Topic: Health Care & Welfare

The Unintended Consequences of Environmental Policy: For the Birds

So, here is a story to make your blood boil. According to National Review, “the federal government acted with a bias, giving renewable-energy companies a pass on unlawful bird deaths while rigorously prosecuting traditional energy companies for the same infractions.” The NR article follows a string of recent stories complaining about tens of thousands of birds cut up to pieces or fried in the sky by windmills and solar plants.

Speaking of birds…

Five decades ago, Rachel Carson, of Silent Spring infamy, helped to ban a pesticide called DDT. Back then, DDT was widely used not only in agriculture, but also in malaria control. Carson argued, among other things, that the use of DDT endangered bird populations. The political left jumped on Carson’s arguments. After a massive campaign, DDT was withdrawn from agriculture and its use in malaria control was greatly restricted. Most countries followed the American example and banned DDT for use in agriculture.

Although developing countries could technically use DDT for disease control, no donor agencies (dominated by western leftists) would support its use. This amounted to a de facto ban of DDT in malaria control. Nobody knows for sure, but thousands of Africans, perhaps millions, have died of malaria since the use of DDT was prematurely discontinued, all because of a hysterical drive to save the birds in the West.

Today, tens of thousands of birds are dying to satisfy the newest progressive fetish: the drive for renewable energy. At least they are dying in an environmentally friendly way.

As the left likes to say, you cannot make an omelet without breaking some eggs!

Years After the Recession, Welfare Rolls Hit New Highs

New Census data shows that the number of households receiving welfare benefits hit a record high of almost 33.5 million in the fourth quarter of 2012. While part of the surge was due to the recession, the proportion receiving benefits has increased from 25.2 percent to 27.4 percent since the recession officially ended in June 2009. These inflated welfare rolls are not just a temporary response to an economic downturn, and could instead become the new normal. This poses a problem not only for the country as a whole, but for the individuals beneficiaries as well.  These welfare programs could eventually become unaffordable as programs for the elderly take up an increasing share of our budget. At the same time, for a record number of beneficiaries the structure of our current system could actually make it less likely they escape poverty for good.

Of particular concern are the households participating in three or more means-tested non-cash programs, which has also increased significantly, rising from 7.3 percent of all households at the end of the recession to 8.6 percent by the end of 2012. Participation in multiple programs is even more commonplace among families headed by a single mother, similar to the case family we used in The Work versus Welfare Trade-off 2013. In that paper, we found that in some states, the welfare benefits package available could be so generous that it could disincentivize work in some cases. One critique of the paper was that not every low-income household qualified for the programs in our benefit package. This is true, and we acknowledged as much in the paper. We even included a scenario where the family only received benefits from a more limited package. However, this Census data shows that cases like the one we examinedare becoming increasingly common. Almost 44 percent of households headed by a single mother participated in three or more means-tested non-cash programs in 2012, compared to only 38.7 percent when the recession ended.  While the point remains that not every low-income household participates in every welfare program, many do participate in multiple programs, and the proportion has continued to increase years after the recession ended.

Would Linda Greenhouse Apply the Same Interpretive Method She Uses in Halbig to Habeas Corpus Cases? (Updated)

Yale law professor Linda Greenhouse is a former New York Times Supreme Court correspondent and now writes a legal column for the Times. Today, she writes about Halbig v. Burwell. For my latest on Halbig and similar cases, see here. Now Greenhouse, who argues these cases are just about gutting the Patient Protection and Affordable Care Act:

To be clear, I’m not suggesting that there is anything wrong with turning to the courts to achieve what politics won’t deliver; we all know that litigation is politics by other means. (Think school desegregation. Think reproductive rights. Think, perhaps, same-sex marriage.) Nor is the creativity and determination of the Affordable Care Act’s opponents any great revelation — not after they came within a hairsbreadth of getting the law’s individual mandate thrown out on a constitutional theory that would have been laughed out of court not too many years ago.

Boy, are they ever determined.

I accept the compliment, with one proviso. The stakes in the Halbig cases are much bigger than the PPACA. The IRS is subjecting those plaintiffs to taxes from which, as Greenhouse implicitly admits, the operative language of the statute would exempt them. The plaintiffs have a right not to be taxed unless Congress expressly grants the IRS that power. A federal judge whom Greenhouse respects (Thomas Griffith) surveyed the IRS’s rationales for subjecting tens of millions of Americans to those taxes, found those rationales to be meritless, and essentially ruled that the IRS is violating the law on a massive scale. If preventing the executive branch from exceeding its lawful powers is just “politics by other means,” then so are the habeas corpus cases Greenhouse approvingly cites.

Unfortunately, when Greenhouse takes the government’s side in Halbig, it seems to be on the basis that, “Of course there are ambiguities and inconsistencies in a 900-page bill that never went to a conference committee for a final stitching together of its many provisions.” That probably is true, but it does not follow that the statute is ambiguous or inconsistent with regard to the question presented in Halbig. The government certainly has asserted such ambiguities and inconsistencies exist. Yet a closer look at the government’s arguments shows that the specific provisions it cites are all quite consistent with the language authorizing subsidies only to those who buy coverage “through an Exchange established by the State.”

Greenhouse also commits an error as well as her own inconsistency. She claims the phrase “through an Exchange established by the State” appears only once in the subsidy-eligibility rules. In fact, it appears explicity twice: one mention appeared in the first draft of those rules; Senate Democrats added the second just before final Senate passage (which all by itself suggests they knew exactly what they were doing). Moreover, that phrase appears seven more times by cross-reference. And the subsidy-eligibility rules do not use any other language – at all – to describe the Exchanges through which the law authorizes subsidies. All of which evince a clear meaning and purpose: to offer subsidies only in states that comply with Congress’ desire that they should establish Exchanges.

Greenhouse’s inconsistency occurs when she (incorrectly) claims, “the two [Halbig] judges trained a laser focus on a single section, indeed on a single word, in the massive statute…ignor[ing] the broader context, in which Congress clearly intended to make insurance affordable[.]” The habeas corpus cases with which Greenhouse apparently agrees also focused on a single phrase – one could argue, a single word – in the Constitution. Would she criticize those cases for failing to uphold the overarching purpose of the Constitution – which appears right there in the preamble – to “insure domestic Tranquillity” and “provide for the common defense”?

I wrote Greenhouse to thank her for her column, which was far more respectful and gracious than many Halbig critics have been. I thought it might be fruitful to offer to debate these cases with her. She respectfully declined, but noted there is a movement afoot to bring my coauthor Jonathan Adler to New Haven for that purpose. Watch this space for development.

Update: I neglected to mention, because I failed to notice, another error in Greenhouse’s oped. She refers to the “failed Commerce Clause” attack on the PPACA brought under NFIB v. Sebelius. As constitutional-law aficionados and health-policy wonks know, the plaintiffs’ claim that the individual mandate exceeded Congress’ powers under the Commerce Clause succeeded (even if the overall attack on the individual mandate failed on account of Chief Justice John Roberts redefining the mandate penalty as a tax).

What If We Applied the IRS’s Reasoning in Halbig & King to the Patriot Act or RFRA, Instead of the ACA?

Over at Darwin’s Fool, I posted a critique of the Fourth Circuit’s opinion in King v. Burwell. Unlike the D.C. Circuit’s ruling in Halbig v. Burwell, the Fourth Circuit held that the IRS has the authority to issue subsidies in states with federal exchanges, despite the fact that the Patient Protection and Affordable Care Act repeatedly says subsidy recipients must enroll in coverage “through an Exchange established by the State.” I reproduce here my response to a commenter to that post, as his argument parallels those of many others who have been critical of these cases.

My commenter objected that a plain-text reading “must include the entire text of the bill,” which “makes clear that the goal of the bill was to provide health care to all Americans who needed it and could not, at that time get it.” Moreover, “It would be illogical for Congress to establish a national health care system that is based on subsidies and then not include those subsidies in all aspects,” thus “it is entirely reasonable to interpret that one sentence to mean that Congress intended the subsidies for all participants.” My reply:

Sir, I’m afraid you have things exactly backward.

The overall context of the PPACA presents no difficulty for the plaintiffs in King v. Burwell, Halbig v. Burwell, or the other cases challenging subsidies in federal exchanges. The text of the eligibility rules for those subsidies clearly and repeatedly limit eligibility to those who enroll in coverage “through an Exchange established by the State.” There is nothing in the broader context of the statute to suggest that Congress understood the words “established by the State” to have any meaning other than their usual meaning. There isn’t even any statutory language that conflicts with that plain meaning. Jonathan Adler and I addressed (almost) all of these supposed anomalies here.

On the contrary, it is the Obama administration and its supporters for whom both the text and context present difficulties. (We can no longer call them supporters of the PPACA, given how adamantly opposed they are to implementing the law as Congress intended.) The subsidy-eligibility rules are the only place where Congress spoke directly to the question at issue. Those rules flatly contradict the administration’s position. Congress did not throw the phrase “established by the State” around loosely. They referred to exchanges “established by the State” when they meant exchanges established by the states. They referred generically to “an Exchange” when they meant either a state-established or a federal exchange. And they referred to state-established and federally established exchanges separately within a single provision, which shows they saw a difference between the two. Congress also did the exact same thing – withholding subsidies from residents of uncooperative states – in the PPACA’s other massive new entitlement program, the Medicaid expansion.<--break->

IPAB Case Coons v. Geithner Dismissed, for Now

Jonathan Adler has a summary at the Volokh Conspiracy.

The Patient Protection and Affordable Care Act’s Independent Payment Advisory Board has been called a “death panel,” though I’ve argued one could just as legitimately call it a “life panel.” Either way, it is the most absurdly unconstitutional part of the PPACA.

Adler’s otherwise excellent summary neglects to mention IPAB’s most unconstitutional feature. Diane Cohen and I describe it here:

The Act requires the Secretary of Health and Human Services to implement [IPAB’s] legislative proposals without regard for congressional or presidential approval. Congress may only stop IPAB from issuing self-executing legislative proposals if three-fifths of all sworn members of Congress pass a joint resolution to dissolve IPAB during a short window in 2017. Even then, IPAB’s enabling statute dictates the terms of its own repeal, and it continues to grant IPAB the power to legislate for six months after Congress repeals it. If Congress fails to repeal IPAB through this process, then Congress can never again alter or reject IPAB’s proposals…

Congress may amend or reject IPAB proposals, subject to stringent limitations, but only from 2015 through 2019. If Congress fails to repeal IPAB in 2017, then after 2019, IPAB may legislate without any congressional interference.

Like I said, absurdly unconstitutional. But that’s ObamaCare for you.

The Size and Scope of Fraud in Medicare

Medicare spends more than $600 billion annually, but not all of that money is spent wisely. Yesterday, I wrote about the Washington Post’s expose on motorized wheelchair fraud. Records suggest that 80 percent of motorized wheelchair claims are “improper,” amounting to billions in waste. Unfortunately for taxpayers, this is just the tip of the iceberg on Medicare fraud.

The Government Accountability Office estimated that Medicare’s “improper payments” amounted to $44 billion, or 8 percent of total expenditures, in 2012. GAO considers Medicare a “high risk” program for its “vulnerabilities to fraud, waste, abuse, and mismanagement.” GAO criticized Medicare for its inability to control the problem saying that Medicare “has yet to demonstrate sustained progress in lowering the rates [of improper payments].”

Other experts believe that GAO undercounts examples of fraud in Medicare. Malcolm Sparrow of Harvard University estimates that closer to 20 percent of claims–or $120 billion annually are improper.

Medicare’s lax oversight of its payment system perpetuates the issue. Millions of claims come in daily and are paid without review or analysis. Scammers know that Medicare payments will not be scrutinized; the chance of getting caught is quite low. Scammers simply adapt and continue finding ways to game the system.

Medicare’s Scooter Scam

Yesterday’s Washington Post has an in depth—and very depressing—piece about Medicare fraud. The piece focuses on scammers taking advantage of Medicare’s payment systems to buy unnecessary motorized wheelchairs and scooters for Medicare enrollees and stick American taxpayers with the bill.

Medicare’s payment system is designed to pay bills within 30 days of receipt; the system receives 5 million claims daily. Due to the huge volume of payments, Medicare only reviews a very small percentage, 3 percent, before the payment is made. Instead, payments are reviewed after they are processed, but even then not all are subject to oversight and review.

That system design invites fraud and scammers are able to take advantage. The Washington Post describes it as an “honor system.” The lack of upfront investigations costs taxpayers billions annually in fraud and wasteful payments.

But even worse than Medicare’s lax oversight is that officials knew about the fraud regarding wheelchairs and still didn’t act. According to the Washington Post,

Now, the golden age of the wheelchair scam is probably over.

But, while it lasted, the scam illuminated a critical failure point in the federal bureaucracy: Medicare’s weak defenses against fraud. The government knew how the wheelchair scheme worked in 1998. But it wasn’t until 15 years later that officials finally did enough to significantly curb the practice.

This problem was widespread. Medicare has spent $8.2 billion on power wheelchairs since 1999 for an ever-increasing proportion of enrollees. Records suggest “that at least 80 percent of claims were ‘improper.’”

Before the fraud had taken off, the chairs were rare:  One study estimated that in 1994, only 1 in 9,000 beneficiaries got a new wheelchair.

By 2000, it was 1 in 479.

By 2001, it was 1 in 362.

By 2002, it was 1 in 242.

In 2012 up to 219,000 Medicare recipients received motorized wheelchairs, 1 in 235 patients, worse than in 2002. In 2013 only 124,000 individuals, 1 in 400 patients, received power wheelchairs from Medicare.

Medicare is slowly getting the issue under control; it is just 15 years too late.

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