Tag: mandate

How ObamaCare Would Keep the Poor Poor

Suppose you’re a family of four at or near the federal poverty level.  Under current law, if you earn an additional dollar, you get to keep around 60-70 cents.

Under the House and Senate health care bills, however, you would get to keep maybe 38 cents.  Or 26 cents.  Or maybe just 18 cents.

The following graph (from my recent study, “Obama’s Prescription for Low-Wage Workers: High Implicit Taxes, Higher Premiums”) shows that under the House and Senate bills, the combination of (1) a mandate tax and (2) subsidies that disappear as income rises would impose implicit tax rates on poor families that reach as high as 82 percent over broad ranges of income.

This graph actually smooths out some rather bumpy implicit tax rates that spike as high as 174 percent.

In the 1980s and 1990s, the public saw that too-generous government subsidies can actually trap people in a cycle of poverty and dependence.  President Obama and his congressional allies seem not to have learned that lesson.

Has HHS Buried Reports on ‘Head Start’?

According to sources within HHS cited by Heritages’ Dan Lips, a congressionally mandated report on the persistence of academic effects from the federal Head Start program was completed in draft form in 2008, but, nearly two years later, has not seen the light of day. A further follow-up report, to have been released in 2009 and covering persistence of effects through the 3rd grade, has also failed to materialized. Lips’ sources say the draft they saw in ‘08 showed no lasting effects.

This timeline meshes with what I was told in a July, 2008 e-mail exchange with a researcher familiar with the studies. The 1st grade report was indeed expected to be completed that summer – one and a half years ago. So where is it?

Could it be, as Lips’ sources seem to imply, that its results were not flattering to the very expensive federal preschool program and that this is not something HHS officials want the public to know? There’s one way to find out:  HHS, release the studies.

This is all rather important, what with the Obama administration seeking to lavish many additional billions on large-scale government pre-K, despite the paucity of results we’ve seen from such programs to date.

ObamaCare Threatens Innovation

That’s the conclusion of economist Glen Whitman and physician Raymond Raad, who write in Forbes:

Unfortunately, the health care bills moving through Congress could curtail medical innovation. Imposing price controls on drugs and treatments–or indirectly forcing their prices down by means of a “public option” or expanded public insurance programs–would reduce the incentive for innovators to develop new treatments.

Proposed reforms could also retard business model innovation–an area where innovation is weak. Congress has already used its control of Medicare to limit the growth of specialty hospitals. A nationally mandated insurance package would severely curtail innovation in payment methods and insurance products, which have the potential to improve the coordination and delivery of health care services.

The health care debate should address more than just covering the uninsured and controlling costs. When the U.S. generates medical innovations, the whole world benefits. That is a virtue of the American system that is not reflected in comparative life expectancy and mortality statistics.

The op-ed is based on the authors’ Cato Institute policy analysis, “Bending the Productivity Curve: Why America Leads the World in Medical Innovation.”

Curtain Call for the ‘Public Option’ Sideshow

Senate Democrats now appear to be jettisoning the idea of creating a new government program to snuff out compete with private insurance companies.  It was an audacious proposal from the start, as it made their health care plan even more left-wing than the Clinton plan, which voters soundly rejected for being too statist.

Yet it was always a sideshow that helpfully distracted the Left, the Right, and the mainstream from what shrewd Democrats and their allies at AHIP have really wanted all along: an individual mandate forcing all Americans to purchase health insurance under penalty of law.

As I argue in this Cato study, an individual mandate gives government more (and more immediate) control over Americans’ health care than even the so-called “public option” would.  As it has in Massachusetts, an individual mandate will allow government to control what kind of insurance you buy, how much you pay, how insurers pay doctors, where doctors report to work, how doctors practice medicine, and what kind of medical care you get.

The question now is whether the Left, the Right, and the mainstream will recognize the Senate health care bill for what it is: a massive $450 billion bailout for private insurance companies that will drive health insurance premiums and taxes higher while reducing quality, all for the benefit of a small cadre of Democrats with a preternatural need to control other people’s health care.

(Cross-posted at Politico’s Health Care Arena.)

The Constitutionality of the Individual Mandate

Ezra Klein defends an individual healthcare mandate against charges that it’s unconstitutional, and what’s striking to me is that the argument seems awfully wobbly even if you’re on board with a lot of the post–New Deal jurisprudence about the scope of federal power.  Sez Ez:

The summary is that you can look at the individual mandate as a tax, which is constitutional, or as a regulation forcing private actors to engage in a certain transaction, much like the minimum wage, which is also constitutional. I’ve also heard scholars mention auto insurance, which is an obvious analogue, and the Americans With Disabilities Act, which proved that the government can order businesses to install ramps, despite the fact that the constitution doesn’t explicitly give the federal government jurisdiction over entryways.

This doesn’t seem like the right level of analysis. Some taxes and regulations are within the ambit of federal powers; that doesn’t mean anything capable of being so described is. Some things not explicitly and specifically mentioned in Article I are nevertheless necessarily implicit in the enumerated powers; that doesn’t mean anything is. Auto insurance seems like a poor analogue because it’s a condition of access to government-maintained roadways. Ezra also mentions Massachusetts’ individual mandate, which seems rather beside the point in a discussion of the scope of Congress’ Article I powers. But bracket that. Even if you think the federal commerce power legitimately extends to legislation like the ADA, there’s intuitively a world of difference between saying that a commercial enterprise providing services to the public must provide them in such-and-such a fashion and insisting that private persons have to engage in a specified type of transaction just by dint of being alive. I don’t think the best reading of the Commerce Clause encompasses either, but it’s not that hard to conceive a reading that extends to the former but not the latter. I stress this just because I don’t think you have to be a libertarian or have a very restrictive view of the legitimate scope of federal power to believe there’s a genuine question here. The real form of the argument here looks an awful lot like: “Look, we’ve stretched commerce…between the several states so absurdly already, why are we even pretending it might be found to exclude anything?”

Are Savvier Democrats Playing Rope-a-Dope?

Let’s simplify things and say there are essentially two parts to the health care bills moving through Congress: an individual mandate that would effectively nationalize health care, and a government-run program that would explicitly nationalize it slowly, over time.

One explanation for Majority Leader Harry Reid (D-NV) including the government-run program – supporters call it a “public option”; I prefer Fannie Med – in the Senate bill is that Fannie Med’s popularity is on the rise.  Another explanation is that Reid had to include it to remain majority leader and get left-wing Nevadans to work for his re-election.

But a third explanation, not inconsistent with the others, is that the savvier Democrats know that all they need to nationalize health care is an individual mandate.  So they’ll let Fannie Med take a beating, and then pass the more sweeping individual mandate when opponents are too exhausted and distracted by their “victory” over Fannie Med to notice.

(Cross-posted at Politico’s Health Care Arena.)

Tuesday Links

  • Dear members of Congress: If you’re not going to read the bills you pass,  at least read the Constitution. Don’t fret; it’s short and written in plain English.
  • NYC: “The city that never smokes.” A proposal to ban lighting up in New York’s parks has exposed the puritanical agenda behind the crusade against smoking.
  • Tyler Cowen: With health care costs high and rising, government mandates to buy insurance would make many people worse off.