Topic: Health Care & Welfare

A 51-Percent Premium Hike Rescues ObamaCare In Pinal County

Demonstrator Ryan Thomas, a supporter of U.S. President Barack Obama's health-care law, the Affordable Care Act (ACA), holds an "ACA is here to Stay" sign after the U.S. Supreme Court ruled 6-3 to save Obamacare tax subsidies outside the Supreme Court in Washington, D.C., U.S., on Thursday, June 25, 2015. The U.S. Supreme Court upheld the nationwide tax subsidies that are a core component of President Barack Obama's health-care law rejecting a challenge that had threatened to gut the measure and undercut his legacy. Photographer: Andrew Harrer/Bloomberg *** Local Caption *** Ryan Thomas

Pinal County, Arizona was in danger of being the first second third fourth place where ObamaCare caused insurance markets to collapse. As of last month, every private health insurance company now selling ObamaCare coverage in the county announced it would no longer do so in 2017. Had that scenario come to pass, it would have tossed nearly 10,000 residents out of their Exchange plans and left them to buy ObamaCare coverage outside of the Exchange, with no taxpayer subsidies to make the coverage “affordable.” If they didn’t buy that unaffordable coverage, ObamaCare would still subject them to penalties, at least until the Secretary of Health and Human Services intervened.

It appears that Pinal County has avoided that fate. Blue Cross Blue Shield of Arizona has announced that, despite reservations, it will sell ObamaCare coverage in Pinal County next year. Pinal County now joins 13 other Arizona counties, one third of counties nationwide, and seven states that will have only one carrier in the Exchange.

In Fact, Prof. Reinhardt, This Is ObamaCare’s Fourth Death Spiral

Dr. Uwe Reinhardt, Professor of Economics and Public Affairs at Princeton University, speaks at a Bloomberg News health-care panel discussion in Princeton, New Jersey, March 23, 2004. Photographer: Christopher Barth/ Bloomberg News.

Princeton economist Uwe Reinhardt supports ObamaCare. He also thinks the law’s health-insurance Exchanges are doomed. An exodus of insurers—lots of Exchanges are down to one carrier; Pinal County, Arizona is down to zero carriers—has taken supporters and the media by surprise. It shouldn’t. Similar laws and even ObamaCare itself have caused multiple insurance markets to collapse.

Reinhardt jokes ObamaCare’s Exchanges look like they were designed by “a bunch of Princeton undergrads.” Those Exchanges are now experiencing “a mild version” of “the death spiral that actuaries worry about.” The extreme version has happened before. “We’ve had two actual death spirals: in New Jersey and in New York,” Reinhardt explains. “New Jersey passed a law that had community rating but no mandate, so that market shrank quickly and premiums were off the wall. You look at New York and the same thing happened; they had premiums above $6,000 per month. The death spiral killed those markets.” Community rating is a system of government price controls that supposedly prohibit insurers from discriminating against people with preexisting conditions.

And it’s not just New York and New Jersey where ObamaCare-like laws have caused health insurance markets to collapse. It also happened in Kentucky, New Hampshire, and Washington State.

In fact, the death spiral Reinhardt sees in the Exchanges would itself be the fourth death spiral ObamaCare itself has caused:

  1. Before they even took effect, ObamaCare’s preexisting conditions provisions began driving insurers out of the market for child-only health insurance. Insurers ultimately exited that market in 39 states, causing the markets in 17 states to collapse.
  2. ObamaCare’s long-term care insurance program – the CLASS Act – failed to launch when the administration could not make it financially sustainable. President Obama and Congress repealed it.
  3. Exchanges effectively collapsed in every U.S. territory, again prior to launch.
  4. Now, a nationwide exodus of insurers has left one third of counties, one in six residents and seven states with only one carrier. In Pinal County, Arizona, every insurer has exited the Exchange. The exodus goes beyond greedy, for-profit insurers. It includes more than a dozen government-chartered nonprofit “co-op” plans.

DEA Plans to Ban Kratom

Kratom is a plant that, according to users, relieves pain, reduces anxiety, and aids withdrawal from opioids like heroin.

The Drug Enforcement Administration, however, believes kratom is dangerous and has no valid medical use. So the DEA is placing kratom in Schedule I of the Controlled Substances Act, which effectively bans legal use of the drug.

The DEA’s decision prompted one user to send me this email:

I’ve read many of your posts online, and remembered you today as I heard some news that, I fear, is going to change my life for the worse. I’m sure you are aware that very soon kratom is going to be banned nationwide.

Full disclosure: I do depend on kratom for anxiety and (very) occassional pain from back spasms. About five years ago kratom gave me my life back after finally weening myself from prescription pain medication. I take it every day, and I’ve never had to increase the amount. This amazes me.

I am a successful high school teacher, husband, and father. I have a master’s degree in education and I work hard to take care of my family. I have refused, and will continue to refuse, to become a ward of the pharmaceutical industry. Which I suppose, in the eyes of the DEA, now makes me a felon.

I am writing to ask you if you have any advice at all for how to fight this. I am writing writing writing … senators and health officials … posting on forums, donating money. This all feels quite futile.

So I guess I’m also, not so subtly, asking you if you believe there is any way you could help. You are an expert in this field. Your voice would be heard much more clearly than a high school teacher in Southwest Ohio. What you might say I do not know. But I do know there are thousands of people right now who are frightened and angry, and my gut tells me this ban could cause many to suffer. But of course I am also being selfish.

When Exchanges Collapse, ObamaCare Penalizes You Even If Coverage Is Unaffordable

MIAMI, FL - NOVEMBER 02: Martha Lucia (L) sits with Rudy Figueroa, an insurance agent from Sunshine Life and Health Advisors, as she picks an insurance plan available in the third year of the Affordable Care Act at a store setup in the Mall of the Americas on November 2, 2015 in Miami, Florida. Open Enrollment began yesterday for people to sign up for a 2016 insurance plan through the Affordable Care Act. (Photo by Joe Raedle/Getty Images)

In opeds at Time and National Review Online, I discuss how ObamaCare’s health-insurance Exchange has collapsed in Pinal County, Arizona, throwing some 10,000 residents out of their ObamaCare plans. Charles Gaba of ACASignUps.net and Cynthia Cox of the Kaiser Family Foundation asked me to explain a claim I make in the NRO piece:

Obamacare will still penalize those residents if they don’t buy coverage — even if the amount they must pay increases tenfold or more.

Before I explain, let me first apologize on behalf of the Affordable Care Act’s authors for the complicated mess that follows.

ObamaCare’s individual mandate penalizes taxpayers who fail to purchase health insurance. But there are so many exemptions that of the 33 million or so people who lacked insurance in 2014, the IRS levied the penalty against only 6.6 million tax filers (which actually represents a larger number, maybe 17 million people).

For example, the Affordable Care Act exempts “individuals who cannot afford coverage” from the penalty. You qualify for this exemption if your “required contribution” exceeds roughly 8.13 percent of your household income. For individuals who don’t have access to a suitable employer plan, the “required contribution” is equal to “the annual premium for the lowest cost bronze plan available in the individual market through the Exchange in the State in the rating area in which the individual resides,” minus “the amount of the credit allowable under section 36B for the taxable year (determined as if the individual was covered by a qualified health plan offered through the Exchange for the entire taxable year).” In other words, if you would have to pay more than 8.13 percent of your income for an ObamaCare plan, even after accounting for premium subsidies, then coverage is unaffordable for you and ObamaCare doesn’t penalize you for not buying coverage.

You would think this exemption would somehow apply to the 10,000 residents of Pinal County, for whom coverage will become dramatically more expensive when the Exchange collapses. If those folks are like Exchange enrollees in the rest of the country, the vast majority of them (85 percent or so) receive premium subsidies. When their Exchange coverage disappears next year, so will those subsidies. If they wish to purchase coverage off the Exchange, they will face, for the first time, the actual cost of ObamaCare coverage. Given that the amount Pinal County residents will have to pay for ObamaCare coverage could rise by several multiples, from a fraction of the premium to the full premium, given that the lowest-income enrollees will see the largest increases, given that the large year-to-year rate increases occurring nationwide will only add to the suffering, you would think the ACA’s unaffordability exemption would somehow cover those 10,000 Pinal County residents. But you would be wrong.

A Left-Wing Tax Victory that Is Actually a Triumph for Supply-Side Economics

Our statist friends like high taxes for many reasons. They want to finance bigger government, and they also seem to resent successful people, so high tax rates are a win-win policy from their perspective.

They also like high tax rates to micromanage people’s behavior. They urge higher taxes on tobacco because they don’t like smoking. They want higher taxes on sugary products because they don’t like overweight people. They impose higher taxes on “adult entertainment” because…umm…let’s simply say they don’t like capitalist acts between consenting adults. And they impose higher taxes on tanning beds because…well, I’m not sure. Maybe they don’t like artificial sun.

Give their compulsion to control other people’s behavior, these leftists are very happy about what’s happened in Berkeley, California. According to a study published in the American Journal of Public Health, a new tax on sugary beverages has led to a significant reduction in consumption.

Here are some excerpts from a release issued by the press shop at the University of California Berkeley.

…a new UC Berkeley study shows a 21 percent drop in the drinking of soda and other sugary beverages in Berkeley’s low-income neighborhoods after the city levied a penny-per-ounce tax on sugar-sweetened beverages. …The “Berkeley vs. Big Soda” campaign, also known as Measure D, won in 2014 by a landslide 76 percent, and was implemented in March 2015. …The excise tax is paid by distributors of sugary beverages and is reflected in shelf prices, as a previous UC Berkeley study showed, which can influence consumers’ decisions. …Berkeley’s 21 percent decrease in sugary beverage consumption compares favorably to that of Mexico, which saw a 17 percent decline among low-income households after the first year of its one-peso-per-liter soda tax that its congress passed in 2013.

I’m a wee bit suspicious that we’re only getting data on consumption by poor people.

Why aren’t we seeing data on overall soda purchases?

The Problem with Income

Last week’s 20th anniversary of welfare reform event put income-based poverty measures on trial and drew skeptics from many circles. Michael Tanner stated that you would be hard-pressed to find “anyone on the left or right to defend the current [income-based] measure,” Robert Rector compared the current poverty measure to wearing glasses with cracked lenses, and Scott Winship presented research indicating income-based measurements distort U.S. poverty estimates.

Criticisms of the poverty metric during the event were only a microcosm of objections that have been occurring for some time.

Specifically, academics have taken issue with the failure of income-based poverty measures to accurately capture the realities of poverty. Measuring poverty incorrectly can have deleterious results, because it leads to misunderstanding the problem itself and, by extension, the solution.

So, what’s wrong with using income to measure poverty?

It turns out a lot, because income does not provide an accurate picture of economic well-being. It does not, for instance, provide information about an individual’s access to welfare benefits or access to formal or informal insurance. Income also can’t say anything about an individual’s accumulation of wealth or access to credit. Practically speaking, the income measurement often ignores dollars earned under-the-table on the so-called “gray market.” Importantly, for poor individuals, the resources that income overlooks are often substantially larger than income itself.

Red Tape and Volunteer Rescuers in Louisiana

In the wake of the devastating floods in Louisiana, many people have been stranded in places that are difficult to access, some needing rescue and others running dangerously low on basic supplies. 

The federal response has gotten mixed reviews so far, but some residents in Louisiana saw the real need for help and decided to step up and do what they could for their friends and neighbors.

“All of a sudden before the feds could react, we got thousands of boats in the water, with locals helping each other,” said Kevin Dietz.

The “Cajun Navy” as it has been called, consists of dozens of people with boats and coordinators who work together to deliver supplies or rescue people from flooded areas. 

These volunteers are not just some disorganized rag-tag group, many of them might know how to navigate their neighborhoods better than the government officials, and they are utilizing new technologies to share their GPS locations with each other and organize their communications onto dedicated channels.

State Senator Jonathan Perry is now in the middle of a maelstrom after a report came out that he was working on a proposal that could require these would-be rescuers to undergo training or get a permit in order to help.

To be fair to Senator Perry, he contends that he is trying to figure out a way to remove the layers of red tape that prohibit volunteers from helping with the rescue efforts, as under current law it is illegal for them to  cross the barriers set up by law enforcement and many of them are prevented from doing so.

In the current framework these volunteers are being turned away and prevented from doing what they can at the same time that people are stranded and waiting for help.

This dynamic is not unique to situations like the flooding in Louisiana. Dozens of cities have passed bans making it illegal for private citizens and charities to feed the homeless, which leads to situations like this 90-year-old man and two being charged in Florida for violating the ban. Occupational licensing makes it much more difficult for medical professionals to volunteer their medical and dental services at free clinics through organizations like Remote Area Medical.