In the wake of the Republicans’ catastrophic inability to repeal Obamacare, many people have begun to accept that the Patient Protection and Affordable Care Act is the new basis on which the US health system will be built. This means that for the foreseeable future, assuming the Republicans are not able to suddenly develop a competent and coherent health financing agenda, progress towards universal health coverage (UHC) in the USA will depend upon improvements of and reform to the free market system as it is regulated by Obamacare. Obamacare is unusual among developing nation health financing systems for its heavy reliance on private insurers as the fundamental providers of risk pooling, as opposed to most other health financing systems where some form of government insurer provides the overwhelming majority of national health financing. For a lot of critics of Obama and Clinton from the left this is seen as a failure, and a sign that they are neoliberal sellouts: under this view of health financing reform, no market-based system will work and Obama sold out his own supporters when he put forward a plan that did not include single payer or a public option. For conservative policy makers in non-crazy countries – for example the UK[1] or Canada – and also in developing countries moving towards UHC, this offers an opportunity to see whether a free market approach to health financing can deliver the key goals of universal coverage and financial risk protection. The problem for conservative thinkers on health care is that there seems to be very little evidence that free market systems work, and the problem for left wing critics of Obamacare is that there is no evidence single payer could have been delivered in the modern US political environment. So for both far left critics and moderate right wing admirers of Obamacare the obvious question is: can UHC be achieved without a single payer system?

This week’s issue of the Journal of the American Medical Association has published an opinion piece addressing this issue. Entitled Achieving universal health coverage without a single payer: Lessons from 3 countries, it gives a brief overview of how Singapore, Germany and Switzerland have achieved UHC with at least nominally non single-payer systems. It attempts to address some of the key differences between these systems and the USA, and some ways in which the health market in those countries is different. Since JAMA is behind a pay wall, I thought I would give a brief summary of a few of these points.

First the article opens with a clanger, asserting that “Universal coverage is a top priority not only for Democrats but also for President Trump,” which does lead one to wonder how critical the authors are. It then goes on to dismiss summarily one of the key ideas raised by Republicans for making private health coverage more affordable in the US: high risk pools. The intention of a high risk pool is that patients with high cost or pre-existing conditions be offered insurance from a special fund financed by the government, thus removing them from the main private insurance risk pool and enabling insurance companies to reduce the cost of mainstream health insurance products. The problem with this model is that it is enormously expensive and there is no evidence that it works. The article points out that no US government will be able to justify the amount of money required to properly finance high risk pools, and that it probably costs upwards of 8 billion US$ a year to do this. It also notes that – contra Paul Ryan’s assertion that pre-ACA high risk pools worked great – most of the state-based high risk pools in the pre-ACA era were hideously expensive and did not work. The article also points out that a preferred strategy of some left-wing critics of Obamacare – shifting high risk patients onto Medicare – may also not work, since Medicare is already a high risk pool and expanding it by dumping in the highest cost patients will be impossible without increased funding (the article uses the language of sustainability, about which I’m suspicious because of its origins, but it cites well-respected sources on the challenges of continuing to finance Medicare if it is treated as a high risk pool).

So given this, the only way that a private system will be able to achieve universal coverage is if everyone is enrolled in insurance, and insurance is properly financed. The article describes the systems in Singapore, Germany and Switzerland, and how each of them force all their citizens into insurance coverage. For example, about Singapore it says:

Singapore institutes compulsory contributions from employers on behalf of their employees to create medical savings accounts. Employees maintain these accounts for health care expenses such as health and disability insurance premiums, hospitalization, surgery, rehabilitation, end-of-life care, and outpatient services. Those failing to pay their premiums are subject to garnished wages and other legal actions that can force payment of back premiums, penalties, and interest. Unemployed or low-income individuals are eligible for government subsidies that enable them to pay for the premiums.

and it points out that Germans are enrolled automatically in “private” funds that take a guaranteed 7.3% of their income. It’s hard to imagine any such plan being popular in the modern US, where the individual mandate has been subjected to years of withering don’t-tread-on-me type criticism and the idea of paying an income-based premium is terrifying to the GOP’s donors. In Switzerland and Singapore, where the systems do not use tax-based payments, they have government subsidies for (according to the article) up to a quarter of their population. So these systems – which by all accounts are functioning, affordable and tolerated by their citizens – share Obamacare’s key tactics of means-tested subsidies and individual mandates.

The article also makes the point that these systems have a very healthy free market structure, with much more vibrant private markets than the USA:

Germany in 2015, for example, had 124 sickness funds and 42 private health insurance companies, and the average resident of Switzerland in 2011 could choose from 59 health insurers offering coverage, with the 5 largest insurers covering 43% of the population. By comparison, in California, a state with approximately half Germany’s population, only 7 firms covered more than 95% of privately insured individuals in 2011, with the 3 largest firms covering 75%. In Massachusetts, with a population slightly smaller than Switzerland’s, 3 insurance companies enrolled 79% of individuals with private insurance.

I think this might be pushing the comparison a little bit, because many of the “sickness funds” in Germany are likely union-run or industry-based mutual associations with very strict management criteria, non-profit structures and guaranteed membership, and they may be regionally based so not actually directly competing with each other[2]. Also, I’m very confident that all three countries studied have rigorous price regulation and strict government oversight of providers (hospitals and clinics), so that they cannot for example price gouge the insurance provider for an infamous $500 band aid as they can in the USA. It’s much easier for private insurers to compete with each other for market share when they know what the cost of the insurance payout is likely to be, and can be confident that the provider won’t charge them arbitrary amounts, and I suspect that this certainty also removes a whole layer of administrative staff at both provider and insurer, for which the US system is infamous.

Having given an overview of these systems the article draws a simple conclusion and gives a firm recommendation: Obamacare needs tougher enforcement of a more punishing individual mandate. I think this conclusion is only partially correct, missing the role of price regulation and cross-subsidization from general taxation that protects these private markets.  So I think that the article is a little strong in concluding that the USA can definitely achieve universal health coverage without at least, for example, introducing a public option to every market place (or at least the rural areas). But it does make the point that a better regulated insurance market with better subsidies and a much tougher mandate would likely encourage competition, and achieve universal health coverage (or close to it) without driving up costs. It certainly seems that the architects of Obamacare knew this and had a long term plan for its expansion and improvement, and assuming the world survives Kim Jong Il’s birthday this weekend, hopefully the Democrats will be back in power in the USA soon enough to begin taking the next steps along that road. I’m not convinced yet, but it is still possible that Obamacare could show the way to a genuinely private, free market alternative to achieving UHC without single payer. In my view, however, if Obamacare (and human civilization!) does survive the Trump presidency, it is likely to become an increasingly state-regulated and state run system, rather than a robust private market place, because introducing a public option, slowly squeezing out private provides, and then making health insurance premiums fully means-tested and tax-based, is a much more reliable way to make everyone happy.

Still, for genuinely interested conservative policy-makers outside of America (whose “conservatives” have no interest in anything resembling policy), the next few years of Obamacare offers an exciting opportunity to develop new pathways to UHC. Given the complexity of movement towards UHC in some low income countries, and the very limited government finances in many of them, it would be interesting to see whether Obamacare’s roll out, expansion and improvement offers a new and more viable pathway to UHC than those currently on offer. I’m not holding my breath, but it will be interesting to see what lessons we can learn from this new and quite unique approach to one of America’s (and the developing world’s) big remaining problems.

First we have to survive the Trump presidency, though.

fn1: Caveats on the use of “non-crazy” should be inserted here, especially after Brexit

fn2: Interestingly, these sickness funds sound a lot like the non-profit mutuals that Obamacare was supposed to encourage, and which US “conservative” critics of Obamacare constantly sneer at and declare completely unviable.

By now everyone has learned the news that after 17 days of massive effort to try and force it through the legislature in the dead of night the Republicans have given up on their godawful attempt to repeal and replace Obamacare, and have accepted that Obamacare is now the “law of the land.” Having made no effort at all to reach out to Democrats, and after trying to push it through the Senate using a reconciliation process that was explicitly designed (and admitted) to negate Democrat votes, Trump’s first act of contrition for his and Paul Ryan’s failure was to blame the Democrats for not working with him. He went on to repeat the lie that Obamacare is “exploding” (it’s probably not) and openly admitted that he is going to try and hasten its collapse through executive action, following the logic that a program initiated by Democrats that is screwed into the ground by a Republican government will somehow be seen to be the Democrats’ fault.

Trump initiated this process of screwing Obamacare on his first day in office, when he passed a notoriously vague executive order that instructed all responsible departments to not comply with the details of the law to the extent they could legally get away with. A lot of people were duly concerned about this, because there are a lot of aspects of Obamacare that rely on administrative guidance that can be modified by the government in power. So this week’s New England Journal of Medicine has a short editorial by Jost and Lazarus about whether Trump can actually successfully undermine the workings of the act through administrative action alone. The two authors appear to be lawyers, one with a connection to the Constitutional Accountability Center, which supports the cause of “progressive constitutionalism” (which appears to be the idea that the Constitution is a living document whose interpretation can change over time), so presumably their understanding of constitutional law is fairly good.

The authors point out that reaction to Trump’s executive order ranged from fear to snorts of derision, and proceed to show at least one way in which it has failed bigly. One of the big fears expressed in initial response to the order was that the Inland Revenue Service (IRS) would stop collecting taxes it is required to under the “mandate”, the unpopular part of the law which punishes through the tax system anyone who does not purchase insurance. This was probably Trump’s intention in passing the executive order, but it turns out the IRS ignored him: it admitted on February 15th (a month after the order was signed) that it was still collecting mandate taxes, and that it’s sole response to the order has been to shelve a planned crackdown on tax evasion related to the mandate.

The authors point out why this should be unsurprising: government agencies are required to enforce the laws of the land, and there is a long-standing history of jurisprudence forcing them to. They point out that in fact

it is one thing to delay temporarily a legal requirement or to phase in a new law to facilitate adjustments by affected people or entities; it is quite another to refuse outright to enforce a law already in force, with the aim and effect of undermining that law. The Supreme Court has said that courts may step in to correct any such “abdication” of the executive branch’s duty to faithfully execute the law.

Apparently the highest court in the land has built up a body of precedent which requires government agencies to enforce government law, and the authors seem quite confident that if agencies don’t do this, court action would likely force them to. They go further than this, though, considering the hypothetical case in which the IRS bends the definition of “financial hardship” sufficiently to enable anyone affected by the mandate to be exempted from it on the basis of “financial hardship” (apparently some devious Republicans had considered this oily move). They write:

In a critical 2015 Supreme Court case upholding nationwide availability of ACA “premium assistance” tax credits for eligible low-income insurance purchasers, Chief Justice John Roberts held that courts and agencies must interpret and apply individual provisions of a law — indeed, of the ACA in particular — so as to further its overall “legislative plan.” Roberts concluded: “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. . . . [W]e must interpret the Act in a way that is consistent with the former, and avoids the latter.”

This might seem quite reasonable to outsiders, but apparently in America the idea that government agencies must act according to the legislative intention of the law of the land is novel and requires clarification from the Supreme Court.

(Also note that this statement was made by justice John Roberts, a conservative judge appointment by Bush Senior, not one of those quisling liberals who think all toilets should be unisex because they’re radical feminists!)

In conclusion the authors are unconvinced that Obamacare can be undone by administrative action alone, though they concede it could become less generous and function less smoothly as a result of meddling. But the Republicans need to be careful here, since administrative overreach in this regard is likely to be punished by the courts, stacking further humiliations on Trump’s already woeful record of mistakes and inactions. Worse still, there is a big and growing split in the Republican movement over Obamacare, and signs that some of the 19 states that resisted the Medicaid expansion are going to cave, further entrenching Obamacare’s role. In particular Kansas, whose economy has been completely wrecked by Republican Crazy Caucus economic ideals, is desperate for money and is very close to taking the Medicaid expansion because balancing the budget will require the extra money. Virginia’s governor is also trying to get that state covered, and activists are using failure to take the expansion and its associated funds as a stick to beat Republicans locally. With Trump’s popularity nosediving, the collapse of the American Health Care Act showing the impossibility of reform through Congress, and many of the areas that voted for Trump most vulnerable to executive action, it is unlikely that vulnerable Republicans are going to want to push this issue at a local level. So the conclusion of this opinion piece in the NEJM is that while Obamacare won’t work as well under Trump, it is unlikely to be seriously damaged. And the longer it continues to function, the harder it will be for Republicans to repeal it or to continue to even talk about it. My guess is that over the next two years – and especially as the mid-term elections approach and it begins to look like a wave election is going to swamp a lot of Republican congress people – we will see more states take the Medicaid expansion, and moderate Republicans begin to talk strong talk about repairing the existing law rather than destroying it. Whether any of them survive the mid-terms will be another question entirely – but if they don’t, they will be replaced by angry Democrats, raising the possibility that after a wave election in 2019 the Dems might be able to force a veto-proof bill across Trump’s desk, requiring him to sign a public option into law.

Regardless of what happens at the next election, though, it appears that there is no easy way for the Republicans to undermine Obamacare enough to destroy it, and it would be increasingly reckless of them to try. Obama’s legacy looks to on increasingly solid ground, and I think it’s now safe to say that he was one of the greatest of the modern presidents. Who would have thought a Kenyan Muslim could go so far!?

What the American people have to look forward to

What the American people have to look forward to

We’re a week away from the inauguration of the 45th President, but the Senate and House seats have changed so that the Republicans now control both houses of Congress, and one of their first actions has been to begin repealing Obamacare. They’ve been salivating over this prospect for six years and making a big fuss about it, as have all their adjutants in think tanks and conservative media, so you would think they would be ready to roll with a coherent plan. Unfortunately it appears that they don’t, and the first week of their attempts to begin the process have been rather shambolic. Since they don’t control 60 Senate votes they are trying to enact the repeal through some arcane process called reconciliation, but that is just the start of the rolling drama that is coming; Vox has an explainer about the whole process, and is running a fairly good series of articles watching as the Republicans attempt to wreck Obama’s signature achievement.

The Republicans’ first plan seemed to be “repeal and replace”, in which they would unravel all the key parts of Obamacare now but put some kind of deadline on when they would take effect, then begin working on a replacement plan in the meantime. Unfortunately this was patent madness, that they were warned about for months, which would tip many insurance markets into a death spiral and create chaos for both insurance companies and millions of insurance holders. Trump stepped on this with the announcement that repeal and replacement would happen simultaneously and soon, which is something of a problem for the Republicans since they don’t have a plan and working one up in a couple of weeks is going to be kind of challenging (Obamacare took about 15 months to happen, I think). Even more challenging for the Republicans is their lack of a filibuster-proof majority in the Senate – they can repeal the law’s components with 51 votes, but they can only put in place a replacement with 60 votes. If the Democrats decide to act in exactly the same way that the Republicans have for the past 6 years, they will prevent any replacement plan for the next two years, and unless the Republicans can hold them responsible in the mid-terms, potentially kill any future replacement. This would be a disaster for the Republicans, since they would create an insurance death-spiral with no ability to legislate a repair, and go to the mid-terms with several million people suddenly losing their insurance. Given this their choices all seem very unpleasant.

This is incredibly irresponsible politics. Health care reform has been a Democratic party priority – and part of national debate – since the 1990s, and Obamacare was passed in 2010. The Republicans have had 25 years to think about this stuff, and have tried more than 50 times to repeal Obamacare while they were in opposition, yet over that whole time they haven’t come up with a single plan that will do anything to improve health insurance coverage. One Republican even admitted that the plans they have tried to pass during Obama’s administration were only pushed because they knew they wouldn’t get passed – they aren’t serious plans. Paul Ryan has been saying the Republicans will release a plan “soon” for years, and although there are a couple of different ideas floating around out there none of them is near the level of a properly designed plan – and none were pushed during the election. The Heritage Foundation was able to scour the whole country looking for complainants in a Supreme Court case – and fight that case – to gut one part of Obamacare, but didn’t appear to have time to come up with an alternative plan that was worth putting to Congress. The Republicans have known this day is coming for at least six years and they have nothing coherent to offer the American people. We all know the reason for this, of course – Republican political ideology simply cannot produce a reform of the American healthcare system that will give more people affordable coverage, because the Republicans’ fundamental position is that government should not be interfering in healthcare markets, and it is impossible to make healthcare affordable and accessible without extensive government interference in markets.

As if that were not bad enough, their president-elect campaigned on a promise not to cut medicare or medicaid, and recently his spokesperson said that no one would lose their existing plan (a promise that has been held against Obama by Republicans for six years!) Trump has also said he likes Obamacare’s provisions on pre-existing conditions. So now the Republicans have to come up with a free market plan that somehow keeps Medicaid in place, doesn’t take away anyone’s insurance, and forces insurance companies to cover pre-existing conditions, while bringing prices down and giving individuals greater choice (the latter two points being raised by Paul Ryan recently as part of what he described as a “rescue mission” to make health care more affordable than it is under Obamacare). And if they follow Trump’s timeline they have to do it in a few weeks or months.

It’s not clear what colour everyone’s unicorn will be, but we know it will be a free market unicorn.

So what can we expect this plan to contain? It’s not clear, because there have been multiple Republican “plans” or “policies” in the past couple of years, but based on the major ones that have floated around and some of the major policy discussions we have seen, the plan will likely include some or all of the following.

  • Abolishing the mandate: The mandate is the Obamcare rule that hits people with a tax penalty if they do not take out health insurance, in an attempt to force young and healthy people to take up insurance. This mandate is key to Obamacare, since forcing young and healthy people to take up insurance will ensure that the insurance risk pools are large enough to keep costs down and keep insurance companies viable. The mandate hasn’t been as successful as its planners envisaged, probably because the plans young people are likely to choose to take up are “Bronze” plans with very poor benefits, and many young people probably don’t think they’re worth the effort of filling in forms, given the size of the tax penalty. Republicans hate the mandate and want to get rid of it but of course don’t have an alternative method for forcing people to take up health care. If you abolish the mandate but force insurance companies to cover people with pre-existing conditions then they have to raise prices for everyone else – which means the care won’t be affordable, a key goal of Ryan’s “rescue mission.”
  • Deregulating insurance markets: Trump was big on allowing insurers to operate across state lines, and most Republican plans want to see some kind of reduction of conditions on insurers. In the repeal of Obamacare this will likely involve removing the restrictions placed on plans that can be marketed on exchanges – when Obamacare was introduced, a set of minimum standards was established for insurance plans which guaranteed people buying them would get a certain minimum level of benefits, and enabled people to choose between plans that were rated as either Bronze, Silver, Gold or Platinum. By deregulating markets and the rules on how insurers market their plans, the insurance companies will be able to return to the pre-Obamacare era of selling absolutely shonky packages at a low price – which, if they’re required to offer coverage to people with pre-existing plans, is the only way they’ll cover their costs. Many Republicans also think insurance companies should be able to compete across state lines, ostensibly because this will increase competition in smaller states and rural areas where currently only one insurer operates, and also to allow more mergers. This is unlikely to encourage competition in the long-term, but will lead to large insurers merging and creating multi-state monopolies – monopoly pricing being another way to cover costs. There is no universal health coverage system in the world which operates successfully with a deregulated private market, and it’s not going to magically happen in the USA.
  • Reforming subsidies: Another aspect of some Republican plans has been to change subsidies so that they are not income-based. Currently under Obamacare anyone with income below a certain level receives a subsidy towards the cost of their health insurance, with the subsidy growing as income decreases, to ensure the plan remains affordable. This is the natural compensation for the mandate, and is one of the pillars of Obamacare. Republicans like Tom Price have proposed replacing these income-based subsidies with age-based subsidies, which means Bill Gates gets the same subsidy as a minimum-wage 61 year old labourer in Louisiana. This policy is part of a new rhetoric the Republicans are developing based on “equality of access” rather than equality of coverage. The natural consequence of this will be that poor people will decline to take up insurance, since the subsidy won’t be enough for them – especially in a deregulated market with no mandates.
  • Block-granting medicaid: As part of Obamacare the Medicaid program was expanded, with states being offered financial support to extend Medicaid to a larger pool of people (Medicaid is the USA’s free health coverage for very poor people). Republicans hate this because it’s straight-up welfarism, and the Heritage Foundation ran a successful challenge in the Supreme Court that enabled states to refuse the expansion. Unfortunately for the Republicans a lot of states – including some Republican-ruled swing states – took the expansion, and about 5-12 million people gained health coverage through it (estimates vary). If the Republicans take away this expansion they will piss off a lot of people, including people in Republican swing states that could damage them in future elections, so they need to find a way to take away the Medicaid expansion from safe Democrat and safe Republican states, and enable swing Republican states to keep it. Their answer is block-grants, in which the money for Medicaid is granted to the states but not earmarked for Medicaid only. Since some deep Republican states like Kansas and Louisiana are in big financial trouble, they can then use the Medicaid money to bail out their failing state finances, and pare back Medicaid in their states; while swing states can keep using the money for Medicaid and avoid creating a large pool of angry voters. Even then it is likely that the block grants will be smaller than the funds currently available so all states will have to cut Medicaid coverage or reduce the quality of care offered – but the Republicans don’t care because Medicaid is for poor people, so just need to make sure they don’t cut it away from so many people that it swings an election.

Any single one of these reforms in isolation would probably be enough to radically roll back recent gains in insurance coverage in the USA, but it’s likely that whatever misbegotten, evil plan the Republicans come up will have all of these reforms to some extent. This is why Republicans have started talking about equality of access rather than coverage, because if everyone theoretically has a subsidy and the right to purchase healthcare, then you can blame them if they decide they can’t afford it. In this rhetorical model they will force insurers to cover people with pre-existing conditions, abolish the mandate, deregulate the market in such a way that insurance companies can offer absolutely shonky products at inflated prices, cut subsidies so that no one takes them, and then blame poor people for “choosing” not to take up the healthcare they had “equal access” to.

It remains to be seen whether the Republicans will be able to get away with this – either because Trump takes a personal interest in a reform that actually works, and vetoes anything they offer, or because the Democrats drag out the replacement strategy until they can again win control of Congress. In any case it’s going to be fascinating to watch the Republicans try to behave like responsible adults now that they have the levers of power, even though for the past six years they have shown themselves pathologically incapable of dealing with the contradictions and challenges their ideology has thrown up.

Of course, what’s “fascinating” to those of us who live in countries with sane governments and universal health coverage, is going to be very terrifying to a very large number of poor and chronically ill people in America. Good luck to all of you!

This week’s Journal of the American Medical Association features an excellent article by Barack Obama, reviewing the implementation and outcomes of the Patient Protection and Affordable Care Act (“Obamacare”). Obviously large parts of this article were likely written by someone else, since Obama is too busy with his secret Muslim conspiracies to write a full paper, but some parts – particularly the part on why and how he implemented it – do seem to be written in Obama’s voice, which is nice to see. Vox has a brief report of the article, indicating that it is the result of a six-month Whitehouse review of the legislation and focusing on the implications of one of Obama’s recommendations (for a public option). Like most non-Americans I don’t find the recommendation of a public option to be particularly controversial or striking, so I’m not interested in revisiting it here. Rather, I’d like to briefly discuss the article’s findings on Obamacare’s achievements, take a moment to rant about what a terrible statistician Obama is, and look at some of the other conclusions he draws from his success. I will quote some parts of the article and put up one figure, but I won’t go quote too much or put up too many figures because JAMA probably wouldn’t like that. I would like to say that this is a very easy-to-read article and the choice of figures and data presentation is largely very strong – Obama certainly knows how to make a case. Also note the author affiliation: “President of the United States, Washington, DC”. Classic.

Reduction in the uninsured

In Figure 1 of the paper Obama presents the long-term trend in the proportion of Americans not covered by health insurance, and shows a huge drop after the implementation of Obamacare, from 15% to below 10% of the population. That is a huge achievement, which he states corresponds with roughly 20 million Americans receiving health insurance who would not have received it if Obamacare had not been passed. This still leaves about 30 million people without health insurance in 2015, a pretty shocking number for a developed country (in contrast, Japan has about 98% coverage and the UK about 100%). In Figure 2 Obama shows that the Medicaid expansion was responsible for a major reduction in the uninsured, by comparing the percentage drop in the uninsured in states that accepted the Medicaid expansion and those that didn’t. This drop in the uninsured increases with the proportion of people who had no insurance before the implementation of Obamacare: in a state that had 20% of its population uninsured in 2013, we see a 10% drop in the uninsured rate if the state accepted Medicaid, compared to 5% if it didn’t (these are percentage point drops, too, meaning that the proportion uninsured halved in the Medicaid state!) Obama doesn’t attempt to estimate the total number of people missing out on insurance due to the recalcitrance of the 21 states that refused to accept the Medicaid expansion, but I think the implication is obvious.

Obama’s sad statistics

Figure 2 annoys me because the straight lines shown in the plot are from an ordinary least squares regression of percentage point drop in uninsured against pre-intervention proportion of the uninsured. The straight line fit for non-Medicaid states is quite poor, because of course the relationship between percentage point drops and their starting point is non-linear. Obama would have been better served to take the logit transformation of the proportional drop, fitted a straight line model to that, and then back-transformed the resulting prediction to get two pretty s-shaped curves in his figure. I guess his article wasn’t subjected to JAMA’s usual rigorous peer review standards …

(In truth this isn’t a big deal in this case because the relationship in the data is so obvious that it doesn’t really matter how you handle it. My guess is that this figure was prepared by one of the people doing the review of Obamacare, and I would like to think that the people doing that review can do higher quality work than this!)

The three dimensions of coverage

The three dimensions of coverage

Mixed results on financial protection

Insurance is only good if it covers the services you need and offers financial protection. In health financing we talk about depth, height and breadth of coverage, which are depicted graphically in the figure above that I cribbed from an LSHTM course on financing health. Reducing the number of uninsured increases the breadth of coverage (the proportion of the population covered) but if this comes at the expense of the depth of coverage (which services are covered) or the height of coverage (the proportion of financial protection people receive) the overall benefits of the plan may be limited. Obama tackles these three dimensions in his paper, though he doesn’t use the WHO framework described in the figure above. Regarding depth, he states

Coverage offered on the individual market or to small businesses must now include a core set of health care services, including maternity care and treatment for mental health and substance use disorders, services that were sometimes not covered at all previously

Which indicates that Obamacare has forced minimum standards of coverage onto organizations that offer health insurance. This is something that people living in countries with robust universal health coverage (UHC) systems take for granted, and it’s really hard to imagine having to navigate a health insurance market where this isn’t the case – at the very least setting up a core set of covered health services reduces the risk of mistakenly choosing a health insurance package that doesn’t help you with the things you’re most likely to need it for. Obama’s language here implicitly suggests that the core package of services covered under Obamacare is an expansion of those in the previous system, but he doesn’t present any evidence that this is the case for all plans, or even in general – it could be that in adhering to these core requirements insurers have dumped some other coverage from their plans. I haven’t ever seen any research on how to assess the best services to include in a plan, or how to compare two plans that have quite different and non-overlapping benefits, so I don’t know how to assess this aspect of Obamacare (or if it can be assessed), but from the point of view of consumer protection having a guaranteed core of services seems like a good idea.

Obama's Figure 3

Obama’s Figure 3

On financial protection – the height of services – Obama makes a strong case that his legislation has been very protective. Figure 3 in the article, shown above, shows the trend in the proportion of workers enrolled in an insurance scheme that has no annual upper limit on the amount of out-of-pocket payments they must make. Out of pocket payments for health care are the main source of financial risk for individuals, and typically arise when someone has no health insurance (so must pay everything from their own money) or has health insurance with very high co-payments and deductibles, a common problem in the USA before Obamacare. Obamacare required insurers to put a cap on these out of pocket payments, and the effect on the proportion of workers exposed to unlimited financial risk is obvious in this chart. Unfortunately in a later figure we see that average out of pocket expenses haven’t changed much over time, suggesting that the annual limits that insurers placed on out of pocket payments were set high enough as to not effect the majority of such payments. To properly explore this issue we need to see data on health-related financial catastrophe, distress financing, and impoverishment due to health expenses, which to the best of my knowledge have never been adequately reported for the USA. We see some hints of this in other parts of the report, where Obama notes that the proportion of people not seeking care because they can’t afford it is down, and the average size of Medicaid debts is also down, but the picture here is incomplete. My suspicion is that a lot of healthy people have picked up bronze plans that offer them financial protection in only the most extreme cases, leaving them wearing significant costs for routine care. This isn’t in itself necessarily a problem, but to properly understand the financial protection and equity effects of the law we really need to see measures of who gets screwed by very high costs and how, rather than seeing trends in average costs.

Lessons from this policy battle

Obama concludes, unsurprisingly, that his policy has been highly effective, and I agree with this conclusion. It’s definitely not the best UHC plan out there, and even before it was rewritten by the Supreme Court and repeatedly undermined by Republicans it wasn’t a great plan, but it has achieved a lot and a lot of Americans are much better off for it. He states in the conclusion that he now wants people to accept it as the law of the land and move on to ways of improving it, but first he makes this comment about the challenges of working in American politics which gives some idea of how much of an achievement even this compromised package is:

The first lesson is that any change is difficult, but it is especially difficult in the face of hyperpartisanship. Republicans reversed course and rejected their own ideas once they appeared in the text of a bill that I supported. For example, they supported a fully funded risk-corridor program and a public plan fallback in the Medicare drug benefit in 2003 but opposed them in the ACA. They supported the individual mandate in Massachusetts in 2006 but opposed it in the ACA. They supported the employer mandate in California in 2007 but opposed it in the ACA—and then opposed the administration’s decision to delay it. Moreover, through inadequate funding, opposition to routine technical corrections, excessive oversight, and relentless litigation, Republicans undermined ACA implementation efforts. We could have covered more ground more quickly with cooperation rather than obstruction. It is not obvious that this strategy has paid political dividends for Republicans, but it has clearly come at a cost for the country, most notably for the estimated 4 million Americans left uninsured because they live in GOP-led states that have yet to expand Medicaid

Here he hasn’t gone into great detail about how the Supreme Court rewrote the Medicaid expansion part of his bill, and he has notably understated the effect of obstructionism on the Republicans, but his central point is clear: this legislation could have been better if Republicans would just have supported it, or contributed in any way at all to a constructive debate on health care. Five years have passed since the bill was first introduced to Congress, and Obama has had enough time to review its effects and write a JAMA article on it, and in all that time the Republicans have tried repeatedly to repeal it yet are still to come up with an alternative health care plan. Today they released their convention platform, and as reported by Vox it doesn’t include an alternative health care plan – in an election year. This is beyond juvenile politics, and in any other democratic polity a party that cannot come up with a coherent health policy would be treated as a joke. This is the background of Obama’s legislative efforts.

Finally, Obama makes the point that people working in health financing understand well: that UHC is about a pragmatic pathway to financial protection for everyone, not about an ideological commitment to a specific means of getting there. He says:

The third lesson is the importance of pragmatism in both legislation and implementation. Simpler approaches to addressing our health care problems exist at both ends of the political spectrum: the single-payer model vs government vouchers for all. Yet the nation typically reaches its greatest heights when we find common ground between the public and private good and adjust along the way. That was my approach with the ACA. We engaged with Congress to identify the combination of proven health reform ideas that could pass and have continued to adapt them since. This includes abandoning parts that do not work, like the voluntary long-term care program included in the law

and in this respect I also agree with him. I suspect that if the Republican party were a real political party and not a clown car, they would have recognized the importance of reform and accepted Obamacare as a practical model that protects the free market nature of the existing health system. For those Bernie dead-enders who refuse to accept compromise, nothing except a full single-payer public plan will do, and while this worked completely fine in Australia, Canada and the UK it just won’t make it in the USA, which is probably why those Berniebros find themselves in their current cul-de-sac. Obamacare is an artful example of the importance of compromise in making good health policy, and the value of practical planning over ideology. Shamefully for the Republicans and unfortunately for the country, it hasn’t been able (yet) to achieve its full promise. Obama made a few suggestions for how it can, but ultimately his particular recommendations are less important than the simple need for a return to rational policy-making by the Republicans. Whoever the next president is, she is going to want to begin tinkering with Obamacare to make it better, and hopefully the Republicans will by then have recognized that it is their responsibility to contribute positively to that process, for the good of all Americans.

I don’t see that happening, but like Obama, I can always hope …

In the first Republican debate all the candidates were asked if they would rule out an independent presidential bid, and Donald Trump was roundly decried for refusing to do so. In hindsight, perhaps the better question would have been “If a batshit insane dude captures the nomination, will you endorse the Democrat candidate?” Because it is looking increasingly likely that a batshit insane dude is gonna steal the Republican candidacy, and if he wins the whole world is in a dark place.

It’s very clear now that a significant proportion of the Republican “base” are sympathetic to a campaign that is, essentially, fascist. Some “moderate” left-wingers are trying to claim that Trump is not fascist, and are splitting hairs over whether he is really a narcissist or just “leading America down a fascist path” but I think it’s clear from his latest little announcement that the F-word is no longer hyperbole. Lots of Republicans have gone ballistic over his plan to prevent all Muslims from entering the USA but some of the front-runners have been careful to avoid criticizing him directly, and it’s not clear whether the objection from some of those Republicans is based on respect for “American values” or fear that such a strategy would prevent them from winning an election. It’s certainly clear that for a significant proportion of Republican primary voters the much-vaunted Republican ideals of freedom of religion, freedom of speech and freedom of association are running a distant second to any political strategies based on racial discimination and nebulous notions of “strength,” mingled in with a healthy dose of imperialism.

This is, of course, the consequence of a long period of Republican craziness, that has mixed racist dog-whistling with openly racist attacks on Mexican migrants and overseas Muslims, along with muscular support for torture and the police state and racism and violence towards internal enemies. This is the environment in which Elliott Rodgers, Robert Dear and Dylan Rooff enacted their openly racist or misogynist militarist plans, and the environment in which some sizable minority of Republican voters have shifted towards an openly fascist platform. For all his bluster and popularity, Trump is a latecomer to this scene of frenetic hatred and partisan divisions: he is a well known birther, but his birtherism is hardly unique or especially well-represented, and when he says there is “something wrong” with the president he is drawing on a deep vein of discontent that is obviously built on racist origins. Although we can hope, there’s no reason to think his latest utterances are going to sink his campaign or discourage his followers.

I think some of the Republican elders must be starting to think that they have woken a slumbering giant here, and worrying that when it starts stomping about it isn’t going to be particularly careful about where it puts its feet. Certainly the Bushes are worried about it, and given how reviled they are by the base I think it’s safe to say they didn’t have much part in the creation of this monster. But a lot of them are up to their necks in it. Cruz, Huckabee and some of those doyens of hate radio, the Limbaughs and Hewitts, need to face the fact that they built this beast, and they’re now caught in its storm. But others, like Christie and Kasich, for all that they’re oily operatives that anyone with any sense wouldn’t go near in this political universe, I think they realize that this beast is going to devour its own party first, before it bursts out of the chest of American democracy and starts eating everything in sight. They want to stop it.

I think they may find that they can’t stop it without interfering in the nominating process. I think Trump is going to win some states, and if they’re lucky he won’t get a clear majority, but there’s a chance he will, and then they face a choice: refuse to nominate him and have him run third party, essentially splitting the vote; or let him be the candidate and watch him either win and destroy the country (unlikely) or lose massively and hand the Democrats a massive majority. In that case I think it’s likely that Trump’s candidacy will spoil the House and Senate elections, and the Republicans risk losing control of all three branches of government. I don’t think the Republicans understand just how toxic this primary is going to be for them, and my fundamental faith in humanity tells me that the longer Trump is in charge, the worse the general election will be for them in every house.

The basic problem here for the doyens of the Republican party is that they have a crazy-wing, and they need to destroy it. Take Cruz as an example. Trump’s antics have made Cruz look almost reasonable, but he’s actually a complete fruit loop. Yesterday he held hearings in the Senate committee on science, of which he is somehow the chair, which all the serious Republicans didn’t attend because they hate him, and which were basically a joke. Steyn was in attendance as an expert on climate change, but didn’t get a chance to speak because Cruz was outnumbered by minority Democrat members, because the other Republicans didn’t want to be there. So instead of having a chance to discuss a Republican approach to climate change based on free markets and innovation, they had some grandstanding about how it isn’t real, and Steyn got some free publicity for his doomed attempt to defend himself from libel charges that will absolutely destroy him. This isn’t how serious people behave, it isn’t how policy is made, and it isn’t a serious base for a political party. Senior Republicans know this, but they don’t know what to do about it.

Trump offers these Republicans a chance to take their party back from the religious nutjobs and Tea Party lunatics. But first they need to find a way to destroy those lunatics, and what better way than to show that they are a tiny minority of the electorate. I think at the very least the senior figures in the Republican party need to make it clear that they won’t support Trump and that if he wins the primary they will campaign against him in the general. They should lay down the line on policy and make clear why they don’t support him. I think, further, that they should endorse the democrat candidate as a strategy for saying enough is enough, and when Trump gets sweet fuck all of the general vote they can start rebuilding – an 8 year process with a real political movement at the end of it. Once Trump lays waste to their party the elders can come forward with a plan to rebuild it based on coherent strategies on ISIS, global warming and healthcare, strategies that may not be what my reader(s) or I want but are generally consistent with vaguely intelligent notions of how to get shit done.

The alternative is that Trump gets selected, leading figures in the party like Cruz refuse to distance themselves, and the Republicans get smashed at every level in the elections, losing complete control of the government. That may seem overly apocalyptic, but bear this in mind: Even though people say he lost the Democrats the senate in the mid-terms, he actually did exceptionally well for a president in his second mid-term. Mid-term elections in the second term typically go really badly for the incumbent and Obama did a lot less badly than the historical average. The Democrats are more popular than they look, and if Trump wins the primary there is every chance of a bloodbath. If the Republican leadership want to take back their party, now is their chance, but they need to show leadership and moral backbone, something in precious short supply in the Republican party. If they don’t act to crush him in the general, the Republican party is going to be toast for a long time to come. Or worse still, America will become a fascist state.

It’s time for the Republicans to show they love their country and not their donors.

The New England Journal of Medicine was released today, with its first assessment of the fallout of the Supreme Court’s decision not to gut Obamacare. Policy analysts writing in the NEJM have been generally supportive of Obamacare, and so of course they’re happy with the result, declaring that it has removed “the largest remaining cloud of judicial uncertainty hanging over the Affordable Care Act” and advocating that now the legislative agenda focus on real improvements to the established law.

The NEJM article also remarks on the importance of assessing the text of the legislation in its full context, not just the strict text of the specific provision. It argues that this is a well-understood principle of Supreme Court jurisprudence, and gives the following example:

An earlier example of this principle comes from the Court’s 2000 decision in FDA v. Brown and Williamson, which King cites or quotes several times. Brown and Williamson held that (before more recent legislation) the Food and Drug Administration (FDA) lacked authority to regulate cigarettes as devices that deliver the drug nicotine. Despite the FDA statute’s broad literal definitions of “drug” and “device,” the Court concluded that “considering the [statute] as a whole, it is clear that Congress intended to exclude tobacco products from the FDA’s jurisdiction.”

This past decision also makes perfect sense to me. While tobacco is clearly a drug, the FDA is not charged with monitoring recreational drugs, and tobacco products should be monitored separately or the FDA’s authority extended to them through an act of Congress.

Interestingly, this is also what the architects and defenders of the King vs. Burwell case thought, back when the FDA v. Brown and Williamson case was decided, and repeatedly since. For example, in a 2007 post the Heritage Foundation cites it as an example of an exception to the trend towards an administrative state. I can’t find any evidence that the legal experts at the Heritage Foundation have decided that this example of the Supreme Court not showing “deference to agencies” must have been wrong due to its willingness to invoke “context,” in which (to quote Scalia) “words have no meaning.” Similarly, the Cato Institute has referred positively to the appeal to context in FDA vs. Brown and Williamson in both its 2006-2007 and 2008-2009 Supreme Court Reviews (see page 201 of the 2006-2007 Review, or a footnote on page 126 of the 2008-2009 Review). The Cato Institute has also issued multiple Amicus Briefs for other court cases where they think that the FDA v. Brown and Williamson case might help to enforce the importance of context. For example, in their Amicus Brief on Texas vs. United States of America (Case 1:14-cv-254) , for example, they argue (citing the case):

The court must “fit, if possible, all parts [of the statute] into an harmonious whole” and use “common sense” to determine the scope of Congress’s delegation to an agency.

Interesting how much their opinion of how the Supreme Court should interpret statutes has changed in just a short time: their amicus brief to that case was submitted in January 2015 but by July 2015 they think that reading the law in its overall context

establishes a precedent that could let any president modify, amend, or suspend any enacted law at his or her whim

What a difference 6 months makes! Apparently now “common sense” is no friend of liberty, and in following the precedent of laws that the Cato Institute relied on heavily (until this year!) the Supreme Court has made it possible for presidents to do anything they want. I guess words really do mean anything these days …

But it’s not just the Cato Institute that appears to have revolutionized its view of the role of context and common sense in the past little while. Four of the majority in King vs. Burwell were dissenters in FDA v Brown and Williamson, the common judge of the two cases being Roberts. Indeed, Scalia agreed fully with Roberts back then that common sense was important, but now appears to think it’s “applesauce” – and the Heritage Institute thinks that “liberals” were shocked then, and applauding now. About, presumably, the same thing.

Where does this leave us? Should there be a common sense test for judges to see if they all agree? Or should we perhaps just roll dice to determine the outcome of Supreme Court decisions where context and common sense are required? Or, perhaps, we could accept that the Supreme Court as it currently works is just an ideological rubber stamp, and the battles in Congress to stack it are way more important than the judges who are on it. It might be of particular value to Republicans to get some bipartisan agreement on this quickly: they’re going to lose the 2016 election after Donald Trump eats a puppy on live TV, and Hilary Clinton is going to get the chance to appoint a couple more judges, which in combination with Obama’s legacy will mean that the nation will be at the mercy of a liberal majority definition of “common sense” for the next 20 years (or 40, if Clinton can find a few young and talented female judges to nominate). Perhaps a move to introduce fixed term limits, and a more objective and less partisan nomination process, might be a good idea. How about 12 year term limits, and nominees for replacement have to be recommended by a consensus of the Supreme Court Bench itself? That would iron out both the kinks in the nomination process and the risk that a single president could dominate the court for years after he or she has gone to the Great Presidential Library in the Sky – a domination, we should note, that will grow over time as life expectancies do.

Of course it’s not going to happen, so Americans will continue to be subject to the tyranny of a system that is clearly broken, invented by a bunch of short-sighted slave-owners a couple of hundred years ago and completely unsuited to the modern world, and now used as a battleground for political retribution rather than solid constitutional decision. Still, at least the USA is on the way to universal health coverage!


Today the Supreme Court found in favour of Obamacare, as I had predicted,and the wheels fell off the Republican clowncar. This is great news for America, as it now means that the law has overcome most of its significant Supreme Court challenges and become settled fact, and the 10 million people who are benefiting from it can continue to have some faith that they can get the healthcare they need. But this is a disaster for the Republican presidential campaign, coming as it does before the primaries, because it means that all 10 riders in the clowncar will now have to rampage through the primaries promising to repeal Obamacare. Whoever wins that hilarious circus of stupidity is then going to have to go to the election with a record of promising to repeal the law – which is going to really worry 10 million people who depend on it, and force them all to vote Democrat.

My guess is it’s going to be a Clinton-Bush battle, pitting one of America’s most popular politicians (Clinton), with a record of rational policy-making in healthcare, supported by the best get-out-the-vote campaign team in American history, against a man who has to hide his last name and is starting the election with a possible 10 million vote deficit. Even putting aside the deep, cutting irony of a democracy holding an election campaign between the scions of two dynasties[1], Bush trying to worm and squirm his way out of promises to repeal this law is going to be very entertaining. Furthermore, some of the states where people are benefiting most from the Medicaid expansion and federal exchanges are conservative or swing states like Alabama, and those 10 million voters are likely to be disproportionately clustered in them.

The alternative for Republicans is to – don’t laugh – come up with an alternative health care plan, something they have signally failed to do for the past 8 years, despite repeated complaints about how terrible and ineffective and bad and fascist Obamacare is. Sure, they have a few op-eds on the matter but they haven’t done anything resembling serious policy development and they’re already in the primary stage. Contrary to journalistic silliness in the USA that the Republicans are “tripping over themselves” to make new laws (I kid you not, a journalist from Vox actually wrote that!) the Republicans are not in any way serious about health policy, and no plan they come up with will be anything except terrible, which is why they aren’t trying. Their “plan” for America’s uninsured is to leave them uninsured.

So what are the Republicans going to do? They seriously threaten their election chances with promises of repeal, but they will look like the idiots and fools they are if they release a plan (can you imagine Trump’s healthcare plan!?) If this decision happened after the primaries maybe they’d be okay – refuse to be drawn on the issue during the primaries because “there’s a court case” and then run for election with the promise of a plan (isn’t that what Obama did?) But it’s hard to win with the promise of a plan when you’ve already made it clear that you’re going to tear away the health insurance of 10 million people. Better the devil you know, and all that. And now any plan they do release will be compared with Obamacare – will it insure more people? Will it cost more? Will it cause millions to lose their insurance? Why should we risk it when we have a plan that is covering more and more people every day!?

I think the Republicans were assuming that their pet conservatives on the Supreme Court would deliver them Obamacare chaos, and they could then coast home to win the election on the basis that Obama had messed everything up, with vague promises of a plan that “serious” political journalists would pretend to believe. But Roberts was appointed to the Supreme Court by George W Bush, proponent of “compassionate conservatism,” and is probably out of step with the modern Republican movement (I have already read people at patterico claiming he is a closet homosexual who is being blackmailed by Obama![2]) They probably shouldn’t have bet their entire political strategy on the opinions of a couple of old men who might, actually, take their role in politics seriously. But then maybe the Republican political movement has forgotten what it means to take a political role seriously, since they’re mostly just grifters, failure and con artists, and couldn’t imagine that those old men might see themselves as bigger than their party allegiances.

Two minor side points of this decision are that 1) hopefully US politics will now begin to back away from the ideology of repeal-through-the-courts, which is fundamentally undemocratic (if you don’t like a law, repeal it through politics not the courts!) and 2) I think it’s well past time I retired the use of the word “conservative” when talking about the American right. There’s nothing about their politics, their attitude towards their institutions, or their public behavior that is conservative – they’re radical. The word “conservative” is not very useful in politics generally, but at least in Australia and the UK it refers to two broad streams of political thought that we all understand and (with a few notable exceptions like Tony Abbott) can accept are broadly trying to be responsible and politically rational. It’s no more or less meaningful than “radical” or “liberal” or “left-wing” in those contexts, though all these words are only of limited use. But in the American context it’s just meaningless. The Democrats are the conservatives of American politics and the other side is, broadly speaking, a convocation of clowns and radicals. So what’s an alternative word for the broad spectrum of anti-Democrat politics in the USA that is still meaningful to readers, but not an insult to actual conservatives? I am thinking “right wing” but is there something more evocative? Radical Constitutionalists? Clownsiders? The Idiot Wing? The Grifter Party?

The primary season hasn’t started properly yet and already the clowncar is overcrowded and looking pretty wobbly. The next couple of months are going to be simultaneously hilarious and deeply depressing. Strap yourselves in, folks, it’s going to be a wild ride …

fn1: Will Chelsea Clinton run in future?

fn2: This is interesting, right here. When the High Court of Australia ruled in favour of Aboriginal people in the Mabo dispute, there was a lot of angst but I don’t remember anyone saying that court members were being blackmailed by the government or demanding an armed insurrection (as is happening in comments at Redstate). It really seems to me like the fragmentation of US politics is complete, and there is no more common ground to be found there.