The Singer, Not the Song

In 2010, social psychologist Eric Knowles and two colleagues published a study showing that some of the opposition to health care reform results from prejudice toward African-Americans and dislike of Barack Obama. The research was a panel study in which participants were interviewed several times over the internet.

During the first contact, Knowles measured implicit prejudice against blacks using a variation of the Implicit Association Test. This test measures an automatic tendency to associate white Americans with the concept “good” and black Americans with the concept “bad.” This bias this is unintentional and occurs without our awareness. Knowles found that the people high in implicit prejudice toward African-Americans reported more negative attitudes toward Obama before the 2008 election and were less likely to vote for him. This is one of several studies to show that racial prejudice influenced votes in both the 2008 and 2012 elections.

These negative attitudes toward blacks spilled over onto Obama's policies. People high in implicit prejudice were more opposed to health care reform in 2009, before the Affordable Care Act (ACA) was passed. How do we know their opposition to health care reform was due to prejudice rather than political conservatism, which is highly correlated with prejudice in this country? Knowles did an experiment in which he described a health care plan. For half the participants, it was presented as Bill Clinton's 1993 plan and for the other half, it was presented as Obama's plan. (The actual description was of features that both plans had in common.) Implicit prejudice had no effect on attitudes toward the “Clinton” plan, but when it was attributed to Obama, the more prejudiced participants were more opposed to it. This study was replicated two years later with the same results.

Fast forward to 2014. Aaron Chatterji and colleagues just published a study asking why members of the House of Representatives did or did not vote for the ACA. The study only included Democrats, since only one of 177 Republicans voted for the bill. The researchers looked at whether three variables were related to the legislators' votes: (1) the percentage of their constituents without health insurance, (2) Obama's margin of victory or defeat in the 2008 election in their district, and (3) political contributions from health insurance companies. The statistical analysis also controlled for eight demographic variables, such as the age and racial composition of the district, and five Congressperson characteristics, such as their own 2008 margin of victory. The results were:

• Percentage of constituents without health insurance was unrelated to the legislators' votes.
• Obama's margin of victory made a significant difference. The 219 Democrats who voted for the ACA came from districts in which Obama's average margin of victory was +30%, while the 39 Democrats who voted against it came from districts in which Obama lost by slightly under 10%. Obama's margin of victory accounted for 47% of the variance in these Representatives' votes.
• Political contributions from the health insurance industry also had no relationship to voting.

The authors note that if the Congresspeople had the best interests of their constituents in mind, there should have been greater support for the ACA from Representatives whose districts contained a higher percentage of uninsured people. At different places in the article, they refer to this as either ignoring their constituents' preferences or ignoring their constituents' needs. The latter is more accurate, since they have no measure of voter preference. Maybe some of the people who needed the ACA did not prefer it (or did not know they preferred it). It is primarily the needs of their poorer constituents that these legislators ignored. This is no surprise, since there is a growing body of research showing that politicians votes are consistent with the opinions of their constituents in the top third of the income distribution, but the opinions of the lower and middle thirds are disregarded.

Of course, Obama's margin of victory or defeat is also a salient indicator of constituent preferences, and these Congresspeople were very responsive to it. However, the presidential election was not a referendum on health care reform, which played only a minor role in the campaign, but is more reasonably regarded as a measure of Obama's popularity. It appears that the legislators voted for or against the ACA based on the evidence of Obama's popularity in their district.

The common thread among both studies is that both citizens' and legislators' attitudes toward health care reform seem to be less influenced by the substance of the policy than by attitudes toward the President himself. At the present time, politicians in 24 states (including Pennsylvania) are ignoring the needs of their poorer citizens by refusing to implement the ACA's provision to expand Medicaid. Is this decision also driven by attitudes toward the President?

By the way, the fact that political contributions from insurance companies had no effect on voting doesn't really contradict the hypothesis that politicians are influenced by campaign contributions. The health insurance industry never clearly favored or opposed the ACA, since it has both advantages and disadvantages for them. In fact, the authors never predicted whether health insurance money would make a Congressperson more or less likely to vote for the bill.

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Another Shoe Drops

We will place a limit on how much you can be charged for out-of-pocket expenses, because in the United States of America, no one should go broke because they get sick.

                                                                           Barack Obama (2009)

One of the most important consumer protections used to sell the Affordable Care Act was the annual limit on the out-of-pocket health care costs that insurance companies were allowed to charge consumers. The ACA states that, beginning in 2014, insurers cannot ask clients to pay more that $6,350 annually per individual, or $12,700 per family, in health care expenses—a sum of money that is already well beyond the means of many American families.

Now, after postponing the employer mandate—but not the individual mandate—the Obama administration has quietly postponed the cap on out-of-pocket costs as well. This was done without any public announcement. Instead, they changed the Department of Labor website's “FAQs about Implementation of the Affordable Care Act (Part XII).” Apparently the change was made in February, but went unnoticed until it recently came to the attention of New York Times health reporter Robert Pear. So far, it has remained under the radar of most of the mainstream media, but Republicans will undoubtedly make it a 2014 campaign issue.

What this means is that, at least through 2014:

• Insurance policies that currently have no limits on out-of-pocket health care costs may continue not to have any limits.
• Policies which have separate out-of-pocket limits for different components of coverage, i.e., separate limits for hospital costs and prescriptions drugs, may continue to apply these separate limits even though they total more than $6,350 per individual and $12,700 per family.

The people who will be hit hardest by this change are people with disabilities or chronic medical conditions, who will no doubt continue to go bankrupt at the current rate.

The reason given for this postponement is almost absurd in its cynicism. More than three years after the ACA was signed, we are asked to believe that insurers “need more time to comply” with the law because some of them “have separate computer systems that cannot communicate with one another.” (I would guess that insurance companies could reset their computers in three weeks if there were money to be made by doing so.)

The Times quotes an unnamed administration official as saying, “We had to balance the interests of consumers with the concerns of health plan sponsors and carriers, . . .” But it's hard to see much balance in these two recent changes to the ACA. Rather, they are best described by the title of a July 2 blog by Obama advisor Valerie Jarrett: “We're Listening to Businesses About the Health Care Law.” Once again, the interests of Americans suffering from serious health problems are subordinated to American corporations' insatiable drive to maximize profits.

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Obama on the Employer Mandate:  ". . . never mind."

Obama on the Employer Mandate: ". . . never mind"

The Obama administration quietly announced on Tuesday that there will be a one-year delay—until after the 2014 midterm elections—in the implementation of the employer mandate, the provision of the Affordable Care Act (ACA) that requires employers with 50 or more employees to provide them with health care coverage or pay a fine. The decision leaves intact the individual mandate, which requires most Americans to have health care in 2014 or pay a tax penalty. Employers get a reprieve, but not workers.

The New York Times quotes Sara Rosenbaum, professor of health policy at George Washington University, as follows: “I am utterly astounded. . . . This step could significantly reduce the number of uninsured people who will gain coverage in 2014.” It's hard to say at this point how many people will lose coverage. The Kaiser Family Foundation estimates that there are 230,000 firms with 50 or more employees who do not offer health insurance, employing about 1.4 million workers. It's unlikely that many of them will voluntarily offer coverage with the penalty for noncompliance removed. It's even possible that some companies that currently offer health care will drop it in 2014.

What will happen to those workers? They will be required to find coverage on their own or pay a fine. Those who do will most likely pay more for comparable insurance. One of the arguments in favor of the employer mandate is that businesses can negotiate a cheaper group rate than workers can obtain on their own. Those workers with lower incomes—$88,000 or less for a family of four—may be eligible for government subsidies, which is why some critics are complaining that this decision will cost the government money. However, the whole issue of subsidies quickly becomes very complicated. For example, people who would have been eligible for Medicaid under the ACA, but whose states—like Pennsylvania—rejected Medicaid expansion, will not be eligible for any subsidy, even though others in their states with higher incomes will be. We won't know until after the fact how many Americans will lose coverage, and therefore, how many will die, as a result of this action.

Photo by seiuhealthcare775nw

It seems likely that this decision will help to reinforce a central part of Obama's legacy: his reputation as a wimp who caves in easily to political pressure. Of course, in this case, the pressure came from a powerful source—U. S. corporations with 50 or more employees.  These are the “corporate persons” who control both mainstream political parties—who, in effect, run the country.

Newspaper accounts attribute the postponement in part to threats from companies hovering around the 50 employee mark to lay off full-time workers or not hire new ones in order to avoid the employer mandate. But that threat is unlikely to go away next year, especially since Obama has caved in several times on various provisions of the law. Republicans, sensing weakness, are again calling for repeal of the ACA. It's certain to be an issue in the 2014 Congressional elections. Americans for Prosperity, the Koch brothers' advocacy group, is rolling out an aggressive new advertising campaign next week attacking Obamacare. “We think that once we incorporate the new bullet points about how the president is already delaying key aspects of the law, it will be even more effective,” said Tim Phillips, the group's president.

Of course, it was a huge mistake to ever merge health insurance with employment. Dave Steil, President of Health Care for All PA, has written about how inconvenient the employer mandate is for businesses. It may discourage the creation of small companies. It introduces needless and expensive complexity into the system—which is one of the things businesses are now complaining about. It distorts labor markets, for example, by giving employers reasons to discriminate on the basis of age, income and health status. It reduces individual choice, since your employer determines your coverage. It encourages employers to meddle in their employees health decisions, for example, by refusing to cover abortion. It reduces tax revenue, since the cost of coverage is tax-exempt. This in turn encourages overly generous coverage for highly paid employees—the kind that pays $100 a month for gym memberships. All of these problems could have been avoided with a single payer system that provides uniform coverage for everyone.

Update (7/12/13):

Not surprisingly, Republicans are trying to exploit the obvious unfairness of postponing the employer mandate but not the individual mandate. House Speaker John Boehner asked, "Is it fair for the president of the United States to give American businesses an exemption from this health care law's mandates without giving the same exemption to the rest of America?  Hell no, it's not fair." Republicans are calling for cancellation of the individual mandate as well, knowing full well that this will bring down the entire ACA. You can't have guaranteed issue—health insurance available to all regardless of preexisting conditions—without the individual mandate.

This latest Republican gambit is outrageously hypocritical. They bend over even further for corporate America than the Democrats. And just yesterday, Boehner and his gang once again ground their heels into the faces of the poor by refusing to fund the food stamp program.

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Protecting the Parasites: The Irony of Obamacare

Earlier this month, the Green Party called on the Supremes to strike down the individual mandate and put an end to the Affordable Care Act (ACA). Their argument is that the ACA is merely a multibillion dollar public subsidy for the insurance, pharmaceutical and medical industries. This is certainly true. But they go on to predict that if the ACA were declared unconstitutional, this would hasten the passage of a single payer, or Medicare for All (as they call it), health care system. (The usually astute economist Robert Reich has made a similar argument.)

As much as I sympathize with their goals, I find that hard to believe that a single payer health care system will make its way through Congress in the near future, even in the unlikely event that a re-elected President Obama were to support it. If he didn't have the votes to support even a public option in early 2010, when the Jackasses controlled the House and had a veto-proof majority in the Senate, what are his chances of passing an all public system in 2013? And how will an overturning of the act by the Supremes affect Obama's chances of re-election? Are you ready for the endless barrage of super PAC-financed TV ads reminding voters that Obama's “signature accomplishment” has been rejected by the courts?

The public also wants the ACA to be overturned. According to a New York Times poll, 29% want the Supremes to overturn the individual mandate, which requires all Americans to purchase health insurance, and another 38% want them to overturn the entire law. After three days of debate, it looks as though they will get their wish. This morning's Washington Post reports that the Supremes “may be on the brink of a major redefinition of the federal government's power.”

Justices on the right of the deeply divided court appear at least open to declaring the heart of the overhaul unconstitutional, voiding the rest of the 2,700-page law and even scrapping the underpinnings of Medicaid, a federal-state partnership that has existed for nearly 50 years.

Of course, you can never predict the Supremes' decision solely on the basis of oral arguments. But if you doubt that they are seriously considering it, remember that they spent 1.5 hours Wednesday discussing what should happen to the rest of the ACA if—or is it when?—the individual mandate is overturned.

This is not a game. With all its flaws, the ACA extends health insurance to 32 million people not previously covered. Without that coverage, we return to a status quo in which 45,000 Americans die every year from lack of health insurance. The Elephants don't have an alternative plan. Their plan B is to “let them die.”

I can point you to a serious article giving at least three constitutional bases for the ACA, but in fact, it's a no-brainer. John Cassidy has referred to this legal case as a “bad joke.” Robert Parry refers to the justices as “clowns.” Who could possibly believe that Congress has no right under the Commerce Clause to regulate the health care, an industry which accounts for 17.6% of GDP? In 2005, Justice Scalia wrote a concurring opinion in Gonzales v. Raich, in which argued he that the Commerce Clause gave government the right to prohibit the sale of medical marijuana. I don't know what percentage of the nation's health care dollars are spent on medical marijuana. Let's say it's about one-tenth of 1%. Are the conservative justices saying that the sale of medical marijuana is important enough to affect interstate commerce, but the entire health care industry is not?  Seriously?!?  It's hard to see this as anything but a farce.

In my opinion, all the verbal jousting going on this week is intended to mystify the public and give judicial cover to the five conservative justices, so they can do what they intended all along: Help the Elephant Party to ensure that Barack Obama will be a one-term president whose four years in office are remembered as a failure. This should not be unexpected. Previous lineups of the Supremes have already allowed politics to trump both the Constitution and legal precedent.

This brings us to the Supreme irony of Obamacare. It appears that the ACA will be destroyed by the individual mandate—an Elephant proposal that Obama was initially reluctant to accept, and that he agreed to in order to save our privatized health care system from the threat of single payer.

During the 2008 campaign, Obama opposed the individual mandate, which Hilary Clinton supported, because he knew it would be perceived as a restriction of individual freedom and there would be a backlash. Why did Obama eventually agree to include something as unpopular as the individual mandate? Basically, it was to save the private health insurance companies.

Insurance companies make money by covering healthy people and denying coverage to those who are sick—or refusing to pay the medical bills of their clients who get sick. That means that in this country, if you develop a serious illness, you are for all practical purposes uninsurable. Americans in this unfortunate situation either become dependent on some sort of public program, die sooner than they otherwise would, or both.

To avoid this, you could require the insurance companies to insure everyone (called guaranteed issue). But if they are forced to cover sick people, they will charge them an amount that most of them can't afford. To avoid this, you could require the insurance companies to charge everyone the same amount regardless of their prior medical history (called community rating). But if you have both guaranteed issue and community rating, there is no logical reason for healthy people to purchase insurance. They can simply wait until they get sick, confident that the insurance companies will have to cover them at an affordable rate. This is known as adverse selection—the tendency for people who buy health insurance voluntarily to be less healthy than the general population. This causes insurance company profits to go down, rates to go up for everyone, and eventually the entire system descends into chaos. To avoid this, you have to require everyone to buy insurance—the individual mandate. This ensures that there are enough healthy people in the system to spread the risk and make insurance affordable for all.

But there's another way. You could simply bypass the insurance companies. Collect the money that people would otherwise pay for insurance premiums up front as taxes and use it to insure everyone. In other words, you could establish a single payer system. This is how social security and Medicare are financed. It would be politically difficult to argue that they are unconstitutional (although some of the arguments currently being advanced against the individual mandate imply that they are).

This irony at the heart of Obama's dilemma was not lost on at least one of the Supremes, Justice Ruth Ginsberg, who noted on Tuesday that:

There's something very odd about that, that the government can take over the whole thing and we all say, oh, yes, that's fine, but if the government wants to preserve private insurance, it can't do that.

Of course, single payer would eliminate the health insurance business. But that's exactly what we should do! Health insurance consumes about 20% of medical spending and provides no useful service in return. It's a giant parasite that sucks up our resources, even as it adds additional misery to the lives of some of our sickest citizens. Eliminating that 20% surcharge virtually guarantees that the extra amount people pay in taxes for single payer will be less than they are currently paying for health insurance.

(That's not the only way single payer will save money. Single payer will give the government the bargaining power to negotiate lower prices for prescription drugs and to rein in the exhorbitant fees paid to doctors and hospitals. Needless to say, big pharma and the for-profit hospitals oppose it too.)

So why couldn't Obama propose a single payer health care system? As the media put it, single payer was “not politically feasible.” That's media-speak for a proposal that is favored by the majority of the American people, but opposed by the “corporate persons” who finance our political campaigns. And in a political system that's basically just legalized bribery, those who finance the campaigns are the only ones who really matter. The richest 1% not only bought and paid for Obama, but most of Congress as well. Had he proposed single payer, he would have faced opposition not only from the Elephants but also from the majority of his fellow Jackasses.

Or as E. J. Dionne put it:

The individual mandate was a conservative idea that President Barack Obama adopted to preserve the private market in health insurance rather than move toward a government-financed single-payer system. What he got back from conservatives was not gratitude but charges of socialism—for adopting their own proposal.

No matter how often he kisses their behinds, the 1% will never accept the legitimacy of Obama's presidency.

Give some credit to the conservative propaganda apparatus. They have successfully framed the individual mandate, the central issue of the debate, as an attack on personal freedom. “The government is trying to force you to buy health insurance.” This is reinforced by a series of wildly implausible slippery slope arguments. “If the government can force you to buy health insurance, then it can also force you to buy broccoli, or a cell phone, or gay pornography!” (Naturally, such proposals are likely to sail through Congress with little dissent.) An American public that lacks the ability or motivation to think critically appears to be buying into this fallacy.

I think Slate's Dahlia Lithwick nailed it when she pointed out that, “This case isn't so much about freedom from government-mandated broccoli or gyms. It's about freedom from our obligations to one another. . . It's about freedom to ignore the injured, walk away from those in peril. . . It's about the freedom to be left alone.”

During Tuesday's oral argument, Solicitor General Donald Verilli argued that health care is different from other markets because we don't just let sick people die. “(G)etting health care service,” he said, “[is] a result of the social norms to which we have obligated ourselves so that people get health care.”

To which Justice Scalia replied, “Well, don't obligate yourself to that.”

Junk Health Insurance

I'm one of those lucky Americans who never had to shop for health insurance. I've always gotten it through my employer or Medicare. So it was a real eye-opener for me when I read about what passes for “health insurance” in the latest issue of Consumer Reports.

Junk health insurance comes in three varieties. Only the first of these qualifies as actual insurance; the other two are not insurance, but are marketed as if they were.

• Mini-med plans. This is real insurance, offered by recognizable health insurance brands, e.g., Aetna, Cigna, but at a lower price than their other insurance plans. Their distinguishing feature is extremely low yearly coverage limits, often only a couple of thousand dollars per year, which is useless if you have a serious illness.
  
  
• Fixed benefit indemnity plans. These plans reimburse you a fixed and generally low amount for medical care, i.e., $100 for each of five doctor visits per year.
  
  
• Medical discount cards. These plans offer a percentage discount on medical services in exchange for a monthly fee, if you can find a provider who will honor the card.

The latter two types of plans are sold by fly-by-night companies with generic names and are marketed directly to consumers over the phone and the internet. Premiums are generally high, and if consumers read the fine print they will realize that the potential reimbursement is not much greater than the yearly fee. Needless to say, the advertising and sales pitches are intended to obscure this fact.

Mini-meds are usually sold to low-wage employees of businesses such as retail or junk food who want to claim they offer some health insurance to their employees. The employer may or may not contribute to the premium. The Affordable Care Act (ACA) prohibits the sale of health insurance that has yearly or lifetime caps on benefits, so these plans were supposed to go out of existence at the end of 2010. However, employers such as McDonald's threatened to completely drop insurance coverage for their employees if the law was implemented. The Obama administration, consistent with its typical pattern of behavior, caved in to the pressure and granted waivers to 1231 mini-med plans covering almost 4 million people until 2014. It's not clear what will happen then.

The fixed benefit plans and discount cards also face a 2014 deadline, since citizens are required to have health insurance by that time and these plans are not health insurance. Of course, this presumes that the ACA still exists in 2014. These plans could be saved by either an Elephant landslide in the 2012 election or a ruling by the Supremes that the ACA is unconstitutional.

The article is filled with horror stories of people with life-threatening illnesses whose coverage fell far short of their expectations. The continued existence of these plans is one of many symptoms of a business culture that tries to cheat people out of their money whenever it can, and a government regulatory structure that does almost nothing to protect consumers from this type of exploitation.

Obama, the States' Rights President

Last week, we posted an op-ed by Wendell Potter about the Obama administration's pending decision on the minimum health benefits insurance companies will be required to cover under the Affordable Care Act (ACA). The ACA says that ten categories of benefits must be covered: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance abuse services; prescription drugs; rehabilitative and habilitative services; laboratory services; preventive medicine; and pediatric services. However, the bill left it up to the administration to specify exactly what services must be included within each category. Consumer groups were hoping for a specific and comprehensive list of benefits. Insurance companies and employers who pay for part of their employees' health insurance argued that “affordability” should be the primary consideration. They lobbied to make the list as narrow as possible. Guess which group had the most money to spend on lobbying? Do I need to tell you the outcome?

The decision was announced by Kathleen Sibelius, Secretary of Health and Human Services, in a 15-page “guidance” released on December 16. In a sense, the President decided not to decide. The list of essential benefits will be left up to the individual states. Each state is supposed to choose an existing health insurance plan as a benchmark. All insurers are required to either provide the same benefits as the benchmark plan, or coverage of equal or greater value.

States have wide latitude in selecting a benchmark plan. It could be any one of the following:

• One of the three largest health plans for state employees.
• One of the three largest small group plans operating in the state.
• The largest commercial health maintence organization in the state.
• One of the three largest health plans for federal employees.

Complicating the states' decisions is the fact that some of the eligible benchmark plans do not provide coverage in all ten required categories. It's not clear how that problem will be resolved.

The decision was accompanied by a flurry of states' rights rhetoric straight out of the Elephant playbook. Sibelius said, “We want to give the states the flexibility to choose an essential health benefits package right for them.”

Although the outcome of these state-level deliberations is uncertain, I think we can make some predictions with confidence. First, the decision ensures that basic health insurance will vary a great deal from one state to another, with resulting inequality of health outcomes. Secondly, since most of the possible benchmarks are from within the state, states whose residents already have comprehensive coverage are likely to continue to have it, while states whose citizens are underinsured will continue to underinsure them. Finally, the result of this decision will probably be poorer health care for U. S. citizens generally than had the federal government made the decision. I say this for several reasons:

• The states will have to pay part of the expenses of any expanded health care coverage. Even blue states like New York, California and Illinois are strapped for cash right now.
• The Elephant Party controls most of the state governorships (29, compared to 20 Jackasses and one Independent). Some Elephant Attorneys General are participating in lawsuits to have the ACA declared unconstitutional. Among the states where we can expect hostility to the ACA is Pennsylvania, where the Elephants control all three branches of government and typically refuse to even consult with the Jackasses on pending legislation.
• This decision will lead to a predictable stampede. Health insurance and Chamber of Commerce lobbyists will descend on our state capitols wheeling barrows of cash into the waiting arms of our public servants. In fact, this may be the greatest fundraising bonanza for state legislators in the history of the country. Public interest groups will be even less able to compete than they were at the federal level.

For the Obama administration, this decision represents yet another concession to corporate interests that opposed health care reform. It comes in the wake of their decision in October to ditch those provisions of the ACA that promised long term care insurance. It is yet another in the seemingly endless series of broken promises by the President who promised hope and change.

David Steil, the President of Health Care for All—PA, our parent organization, has suggested that, because states' geographies and cultures are different, states should determine the health care coverage their citizens receive. I disagree. States have less leverage than the federal government to bargain effectively with hospitals, insurance and drug companies. More importantly, the likely outcome of state variability is that those Americans who have the greatest need for expanded health care coverage are least likely to get it. If you live in a progressive state, you might be fairly well insured against most health emergencies, but if you live in Texas, now may be a good time to look into that cemetery plot you've been putting off buying.  (A new Harvard study has estimated that 45,000 Americans die each year from lack of adequate health insurance.)

Anyone who favors the policy of having states define essential health care benefits must answer this question: What exactly is it about the “cultures” of states like Alabama, Mississippi and Texas that makes them want less adequate health care coverage, especially for their poorest citizens, than states like Minnesota, Oregon and Vermont? Are these cultural differences that deserve our respect?