Topic: Health Care & Welfare

A Drop in Mortality Is Stale News

The New York Times reported that a drop in mortality in Massachusetts not seen elsewhere can be attributed to its adoption of mandatory health care coverage:

The death rate in Massachusetts dropped significantly after it adopted mandatory health care coverage…offering evidence that the country’s first experiment with universal coverage…has saved lives… In contrast, the mortality rate in a group of counties similar to Massachusetts in other states was largely unchanged.

Implying causality based on this evidence is misleading in several ways as discussed here. In particular, I take fault with mentioning mortality reductions only in locations with mandatory health care coverage even though mortality has been dropping throughout the United States and the world since at least the 1960s. According to the World Bank, American males’ mortality rate has dropped by 3.6 percent between 2000 and 2007—a greater rate over a shorter time period than covered in this study. Over the same period, American females’ mortality rate has dropped by close to four percent.

The mortality rate is dropping, on average, throughout the United States, yet only Massachusetts adopted the mandatory health care law. Therefore, we may conclude that reductions in death rates happen for many reasons that do not restrict human freedom. One possible cause is new technologies that inform and enable proactive people to improve their health, ushered in through greater economic freedom. Check out Cato’s new website, HumanProgress.org, to see more positive changes to our health that are highly correlated with liberty.

Minimum Wage Increase Not the Answer in Hawaii

According to reports, lawmakers in Hawaii agreed to a four-step increase in the minimum wage from its current level of $7.25, rising to $10.10 by 2018. This increase would make them just the third state to impose a double digit minimum wage, along with Connecticut and Maryland. Proponents of the increase point to the high cost of living on the island, and say that, without this increase, low-wage workers will be consigned to living in poverty. They also point to the low unemployment rate in the state as a sign that the labor markets could absorb the increased minimum wage without significant job loss. These arguments fail to look at who the proposed increases would actually affect and do not properly account for the adverse effects this legislation could have on some segments of the population.

Despite claims to the contrary, relatively few Hawaiians would benefit from the increase. For one, the median wage for many sectors that are targeted by minimum wage legislation is already above the $10.10 goal: the median wage for bellhops in 2012 was $10.12, for cashiers it was $10.41 and for amusement and recreation attendants it was $11.87. Older, more experienced workers more likely to support a family are more likely to earn above the median wage, and thus be unaffected by the minimum wage hike.  According to testimony before the state legislature, only around 14,000 people worked at the current minimum wage or less in 2012, but even this might overstate how many people would benefit from the increase; many of these workers were teenagers or secondary earners, after accounting for this, the number of full-time workers who are also the head of household falls to 3,700. Depending on which poverty measure you look at, there are between 173,000 and 231,000 people in poverty in Hawaii, so the tiny proportion of families that could benefit from the increase is little more than a drop in the bucket when looking at their broader poverty problems. The plight of these people is not trivial, but introducing broad ineffective policy that introduces distortions into the entire labor market is not the answer.

While it is true that topline unemployment rate (4.7 percent over the past four quarters) is significantly lower than the national average (7.1 percent), as is often the case, looking solely at a headline statistic leaves out many of the nuances needed to understand the context. When people not attached to the labor force or involuntary working part time for economic reasons are accounted for, their unemployment rate rises to 11.3 percent, closer to the national average, so claims that the labor market is strong enough to absorb the distortions of the minimum wage increase are not true.

Why Worry About Conspiracy When Incompetence Will Do?

Last week, the New York Times reported that the Census Bureau would be significantly changing the questions and methods it uses to determine who has health insurance. The redesign is an attempt to address some of the flaws in the current design that have long troubled the agency. A working paper from the Census Bureau had found that it provided an “inflated estimate of the uninsured” and was prone to “measurement errors” that diminished the reliability and usefulness of the measure.

The timing of this change could hardly be worse. The massive coverage provisions of the health care reform have just taken effect, and these new changes could make comparisons to past years difficult, or meaningless. Another document from the agency explains that the questions would elicit such different responses that “it is likely the Census Bureau will decide that there is a break in the series for the health insurance estimates.”

As the Times reports, the differences in responses between the two sets of questions are significant; in a trial run last year, the percentage of people without health insurance was 10.6 percent with the new questionnaire, compared with 12.5 percent using the old version, with similar effects across all demographic groups.

Some defenders of the decision have pointed out that these new questions will also give data for 2013, so there will be at least one year of pre-ACA data to compare to. This is true, and having at least one data point will be helpful to some extent, but what we really want to evaluate when analyzing the law would be the longer term trend, for two reasons. One, there is a decent amount of variation in these surveys that make single data points less informative. Two, while the major coverage provisions of the law take effect in 2014, the law has already been influencing the insurance market in smaller ways since its passage, and more than half of the reduction in the uninsured will occur after 2014, according to the Congressional Budget Office. This is why having a stable baseline would be useful, so we could examine the longer term trends in insurance coverage, and why now is close to the worst time to incorporate this change. The Census Bureau acknowledged as much in a paper, admitting that “[i]deally, the redesign would have had at least a few years to gather base line and trend data.”

Kathleen Sebelius Sticks American People With Higher Costs, Fewer Choices, and Lost Jobs

Congress passed the misnamed Patient Protection and Affordable Care Act four years ago.  It was a signal political achievement.  Alas, ObamaCare is proving to be a policy bust as Kathleen Sebelius leaves her job as Secretary of Health and Human Services. 

For instance, health insurance premiums are rising dramatically, especially for the young.  The federal government now mandates expensive “benefits” that many people do not need or desire.

Even more dramatic is the reverse Robin Hood redistribution from the generally lower-income young to the mostly wealthier old.  As I point out in my new Forbes online article:  “By requiring coverage irrespective of health status and limiting risk-based premium differentials ObamaCare shifted costs from gray-haired investment bankers to newbie sales associates.  Despite the administration’s faux shock at the huge premium increases for the young, the legislation is working precisely as intended.” 

Dan Snyder’s Indian Initiative

The owner of the Washington Redskins, Dan Snyder, has launched the Original Americans Foundation to “provide resources that offer genuine opportunities for tribal communities.” Snyder and his staff have recently visited a couple dozen Indian reservations, and they are determined to “work as partners to tackle the troubling realities facing so many tribes across our country.”

This sounds like a very worthwhile initiative. However, Snyder’s efforts so far seem to be focused on providing hand-outs, such as coats, shoes, and a backhoe. Such aid may provide short-term relief, but it will not change the long-term prospects of the many reservations that have deep-seated problems of poverty and economic stagnation.

If Snyder wants to drive fundamental change, I’d suggest that his new foundation focus on the need for institutional reforms in tribal governments and in the relationship between tribes and the federal government. Indian reservations are often lacking individual property rights to land, dependable security of contract, efficient administration, and impartial legal proceedings. As a result, they can be starved of commercial business lending, real estate development, entrepreneurship, and capital investment.

In this essay, I note that American Indians and the federal government have a long, complex, and often sordid relationship. The government has taken many actions depriving Indians of their lands, resources, and freedom. The aims of federal policies have gyrated wildly over two centuries, and most policies have failed, as is evident from the continued high poverty rates on many reservations.

These days, Congress often ignores the serious problems on Indian reservations that it played a large part in creating. Congress hands out subsidies, and it gives special preferences to those tribes that are good at lobbying, but it puts little effort into pursuing fundamental reforms that would benefit all reservations. Meanwhile, the Bureau of Indian Affairs has long been one of the most dysfunctional agencies in government.

In sum, good for Dan Snyder in engaging on these issues. But I hope he uses his funding and influence to draw attention to the need for fundamental policy reforms.  

For more, see Indian Lands, Indian Subsidies, and the Bureau of Indian Affairs.

Is Religious Liberty an “Exception” to Government Rule?

In a free society, employers would be at liberty to offer their employees group health insurance, if they wished, and to offer whatever coverage they wished to offer. In the Supreme Court today, however, so basic a premise barely surfaced during oral argument in Sebelius v. Hobby Lobby, the Obamacare “contraceptive mandate” case. Rather, Justices Sotomayor, Kagan, and Ginsburg, clearly supporting the mandate, pressed Hobby Lobby’s attorney Paul Clement as to whether an “exception” should be provided for religious employers who are otherwise required by regulation to offer contraceptive coverage, and whether such an exception could be limited or instead would have no principled bounds. By contrast, Chief Justice Roberts, Justice Kennedy, and even Justice Breyer were at pains to show how such a religious “accommodation” could in fact be limited.

Thus have we come to a point at which religious liberty is recognized, if it is, as an exception to the general rule that government may require us to act as it dictates—and we have to be careful not to extend that accommodation too far lest it gobble up the rule.

That’s a remarkable inversion of First Principles: government first, liberty second, as a limited exception. True, we don’t allow the religious, in the name of religious liberty, to proselytize by the sword. And we don’t because that “exception” is perfectly consistent with a general rule in favor of liberty and against forced association—as in murder. Here, however, religious employers are asking simply to be free from a rule that would otherwise restrict their liberty or require forced association, a rule that would force them to choose between not offering their employees insurance, and paying the Obamacare penalty for so choosing, and offering their employees coverage that offends the employers’ religious beliefs. And it’s no answer to say that, absent the mandate, the employees’ liberty is restricted. They’re at perfect liberty to obtain contraceptives, but not free to force their employer to provide them.

In other words, if you start with freedom of association, then it’s association that must be justified, by mutual consent, not individual liberty. But if “we’re all in this together”—as President Obama so often says and as Obamacare so clearly manifests—then liberty has to be treated as an “exception,” an “accommodation,” carved out from that general rule. For more on this see here and here.

The Wall Street Journal on Halbig v. Sebelius

Today, the U.S. Court of Appeals for the D.C. Circuit will hear oral arguments in Halbig v. Sebelius, one of four cases that Jonathan Adler and I helped spur with our 2013 Health Matrix article, “Taxation Without Representation: The Illegal IRS Rule to Expand Tax Credits Under the PPACA.” Critics call Halbig the most significant existential threat to the Affordable Care Act.” In anticipation of the hearing, the Wall Street Journal wrote a lengthy editorial explaining the issues. Excerpts:

Halbig v. Sebelius involves no great questions of constitutional interpretation. The plaintiffs are merely asking the judges to tell the Administration to faithfully execute the plain language of the statute that Congress passed and President Obama signed.

The Affordable Care Act—at least the version that passed in 2010—instructed the states to establish insurance exchanges, and if they didn’t the Health and Human Services Department was authorized to build federal exchanges. The law says that subsidies will be available only to people who enroll “through an Exchange established by the State.” The question in Halbig is whether these taxpayer subsidies can be distributed through the federal exchanges, as the Administration insists…

In 2012, HHS and the Internal Revenue Service arrogated to themselves the power to rewrite the law and published a regulation simply decreeing that subsidies would be available through the federal exchanges too. The IRS devoted only a single paragraph to its deviation from the statute, even though the “established by a State” language appears nine times in the law’s text. The rule claims that an exchange established on behalf of a state is a “federally established state-established exchange,” as if HHS is the 51st state.

Careful spadework into ObamaCare’s legislative history by Case Western Reserve law professor Jonathan Adler and Michael Cannon of the Cato Institute has demonstrated that this jackalope rule-making was contrary to Congress’s intent…

Mr. Obama has conceded that “obviously we didn’t do a good enough job in terms of how we crafted the law.” The right and only lawful way to repair ObamaCare is through another act of Congress. In Halbig, the judiciary can remind the Obama Administration of this basic constitutional truth.

Jonathan Adler critiques the Halbig district court’s ruling in favor of the IRS here.

Find lots of commentary by me on the Halbig cases at DarwinsFool.com.

This reference guide contains all the information you could want about these cases – and more.