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

States Fight non-ObamaCare Health Plans

The Trump administration’s new policy of expanding the sale of “short-term” insurance plans as a cheaper alternative to ObamaCare is quickly running into opposition from state regulators.

The Department of Health and Human Services is urging states to cooperate with the federal government, but instead, insurance commissioners are panning the new plans as “junk” insurance and state legislatures are putting restrictions on their sales.

State insurance officials argue that, despite being less expensive than ObamaCare plans, the short-term plans are bad for consumers and aren’t an adequate substitute for comprehensive insurance.

“These policies are substandard, don’t cover essential health benefits, and consumers at a minimum don’t understand [what they’re buying], and at worse are misled,” California Insurance Commissioner Dave Jones (D) said.

CBO Releases 2014 Long Term Budget Outlook

    2014 Long Term Budget Outlook (pdf 64pp)

While we are still waiting on the 2014 Social Security Report we do have today the release of CBO’s annual Budget Outlook which among other parts does include a chapter on Social Security. I plan to extract and post some Tables from it but in the meantime people can have their own look and draw their own conclusions. Key pieces:

p. 10 Table 1-1. Projected Spending and Revenues in Selected Years Under CBO’s Extended Baseline

Note that under CBO’s 10 year window (the one used to score legislation) non-interest spending is projected to drop from 19.1% of GDP to 18.8%. Or essentially flat, and BTW this includes spending on Social Security and Medicare. On the other hand TOTAL spending INCLUDING interest is projected to increase from 20.4% to 22.1%. With the entire difference being made up by interest payments rising from 1.3% of GDP to 3.3%. I for one would be interested in seeing and discussing the interest rate assumptions that go into that increase, perhaps it just represents some reversion of 10 year Bond Rates to the mean. Please chime in in comments.

p. 25-44 Chapter 2: The Long-Term Outlook for Major Federal Health Care Programs

Lots and lots of good stuff here. I haven’t even started sampling yet. Bon appetit!

p. 45-51 Chapter 3: The Long-Term Outlook for Social Security

Ditto. And my first stop at this particular buffet table, with reports in the next hours or days. My first focus might well be on: Table 3-1. Financial Measures for Social Security Under CBO’s Extended Baseline on p. 50. Note that while the main text does highlight the need for an “immediate and permanent increase of 4.0%” this is based on the assumption that despite all the uncertainties in the projections that we need to address the 75 year actuarial gap in one gulp. But an inspection of Table 3-1 shows that the actuarial gap for the first twenty five years is just 2.1% of payroll or 0.7% of GDP. Which might suggest to some that an plan to address the first 25 years IN the first 25 years by implementing something like the Northwest Plan’s phased in FICA increases while putting in contingency plans for actions in the decades that follow that might be more reasonable and prudent than trying to pre-fund a retirement insurance reserve 75 years in advance.

But let me turn this over to you all.

Posts I Won’t Write

Buce sends us to Der Spiegel’s description of Barack Obama’s potential 2012 opponents (“You Think This is Bad?”)

John Kay in today’s FT (no link) tells us why letting economists pontificate about finance is a Mug’s Game. The mugging being of people who are stupid enough to believe economists. (If Brad DeLong or Mark Thoma links to this one, I’ll add a link to them.)

This (from Kaplan Daily of all places, but Valerie Strauss is one of the only Bright Lights there) is probably the most important general article about standardized testing and education.

This one tells the truth and shames the devil, as it were. Those fooling themselves that vouchers and charter schools will lead to improvement in anything other than excess rents going into the pockets of the people who are hired to run them (such as Christopher Cerf, President and COO and Christopher Christie, lobbyist) either have forgotten or are ignoring history:

Decades of research have shown that not only do the for-profit, corporate models being forced on school districts from coast to coast not work, they present a separate and unequal solution, and offer huge profits for investors.

Anyone stupid enough to believe the “anti-piracy” crowd has the best interest of Creators in mind needs to mark that belief to market. For another data point (via Dr. Black), see here.

On a more positive note—not to mention having grown up watching Bob Braun as a local, afternoon talk-show host—I want to note Mr. Braun being one of the only reasons to read The Star-Ledger, and especially highlight his series dealing with ICE abusing its power (nu?) and almost preventing a girl from saving her sister’s life.

This one has a happy ending.

DC Appellate Court upholds constitutionality of Obamacare

Talking Points Memo reminds us that there are still ongoing legal issues regarding our healthcare system:

A three-judge panel on the D.C. Circuit Court of Appeals — comprised of two judges appointed by Republican presidents and one by a Democrat — upheld the constitutionality of a key section of President Obama’s health care law in a ruling released Tuesday.

Senior Judge Laurence Silberman and Judge Harry Edwards ruled to uphold the law — specifically the mandate that requires Americans to purchase health insurance — on the merits. Judge Brett Kavanaugh dissented from their ruling, but he, too, would have ruled against the plaintiffs seeking to overturn the mandate. His opinion argued that federal courts lack jurisdiction to enjoin the mandate, which functions similarly to a tax.

View Decision

Update: See Mark Thoma’s article on Why we need an individual mandate for health insurance.

Prostate Cancer Advance, and Europeans Free Riding on American Research

by Mike Kimel

There’s a story going around in the news about a new prostate cancer drug. Here’s press release:

A life-extending new drug to treat patients with advanced prostate cancer, developed by The Institute of Cancer Research (ICR) and The Royal Marsden Hospital, has received its UK license.

Abiraterone acetate, marketed by Janssen under the trade name ZYTIGA®, has been shown in clinical trials to prolong survival for men with advanced prostate cancer. An estimated 10,500 men in the UK have advanced prostate cancer that has become resistant to standard hormone treatments.

The once-daily pill officially launches in the UK today after the European Commission earlier this month approved it for the treatment of metastatic prostate cancer. Abiraterone acetate was licensed for use in combination with the steroids prednisone or prednisolone, by men whose disease has developed resistance to conventional hormone therapies and docetaxel-based chemotherapy.

Abiraterone acetate is a new type of treatment for prostate cancer that works by blocking the synthesis of testosterone in all tissues including the tumour itself, not just the testes. This testosterone would otherwise continue to fuel prostate cancer growth and spread. Abiraterone was discovered at the ICR in what is now the Cancer Research UK Cancer Therapeutics Unit and further developed at the ICR and The Royal Marsden.*

The ICR’s Chief Executive Professor Alan Ashworth says: “This drug was discovered in the UK at The Institute of Cancer Research. Its launch is the culmination of immense hard work and dedication by scientists and clinicians here and around the world. To have reached the point where thousands of prostate cancer patients will be able to benefit from this life-extending treatment is hugely rewarding.”

Royal Marsden Chief Executive Cally Palmer says: “The development of abiraterone by The Royal Marsden and the ICR highlights the national importance of funding pioneering cancer research. We are delighted our patients at The Royal Marsden have been among the first to benefit from the very latest in drug development.”

Another quote:

Results of a major international Phase III trial of almost 2,000 men jointly led by Professor Johann de Bono from the ICR and The Royal Marsden showed that patients given abiraterone acetate lived on average 15.8 months compared to 11.2 months for men taking a placebo. Pain also eased for a higher proportion of patients taking abiraterone, while side effects were easily manageable and reversible.

From the footnotes:

Cancer Research Technology assigned abiraterone acetate to BTG International Ltd, who in turn licensed it to Cougar Biotechnology Inc., now a member of the Janssen Pharmaceutical Companies.

Now, I’m not that familiar with British entitites, but as I understand it, a publicly funded university and its research hospital developed a new wonder-drug using grants from the public, a charity, and a formerly government owned but now private company. Commercialization rights eventually ended up with Janssen, a company owned by Johnson & Johnson.

How long will it be before Zytiga gets trotted out as an example of the European healthcare system free-riding on American research and who will be the first pundit to make that argument?

Fo/u/r/ive Notes

For Mother’s Day, as it were, xkcd presents The Lawrence H. Summers Memorial History of Math and Science.

Buce at Underbelly does this, probably saving me the trouble of a post. (Consider this a SlothBear moment.)

The problem I want Drek the Uninteresting—or anyone else who knows the research—to address: if we assume that mercury in the vaccine wasn’t the cause of the rise in autism, what are the causes that have been identified?

Maligning Tony Kushner by the Trustees of CUNY while he is on the cover of the current issue of his alma mater’s alumni magazine probably was not a good idea.

Update: The one I left out earlier: the Second Quarter Kauffman Economic Bloggers Survey is out (warning: PDF). I’m especially thrilled by Mark Thoma’s victory (p. 12), though surprised that the margin was so small. Suggestions that the 35% who voted for the second-best option were desperately attempting to deny incompetence are, of course, beyond the pale.

Town Hall Meetings on the Ryan Budget Raise Concerns

Various congressional representatives held town hall meetings recently, and the news channels and print media were abuzz with the lively give-and-take, including shouting matches. See, e.g., House G.O.P. Members Face Voter Anger Over Budget, New York Times, Apr. 26, 2011; Republicans facing tough questions over Medicare overhaul in Budget Plan, Washington Post, Apr. 22, 2011.

The issue–the House’s adoption of the Ryan budget proposal and its clear agenda of overturning New Deal safety nets embodied in the current understanding of Medicaid, Social Security and Medicare.

Those at or near retirement are worried that the Ryan proposal will hurt everybody. The Ryan proposal comes with frequent disclaimers about protecting the already older population and needing to act now to protect our grandchildren, a clear effort to massage the message to appeal to current grandparents. See, e.g., House G.O.P. Members Face Voter Anger Over Budget, New York Times, Apr. 26, 2011 (noting Webster’s statement that “not one senior citizen is harmed by this budget” while implying that it is necessary to prevent grandchildren from “looking at a bankrupt country”); Congressional Republicans go home to mixed reveiws,, Apr. 26, 2011 (noting North Carolina GOP Rep. Renee Ellmers’claim that “If you’re 55 and older, your Medicare and Social Security will not change”).

But the Ryan proposal clearly envisions mechanisms that would likely lead to decimation of these programs–either through turning them into limited vouchers (Medicare proposal); turning the funds over to the states to use as they see fit (Medicaid proposal) or limiting benefits (Social Security proposal) in ways that will –probably sooner rather than later– hurt everybody.

  • These proposals take place in a context of expansive, concerted attacks on these “entitlement” programs, often failing to acknowledge the historic support for these programs or their foundation in the recognition that federal support is required to protect against the abject poverty and humiliating degradation that accompanied the Great Depression;
  • Benefits for elderly and sick Americans are cut to provide savings to offset some of the loss of revenues from tax cuts for Big Business and the wealthy, both of whom already pay relatively low taxes, in what hardly seems a bargain to the working poor, the elderly or in fact the overwhelming majority of Americans who are not in the top 15% income or wealth distribution. (This in spite of Ryan’s claim that there is no huge tax cut for big corporations and the wealthy–he asserts that the proposed 25% rate is “in exchange for losing their tax shelters”. See, e.g., Evening News coverage of Paul Ryan holding Wis. town meetings, at;photovideo )
  • In spite of the high cost for the vulnerable poor and elderly of these budget proposals, they don’t appear likely to achieve their proffered rationale of reducing debt and deficits–in fact, the CBO has said that the Ryan budget proposal will result in higher deficits and bigger debt burdens over the next decade.
  • It appears shortsighted to wring one’s hands about a “bankrupt country” while considering only one potential solution, especially when that solution is highly detrimental to the most vulnerable populations, and without considering the full facts regarding the amount of debt, the ability of the U.S. to weaken the dollar further to aid unemployment and debt payment, the ability of the U.S. to raise taxes judiciously rather then merely cutting spending, or the ability of the U.S. to let the tax law play out as it is currently slated to do (with the Bush tax cuts that were extended 2 more years over their originally intended short life due to sunset in 2012). As Jim Johnson, a former Ryan supporter who has “grown increasingly disgusted” with Ryan noted, “[Ryan] says Medicare is unsustainable. I’m thinking, ‘Yeah, it’s because medical costs are out of control.’ …Why isn’t he attacking it at that level?” Congressional Republicans go home to mixed reviews, CBS
  • Any voucher system for health care will inevitably fail to cover increasing health care costs, resulting in rationing even the most basic health care by socio-economic class–the very problem that Medicare, Medicaid, and the limited health care reforms undertaken by the last Congress were intended to address. The Center for Budget and Policy Priorities concluded that out-of-pocket medical costs would skyrocket for low-income seniors; the Washington Post’s Fact Checker Glenn Kessler (in GOP Lawmakers tout Medicare reform by stretching a comparison to the health benefits they receive, Apr. 29, 2011) notes that the CBO analysis concluded that the Ryan Medicare system would pay only 32% of health care costs by 2030, compared to 70-75% if traditional Medicare remained in place.
  • Addressing the problems in the U.S. health care system solely by market means that put the onus on health care recipients to seek cost-savings has failed miserably over the last forty years and cannot help but fail more spectacularly when the Medicaid backup is weakened and the nature of health care needs is such that one of the best antidotes to market problems (the only one permitted in radical market thinking that objects to regulatory safeguards)–informed consumers who can review options and select among competing providers–is simply not applicable. Car accident victims don’t shop for surgeons; cancer victims don’t know enough to select based on price; etc.
  • The Ryan proposal appears one-sided in its decision to cut spending on potentially vulnerable populations rather than to address the means through which health care is provided or to consider ways to control profit-taking in the health care system. The market ideology of the proposers leaves many options that might work better off the table (single payer; tax on excessive compensation; revamping the non-profit hospital system; attaching strings to the R&D and other tax expenditures in the tax code; using the clout of a national system to negotiate better doctor and drug pricing for Medicare and Medicaid, etc.);
  • Many of those states that would acquire more control over the use of Medicaid funds are controlled now, as is the House, by people who have announced their intent to cut taxes on the wealthy and business while cutting or taxing pensions and health benefits for public employees and cutting funds available for Medicaid and other poverty-directed programs; it is not a difficult leap to see the interrelationship of these trends;
  • Plans to cut benefits for those who may enjoy them in the future pave the way in at least two ways for decisions shortly thereafter to cut benefits for those who currently enjoy them: first, by creating lowered expectations; second, by creating an unfair disparity that supports an “us against them” attitude between the current elderly and those who will get lesser benefits in the future. (Note that this resembles the way the right has encouraged an “us against them” attitude of private workers, who have been deprived of union benefits through the harsh anti-union tactics used by Big Business, against public employees, who have generally benefited in the past from more reasonable attitudes towards unions fostered in legislative bodies that have, in the past, understood the nature of the bargain that public employees make (which might be summarized as ‘work hard, get paid less than you could in the private sector, and accept later benefits in pensions and health care for lesser salary/percs now).

Is is surprising that left-leaning activist groups like Move-On point to the Ryan budget proposal as a “naked, unapologetic attack on working Americans for the sake of Big Insurance and the riches of the rich” (quote from Move-On email on this matter)?

Health Care FYI

The quality of the posts at Disruptive Women in Health Care(r) varies widely, but their special issues bring out the best and leave most of the chaff behind.

Their latest eBook is Innovation Nation: Recognizing the Benefits of Innovation in Health Care. The PDF (direct link here) collects a series of posts from December, and includes references and research links that formed the basis of their posts and ancillary material dealing with innovation and research in both the specifics of health care/medicine and general research.

Worth a look to see how people who work in the field view their future.

Laurence Tribe on the ACA … and the Supreme Court justices

by Beverly Mann

Laurence Tribe on the ACA … and the Supreme Court justices

Argggh. In rereading my comment from yesterday to Bruce’s “Health Care ACA Act: Who does the Roberts Court Work For?” post, I realized that there’s a major part of my comment that’s, well, missing: the part that explains why I started out saying that the potential conflict between the pro-business Republicans and the Tea Baggers, and therefore between the business-interests-first justices and the Tea Party justices, appears more significant than it actually is, but ended up predicting that business-proxy Roberts and anti-libertarian Alito indeed would part company with Tea Partiers Scalia and Thomas and vote to uphold the insurance mandate.

OK, well, I was in a hurry when I wrote that post. Today I’m not in a hurry, and I was going to post a comment explaining how I got from Z to A. But it turns out that eminent Harvard constitutional law professor Laurence Tribe did that for me, in an op-ed piece today in the New York Times: On Health Care, Justice Will Prevail.

(Dan here…The prestigious Scotusblog makes mention of Beverly’s post on the Supreme Court justices in its roundup.)

Tribe explains, as I should have but did not, that a new Supreme Court precedent on the breadth of Congress’s authority under the Commerce Clause, via the Necessary and Proper Clause, of the sort that would be necessary to invalidate the insurance mandate in the ACA, also would establish grounds to invalidate a slew of federal laws, current ones and potential ones, that Scalia and Alito like, particularly criminal laws of the sort that the Court upheld in a 2005 opinion written by Scalia and joined by Alito (uphold a law making it illegal to grow marijuana on your own property for your own use rather than for sale in interstate commerce), but also—although Tribe doesn’t mention this—laws such as the one requiring 18-years to register with the Selective Service.

The authority for the Selective Service law is the Constitution’s “provide for the common defense” Clause rather than the Commerce clause, but the main objection to the ACA’s insurance mandate is, as Judge Vinson put it, that it compels activity by those who want to opt for inactivity. If that’s a problem under the Commerce Clause paired with the Necessary and Proper Clause, why wouldn’t it be problem under the Common Defense Clause when paired with the Necessary and Proper Clause?

But Tribe and I part company in predicting what Scalia will do, mainly because we part company in our view of the intellectual integrity of the justices, and probably of judges in general.

To imagine that Justice Scalia would abandon the fundamental understanding of the Constitution’s necessary and proper clause that he expressed six years ago in the marijuana case, because he was appointed by a Republican president, is to insult both his intellect and his integrity, Tribe says. Well, his integrity anyway. As would imagine that Justice Scalia would abandon the fundamental understanding of the Constitution’s necessary and proper clause that he expressed six years ago in the marijuana case, because he is a Tea Party fave would, too.

And as several commentators have pointed out recently, Scalia indicated recently in a dissent from the Court’s refusal to hear a particular case, that’s likely what he’ll do. Only Thomas, who dissented from Scalia’s opinion in the marijuana case in 2005, also dissented from that recent refusal to hear that other case.

Tribe’s umbrage that legal commentators are expressing their expectation that the Court will divide 5-4 along ideological lines in deciding whether the mandate in the ACA is constitutional makes my skin crawl. Tribe, some of y’all may recall, was Al Gore’s Supreme Court advocate in Bush v. Gore. His point that the ACA opinion will not—could not—be a ruling good for that case only is spot-on. Which is why I think Roberts and Alito will vote to uphold the mandate. “My bet—not the ranch, but let’s say a nickel—is that Roberts and even Alito will vote to uphold the mandate,” is how I ended my post comment to Bruce’s post yesterday.

But Tribe knows well that it is only for that reason—that the ACA case, unlike Bush v. Gore, cannot be limited to that case only, and that an opinion invalidating the insurance mandate as beyond the reach of the Necessary and Proper Clause, would have repercussions that some of the Federalist Society justices wouldn’t be happy about—that those justices may vote to uphold the insurance mandate. For that reason, Scalia may have second thoughts and vote to uphold it; it won’t be because his intellectual integrity is impeccable.

Just as Tribe’s fawning over Scalia and the other justices has everything to do with Tribe’s ongoing Supreme Court practice, and nothing to do with his opinion of the intellectual or personal integrity of the justices.

Health Care ACA Act: Who does the Roberts Court Work For?

It is an article of faith among many on the Left that the answer is easy: the majority on the Roberts Court is in the tank for the Republican Party. And within certain limits and with qualifications that is my view too. But the question today is WHICH Republican Party? The nativist libertarian leaning Christianist Tea Party? Or the internationalist corporatist Republicans? And the answer is critically important when it comes to the ACA bill. And the key factor is the individual mandate.

The sideshow of outright repeal was settled last week The debate over the ‘individual mandate’: Stuck in neutral? the Republicans got an up or down vote, albeit with a 60 vote majority needed and ended up with a party line 47-51 vote to waive the budget rule, or not even the 50 votes actually needed to win final passage on the underlying amendment or the final bill to repeal. They had their shot, demonstrated to both sides of the Party that they were willing to do the ‘right/Right’ thing, but had to move onto one of the other three paths available: defunding implementation, piecemealing it, or supporting court action. But there is where things fall apart on them. More below the fold.

Would the insurance companies welcome total repeal and a return to their old business model? Well probably but it would be a mixed bag, because they love the new locked in customer base and tax breaks for small business even as they hate much of the insurance reform. But the biggest and most powerful driver of that locked in customer base is the individual mandate, the worst possible outcome for them is for just that piece to be knocked out via legislation or the courts. For them it is all or nothing, a piecemeal approach being fatal.

Teabaggers come at this from a different directions. Those who start from a more libertarian position detest the individual mandate while the nativist side is driven by darker visions of socialized medicine and death panels but the real point of communality and the focus of their organized efforts is precisely the mandates. These people could conceivably settle on a package that preserved most of the insurance reforms relating to pre-existing conditions as long as mandates were stipped out.

Meaning that any intermediate solution leaves Teabaggers and Insurance companies in diametrically opposed positions, their only common ground being outright repeal. Which leaves the Supreme Court in a bind. Are they really willing to rely so heavily on the lack of a severability clause that they would just steamroll over the intent of Congress on a matter that had been under constant debate for half a century and throw out the whole bill? Or are they more likely to just focus on the actual legal challenge centered on the mandate and possibly just strike down that provision of the law and so leaving insurance companies high and dry? I don’t know but the vote on Citizens United suggests the majority is weighted towards the corporatist side.

So once again, and starting from the assumption that the Court operates on ideological and Party grounds, which faction are they going to stand with? And this is complicated further by the fact that the interests of other sectors outside big insurance have different stakes in this, if you are a ‘small’ to ‘large’ business as defined (as opposed to ‘largest’) there is a lot to like in the ACA in the way of subsidies. That is the question’s answer does not resolve down to ‘Republicans’, that is more a starting point than ending one.