Individual Mandate

Can Obamacare Set Americans Free?

  • By
  • Steve Coll,
  • New America Foundation
July 20, 2012 |

About six years ago, Netflix offered an award of $1 million to anyone who could mine its database of customer-provided movie ratings and improve the system’s overall accuracy by more than ten per cent. Many people tried. In 2009, Netflix awarded the prize, in the form of stock, to one participant.

Programs:

Drug Regulation, Symbolic Votes, and Hospital Safety

July 16, 2012

Here's our wrap-up of last week's articles by our own Shannnon Brownlee and Joe Colucci:

Letting Big Pharma Review Its Own Drugs — What Could Go Wrong? (The Atlantic Health Channel):

Earlier this month GlaxoSmithKline agreed to pay a record breaking $3 billion fine for a slew of criminal and civil violations. But is a fine really enough? In a piece in The Atlantic, Shannon Brownlee and Joe Colucci argue that we need to stop letting drug companies track the post-market safety of their drugs and establish an external automatic review system. 

 

12 Ways Health Care Could Be Improved If the House Wanted to Hold More Than Symbolic Votes (The Atlantic Politics Channel):

In the wake of the House's 33rd vote to repeal/defund Obamacare, Joe and Shannon propose a list of 12 things the House could have done to make a better use of tax payers' dollars and actually improve health care. In the article in The Atlantic the proposals range from enacting a less intrusive mandate to funding after school programs to teach kids how to cook. Any of them would have worked better than another "symbolic vote."

 

Why The ‘Best’ Hospitals Might Also Be The Most Dangerous (TIME Ideas):

We've all seen them—the U.S. News Rankings of everything from colleges to cars. How do their hospital rankings look? In her latest article for TIME, Shannon argues that, based on new rankings by Consumer Reports, many top-name hospitals fail to measure up in terms of safety. Hospital rankings would be a lot more useful if they considered how medical care affects most patients, not whether a hospital performs some cutting-edge procedure on three patients per year.

31 Things the House Could Have Done...

July 16, 2012

Last week the house voted to repeal Obamacare... again.  This marks the 31st time that they have voted to repeal, defund, or otherwise try to hamper the PPACA, even though they have known that such efforts would go nowhere with Democrats controlling the Senate and the Presidency.  In response to this less-than-momentous occasion, my supervisors here at the New America Foundation wrote a piece for the Atlantic detailing real, meaningful reforms that could have been enacted instead of the 31 "symbolic" votes.  Those are great, but I've compiled a more comprehensive list of things that I think would really improve the health of both Congress and the American people:

  1. Sell the audio from all 31 repeal attempts as an over-the-counter insomnia cure.
  2. Create "Fast Food Health Savings Accounts": Every time you buy fast food, your credit card transfers $2 into an HSA to pay for your future diabetes treatment.
  3. Build a new exhibit in the Newseum: "Florets v. Freedom: Broccoli as Propaganda in American Life."
  4. Collect all the taxpayer money that would've been spent on these “symbolic votes” and associated debates, and buy insurance for 4500 families.
  5. Create a new weekly C-SPAN show called "Mandate: Delicious." Each show will consist of the reading of USDA-approved healthful recipies.
  6. Replace all the desks in the House with standing desks.
  7. Replace all the chairs in the Senate with yoga balls.
  8. Take the House on a field trip to a primary care doctor's office.
  9. Hold a Congressional Scavenger Hunt. The first Congressperson to bring back the following wins:
    1. An underpaid primary care doctor,
    2. A grossly overpaid specialist,
    3. A person who is uninsured by choice,
    4. A legible prescription,
    5. Credible evidence of "death panels."
    6. Bonus points to anyone who manages to get a primary care appointment without mentioning that they're insured.
  10. Get corporate sponsorship for major surgeries: “Well, Jim, you’ve got an artery that’s almost completely blocked. I recommend an immediate McDouble Bypass!”
  11. Compile a cookbook of heart-healthy broccoli recipes and start a CSPAN cooking show where Justice Scalia and George H.W. Bush demonstrate them.
  12. Have the two parties compete against each other in a special election-year season of "The Biggest Loser."
  13. Require all sodas in the Congressional cafeteria to be served in Dixie cups.
  14. Change the national salad from Jell-O salad to “anything containing actual vegetables, and comprised of no more than 50% by weight of ranch dressing.”
  15. Candy salad is not salad.
  16. Meat salad is definitely not salad.
  17. See if members of Congress are fitter than a fifth grader: Require all Members of Congress to perform the Presidential Fitness Challenge. Anyone who doesn't pass will be held in contempt.
  18. Get exercise by changing the House rules: Allow bills to be passed by calling for a dodgeball vote, where the last member standing gets to decide whether a bill goes on to the Senate.
  19. Commission a CDC report on whether broccoli consumption has gone down among conservatives since Obamacare passed.
  20. Establish a National Speed Limit for hot dog consumption of no more than fifty-five hot dogs per hour.
  21. Buy "Twinkie sniffing dogs" for the TSA.
  22. Form a committee to study the long-term effects of spray tan, chaired by Speaker Boehner.
  23. “Vaccinate” against obesity and related problems by making gastric bypass surgery part of the childhood vaccine schedule.
  24. Forget “a chicken in every pot.” Pass the "Wii the People" bill, putting a Wii Fit in every American home by 2014.
  25. Block grant Congressional health insurance. Stop giving Representatives federal health insurance; instead, increase their salaries by $8000 and let them choose their own plan in the individual market!
  26. Exclude any gathering involving a "You Bring It, We Fry It" truck from the Assembly Clause of the First Amendment.
  27. Enact a broccoli mandate (er, I mean, tax...?), just to see if it would work.
  28. Clarify to school lunch programs that pizza and ketchup are not, in fact, vegetables.
  29. Put WMATA in charge of the nation’s moving walkways and escalators. We'll all be taking the stairs within a week.
  30. Blame China.
  31. Just give up: Paula Deen 2012!

Health Wonk Review: SCOTUS edition

July 2, 2012
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The health wonks have responded en masse to the Supreme Court's decision on the ACA.  Here are the links to this special edition of Health Wonk Review.

Part 1

Part 2

A Supreme Day - In Photos

July 3, 2012

On Wednesday, June 27th my roommate convinced me that we should give up the comfort of our intern-housing beds for the cold hard concrete of justice and the company of other "Supreme nerds," waiting in line to witness the historic ruling on the ACA.  I'm usually not that compulsive, and I resisted at first. After some powerful persuasion, I eventually consented to go.  Interning here in DC this summer has presented me with many invaluable opportunities, but none has been as amazing as what awaited me next morning.  I owe my roommate a big "Thank you" for not succumbing to my stubbornness.

You could feel the excitement in the air.  Most of us were students or recent graduates, interns or nearby residents. Many didn't sleep that night, choosing instead to stay up night sharing opinions and speculations. Some finally succumbed to exhaustion.

We woke up in a sea of cameras. At 5:00 AM there were more camera crews set up than at 10:00am on Monday, when the Arizona case was released.  

As the morning wore on, I found myself constantly mulling over what might happen inside that beautiful building later that day. This would be among the most important, far-reaching cases of my lifetime.  

Politically I have always found a bit of both sides in myself.  With conservatives, I share concerns about the growing powers of government.  I was wary of the expansion of power that upholding the mandate would grant to Congress's interpretation of the Commerce Clause. (Yes--I was concerned about the broccoli argument.)

On the other hand, as I have learned more about the Affordable Care Act, it has become more and more appealing.  As a future physician I love the patient protections and expanded access that the health care law provides.  I also believe that sometimes the spirit of the law is more important than the letter of the law.

I hoped for a ruling that satisfied my views on both ends of the spectrum.  

While we waited inside I talked with a political science major from Johns Hopkins University.  When I asked her how she would respond to someone who believes that the ACA violates the Constitution she told me about her "Comparating Constitutions" class.  

"Under the United States Constitution, the government would not be violating its duty if it just sat back and did nothing," she said.  "Other countries' constitutions  have specific provisions written in them that forbid the government from doing nothing.  They have to provide certain services. Because of this, they are much more welcoming of big social changes like health care reform." When I asked if she advocates amending the constitution to have such duties she said, "Well, that's so long and difficult."

Her attitude surprised me.  In effect, she was saying, "Yeah, I realize there are limits in our Constitution, but they shouldn't get in the way of doing what society believes is right." 

Eventually we were shown upstairs to a room with small lockers where we were told to leave all electronic devices and other personal items.  From there we were directed to the courtroom where we waited and whispered for half an hour. Despite my profound lack of sleep, as soon as the Justices walked in a surge of adrenaline flooded my body.  No one but this relatively small group of people I was sitting with would ever witness these words uttered out of Justice Roberts's, Ginsburg's and Kennedy's mouths.  It was amazing to think that I was watching history before anyone else.  

The mandate was found unconstitutional under the Commerce Clause, but constitutional under the taxing power, and the rest of the law stood with it. (The Court did overturn the expansion of Medicaid as coercive, but the only part that was actually removed was the threat of removing all Medicaid funding for states that choose to opt out of the expansion.) I don't think there was a soul there who saw what was coming. As for me, I was elated! Upholding most of the ACA meant that meaningful health care reform would continue, and the check on the Commerce Clause abated my fears of growing Congressional power. Both of my concerns had been addressed.

I was surprised, however, by the "strike-the-whole-thing-down" position taken by the four justices who wrote the dissent.  As I see it, there are many parts of the ACA that are completely constitutional. The opinion of the dissenters seemed to be the mirror opposite of the opinion I had heard from the political science student just an hour earlier. According to the dissent's view of Congress's taxing and spending power, "the Court has long since expanded that beyond ... taxing and spending for those aspects of the general welfare that were within the Federal Government's enumerated powers." They cited "the Department of Education, the Department of Health and Human Services, [and] the Department of Housing and Urban Development" as "sizeable federal Departments devoted to subjects not mentioned among Congress' enumerated powers, and only marginally related to commerce."

In other words, they were saying, "Yeah, these agencies are solving pressing problems, but they extend beyond Congress's constitutional powers." Under similar logic, they argued that the whole Affordable Care Act should be struck down.

Picture:  Associated Press

After the Court finished the rulings, and the term, we were quickly ushered outside.  

Michelle Bachman was on a loudspeaker in the middle of the Tea Party crowd, insisting that since the justices had failed it now falls to the voters to repeal Obamacare.  She was drowned out, at times, by boos and chants of "Four more years" by people holding "we love Obamacare" and "stand up for women's health" signs.

 I stopped to ask a woman holding a "Protecting Our Care" sign what she thought about the ruling.  She was happy, of course, that the law had been upheld.  I followed up by asking her what she thought about Justice Roberts' ruling that the mandate doesn't stand under the Commerce Clause yet does stand under the taxing power.  She gave me a confused look and said, "I don't know what you're talking about."  Caught off guard, I awkwardly ended the conversation as I came to a profound realization:  most of these people here don't care about the specifics.  They're not here to find out how all the details play out.  

I would venture a guess that nearly everyone there that day would very comfortably identify themselves with one of two groups: those for limited government or for social justice.  In each group, as long as their ends are met, the details aren't important.  The limited government crowd wanted the law overturned--despite the fact that our health care system is on life support and millions don't have access to care.  The social justice crowd was elated by the ruling--regardless of its implications for the federal government's power.

In contrast to these groups, Court's job is only to determine whether the law in question is Constitutional--nothing more, nothing less.  As Justice Roberts put it, "we possess neither the expertise nor the prerogative to make policy judgments. Those decisions are entrusted to our Nation’s elected leaders, who can be thrown out of office if the people disagree with them." 

In that sense, it seems like this discussion--between two parties who care more about the ends than the means--is sort of out of place in front of the institution that is primarily concerned with the means. It was precisely the means, the details, that allowed me to feel like the day had been a win-win. By knowing the specifics of the law and the case against it, I felt like I was the only one reveling in a two-sided victory!

If the limited government crowd would have paid a little more attention to the details they may have found a silver lining in their defeat--the ruling on the Medicaid provision could end up being a major limit on federal power over the states, and some liberal bloggers have been complaining that the Court's ruling has "gutted the commerce clause."

Instead of examining the ruling, the groups were too busy volleying taglines. When this type of one way discussion takes place and people disregard the details, they tend to talk past each other.  The result is conflicting, often embarrasing, messages...

...like this:    

...or polls like this (CBS News/NY Times):  

And yet, while it might not always make sense, we have a long tradition of protesting in front of the Supreme Court.  I'm not suggesting that should end. Nor am I suggesting that we need to avoid the use of hyperbole to get one's point across.  Sometimes it can be entertaining.

But, are the two positions really irreconcilable? Can we fix the health care system and still keep limits on governmental power?  I believe we can, and I believe that is what we saw last Thursday.

Politics will continue to play on, speculations about Justice Roberts's reasoning will continue, but if we want to get things done we need to stop talking past each other, care enough to see what the other side has to offer, and build off our common ground.  

In the coming months and years, health care reform must continue. The ACA, though a good step forward, is far from a complete solution to the health care crisis. We have some tough questions ahead of us involving the quality and cost of care. Solving these problems will require our meaningful dialogue and thoughtful consideration of the details.

And by considering the details we may just discover, like I did, that solving problems doesn't have to be one-sided. We can find a middle-of-the-road solution that covers everyone's needs. That way, no one has to feel like they are "left out in the open."

The Supreme Court has Ruled on the ACA

June 28, 2012
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After a tense last two weeks of the term, the Supreme Court has handed down its ruling for the cases challenging the Affordable Care Act (Florida v. Department of Health and Human Services, Dep't of Health and Human Services v. Florida, and National Federation of Independent Businesses v. Sebelius). The court voted 5-4 to uphold the entirety of the law, under a different justification than many people expected.  Here's the link to the opinion (majority opinion by Chief Justice Roberts; concurrence by Justice Ginsburg, dissent by Justice Kennedy):  http://www.supremecourt.gov/opinions/11pdf/11-393c3a2.pdf. Please be patient if the opinion doesn't load right away--the Court's servers tend to get overwhelmed. The decision is also uploaded as an attachment on this post (on the right side of the page).

If you need a refresher on what the cases are about, here's our pre-oral argument summary, and our post-argument comments.

We're going to take our time reading the opinion, because we want to give you the our best analysis of what this means for the law, the health insurance and delivery system reforms already in progress, and the problems of unnecessary care and healthcare waste in general. We'll be back soon with our thoughts. In the meantime, follow us on Twitter (@NewHealthDialog) for immediate reactions!

A Market-based Case for the ACA

June 20, 2012
Waiting for Robbo

The Supreme Court will soon pass down their decision on the most hotly-contested and highly influential policy decisions in recent years:  the Affordable Care Act (ACA).  As CNN has put it, this is "an issue that affects every American."  If fully implemented, the ACA is projected to extend coverage to millions of Americans—a huge victory for universal coverage advocates.  It has also received opposition from those who claim that it represents an unprecedented intrusion of government into the free market.  But free market lovers also have reasons to cross their fingers that the ACA will be upheld in its entirety.  Here's why:

1.  The ACA is market friendly: The ACA is among the most market driven universal health care proposals that has, to date, been tried in other universal health care systems around the world—beat only, perhaps, by the Swiss model.   Ezra Klein shares this view:  “I think conservatives would be smart to embrace the Affordable Care Act structure…giving private insurance a central role in those markets and leaving us with a health system that looks more like Switzerland than like Canada.”  

Many free market advocates point to the fact that our current insurance structure is the problem—patients are shielded from the costs of their medical care, so market forces don't play into their choices.  The ACA will, to some extent, level the playing field in that area.  The creation of state insurance exchanges, with minimum coverage requirements, demystify the health care shopping process, allowing patients to compare apples to apples and buy a plan based on the best value.  Unlike systems in other countries, where government officials negotiate prices, this will force insurance companies to compete for your business, pushing them to provide the best service at the cheapest price.  As Austin Frakt puts it, "That's, essentially, competitive bidding."   The ACA allows the private markets to stay in the game, increases competition, and buys us more time to tinker with free market solutions to escalating costs.

2.  Inaction will kill us:  Inaction—the very thing that the anti-ACA legal case claimed the government is trying to regulate—is the thing that will bring us down.  The rising cost of health care is unsustainable and represents, according to the bipartisan Social Security Advisory Board, "perhaps the most significant threat to the long-term economic security of workers and retirees."  If something isn't done, we will be spending one of every five dollars on health care by 2020.  Imagine the jobs that could be created if we weren't paying so much to the health care system!  (And no: more health care jobs are not always a good thing!)

Some sort of major health system reform is coming in the next decade or two, regardless of how the Supreme Court rules.  As a nation we will soon come to the point when we have to decide if we want to keep spending a fifth (or a fourth? a third?!) of our paychecks on health care. We can either willingly enter the realm of 21st century health insurance (like the rest of our industrialized buddies), or we can have our tattered economic carcass dragged there when our ever-burgeoning health care costs squash other economic activity.  Fast forward fifty years to when more than a third of our GDP--one third of all economic activity--goes to pay for health care.  At that point, public and market pressure will force the government to move to contain costs, and it's hard to imagine they'll do anything 'market friendly.'  Then will free market advocates look back, longingly, to a time when we could have had a health care system with maximum free market involvement?  

We are waiting with bated breath to see how the court will rule.  Regardless of what happens, one group will bemoan the end of the world and another will throw a party.  Free market advocates should think twice about where they would be most comfortable.

A Belated SCOTUS Wrap-up, and A Look Forward

April 13, 2012
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Unless you've been living under a whole pile of rocks, you heard about the Supreme Court’s oral arguments in Florida v. Department of Health and Human Services—the Obamacare case. You’ve probably heard by now from a dozen reporters and pundits who claim that they know which way the Court will rule.

I’m not going to make that claim. There are understandable arguments on both sides, and it’s incredibly difficult to predict how this Court will decide on such an important, divisive, politically charged issue.

Instead, I want to provide a little perspective. Even if the Court decides that the individual mandate is not a Constitutional exercise of Congressional power, the consensus of Courtwatchers is that they’re unlikely to toss the entire law down the drain with it. If the mandate is unconstitutional, there are two main options without throwing out the whole thing: the mandate might get thrown out on its own, or two crucial insurance reforms (community rating and guaranteed issue) might go with it.

Guaranteed issue and community rating are the key pieces of the law—they require insurers to give insurance to anyone who comes asking, and limit the amount that prices can vary between people, respectively. The individual mandate was designed by the Heritage Foundation during the last health care debate (over President Clinton’s health care reforms, in 1993), and it's designed to attack two economic problems that can emerge when people have that protection: moral hazard and the insurance “death spiral.” Moral hazard is the economics term for the danger that healthy people might go without insurance, only to buy it (at the low, community-rated price) if they get sick. If people can do that, insurance costs have to be higher for responsible buyers who get in at the beginning. The “death spiral” is a similar phenomenon, where people who buy insurance are sicker than average, which drives up the price of insurance. That price increase makes more healthy people drop their coverage, leading to an even sicker risk pool and higher costs. Eventually, the insurance market falls apart because the only people left wanting to buy insurance are too sick to afford their own health care costs.

The mandate works by pushing healthy people to buy insurance even when they’re likely to stay healthy—thereby preventing moral hazard, and avoiding death spirals. The thing is, any policy mechanism that makes going without insurance less appealing will work the same way. That means even if Congress isn’t allowed to create an individual mandate, there are a whole slew of other options for what they could do. Several mechanisms have been proposed that would achieve exactly the same result as the mandate penalty, but would do it through the tax code, where Congressional power is less restricted. Those might still be challenged in court, but would have a better chance of survival. Alternatively, Congress could just force people who choose to go without insurance to stay that way, even if they get sick: it would be entirely within Congress’s power to say that an individual who could have gotten insurance and didn’t, would: 1) not be eligible for insurance subsidies if he wanted to get insurance on the exchanges; 2) not have guaranteed coverage for any pre-existing condition; 3) not be protected by guaranteed issue and community rating, so he might have to pay an incredibly high premium if he could get insurance at all. Those penalties might be in effect for five years from the date when he declined insurance, in order to strongly discourage people from making rash choices because they feel healthy this month.

That would, in effect, create a universal insurance system, with an opt-out for the very confident and those who genuinely wish to self-insure. It would be indisputably within Congress’s Commerce Clause power, too—it would be a direct regulation of insurers and participants in the insurance market. If the mandate gets struck down, it would be a relatively simple legislative task (although perhaps a heavy political lift) to fix the law and restore its universality.

As an eternal reminder: the Affordable Care Act didn’t fix the American health care system—it aimed only at the health insurance system. Researchers have documented unnecessary care that costs hundreds of billions of dollars each year, and the law does little to attack that waste. Correcting the delivery system will require hard political and practical conversations about global budgets, evidence-based care, and getting control of the outrageous growth in health care resources. Depending on how the Court rules, health care might fall off the political radar this year, but you can be sure it’ll be back soon enough. The system has too much waste—and too much opportunity for improvement—to let it go when the Justices rule.

The Right Rx for Better Health Care: Rise Up to Challenge the Industry's Lobbying Power

  • By
  • Shannon Brownlee,
  • New America Foundation
  • and Brian Klepper
March 29, 2012 |

Obamacare had its days in the Supreme Court this week, and the justices’ decision could have sweeping consequences for the individual mandate provision in the Patient Protection and Affordable Care Act, and maybe even for the fate of the law itself.

Yet whatever the court decides, we will still be stuck with a problem that this contentious law was not likely to solve on its own: an out of control health care industry that threatens the stability of the U.S. economy and the federal government’s ability to deal with our long-term debt.

Final Round: FIGHT!

March 28, 2012
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Wow. Over six hours of argument later, we're left with... well, a little over six hours of audio. Now we get to wait for the decision--only 89 days to go! (The opinion will almost certainly be issued on the last day of the term, which is scheduled for Monday, June 25th.)

We haven't had a chance to listen to today's arguments yet, so without comment: this morning, in National Federation of Independent Businesses v. Sebelius, the Court considered whether the remainder of the Affordable Care Act can stand if the Court finds the individual mandate unconstitutional. This afternoon, again in Florida v. Department of Health and Human Services, the Court heard argument about the Medicaid expansion in the law--specifically, whether it amounts to an impermissible coercion of the states by the federal government. Remember, this one is incredibly important for the federal-state balance. The Supreme Court has never struck down spending as coercive before, and it would be shocking if they did now. See Aaron Carroll's piece over at JAMA if you're interested in more.

We'll be back with more blogging soon (and probably more commentary on the arguments), but in the meantime, check out the recordings! Happy listening.

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