred years -- I would hope that a single democratic state with no special status accorded to any religion or ethnicity might emerge in present day Israel-Palestine.

Nostalgic bullying

Andrew Sullivan relays complaints from three writers, Leon Wieseltier, Molly Worthen and Rod Dreher, who are uncomfortable with the DIY approaches to religion adopted by many Americans. Worthen expresses the nub of their common complaint. "An institution" such as the Catholic church

forces you to have, for at least part of your life, a respect for authority that inculcates the sense that you have something to learn, that you’re not reinventing the wheel, but that millennia have come before you.

The loss of such authority is in my view a good riddance. On the plane of dogma, it means that those who confuse their close analysis of the fantasies derived from ancient fables with actual knowledge are not fooling anyone but atavists like themselves. On an institutional level, we've learned, or should have learned, that those credited an authority alleged to derive from God are likely to abuse it.

Perennial Millennials?

I've already forgotten what news snipped induced me to tweet, "If immortality is achieved in the next 50 years, we can call Millennials Perennials."  But underlying it was a children's poem I wrote maybe around 2005, which I think reflects a sneaking suspicion or hope held by my own (millennial) kids at the time:

What if human lifetimes double
before I'm 75?
What if they double again and again
and each time I'm still alive?

What if we're all electronically saved
on some future Internet
and email not only our thoughts but ourselves
wherever we want to get?

What if we move through time as well
and take on any shape
or shed our bods and morph to gods --
not bad for a naked ape.

Yes, Peter Suderman, the ACA covers the short-term as well as long-term uninisured.

Many people poring over the data still emerging from the ACA's first open enrollment season seem not to grasp  the volatility of Americans' insurance status.  Take Peter Suderman:

Kaiser’s survey finds that the majority of previously uninsured lacked coverage for two years, and that 45 percent reported not having coverage for five years. Which means that more than half of the previously uninsured were covered at some relatively recent point.

Now, many of those people clearly were having difficulty getting coverage for some reason—perhaps as a ripple effect of the recession, perhaps because of some other factor. But many of them appear not to be completely uninsurable. These are not people who couldn’t get insurance under any circumstance. They’re people who didn’t have it for the last several years.

Obamacare’s supporters would no doubt say that the law was designed to help those people just as much as it was designed to help those who never had coverage at all. That’s an entirely reasonable position. But when we talk about Obamacare’s coverage effects, it’s important to be clear about who is being covered: a sizable number of people who were already insured, as well as people who were both eligible for coverage and covered at one point, but had lost their coverage.

It's true that the ACA is designed to help the long-term uninsured. It's also designed to help the millions who fall out of and back into insured status every year. Last fall, healthcare scholars Rick Curtis and John Graves brought those millions into focus:

Hey, red state governors: here's an ACA "repeal and replace" plan to protect the rate-shocked

Guaranteed issue -- the guarantee that one's health or medical history won't be factored into the cost of health insurance bought on the individual market -- is one of the most popular features of the ACA. Many Republicans vowing to "repeal and replace" the law promise to keep it. But maybe they shouldn't.

Guaranteed issue is also the primary driver of the rise in health insurance premiums triggered by the ACA (the base price, that is, offset for most consumers by government subsidies). Benefits consultant Milliman estimated in March 2013 that guaranteed issue would drive the cost of insurance in California up 26.5%.  More recently, with the data for the ACA's first open season in, a NBER study by a team of health economists led by the Wharton School's Mark Pauly identified it as the primary cause of cost increases averaging 14 to 28% in 24 states. 

The rise in insurance premiums for the unsubsidized, leading to "rate shock" for some who were already buyers in  the pre-ACA individual market and earned too much to qualify for subsidies, has been Republicans' most potent attack point against the ACA. Rhetorically, they like to pin the price hike on the "essential health benefits" (EHBs) that all policies must provide under the ACA -- e.g., childbirth and mental health coverage. But the price impact of EHBs is dwarfed by guaranteed issue. Some Republicans and conservatives acknowledge this indirectly by touting state-run high risk pools for those with preexisting conditions -- a proposal that implies the end of guaranteed issue.

State high risk pools have been around for some time, and were funded as a temporary measure by the ACA to cover those with pre-existing conditions until the state insurance marketplaces were launched in 2014.  They have generally been underfunded, often prohibitively expensive and/or available to only a fraction of those who needed them.

I have a question for health economists -- or, if you prefer, a modest proposal for red state governors who would like to "repeal and replace" the ACA on a state level -- as the law allows via innovation waivers that empower states to submit plans that would meet the law's goals by alternative means. If feasible, it might be attractive to self-styled champions of the free market -- and of constituents who liked their pre-ACA insurance and couldn't keep it, chiefly because they've been drafted to subsidize insurance for the less healthy.

The bipartisan consensus on healthcare cost control

It would be inaccurate to say that there are two main methods of controlling healthcare costs. But it's fair, I think, to say that there are two poles, with an important if unproven class of measures between them.

One pole is government control over the price of medical services, procedures and products, including drugs. The means vary widely, from direct government payment of providers (the U.K.) to regional government approval of rates negotiated by all insurers (Switzerland, for hospitals). Government rate-setting is employed by every wealthy country except the United States, which is also to say every country that provides universal health insurance to its citizens. Not coincidentally, the U.S. spends two-and-a-half times the OECD per capita healthcare spending average and almost twice as much as a percentage of GDP (as of 2011).

The other pole is to offload an ever-increasing share of the healthcare tab onto consumers, causing them to restrict their healthcare consumption.  The U.S. has de facto taken this route. According to Kaiser Family Foundation research, the percentage of workers who pay an annual deductible of more than $1,000 for a single-person plan provided by the employer rose from 10% in 2006 to 38% in 2013. From 2003 to 2013, while premiums overall rose 80%, the cost of the average worker's share of the premium rose 89%, from $2,412 for a family plan in 2003 to $4,565 in 2013. According to the 2013 PwC Touchstone Survey of major US companies, 44% of employers were considering offering high-deductible health plans as the only benefit option to their employees in 2014; 17% did so in 2013.  Deductibles have also skyrocketed in the individual market, a trend accelerated by the Affordable Care Act. In the ACA exchanges, the average bronze plan's single person deductible was just over $5,000 and the average silver plan's, just under $3,000.

Can states "repeal and replace" the ACA? Nicholas Bagley on the scope of the law's "innovation waivers"

There is a paradox in the power the Affordable Care Act lends to states to devise alternative means to meet the law's goals. On the one hand, the scope of the law's Section 1332 "innovation waivers" is sweeping: states can propose alternatives to the law's coverage rules, funding and subsidy formulas, and mechanisms for compelling participation, i.e., the employer and individual mandates.

On the other hand, the alternatives proposed in waiver applications must provide coverage "at least as comprehensive" as that defined by the ACA and protections against excessive out-of-pocket spending that render coverage at least as affordable as stipulated by the ACA. Waiver proposals must also cover "at least a comparable number" of the state's residents and must not increase the federal deficit.

Does the left hand's demand of equivalence take back the right hand's proffer of freedom of design? I posed the question to Nicholas Bagley, a health law scholar at the University of Michigan and  former appellate attorney at the U.S. Department of Justice who blogs about health law and policy at The Incidental Economist.

Um...

Dear readers, I have another future-of-the-ACA interview in progress, to be posted tomorrow or Thursday. Hence the pause in posts. Meantime, as Woody Allen's Socrates might say, I give a (children's) poem.

Leftovers

Lint in the dryer,
dust in the corner,
hair in the shower,
crumbs in the toaster.

Nothing’s broken,
Nothing’s breaking –
Everything’s shedding,
peeling, flaking.

Can an ACA marketplace offer too much choice? (cont.)

When it was announced last week that the Illinois ACA exchange will have 306 plans on offer next year, I wondered how much choice was too much. A couple of takeaways: 1) extrapolating from this year, the county with the most plans, Cook, will probably have about 150 plans total, and 50 silver plans, in 2015; and 2) in practice, most people probably choose from the two or three cheapest plan in a given metal level, or in two metal levels. That is, price probably simplifies the choice to a manageable pool for most buyers.

The final 2014 statistics released by HHS on Wednesday for the federal exchange states shed a bit of light on both inferences.  First, there's a mention of the highest number of silver plans available in any county this year: 67. That's even more than the most populous county in Illinois' robust market will have in 2015. Some ACA shoppers have already been confronted with a ton of choice (and others with far too little).

Second, among those who chose silver plans, 65 percent chose either the cheapest or the second-cheapest plan at that level -- the latter being the benchmark to which premium subsidies are keyed. 60 percent of those who chose bronze plans chose one of the two cheapest.  So I was right that most people narrowed their range of choices dramatically (though a substantial portion did not not).

Does the ACA shaft the working class and middle class as Robert Laszewski claims?

HHS released statistics yesterday showing that "69 percent of enrollees who selected Marketplace plans with tax credits had premiums of $100 a month or less, and 46 percent of $50 a month or less after tax credits." Among the 87% of buyers on ACA exchanges who qualified for federal subsidies, the average premium was just $82 per month.

Healthcare industry consultant Robert Laszewski is unimpressed. In a post titled "Obamacare: What About the Working Class and the Middle Class?" he writes:

The lowest income people––who pay the lowest premiums and out-of-pocket costs––are the ones who are obviously signing up. That explains why the average consumer subsidy is so high and the average net cost is so low.

As I have said on this blog before, the biggest consumer problem Obamacare has is that the plans––with their still high premiums even after the subsidy, big deductibles, and narrow networks––are not attractive to working class and middleclass families and individuals who don't qualify for the biggest subsidies.

Simply, the Obamacare plans are unattractive to all but the poorest who get the biggest subsidies and the lowest deductibles

While Laszewski's market knowledge is to be respected, he rarely backs up his assertions as to what insurance buyers allegedly want with data.  Evidence suggests that the group of Americans who earn too much to qualify for subsidies yet lack access to employer-sponsored insurance is smaller than he thinks, and wealthier than he thinks. The ACA's direct winners will continue to outnumber its direct losers -- those who will pay more for coverage in the individual market -- and get less value -- than they would have had the law not passed. Consider the following:

Raymond Scheppach: States wll take back their ACA exchanges (eventually)

Raymond Scheppach, longtime director of the National Governors Association (1983-2011) and a former deputy CBO director, is an expert on the role of the states in the formulation and implementation of public policy.  Currently a professor at the University of Virginia, he recently served as project director for a report, Cracking the Code on Health Care Costs,  produced under the auspices of UVA's Miller Center by a State Health Care Cost Containment Commission co-chaired by Michael Leavitt, former Republican Governor of Utah and HHS Secretary under George W. Bush (interviewed here), and Bill Ritter, former Democratic governor of Colorado.

The report highlights the power of state governments to shape healthcare policy, given their roles administering Medicaid, state employee benefits, and now the health insurance marketplaces established by the Affordable Care Act.  It calls on states to set targets for health care spending; promote various forms of managed care, ACOs and alternatives to fee-for-service medicine in the programs it administers; and help consumers generate competition by reporting cost and quality information about health care providers and insurers.

I spoke to Dr. Scheppach, now a professor of public policy at UVA, about current and likely future state-level healthcare reform efforts.

Scheppach noted at the outset that  state governments administer or oversee health insurance for a large swath of the U.S. population  -- with more to come as the ACA exchanges and Medicaid expansion matures. "If you add it all together, in another year or two, there will be about 75 million people in Medicaid, another 3-5 million in state and local government employees' health plans, and then there's the exchanges." (CBO projections envision 25 million ACA exchange customers by 2018.)

In which Krugman borrows Martin Wolf's scalpel, possibly via Geithner

[n.b. see update in mid-post. I seem to have misread...]

In October 2010, Financial Times columnist Martin Wolf led off a column with a heroic simile to describe Obama's economic performance:

An ambulance stops by the roadside to help a man suffering from a heart attack. After desperate measures, the patient survives. Brought into hospital, he then makes a protracted and partial recovery. Then, two years later, far from feeling grateful, he sues the paramedics and doctors. If it were not for their interference, he insists, he would be as good as new. As for the heart attack, it was a minor event. He would have been far better off if he had been left alone.

That is the situation in which Dr Barack Obama finds himself...more stimulus was needed. After all, it was quite modest: fiscal stimulus was less than 6 per cent of GDP and so accounts for less than a fifth of the cumulative deficits of 2009, 2010 and 2011, while monetary policy is caught in a liquidity trap.

The truth is not that policy was foolhardy and failed, but that it was too timid and so could not succeed.

Lo, now cometh Paul Krugman to review Tim Geithner's memoir:

More choice is coming to ACA exchanges. How much is too much?

Hooray! Based on the first state reports, more health insurers will enter more ACA state exchanges in 2015 than in 2014. In Illinois, for example, as Peter Frost reports in the Chicago Tribune, six insurers offered a total of 120 health plans in the state in 2014, whereas in 2015, eight companies (with ten brand names) will offer 306 plans.

That's good, right? Well, more competition should mean better prices, and perhaps force constructive creativity in plan design. From a consumer shopping standpoint, though, how much choice is too much? What will a state marketplace with 300 plans look like?

The first thing to recognize is that the market is different in each county, and no county will offer 306 plans. This year, with 120 plans sold in the state as a whole, Cook County, home of Chicago, had 65 plans on offer.* Other Illinois counties that I tested at random had between 36 and 51 plans.  (That's a lot. By my count, Los Angeles, CA had 36 plans on offer this year.) Extrapolating, Cook County may have 160+ plans posted next year, sorted into the four metal tiers plus catastrophic. 

Michael Leavitt on State-level healthcare reform

Beneath the furious passions aroused by the Affordable Care Act lurk broad areas of bipartisan consensus regarding healthcare reform in the United States. Lawmakers in both parties want to move payment for healthcare away from fee-for-service and toward managed care, "bundled" payment by the patient or treatment episode, and risk-based payment, in which providers are rewarded for keeping costs under target and penalized for exceeding it. Both parties also accept the premise that high deductibles and co-pays help control costs -- with lip service at least usually paid to giving patients viable choices by providing information about providers' pricing and quality.

The bipartisan zone is mapped out in a report produced under the auspices of the University of Virginia's Miller Center by a commission co-chaired by Michael Leavitt, former Republican Governor of Utah and Secretary of Health and Human Services under George W. Bush, and Bill Ritter, former Democratic governor of Colorado. Cracking the Code on Healthcare Costs, released in January 2014, focuses on the role of state governments in containing healthcare costs while improving delivery, emphasizing that states have powerful levers on both fronts.  Those levers include administration of Medicaid, state employee health programs, and the state health exchanges established by the ACA, as well as the state regulation of insurance mandated by US law and "state laws affecting market competition and consumer choice, such as antitrust enforcement and requirements for providers to report price and quality information."

The report's working assumption is that, Republican cries of "federal takeover of healthcare" notwithstanding, both the ACA and existing Medicaid rules afford governors and state legislators and administrators ample scope to shape the healthcare markets in their states. Key recommendations include setting annual overall state spending benchmarks, as Massachusetts has done; promoting "coordinated, risk-based care to the disabled and dual-eligible population" -- the most expensive Medicaid beneficiaries; and also promoting coordinated, risk-based plans in the ACA exchanges -- as well as pricing transparency and quality ratings for participating plans.

ACA is here to stay

Does the ACA significantly constrain state innovation, or encourage it? I spoke about current and potential state efforts to transform healthcare delivery with Michael Leavitt and with Professor Raymond Sheppach, project director for Cracking the Code, whose comments I'll relay in a followup post.

When "choice" is a euphemism for "wealth"

I am a little surprised that two leading healthcare economists, Austin Frakt and Amitabh Chandra, write approvingly in The Upshot of this proposal for a new kind of health insurance:

If plans could compete on the basis of the therapies they cover, consumers could decide what they wish to pay for. This sounds complicated, but it need not be.

Health plans could define themselves at least in part by the value of technologies they cover, an idea proposed* by Professor Russell Korobkin of the U.C.L.A. School of Law. For example, a bronze plan could cover hospitalizations and visits to doctors for emergencies and accidents; genetic diseases; and prescription drugs that keep people out of hospitals. A silver plan could cover what bronze plans do but also include treatments a large majority of physicians find useful. A gold plan could be more inclusive still, adding coverage, for instance, for every cancer therapy shown to improve patient outcomes (no matter the cost) as long as it was delivered at a leading cancer center. Finally, a platinum plan could cover experimental and unproven cancer therapies, including, for example, that proton beam.

This way, nothing would be concealed or withheld from consumers. Someone who wanted proton-beam cancer treatment coverage could have it by selecting a platinum policy and paying its higher premiums. Someone who did not want to pay higher premiums for lower-value care, in turn, could choose a bronze or silver plan

The author of the proposal, Russell Korobkin, implicitly admits that it's a bit utopian, or at least a distant prospect, in that "there is very little solid information demonstrating the basic effectiveness of the majority of medical treatments recommended by physicians and other providers every day" and "where there is more than one plausible intervention, there is even less information available concerning the comparative effectiveness of possibilities."  His plan depends on creating a uniform scale of "relative value ratings" based on an existing measure, quality-adjusted life-years, "routinely used by health service researchers to compare the benefits of dissimilar interventions."

ICYRMI: Six online classics of 21st century history

"ICYMI" generally refers to something written a day or a week ago.  In recent days, I've had recourse several times to Michael Hastings' deeply reported 2012 reconstruction of Bowe Bendahl's upbringing, inner life and military career -- as well as of the negotiations for his release. It would be a mistake to suggest that everything most of us are learning now about Bendahl is in that story, but my sense is that 80 percent of it is.

That set me thinking this morning about other articles, written years ago but still online, that made a strong impression on me and that still resonate. Here's a short "in case your really missed it" list.

America's Sicilian Expedition: in the runup to the 2003 U.S. invasion of Iraq, pundits and scholars analogized the impending war to every conflict in American history, with the possible exception of the War of 1812. Some went further afield. One that struck me as a bit outlandish at the time was historian Simon Schama's essay raising the specter of ancient Athens' disastrous exercise in imperial overreach:

Seeing eye to eye on Afghanistan: Bowe Bergdahl and Robert Gates

Five days before his disappearance, Bowe Bergdahl poured out his disillusionment with the US effort in Afghanistan in a long email to his parents, quoted at length in Michael Hastings' June 2012 profile. It included this indictment:

In the second-to-last paragraph of the e-mail, Bowe wrote about his broader disgust with America's approach to the war – an effort, on the ground, that seemed to represent the exact opposite of the kind of concerted campaign to win the "hearts and minds" of average Afghans envisioned by counterinsurgency strategists. "I am sorry for everything here," Bowe told his parents. "These people need help, yet what they get is the most conceited country in the world telling them that they are nothing and that they are stupid, that they have no idea how to live." He then referred to what his parents believe may have been a formative, possibly traumatic event: seeing an Afghan child run over by an MRAP. "We don't even care when we hear each other talk about running their children down in the dirt streets with our armored trucks... We make fun of them in front of their faces, and laugh at them for not understanding we are insulting them."

Does that sound harsh? Compare Robert Gates' account in Duty: Memoirs of a Secretary at War of how he saw the U.S. war effort at just about exactly the same point, the summer of 2009:

Hey, what about Obama's threat to veto the NDAA if it maintains restrictions on prisoner transfer?

Remember Obama's May 21 threat to veto the National Defense Authorization Act if restrictions on his authority to transfer Guantanamo prisoners are not removed?

The President applauds Ranking Member Adam Smith for his continued stalwart leadership in standing up for our values and national security by advancing the cause of closing the detention facility at Guantanamo Bay. By eliminating unwarranted and burdensome restrictions relating to the transfer of Guantanamo detainees, his amendment would further our efforts to move past this chapter in U.S. history. We urge the House to adopt the Smith Amendment and put an end to the ongoing harm to the nation’s security that results from the operation of the facility at Guantanamo Bay, Cuba.

This Administration has repeatedly objected to statutory restrictions that impede our ability to responsibly close the detention facility and pursue appropriate options for the detainees remaining there, including by determining when and where to prosecute detainees, based on the facts and circumstances of each case and our national security interests. In hundreds of terrorism-related cases – and as illustrated once again this week – our federal courts have proven themselves to be more than capable of administering justice.

John McCain is Obama's Sal Maglie

Back in February, John McCain told Anderson Cooper he would support "some sort of exchange" for Bowe Bendahl -- at a time when it was public knowledge, explained by Cooper on the same show, that the exchange being negotiated was for the five Taliban detainees who later were in fact exchanged.  Now McCain says that the done deal is  "ill-founded," that it is "putting the lives of American servicemen and women at risk," and  that the five traded detainees are "the hardest and toughest of all" and "wanted war criminals."

I am reminded of the sage advice offered by Seattle Pilots pitching coach Sal Maglie in Jim Bouton's 1969 memoir Ball Four:

In the clubhouse meeting yesterday on the Oakland Athletics Sal Maglie said about Reggie Jackson, “Once in a while you can jam him.” I could just see the situation. Reggie Jackson up. Pitcher throws one high and inside, perfect jam pitch. Jackson leans back, swings and puts it into the right-field bleachers. And Sal screams from the bench, “Not now, goddammit, not now!” (Kindle locations 4403-4406).

It's not necessarily inconsistent to have been in favor of negotiating but now to balk at the terms of the actual deal struck. McCain did leave himself some wiggle room in his February exchange with Anderson Cooper: 

COOPER: Would you oppose the idea of some form of negotiations or prisoner exchange? I know back in 2012 you called the idea of even negotiating with the Taliban bizarre, highly questionable.
SEN. JOHN MCCAIN (R), ARIZONA: Well, at that time the proposal was that they would release -- Taliban, some of them really hard-core, particularly five really hard-core Taliban leaders, as a confidence- building measure. Now this idea is for an exchange of prisoners for our American fighting man. I would be inclined to support such a thing depending on a lot of the details.

Cue the WilllieHortoning

If you wonder why Obama cut Congress out of the endgame of his negotiation for Bowe Bergdahl, tune in to the late Michael Hastings' account of the politics as of June 2012, in his great reconstruction of Bergdahl's tale:

Officially, Bowe remains a soldier in good standing in the United States Army. He has continued to receive promotions over the past three years, based on his time in uniform, and he now holds the rank of sergeant. Unofficially, however, his status within the military is sharply contested. According to officials familiar with the internal debate, there are those in both Congress and the Pentagon who view Bowe as a deserter, and perhaps even a traitor. As with everything in Washington these days, the sharp political discord has complicated efforts to secure his release.

"The Hill is giving State and the White House shit," says one senior administration source. "The political consequences­ are being used as leverage in the policy debate." According to White House sources, Marc Grossman, who replaced Richard Holbrooke as special envoy to Afghanistan and Pakistan, was given a direct warning by the president's opponents in Congress about trading Bowe for five Taliban prisoners during an election year. "They keep telling me it's going to be Obama's Willie Horton moment," Grossman warned the White House. The threat was as ugly as it was clear: The president's political enemies were prepared to use the release of violent prisoners to paint Obama as a Dukakis-­like appeaser, just as Republicans did to the former Massachusetts governor during the 1988 campaign. In response, a White House official advised Grossman that he should ignore the politics of the swap and concentrate solely on the policy.

"Frankly, we don't give a shit why he left," says one White House official. "He's an American soldier. We want to bring him home."

Is Obama offering "new ways of understanding" the economy?

Political scientist Julia Azari, who has written a book about presidential rhetoric, suggests that Obama's rhetoric has so far failed to be transformative:

A more nuanced critique of Obama’s rhetoric might suggest that, especially early on, his rhetorical choices fit very neatly into existing terms of debate. His speeches have offered very little in terms of new ways of understanding the central policy issues of his presidency – healthcare, the minimum wage, immigration, climate change and the environment. I’m not arguing that with better framing, Obama would have been more successful on these issues. But the old frames have allowed opponents to define the discussion, even after policies are signed into law. Furthermore, debate about issues like immigration and minimum wage continue to invoke the same tradeoffs and considerations that they have in the past. Effective rhetoric would cast familiar issues – particularly ones like immigration, which tend to cut across party lines – in terms of values and considerations that are both novel and resonant. That might not be enough for policy change now, but it might allow for it later, under the right conditions. This is admittedly a high bar for presidential rhetoric, even for someone with Obama's facility with certain kinds of public speeches.

This may be true at the single-policy level. It is true at the sound bite level. Obama's not good at war cries, or slogans, or, less cynically, single phrases that sink into the national consciousness.

Piketty: U.S. sold its middle class birthright for a mess of Reaganite pottage

The main thesis of Thomas Piketty's Capital in the Twenty-First Century is that the accumulation of wealth in the hands of a few is subject to a kind of gravitational pull. That's what the long-term data tells Piketty. But there's a second core thesis: that gravitational pull can be countered by social policy. Markets, he asserts, are a social construct: prices and wages do not magically align themselves with intrinsic worth.

In practice, the invisible hand does not exist, any more than “pure and perfect” competition does, and the market is always embodied in specific institutions such as corporate hierarchies and compensation committees (p. 332).

In Chapter 8, Piketty traces "the explosion of inequality in the U.S. after 1980." In Chapter 9, he homes in on the explosion in compensation of top executives in the U.S. -- mirrored to a somewhat lesser extent, throughout the Anglosphere, and to a lesser but still pronounced degree, through Continental Europe, Japan, and emerging economies:

The central fact is that in all the wealthy countries, including continental Europe and Japan, the top thousandth enjoyed spectacular increases in purchasing power in 1990– 2010, while the average person’s purchasing power stagnated (p. 320).

Obama's audacious claim: U.S. is retooling foreign policy from a position of strength

Back in December 2008, in an interview with Time's Richard Stengel, Obama set for himself what struck me as a "modest and ambitious agenda" to make a significant beginning on several long-term challenges.  I posited in early 2012 that he'd done reasonably well by his own yardstick.

In an interview airing on NPR today, Obama set himself an ambitious set of benchmarks in a narrower range: not foreign policy per se, but the legal and ethical framework in which foreign policy -- and military action -- is formed and executed.  Here's the agenda:

On his foreign policy goals before leaving office:
 
"I'm going to keep on pushing because I want to make sure that when I turn the keys over to the next president, that they have the ability, that he or she has the capacity to — to make some decisions with a relatively clean slate.

"Closing Guantanamo is one. Making sure that we have the right legal architecture for how we conduct counterterrorism and that there's greater transparency, as I discussed today, that's another.

Is Obama a "superdove"? No.

Max Fisher's analysis of the foreign policy doctrine Obama laid out today at West Point includes a pretty serious misreading:

Obama argued, directly and repeatedly, that the US would have to reduce its use of military force as a tool of foreign policy. Obama argued that the US could and should not use military force, including even limited actions such as off-shore strikes, except when absolutely necessary to defend "core interests" or to "protect our people, our homeland, or our way of life."

That's a very high bar for the use of military force. Obama didn't just make the point abstractly, going through several major US foreign policy changes to explain why, in each, military force was not and should not be applied.

Obama did not suggest that the U.S. would use force only when core interests were at stake. He said that the U.S. would use force unilaterally only when core interests are at stake. Or rather, that unilateral action would be on the table only under such circumstances. Here is the distinction he actually made:

The Obama Doctrine: Pushing on a String?

There wasn't much to inspire in Obama's West Point speech. Dan Drezner wished in advance -- fairly, I think -- that Obama would sketch out in some detail for the benefit of allies just how he proposes to use means other than war to enhance collective security -- in the South China Sea, in eastern Europe. He didn't do that  He just touted in rather general terms the sanctions against Iran and Russia as examples of effective collective action.* He also drew a line, with perhaps more specificity than in the past, between vital U.S. interests that would be defended unilaterally if necessary and " issues of global concern do not pose a direct threat to the United States," in which collective action, usually nonmilitary, is the appropriate course. Perhaps I've grown accustomed to that distinction through Obamosmosis -- it did not surprise me.

What did strike me was a few rather caustic notes. The speech was short on rhetorical olive branches. For example:

1. China the aggressor and competitor: 

Russia’s aggression toward former Soviet states unnerves capitals in Europe, while China’s economic rise and military reach worries its neighbors

Regional aggression that goes unchecked – in southern Ukraine, the South China Sea, or anywhere else in the world – will ultimately impact our allies, and could draw in our military.

Twice Obama rhetorically yoked China's aggression with Russia's -- and once, China's economic success with its military muscle-flexing.  No "we do not seek to contain China's rise" reassurances.

When a heavily subsidized private health plan doesn't quite suffice

The Times' Abby Goodnough reported this past weekend that many hospitals have cut back on charity care, hoping to push uninsured patients into subsidized ACA coverage.  Some hospitals are targeting new payment requirements at specific groups eligible for coverage (e.g., those with incomes between 200% and 400% of the Federal Poverty Level), and some are requiring co-pays from the newly insured.  In the latter category, Goodnough spoke to one woman whose current situation points toward complex choices and tradeoffs spurred by the new law.

Here's the tale:

Beverly Jones, 51, of St. Louis, who has lupus, is the type of person targeted by Barnes-Jewish Hospital’s new policy. Ms. Jones, who already owes Barnes-Jewish thousands of dollars for emergency room treatment and other visits, said the hospital’s new co-payments for the uninsured would “throw my budget into a tailspin” on her annual income of $13,400, which comes mostly from disability checks.

She has enrolled in a subsidized insurance policy under the Affordable Care Act. But she worries that she will have trouble paying the fees and deductibles required under her new plan, even with generous subsidies.

“There’s still a lot of stuff I can’t afford to do,” she said.

This caught my because at an income of $13,400, Ms. Jones is eligible for the maximum level of Cost Sharing Reduction (CSR) under the ACA (if Missouri had accepted the Medicaid expansion, she would be eligible for that). At maximum CSR, any silver plan she chose would have a mandated actuarial value of 94%, equivalent to the best employer-sponsored plans. Her out-of-pocket expenses would not be negligible at her income level, but they would be quite low.

Political polarization correlates with rising inequality

Thomas E. Mann, arguing that U.S. political dysfunction is more extreme than political scientists are willing to acknowledge, asserts (and demonstrates) that paralyzing party polarization is asymmetric:

That mismatch between parties and governing institutions is exacerbated by the fact that the polarization is asymmetric. Republicans have become a radical insurgency—ideologically extreme, contemptuous of the inherited policy regime, scornful of compromise, unpersuaded by conventional understanding of facts, evidence, and science; and dismissive of the legitimacy of its political opposition. The evidence of this asymmetry is overwhelming.

The time frame for this accelerating dysfunction is approxmately 1980 - present:

And Norm Ornstein and I in It’s Even Worse Than It Looks document how the asymmetry developed from Newt Gingrich in the 1980s to the present. Asymmetric polarization has found its way to the public: Republican Party voters are more skewed to their ideological pole than Democratic Party voters are to theirs.

Serendipity: continuing my slow plow through Thomas Piketty's Capital in the Twenty-First Century this morning,  I came across the foundational fact base:

Another survey shows: those who remain uninsured don't know about ACA subsidies

Last week, I noted that a main takeaway of the latest McKinsey survey of 2874 people seeking health insurance in the individual market in 2014 was that the majority of those who said that they could not afford insurance did not know about the subsidies provided by the Affordable Care Act. McKinsey found that 88% of those citing perceived affordability challenges were subsidy-eligible, and two thirds of the subsidy-eligible respondents who cited perceived affordability as the reason they stopped shopping were aware of neither their eligibility nor the amount for which they were eligible. Further, 90% of those citing perceived affordability challenges who did not shop were subsidy-eligible, and 79% of those were unaware of their eligibility or the amount of subsidy for which they were eligible.

Now, a survey just released by EnrollAmerica reports similar findings with regard to ignorance of ACA offerings.  Bruce Rule of Bloomberg reports:

Pence palms a card in plain sight

Obamacare must die. Medicaid is a disaster. Long live Healthy Indiana, an implementation of Obamacare and an expansion of Medicaid.

Such was the inherent logic of Indiana Governor Mike Pence's May 19 speech to the American Enterprise Institute announcing his intent to seek a waiver to use ACA funds earmarked for state Medicaid expansion  to expand an updated version of the Healthy Indiana Program, Indiana's current Medicaid alternative.

If the hospital's nonprofit, the CEO may not be

Updated, 5/19:

A footnote to Elisabeth Rosenthal's story in today's Times about how huge pay packages for hospital executives contribute to high U.S. healthcare costs: Exhibit A was Ronald Del Mauro, the just-retired president of the nonprofit New Jersey hospital group Barnabas Health, who was paid $21 million in deferred compensation, bonus and incentive pay in his final year.

The footnote concerns an explanation from a Barnabas spokesperson:

Ms. Greene also said Barnabas’s compensation program follows I.R.S. rules and is established by an executive compensation committee with “guidance from a nationally recognized compensation consultant.”

That jogged memory of a related factoid. Mr. Del Mauro was not only paid in accordance with advice from a consultant: he was also paid as a consultant, at least as of the end of 2012.

Robert Laszewski's ACA blind spot

Robert Laszewski, health insurance consultant and blogger, is among the critics of the Affordable Care Act whom supporters of the law respect the most. He knows the market, he knows the law, he wants to see everyone insured, he's not averse to calling out Republican idiocy and mendacity, and he wants to fix the law, not repeal it. Ezra Klein's Wonkblog named him "Pundit of the Year" for 2013.

Yet Laszewski has a bias, which progressive healthcare reporters, including Klein, are slow to call out.  His ur-insurance buyer is a veteran of the pre-ACA individual market, healthy, ineligible for ACA subsidies or for only limited subsidy, and so hit by rate shock.  His chief complaint seems to be that ACA-compliant plans are weighed down by unnecessary Essential Health Benefits, which drive up the base premiums and so increase the hit to the unsubsidzed.

The plight of this cohort is real, and the law could be amended to ease it. Yet Laszewski generally fails to acknowledge that such victims are far outnumbered by ACA beneficiaries, that negative responses to the law have been shaped in large part by five years of Republican disinformation, that guaranteed issue is a much larger driver of unsubsidized rate increases than the benefit mandates, and that the law is on target so far to meet long-term CBO projections.

Laszewski's bias in on display in his latest post -- which pleased progressives by acknowledging that Democrats pledging to modify the law are more in line with public opinion than Republicans vowing to repeal it. Here's the nub of his case that the law is in trouble because people do not like the core offering:

How to choose a health plan? Even Austin Frakt needed help

If you were shopping for a new health insurance plan, how much extra would you be wiling to pay for a plan that included your current doctor or doctors, or a nearby hospital you think well of, or a top cancer center that you don't need now --as far as you know?  How much more deductible and co-insurance would you take on to lower your monthly premium?

These questions are not easy to answer. Not for a 27 year-old transitioning off a parent's health plan. Not for a 35 year-old fast-food worker. Not for a 48 year-old self-employed consultant. Not even for a health economist.

Austin Frakt, a health economist at the U.S. Department of Veterans Affairs and Boston University and co-Editor-in-Chief of The Incidental Economist blog, has had a personal taste of the complex decisions facing shoppers on the health insurance exchanges established by the Affordable Care Act. In many states, buyers are confronted with dozens of plan options -- though for most, price will probably narrow the feasible choice to a handful. As a federal employee, Frakt has for some time chosen his family's insurance on a yearly basis  from a precursor of the exchanges, the Federal Employee Health Benefits Program, which in Massachusetts offers more than a dozen options. He has long chosen Blue Cross Blue Shield plan for his family that has a low deductible and is "accepted pretty much everywhere" -- that is, by every doctor and hospital the Frakt family has had cause to access.

Frakt has more than once considered the possibility that higher deductible plan with a lower premium might save his family money. He tells me, though, that when he considered switching to a high deductible plan without any form of decision support,  the utility of doing so was "very hard to assess. You have to know a good deal of detail about your own plan,  the plan you're comparing it to, and your own utilization pattern. Also, the deductibles and copays for everything. You would want to know if the doctors you currently use are in the other plan's network. It's a very complicated comparison. I was overwhelmed, couldn't compare them meaningfully."

Is there a hole in the heart of U.S. healthcare cost control?

It's a given that the sine qua non of providing universal access to quality healthcare is effective cost control. That's especially true in the United States, where healthcare costs 50% more per capita than in the next most expensive country, Switzerland, and more than twice the OECD average, notwithstanding the fact that the U.S. is the only wealthy country that does not insure all its citizens.

This high-cost starting point is the Affordable Care Act's pre-existing condition, the reality underlying bitter complaints about high premiums for the unsubsidized and narrow networks in exchange plans.  As Yogi Berra might say: if you want to make healthcare affordable to all, healthcare has to be affordable. To be successful, the ACA has to bend the cost curve -- or at least, maintain the windfall spending growth slowdown that seems to have taken hold over the last ten years -- at the same time it's expanding access.

The ACA's main efforts to control costs fall broadly into two categories. First, in Medicare payments, a series of pilot programs seek to move healthcare providers away from fee-for-service, via per-patient and per-episode payments and incentives to reduce costs and meet quality benchmarks. Second, in the exchanges, competition and price pressure induce insurers to reduce costs by a) putting a good deal of the cost burden on patients, via high deductibles and co-insurance payments, and b) offering narrow networks -- that is, limiting covered doctors and hospitals to those who meet the insurer's price (and, theoretically, quality) demands. In the broad category of putting price pressure on payers of all kinds also belongs the ACA's excise tax on the most expensive employer-sponsored plans, which is driving employers too toward both narrow networks and more cost-shifting to employees.

Cost control without cost controls?

Atul Gawande has expressed the hope that by seeding myriad experiments, the ACA will grow a few cost-saving sequoias  -- as an analogous outpouring of experiments and demonstration projects spurred by the U.S. Department of Agriculture revolutionized food production and drove down food prices in the early 20th Century.

I hope Gawande is right. He may be. But it might also be argued that all this experimentation is "designing around" the one cost control element that works in every other wealthy and is lacking in the U.S.: uniform pricing per procedure, imposed or at least overseen by government. (It's "overseen" in Switzerland, where hospital rates in each canton are negotiated by hospitals and insurers acting collectively, subject to approval by the cantonal government. Physicians are paid on a national fee-for-service scale.) Without that core shift in leverage away from healthcare providers, reforms are balkanized and incentives may fly in various directions.

McKinsey's really important finding: the still-uninsured don't know about ACA subsidies

McKinsey & Company is out with a new survey -- conducted online and in English only -- of participants in the 2014 individual market for health insurance. One headline stat seized on by ACA skeptic Avik Roy (see note below) is that of those who purchased ACA-compliant plans, just 26% reported themselves uninsured in 2013.  That number is apparently at wild variance with HHS' report that of the 5.18 million Healthcare.gov enrollees who applied for financial assistance (95% of the total), 87% reported being uninsured at the time of application.The huge difference is due in large part to these factors:

1) HHS asked those applying for financial assistance whether they were insured at the time of application. McKinsey asked whether they were covered through most of 2013.

2) McKinsey's numbers include people who bought off-exchange -- and people not eligible for subsidies* (as Charles Gaba has noted).

3) McKinsey's respondents were self-selected via an online survey, and the survey was conducted in English only.

The truth probably lies somewhere in between. Charles Gaba estimates that about half of ACA exchange signups were previously uninsured. The question of who was previously uninsured is in any case complex, given the high volatility of the individual market for insurance (and of the job market). According to an estimate by healthcare scholars Rick Curtis and John Graves, less than half the people who will be eligible for ACA enrollment at the end of 2014 will have been eligible a year prior. According to Graves and Jonathan Gruber, 7.6 million people lost health insurance in 2012; approximately the same amount must have gained it.  That kind of churn is perpetual.

While the questions, "how many signups were uninsured?" and "how many paid?" suck up all the political air, the real import of the McKinsey survey (to the extent that it is representative) lies elsewhere, in my view. The survey indicates pervasive ignorance among the subsidy-eligible of what the ACA had to offer them.

Reporters read insurance execs' testimony before yesterday's House ACA hearing. Looks like GOP reps didn't

Last week, the House Energy & Commerce Committee put out a mendacious report claiming that insurance company executives had submitted data to them showing that just two thirds of ACA private plan enrollees had paid their first month's premium. ACA signups tracker Charles Gaba shot that rotten fish in a barrel within an hour of the report's release:.

...they're VERY clear about what they're claiming: that as of 4/15/14, only 67% of all QHP enrollments via Healthcare.Gov had paid their first month's premium, right?

Well, there's a serious problem right there, because out of the 8 million or so enrollments as of 4/15, only 5 million of the first month's premiums were even due.

Gaba was the first of many; the claim was widely debunked. That didn't deter the Committee from calling health insurance executives to a May 7 hearing,  presumably to ratify their statistical legerdemain.  Unsurprisingly, the hearing, conducted by the Oversight and Investigations Subcommittee, did not go as planned. Jonathan Bernstein marvels at the manifestation of an apparent feedback loop:

But yesterday, a House subcommittee invited insurance company executives to testify and, according to the Hill, Republicans on the panel were “visibly exasperated, as insurers failed to confirm certain claims about ObamaCare, such as the committee's allegation that one-third of federal exchange enrollees have not paid their first premium.”

We don’t have to rely on reporter interpretations (here’s another one). It made no sense to hold the hearing unless Republicans were (foolishly) confident that the testimony would support their talking point, instead of undermining it.

The only plausible explanation is that closed feedback loop. Either members of the committee managed not to be aware of the criticisms of their survey, or they mistakenly wrote off the criticism as partisan backbiting.

Kevin Drum piles on:

Obviously Republicans were caught off guard at yesterday's hearing, and that could only happen if they really and truly believed their own flawed survey. And that, in turn, could only happen if they get pretty much all their information from Fox News and don't bother with anything else. 

The bubble is apparently more airtight even than Bernstein and Drum fathomed, because the executives' prepared testimony had already hit the newswires before the hearing started. Bloomberg's Alex Wayne had the whole gist in a story that ran on Wednesday morning, prior to the hearing:

Is health insurance worth the money? Would you do without it?

A rigorous study* of the effects of health reform in Massachusetts since its 2006 launch yielded powerful evidence that the state's expansion of access to health insurance improved health and reduced mortality, particularly among poorer citizens. Adrianna McIntyre summarizes the core finding:

Benjamin Sommers, Sharon Long, and Katherine Baicker estimate that overall mortality in Massachusetts declined 2.9 percent relative to control counties between 2007 and 2010; mortality amenable to health care declined 4.5 percent. This translates to one death prevented for every 830 people who gain insurance, and the effects were larger in counties with low income and low pre-reform insurance rates—the counties we would expect to be most favorably impacted by reform.

Health economists, as is their wont, have put  (tentative) price tags on lives saved.  The ever-humane Harold Pollack pegged the cost-per-life at $3.3 million, adding the essential caveat:

Don't deny ACA-driven rate-shock. Do put it in perspective

Most Obamacare horror stories trumpeted by Americans for Prosperity, Fox News et al did not hold up to scrutiny because the protagonists turned out to be eligible for subsidies. The law's enemies wanted real hardship cases, and even modest affluence apparently takes the edge off for propagandists.

That sloppiness has made it relatively easy for some of the law's supporters, including Paul Krugman (see update #7 here), to gloss over the substantial price hikes suffered by those who 1) are in the individual market for a relatively long haul, 2) earn too much to qualify for ACA subsidies, and 3) do not have a pre-existing condition or a family member who has one.

eHealth, the nation's best-known online health insurance broker pre-ACA, has published statistics indicating the extent of  premium price hikes for the unsubsidized under the ACA. The latest snapshot is based on 213,000 insurance applications completed on eHealth during the ACA's first open enrollment period, from October 2013 through March 2014;  a 2013 baseline is published here.   According to eHealth's most recent stats, the average individual plan premium rose from $197 in 2013 to $271 in 2014, a 38% increase. The average family plan rose from $426 to $667, a 57% hike.

The larger jump in family plan premiums is partly explained by a larger reduction in average deductibles, which shrank from $10,568 in 2013 to $7,771 in 2014 (that's for the whole family; each individual would have a smaller deducible). The average individual plan deductible fell less dramatically, from $4,900 to $4,164.  As open season wore on, eHealth customer trended toward lower premiums and higher deductibles.

Fauxbamacare freebie No. 1: Covering those with pre-existing conditions

In their burgeoning promotion of Fauxbamacare -- promises to repeal the ACA while retaining its most popular features, without specifying how -- dozens of Republican incumbents and candidates are promising to maintain affordable coverage for people with pre-existing conditions. Small wonder: approval of the provision is at 70% nationally, according to the Kaiser Family Foundation's March poll.

Of course, Republicans also love to bash the ACA for driving up the cost of private-market insurance for the unsubsidized.  They blame the rise -- which is real for those who earn too much to qualify for ACA subsidies and have no pre-existing conditions in their household -- on the ACA's new rules for what all insurance policies must cover, which took full effect on Jan. 1, 2014.

Here's the thing, though. Guaranteed issue -- the prohibition against varying the price or scope of insurance on the basis of the buyer's health and medical history -- is the prime driver of the increase in the base price of private insurance triggered by the ACA.

Republicans wouldn't scrap the main driver of ACA rate shock

As the reality that millions have benefited from full implementation of the Affordable Care Act takes hold, more and more Republicans are resorting to what Ezra Klein has dubbed Fauxbamacare: propose to repeal the hated law, replace all its popular components without providing any details.

Progressives counter that if you claim you want to make health insurance affordable to all, unless you come out in favor of a single payer system there is no real alternative to the basic structure of the ACA: guaranteed issue (that is, no variation in health plan price based on a person's medical history), an individual mandate or equivalent* to offset the influx of sick people into the risk pool, and subsidies (or Medicaid) for those who can't afford the premiums.

While that's mostly true, it's also true that some plans crafted to current conservative specs look significantly if not radically different from the ACA. The vast majority of Republican elected officials have shied from putting forward such a plan -- or ignored the one put forward by Senators Coburn, Burr and Hatch --  since such alternatives require tough tradeoffs. The main difference is that conservative schemes give insurers more leeway to sell plans with skimpier benefits and lower premiums. They eliminate or vastly reduce the Essential Health Benefits (EHBs) mandated by the ACA. They loosen the allowing "age banding" of premiums -- the degree to which older buyers can be charged more than younger ones -- from the ACA-mandated 3-to-1 to the pre-ACA norm of 5-to-1.

It's true that for healthy people who were buying insurance in the individual market prior to the ACA, the law's coverage rules substantially drove up the premium price. Rate shock is a real phenomenon. As the complaints poured forth, the EHBs were a prime attack point.  "I'm 55 -- I don't need childbirth coverage." "I'm of sound mind -- I don't need mental health coverage."  Limited age-banding was also a rallying point, since the 5-to-1 ratio was based on actuarial calculations.  Why should a 23 year-old pay more so that a 58 year-old can pay less?

These complaints have some legitimacy. The EHBs and age-banding limits involve tradeoffs that can be argued from either side. But they are not the prime drivers of the rate hikes caused by the ACA.