Topic: Health Care & Welfare

SHOP Exchange Glitches

Open enrollment for Obamacare’s second year begins next week. In the chaotic launch of HealthCare.gov, the Department of Health and Human Services (HHS) delayed the launch of the sister portal for small businesses. Now, the health insurance exchange for small businesses is expected to open, but it is still plagued with problems.

The Small Business Health Options Program (SHOP) provides an online portal for small businesses with fewer than 50 employees to purchase insurance. The website allows employers to provide a contribution towards an employee’s health insurance purchase.

A new report from the New York Times summarizes the issues discovered during recent testing:

For example, they said, some health insurance plans approved for sale on the exchange did not show up on the website. The site worked well with some web browsers, like Chrome, but not with others, like Internet Explorer and Firefox. Premiums and other charges for some plans were erroneously displayed as percentages rather than dollar amounts — 350 percent rather than $350, for example. For some households, the principal subscriber was listed as a dependent, or vice versa.

HHS is claiming that the website will be functional when open enrollment starts on November 15.

The future success of SHOP is doubtful even if HHS gets the website working. States had the option of creating their own SHOP or relying on the federal exchange. Several states decided to launch their exchanges last year. The results were lackluster:

California signed up 1.4 million people through its individual exchange, but its small-business exchange enrolled only 1,700 companies, with 11,500 employees and dependents. In Minnesota, the small-business exchange signed up 190 employers covering 1,500 people.

The low participation is not surprising since businesses can still purchase insurance outside of an exchange. The primary reason to use a SHOP exchange would be to receive a tax credit. Firms with fewer than 25 workers who purchase via the exchange are eligible for a tax credit to help offset the cost of the employer contribution. Credits can be as large as 50 percent of the employer contribution.

However, the tax credit is unlikely to induce many small businesses to use the exchange. Only a small number of eligible businesses claimed the previous version of the tax credit, which did not require the extra step of a SHOP purchase. According to the Government Accountability Office (GAO), many employers did not claim it due to the complexity in its calculations. Adding another requirement suggests even fewer employers will take advantage of the credit.  Additionally, GAO estimates that very few small firms offer health insurance as benefit to employees because the tax credit is small. Firms are not encouraged to provide the benefit.

HHS had an additional year to get its SHOP website development right. Reports suggest that HHS is still not ready, despite the large cost. But even if the website becomes functional, success of the overall SHOP program looks unlikely.

The Costs of Ebola: Guinea and Sierra Leone

For a clear snapshot of a country’s economic performance, a look at my misery index is particularly edifying. The misery index is simply the sum of the inflation rate, unemployment rate and bank lending rate, minus per capita GDP growth. 

The epicenter of the Ebola crisis is Liberia. My October 15, 2014 blog reported on the level of misery in and prospects for Liberia.

This blog contains the 2012 misery indexes for Guinea and Sierra Leone, two other countries in the grip of Ebola. Yes, 2012; that was the last year in which all the data required to calculate a misery indexes were available. This inability to collect and report basic economic data in a timely manner is bad news. It simply reflects the governments’ lack of capacity to produce. If governments can’t produce economic data, we can only imagine their capacity to produce public health services.

With Ebola wreaking havoc on Guinea and Sierra Leone, the level of misery is, unfortunately, very elevated and set to soar.

What Public Choice Theory Says about Ebola

What does public choice theory say about responding to Ebola?

That is: What are the costs and benefits of various policies – not to the public – but to self-interested politicians? Public choice theory holds that politicians’ interests don’t always coincide with the public’s, and sometimes they diverge quite sharply. When interests diverge, politicians will often side with their own self-interest, even at the expense of the public.

So what do they want? Politicians want public esteem. They want above all to be seen as heroes. If that means sacrificing civil liberties - to little or no public benefit - then they will do so.

This remains true even if the “heroic” measures at hand amount to Ebola security theater. It would appear that’s what we’re getting - a set of state-level quarantines that are actually contrary to what doctors and epidemiologists recommend. (No, the public probably won’t care what the experts say. I mean, look – the public still buys antibacterial soaps, and public health experts don’t recommend those either.)

In general, then, we can expect politicians to be eager to quarantine. This eagerness will be completely independent of the specific facts of any particular disease. Recall that lots of politicians once wanted to be able to set up an HIV quarantine, too, even long after it was well known that HIV can’t be transmitted by hugging, kissing, sharing utensils, sharing toilet seats, non-euphemistic cuddling, or what have you. (Wasn’t that a loooong time ago? No: It was just last year. And they got what they wanted.)

In short, whether or not a quarantine is right in any particular case – and it might be right in some cases, though I wouldn’t know – public choice theory says that politicians will err on the side of quarantine.

If that seems cynical, consider the flip side: Politicians also don’t want to look like the ones who let Ebola into the country. Note that one might look like the person who brought Ebola into the country even when one’s policies are responsible for exactly zero additional Ebola risk. Life is unfair sometimes. Even to politicians.

To look like a screwup, all you have to do… is nothing. The public will be left to stew in its fears, and they hate it when that happens. So they will punish you, and your party, at the next possible opportunity. (When is that again?)

The costs of doing nothing here are especially high if your constituency happens to be made up of conservatives – in whom Jonathan Chait has pointed out a strong emotional preference for purity and cleanliness. We should thus expect to find fear of contamination at or near the top of the to-do list for conservatives, who will try, first, to intensify these fears, and second, to promote their own policies as the only ones capable of relieving them.

Top Ten Reasons You Should Attend Cato’s Conference on the Halbig Cases This Thursday

Here are ten reasons everyone should attend this Thursday’s Cato Institute conference, “Pruitt, Halbig, King & Indiana: Is Obamacare Once Again Headed to the Supreme Court?

  1. The very next day – October 31 – the Supreme Court could grant certiorari in King v. Burwell. Reporters who attend will be able to write their stories in advance.
  2. Our luncheon keynote speaker, Oklahoma attorney general Scott Pruitt, filed the first Halbig-style challenge in September 2012. (Does that mean I should call them “Pruitt-style challenges”?) Last month, a federal district court sided with Pruitt against the federal government. Our morning keynote speaker, Indiana attorney general Greg Zoeller, filed the fourth such challenge, Indiana v. IRS. A ruling is expected at any time. Pruitt and Zoeller will discuss why they have asked the Supreme Court to grant cert in King.
  3. We’ve already been King-ed! The Center for American Progress and Families USA were so impressed (or worried) about our conference that they scheduled a conference call with reporters to piggyback on (or drown out) any coverage of our conference. Their teleconference is on Wednesday, October 29, at 10am ET. Dial in: 888-576-4398. Confirmation code: 1635383.
  4. Case-Western Reserve University law professor Jonathan Adler, an intellectual father of the Halbig cases, will discuss recent and future court rulings. So will law professor Jim Blumstein, intellectual father of the Supreme Court’s Medicaid ruling in NFIB v. Sebelius, who also played a seminal role in the Halbig cases.  
  5. Len Nichols, who advised the Senate on state-run vs. federal Exchanges will explain why all this is nonsense.
  6. Health-insurance industry expert Bob Laszewski will explore the possible impact of Halbig.
  7. University of Washington law professor David Ziff will discuss how Halbig critics could improve their arguments.
  8. The Constitutional Accountability Center’s Brianne Gorod, who wrote the amicus briefs filed by the members of Congress who wrote Obamacare, will explain what Congress really intended.
  9. AEI’s Tom Miller, who helped launch the Halbig cases, will explore how states might respond to a Halbig win.

And finally, the number-one reason you should attend this conference…

  1. Obamacare architect Jonathan Gruber will explain his flip-flop on Halbig. Ha! Just kidding. The real number-one reason is: these lawsuits have more of a shot than you thought, and you need to get up to speed.

Register now.

Government Gold-Plating

Sen. Tom Coburn (R-OK) released his annual Wastebook this past week. It contains a laundry list of doozies. The U.S. government’s gold-plating operations included $190,000 to study compost digested by worms, $297 million for the purchase of an unused mega blimp, and $1 million on a Virginia bus stop where only 15 people can huddle under a half-baked roof. These questionable (read: absurd) expenditures only represent the tip of the iceberg.

In addition to supporting members of Congress and civil servants, U.S. taxpayers support welfare recipients. And they support them lavishly, too. Hawaii, Massachusetts, and D.C. residents receive sizeable welfare payments (read: salaries). Indeed, the magnitude of these payments exceeds the average salary of an American teacher, as well as a soldier deployed in Afghanistan, by at least $10,000 per year.

The public can forget all the clap-trap they are hearing about austerity. Indeed, a fairly dull knife could cut billions of dollars from the U.S. government’s largess. 

Send The International Nanny Packing

As many of us have noted lately, the federal Centers for Disease Control, known originally for their work against infectious and communicable diseases, have shifted focus in recent years to supposed public health menaces like beltless driving, gun ownership, social drinking, and suburban land use patterns. CDC director Thomas Frieden came recommended to President Obama because of his national fame as Mayor Michael Bloomberg’s health commissioner, in which capacity he oversaw portion sizes and donut recipes, restaurant smoking policies and anti-salt campaigns, as well as the occasional infectious disease issue. 

If national nannyism strikes you as bad enough, get ready for the international kind. As the Wall Street Journal noted the other day

The United Nations-run WHO has long been a growing irrelevance, as director-general Margaret Chan spent the week not in Monrovia but Moscow, pontificating at a WHO conference aimed at raising global tobacco taxes. … Since the 1990s, the WHO has gradually transformed itself from a disease fighter to what Dr. Chan calls “a normative agency” that makes international public health rules and promotes political goals like universal coverage. 

The ideology behind this is driven by ideas fashionable in the West, particularly that of rolling out the “tobacco control” model to other consumer goods like food and alcohol. This summer in Nature, for example, much-quoted Georgetown law prof Lawrence Gostin outlined such an agenda under the headline “Healthy Living Needs Global Governance.” According to the abstract of his article, “researchers have identified a suite of cost-effective NCD [non-communicable disease] prevention measures” and now it is time for international regulatory bodies to step forward to impose them.  

Stronger global governance could spur national action by providing funding, creating stronger norms and holding states accountable. The UN’s comprehensive review on progress in NCD prevention, held in July 2014, offered an opportunity for the international community to take concrete steps in strengthening global prevention efforts. This article proposes four concrete steps for a long-term solution: creating a dedicated fund for NCD control and prevention; regulating industry to improve nutrition and restrict alcohol and tobacco marketing; altering the built environment to promote physical activity; and prioritizing prevention in all sectors of government and in the global regimes that govern NCD risk factors.

Barriers to quick adoption of such measures, Gostin laments, include “philanthropic action favoring swift wins in infectious disease control, and the framing of NCDs as an individual rather than collective problem.” That second point you might be right to interpret as annoyance at libertarians and individualists who keep arguing that people choose, and should have a right to go on choosing, what they eat. But pause for a moment to take in Gostin’s first point about how narrow-minded philanthropy is to favor “swift wins in infectious disease control.” The rest of us may see it as inspiring, even heroic when a tech billionaire donates a zillion dollars to roll back the scourge of malaria, Ebola, or some less familiar tropical disease. If you were truly advanced, however, you would see this as a distraction from the task of organizing to regulate pretzel consumption. 

Agencies like WHO promoted their mission to skeptics as a way of addressing communicable diseases that, like Ebola, can quickly jump borders. Why let it arrogate more power to itself than it would need for that purpose?

Bill Gates Recognizes the Improving State of Humanity

With the newspapers full of crises, it can be hard to maintain a proper perspective on the progress humanity has made, and to remember that there are individuals striving every day to make the world a better place. In a recent interview, businessman and philanthropist Bill Gates discussed the improving state of humanity, and the work that he is doing through private charity to help those in need.  He said,

I think the idea that people are worried about problems, like climate change or terrorism or these challenges of the future, that’s okay. But boy, they really lose perspective of what’s happened over the last few hundred years. And how science and innovation have been a central factor of that. And I think that’s too bad, because people are lucky to live now. And they should see that progress is actually taking place faster during their lives than at any time in history.

One of the major initiatives of the Gates Foundation, for example, aims to eliminate polio. The data bear out how much progress has already been made towards that end:

Blog chart 1

In 1980, about half of all children received the polio vaccine. Today, around 90% of children receive the vaccine, and eradication of the condition is in sight – just as people eradicated smallpox in 1979.

Gates is also among the many caring individuals working to eliminate malaria and malnutrition, areas where humanity has already made great strides. Insecticide-treated mosquito nets, for example, protect more children from malaria in Sub-Saharan Africa:

blogchart2

Malnutrition among children is also declining. In populous developing  regions, such as East Asia and the Pacific, malnutrition affected about 20% of children in 1990. More must be done, but today malnutrition affects fewer than 6% of children in those areas.

blogchart3

Even one child afflicted by polio, malaria, or malnutrition is too many, but the dramatic improvements the world has made on these fronts should be celebrated. Like Gates, while working to make the world better we must not lose a proper perspective on the progress humankind has already made.