Wednesday, May 31, 2017

http://www.newyorker.com/news/john-cassidy/six-reasons-why-the-trump-reset-wont-work?mbid=nl_TNY%20Template%20-%20With%20Photo%20(173)&CNDID=18000286&spMailingID=11154930&spUserID=MjAxNzA3NjMzODgzS0&spJobID=1162689901&spReportId=MTE2MjY4OTkwMQS2

Enlighten Radio:The Wonk City Lectures on Economics and Sociology and Political Science -- 11 AM - 4PM Wednesdays and Thursdays

John Case has sent you a link to a blog:

Blog: Enlighten Radio
Post: The Wonk City Lectures on Economics and Sociology and Political Science -- 11 AM - 4PM Wednesdays and Thursdays
Link: http://www.enlightenradio.org/2017/05/the-wonk-city-lectures-on-economics-and.html

--
Powered by Blogger
https://www.blogger.com/

Tuesday, May 30, 2017

Class, Race and Political Strategy in the Rust Belt

https://shar.es/1R4OUp

Sent using ShareThis

Bernstein: The ACA, the myths and flaws of Republican reforms, and single payer [feedly]

The ACA, the myths and flaws of Republican reforms, and single payer
http://jaredbernsteinblog.com/the-aca-the-myths-and-flaws-of-republican-reforms-and-single-payer/

Over at WaPo.

The piece was already too long so, while I didn't have time to get into another germane point: the role of single-payer coverage in this debate.

A key point of my analysis is that the problem facing private insurers in the exchanges was that they initially underpriced premium costs, leading to high medical-loss ratios and thin to non-existent profit margins. They've since been recalibrating and are in the process of returning to profitability, though now they're in a race with team Trump's sabotage.

A reasonable response from progressives would be: the problem isn't price calibration. The problem is this part of the ACA depends on profitable private insurers in the delivery of a partially non-market good (see my "fundamental flaw" point in the WaPo post). A single-payer plan would obviate such concerns.

[Note that I do mention the salient lack of a public option in the exchanges, and stress this irony:

Let's pause on the irony here for a moment. Conservatives' flawed ideology (explained below) that the private sector is the most efficient delivery mechanism for health coverage kept a public option out of the ACA. But the private insurers themselves said at the time, and maintain to this day, that they can't serve the exchanges without government subsidies. Now, Republicans want to block those subsidies, because … you guessed it … the private market blah, blah, yada, yada.]

On one level, that's a strong point–that a single-payer plan, by taking insurer profitability out of the picture, would ease a major constraint in the ACA–one which I support. The exchanges, though they cover a relatively small share of the population, have consistently been the most problematic part of the ACA.

But once again, I'm plagued by my adherence to path dependency, a point I often raise here and one which often raises the ire of the leap-froggers who are much less constrained by the challenge of getting from where we are to where we need to go.

But there are political constraints between here and there–big ones, protected by entrenched lobbies–and when we were crafting the ACA, it seemed clear to us that they needed to be brought on board. And there are economic constraints as well, including the disruption engendered by replacing a major, private insurance industry.

Thus, the path to single payer probably is an incremental one. Start with a public option in the exchanges, greater regulation of the industry, including cost controls (I also like Henry Aaron's policy tweak: if an insurer offers coverage in a state, they must also offer it in that state's exchange), and perhaps a slow reduction in the eligibility age for Medicare.

-- via my feedly newsfeed

Bernstein:

The Affordable Care Act is neither imploding nor collapsing

By Jared Bernstein

Jared Bernstein, a former chief economist to Vice President Biden, is a senior fellow at the Center on Budget and Policy Priorities and author of the new book 'The Reconnection Agenda: Reuniting Growth and Prosperity.'

Senate Republicans appear to be solidly rejecting their House colleagues' health-care plan. That shouldn't be a close call, given the Congressional Budget Office's findings that the American Health Care Act would increase the ranks of the uninsured by 23 million, while raising the cost of coverage for older and sicker people. Compared with current law — the Affordable Care Act — the out-of-pocket cost of coverage for an older, low-income person would rise by a factor of eight to nine under the AHCA.

So, drop-kicking the House plan is a no-brainer. But we then have Senate Majority Leader Mitch McConnell declaring that "the Obamacare status quo is unsustainable" and "indefensible." Thus, Republicans have no choice but to craft an alternative.

They've made these negative claims about the ACA since its inception, and far too often, they are uncritically repeated in the media. But they're false. Obamacare is not collapsing. There are problems in parts of the nongroup markets — the ACA health-care exchanges — but these problems were in the process of getting worked out as insurers figured out how to profitably set prices. That progress is actively being undermined by the Trump administration.

Still, here are a few reasons to discount Republicans' claims of collapse and implosion:

Coverage gains remain the clearest evidence of the ACA's success: The number and share of the uninsured fell to historically low levels — from about 15 percent to 9 percent of the population — thanks to the ACA. But, as the figure below reveals, both the old and new versions of the AHCA would reverse those gains.

The individual marketplace is stabilizing: The most common motivation for claims of collapse is the individual market. Importantly, most Americans get coverage through their employer or the government (Medicare, Medicaid). The Kaiser Family Foundation notes that the "individual market is where just 7% of the U.S. population gets their insurance (and thus also represents a small share of most health insurers' business)," but it also correctly notes that "the stability of the market and willingness of insurers to continue to participate is essential to the ACA's success."

The problem in this part of the market is that too many private insurers have pulled out of the exchanges, leaving some parts of the country with too few coverage options. However, this problem, initially caused by the insurers pricing coverage too low to maintain profitability, is improving. Metrics of their profitability that showed earlier deterioration, including medical loss ratios (the share of premiums insurers are paying out in claims) and profit margins, are correcting, thanks in part to premium increases for 2017. One careful analysis of major insurers finds that they "… have now largely recovered from initial underpricing for the ACA marketplaces, and their individual-market premiums are now generally in line with costs."

After a few years of the experience with the ACA, private insurers are figuring out how to profitably price coverage. But many moving parts make this process an ongoing challenge for them. Some of that was expected, like the phaseout of reinsurance subsidies. But others, like the Trump administration's flirting with the loss of cost-sharing subsidies that private insurers depend on to hold down premium charges, are pure sabotage.

These payments reduce deductibles and copays for low- and moderate-income people, and their loss could lead the average premium for a benchmark plan to go up almost 20 percent. Just as they're getting the pricing calibrated, the uncertainty around whether the government will continue to make these payments has surfaced as one of the main reasons that private insurers are asking themselves whether it makes sense to continue to offer coverage in the exchanges.

Let's pause on the irony here for a moment. Conservatives' flawed ideology (explained below) that the private sector is the most efficient delivery mechanism for health coverage kept a public option out of the ACA. But the private insurers themselves said at the time, and maintain to this day, that they can't serve the exchanges without government subsidies. Now, Republicans want to block those subsidies, because … you guessed it … the private market blah, blah, yada, yada.

There is no death spiral, and that's part of the ACAs design: Above, I noted how private insurers have raised their premium charges to achieve profitability. Well, good for them, but what about their customers? How can the ACA maintain affordable coverage amid these increases, many of which were in the double digits this year? Death spiral, right??!!

Wrong. An essential part of the ACA's architecture is subsidies for the majority (85 percent) of purchasers in the exchanges, of whom about two-thirds, according to health economist Matt Fiedler, "are eligible for tax credits that rise dollar-for-dollar when premiums in their area rise."

Aviva Aron-Dine finds that among enrollees eligible for tax credits, "premiums after accounting for premium tax credits increased by just $4 per month between 2015 and 2017, from $102 to $106." Such magnitudes are grounds for neither collapses nor implosions.

Finally, here's the CBO's most recent assessment (my bold):

"Although premiums have been rising under current law, most subsidized enrollees purchasing health insurance coverage in the nongroup market are largely insulated from increases in premiums because their out-of-pocket payments for premiums are based on a percentage of their income. … The subsidies to purchase coverage, combined with the effects of the individual mandate, which requires most individuals to obtain insurance or pay a penalty, are anticipated to cause sufficient demand for insurance by enough people, including people with low health care expenditures, for the market to be stable in most areas.

Bottom line, there is as yet no collapsing, imploding or death-spiraling.

But through repealing the Medicaid expansion and undermining private insurers in the exchanges, the Trump administration and the congressional majority are fully capable of engendering those very outcomes. Why would they do that?

To answer that question, you must understand the fundamental myth and the fundamental flaw of conservative "health-care reform."

The Fundamental Myth: Republicans are not interested in actual reform of the health-care system, one that would control costs and promote affordable, quality coverage. They want to cut taxes for wealthy people, for which "health-care reform" is a mere stalking horse.

The Fundamental Flaw: Because hospitals must treat the sick, regardless of their ability to pay, health care is not a normal market good. Thus, market solutions alone cannot solve the health-care problem. Comprehensive coverage implies risk-pooling, which implies mandates, which implies subsidies and/or controls on market costs. International comparisons show that no system achieves full coverage without some combination of these components.

We can either shore up the ACA or give the resources needed to do so to the wealthy in the form of tax cuts. In the meantime, let's hear less phony rhetoric about implosion and more straight talk about what's really going on.

John Case
Harpers Ferry, WV

The Winners and Losers Radio Show

7-9 AM Weekdays, The Enlighten Radio Player Stream,

Check out Socialist Economics, the Enlighten Radio website, and

The Poets and Mechanics Quaker Worship Group