Saturday, March 11, 2017

The Heritage Insider news

Obamacare 2.0? | It's the third-party payment, stupid! | Weak ACA replacement threatens Maine's Medicaid success. | Travel suspension clarifies national security issues. | Standing up for free speech at Middlebury.

Is “replace” undermining the “repeal” part of the program? Republicans campaigned on repealing ObamaCare, and this week they unveiled a new health care bill in the House. Does it repeal anything?
How about the regulations that have destabilized the individual insurance market (primarily the requirement that insurers cover pre-existing conditions)? Nope.
The individual mandate? Sort-of, but not really. The bill replaces the tax penalties for not having insurance with a weaker insurance-gap penalty that will hit those who try to game the system by signing up only when they get sick.
The Medicaid expansion? Nope.
The exchange entitlements? Those are replaced with refundable tax credits—i.e., a replacement entitlement program.
The “Cadillac tax,”—the 40 percent excise tax on high-cost plans? No. The tax-exclusion on employer-provided health insurance incentivizes the purchase of high-cost plans—and thus encourages the overconsumption of health care generally. Instead of addressing that problem directly with a cap on the exclusion, the GOP bill keeps Obamacare’s Cadillac tax in place.
Read on:
The GOP’s Obamacare Repeal Bill Is Here. Is This Just Obamacare Lite? by Peter Suderman, Reason, March 6;
House Republican Health Care Bill Missed the Mark, by Edmund Haislmaier, The Daily Signal, March 7;
Congressional Republicans’ Obamacare Replacement Won’t Cut It, by Michael Tanner, National Review Online, March 8;
5 Reasons the GOP’s Obamacare Plan Isn’t Real Repeal, Genevieve Wood, The Daily Signal, March 9;
Obamacare v. GOP Replacement Proposal, Texas Public Policy Foundation, March 10.

 
It’s the third-party payment, stupid. Veronique de Rugy explains the underlying problem in health care for the infinitieth time:
“[A]t the heart of the Republicans’ inability to reform health care is their commitment to this notion that the provision of health insurance is the goal rather than the provision of health care or, more fundamentally, the production of health itself. Though insurance companies love it because it guarantees overinflated profits for their industry, this idea goes a long way toward explaining why the supply of health care remains so expensive. […]
“According to a Congressional Budget Office report in July, consumers pay for only 11 percent of their health care costs. Everything else is paid for by third parties, whether it’s the government or private insurance. That’s a problem, because when people’s consumption is paid for by someone else, it jacks up demand and drives up the prices and inefficiencies of the subsidized good or service. Why should you consume health care carefully if you don’t pay for it? And of course, health care providers have little incentive to keep their prices low to retain their customers (patients) because these consumers aren’t paying the full tab.
“[Robert] Graboyes notes that this laser focus on the provision of health insurance coverage has distracted us from a more important health care goal: producing better health for more people at lower cost, year after year. The solution here is innovation. Nothing would affect prices and quality of health care as radically as revolutionary innovation, which we’ve seen in other fields, such as information technology. To encourage such innovation, we have to free the health care supply from the many constraints imposed by federal and state governments (both blue and red) and the special interests they serve.” [Reason]
 
Will Maine’s Medicaid success survive the GOP health care bill? Maine has shown that a state can regain control over its finances by focusing its Medicaid spending on those who truly need help. That lesson could be lost if the House health care bill is passed. Mary Mayhew, commissioner of the Maine Department of Health and Human Services, explains:
“From 2000 to 2010, previous administrations expanded Maine’s Medicaid program, causing it to double both in enrollment and cost. Due to annual shortfalls, the state was unable to pay hospital bills and provider rates were constantly slashed to bail out the Medicaid program.
“The worst of it all, these prior expansions came at the direct expense of our elderly and disabled as nursing facility costs were ignored, home care services were grossly underfunded, and wait lists for home and community services for individuals with intellectual and developmental disabilities grew longer. […]
“As we’ve reduced enrollment by 24 percent, we’ve contained spending to an average 2 percent rate of growth compared to the national average of 6 percent.
“This year, we are forecasting a 0.7 percent increase.
“At the same time, however, we have been able to increase funding to nursing facilities by over 40 percent, increase rates to home care by 60 percent, and add an additional $100 million to support the needs of individuals with intellectual and developmental disabilities.
“Additionally, we’ve invested in increased support for primary care to better manage individuals with chronic diseases and to integrate primary care and mental health for those struggling with mental illness.”
The lesson:
“The current House proposal that delays the repeal of the Medicaid expansion will absolutely trigger a push to expand Medicaid in nonexpansion states—Maine included—by the same advocacy groups that have been trying for the last several years.
“Such an effort will bankrupt our state and send us backward from the economic stability we have achieved today.” [The Daily Signal]
 
New executive order on travel clarifies its national security purpose and its scope. On Monday, President Trump signed a revised executive order suspending travel and refugee admissions from certain countries that present a terrorism risk. The new EO applies to travel and refugee admissions from six of the seven countries identified by the EO issued on January 27; Iraq is no longer included in the new order because that government is cooperating with the United States on vetting travelers. The order also provides greater clarity on those who are not subject to the order—including diplomatic personnel, those already granted a visa or refugee status, and dual nationals with a passport issued by any country other than the six identified in the new EO. Hans von Spakovsky writes that while the original EO was perfectly legal, the new one does a better job of laying out the national security case for the suspensions of entry and refugee settlement:
“The six remaining countries had been designated by the Obama administration as ‘countries of concern’ (Libya, Somalia, and Yemen) or state sponsors of terrorism (Iran, Syria, and Sudan). The new executive order lists specific reasons for each country’s inclusion in the suspension taken from the State Department’s Country Reports on Terrorism 2015 (released in June 2016).
“It is certainly common sense (and easy to understand) why one would suspend entry from countries whose governments are official sponsors of terrorism, given that we could not trust any records those governments produce when their citizens are being vetted.
“And the executive order points out that the other three countries were designated as countries of concern by Jeh Johnson, President Barack Obama’s secretary of homeland security, in 2016 based on three statutory factors set out by Congress:  
1. Whether the presence of an alien in the country or area increases the likelihood that the alien is a credible threat to the national security of the United States. 
2. Whether a foreign terrorist organization has a significant presence in the country or area.
3. Whether the country or area is a safe haven for terrorists. […]
      “Finally, the revised executive order also takes the time to answer another question that arose in the litigation over the previously issued executive order. The order specifically states that since 2001, ‘hundreds of persons born abroad have been convicted of terrorism-related crimes in the United States. They have included not just persons who came here legally on visas but also individuals who first entered the country as refugees.’
      “That includes the two Iraqi nationals convicted in 2013 for multiple terrorism-related offenses who were admitted as refuges in 2009. According to the order, Trump has been informed by the attorney general ‘that more than 300 persons who entered the Untied States as refuges are currently the subjects of counterterrorism investigations’ by the FBI.” [The Daily Signal]
       
      The Middlebury College faculty is standing up for free speech. Responding to the actions of some of its students whose protests shut down a planned talk by Charles Murray and injured a professor, a group of Middlebury faculty has put out a statement of principles. These include:
      “Exposure to controversial points of view does not constitute violence.
      “Students have the right to challenge and to protest non-disruptively the views of their professors and guest speakers.
      “A protest that prevents campus speakers from communicating with their audience is a coercive act.
      “No group of professors or students has the right to act as final arbiter of the opinions that students may entertain.
      “No group of professors or students has the right to determine for the entire community that a question is closed for discussion.
      “The purpose of college is not to make faculty or students comfortable in their opinions and prejudices.
      “The purpose of education is not the promotion of any particular political or social agenda.
      “The primary purpose of higher education is the cultivation of the mind, thus allowing for intelligence to do the hard work of assimilating and sorting information and drawing rational conclusions.” [Free Inquiry on Campus]