Health Care Reform

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Senate in a hurry

The Senate, that body that couldn’t seem to muster enough energy to do very much since 2010 except hold endless hearings about Hillary Clinton, has suddenly gotten busy.  Last night – or rather early this morning – they took the first steps toward repealing the Affordable Care Act.  The New York Times reporters wrote

The approval of the budget blueprint, coming even before President-elect Donald J. Trump is inaugurated, shows the speed with which Republican leaders are moving to fulfill their promise to repeal President Obama’s signature domestic policy achievement — a goal they believe can now be accomplished after Mr. Trump’s election.

The action by the Senate is essentially procedural, setting the stage for a special kind of legislation called a reconciliation bill. Such a bill can be used to repeal significant parts of the health law and, critically, is immune from being filibustered. Congress appears to be at least weeks away from voting on legislation repealing the law.

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Senate Minority Leader Sen. Charles E. Schumer (D-N.Y.) is leading the charge to make Hill Republicans own the Obamacare repeal process.

The Democrats staged a protest on the floor, taking turns speaking even while being ruled out of order.  The vote was 51 to 48.  So, what can someone who is opposed to repeal do at this point?  I found a New York Times Op-Ed Seven Questions About Health Reform to be a useful guide to the questions we should be asking any Senator or Congressperson who supports repeal.  The piece by Harold Pollack and Timothy S. Jost should be read in full, but here are what I think are the most important of the seven questions. (The numbering is mine not theirs. And they are not in the order of importance.}

First, “How many millions of Americans will lose coverage?”  Among the issues pointed out is

Proposals by Tom Price, Mr. Trump’s choice to run Health and Human Services, and by the House speaker, Paul D. Ryan, would repeal the expansion of Medicaid and replace the A.C.A.’s income-based subsidies with less generous tax credits. Another plan from the House Republican Study Committee would offer deductions. We particularly need to know how this would affect low-income Americans, to whom tax deductions are nearly worthless, and who would generally not be able to afford coverage under these plans.

Second, “Will people over 55 pay higher health premiums for the same coverage?”  If the repeal is paired with cuts to Medicare, all of us over 55 will be in trouble.  And younger folks who may not have saved much for retirement yet will find it impossible to save enough.

Third, “… how much more will those with costly illnesses or injuries have to pay in out-of-pocket costs?”

Critics of the A.C.A. often argue that the law has made health care unaffordable. But many Americans would pay much more without it. The A.C.A. capped out-of-pocket spending at $7,150 for individuals and $14,300 for families for 2017. Republican proposals appear to offer no protection from high deductibles and other cost-sharing.

This could be devastating to millions, including older Americans who often develop chronic illnesses.

Fourth on my list. “Will the new plan let insurers charge women higher premiums than men while offering them less coverage?”

Before the A.C.A. banned gender-based premiums, insurers in many states charged women more than men of the same age — some as much as 50 percent more. The A.C.A. also required all insurers to cover preventive health services without co-payments; for women, this includes birth control, Pap smears, mammograms and a host of other crucial services. Maternity care is fully covered as well. Republican replacement plans offer no such protection. And many Republicans want to defund Planned Parenthood, too, which would deprive women not just of coverage but also of care.

And, as we have learned, many men, particularly Republican men, have no idea of how a woman’s anatomy works.  For those opposed to choice on abortion, this could have the effect of increasing the number of abortions – legal and illegal.

I think there is time while President Trump argues with Congress and Congress argues with itself about what should be in any new law.  If your Senator and/or Congressperson favors repeal, call or write or visit and ask some of the seven questions.  And express your support for those that oppose wholesale repeal.  Should you agree with what is happening, leave me a message explaining why you think this is OK.

Photograph:  Alex Wong/Getty Images

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Repealing the Affordable Care Act

The Republicans have made a mantra out of repealing the ACA aka Obamacare.  I’ve lost track of how many times they have voted to repeal it, but close to 60, I think.  The surprising thing is how unprepared they really are to “repeal and replace”.  They seem to have the repeal part down, but in all the years it has been since the law was enacted, they haven’t come up with a replacement plan.  I think that even supporters of the ACA know that some things need fixing but no Republicans were willing to work with Democrats and President Obama to do so.

They could just repeal it.  This would create chaos in the health care system and upset millions.  I don’t think they want to deal with loss of support right away.  I’m not sure that voters who say they don’t like the ACA understand that things like free vaccinations, physical exams, and mammograms are part of the Act.  On the other hand, Republicans cannot seem to agree on a plan to replace the ACA.  There are a lot of ideas, but no plan and not even a framework for a plan as far as I can tell.

In the January 4 edition of the New York Times, Robert Pear had an interesting and informative article, Republicans’ 4-Step Plan to Repeal the Affordable Care Act.  In it he outlines the things that have to happen before Repeal.

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Vice President-elect Mike Pence, second from right, listened as the Senate majority leader, Mitch McConnell, spoke after a Republican luncheon on Wednesday.

Step One is to pass a budget resolution that is filibuster proof in the Senate.

The Senate intends to pass a budget resolution next week that would shield repeal legislation from a Democratic filibuster. If the Senate completes its action, House Republican leaders hope that they, too, can approve a version of the budget resolution next week. Whether they can meet that goal is unclear.

Step Two would add details.

Republicans say they will delay the effective date of their repeal bill to avoid disrupting coverage and to provide time for them to develop alternatives to Mr. Obama’s law. They disagree over how long the delay should last, with two to four years being mentioned as possibilities.

Step Three adds in ideas from President Trump.

Within days of taking office, President-elect Donald J. Trump plans to announce executive actions on health care. Some may undo Obama administration policies. Others will be meant to stabilize health insurance markets and prevent them from collapsing in a vast sea of uncertainty.

“We are working on a series of executive orders that the president-elect will put into effect to ensure that there is an orderly transition, during the period after we repeal Obamacare, to a market-based health care economy,” Mr. Pence said at the Capitol on Wednesday.

Step Four is replacement.  For which there is no consensus.

Meanwhile Democrats are also taking action.

In the Senate next week, Democrats will demand votes intended to put Republicans on record against proposals that could protect consumers. Defenders of the law also hope to mobilize groups like the American Cancer Society and the American Heart Association to speak up for patients.

This process is far from over.  Even Republicans put implementation of a new health care law a minimum of 2 years out – just in time for mid-terms- and more likely, 4 years away – just in time for the next Presidential election.

Photograph:  Doug Mills/The New York Times

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As the dust settles

on the first enrollment period of the new Affordable Care Act, we are learning that a lot more people than a lot of people predicted have signed up for insurance.  President Obama is claiming 7.1 million people signed up on the health insurance exchanges – along with unknown numbers of others who signed up directly with insurance companies.  There was a claim yesterday that 90% of the enrollees had actually paid a first premium, a crucial step to being able to actually use the insurance.  We all know that there will be hassles when people go to their medical provider, when insurance cards don’t arrive in the mail, when someone with expanded Medicaid goes to a doctor who doesn’t accept that plan, but then, there have always been hassles with health insurance.  This will be nothing new.  What will be new is the massive number of new people suddenly looking for a provider.  Adjustments will have to be made all around.

But the biggest losers as of this morning would seem to be the opponents of the ACA or Obamacare as they call it.  Here is Dan Wasserman’s cartoon from this morning’s Boston Globe.

obamacare wasserman

 

And then there is this story from Politico.

Back in the fall, conservatives seized on the flubbed Obamacare rollout as proof that President Barack Obama’s brand of liberalism doesn’t work.

Now, the law’s opponents aren’t about to say that critique was wrong — but they’ve lost the best evidence they had.

On Tuesday, Obamacare sign-ups passed 7 million, six months after the launch of a federal website that could barely sign up anybody. There are still a lot of questions about how solid that figure is, but the idea that the law could even come close to the original goal after such a disastrous start would have been laughable even a few weeks ago.

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That’s left the critics questioning the early numbers or changing the subject. It’s a reminder that the attacks on the website were more than complaints about technology, but a proxy for a much deeper argument about what government should do and what it can’t do

But the Republicans do seem to be suffering from a compulsion disorder.  Here is Representative Paul Ryan quoted in the Politico story

And House Budget Committee Chairman Paul Ryan, who on the same day released a budget plan that would repeal the law, wasn’t fazed by the enrollment news.

“I think Obamacare is a slow-rolling fiasco. I think it’s a Pyrrhic victory,” the Wisconsin lawmaker said during a conference call with reporters Tuesday, at the same time that Obama was giving his victory speech in the Rose Garden.

But it was so much easier when they could just say the federal government can’t tie its own shoelaces. Now, they have to acknowledge that the government fixed the problem — and enrollment came roaring back.

Louisiana Governor Bobby Jindal is set to release his health care plan – I guess he is running for President.  According to the Washington Post

Louisiana Gov. Bobby Jindal will announce Wednesday a plan to repeal and replace President Obama’s health-care law, an effort by the Republican to insert himself into the increasingly competitive early maneuvering for his party’s presidential nomination.

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In his 26-page plan, Jindal lays out a lengthy critique of the health law — which he refers to throughout as “Obamacare” — and reiterates his belief that it needs to be entirely done away with. In its place, he sets forth a bevy of ideas that have run through conservative thought for years, in some cases renaming them and in other cases suggesting new variations on old themes.

These themes appear to include giving those on Medicare a subsidy to buy private insurance and giving Medicaid money to the states to provide whatever care they decide on.  I have a feeling that this every-state-for-itself  idea will be proven to be a real problem as people in states that didn’t accept the expanded Medicare under the ACA are faced with citizens who won’t understand why Uncle Charlie can get health insurance subsidies and they can’t.  I don’t think this is a plan people will go for – especially after they get a feel for what is covered under ACA – but at least Jindal has something.

President Obama’s poll numbers are creeping up.  Democrats running for re-election would do well to be cautious about running away from the ACA, and optimistic me says that Nate Silver might just be wrong this time with is prediction that the Republicans have the edge in the mid-terms.  It won’t be easy for the Democrats:  They have to turn out their base in larger numbers than is usual for a mid-term, but it can be done.  Nate did favor Duke which lost in the first round of the NCAA men’s basketball tournament.

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Random thoughts on the state of the world on the first day of spring

Today, the first day of spring, is warmish outside.  I think it actually broke 50!  We had a few hours of sun, but now it is mostly cloudy.  I finally purchased John Grisham’s “Sycamore Row”.  I had been resisting but succumbed because I loved “A Time to Kill” and I ended up getting 45% off the cover price.  Don’t know if a new Grisham is a sign of spring or not, but I’m going to take it as one.

It is hard for me to concentrate on much the last few days.  There is just too much news! Between the missing Malaysian airliner, Crimea, and worrying about the Democrats retaining Congress in the fall, things are pretty depressing even for someone who tends to be an optimist.

Unfortunately, I think that time ran out a long time ago for the passengers on the airliner and now all we can do is watch as the world tries to locate the remains of the plane and the black box.  While everyone points out that they did eventually find the Air France plane that went down in the Atlantic, it was very difficult even though we had a much better of idea of where it went down.  I see the families on television and wonder what I would feel if I just didn’t know what happened.  At this point one almost has to treat it as a forensic mystery to be solved.

I don’t think we are on the verge of a war over Russia and the Crimea, but I do think that things will be difficult internationally for a while.  This will affect negotiations in Iran and Syria as well as people in the Ukraine and Crimea.  But the ultimate losers may be the Crimeans.  David M. Herszenhorn had an article in the New York Times yesterday which pointed out that the troubles there may just be starting.

Many A.T.M.s in this sun-dappled seaside resort city in Crimea, and across the region, have been empty in recent days, with little white “transaction denied” slips piling up around them. Banks that do have cash have been imposing severe restrictions on withdrawals.

All flights, other than those to or from Moscow, remain canceled in what could become the norm if the dispute over Crimea’s political status drags on, a chilling prospect just a month before tourist season begins in a place beloved as a vacation playground since czarist times.

He points out that Ukraine could cut off electricity and water supplies and that there is no direct overland route between Crimea and Russia.  The story ends with this

Some Crimeans said they were already feeling the financial sting from political instability.

As crowds in the cities of Simferopol and Sevastopol held raucous celebrations well into Monday morning after the vote, here in Yalta, Ihor B., the owner of a small travel business, went to bed with a growing sense of dread: The roughly two dozen bookings that he had received since the start of the year had all disappeared.

“I got 10 requests from Germany, and 10 assignments from Ukrainian agencies for Western tourists; a couple of requests from Dutch tourists and cruise ships,” said Mr. B, who asked that his last name not be used for fear of reprisal by the new Russian government. “At the moment, all of them, absolutely all of them, are canceled.”

In the same issue of the Times was a long cautionary story about South Ossetia which was liberated from Georgia five years ago.  But things have moved on and South Ossetia is not doing very well.

When Russia invaded Georgia, repelling a Georgian attack on South Ossetia and taking control of the separatist enclaves of South Ossetia and Abkhazia, it seemed most unlikely that the Kremlin was thinking about long-term consequences.

As in Crimea, the war was presented to Russians as a humanitarian effort to protect its citizens, and more broadly as a challenge to encirclement by the United States, which was aligned with Georgia. Television stations gave the intervention blanket coverage, and it was wildly popular in Russia, lifting the approval ratings of Dmitri A. Medvedev to the highest point of his presidency.

The aftermath of recognition, however, has presented Russia with a long series of headaches. This week, economists have warned repeatedly that Crimea, if it is absorbed, will prove a serious drag on Russia’s budget, but their arguments have been drowned out in the roar of public support for annexation.

Aleksei V. Malashenko, an analyst at the Carnegie Moscow Center, said Russian officials “will be shocked” with the challenges they face when trying to manage Crimea — reviving its economy, distributing money and influence among its ethnic groups, and trying to control the corruption that accompanies all big Russian projects. And, judging from precedent, the public’s euphoria will fade, he said.

“I think that in Russia, the majority of the society forgot about Ossetia, and if it weren’t for the Olympics, the majority of the society would also forget about Abkhazia,” Mr. Malashenko said. “Of course, Crimea is not Ossetia. But anyway, the popularity of Crimeans, and the Crimean tragedy, will be forgotten in a year.”

So maybe we don’t need to do anything except some sanctions and make sure that Russia and Putin’s next move is not to march into eastern Ukraine.  Forget John McCain’s mockery and advice.

As for domestic politics, I recalled Andrew Sullivan’s March 13th blog entry on The Dish. The Boring, Relentless Advance Of Obama’s Agenda.  To read the entire piece one has to subscribe [which I would encourage you to do], but here is his conclusion.

…One side is theater – and often rather compelling theater, if you like your news blonde, buxom and propagandized. The other side is boring, relentless implementation. At any one time, you can be forgiven for thinking that the theatrics have worked. The botched roll-out of healthcare.gov, to take an obvious example, created a spectacular weapon for the GOP to hurl back at the president. But since then, in undemonstrative fashion, the Obama peeps have rather impressively fixed the site’s problems and signed up millions more to the program. As the numbers tick up, the forces of inertia – always paramount in healthcare reform – will kick in in defense of Obamacare, and not against it. Again, the pattern is great Republican political theater, followed by steady and relentless Democratic advance.

Until the theater really does create a new majority around Republican policies and a Republican candidate, Obama has the edge. Which is to say: he has had that edge now for nearly six years. Even if he loses the entire Congress this fall, he has a veto. And then, all he has to do is find a successor able to entrench his legacy and the final meep-meep is upon us. And that, perhaps, is how best to see Clinton. She may not have the stomach for eight years in the White House, and the barrage of bullshit she will have to endure. But if you see her as being to Barack Obama what George H.W. Bush was to Reagan, four years could easily be enough. At which point, the GOP may finally have to abandon theater for government, and performance art for coalition-building.

Plus, it is spring.

Mutts by Patrick McDonnell

Mutts by Patrick McDonnell

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The state of health care reform

As everyone knows, the rollout of the Affordable Care Act has been pretty bumpy what with website problems, Congress not providing funding for getting the word out, and states refusing expanded Medicaid even if it is free money.  There have been surprises also.  The red state of Kentucky with a Democratic Governor, Steve Beshear, is running a successful program.  Connecticut has an online program that it is thinking of selling to other states.  Massachusetts with the original universal health care program hired the same folks that messed up the federal website resulting in problem after problem resulting in a backlog in processing paper applications.

In the meanwhile, the Congressional Republicans would still like to either eliminate or defund the ACA, but as Greg Sargent wrote recently in the Washington Post people are beginning to move away from supporting those actions.

Obamacare is a disaster for Democrats, and a certain winner for Republicans. That’s what we keep hearing, anyway.

So why does it look as if the percentage of Americans who favor repeal may have actually shrunk since its rollout problems began?

That’s what the February tracking poll for the Kaiser Family Foundation suggests. To be sure, the new poll finds that opinion of the law is more negative than positive: 47 percent of Americans view the law unfavorably, while 35 percent view it favorably (though opinions have improved a bit since October).

But unfavorable views have not translated into support for the GOP position of repeal; indeed the repeal position may have lost ground since the October rollout problems, while a clear majority favors keeping and improving the law.

Some Kaiser survey results

Some Kaiser survey results

I think most people, including President Obama, would say that the ACA could be improved.  Any piece of legislation of that scope is going to have parts that don’t work well or have unintended consequences which need fixing.  And they need fixing in a systematic way and not just on the fly through delays and exceptions as the administration has been trying to do.  The poll results show support for making fixes.

The poll shows that 48 percent want to keep and improve the law, and another eight percent want to keep it as is — for a total of 56 percent who want to keep it. (50 percent of independents want to keep and fix.)

Meanwhile, 19 percent want to repeal the law and not replace it, while 12 percent want to repeal and replace with a GOP alternative — totaling 31 percent.

Back in October Kaiser found that 37 percent want repeal/replace or just repeal, versus 47 percent who want to keep/expand it. There was a temporary spike for repeal in December, at the height of the problems; now it appears to be back down to below where it was.

In fairness, the wording is not directly parallel. The new poll offers respondents the option of keep and improve, while the October poll offered folks keep or expand. But this underscores the point: When people are offered keep and improve — the Dem stance — support for keeping the law grows.

Paul Krugman pointed out in his last New York Times column that Republican attempts to find horror stories have so far not really succeeded.

Remember the “death tax”? The estate tax is quite literally a millionaire’s tax — a tax that affects only a tiny minority of the population, and is mostly paid by a handful of very wealthy heirs. Nonetheless, right-wingers have successfully convinced many voters that the tax is a cruel burden on ordinary Americans — that all across the nation small businesses and family farms are being broken up to pay crushing estate tax liabilities.

You might think that such heart-wrenching cases are actually quite rare, but you’d be wrong: they aren’t rare; they’re nonexistent. In particular, nobody has ever come up with a real modern example of a family farm sold to meet estate taxes. The whole “death tax” campaign has rested on eliciting human sympathy for purely imaginary victims.

And now they’re trying a similar campaign against health reform.

Krugman cites the Response to the State of the Union Address.

 In the official G.O.P. response to the State of the Union address, Representative Cathy McMorris Rodgers alluded to the case of “Bette in Spokane,” who supposedly lost her good health insurance coverage and was forced to pay nearly $700 more a month in premiums. Local reporters located the real Bette, and found that the story was completely misleading: her original policy provided very little protection, and she could get a much better plan for much less than the claimed cost.

Louisiana is running ads about people losing health care insurance with actors.

In Michigan, Americans for Prosperity is running an ad that does feature a real person. But is she telling a real story? In the ad, Julia Boonstra, who is suffering from leukemia, declares that her insurance has been canceled, that the new policy will have unaffordable out-of-pocket costs, and that “If I do not receive my medication, I will die.” But Glenn Kessler of The Washington Post tried to check the facts, and learned that thanks to lower premiums she will almost surely save nearly as much if not more than she will be paying in higher out-of-pocket costs. A spokesman for Americans for Prosperity responded to questions about the numbers with bluster and double-talk — this is about “a real person suffering from blood cancer, not some neat and tidy White House PowerPoint.”

Even supporters of health reform are somewhat surprised by the right’s apparent inability to come up with real cases of hardship. Surely there must be some people somewhere actually being hurt by a reform that affects millions of Americans. Why can’t the right find these people and exploit them?

The most likely answer is that the true losers from Obamacare generally aren’t very sympathetic. For the most part, they’re either very affluent people affected by the special taxes that help finance reform, or at least moderately well-off young men in very good health who can no longer buy cheap, minimalist plans. Neither group would play well in tear-jerker ads.

There is about a month left to sign-up before one has to pay a tax penalty for not having coverage for 2014.  The last number reported was 4 million sign-ups.  A priority:  Get the young and healthy to sign-up.

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Chart from Kaiser via the Washington Post

Picture of buttons from sites.tufts.edu

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Healthcare confusion

Let’s start with Jen Sorensen

Jen Sorenson

A lot of people are confused about what the Affordable Care Act does and don’t seem to realize that their insurance will actually come from a combination of Medicaid (or Medicare (for those who qualify) and a private insurer or just from a private insurer.  This is  the kind of insurance many got (I understand there are fewer offered these days) when they retired and got Medicare Advantage from a private insurer through their former employer as I do.  My retiree’s Medicare Advantage is partly subsidized by the City of Boston but I pay a monthly premium just as I pay a monthly premium for Medicare.  The ACA changes none of this for me.  And it changes nothing about employees who get qualified plans through their employers.  But to hear some of the Republicans carry on you would think that some staffer from the Department of Health and Human Services – or maybe Kathleen Sebelius herself will be performing medical exams.

As Gail Collins explained in her New York Times column today

The Democrats are depressed. The Republicans enjoy pointing out that the Obamacare rollout has been a mess. But they obviously can’t pretend to be upset that people are finding it hard to sign up for a program their party wanted to kill, eviscerate and stomp into tiny pieces, which would then be fed to a tank of ravenous eels.

Well, actually, they can.

“I haven’t heard one of you apologize to the American public,” Representative David McKinley of West Virginia sternly told government contractors who had worked on the HealthCare.gov Web site. McKinley’s party recently shut down everything from the national parks to preschool programs, while costing the economy an estimated $24 billion. Nobody apologized. Perhaps they’ll write a note this weekend.

“I’m damned angry that I and 700,000 Texans I represent have been misled, misled and misled,” said Representative Pete Olson. The only thing that could conceivably make Olson angrier would be if the Obamacare site was working so well that Texans could get health insurance as easily as they can order a chrome scarf holder from Amazon.com.

I thought these guys would be happy that people couldn’t get insurance and that the whole enterprise was a flop.  But maybe it is just the technical failures with the website that they don’t like.  I’m very confused.  As Andy Borowitz posted ” I guess once the Obamacare website is fixed the Republicans will be totally on board.”

But I don’t think the news will be good in the long run for the Republicans who want to repeal the ACA even if access to the sign-up website gets fixed.  This post from Sarah Kliff on Ezra Klein’s Wonkblog is likely just the start.

More than 330,000 people have managed to get deep enough into new government health insurance Web sites to learn how much financial assistance they will receive purchasing coverage, the Internal Revenue Service said Saturday.

That figure is arguably the most robust measure released to date by the Obama administration of how many Americans are successfully applying for financial help in purchasing a private insurance plan.

Calculations of financial assistance is a step that follows filing an application and tells applicants how much of a tax credit–if any–they can use to purchase a private health plan. This figure does not include shoppers who were found to likely qualify for Medicaid earlier in the shopping process.

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The IRS said it has also received and responded to more than 1.3 million requests from the marketplace for personal data used to apply for Affordable Care Act programs, such as household income and family size.

The IRS said it is currently receiving about 80,000 such data requests each day. It is one of about a half-dozen agencies that send information to a federal data hub, along with the Department of Homeland Security and the Social Security Administration.

“Our IT systems are working well and providing both the historical tax data and the computation service accurately and quickly through the government’s data hub,” IRS spokesman Terry Lemons said. “The requests are being processed within seconds.”

This federal data hub determines eligibility for premium tax credits for the 36 states using the federal insurance marketplace and also for some, but not all, of the state-based exchanges. California, for example, opted to use its own technology to determine who qualifies for which programs.

The federal data hub was built by the contracting firm QSSI. The Obama administration announced Friday that QSSI would take on a new role as HealthCare.gov’s general contractor, overseeing efforts to fix the Web sites’ problems.

HealthCare.gov pings this federal data hub to verify a consumer’s identity and also when shoppers indicate in their applications that they would like to apply for financial assistance with coverage. Health and Human Services has said that, as of Thursday, 700,000 applications have been filed through the federal and state insurance exchanges.

People were slow to sign up when Massachusetts rolled out Romeycare and now there is close to universal coverage.  ACA sign-up, despite the problems is going even faster.

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The myth of small businesses and healthcare

One of the favorite talking points of the Republicans who oppose the Affordable Care Act (ACA) is that it will kill job growth and hurt small businesses.  Quite honestly, I think that their government shutdown which they admit is largely about defunding/delaying/repealing the ACA is doing a fine job of doing both.  Forget what they think “Obamacare” will do.  But in the current issue of the New Yorker, James Surowiecki takes on the myth, at that, according to him, is what it is, that the ACA will do horrible, terrible, no good things to the economy.

The G.O.P.’s case hinges on the employer mandate, which requires companies with fifty or more full-time employees to provide health insurance. It also regulates the kind of insurance that companies can offer: insurance has to cover at least sixty per cent of costs, and premiums can’t be more than 9.5 per cent of employees’ income. Companies that don’t offer insurance will pay a penalty. Republicans argue that this will hurt companies’ profits, forcing them to stop hiring and to cut workers’ hours, in order to stay below the fifty-employee threshold.

How much of this is true?

The story is guaranteed to feed the fears of small-business owners. But the overwhelming majority of American businesses—ninety-six per cent—have fewer than fifty employees. The employer mandate doesn’t touch them. And more than ninety per cent of the companies above that threshold already offer health insurance. Only three per cent are in the zone (between forty and seventy-five employees) where the threshold will be an issue. Even if these firms get more cautious about hiring—and there’s little evidence that they will—the impact on the economy would be small.

Meanwhile, the likely benefits of Obamacare for small businesses are enormous. To begin with, it’ll make it easier for people to start their own companies—which has always been a risky proposition in the U.S., because you couldn’t be sure of finding affordable health insurance. As John Arensmeyer, who heads the advocacy group Small Business Majority, and is himself a former small-business owner, told me, “In the U.S., we pride ourselves on our entrepreneurial spirit, but we’ve had this bizarre disincentive in the system that’s kept people from starting new businesses.” Purely for the sake of health insurance, people stay in jobs they aren’t suited to—a phenomenon that economists call “job lock.” “With the new law, job lock goes away,” Arensmeyer said. “Anyone who wants to start a business can do so independent of the health-care costs.” Studies show that people who are freed from job lock (for instance, when they start qualifying for Medicare) are more likely to undertake something entrepreneurial, and one recent study projects that Obamacare could enable 1.5 million people to become self-employed.

English: This is a diagram depicting the perce...

English: This is a diagram depicting the percentage in US who have no health insurance by age. (Photo credit: Wikipedia)

Remember that large employers get tax incentives to provide health insurance.  The ACA will actually do the same for small businesses.

Obamacare changes all this. It provides tax credits to smaller businesses that want to insure their employees. And it requires “community rating” for small businesses, just as it does for individuals, sharply restricting insurers’ ability to charge a company more because it has employees with higher health costs. And small-business exchanges will in effect allow companies to pool their risks to get better rates. “You’re really taking the benefits that big companies enjoy, and letting small businesses tap into that,” Arensmeyer said. This may lower costs, and it will insure that small businesses can hire the best person for a job rather than worry about health issues.

Surowiecki ends his short piece with this kicker.

The U.S. likes to think of itself as friendly to small businesses. But, as a 2009 study by the economists John Schmitt and Nathan Lane documented, our small-business sector is among the smallest in the developed world, and has one of the lowest rates of self-employment. One reason is that we’ve never had anything like national health insurance. In a saner world, changing this would be a reform that the “party of small business” would celebrate.

So it seems that implementation of the ACA with small business health insurance exchanges will actually help lead to more job growth.

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The government shutdown: a letter from Congressman Capuano

I am posting the entire weekly email newsletter I just got from my Congressman, Mike Capuano.    I am proud to say that he was my boss for several years when he was the Mayor of Somerville.

Dear Friends,

The government shutdown is in its fourth day. Speaker Boehner still refuses to bring up a clean Continuing Resolution (CR), even though it would pass Congress and be signed by the President, reopening the government.

The House has spent most of this week considering bills to partially fund the government. This process is more about appearances than responsible legislating. That’s why you’ve seen attempts to fund the National Park Service so tourist attractions can reopen but not the Transportation Department. The Senate and President have both rejected this path. I’m not sure where or when this all ends. It’s certainly true that this battle is about the Affordable Care Act (ACA) and the obsession many Republicans have with sabotaging it. I think there’s more to it though.

This is also about one of the fundamental principles of our government, the idea of majority rule. The importance of that principle is vividly on display here and it’s one worth protecting.

The ACA was signed into law in 2010 after months and months of substantive and at times contentious debate. Since Republicans regained control of the House in 2010, there have been 42 attempts to repeal, defund or gut the law. Each time the effort has accomplished essentially nothing. As I noted earlier this week, Mitt Romney ran on a promise to repeal “Obamacare”. He lost the election. House Democrats got more votes than House Republicans and Democrats retained control of the Senate. The ACA was even declared constitutional by the Supreme Court.

Despite all of that, a small percentage of the House Republican Caucus refuses to accept the will of the majority, democratically expressed. They shut the government down because they can’t accept it. The ACA is the law of the land, affirmed by the results of a national election and a Supreme Court ruling. More and more moderate Republicans are speaking out on the need for a clean CR. Unfortunately there aren’t enough of those moderate voices and the extremists in the House continue to drown them out.

Imagine what our government would look like if more Members refused to respect the principle of majority rule and insisted on getting their way without regard for the consequences. It wouldn’t be 17 years between government shutdowns, that’s for sure.

I believe that this battle is also about the role that government should play in our lives. Do we want to provide some help to those less fortunate in the form of nutrition assistance or home heating aid? Do we want to help our states build world class roads, bridges and subway systems? Do we want to attract cutting edge research that results in medical advances? All of that takes an investment of federal dollars.

What has been happening over the past couple years is a steady and steep reduction in federal spending. That often gets lost in the din but numbers don’t lie. In two years, a total deficit reduction of almost $2.4 trillion has been achieved. In 2011, the Budget Control Act placed a cap on discretionary spending at $1.066 trillion for fiscal year 2014. That cap has been ignored by the House, with much deeper cuts going into effect as a result of sequestration.

Here are just a couple examples of how those cuts have impacted some important programs. In the past year, funding for the National Institutes of Health has been cut by $1.6 billion. Funding for Head Start has been cut by $400 million.

Earlier this year, the Senate passed a budget that proposed spending $1.058 trillion for fiscal year 2014. Under the clean CR proposed in the Senate in order to reopen the government, that spending is cut to $986 billion. This is much closer to the Republican proposal than the Senate’s.

In terms of cutting spending, Republicans don’t seem to recognize that they are gaining significant ground. The CR that many of them say they won’t support includes deep cuts to discretionary programming.

More votes are expected in the House tomorrow and the schedule for next week is unclear. Thanks for your calls and emails of support. I appreciate all of them.

Best,

Mike
English: Official Congressional portrait for C...

English: Official Congressional portrait for Congressman Mike Capuano. (Photo credit: Wikipedia)

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Trying to made sense of it all

I think I may be ready to retreat to my cocoon to read trashy books and watch baseball and reruns of NCIS before my head explodes from trying to make sense of what is going on out there.

Yesterday, Boston Globe columnist Adrian Walker had a little anecdote from my Congressperson, Mike Capuano.

…Capuano said he was in an airport last weekend flying home from Washington when a TSA screener stopped him and said, “You really need to cut our taxes!” Capuano was incredulous to hear that from a federal employee, though he probably shouldn’t have been.

“I asked him, ‘Do you know taxes pay your salary?’ ” Capuano said with a laugh.

I wish I knew what the silly TSA screener said then.  It is an example of how divorced from reality so many people are.  Maybe we should expand the shut down to include furloughs for half of the screeners.  This would cut flights so many of the members of Congress would have trouble getting home.  I don’t think this would be a bad thing.  Maybe if they stayed in Washington more, they would figure out how to talk to each other informally over a beer.  That could only help.  Maybe some of them would get a grip on reality.

As I was getting ready to write this, I Googled  both “Republican Alternate Reality” and “Republican Alternate Universe”.  Turns out people have been writing about the topic for a number of years now.  It is one thing to talk sans facts, but another to act.  And what is happening now is the action that they have all wanted:  a government shutdown.  I think they are hoping that a few weeks without government will show people they can live without it.  Maybe a good plan except that there are already Republicans complaining that monuments in Washington are closed so veterans can’t visit them.  Duh!

Back in August 2012 (2012 not 2013), Michael Cohen wrote a piece in the Guardian about the Presidential campaign.  If you recall, they had a slogan “You didn’t build that”.

On 17 July, President Barack Obama spoke at a campaign rally in Roanoke, Virginia. It was a typical event for an incumbent president who is seeking a second term. In his remarks, he offered his vision of government’s role in spurring entrepreneurship and creating jobs in the United States:

“If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business – you didn’t build that. Somebody else made that happen. The internet didn’t get invented on its own. Government research created the internet so that all the companies could make money off the internet.”

This is all fairly boilerplate rhetoric – a basic recitation of how Democrats view the role of government and its interplay with the private sector. But in this statement, there was one phrase that Republicans have grabbed on to like a famished dog with a new bone:

“You didn’t build that.”

That single phrase, taken out of context by Republicans, has become the GOP’s symbol of Obama’s supposed contempt for the free market and entrepreneurship, and for his socialist assault on America.

The Affordable Care Act is a prime example of government overreach and socialism even though it is built on private insurance companies.

“You didn’t build that” became “We built that”

And so, the Republicans made “We built that” the theme of Tuesday’s convention proceedings. Speaker after speaker hammered on this theme, accusing Obama of disrespecting small business. But they did so with almost a wilful sense of hypocrisy. For example, Delaware lieutenant governor candidate Sher Valenzuela attacked Obama for the line despite the fact that, just a few months ago, she gave a detailed speech to a business group about how they could do a better job getting government contracts.

Cohen goes on to detail a number of instances where the speakers at the Republican Convention ignored facts and concludes

But all of this is at pace with a conservative worldview that considers government to be nothing more than malevolent interference with the smooth operation of the private sector – except when it’s not. “Jobs don’t come from government,” said Texas Senate candidate Ted Cruz last night, a view that basically sums up GOP economic thinking. But if you listened to Republican governors on Tuesday, you might have found yourself surprised to discover that, in their states, the government has played an oddly integral role in spurring job creation. If you listened to Mary Fallin, governor of Oklahoma, extol the virtues of the energy industry in her state and bemoan “more government, bigger spending and more regulation”, you might never know that the oil and gas industry is deeply reliant on – and spends millions lobbying for – tax breaks from the federal government.

One can believe that government should play a less direct role in the workings of the private economy – clearly, this is a defensible notion. But to listen to Republicans harping on Obama’s “you didn’t build that” line is to hear a party that views “government” in the most simplistic imaginable terms. This isn’t a governing philosophy; it’s a caricature of how the economy actually works.

To be sure, it’s hardly unusual for political rhetoric to take liberties with the truth, or to stretch an argument to breaking-point, but with Republicans today, the issues runs much deeper. Very simply, the way they talk about what the federal government does or should do, and about the role of spending, taxation and regulation, is more than just a compendium of lies: it describes an alternate reality.

In the GOP’s defense: at least they can argue they built that.

So now they have shutdown the federal government which was a goal all along.  They built it.  And in their alternate universe, President Obama and the Democratic congressional leadership should negotiate with them.  Nancy Pelosi has tried to explain what she calls “regular order”:  The Senate passes a bill.  Then the House passes one.  Then there is a conference committee.  Budget bills were passed back in March, but the House declined to appoint members to a conference committee.  Contrary to what some members of Congress seem to believe there are rules and conventions as to how to proceed.

Gail Collins has a response in the New York Times.

On Wednesday, House Republicans pushed to refund bits and pieces of the government that the members particularly like, such as veterans and the National Guard. Also anything that lends itself to a dramatic press conference, such as national parks and cancer treatment for children. Since the House proposals are never going anywhere in the Senate, there’s a limit to what you want to know about what went on during the debate. Let’s summarize:

Democrats: “Meaningless political theater!”

Republicans: “Come to the table!”

Coming to the table has now replaced strangling Obamacare as the most popular G.O.P. war cry. There is a longstanding political rule that when all else fails, you demand more talking. If you’re running for office against a guy who’s got 70 percent in the polls, it’s time to call for a debate. If you’re already having four debates, it’s time to call for six.

“Why don’t we sit down and have a conference committee about how we’re going to fund the federal government?” demanded Representative Ander Crenshaw of Florida. Republicans have posed this question a lot, and it would be an excellent one if they were not the same folks who have spent the last half-year refusing to sit down and have a conference committee about the federal budget.

Representative John A. Boehner, the House speaker, arrived at the Capitol on Thursday with his security personnel on the third day of the government shutdown.

Representative John A. Boehner, the House speaker, arrived at the Capitol on Thursday with his security personnel on the third day of the government shutdown.

I’ll give the final word on reality to Elizabeth Kolbert in her New Yorker posted this morning.

…Shuttering the government is a dumb idea under pretty much any circumstances. Still, the objections that Republicans in Congress raise to the health-care law might be worth considering if they bore any relationship to the law in question. Rarely do they.

Some lawmakers’ comments have been so off the wall that they defy parody. A few months ago, for example, Representative Michele Bachmann announced on the House floor that Obamacare needed to be repealed “before it literally kills women, kills children, kills senior citizens.”

“Let’s not do that,” she added helpfully. “Let’s love people.”

“All of this would be funny,” President Obama noted the other day, after bringing up the Bachmann line, “if it weren’t so crazy.”

The crazy list goes on and on. As the economist Paul Krugman has repeatedly pointed out in his Times column, congressional Republicans these days seem to think that they can override not just the laws of physics but also the rules of arithmetic. They insist that the federal budget is so bloated it could easily be cut by hundreds of billions of dollars. But when a transportation bill was drafted this summer that would have actually reduced spending, they refused to vote for it. (The bill had to be pulled from the floor.) It’s hard to cut the federal budget if you’re not willing to reduce the amount of money the government spends. “What Republicans really want to do,” Krugman wrote recently, is “repeal reality.”

…

It’s been so long since reality has made much of a difference on Capitol Hill that it sometimes seems it genuinely has been repealed. But the thing you can always count on with reality is that it has staying power.

I hope I can hold out until reality and fact make a comeback.

Photograph: Doug Mills/The New York Times

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Still more on sequestration

This morning The Fix by Chris Cillizza included this interesting post by Aaron Blake.  Blake posted four great graphics explaining the impact of the sequester.  I am going to copy 2 of them here, but you should look at the entire post.

Blake explains

First up is Pew’s illustration of the year-by-year spending cuts that are included in the sequester. As you can see, the cuts start out relatively small — less than $75 billion in 2013 — but they grow to more than twice that size by 2021, for a total of more than $1 trillion.

The biggest growth in cuts over that time occurs in the interest payments, but everything except for mandatory spending cuts grow steadily over time.

And then there is this depressing news.  Sequester will not have that big of a positive impact.

There has to be a better way.  Maybe spend some money to put people back to work and let them pay taxes thus increasing revenue?  And we do have to fix the tax code so Facebook executives actually pay taxes.  And maybe we can cut programs and defense more selectively.  This won’t be as dramatic, and it might be slower, but it will hurt fewer people.

Meanwhile, members of Congress of both parties are doing their best to keep funding for their own districts.  Politico quotes Senator Lindsey Graham, an opponent of the sequester

I’m almost relishing the moment all these tough-talking guys say: ‘Can you  help me with my base?’” Sen. Lindsey Graham (R-S.C.), one of the most vocal  critics of the sequester, told POLITICO.

“When it’s somebody else’s base and district, it’s good government. When it’s  in your state or your backyard, it’s devastating,” he added.

Of course Graham’s solution is to do away with the Affordable Care Act or Obama care.  Is the momentum swinging toward a rational budget and solution?  Probably not.

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