Ignorance is bliss: How Americans' low political knowledge may help "Obamacare" work better

For those of you nervous about the success the health-care exchanges, take a look at this letter:

It's a boring HR letter. That's actually the point. 

(Photo by Patrick O'Mahen)

It comes from the benefits office of my most recent employer, the University of Michigan, with which I am still nominally affiliated. The letter describes coming options under the Affordable Care Act. It indicates that UM offers many employees health care benefits that meet standards for the ACA, and indicates that other employees can go get health insurance on the exchanges.

Polls suggest that Americans don’t particularly love the ACA. Most polls also suggest that they don’t understand it. With uncertain roll-out and the loud and well-funded campaign encouraging people not to sign up on the exchanges, many of the law’s backers (including me) are a bit nervous. But it’s reassuring that a letter like this that will be many Americans’ first contact with the health care law. 

Follow me below the fold for my reasoning.

"The Sound of Freedom"

When Texas Gov. Rick Perry officially marked the opening of the Katy Freeway expansion in 2008, he declared that the roar of traffic in the background was "the sound of freedom."

Freedom:

 
10 mph, thousands of unnecessary of tons of carbon emissions and particulate pollution, thousands of wasted hours sitting in traffic. Freedom, indeed. Didn't George Orwell write a few things about this?

Sure, technically that's is the Southwest Freeway I snapped walking home a few days ago, but I guarantee that I-10 looked the same or worse. And yes, that bumper-to-bumper center lane is the HOV toll lane. At least the toll-authority was collecting $4.75 for every non-HOV vehicle to recoup some of the costs for ramming this monstrosity through a residential neighborhood. (The rich white neighborhoods got expensive trenching and soundproofing -- African American communities didn't make out so well in highway construction.)

Thank God I can walk home -- it's faster.

And thank God that (some parts of)] this region has finally started to get serious about transportation planning over the last decade -- because if 13- and 18-lane freeways can't handle the volume, I doubt that it's cost effective or desirable to build any road that can.

The University Light Rail Line can't get here fast enough.

Compromising on Medicaid Expansion: Real Alternatives, or GOP trap?

Tomorrow, the big news for the Affordable Care Act will be the opening of the state-level insurance exchanges. But the other major part of the law, Medicaid expansion, proceeds apace. Republican governors in many states have simply rejected Medicaid increases, presumably on the grounds that providing poor people with health insurance is a nefarious communist plot. However, some GOP-dominated states like Michigan or divided-control states like Arkansas are working with the Department of Health and Human Services to develop alternative routes for expanding Medicaid coverage to the working poor. The challenge for the Obama administration (and progressive activists) is to determine which plans stay true to the spirit of the ACA and which ones may dangerously undermine it.

Obviously, the biggest goal is to increase coverage, but we also need to be mindful of the various strings that conservative governors and legislators might attach to the modified plans seeking waivers from the Department of HHS. 

Medicaid expansion was originally supposed to automatically apply to all states, but the Supreme Court’s 2012 ruling on the Affordable Care Act made it optional. Not surprisingly, 14 states with unified Democratic control immediately signed up for the expansion; the opportunity to provide universal health insurance to residents under 138 percent of the poverty line fulfilled a longstanding progressive dream – all made possible by the federal government picking up 90 percent of the long-term costs.

Of 24 states under complete GOP control, only two took the traditional expansion (North Dakota and Arizona) while 17 rejected it entirely. Six of the 12 states with divided control governments agreed to the standard expansion, while three have passed for now. (Here's a handy map with the state decisions)

That leaves six states under GOP control (Pennsylvania, Ohio, Michigan, Indiana, Tennessee and Florida) and three states under with split control (Arkansas, Iowa and New Hampshire)  that are either still actively considering the expansion or have proposed a non-traditional style of expanding Medicaid more agreeable to Republican majorities.

And that’s where things have gotten interesting. Follow me below the break for details.

A good ACA info source

Balloon Juice has a new front pager named Richard Mayhew. He's a bureaucrat at some private insurance company someplace and a political liberal. He's also been using his inside knowledge of health insurance to write a serious of very informative posts  about the nuts and bolts of why health insurance works the way it does and how the Affordable Care Act changes incentives. The comment threads that follow are also unusually thoughtful and informative with real questions from real people about real situations.

I highly recommend checking him out. Here's a link to a collection of all of his posts.

On specific topics, see a list below:

How and why deductibles and co-payments work the way they do.

What networks are and how they affect costs.

The problem of adverse selection and how it hampered reforms in New York and other states
(THIS IS WHY WE NEED AN INDIVIDUAL MANDATE PEOPLE)

An explanation of the rationale behind Medicare Part D doughnut hole and why it doesn't work out well in practice. 

This is how the Internet ought to work.

The Affordable Care Act: Obama's greatest achievement on gender equality?

As we count down the days to the opening of the health-care exchanges, it's worth mentioning that the Affordable Care Act is easily the biggest law promoting gender equality since the Violence Against Women Act of 1994 for the Family Medical Leave Act of 1993.

Barrack Obama has taken his share of flack on women's issues. Most recently, people have challenged his record of high-level executive-branch appointments for women, which has been considerably better than George W. Bush's but weaker than Bill Clinton's. On the other hand,Obama has appointed a record percentage of female judges -- by a country mile. (He's still not appointing women at their prevalence level in the population, but he's getting close)  And the pay gap between men and women is stubbornly constant, with women (still) making roughly 77 cents on average for every man.

But starting January 1, 2014, the ACA will remove several billion dollars in annual gender discrimination.

Chait on the GOP's desperate push to kill Obamacare

Here's a fascinating must-read on the implementation of Obamacare regarding the differences of rhetoric between the pro- and anti- Affordable Care Act factions. It's a wonderfully researched summary full of very interesting political science hypotheses waiting to be tested.

Jonathan Chait was one of the earliest, best and most thorough reporters on the ACA as it wheezed toward passage. It's only fitting that he's here writing excellent stuff at the end of the journey.

Update: Krugman nails it:

Yep, when it comes to reaching hipsters, or young people in general — I know, Katy Perry — Dems have big advantages; all that coastal cultural elite hatred suddenly turns into a big disadvantage for the right.

But that’s not all: there are also channels of influence the party of Fox News simply cannot reach: Spanish-language radio and TV, black churches (which played a big role in 2012), and more.

I don’t know whether anyone thought this out in advance, but the battle of the exchanges is indeed being fought on remarkably favorable ground for the reformers. And I, for one, find the thought of conservatives humiliated by an army of tweeting hipsters remarkably cheering.

Does the medical device tax cut innovation? Maybe sometimes -- and that's the point

In the Sept. 5 issue of the New England Journal of Medicine's correspondence section, several physicians jousted over the impact of the Affordable Care Act's 2.3 percent excise tax on medical devices. I was disappointed in the focus of the argument on the tax's effect on innovation in the medical device industry.  The entire exchange missed the broader point: how much does "innovation" in medical devices actually improve health care and how much of it is rent-seeking that siphons off patient and taxpayer dollars without helping patients?

Right now, most of my readers are probably asking, "Wait, what's this medical device tax?"

Good question. Part of the negotiations behind the ACA entailed major stakeholders in the health care industry -- hospitals and provider organizations,  health insurance companies, drug companies and medical device manufacturers to contribute to cost savings as the law was implemented. Hospital associations agreed to cuts in reimbursement rates in Medicare and Medicaid payments valued at about $155 billion from 2010-2020, health insurance companies had an annual fee levied on them that works out to about $60 billion over the same decade, while drug maker agreed to levies on branded drugs of about $27 billion. The medical device industry reluctantly acceded to a 2.3 percent tax on all sales of medical devices not available on the retail market (i.e. we're taxing M.D Anderson's newest CT Scanner and not grandma's wheelchair). The tax is projected to bring in about $20 billion over the first decade of the ACA's existence and went into effect at the beginning of 2013

I'm getting all of these details out of John E. McDonough's superb Inside National Health Reform, which is a must-read for anyone who wants to understand Obamacare. You should buy this book.

OK, now back to the debate in the New England Journal of Medicine.

Does GOP hate Obamacare or Unions more?

The post title here is rhetorical. Conservative Republicans hate both with equal fervor. But it is interesting to watch them twist themselves into knots with the Obama administration's move last week to deny a waiver sought by labor unions to cover multi-employer health plans common in some industries.

First, Republicans praised unions for criticizing the Affordable Care Act:

“It’s encouraging to see those who strongly endorsed the health care law finally recognize its fundamental problems,” the GOP-led House Education and Workforce Committee said in a statement Thursday.

Then they immediately made hay bashing unions again:

And even if the administration isn’t signaling that it’s going to respond to union demands — Republicans are moving to preempt any such accommodation.

Sen. John Thune (R-S.D.) has introduced the Union Bailout Prevention Act and filed it as an amendment to the energy bill the Senate is debating. By Thursday, he had 10 co-sponsors.

“The Republicans are perfectly happy to crow about how the unions hate the law too, but hell will freeze over before they agree to do” anything legislatively to address their concerns, [Washington & Lee University Professor Tim] Jost said.

Sigh.

My personal favorite commentary was this rather unhinged reaction by Aik Roy, allegedly one of the smarter conservative commentators on health care. He's does an about face from (incorrectly) hyperventilating that ACA exchanges will lead to rate shocks people paying much more for insurance to crowing about how workers will get better insurance and lead to the end of unions in the United States.

Why?

Well, because government-sponsored health insurance remove union's role in managing health care and show workers that unions are unnecessary:

The great irony—one that union leaders are only now starting to recognize—is that by [backing universal health insurance], they’ve accelerated their own demise, at least in the private sector. Today, less than 7 percent of American private-sector workers are unionized. That number will continue to decline as workers realize they don’t need unions for their health benefits. The labor movement will increasingly become comprised of public-sector unions, giving it a far different character than it has today.

Most importantly, workers will benefit from this change. Instead of paying a big chunk of their wages to labor unions and insurance companies, they’ll be able to keep those wages for themselves.

But we can test this hypothesis. According to Roy's logic, countries with universal government-sponsored health insurance -- especially single-payer systems -- should cut unions out of the system. Without health insurance to dangle in front of their members, unions should then whither away and these countries should have low union densities.

Do Roy's contentions hold up?  Not so much.  According to a study by the U.S. Bureau of Labor Statistics, 23.5 percent of the U.S. work force was unionized in 1970. In 2003, that had dropped to 12.4 percent, a decline of 47 percent. In contrast, Canada with its universal health insurance went from a union density of  31.8 percent to 28.4 percent, a decline of 10.7 percent. The average European Union country dropped from 37.8 percent to 26 percent - a decline of 32 percent. (See page 8 of the study)

Not only are the absolute levels of union membership higher in countries with universal healthcare, but their decline have been slower than in the United States. Sorry Aivk, thanks for playing.

Roy is likely to get his wish of weaker unions. But it has nothing to do with universal health insurance. The long shadow of the Taft-Hartley law, the destruction of traditionally unionized manufacturing industries, and state governments run by vandals have done a quite effective job of destroying organized labor and eroding workers living standards over the last four decades.

Thoughts on Obama administration denying union attempts for an ACA waiver

UPDATE: There's a political dimension to this, which I'll deal with in another post.

Ezra Klein, Politico and Avik Roy  reported that the Obama administration denied a key waiver sought by labor leaders for a type of multiple-insurer insurance plan that covers more than 20 million American workers.

Unions,  particularly the Teamsters, United Food and Commercial Workers and the garment workers union (UNITE HERE) wanted the Obama administration to make these plans (called "Taft-Hartley" plans after the legislation that created them) eligible for subsidies offered under the new state health exchanges. As Klein notes, however, they don't comply with some of the requirements of the exchange plans (general issue for example) Also, the plans are already tax-exempt -- and will be until 2018 when taxes will be levied on the company-paid plan premiums in excess of $10,000 for an individual and $27,000 for a family.

Labor is a bit miffed because they believe that the administration is delaying regulations for businesses while leaving labor out. I'm sympathetic to this, but I'm not really sure how how the administration could have ruled otherwise. If they make this exemption for the labor plans, it might open up Pandora's box. How will they stop businesses from claiming both subsidies and tax-exemptions for offering insurance?  How will they deny insurers who want to open plans on the exchanges that don't have guaranteed issue (i.e. exclude sick people)? It has the potential to undermine some pretty big parts of the Affordable Care Act in the way the delaying other regulations for 12-24 months won't.

What are the ramifications of the Obama administration's refusal to grant a waiver for these plans? The short answer is that we don't know. There are several shifting incentives here that may shift the state of the Taft-Hartley plans in a variety of directions.

Trader Joe's decision good sign for Obamacare

Recently, Trader Joe's  made waves when it announced that it would stop offering health insurance to currently eligible part-time employees (about 17,000 employees) and give them an extra $500 in pay to let them shop for coverage on the new health care exchanges that will open on Oct. 1.

At first glance, this looks terrible: a private company is taking advantage of the Affordable Care Act and dumping workers' benefits to save money -- others surely will soon.

On reflection though, this is probably a good thing. After all, the private insurance market has been unraveling for over a decade anyway. Trader Joe's is still offering benefits to its full-time employees. Health reform hasn't caused the collapse of employer insurance in Massachusetts. Finally, Trader Joe's part-timers will on the balance have access to health insurance for a fair price -- regardless of their future employment.

Like many economic developments, this move creates winners and losers. But we can't stop there: we need to ask two questions: First, who wins and who loses? Second, how much do they win or lose?

Home-care workers get federal wage protections

The Obama administration just announced that home-care workers qualify for federal  wage protections under the Fair Labor Standards Act. This is a big deal. Most of these workers already make at least the minimum wage, but they don't qualify for overtime salaries because they were literally classified as babysitters.

According to the Department of Labor, there are about 2 million workers that qualify for the new protections --nearly 50 percent of whom are minorities.

It's not surprising that a job classification dominated by minorities (and women, but that's another story) was exempt from the FLSA. The exemptions were part of the price that Jim-Crow-era Southern politicians extracted as their price for the passage of much of the New Deal. They wanted relief from the Great Depression, but only would agree to social programs that did not interfere with the peculiar institutions of the south that kept African Americans on the bottom of the labor and social structure. (It's also why every Southern Democrat joined pro-business owner Republicans in backing the anti-labor Taft-Hartley Act) For those looking for a good history on the subject, Ira Katznelson's When Affirmative Action Was White details the whole depressing process.

Today's long-overdue step eradicates a small part of the poisonous legacy over despite the opposition of for-profit nursing homes.

Finally: Elections have consequences. This wouldn't have happened in a Mitt Romney administration.

Houston's baby bike-share grows into a precocious toddler

So walking home recently from the library, I found this nice surprise:

Houston B-cycle is apparently in expansion mode again.

The system, which started in the spring of 2012 as a three-station pilot program and 18 bikes, is now 26 stations with roughly 200 bikes. Early signs of the first part of the expansion last spring seemed to be a success, as the increased network led to a large jump in users.  According to Houston's office of sustainability, now an average of 1,300 trips are taken every week on Houston B-cyle around downtown. That's up from 150 checkouts immediately before the system expanded in March and 500 the week after.

Of course, ridership is a drop in the bucket of the several million auto trips taken in the city every day, and only a fraction of a decently used bus route (think about 2,000-3,000 boardings a day), but it's a start that will only grow bigger as the system spreads out within the I-610 Loop -- and remember, bike-share complements mass transit, it doesn't compete with it

Houston's bike-share folks seem to know what they're doing. You start in the densest parts of the city and build outward to develop a strong network. What's frustrating is the pace. Some bike-share systems subscribe to the "go-big or go home" school of building a network on the theory that a few stations give users few options and will be underused. What cities like Boston, New York, Washington DC, and Minneapolis did was to launch a large network of at least 60 stations and several hundred bikes to give instant access -- and all were wildly successful.

Like all public infrastructure, bike-share needs help for capital costs -- and government grants are a bit tougher to get in Texas for these sorts of things, as El Paso has found out to it's frustration. Houston B-cycle's pilot program was sponsored by a small federal grant that came from the stimulus package, while the expansion is being funded by a $750,000 sponsorship package from Blue Cross and Blue Shield of Texas. Membership fees defray a good portion of the operating costs of the system. Similar-sized programs have taken root and are succeeding in places like San Antonio.

But it still seems expansion is maddeningly slow. Imagine if we could get a $7.5 million grant to fund a 1,800 bike expansion instead of a $750,000 grant  for a 180-bike expansion? Imagine getting 13,000 checkouts (or more -- a denser network makes this more attractive) instead of 1,300 I mean, if TxDOT will move heaven and earth for a $5.2 billion sprawl-inducing third beltway for Houston,  $7.5 million ought to be pocket change, right?

There are advantages to going under the radar too. The city can keep quietly improving the bicycle and cycling infrastructure in central neighborhoods and build a constituency for the program. As the safety and environmental benefits become apparent, bikes should become a much more accepted part of Houston, just like Metrorail has become. Every little expansion will gain new community groups and stake holders buying in (Rice University is hopefully next) who will push and defend the program as it continues to expand. precocious

Also, starting small and expanding incrementally might not draw the notice of this guy, which would be very much a positive thing, as any Metro planner can tell you.

So slow it is. Right now, it's tantalizing close to being useful to me -- but not quite. I now have two stations within a 15-minute walk of my home, but the problem is that it's a 10-minute walk in the opposite direction from many of the places I need to go. This isn't something that's convenient for me and thousands of my neighbors yet -- but it will be someday very soon.

Saved by the Stimulus

Last night I went out to grab a drink with the fiance and a few of her friends. I met one of her college friends for the first time, and as we fell into conversation. She had an interesting personal story to tell about the impact of the much-maligned American Recovery and Reinvestment Act  of 2009 (AKA "the stimulus").

You see, she's a lawyer who now works for the federal government.  But she wasn't working when she graduated law school in the summer of 2008. She went to a top-50 law school and probably one of the 3 best ones in the south-central region -- so not tip-top, but solid quality. Insofar as law school prepares you to be a lawyer, this lady was prepared to be a lawyer. Over the next year, she applied for dozens of law jobs -- many in areas she didn't specialize in or had little interest in. But with the economy crashing around her, law work had dried up.

But in the spring of 2009, the Social Security Administration suddenly got an influx of federal from the ARRA to hire employees and improve administration -- about $1.1 billion (see page 6, footnote A).

Guess who got hired to work with disability claims?

Notice four things happen here. First, Fiance's College Friend (FCF) gets a job. Second, because FCF gets a job, she's able to go out more often for drinks at fine eating establishments in Houston, which helps those establishments stay in business and helps their employees get bigger paychecks and tips. That money then keeps accelerating through the economy. Note that those two things would happen even if FCF does nothing but look at cat pictures on the Internet and does nothing useful for society or Social  Security. But that's not the case, because third, she actually gains skills at a job that she seems to like and becomes more useful over time. And finally, skillfully evaluating disability claims means more efficient service for people filing claims and better value for taxpayers wanting efficient use of government resources.

Look, we can argue about how well the stimulus was targeted, or whether it was big enough, but it's actually full of millions of little stories similar to FCF's. And, as Alan Blinder and Mark Zandi (among others) have shown (see page 8 in particular, those stories cumulatively added up to keep the  unemployment rate about 1.5 percentage points lower than it otherwise would have been -- saving or creating roughly 2.7 million more jobs across the public and private sectors

Food for thought for policymakers, especially as I keep searching for a job.

In which I climb into the Monkey Cage

So I write things for other places too. I suppose it makes sense to link to this piece in the Monkey Cage, which highlights some of the work in my dissertation about the relevance of public broadcasting for increasing political knowledge. Despite our best efforts as political scientists, political science actually remains a relevant discipline for making public policy from time to time.

Now if some one would tell Tom Coburn. Actually don't -- the problem is that he understands all too well that political science has found  some uncomfortable truths about how modern democracy works -- or might not work -- in the United States.