Archives: 08/2017

Is The ACA Helping to Fuel the Opioid Overdose Rate?

Leaders at all levels of government and civil society are alarmed at the continued rise, year after year, in the death rate from opioid overdose. The latest numbers for 2015 report a record 33,000 deaths, the majority of which are now from heroin. Health insurers are not a disinterested party in this matter.

Cigna, America’s fifth largest insurer, recently announced it has made good progress towards its goal of reducing opioid use by its patients by 25% by mid-2019. To that end, Cigna is limiting the quantities of opioids dispensed to patients and requiring authorizations for most long acting opioid prescriptions. Cigna is encouraging its participating providers to curtail their use of opioid prescriptions for pain patients and is providing them with data from monitoring the opioid use patterns of their patients with an aim towards reducing abuse.

In a Washington Post report on this announcement Cigna CEO David Cordani said, “We determined that despite no profit rationale—in fact it’s contrary to that—that societally we needed to step into the void and we stepped in pretty aggressively.”

No profit rationale?

Paying for fewer opioids saves the insurer money in the short run. And opioids have become costlier as “tamper-resistant” reformulations, encouraged by the FDA, have led to new patents allowing manufacturers to demand higher prices.

There is growing evidence that, as doctors curtail their opioid prescriptions for genuine pain patients, many in desperation seek relief in the illegal market, exposing them to adulterated opioids as well as heroin. For the same reason, recent studies on the effect of state-based Prescription Drug Monitoring Programs (PDMPs) suggest they have not led to reductions in opioid overdose rates and may actually be contributing to the increase. It is reasonable to be skeptical that Cigna’s internal prescription drug monitoring program will work any differently.

Further research suggests the community rating regulations of the Affordable Care Act may be contributing to the problem. The ACA requires insurance companies to sell their policies to people who have very expensive health conditions for the same premiums they charge healthy people. At the same time, the ACA’s “risk-adjustment” programs systematically underpay insurers for many of their sickest enrollees. The overall effect is that the ACA penalizes insurers whose networks and drug formularies are desirable to those who are sick. Insurers respond to this disincentive by designing their health plans to have with provider networks, drug formularies, and prescription co-payment schedules that are unattractive to such patients, hoping they will seek their coverage elsewhere. This “race to the bottom” between the health plans results in decreased access and suboptimal health care for many of the sickest patients.

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Vox on ObamaCare’s Many Near-Death Experiences

Vox’s Dylan Scott offers “An oral history of Obamacare’s 7 near-death experiences.” It’s a well-balanced take on how close the Affordable Care Act and ObamaCare—they are different animals—have come to oblivion.

Scott includes an excerpt of an email I sent him on his original, planned theme of “ObamaCare’s nine lives.” But I thought it might be worthwhile to include my entire response to him. I have lightly edited my email for clarity, added two illegal acts I had forgotten (#5 and #7), and added hyperlinks to useful references.

Just nine? The premise is inapposite, though. 

Jonathan Gruber was right: had the public known what the Affordable Care Act does, it never would have passed, because even more Democrats would have voted to kill it. ObamaCare keeps surviving not because it has nine lives, but because the executive and judicial branches keep rewriting the Affordable Care Act, outside the legislative process, to save it from constitutional and political accountability.

These unconstitutional and illegal actions began before the ink was dry on Obama’s signature. They include:

  1. Allowing Congress to remain in the FEHBP from 2010 until 2014;
  2. The bevy of exemptions Sebelius issued unions and other firms from various regulations;
  3. The threats Sebelius made to insurers who spoke publicly and truthfully about the cost of those regulations; 
  4. Sebelius soliciting funds for Enroll America from companies she regulates;
  5. Sebelius raiding the Prevention and Public Health Fund to the tune of $454 million to fund federal Exchanges; 
  6. The Supreme Court rewriting the individual mandate in 2012; 
  7. Sebelius gutting the Supreme Court’s Medicaid ruling by coercing states to implement parts of the Medicaid expansion the Court made optional;
  8. Obama’s illegal “if you like your health plan” fix/grandmothered-plans exemptions;
  9. The IRS issuing subsidies through federal exchanges;
  10. The Supreme Court upholding ObamaCare’s subsidies and penalties in federal-Exchange states;
  11. The Obama administration making illegal CSR payments;
  12. The Obama administration illegally diverting reinsurance payments from the treasury to insurance companies;
  13. The Obama administration declaring Congress to be a small business; 
  14. The Obama administration giving members of Congress an illegal $12,000 premium contribution to their SHOP premiums;
  15. The Trump administration continuing to make illegal CSR payments;
  16. The Trump administration continuing to give Congress an illegal exemption from the ACA…

Etc., etc.

It’s not that Obamacare has nine lives. It’s that ObamaCare has 90 or 900 or 9,000 committed ideologues who are willing to violate the law to protect it from the voters. 

What we have left is no longer the law Congress enacted. The ACA was a legitimate law, duly passed by Congress. ObamaCare is an illegitimate law that no Congress ever passed or ever could have passed. 

The ACA is dead. Long live ObamaCare.

Absent these unlawful actions, Republicans’ recent attempt to repeal ObamaCare would have succeeded.

Years ago.

The Overcriminalization of Impeachment

Trying to tamp down impeachment talk earlier this year, House minority leader Nancy Pelosi (D-CA) insisted that President Donald Trump’s erratic behavior didn’t justify that remedy: “When and if he breaks the law, that is when something like that would come up.” 

Normally, there isn’t much that Pelosi and Tea Party populist Rep. Dave Brat (R-VA) agree on, but they’re on the same page here. In a recent appearance on Trump’s favorite morning show, “Fox & Friends,” Brat hammered Democrats calling for the president’s impeachment: “there’s no statute that’s been violated,” Brat kept insisting: They cannot name the statute!” 

Actually, they did: it’s “Obstruction of Justice, as defined in 18 U.S.C. § 1512 (b)(3),” according to Rep. Brad Sherman (D-CA) who introduced an article of impeachment against Trump on July 12. Did Trump break that law when he fired FBI director James Comey over “this Russia thing”? Maybe; maybe not. But even if “no reasonable prosecutor” would bring a charge of obstruction on the available evidence, that wouldn’t mean impeachment is off-limits. Impeachable offenses aren’t limited to crimes.

That’s a settled point among constitutional scholars: even those, like Cass Sunstein, who take a restrictive view of the scope of “high Crimes and Misdemeanors” recognize that “an impeachable offense, to qualify as such, need not be a crime.” University of North Carolina law professor Michael Gerhardt sums up the academic consensus: “The major disagreement is not over whether impeachable offenses should be strictly limited to indictable crimes, but rather over the range of nonindictable offenses on which an impeachment may be based.” 

In some ways, popular confusion on this point is understandable. Impeachment’s structure echoes criminal procedure: “indictment” in the House, trial in the Senate—and the constitutional text, to modern ears, sounds something like “grave felonies, and maybe lesser criminal offenses too.”

But “high crimes and misdemeanors,” a term of art in British impeachment proceedings for four centuries before the Framers adopted it, was understood to reach a wide range of offenses that, whether or not criminal in nature, indicated behavior incompatible with the nature of the office. For James Madison, impeachment was the “indispensable” remedy for “Incapacity, negligence, or perfidy” on the part of the president—categories of conduct dangerous to the republic, only some of which will also constitute crimes. 

The criminal law is designed to punish and deter, but those goals are secondary to impeachment, which aims at removing federal officers unfit for continued service. And where the criminal law deprives the convicted party of liberty, the constitutional penalties for impeachable offenses “shall not extend further than to removal from Office,” and possible disqualification from future officeholding. As Justice Joseph Story explained, the remedy “is not so much designed to punish an offender, as to secure the state against gross official misdemeanors. It touches neither his person, nor his property; but simply divests him of his political capacity.”

No doubt being ejected from a position of power on the grounds that you’re no longer worthy of the public’s trust can feel like a punishment. But the mere fact that removal is stigmatizing doesn’t suggest that criminal law standards apply. Raoul Berger once illustrated that point with an analogy Donald Trump would probably find insulting: “to the extent that impeachment retains a residual punitive aura, it may be compared to deportation, which is attended by very painful consequences, but which, the Supreme Court held, ‘is not a punishment for a crime.’”

90 Percent of Businesses Don’t Use E-Verify—Especially Small Businesses

E-Verify is the federal government’s national identification system that some employers currently use to verify the employment authorization of their new hires either voluntarily or under a requirement by state law. The Legal Workforce Act (LWA) would make this program mandatory for all employers in all states. Its proponents contend that E-Verify is simpler than the current I-9 form process and that it will protect employers from government raids and I-9 audits. But these talking points are false, and seemingly for this reason, employers refuse to use it voluntarily.

In 2017, 729,595 employers participated in E-Verify. Using a calculation from a USCIS-commissioned study, this figure corresponds to 9.5 percent of the 7.7 million private sector employers, which is somewhat higher than the actual level because some E-Verify users are public employers. It also greatly inflates the level of voluntary compliance. Only 10 states and D.C. have greater than 10 percent participation in E-Verify—all of them have expansive E-Verify mandates of some kind. To achieve this level of compliance, states need to require E-Verify for some private sector employers—either by fining non-users or rescinding subsidies from them. President Bush’s 2008 executive order mandating E-Verify for federal contractors drives the relatively high level of compliance in D.C.

Nearly half of all employers who use E-Verify operate in the 10 top E-Verify-using states, while only 17 percent of the businesses operate there. Only 6 percent of the 40 states without the more expansive mandates use E-Verify. As the Figure below shows, the true level of “voluntary” compliance is undoubtedly much lower than 6 percent. Another dozen states have various E-Verify requirements for public employers or contractors, and federal contractors exist in every state, meaning that it’s impossible to determine the precise level of voluntary participation.

Figure: E-Verify Participation Rates, 2017

Sources: Author’s calculations based on USCIS; SBA; BLS (Top 10 states: Alabama, Arizona, Georgia, Mississippi, Missouri, Nebraska, North Carolina, Rhode Island, South Carolina, Tennessee, and Utah, plus D.C.)

Legal Workforce Act Would Delay or Cost 1.7 Million Jobs for U.S. Citizens and Legal Workers

E-Verify is a government-run national identification system that some U.S. employers currently use to verify the employment status of their new hires on a voluntary basis or a compulsory basis if they are federal contractors or operate in states with an E-Verify mandate. The Legal Workforce Act (LWA), which has passed the House Judiciary Committee on three occasions since 2012, would mandate that all employers use the program. In scope, LWA would surpass all other regulations in U.S. history, applying to every single employer and every single worker—illegal and legal—with deleterious consequences for both.

Proponents see E-Verify as an inexpensive silver bullet to end illegal immigration. But naturally, this technocratic dream fails to fit reality. As my colleagues’ recent study shows, E-Verify does slightly reduce unauthorized immigrant wages, but not nearly far enough to “turn off the jobs magnet.” Unsurprisingly, the market finds a way to connect willing workers with willing employers. However, while E-Verify fails to separate illegal workers from their jobs, it does manage to do exactly that for many legal workers—U.S. citizens and work authorized immigrants.

E-Verify salesmen neglect to mention that the program applies to all workers, not just those here illegally, and that U.S. citizens and legal workers can end up caught in the system. I have previously explained how, from 2006 to 2016, legal workers already had 580,000 jobs held up due to E-Verify errors, and that of these, 130,000 lost their jobs completely. These shocking numbers would grow worse under mandatory E-Verify. Under the most conservative estimate, if applied to all employers, E-Verify would delay at least 1.7 million jobs for legal workers and eliminate nearly half a million jobs over 10 years.

How E-Verify already harms U.S. workers

LWA requires employers to submit the information employees provide them on the I-9 forms to E-Verify. If the information fails to match the records of the Department of Homeland Security or Social Security Administration, E-Verify issues a “tentative nonconfirmation” (TNC). Under LWA, people who receive a TNC would need to challenge it within 2 weeks or it would become a “final nonconfirmation” (FNC), which requires an employer to immediately terminate their employment or face major fines or jail time.

Errors can occur because employers enter the name incorrectly. This mistake is particularly common for people with multiple or hyphenated last names or names with difficult spellings. They also happen when bureaucrats incorrectly enter information into their databases or when employees fail to fully update their information after a name change.

To sort out the problem, employees then have to visit in person the Social Security Administration or U.S. Citizenship and Immigration Services (USCIS)—the new DMVs for employment. Employees and employers have to stumble through this process in the dark because E-Verify is unable to tell them the origin of the problem. Workers may need to file Privacy Act requests to access their records and fix the issue. In these cases, it can take more than three months to even obtain a response. LWA allows employers to delay hiring a worker until they clear this bureaucracy.

Even worse, E-Verify can cause legal workers to lose their jobs entirely. Authorized job seekers can receive an FNC if they fail to challenge the TNC or if their employer fails to notify them. According to a USCIS-commissioned study, 17 percent of FNC errors were the fault of the employee not following the regulations. The other 83 percent were the result of employers not informing the worker about the TNC, so they could challenge it.

E-Verify’s boosters tout its 99.8 percent accuracy rate, implying that U.S. workers have little to fear. But even a low rate applied to a population as large as the U.S. workforce would result in hundreds of thousands of errors. Indeed, in 2016, under voluntary use of the system, E-Verify caught up 63,000 legal workers in its regulatory scheme. It will become much worse if Congress mandates it for all employers.

The RAISE Act Talking Points Are Deceptive

Supporters of the RAISE Act are counting on the media, voters, and policy makers to focus on talking points supporting the bill rather than its actual substance.  Those supporters want the debate over this bill to be “skilled or merit based immigrants versus family-based immigrants” – a debate that they could win.  But they can only do that if everybody focuses on the talking points and they remain ignorant of the actual contents of the bill.  The RAISE Act talking points are grossly deceptive, at best, and do not accurately describe the bill’s contents or what its effects would be.  Each heading below is a major talking point that RAISE’s supporters are using followed by what the facts actually are.

“The RAISE Act creates a merit and skills-based immigration system.”

The RAISE Act does not increase merit and skills-based immigration over the existing cap.  The bill sets an annual cap of 140,000 green cards annually for merit and skills-based immigrants – the exact same number apportioned to the current employment-based green card for skilled workers.  The RAISE Act merely cuts other immigration categories, such as family-based green cards, while creating a points system for obtaining one of the 140,000 merit and skills-based green cards.  Cutting family reunification does not create a merit or skills-based immigration system.  

“The RAISE Act is very similar to the merit-based Canadian and Australian immigration systems”

The Canadian and Australian merit-based immigration systems are far more open than either current U.S. immigrant law or what the RAISE Act would create.  As a percent of the population, which is the only meaningful way to compare the size of immigrant flows in different countries or across time, the Australian and Canadian merit-based immigration policies allow about 3.5 and 2.4 times as many immigrants annually as the United States, respectively.  The RAISE Act would widen this gulf even further whereby the annual immigrant flows to Australia and Canada would be about 7.9 and 5.3 times as great as to the United States.  

How Regulations Impede Economic Mobility

Why are Americans less likely to move to better opportunities than they used to be? The Wall Street Journal reports:

When opportunity dwindles, a natural response—the traditional American instinct—is to strike out for greener pastures. Migrations of the young, ambitious and able-bodied prompted the Dust Bowl exodus to California in the 1930s and the reverse migration of blacks from Northern cities to the South starting in the 1980s.

Yet the overall mobility of the U.S. population is at its lowest level since measurements were first taken at the end of World War II, falling by almost half since its most recent peak in 1985.

In rural America, which is coping with the onset of socioeconomic problems that were once reserved for inner cities, the rate of people who moved across a county line in 2015 was just 4.1%, according to a Wall Street Journal analysis. That’s down from 7.7% in the late 1970s.

One particular problem with today’s immobility is that people find themselves in areas where jobs are dwindling and pay tends to be lower. Why don’t they move to where the jobs are? This comprehensive article for the Journal by Janet Adamy and Paul Overberg points to a few factors:

For many rural residents across the country with low incomes, government aid programs such as Medicaid, which has benefits that vary by state, can provide a disincentive to leave. One in 10 West Branch [Mich.] residents lives in low-income housing, which was virtually nonexistent a generation ago.