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Think Obamacare’s not working? Think again

Republicans seem obsessed with the idea that Obamacare is a failure; that it is a “train wreck” exacerbating unemployment. But is that really so?

First of all, the claim that the Affordable Care Act is a job killer flies in the face of reality, as Dan Diamond at Forbes reports:  Since the law was signed in March 2010, the economy has added 7.7 million jobs, 982,300 of which are in the healthcare field. If Obamacare is a drag on employment, its effect is being drowned by other factors. Of course, the fact that healthcare is gaining jobs at a healthy clip suggests it’s not a drag on employment at all.

Diamond also highlights important differences between states that expanded Medicaid and those which did not. He cites a Colorado Hospital Association study of 465 hospitals in 15 expansion states and 15 non-expansion states, which show sharply divergent patterns in the two groups on the number of people seen at the hospital without insurance, and the volume of charity care per hospital. Here is his chart, a selection from that available in the CHA study.

 

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Source: Colorado Hospital Association, June 2014, link above

 

As we can see, hospitals in both expansion and non-expansion states were seeing between 4.5% and 5% uninsured quite consistently in 2012 and 2013. (Note that the study did not include Texas or California, the biggest state in each category, both of which had high overall uninsured rates.) In the first quarter of 2014, as new insurance began to kick in, there was an immediate drop to 3.1% in the expansion states, while the figure actually edged up in the non-expansion states to 5.0% from 4.8% a year previously.

For charity care, there was already a noticeable difference between the two sets of states over 2012-2013, where hospitals in expansion states provided an average of $3 million in charity care per quarter vs. about $4 million in non-expansion states. Again, we see an immediate improvement in the expansion states in the first quarter of 2014, falling by about 1/3 to $1.9 million, compared to a slight increase in the non-expansion states relative to the first quarter of 2013.

Meanwhile, rural hospitals are closing in non-expansion states, prompting the Republican mayor of Belhaven, North Carolina, where Vidant Pungo Hospital is closing, to call on the state to accept the Medicaid expansion made optional by the U.S. Supreme Court’s ruling that upheld the ACA’s individual mandate.

In another post, Diamond underlines other dimensions of Obamacare that usually go under the radar. Perhaps the most powerful, but rarely discussed, effect is that on healthcare quality. Diamond catches a December 2013 study from the Centers for Medicare and Medicaid Services (CMS). As Diamond explains, one early ACA initiative allowed CMS to reduce Medicare payments to hospitals that had high re-admission rates, which is generally an indicator of poor care. Specifically, as the study says, re-admissions within 30 days “often means there have been unclear instructions to patients or lack of follow-up care.” Here is the 30-day re-admission rate for Medicare from 2007 through August 2013.

 

Line chart. Shows annual readmission rates holding steady at 19 percent from 2007-2011, then declining to 18.5 percent in 2012 and 18 percent for the first 8 months of 2013.

 

Source: Office of Information Products and Data Analytics, CMS (link above)

 

As we can see, there was virtually no change from 2007 through 2011. But in 2012, the rate fell by a full half-point, and by even more than that in the first eight months of 2013. As Diamond points out, this is pretty hard to spin as anything but a success for Obamacare. He also provides a map from the study which shows that virtually the entire country had an improvement (see link to the study or his article). In only six states were there any areas seeing worse performance, defined as an increase of over 0.25 percentage points. Numerous states saw increases in all of their CMS regions, and plenty of regions saw improvements greater than 1.5 percentage points, including Las Vegas, Memphis, and almost all of Kansas.

Finally, let’s look at the issue that has dominated the discussion: Are more people actually insured? Paul Krugman sends us to the Gallup poll on the percentage of uninsured Americans. The poll, based on more than 30,000 interviews in April and May, showed that the uninsured rate dropped 3.7 percentage points for all adults from the 4th quarter of 2013 to April-May 2014 (see graph below). It dropped 6.2 percentage points for African-Americans and 6.0 points for those with an income below $36,000.

 

Percentage Uninsured in the U.S., by Quarter

 

The best estimate of total ACA enrollments continues to come from Charles Gaba at ACAsignups.net, who estimates a range from 23.6 to 28.2 million gross enrollments.

Finally, don’t forget the PP in PPACA, patient protection. Everyone can now get insurance regardless of pre-existing conditions, no one can have their insurance canceled because they get sick, and no one has annual or lifetime insurance caps anymore. Indeed, these factors may well lead us to see a decrease in the country’s bankruptcy rate, as medical bankruptcies become less frequent.

Obamacare not working? Don’t believe the hype.

Cross-posted at Middle Class Political Economist.

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Twenty-Six Republican State Attorneys General v. W. Mitt Romney (subtitle: Does Romney’s Economic Plan Violate State Sovereignty?)

Okay, folks.  The title of this post is not really also the title of a lawsuit.  Not formally, anyway.  But it could suffice as the title for the final hour of the six hours of oral argument in the Supreme Court late next month on the constitutionality of the Patient Protection and Affordable Care Act. 

A.k.a., Obamacare. 

More specifically, and more seriously—very seriously, actually—Romney’s newly-announced budget plan undermines the argument of the 26 Republican state attorneys general who, in the name of their states, are contesting the constitutionality of the part of the ACA that expands the Medicaid program so that it will operate as a key mechanism by which to provide healthcare coverage to those who cannot afford to buy healthcare insurance.

The legal issue, like the other legal issues that will be argued that week that are not known as the “individual-mandate” provision, and that therefore have not been discussed ad nauseam in the media, is very inside-baseball-ish stuff.  But unlike most of those other issues, which (like this one) the Court has accorded a designated time allotment separate from the individual-mandate issue, this issue is not merely a procedural one having to do with, say, who has “standing” (the legal right) to challenge the constitutionality of the provision, or whether the law can be challenged at all before it becomes effective in 2014.

No, this issue, like the minimum-coverage provision, a.k.a., the individual-mandate provision, cuts to the heart of much, or most, of the statute.

The specific case that the Supreme Court agreed to hear is the one decided last August by the Atlanta-based 11th Circuit Court of Appeals, the federal regional appellate court for several Southeastern states, based in A.  In a 2-1 opinion, the panel that decided the case held the individual-mandate provision unconstitutional—a ruling that conflicted with a 2-1 opinion issued two months earlier by the Cincinnati-based 6th Circuit Court of Appeals. 

The 6th Circuit opinion, the first one issued by an appeals court addressing the constitutionality of the ACA, was notable both for its author, Jeffrey S. Sutton, a conservative G.W. Bush appointee, and for the fineness of its constitutional analysis.  Specifically, the distinction between the Commerce Clause, the clause under which Congress had enacted the ACA and the clause under which the constitutionality of the individual-mandate provision was being challenged, and the Fifth Amendment’s due process clause, which the challengers were not expressly invoking but that Judge Sutton recognized was the appropriate constitutional provision to assert in light of the nature of their argument.  The Commerce Clause, he said, was not. 

The 11th Circuit opinion, for its part, was notable in that the judge who joined the majority-opinion writer, Joel F. Dubina, a conservative G.H.W. Bush appointee, in holding that the individual-mandate provision does exceed Congress’s legislative authority under the Commerce Clause because the provision violates the Fifth Amendment’s due process clause, or something, was Clinton appointee Frank M. Hull.  The majority also held that the remainder of the statute was “severable” from the individual-mandate provision; that is, the rest of the statute could survive the demise of the individual-mandate provision because the other provisions were not so intrinsically dependent upon or related to the individual-mandate provision that they couldn’t function without the stricken provision.  (The Supreme Court will hear 90 minutes of argument on this “severability” issue.)

Among the provisions that the entire 11thCircuit panel upheld as constitutional was the expanded-Medicaid provision.  Which Romney has now implicitly said is constitutional under the Spending Clause, the constitutional power under which Congress enacted that part of the ACA.  And which, more relevant here, Romney has said implicitly, does not violate the Tenth Amendment, which reads, “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people, and which serves as the rallying cry for the neo-conservative states’-rights, state-sovereignty crowd.

Let me explain.  Or, better, let Judge Dubina and Romney explain. Separately, of course.

First, Judge Dubina.  He explains that “Medicaid is a long-standing partnership between the national and state sovereigns that has been in place for nearly half a century [and that] Medicaid is a jointly financed federal-state cooperative program, designed to help states furnish medical treatment to their needy citizens.”  He then notes that state participation in the program is voluntary, and that under the Medicaid Act as it currently exists, the states must, in order to participate, “meet various guidelines, including the provision of certain categories of care and services [and that some] of these categories are discretionary, while others are mandatory for participating states.”

He explains that the ACA expands the Medicaid program, that this expansion “serves as a cornerstone for expanded health care coverage.” And that the 26 attorneys general who have made their states plaintiffs in this lawsuit claim that the ACA’s “expansion of the Medicaid program, enacted pursuant to the Spending Clause, is unduly coercive under South Dakota v. Dole,” a 1987 Supreme Court opinion, which created what is known as the “coercion doctrine.”  Judge Dubina explains that, too: The coercion doctrine holds that “Congress may not employ the spending power in such a way as to ‘coerce’ the states into compliance with the federal objective.”  He also explains why the panel concluded that, in enacting the expanded-Medicaid provision, it did not.

First among those reasons is that as with the original Medicaid Act and earlier amendments to it that increased the states’ obligations, states retain the option to withdraw from the program.  The states acknowledge this fact—that they can, as matter of law, withdraw from participation in the program—but argue that as a matter of political reality, they cannot. Participation in the Medicaid program is simply too popular in each state, the results of withdrawal too distasteful, to make a state’s withdrawal from the program politically tenable.  Yet, they say, the additional state-funded mandate intrudes too much into each state’s right to determine their own budget priorities (spending and taxing), because the money must either be taken from other legislative priorities or from higher or additional taxes. 

The states are, in other words, hooked on federal Medicaid funds, and their state legislators are unwilling to withdraw the drug.  Er, the federal financing.  This violates the states’ sovereignty under the Tenth Amendment.  Indirectly.  But directly enough.

To which Judge Dubina responds that the initial Medicaid Act warned the states that Congress might make changes to the program, down the road.  But of course, well, cocaine addicts were warned of the addictive statute of that drug, and they took that first step anyway.  So this i-was-conned-into-it excuse won’t suffice.  Probably.

But Dubina also mentions that the ACA does not actually say that refusal to participate in this portion of the Medicaid program would require the state to withdraw from the entire Medicaid program; the states probably would see only some of their Medicaid funds withdrawn.  But this is of little consolation to an addict.  Or a states-rights asserter.

But then Dubina states the coup de grâce: The question of continued state participation in the Medicaid program is a political one, not a Tenth Amendment one.   Participation by the states in the federal Medicaid program continues to be voluntary, not compulsive, whether or not the states are addicted politically to receipt of the federal Medicaid money.

That is a statement of law with which Mitt Romney wholeheartedly agrees.  He made that clear last Friday, when speaking to the assembled members of the Detroit Economic Club.  Unveiling his amended deficit-reduction plan, he said:

Second, we will return federal programs to the states. I will send Medicaid back to the states and cap that program’s rate of growth. And I will do the same for other programs, like food stamps, housing subsidies and job training.

Okay.  Only if federal funding for these safety-net programs is eliminated or dramatically cut—as the math would require, given the draconian tax cuts that Romney also promised in that speech—would this policy of “returning” these programs to the states impact the federal budget significantly, or at all.

So, next month, when Solicitor General Donald Verrilli is arguing to the Court in that final hour of argument on the constitutionality of the ACA, I hope that, exhausted as he may be, he remembers to invoke the name of that most expert of constitutional scholars on the issue of the coercion doctrine: Mitt Romney.

And I hope that down the road, during the campaign, President Obama remembers to mention that Romney’s plan to balance the budget includes ending federal funding for Medicaid, food stamps, housing subsidies and job training—and suggesting that the states pick up the tab.

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