Topic: Health Care & Welfare

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.

Cato Keeps Challenging an Illegal IRS Rule Regarding Obamacare

Last month, Cato filed a brief in the D.C. Circuit case of Halbig v. Sebelius, supporting a challenge to the IRS’s unilateral and unauthorized decision to extend tax credits to individuals who purchased health insurance from exchanges that were not established by their state. Now we’re continuing out advocacy in this area by filing a brief, joined by the Pacific Research Institute and the American Civil Rights Union, supporting the challengers in a similar Fourth Circuit case.

Here’s the background: To encourage the purchase of health insurance, the Affordable Care Act added a number of deductions, exemptions, and penalties to the federal tax code. As might be expected from a 2,700 page law, these new tax rules have the potential to interact in unforeseen and counter-intuitive ways. As first discovered by Michael Cannon and Jonathan Adler, one of these new tax provisions, when combined with state decision-making and IRS rule-making, has given Obamacare yet another legal problem. The legislation’s Section 1311 provides a generous tax credit for anyone who buys insurance from an insurance exchange “established by the State”—as an incentive for states to create the exchanges—but only 16 states have opted to do so. In the other states, the federal government established its own exchanges, as another section of the ACA specifies. But where § 1311 only explicitly authorized a tax credit for people who buy insurance from a state exchange, the IRS issued a rule interpreting § 1311 as also applying to purchases from federal exchanges. This creative interpretation hurts individuals like David King, a 63-year-old resident of Virginia.

Because buying insurance would cost King more than 8% of his income, he should be immune from Obamacare’s tax on the decision not to buy insurance (the “tax” that you’ll recall Chief Justice Roberts devised in his NFIB v. Sebelius opinion). After the IRS expanded § 1311 to subsidize people in states with federal exchanges (like Virginia), however, King could have bought health insurance for an amount low enough to again subject him to the Roberts tax. King argues that he faces these costs only because the IRS exceeded the scope of its powers.

In our latest brief, we argue that the IRS’s decision wasn’t just unauthorized, it was a blatant invasion of the powers exclusively awarded to Congress in Article I of the Constitution. This error was compounded by the district court’s holding that the IRS actions were lawful because, even if Obamacare explicitly restricts the availability of tax credits to states which set up their own exchanges, the expansion of tax-credit availability serves the law’s general purpose of making healthcare more affordable. By elevating its own perception of congressional purpose over the statutory text, the district court ignored the cardinal principle that legislative intent must be effected by the words Congress uses, not the words it may have meant or should have chosen to use.

In other words, if Congress wants to extend the tax credit, it can do so by passing new legislation. The only reason for executive-branch officials not to go back to Congress for clarification, and instead legislate by fiat, is to bypass the democratic process, thereby undermining constitutional separation of powers. This case ultimately isn’t about money, the wisdom of individual health care decision-making, or even political opposition to Obamacare. It’s about who gets to create the laws we live by: the democratically elected members of Congress, or the bureaucrats charged with no more than executing the laws that Congress passes and the president signs.

The U.S. Court of Appeals for the Fourth Circuit (based in Richmond) will hear argument in King v. Sebelius in May.

Free Trade in Doctors

I wish I knew more about the medical system, so that I could write more intelligently about domestic and international trade issues in this area. With the caveat that there is a lot I don’t know here, I’m excited by the following development that will hopefully allow more inter-state trade in medical services:

A significant barrier to the interstate practice of telehealth is closer to being broken down. The Federation of State Medical Boards (FSMB) has completed and distributed a draft Interstate Medical Licensure Compact, designed to facilitate physician licensure portability that should enhance the practice of interstate telehealth.  Essentially, the compact would create an additional licensing pathway, through which physicians would be able to obtain expedited licensure in participating states.  As the FSMB notes in its draft, the compact “complements the existing licensing and regulatory authority of state medical boards, ensures the safety of patients, and provides physicians with enhanced portability of their license to practice medicine outside their state of primary licensure.”  This is a potentially significant development because burdensome state licensure requirements have been a major impediment to the interstate practice of telehealth. A physician practicing telehealth is generally required to obtain a medical license in the state where the patient—not the physician—is located.  As a consequence, physicians wishing to treat patients in multiple states need to obtain a license in each of those states in order to practice medicine lawfully, a lengthy and expensive process.

Thinking even bigger, the same idea could be applied internationally.