Congress and the Affordable Care Act: File under Revealed Preferences

John Bresnahan and Jake Sherman (Politico) report (unsurprisingly) that those who brought us the Affordable Care Act are scurrying to create exemptions for Capitol Hill. The big concern: the costs of insurance on the exchanges will lead to the rapid exodus of legislative aides—a policy-induced brain drain.

The talks — which involve Senate Majority Leader Harry Reid (D-Nev.), House Speaker John Boehner (R-Ohio), the Obama administration and other top lawmakers — are extraordinarily sensitive, with both sides acutely aware of the potential for political fallout from giving carve-outs from the hugely controversial law to 535 lawmakers and thousands of their aides.

They continue:

The problem stems from whether members and aides set to enter the exchanges would have their health insurance premiums subsidized by their employer — in this case, the federal government. If not, aides and lawmakers in both parties fear that staffers — especially low-paid junior aides — could be hit with thousands of dollars in new health care costs, prompting them to seek jobs elsewhere. Older, more senior staffers could also retire or jump to the private sector rather than face a big financial penalty. Plus, lawmakers — especially those with long careers in public service and smaller bank accounts — are also concerned about the hit to their own wallets.

Nancy Pelosi famously assured her audience “we have to pass the bill so that you can find out what is in it.” Now that lawmakers have found out what is in it, it appears they are not too pleased.  Or should we interpret their actions differently?

Read Full Post »

Hundreds of Unnecessary Deaths in One NHS Hospital

A new public inquiry into abuses at the Mid Staffordshire National Health Service Trust’s hospital has found a years-long pattern of fatal mistakes and abuses. The report makes for damning reading. From the BBC report:

Years of abuse and neglect at the hospital led to the unnecessary deaths of hundreds of patients.

But inquiry chairman, Robert Francis QC, said the failings went right to the top of the health service.

While it is well-known the trust management ignored patients’ complaints, local GPs and MPs also failed to speak up for them, the inquiry said.

The local primary care trust and regional health authority were too quick to trust the hospital’s management and national regulators were not challenging enough.

Meanwhile, the Royal College of Nursing was highlighted for not doing enough to support its members who were trying to raise concerns.

The Department of Health was also criticised for being too “remote” and embarking on “counterproductive” reorganisations.

The report said the failings created a culture where the patient was not put first.

Specifically, the report cites 1200 “unnecessary deaths” due to poor care, without a single manager having been held responsible. But the United Kingdom keeps health care costs down!

Twitter hashtag “#welovethenhs” is again trending.

Read Full Post »

Occupational Licensing as an Implicit Barrier to High Skill Migration

That’s the subtitle of a new working paper from Peterson, Pandya, and Leblang. Here’s the abstract:

Skills are often occupation-specific, a fact missing from existing research on the political economy of immigration. Although analyses of survey data suggest broad support for skilled migration occupational licensing regulations persist as formidable barriers to skilled migrants’ labor market entry. Regulations ostensibly serve the public interest by certifying competence but are simultaneously rent-preserving entry barriers. We analyze both the sources of US states’ licensure requirements for international medical graduates (IMGs), and the effect of these regulations on migrant physicians’ choice of US state in which to work over the period 1973-2010. Analysis of original data shows that states with self-financing state medical licensing boards, which can more easily be captured by incumbent physicians, have more stringent IMG licensure requirements. Additionally, we find that states that require IMGs to complete longer periods of supervised training receive fewer migrants. Our empirical results are robust to controls for states’ physician labor market. This research identifies an overlooked dimension of international economic integration: implicit barriers to the cross-national mobility of human capital, and the public policy implications of such barriers.

Read Full Post »

When Obamacare Really Kicks In

Most of the PPACA’s most controversial provisions were backloaded until after this election. Unless Romney wins the presidency and Republicans at least make it close enough in the Senate that they can pick off a moderate Democrat or two on a roll-call, these provisions will start to kick in next year. Avik Roy explains:

In [2013], a number of Obamacare’s tax increases will come into effect. The law will, among other things, raise taxes on investment income, itemized medical expenses, privately-sponsored retiree prescription-drug coverage, medical devices, and flexible spending accounts.

[...]

2014 is the critical year for Obamacare. It’s the year that the bulk of the law’s provisions go into effect. Notably, it’s the year that the law’s controversial individual mandate goes into effect, requiring most Americans to buy a government-sanctioned health insurance product…

In addition, 2014 is the year that Obamacare’s employer mandate begins to be enforced. That mandate requires all businesses with 50 or more workers to provide government-approved health insurance to all of their workers, or face steep fines…

2014 is also the year that Obamacare’s gusher of new spending kicks in, through its expansion of the Medicaid program and the institution of federally subsidized health insurance exchanges. Once these two programs are in place, it will become impossible to repeal Obamacare.

In 2014, Obamacare guts the laws related to consumer-driven health plans, by capping deductibles in the small-group market at $2,000 for individuals and $4,000 for families, down from $6,050 and $12,100 today…

Also, in 2014, Obamacare will force insurers covering small businesses and individuals to cover a set of “essential health benefits” defined by the Secretary of Health and Human Services…

In addition, the law will impose a tax on health insurance premiums, though labor unions and government-sponsored plans are exempted from the tax.

More here.

Read Full Post »

Market Seems to Believe Romney Would Repeal Obamacare if Elected

…Judging from the the post-debate health care stocks performance. Of course, the assumption would have to be that the GOP both retains the House and takes the Senate, also unlikely.

Context: I’ve had debates with people who say that Romney would quickly go back on that promise once elected, but I just don’t see it. He’s not going to veto a GOP Congress-led bill to repeal the PPACA.

HT: Reason.com

Read Full Post »

Some Bad Arguments for the PPACA from Jonathan Gruber

Even though I disagree with much of its interpretation, I admire Jonathan Gruber’s pre-PPACA research on health insurance markets. He’s one of the most forthright and clear-headed advocates of government takeover of health insurance that I know. However, his recent defense of the law in The New Republic indulges some pretty blatant economic fallacies:

But what few realize is that, by expanding insurance coverage, the law will also increase economic activity. These newly insured individuals will demand more medical care than when they were uninsured. And while it takes many years to train a family physician or nurse practitioner, it doesn’t take much time to train the assistants and technicians (and related support staff) who can fill much of this need. In many cases, these are precisely the sort of medium-skill jobs that our economy desperately needs—and that the health care sector has already been providing, even during the recession.

Gruber surely knows better than to attribute economic growth over the long term to “demand.” All increase in wealth ultimately comes from growth in productivity and exchange, not “demand.” Whether increasing demand for health care will increase aggregate demand and short-run return to equilibrium — as opposed to redistributing spending from other sectors — is another question, but Gruber doesn’t even attempt to answer it. And the amount of jobs in the economy is a function of cyclical and structural factors. Redistributing jobs from other parts of the economy to health care does not mean more wealth or a higher standard of living for Americans. These are basic, 101-level errors.

When attacking critics of the PPACA, Gruber switches to supply-side arguments. Thus:

There is now a large body of literature examining the impact of tax changes on the highest income taxpayers. This literature finds that those taxpayers will avoid some of those taxes by re-categorizing their incomes in ways that minimize taxes. But there is no evidence that they will actually work less hard, invest less, or do anything which reduces their “real contribution” to the economy.

All of a sudden the fiscal contractionary effect of the tax increase doesn’t matter. Can we just call it even on the demand-side claims – as the PPACA will probably neither increase nor decrease the deficit very significantly – and focus on the supply side? The real justification for the PPACA, if there is one, is that it makes health insurance markets more efficient. There’s simply no denying that it imposes some distortions on the rest of the economy to achieve this goal, and Gruber himself seems to acknowledge this toward the end, although he insists the cost will be small.

Read Full Post »

The Necessary Inadequacy of Charity

A common libertarian and conservative response to questions about how beneficiaries of government programs will carry on after the removal of their subsidies is that charity should take care of them. This answer is often overly glib, even when combined with the observation that a lower burden of taxation might foster more giving (charity is already tax-deductible after all). Charity will always be insufficient to meet basic human needs, and in the absence of government programs, some people will fall through the cracks. (In the presence of government programs, some people will fall through the cracks.)

This aspect of charity is a feature, not a bug. Charity suffers from the same problem that government welfare programs do: the Samaritan’s Dilemma, as economists call it. The more you help those in need, the more need there will be, because people’s behaviors will change as they come to expect assistance. To the extent that libertarians and conservatives oppose welfare programs because of “dependency” issues, they must also oppose charity for the same reason. Of course, charity is superior to government programs in at least two respects: lower administrative expenditures and, more importantly, greater respect for the moral autonomy of the donor. To the extent that we can reduce extreme human deprivation, many of us will think it worthwhile to do so even if it somewhat reduces the productive efforts of those less deprived, whether through charity or through government assistance. Nevertheless, it is possible for charity to be excessive.

To see the point, consider the argument I made that libertarianism does not preclude mandatory health insurance for children.

Read Full Post »

Munger on Single-Payer

Mike Munger, Duke political scientist and sometime Libertarian Party of North Carolina gubernatorial candidate, explains his support for single-payer health insurance:

I would prefer personal responsibility, and a competitive market in health care. Modeled after the very successful, constantly cheaper, constantly better quality, service in Lasik surgery and other “elective” surgeries. If someone, anyone, would even consider going in that direction, that would be fine.

Insurance would be for major problems, big surgeries, accidents. You might have an annual deductible of $5k or more. Doctors would advertise prices (yes, PRICES) of standard surgeries.

Does any of that sound familiar? I didn’t think so. Instead, we have something really bad. Single payer would be better than what we have. Single payer is also better than ACA, by the way, which is why I am not happy about the decision yesterday.

What we have is this…

Click through for the rest. I’m not persuaded by the claim that single-payer is better than what we have now, but I think it might be better than what the PPACA sets up. The fact is that in unregulated states (no community rating or guaranteed issue, elimination riders permitted, low mandated benefits), health insurance is pretty cheap for healthy people, and states are increasingly experimenting with allowing nurse practitioners and dental hygienists to practice independently, making less than half of their respective top-level professional equivalents and presumably passing along the savings to us. The problem is that in unregulated states, unhealthy people can’t get coverage. At all. There are tools that insurance companies can use to make coverage reasonably achievable even for the unhealthy, like elimination riders, but there is strong social pressure against their use. As a result, insurance companies would rather deny coverage to a high risk than offer coverage with exclusions. It looks bad to people to do the second. It makes no sense, but it’s a good case study of how social pressure can influence markets just as much as law and policy. And yes, mandated ER care is a problem, but uncompensated ER care is something around $50 billion a year – not a huge enough number to be driving cost inflation. Finally, the employer health insurance deduction probably means that the employed are over-insured, but the fact is that people want low-deductible, expensive, gold-plated health insurance. Some of the rise in health care costs is being driven by the market. People are willing to pay high prices even for a very small marginal benefit in treatment technology. Single-payer would probably drive down costs, at the expense of a small amount of quality – but people put tremendous value on that small amount of quality, and thus the welfare losses would stand to be huge.

Read Full Post »

Was this a victory for universal coverage?

First, for most Americans the amount due will be far less than the price of insurance, and, by statute, it can never be more. It may often be a reasonable financial decision to make the payment rather than purchase insurance . . .

Indeed, it is estimated that four million people each year will choose to pay the IRS rather than buy insurance. See Congressional Budget Office, supra, at 71. We would expect Congress to be troubled by that prospect if such conduct were unlawful. That Congress apparently regards such extensive failure to comply with the mandate as tolerable suggests that Congress did not think it was creating four million outlaws. It suggests instead that the shared responsibility payment merely imposes a tax citizens may lawfully choose to pay in lieu of buying health insurance.

So the tax is acceptable, in part, because it is trivial.

Imagine, for the sake of argument, you accept the basic position that it is the state’s responsibility to provide universal health care coverage.

The problem: to the extent that the tax is trivial, it will be ineffective. That is, it would be quite rational—as recognized by Roberts—for an individual to pay a small tax and avoid large premiums.  It would be rational, once again, to do this up to the moment when one would require serious medical attention, at which point the ACA limits the amount that can be charged for entry into the system and prohibits discrimination based on pre-existing conditions.

The ACA—by design or by accident—seemed to neglect this issue.

Another point: while one might have little concern over those who make a rational decision not to purchase insurance, one might have a far different response to those who want insurance but simply do not have the wherewithal to purchase it. These were the folks who might have been covered by the expansion of Medicaid. Now that states cannot be punished for refusing to extend Medicaid as required under the ACA, I am assuming many (most) states will not provide additional coverage.

Yes, the Court upheld the ACA. But was it really more than a short-term victory for those who believe that the state has an obligation to provide universal health care coverage?

Read Full Post »

Obamacare Upheld: Thank Goodness!

The Supreme Court’s decision to uphold the Affordable Care Act (don’t call it “Obamacare”!) gives me a great sigh of relief. Although I was one of those who thought it well-nigh impossible to be overturned when the lawsuits were initially filed, over the last several months I began to think that there was actually a chance it could happen. I must say I am enormously relieved that the ACA will remain the law of the land.

The primary reason for my relief is that my health care bills are big, and getting bigger. And as I age, I expect they will continue to go up, as I will need various tests, procedures, medications, and so on. These are expensive! And I really believe that I have been having to pay too high a proportion of those costs myself. I do not ask to get sick, so why should I have to shoulder the entire burden of the costs of my illnesses?

The so-called individual mandate is absolutely necessary to the functioning of ACA. Remember, “affordable” is the first word in its name—and affordability could not be accomplished if younger and healthier people were not required to pay for insurance that they would not use. We assume they will consume less in health benefits than they will pay, which means that the remainder will go to pay for people like me who are the reverse—consuming more than we pay for. Without the individual mandate, many of those younger and healthier people would simply have not bought insurance, because they (selfishly) would have seen it as a bad bargain; but that would have meant that there would not be the funds to pay for others’ health care.

Now, however, they will be required to pay, which means I, like millions of others like me, won’t have to pay as much for my own care. That does mean, I concede, that we are effectively using others to serve our own ends. By not allowing those younger and healthier people the chance to give or withhold their voluntary consent, a Kantian might say we are violating their rational autonomy, their moral agency, their ‘personhood’—using them merely as a means to our own ends, thus violating the Categorical Imperative of morality. But that is far too extreme and restrictive a standard. Sometimes social justice requires violating others’ “rational autonomy” just a bit, especially when others benefit so much from it.

Now it is true that among those younger and healthier who will now be paying for my and others’ health care benefits are my own children. And because they are my children, I do worry about the financial burden that is now placed on them to pay the trillions of dollars this will cost (in addition, of course, to the trillions of dollars in national debt we already have that will also be their burden). But they are still young enough that they don’t really notice it at the moment. And, in any case, I have sacrificed a lot for them, so why shouldn’t they sacrifice for me? Plus, they have been irritating me recently anyway, so I’m not exactly inclined to “put the children first,” if you know what I mean. When it comes time for them to pay these bills, let them figure out a way to do it. Maybe they can put it off on their children.

A perhaps surprising benefit of the ACA is that it makes me care much more about my fellow Americans, especially those younger and healthier ones. I may not care about them as so-called rationally autonomous moral agents, but now I do very much care about them as laborers generating the wealth that will fund my health care. They need to keep working, and I am really concerned about their ability, and willingness, to do so. So I will be thinking about them a lot, and I will be most interested to make sure that Secretary Sibelius adopts appropriate measures to ensure that their willingness to keep working hard does not flag.

This, then, is a great day for our social democracy. The nineteenth-century economist Frédéric Bastiat once wrote that under any government, there are only three possibilities: (1) the few plunder the many, (2) everybody plunders everybody, and (3) nobody plunders anybody. Although Bastiat argued for option (3), that was a pretty extreme position. It wasn’t very practical, and it was also extremely limiting as to what the government could do. The ACA is more like option (1), which, for those of us among the “few,” is clearly the best option.

As it happens, just this week my family and I have been struggling with some relatively difficult health care decisions. Cost was one large part of our considerations. Thanks to President Obama and the ACA, however, cost will soon be a much smaller factor in the health care decisions we make. Also, soon we won’t have to worry about difficult decisions like which tests or procedures to have, or which medications to take. Not only will the costs be borne by others, but the hard decisions will be made by others too. I don’t know who those “others” will be, but another underappreciated aspect of the ACA is that it doesn’t matter—I don’t have to know who they are. Just as long as it’s not me!

If you are my age or older, then, I hope you will join me in celebrating this day. If you are younger, I hope you will come to appreciate how important you are to me and those like me. We need you, now more than ever! The ACA will now give you a chance to really do your patriotic and moral duty. Remember, sacrifice is always involved when doing one’s duty. So if you find your patriotism wavering in the future, just keep in mind that you are doing your part to keep America strong!

Read Full Post »

Ed Glaeser on Federal Mandates

Harvard economist Ed Glaeser weighs in on federal mandates in general:

Although I am open to having state governments require more health coverage, I fear a federal government with too much power to control individual behavior. The track record of federal interventions in managing markets suggests a strong case for limiting that power.

The question of bestowing appropriate power on the federal government depends not on the health-care issue alone, but on whether you think — on the whole — that the U.S. government does good things when it heavily regulates behavior. The 1942 case that is often cited as a precedent for health care, Wickard v. Filburn, provides the perfect example of why I fear this control….

There are many reasons to leave control over markets, such as health care, to state governments. States have tougher budget constraints, which discipline spending. States can adapt to local tastes, so Massachusetts can have more intervention than Texas. If people don’t like a state’s rules, they can always move elsewhere. Local experiments provide the evidence that can lead to real progress.

I’m not against all health-care mandates, but the history of federal overreach is worrisome, and I’d be happier if the Supreme Court decides that the law limits this ability to manage markets.

I don’t agree with everything in the article, and it’s unclear whether he favors a federal “tax penalty” on the uninsured to replace the “mandate,” or whether this is also something he prefers state governments do, but it’s refreshing to see a clear and sensible articulation for a more thoroughly federalist construction of the Constitution.

(For my part, tomorrow’s decision is ho-hum unless the whole bill is struck down. Community rating, guaranteed issue, rate review (price controls), Medicaid expansion, and the associated tax increases are all a bigger deal for the economy than the individual mandate.)

Read Full Post »

The Affordable Care Act and the Power of Meh!

Policy wonks and pundits are waiting in anticipation for tomorrow’s decision on the Affordable Care Act (I know it was one of the first things that crossed my mind this morning as I prepared for the day).  Although social scientists may not be too good at making predictions, I think most of us could  have long ago written the talking points for both sides of the dispute with great accuracy. But what of the public at large? Will the decision factor into their decisions in November? Will the Democrats and Republicans be able to use tomorrow’s decision effectively as a rallying point? I have my doubts.

The newly released NBC/WSJ poll has several questions on the SCOTUS and the Affordable Care Act.

From what you have heard about Barack Obama’s health care plan that was passed by Congress and signed into law by the President in 2010, do you think his plan is a good idea or a bad idea? If you do not have an opinion either way, please just say so.

• Good idea: 35%
• Bad idea: 41%
• Do not have an opinion: 22%
• Not sure: 2%

I am not certain how the Obama administration will spin a defeat at the Supreme Court (should it be handed a defeat). The obvious take is to present the Supremes as activist and counter-majoritarian. But in a world where only 35 percent think the Affordable Care Act was a “good idea,” will this spin have much traction outside of the 35 percent, who are likely already strong supporters of a second term?

If the Supreme Court rules that the health care law is unconstitutional meaning that it will not be implemented would you be pleased, disappointed, or would you have mixed feelings about it?

• Very pleased: 27%
• Somewhat pleased: 10%
• Somewhat disappointed: 5%
• Very disappointed: 17%
• Mixed feelings: 39%
• Not sure : 2%

Once again, how do you frame a defeat? 37 percent would be pleased, 22 percent would be disappointed, and those who would be pleased appear far more passionate about the issue. But overall, “mixed feelings” carry the day.

Now, if the Supreme Court rules that the part of the health care law called the individual mandate, that requires everyone to either have or buy health insurance is unconstitutional and will not be implemented, do you think this will help you and your family, hurt you and your family, or not make much difference either way?

• Help: 18%
• Hurt: 25%
• Not make difference: 55%
• Not sure: 2%

This may be the most interesting result. The vast majority of Americans get their healthcare through employers, Medicare or Medicaid. They are already covered and, as a result, they may feel that they don’t really have a dog in the fight when it comes to the personal mandate.

Bottom line: although those with hard positions will praise or curse the outcome, for most voters, I assume the response will be: Meh!

Read Full Post »

A Health Insurance Mandate Libertarians Can Support

Libertarians have generally opposed government mandates to participate in commerce on moral, economic, and constitutional grounds. Certainly, a federal government mandate to buy private health insurance contradicts standard libertarian understandings of the right to property and self-determination and the ability of individuals to decide for themselves their need for insurance (and concomitant skepticism of paternalist justifications for government involvement in health insurance), and runs afoul of textualist interpretations of the U.S. Constitution. A state government mandate would not violate the Constitution, but libertarians would nevertheless still tend to oppose it on the moral and economic grounds already cited.

However, there is one type of insurance mandate to which standard libertarian objections fall short. This is not to say, by any means, that all libertarians would support it, merely that opposition would have to find grounding in contingent, disputable facts. The mandate to which I refer is a requirement that

Read Full Post »

Indian Superbugs

As a followup on my libertarian case for prescription laws, I note this recent story on Indian superbugs that are totally antibiotic-resistant:

India’s $12.4 billion pharmaceutical industry manufactures almost a third of the world’s antibiotics, and people use them so liberally that relatively benign and beneficial bacteria are becoming drug immune in a pool of resistance that thwarts even high-powered antibiotics, the so-called remedies of last resort.

So this is not just a domestic problem, but an international one. Drug-resistant bacteria are now spreading across the globe. Soon we may re-enter the dark age when “[t]hings as common as strep throat or a child’s scratched knee could once again kill,” in the words of WHO chief Margaret Chan. If the Indian government is not going to regulate antibiotics on its own initiative, other governments need to impose sanctions on it in order to force it to do so.

Read Full Post »

When X is Not-X

There have been some wonderful pieces written in the past few weeks trying to make sense of the President’s claim that a SCOTUS decision to overturn the Affordable Care Act would be unprecedented. Of course, the pieces often proceed as follows

1. The President stated X
2. The President obviously knows not-X
3.  Therefore X must have a deeper meaning and significance

The newest installment—and one that may come the closest to providing an accurate interpretation—is written by Jonathan Cohn i(n today’s New Republic).  As you will recall, the Solicitor General made reference to Lochner and Chief Justice Roberts responded by reminding the government’s attorney that the decision involved state regulation rather than federal regulation. Deploying the approach presented above, we can conclude that either (1) the SG was incompetent or (2) the appeal to Lochner had a deeper meaning that must be discerned. Obviously, (1) could not be true.

After a rather enjoyable discussion, Cohn concludes:

But I’m pretty sure both Obama and his administration’s lawyer were saying something different, and broader, when they invoked Lochner: By invalidating the Affordable Care Act, the Supreme Court would be resurrecting a vision of constitutionally limited government that, quite rightly, went out of fashion a long time ago.

Any thoughts?

Read Full Post »

In the Land of the Blind, the One Eyed Man is King

Those of you who followed Grover’s link and read the transcript (or even better, heard the audio) of yesterday’s Supreme Court hearing may find the following quote entertaining (h/t Politico). The Source: White House Counsel Kathryn Ruemmler.

“Mr. Verrilli is an extraordinarily talented advocate who possesses a sharp mind, keen judgment, and unquestionable integrity. He ably and skillfully represented the United States before the Supreme Court yesterday, and we have every confidence that he will continue to do so.”

I know that this is a little outside of Ms Ruemmler’s portfolio, but I wonder if she could recommend a solar panel company that I might invest in? I’ve heard good things about this company named Solyndra.

Read Full Post »

Less Economic Freedom, Less Personal Freedom

This proposal in the UK to tax “fatties” highlights once again how once government gets deeply involved in funding health care, the pressures to control people’s lifestyles become significant. This is the same argument we hear from supporters of sky-high cigarette taxes, smoking bans, seat-belt and helmet laws, ad nauseam. “We all pay for it.” If only we didn’t.

More on the public health scam.

Read Full Post »

Chart of the Day

My only problem with the chart is its title. I don’t think a simple bivariate correlation is enough to establish causality. But it’s a suggestive piece of evidence, since both regime uncertainty and the employer mandate associated with the PPACA are plausibly related to slowing job growth.

Read Full Post »

Liberty: the example of circumcision

The Seattle Times, Slate, and other outlets have run interesting stories in the last couple of days discussing a new initiative that will appear on this November’s ballot in San Francisco–and hold onto your privates, gentlemen: It would ban circumcision for all minors (under age 18), rendering it a misdemeanor punishable by up to one year in jail or a $1,000 fine. It would contain no religious exemptions. While this is just a ballot initiative–not yet an approved ordinance–the mere threat of its enactment (and the fact that its supporters managed to get over 7,000 signatures) bothers my libertarian soul.

Media reports obsess about the First Amendment implications of such an ordinance, though honestly, since the Supreme Court’s decision in Employment Division v. Smith (1990), any state or local law of “general applicability” that burdens the free exercise of religion will be subject only to low-level rationality review (federal actions are subject to more rigorous review under the Religious Freedom Restoration Act). Since the supporters of the proposed circumcision ban claim that circumcision is a form of “genital mutilation” that is painful and unnecessary, it would seem to sail easily over the “rational basis” hurdle.

So frankly, I’m not all that interested in the First Amendment implications, though Smith is an intriguing case worthy of reconsideration. Instead, I’m struck by the lack of attention given to the individual liberty (substantive due process) implications of San Francisco’s proposed circumcision ban. I had thought it long settled that parents have a broad (though admittedly not limitless), presumptive liberty to raise their children as they see fit. Circumcision may indeed be painful to an infant, but is it any more so than piercing a little girl’s ears? Or tattooing your child? In either case, there is temporary pain and an extremely low risk of serious harm. In both cases, the procedure is undertaken to satisfy the parents’ own cultural or aesthetic preferences.

Supporters of the ban try to analogize circumcision to female genital mutilation, but I’m just not buying it. Female genital mutilation involves cutting out the clitoris, rendering the girl disfigured and permanently unable to have a normal, healthy sexual life. Circumcision obviously has no such long-term effects, as the 80 percent of U.S. men who’ve undergone the procedure can attest. Moreover, circumcision may actually have health benefits for some– it has been considered a way to lower the risk of AIDS in African communities ravaged by that disease.

On a broader level, I’m bothered by the fact that–particularly in an ultra-progressive city like San Francisco–there’s a decent degree of support for nanny-state restrictions on individual liberty, particularly when it relates (at least tangentially) to an individual’s choice of something so fundamental–”deeply rooted” in our history and tradition–as to what medical or aesthetic procedures to undergo. I know we are talking about minors here, but again–parents are presumptively allowed to make medical and aesthetic decisions for their children all the time. But then again, progressives are just as aggressive about nanny-state intrusions into individual liberty as conservatives, when it suits their agenda–witness progressive-supported bans on foie gras in California beginning in 2012 and the FDA’s recent decision to revoke approval of Avastin as a treatment for breast cancer.

Would love to hear others’ thoughts.

Read Full Post »

The Care of the Elderly Under Socialism

 European commentators on US healthcare are often misguided in their description of the American system as a ‘free market’ model – when that system involves significant levels of government regulation and funding. Equally, American commentators are often misguided in their accounts of ‘socialist’ healthcare in Europe. Europe contains a diversity of healthcare systems. Some, such as Switzerland are based predominantly on private insurance while others such as Germany and France combine elements of public and private funding and supply. The one European healthcare system that might genuinely be described as socialist is that of the United Kingdom. In the UK system of compulsory ‘free’ health provision, competition and the price system have been almost entirely eliminated from the patient-provider relationship, and even co-payment schemes which allow citizens to ‘top-up’ public funding with their own savings of the sort that are widespread in continental Europe, are prohibited.

 Both European and American citizens have got much to fear from any move away from their current ‘mixed’ systems to anything approaching the UK model. The following extract comes from a report by an independent ombudsman charged with examining the quality of care for the elderly under the UK’s ‘National Health Service’. Having catalogued an appalling number of cases where patients were regularly starved of food and pain-killers, she concludes in the following vein:

 “The findings of my investigations reveal an attitude- both personal and institutional-which fails to recognise the humanity and individuality of the people concerned and to respond to them with sensitivity, compassion and professionalism.

 The reasonable expectation that an older person or their family may have of dignified, pain-free end of life care in clean surroundings in hospital is not being fulfilled. Instead, these accounts present a picture of NHS provision that is failing to meet even the most basic standards of care.”

 This parlous state of affairs, it should be noted, follows a ten year period which has seen real expenditure on health care in the UK more than double. Where, one might ask, will Michael Moore choose to spend his retirement?

Read Full Post »

Additional Thoughts on Health Care: Eliminate the “Backstops”

Having read Judge Vinson’s decision, available here, I must recommend it. It is a relatively brief 78 pages and, at times, the discussion is quite lively. Will the Supremes agree with Vinson on the unconstitutionality of the individual mandate and the question of severability? Only time will tell.

One passage (not central to the decision) led me to reflect on James Buchanan’s essay “Afraid to Be Free: Dependency as Desideratum.” Public Choice, 124 (2005): 19-31. The decision notes:

the defendants emphasized during oral argument that it is not just the “economic decision” itself that renders the failure to buy insurance activity; rather, it is that decision coupled with the fact that the uninsured are guaranteed access to medical care in hospital emergency rooms as a “backstop,” the use of which can and does shift costs onto third parties. The defendants thus refer to the failure to buy health insurance as a “financing decision.” However, this is essentially true of any and all forms of insurance. It could just as easily be said that people without burial, life, supplemental income, credit, mortgage guaranty, business interruption, or disability insurance have made the exact same or similar economic and financing decisions based on their expectation that they will not incur a particular risk at a particular point in time; or that if they do, it is more beneficial for them to self-insure and try to meet their obligations out-of-pocket, but always with the benefit of “backstops” provided by law, including bankruptcy protection and other government-funded financial assistance and services. (p. 54)

Let’s turn to Buchanan:

Almost subconsciously, those scientists-scholars-academicians who have tried to look at the “big picture” have assumed that, other things being equal, persons want to be at liberty to make their own choices, to be free from coercion by others, including indirect coercion through means of persuasion. They have failed to emphasize sufficiently, and to examine the implications of, the fact that liberty carries with it responsibility. And it seems evident that many persons do not want to shoulder the final responsibility for their own actions. Many persons are, indeed, afraid to be free (p. 23).

Isn’t this a big part of the problem? Individuals want to liberty to purchase (or not purchase) health insurance. At the same time, they want to be certain that they will not be forced to bear the responsibility for the negative consequences of their decisions. The implicit guarantee creates problems of moral hazard.

Let us assume for the sake of argument that we continue direct provision of insurance or health care for those who are indigent. What of those who freely choose to remain without insurance?

I would argue that any individual should be at liberty to purchase health insurance (or not) as he or she see’s fit. But the decision should not be made with the expectation that the government (or its surrogates) will be there to make certain that one will not be forced to bear the consequences of his or her decisions. If medical service providers (including emergency rooms) were free to refuse service to the uninsured—and acted accordingly—and if the voluntarily uninsured could not rely on bankruptcy protection for the bills they incurred, I imagine the number of uninsured would drop significantly.

It is sometimes said that nothing is more dangerous than an implicit guarantee (most recent evidence: Fannie Mae and Freddie Mac). In health care, one wonders how much the elimination of the implicit guarantee would affect the decisions of those with sufficient means who knew that absent insurance, medical emergencies would carry catastrophic consequences? What would happen if we eliminated the “backstops” and got the incentives right?

Read Full Post »

The Politics and Policy of Health Care in the Age of PPACA

Avik Roy has an interesting piece in National Review on how conservatives (really, free-marketeers) should approach the policy and politics of health care in the age of PPACA. I largely agree with his policy prescriptions, somewhat vaguely stated as they are:

First, Republicans must foster a truly free market for health insurance by eliminating the differing tax treatment of employer-sponsored and individually purchased insurance. Second, Republicans must make dramatic improvements to Medicaid, using Mitch Daniels’s impressive reforms in Indiana as a template. Third, Republicans must move Medicare onto a sustainable path that puts financial control in the hands of seniors themselves rather than central planners.

I would also argue for repealing state-level health insurance mandates, but that is properly the role of state governments. (As noted in this blog, allowing purchase of health insurance under other states’ laws would achieve more or less the same end.)

Roy’s analysis of the political situation is insightful. Republicans and conservative Democrats are very unlikely to achieve a filibuster-proof majority after the 2012 elections. Therefore, repeal of PPACA will have to be passed through reconciliation. But since the CBO scored PPACA as reducing the deficit, a simple repeal cannot pass through reconciliation.Thus, whether they like it or not, Republicans will have to take on new spending cuts to any repeal.

And this on the presidential race is spot on:

This means that influential Republican activists must — must — coalesce around the most electable Republican presidential candidate who can articulate conservative health-care principles. This is no time for single-issue small-ball or personal score-settling. A GOP nominee who passes all the litmus tests but can’t win in November would only succeed in making Obamacare permanent. One who can win but isn’t capable of pushing for real health-care reform wouldn’t be much better.

The first criterion rules out Palin and Gingrich (and let’s be honest, Paul and Johnson too). The second rules out Huckabee and Romney. Who’s left? Mitch Daniels?

Read Full Post »