Relevant and even prescient commentary on news, politics and the economy.

WA Senator Murray Thinks She has a Deal to Save the CSR

Sen. Lamar Alexander (R-TN), chairman of the Senate health committee, said he hopes to release a bill this week, in collaboration with Sen. Patty Murray (D-WA), the senior Democrat on the committee, to fund the cost-sharing reduction payments and give states more leeway on insurance rules.”

Not sure why Senator Murray feels the need to go down this avenue when the preceding Executive Order already wandered into greater flexibility for states, states rights, and who decides what. As has been explained by the CBO, Drum, other pundits, and myself; the loss in out-of-pocket subsidies will result in increased premiums which are “still” paid for by the ACA between 138% and 250% FPL. In some cases, Bronze plans can be had for free, Silver plans become cheaper, and Gold plans offering better care and lower deductibles attainable.

Senator Murray is giving away the store if what Senator Alexander says is true. “Alexander said Murray agreed to a deal giving states ‘meaningful’ flexibility on coverage rules. Asked what the stumbling blocks to the deal are, Alexander replied: ‘The definition of meaningful.'”

We have already seen what the word meaningful means with regard to the expansion of Medicaid in some states . . . it never happened. I am hoping Senator Murray has second thoughts and decides not to go farther with her thoughts on negotiating with the Republicans as she is off base and we will be better off by not altering what is law already and it is the ACA.

Premiums will go up in 2018 as no one is going to trust Trump regardless of any deal reached with the Republicans.

Tags: Comments (7) | |

A thought for Sunday: the Rule of Gerontocracy

A thought for Sunday: the Rule of Gerontocracy

The US looks like government of, by, and for senior citizens.
President Donald Trump just had his 72nd birthday. He assumed office at age 71, the oldest person ever to do so.
In Congress, Senate Majority Leader Mitch McConnell is 75 years old.  His Democratic counterpart, Charles Schumer, is a relatively spry 66. The median age of US Senators is 63. A full 30 Senators are age 70 or older. Sixteen of them are over 75. Nine are over 80!
The oldest, Diane Feinstein of California, is 84 years old and just announced that she intends to run for re-election. Should she win, by the end of her term, she will be 91 years old — if she survives. The average life expectancy for an 85 year old woman is 6.9 years. In other words, she will have nearly a 50% chance of dying in office before she completes her term.
In the House of Representatives, Speaker Ryan is the baby of the group at age 47.  Democratic Minority Leader Nancy Pelosi is 77. The average House member is 57 years old, the oldest average ever. Over 30% of the Members are age 65 or older. Over 15% are over 70. Twelve Members are over 80!
The median age of Justices of the Supreme Court is 67. Two Justices are over 80.  One is 79. In the 19th Century, the average Justice served about 10 years. Now they sit on average close to 25 years.
In short, the majority of the leadership of all three branches of the US government are old enough to collect Social Security and Medicare.
Forget Boomers, most of the US leadership belongs to the Silent Generation, and formed their basic political opinions in the 1950s during the days of Ike and Senator Joseph McCarthy, and when court-ordered racial integration was just beginning.  And it shows.

Comments (11) | |

Leaked ICE Guide Offers Unprecedented View of Agency’s Asset Forfeiture Tactics

Via The Intercept

Leaked ICE Guide Offers Unprecedented View of Agency’s Asset Forfeiture Tactics

ICE confirmed to The Intercept that the handbook reflects the agency’s most up-to-date guidance on asset forfeiture. Agents under its instruction are asked to weigh the competing priorities of law enforcement versus financial profit and to “not waste instigative time and resources” on assets it calls “liabilities” — which include properties that are not profitable enough for the federal government to justify seizing. “As a general rule, if total liabilities and costs incurred in seizing a real property or business exceed the value of the property, the property should not be seized,” the document states.

The handbook also instructs ICE agents on the various ways laws can be used to justify the seizure of a property, and devotes a significant portion of its pages to the seizure of real estate. The manual instructs agents seeking to seize a property to work with confidential informants, scour tax records, and even obtain an interception warrant to determine whether “a telephone located on the property was used to plan or discuss criminal activity” in order to justify seizing the property.

The handbook acknowledges that civil forfeiture can be used to take property from a person even when there’s not enough evidence for a criminal indictment. There “may be third party interest that would prevail in a criminal case, but would not survive in a civil proceeding, making the civil proceeding essential to forfeiture,” the handbook states, referencing a property owner not officially implicated in a crime. “Those situations generally occur when a property owner is not convicted of a crime but is also not an innocent owner. Under criminal forfeiture, that property owner would be entitled to the return of the property. Under civil forfeiture, however, the owner would lose his or her interest to the Government.”

Noting that ICE is not alone among federal agencies in relying on asset forfeiture,

Comments (0) | |

The Incidence of the Obamacare Subsidies

The Incidence of the Obamacare Subsidies

Justin Fishel and Mary Bruce covers Trump’s dismantling of Obamacare:

The White House announced Thursday night that the administration will slash Obamacare subsidy payments to insurers. The “cost-sharing reduction payments,” worth an estimated $7 billion this year, are intended to reduce out-of-pocket costs for low-income Americans on Obamacare … House Democratic leader Nancy Pelosi and Senate Democratic leader Chuck Schumer issued a joint calling the action “pointless sabotage.” “Sadly, instead of working to lower health costs for Americans, it seems President Trump will singlehandedly hike Americans’ health premiums,” they said in a joint statement. “It is a spiteful act of vast, pointless sabotage leveled at working families and the middle class in every corner of America.”

Trump’s counter is that the health insurance companies are very profitable because they are reaping the benefits of these subsidies. I would argue that health insurance company profit margins are high in large part because we have not enforced the anti-trust laws and allowed a lot of market power. Brad and Michael Delong made this point last fall:

The United States’ Affordable Care Act (ACA), President Barack Obama’s signature 2010 health-care reform, has significantly increased the need for effective antitrust enforcement in health-insurance markets. Despite recent good news on this front, the odds remain stacked against consumers … It is not surprising, then, that in 2015 some of the largest private American health-insurance companies – Anthem, Cigna, Aetna, and Humana – began exploring the possibility of merging. If they could reduce the number of national insurers from five to three, they could then increase their market power and squeeze more profits from consumers.

Even five health insurance companies are two few. But suppose we did have real competition in the health insurance market – what would be the effect of subsidies. Let’s consider this primer on the incidence of taxes:

The tax incidence depends on the relative price elasticity of supply and demand. When supply is more elastic than demand, buyers bear most of the tax burden. When demand is more elastic than supply, producers bear most of the cost of the tax.

Most economists know this and we know how to translate this into the implications for the incidence of a subsidy. We have to admit, however, that Trump is really awful at economics. But he does have economic advisors. Trump is implicitly assuming a very elastic demand for health care or a very inelastic supply of health care. But where is his evidence for these claims? I guess when Kevin Hassett produces his “analysis, we might see a link from Greg Mankiw.

Comments (1) | |

Trump Fails To Certify JCPOA Iran Nuclear Deal

Trump Fails To Certify JCPOA Iran Nuclear Deal

I wish to be very precise here on this extremely important matter. President Trump has not “decertified” the JCPOA Iran nuclear deal.  Now Congress must ultimately be responsible. He has, after a lot of discussion and intervention by his national security team, failed to certify the deal.  This is not something that was part of the deal, but an epiphenomenon put in place by the US Congrees as part of a deal agreed to by former President Obama to get the deal through, a matter of every 90 days the US president certifying that Iran is complying with the agreement.  Two times running, President Trump certified it, confronted by the hard fact that Iran has been complying with the deal according to every official body in the world.  But, he has said he would not certify it, and reportedly he has blown up over this matter with screaming fits his c.  So his NatSec team has cooked up this partial save: OK, boy, fail to certify, putting it on Congress to really undo the deal.

In the face of way more to say than I shall here, let me point out odd items most will not. So one of those is a positive.  Even if the Congress fails to do what is right and reasonable and keeps the deal going, probably Iran will not pursue an active nuclear weapons acquisition program.  There are two reasons for this, which could easily be undone if Trump continues to insanely go after them.

The first is that this whole negotiation with Iran was an unnecessary farce to begin with.  Vilayet-al-faqih Ayatollah Ali Khamenei was issuing fatwas against the building of nuclear weapons as far back as the G.W. Bush admin.  Pres Bush even accepted two official National Intelligence Estimates (NIEs) that declared that Iran was not actively pursuing a nuclear weapons program. He did it twice.  The fatwas by Khomeini were the ultimate reason why these hard fought and deeply studied NIEs came forth, representing after all a consensus of every one of 17 plus US intelligence agencies, who have a wide variety of perspectives, some of them almost insanely hawkish.  But twice during the G.W. Bush presidency they came together to make this super official certification: Iran did not have an active nuclear weapons program, even though it had one earlier, one that dated back to the Eisenhower admin when the US supported their program under the Shah.  But, the bottom line is that while Khamenei is alive, there will be no Iranian nuclear program.

What this means is that ultimately Obama’s massive effort to negotiate a halt to the nonexistent Iranian nuclear program was ultimately a worthless empty exercise, much as I have on occasion praised it.  I mean, it was a noble and heroic and difficult effort,  Obama supported John Kerry in getting the Russians and the Chinese, as well as the EU and other obvious US allies, to go along with economic sanctions, which actually had an effect, given that Iran is actually a semi-democratic regime, so that even the hardliners associated with Khameini went along and agreed.  And beyond Iran, it was a big deal, the UN officially supporting it along with the Russia, China, UK, France, Germany, and the UN Security Council (oh, sorry, a part of the UN), as well as most of the rest of the world, aside from a handful of countries (not to be listed, although in most cases their intel/military support it).

Comments (10) | |

Enslaved to an Individualist View of Social Change

Enslaved to an Individualist View of Social Change

I note with some interest the debate over whether it is ethically necessary to refer to slaveholders as “enslavers” in order to convey our disapproval over their actions.  The obsessive use of the enslaving terminology in The Half Has Never Been Told (Baptist) bothered me at the time, and now I see he was part of a trend.

I understand the motivation—up to a point.  Anyone who participated in the slave system had a share in the responsibility for it.  It is not anachronistic to look at it this way, since many members of slave-owning households had the same feeling and chose to opt out.  Of course, this moral judgment applies not only to those who directly owned slaves, but also those whose livelihood was predicated on enslavement, which includes financiers accepting slaves as collateral and business owners producing goods for slave maintenance and exploitation.  To some extent, in my opinion, it even applies to workers for those slavery-based businesses: I’d like to think that I would never have taken such a job if I had been around back then.

Nevertheless, the insistence on language that parcels out responsibility to each participating individual implicitly distracts attention from the systemic, collective basis for slavery.  In what sense was an individual slaveholder an enslaver, personally responsible for the enslavement of his or her chattel?  An individual is responsible for whether they will be the one with the whip, but not whether individuals will be placed in bondage to someone.  The institutions of slavery, which encompassed the political, legal and financial mechanisms that defined, enforced and managed enslavement, took care of this.  Language that foregrounds individual responsibility backgrounds the institutional basis of the system.

Comments (1) | |

States Can, In Effect, Make The Treasury Pay For Cost Sharing Reductions

Many have noted that Trump has the strange idea that he can destroy the US health care financing system & people will blame Obama. I actually think he is wrong about this — many polls show that a solid majority of US adults say they will Republicans responsible (yes I know it’s unfair to think they have the responsibility just because they have all the power).

But before that comes the question of whether Republicans can destroy the ACA without repealing the bill. I think there is a weak point in their strategy (and there is no doubt this is the the Trump administration’s strategy). The Federal Government does not regulate the premiums insurance companies may charge if the participate in the exchanges. Even if only very sick people buy insurance on the exchanges, state regulators can allow insurance companies to make a profit by charging gigantic premiums. If only very sick people with income less than 4 times the poverty line buy insurance on the exchanges, then the Federal Government will pay the huge increase in premiums due to adverse selection. I don’t see any way the Trump administration can stop this without changing the law (or how they can change the law having repeatedly failed).

Already states including Oregon, California and Alaska have allowed insurance companies to raise premiums to compensate for Trump’s decision to welch on CSR payments (who would have thought Trump would refuse to fork over money that is owed ???). In particular, they are allowing increases of the premium on silver plans — the premium which determines the subsidies.

I should cite @xpostfactoid https://twitter.com/xpostfactoid who has been making this argument on Twitter.

I don’t see a limit on what state insurance commissioners could do if they decided to play hard ball. In particular, they can allow gigantic premiums without hurting people with income over 4 times the poverty line if the market segregates and some insurance companies sell only on the exchanges (to people getting subsidies) and some only directly (setting market insurance rates).

What if a regulator approved a premium of $ 1,000,000 a month ? This would create no problem for people with income under four times the poverty line — they would pay the same function of their income as now and the Treasury would pay the rest. No one who didn’t get a subsidy would come close to the exchange (or that company which is required to charge the same if it sells directly to prevent blatant fraud). Now the insurance company wouldn’t be able to keep the money — the minimum medical loss ratio of 80% means they get only 25% what health care providers get. However, unless I am confused, the excess is sent to policy holders not the Treasury.

I may be confused, but I think the only things which has been preventing this raid on the Federal Treasury are norms of fairness and a desire to not inconvenience unsubsidized upper middle class consumers by forcing them off the exchange. I’d guess the second factor is more important.

But if the alternative is a collapse of the individual market *and* Trump is, as usual, ignoring norms by not paying what is owed, then I think neither barrier will hold.

I am sure they won’t go to the blatant million dollar raid on the Treasury. But I am also sure that state regulators can (and some will) make the Federal Government bear more than 100% of the cost of Trump’s stunt.

Comments (5) | |

They are monsters

They are monsters

The President and his GOP majorities in Congress are monsters. As one commentator on NPR put it yesterday afternoon, the President’s default mode is to toss an armed hand grenade into a room in order to create chaos.  He can then pick out the most vulnerable, and use that leverage to enter into a win-lose deal.
Meanwhile, having been emboldened by the 2011 Debt Ceiling Debacle, the Congressional GOP majorities, who haven’t been able to legislate affirmatively, have become specialists in taking hostages and threatening to shoot them unless their agenda is enacted.
Trump and the GOP Congress combined have, as of this morning taken at least four hostages:
DREAMers – the DACA program is being terminated. After an initial claim that a deal had been made to protect young people who had been brought to the US as children and know of no other home, the malAdministration is now taking a hard line, refusing to protect the nearly 1 million enrollees from deportation unless it gets its entire immigration policy enacted.

SChip recipients – this program, which provides medical insurance coverage for over 8 million  lower income children, was allowed to expire on September 30.  Despite assurances from the Congressional GOP that it would be re instituted promptly, nothing has been done.

Puerto Ricans – Unlike Texas, Louisiana, and Florida, which are GOP majority states, the malAdministration never provided prompt aid to the over 3 million Puerto Ricans, and is threatening to withdraw the aid before basic services are restored.

Recipients of Obamacare subsidies – the malAdministration is refusing to make subsidy payments under the ACA to insurers who enroll those who have less than 2.5 times the income of the Federal poverty level, which includes about 7.5 million people who have enrolled under Obamacare.

That’s a total of close to 19,000,000 hostages.

Comments (4) | |

Healthcare News; ACA and CHIPs

Trump’s Healthcare Executive Order

Trump Signs Executive Order relaxing ACA health insurance rules. About a week or so ago, I had read this elsewhere, mentioned it, and was told there was no way this would happen. Similar to the three attempts to defund the ACA, Trump is doing what he says the Senate could not do and that is to take healthcare insurance away from the citizenry.

More of Trump’s Executive Order down the page.

Children’s Health Insurance Program

Also if you did not know this, the Children’s Health Insurance Program is being held hostage by the House. Rather than pass a clean bill, the House Republicans added provisions to the passage of new funding. 2017 CHIP Program funding was used up during the time period when Republicans were spending inordinate amounts of time trying to defund the ACA rather than attending to other needs of the country. Some states such as Minnesota have already run out of funds to pay for the 9 million children in the US who are dependent on this program; however, nothing appears to get in the way of the House working on a Tax Reform Budget Resolution giving $billions to 1% of the households making >$500,000 annually.

One provision put in place by Michigan Congressman Fred Upton is nonsensical and strictly for show. Mind you, Fred Upton was one of two Congressmen who tampered with the Risk Corridor Program causing premiums to rise for those in the individuals market place with incomes > 400%, Coops to go bankrupt, insurance companies to lose money, and insurance companies to withdraw from the exchanges. Today Mr. Upton proposes to increase Medicare payments for those making >$500,000 annually saying it will help offset the cost of CHIPs, these oldsters can afford it, and if they do not like it . . . do not sign up for Medicare.

Upton’s statement is cold hearted and mean except for the extra $135/ month means testing the “few” would endure. In the US there is ~1 million household with incomes in excess of $1 million annually. Few of them are old enough for Medicare and the return from the Republican proposed tax reform would more than outweigh the additional $135/month.

The Impact of Trump’s Healthcare Executive Order

President Trump’s Executive Order “directs the departments of Treasury, Labor and HHS to consider expanding healthcare coverage through low-cost, short-term health plans that are exempt from Affordable Care Act insurance market rules.” The plans would:

• Be Short Term and up to 364 days as opposed to the ACA’s 90 day limit.

• Would not have to comply with the 10 categories of minimum essential benefits or accept all applicants at the same rates without regard to pre-existing medical conditions.

• Expand access to so-called association health plans allowing employers to band together in healthcare plans and cross state lines.

• Allow the expanded association plans to market to individuals across state lines.

More than likely, the impact of the Executive Order will drive up premiums for those left in the ACA, increase premiums for those with pre-existing conditions, and increase premium costs for older citizens. Much of the increase could be covered by ACA premium subsidies; but, those with incomes > 400% FPL (~10 million) in the individuals market would bear the full cost increase.

Kaiser’s Larry Levitt said; “ Association plans exempt from the ACA can cherrypick healthy people and make coverage unaffordable for those with pre-existing conditions. Insurers will leave the ACA marketplaces as soon as they can or hike premiums a lot.”

The only thing standing in the way of Trump’s Executive Order “easing the ACA’s statutory insurance market rules” from taking place is the legal challenges. As one legal expert posited; “I do not believe you can solve this problem without changing the law. It has to be done by statute, not regulation.”

Tags: Comments (2) | |

Trump Ends CSR Payments Immediately

According to Modern Healthcare:

“In a brash move likely to roil insurance markets, President Donald Trump will ‘immediately’ halt payments to insurers under the Affordable Care Act.

Before sunrise Friday morning, Trump went on Twitter to urge Democrats to make a deal:

‘The Democrats ObamaCare is imploding, massive subsidy payments to their pet insurance companies has stopped. Dems should call me to fix!’

The Department of Health and Human Services had made the announcement in a statement late Thursday. ‘We will discontinue these payments immediately’ said acting HHS Secretary Eric Hargan and Medicare administrator Seema Verma. Sign-up season for subsidized private insurance starts Nov. 1, in less than three weeks, with about 9 million people currently covered.”

This could be devastating to those with incomes less than 250% of the Federal Poverty Limit. It is a direct attack on US citizens by a president who can not get his way politically and is meant to punish citizens and politicians alike for not following his dictates. Let me assure you, the ACA was not imploding and most of the cost issues with it were caused by Republicans such as former Alabama Senator Sessions and Michigan and Colorado Representatives Upton and Kingston tampering with the Risk Corridor Program.

However, what will happen is the differences will be picked up by increases in premium subsidies as I have said previously for those in this category of 138% to 250%. Indeed as the CBO has pointed out, it becomes cheaper in some cases to bump up to a Gold plan for some. See Tables 1 and 2. Net cost of the ACA increases by $31 billion over 10 years.

Trump asserted: “Obamacare is a broken mess. Piece by piece we will now begin the process of giving America the great HealthCare it deserves.”

The only thing broken today is the Presidency as it is occupied by a madman. One has to wonder if this is Trump’s last hurrah before indicted.

At this time, I have no polite words I can print on AB.

Tags: Comments (10) | |