The Liberal Zone

Is there any better indication of the perverse nature of progressive ideology than that the left now declares it desirable that able-bodied workers will be able to choose not to work to support themselves as the result of taxpayer funded wealth transfers? It used to be the case that the left would dismiss with contempt the notion that its welfare policies discouraged people from working. Welfare was simply for the unfortunate few that couldn’t possibly support themselves, we were always told. Now, with the announcement from the CBO that Obamacare will result in 2 million fewer workers in the workforce, the true mindset of the left comes out. Paying government subsidies to people who can and do work to support themselves is now apparently a good thing precisely because it allows them to stop working to support themselves.

When it comes to the warped and disturbed, Rod Serling has nothing on the bizarre thinking of progressives.

What’s Next

The PPACA extends the current system to more people to increase coverage, but doesn’t fundamentally reform health care at the delivery level. As such, it will not succeed in bending the cost curve to make the growth rate of health care spending sustainable. The interesting question now is what path it takes when it inevitably collapses. I see one of two options: 
 
1. “Individual Market Based” – Some combination of Ron Wyden’s and Paul Ryan’s reforms are enacted eliminating the employer based tax preferences and replacing them with individual tax credits, thus eliminating the already tenuous “firewall” between the exchanges and the employer based system.  
 
Medicare and Medicaid (and potentially TriCare) are voucherized and integrated into the existing subsidy system in the exchanges so that all health insurance is purchased by individuals in the exchange system with varying levels of subsidies and tax credits based on age and income. About as close to “Free Market” as you are likely to get. 
 
2. “Single Payer (sort of)”. Medicaid for all is enacted replacing the exchange system entirely with a universal minimal standard insurance package provided by the government. Coverage and reimbursement is dictated by a more robust version of the Medicare Payment Advisory board that strictly limits name brand drugs and other expensive treatments in favor of generics and applies similar cost/benefit analysis to approved procedures (and reimbursement rates). The ability to see specialists without a referral or otherwise go “out of network” is curtailed, as are end of life procedures.  
 
In parallel with the public system, private insurance and medical care remain to provide enhanced care for those who can afford it.  
 
Eventually, the public system comes to resemble public schools vs private schools as taxpayers who opt for the private system are not receptive to tax increases to maintain and improve a public system that they themselves do not participate in, thus regulating the public system to a second tier level of care, much like Medicaid is today.

Health Care Predictions Post

Prediction time — by 9:00 Thursday morning enter your prediction.  To keep this somewhat simple, include (at a minimum) the outcome on the mandate and the related insurance reforms (guarantee issue and community rating), the vote, and who writes the opinion for the majority and the dissenters and a brief rationale.  If you want to weigh in on the Medicaid expansion feel free.

Example:

6-3 mandated overturned, but guarantee issue and community rating upheld.  Roberts for the majority, Kennedy concurring, and Thomas with the dissent.   Congress can dictate how insurance is sold and priced, is within its rights to require companies to sell to all comers, but it can’t make an individual purchase  it.

Just edit the post to insert your comments next to your handle.  Applogies if I’ve missed a name.

UPDATE:  How to read the ruling from SCOTUSblog

NoVA: Mandate is unconstitutional based on a vote of 5-4.  Based on this, the entire law goes down 6-3, as one of the liberals —  Sotomayor — joins with the rest majority on the severability issue and finds that Congress did not want the rest of the law without the mandate.   Roberts with the majority, Thomas with a concurrence that eviscerates the reasoning behind Wickard,  and Kagan with the dissent.

ScottIn a total shock, one liberal justice (not sure which one) decides to actually read the constitution and betray the cause, sending the mandate down in flames, 6-3. Then, in October, Yankees over the Nationals in 6. A-Rod goes 0 for the series, Strausberg get the win in both National victories, including only the second perfect game in World Series history, but Robinson Cano win Series MVP honors after hitting .515.

LMS  Mandate goes down 5-4 with Scalia writing a scathing critique of Obama as the majority.  I read about his dissent in the immigration case, took it all the way back to the civil war and free blacks from what I heard.  Ginsburg writes the dissent.  I’m not sure about the rest (or even the above frankly) but I don’t really expect the rest of the law to stand as is.  I’m just not enough of a lawyer (none at all actually) to know how they could frame it.

Yanks vs Angels in American League Playoffs…………..Trout saves game five for the Angels with an over the wall catch and two home runs but Weaver pitches the no hitter that clinches the AL title in six.

NoVA, what do we win if we get it right?  What’s the prize?

Mark  

1] Severance.  Addressed only by Thomas and Scalia in their dissents.

2] Medicaid.  Roberts writes majority opinion on all points.  6-3 uphold expansion, but more important to the state AGs, effectively 8 vote that the Congress cannot penalize a state for refusing the “voluntary” expansion.  Breyer dissents that the states can be penalized for refusing the “voluntary” expansion.    The state AGs get what they hired Clement to do.

3] Individual Mandate.  Congress can dictate how insurance is sold and priced, is within its rights to require companies to sell to all comers,  can’t make an individual purchase  it, but can tax the uninsured, which is what Roberts says is being done.  Upheld, 6-3, Scalia, Thomas, and Alito dissenting.  Breyer concurs but writes an opinion that Congress can make an individual purchase insurance if it is part of an overarching scheme to provide health care for all.  Kagan and Sotomajor join the concurrence but RBG does not, preferring to join Roberts and Kennedy in the Opinion.

4]  Anti-Injunction statute.  Roberts shuts that door on a second attack in 2015.  Scalia writes an attack dissent to this, suggesting that the first time someone pays the tax he should sue for a refund, because this whole scheme is an imposition on liberty.

I might change my mind, because like QB I really go back and forth on this.

Banned

Yello The insurance mandate is struck down 5-4 with Roberts writing the main opinion. Scalia’s concurring opinion mentions broccoli explicitly. Kennedy writes a separate concurring opinion undercutting Scalia and giving guidance on how a rewrite could pass muster.

Brent

Kevin

Michi

Entire law stands 6-3, Alito, Scalia and Thomas dissenting.  Georgia just opened the door to interstate commerce with its new health insurance law, and the Court has to address it; Roberts sees the long picture and decides to go with history.  Of course, I’m writing this without the benefit of having read any of the learned comments posted below, so. . .

Roberts writes the majority opinion, with Sotomayor and Ginsberg writing their own concurrences (if that’s the right term), and Scalia jumps the shark again in his dissent.

Scott–I never knew that you were such a romantic!  Cano batting 0.515?!?!!  🙂

Ashot

Mike Well, FWIW …

1) Anti-Injunction Act. 7-2, SCOTUS is not precluded from deciding. Roberts writes that the penalty is really a penalty and not a tax because the word “penalty” is written into the legislation. So, AIA doesn’t apply. Scalia/Thomas dissent.

2) Mandate. 6-3, mandate upheld. Roberts buys the argument that Congress can regulate the purchase of health care and that buying health insurance is the way that most health care is purchased. Since Congress has already mandated that emergency rooms must provide health care regardless of ability to pay (through EMTALA), they can assess a penalty for “costs.” The activity/inactivity argument is tackled using Judge Sutton’s formulation of self-insurance. Scalia/Thomas/Alito dissent, each writing a dissent and reading from the bench.

3) Severance. Mooted by the majority opinion upholding the mandate.

4) Medicaid expansion. 7-2, upheld. Roberts is unwilling to go back through all the Spending Clause cases and agrees with the lower courts that the expansion is consistent with Congress’ spending power. He is also unwilling to set a precedent for the application of coercion theory in this case. Scalia/Thomas dissent.

Dave!

TrollMcWing

Quarterback:  Upheld 5-4. Kennedy will not have the courage to do the right thing. As the Casey plurality opinion showed, he is more committed to protecting what he sees as Court legitimacy than to following the Constitution. [I have changed my mind several times recently, and may do so again! In fact, even now I am trying to imagine how he will rationalize upholding it. I would like to read all the Arizona opinions first but probably won’t have time.]

jnc4p

Fairlington Blade:  Mandate goes down 5-4, but I’ll go with severability. Most of the law stands.

okie

allbutcertain

bsimon

Health Care Link Dump

Just wanted to post some of the recent health care news.  There’s also been an uptick in the number of SCOTUS ruling previews, but none of them are really all that insightful.  Just parlor game speculation.

Also, the White House has issued a veto threat on the medical device tax repeal bill.  [Edit:  Link to Statement of Administration Policy]

AHIP released a survey that found the number of people enrolled in health savings accounts and high deductible health plans has tripled over the last five years.  Survey is available here.  The Washington Post and Kaiser Health News recently profiled employers’ increasing use of high deductible health plans.  Most of these plans already covered a lot of the essential benefits stuff for free, even before the ACA, which I probably should have known.  The article is available here.

Medical costs are expected to rise by 7.5 percent in 2013, the fourth consecutive year of modest increases, according to a study released by PricewaterhouseCoopers LLP’s Health Research Institute.   Four factors that will continue to slow the rise in medical costs in 2013: medical supply and equipment costs are moderating under market pressure; growth in physician services is expected to be one of the slowest areas of cost growth as consumers choose alternatives to traditional office visits; accessibility to information on prices is exerting downward pressure as consumers in high-deductible plans seek cost information and pricing information becomes more readily available; and pharmaceutical patents are expiring.  The study is available here.

The Washington Post and GAO on a ACA tax credit in that small businesses aren’t using due to the complexity of taking it.  article is available here.  The GAO report, “Small Employer Health Tax Credit – Factors Contributing to Low Use and Complexity” (GAO-12-549) is available here.

Video:  Former CMS Administrator says that premium support (aka vouchers) is going to happen.

Medicare Trustees Report

Here’s all you need to know about the 2012 Medicare Trustees Report, which was “released” in the sense that press releases have been issued and talking points have been distributed. Have not seen the actual report language, but will post a link when I do.

The spin is that the ACA is working and will save money. And then CMS Richard Foster will speak.

Somewhere in the back of the report, Foster will write something to the effect of “these projections are based on current law and will not be viable” long term. He’ll reference the doc fix.

Count on it. So, are those pointing to the savings “wrong”? No. Are they lying bastards? Yes.

Update: Here’s the actual report.

Yep. Foster writes:

“Further, while the Affordable Care Act makes important changes to the Medicare program and substantially improves its financial outlook, there is a strong likelihood that certain of these changes will not be viable in the long range. Specifically, the annual price updates for most categories of non-physician health services will be adjusted downward each year by the growth in economy-wide productivity. The best available evidence indicates that most health care providers cannot improve their productivity to this degree—or even approach such a level—as a result of the labor-intensive nature of these services.
Without unprecedented changes in health care delivery systems and payment mechanisms, the prices paid by Medicare for health services are very likely to fall increasingly short of the costs of providing these services. By the end of the long-range projection period, Medicare prices for hospital, skilled nursing facility, home health, hospice, ambulatory surgical center, diagnostic laboratory, and many other services would be less than half of their level under the prior law.”

He goes on:

For these reasons, the financial projections shown in this report for Medicare do not represent a reasonable expectation for actual program operations in either the short range (as a result of the unsustainable reductions in physician payment rates) or the long range (because of the strong likelihood that the statutory reductions in price updates for most categories of Medicare provider services will not be viable).

Any of the health care / legal experts care to weigh in on the day’s activities?

Ashot here…I’m adding a first person account from yesterday’s arguments. And here’s the link to the audio.

Impressions from inside the courtroom

Mark A. Hall

Wake Forest University

The room was packed and buzzing with excitement. Some people clearly had slept outside last night. Even some of the attorneys general from the challenger states had to stand in line to get in. In the way into the building, I spotted none other than Ken Cuccinelli, attorney general of Virginia and lead party in the Fourth Circuit case. Sitting in my same row in the courtroom was a virtual quorum of the Senate Finance Committee, including Senators Leahy, Baucus, Grassley, and Kerry.

Solicitor General Verrilli encountered some forceful challenges early on in his presentation In particular, Chief Justice Roberts and Justices Scalia and Alito raised concerns about the slippery slope problem, citing examples such as burial insurance, gym membership, and mandatory cell phones to help with police emergencies.

Perhaps one of the most memorable exchanges, and certainly one that will resonate in the media, involved a question from Justice Scalia asking Solicitor General Verrilli to define the market.

JUSTICE SCALIA: Could you define the market — everybody has to buy food sooner or later, so you define the market as food, therefore, everybody is in the market; therefore, you can make people buy broccoli.

GENERAL VERRILLI: No, that’s quite different. That’s quite different. The food market, while it shares that trait that everybody’s in it, it is not a market in which your participation is often unpredictable and often involuntary.

Students of the Court, and of effective rhetoric, know that how issues are framed is critical to how analysis and decisions proceed. Thus, much of the questioning throughout the morning addressed the issue of which of several markets the Court should regard as being regulated: the insurance market, all health services, or the portion of health services the uninsured people are likely to use. As another example of framing, Justice Alito countered the government’s position that the uninsured force others to pay for their care by noting that most people subject to the mandate are required to pay more into the insurance pool than they are expected to use. Justice Roberts also pointedly observed that the comprehensive insurance mandated by the law includes several services that many people never use, such as pediatric care and substance abuse treatment. So, it appears that cross subsidies are in the eye of the beholder.

None of the Justices appointed by Democratic presidents expressed any substantial concerns about the government’s commerce clause position—suggesting that their votes are secure, as has been speculated. Instead, they appeared to rise to the government’s defense. Toward the end of the first hour, Justice Sotomayor crisply defined the government’s three main lines of defense somewhat more clearly than even the Solicitor General had. About 15 minutes into the argument, Justice Breyer spoke up to offer the government some support. He observed that Congress created commerce where none previously existed when it started the Bank of the US, for instance, which Justice Marshall’s opinion in McCulloch v. Maryland famously upheld under the Necessary and Proper clause.

That was the first of two novel arguments Justice Breyer made that I don’t recall reading in the principal briefs. He also pressed several times an argument that should appeal to public health lawyers: what if there were a rampant contagious disease that threatened 10 million lives; couldn’t the government mandate vaccinations? If so, what does it matter that people who are forced to be vaccinated weren’t engaged in any commercial activity?

About 30 minutes in, the Lochner v. New York case was unexpectedly introduced into the arguments, in the form of questioning from Justice Scalia about whether the term “proper” in the Necessary and Proper clause has independent force. Chief Justice Roberts joined in, noting that the Court had earlier expressed concerns about unwieldy substantive due process jurisprudence only with regard to constitutional limits on states’ police plenary powers, and not with respect to limiting the federal government’s enumerated powers.

Tax arguments, on the other hand, received fairly short shrift in all of the arguments. There seems to be very little support, on either side of the Court’s ideological divide, for sustaining the individual mandate as an exercise of Congress’ taxing power. The challengers also reminded the Court that, if this were a tax, they still contend that it is unconstitutional as an unapportioned “direct tax.”

Both Paul Clement for the states and Michael Carvin for the private parties spoke smoothly and quickly. Justices Sotomayor and Breyer were especially active in challenging their positions, with Justices Kagan and Ginsburg also chiming in regularly. Especially notable, I think, were Justice Breyer’s several references to his concern that barring the federal government from mandating individual health insurance in this case might prevent it from responding effectively to a virulent epidemic.

One of my favorite moments, which drew hearty laughs, was this exchange with Justice Kagan: “Well, doesn’t that seem a little bit, Mr. Clement, [like] cutting the bologna thin? I mean health insurance exists only for the purpose of financing health care. The two are inextricably interlinked. We don’t get insurance so that we can stare at our insurance certificate. We get it so that we can go and access health care.”

I listened most attentively to questions for the challengers from the Court’s conservative wing. All eyes and ears were on Justice Kennedy, as a potential swing vote, and he spoke up early on (about 3 minutes in), raising a key point: is it “true that the noninsured young adult is, in fact, an actuarial reality insofar . . . health insurance companies figure risks? That person who is sitting at home in his or her living room doing nothing is an actuarial reality that can and must be measured for health service purposes; is that their argument?” Justice Kennedy repeated this sophisticated point later: “they are in the market in the sense that they are creating a risk that the market must account for.” And, near the end of the morning’s argument, he interjected (in response to the slippery slope concern that regulating here would allow the government to regulate anything): “I think it is true that if most questions in life are matters of degree, in the insurance and health care world, both markets — stipulate two markets — the young person who is uninsured is uniquely proximately very close to affecting the rates of insurance and the costs of providing medical care in a way that is not true in other industries. That’s my concern in the case.”

Later, Chief Justice Roberts challenged the analogy to requiring people to buy cars, noting that not everyone is in the car market, but they are all in the health care market. He made the same points several times in different ways. For instance, to Mr. Carvin: “I don’t think you’re addressing their main point, which is that they are not creating commerce in health care. It’s already there, and we are all going to need some kind of health care; most of us will at some point.” And, in response to Carvin’s analogy to mandatory mortgage insurance: “I don’t think that’s fair, because not everybody is going to enter the mortgage market. The government’s position is that almost everybody is going to enter the health care market.”

NOT ENOUGH MDs

We here have been educated to understand the supply problem in American health care, thanks to NoVAH, Mike, and Michigoose, although many, if not all, of us understood the general outlines of this basic issue before we got here. This morning we read this:

http://www.washingtonpost.com/blogs/ezra-klein/post/the-health-reform-laws-biggest-threat-30000-too-few-doctors/2012/02/10/gIQALEQp4Q_blog.html?wpisrc=nl_wonk

What I did not know, until I read this article, is that Medicare covers the lion’s share of the cost of training medical residents.  Further, in order to make ACA’s package politically marketable, in the negotiations, there was no increase in the funding for residents.  Thus ACA built into itself the seeds of its own failure, and this is what NoVAH has been saying to us, although I don’t recall his having pointed to the failure to increase funding for residents.

When I read ACA in detail for my clients, I looked at it from the POV of the effect on small biz, which I decided was actually nil, for my clients.  A myopic view, I admit, but it fit my assignment.  A shortfall of 30000 new doctors in a near time frame will greatly increase health care costs above what they would have been if 30000 new docs had been trained.

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