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Thomas P. Miller

Entitlement reform for the highly educated

By Thomas P. Miller

May 22, 2012, 10:06 am

Former OMB factotum (let’s make that “health policy adviser without fixed portfolio”)  Zeke Emanuel has returned to academic life, but he opines periodically in a New York Times opinion column. On Sunday, the improbable happened. He proposed an idea for entitlement reform that should not be rejected out of hand—graduated eligibility based on lifetime income for Social Security and Medicare.

Bring out the usual clichés:

•    What was the wind chill factor today in Hell?

•    The lion and the lamb shall lay down together (Nope: it’s a co-tenancy with a wolf).

•    What were the other six warnings signs of the Apocalypse?

•    Even a stopped clock is right twice a day (and check out that blind squirrel’s acorn…)

•    There really is a pony inside that room piled high with manure.

•    C’mon. We kid because we love.

Suffice it to say, I’ve been a little critical of the other brother Emanuel’s advice on health policy reform in the past. But the desperate search for the road to bipartisan entitlement reform (it only takes two, if you’re filling up an ark for the great fiscal flood ahead) means any semi-plausible rationale for trimming back the outer bounds of our unfunded political lies (we call them “promises” in Washington) is worth a second look.

The shorthand description of the proposal is to replace a fixed “normal” age of eligibility for cashing in on the taxes of younger Americans with age of eligibility linked to one’s place in the lifetime earning distribution. The lower 50 percent of new retirees (I’m assuming the proposal would only operate prospectively) would be insulated from this change in policy, while the top quarter of seniors would have to wait the longest for their federal paydays to start (age 70 for Medicare, and age 71 for Social Security). The minimum age for social security retirement benefits would be adjusted similarly, but delayed retirement credits would remain in place.

The empirical argument for this change (aside from re-soaking the rich by narrowing the entitlement spending spigot, instead of extracting their dollars through the tax code—although I suspect the former would not replace the latter in the full Emanuel package) is that the lifespans of richer Americans have grown longer in recent decades than those of less affluent retirees. Perhaps those extra dollops of grey poupon are good for your health!

Is it time to close the dreaded longevity gap, and try to equalize the time in orbit for retirees on federal taxpayer support? Emanuel presents the proposal as not changing richer Americans’ state-given right to health and retirement benefits when they get older; it’s just a matter of adjusting WHEN they first get them.

The concept has some broader appeal on equity grounds, but more affluent, older Americans can do the math (or ask their financial adviser to check into it). Speculation over how the electoral math might change is premature, depending on which desperate options we might be choosing among when Congress finally approves a budget within our lengthening lifetimes.

However, several complicating aspects of the proposal remain.

•    Social security benefit formulas already are very progressive and favor workers with lower lifetime earnings.

•    Wasn’t progressive indexing of future social security benefits a better way to reduce the future growth rate of payments to higher earners?

•    The purported regressivity of the lifetime dollar amount of Medicare benefits has been diluted, if not fully reversed, over the last two decades.

•    The proposal overlooks the effects of lifetime wealth and other sources of non-wage income in making its adjustments.

•    Even relatively richer young retirees would face difficulties in relying more on current private markets for pre-Medicare health insurance coverage. Medicare buy-in options always sound better on paper than they unfold in practice.

•    Wary analysts should account for compensating behavior like increased rates of claims for disability benefits by younger retirees (and the Disability Insurance fund is headed toward insolvency well before Social Security or Medicare spring major fiscal leaks).

•    After recent rounds of Medicare income-related premiums, additional Medicare-dedicated taxes on the wages and capital income of higher-earning Americans, unindexed income taxes on social security benefits for growing numbers of retirees, and various caps on Medicare premium increases for different cohorts of retirees receiving small, if any, COLA hikes to their monthly retirement checks, the most “universal” characteristic of Social Security and Medicare is that both programs are running short of money and unable to fulfill all of their past promises.

Finally, the more powerful driver of growing differences among retirees in remaining life expectancy is more likely their relative levels of education; not their lifetime incomes.

So, perhaps we should consider reducing promised benefits first for more highly educated Americans (we could start with the past and present Obama White House staff!). Except that they’d be more likely to find out about it ahead of time and lobby more articulately and extensively against the idea.

Okay, then let’s start with a future benefits reduction for all those under-age-26 slackers sucking up their parents’ group insurance coverage under ObamaCare’s regulatory cross-subsidy, without looking for a job and moving out of the basement. Don’t let them think they are legally entitled to other people’s money until they are at least a “subsidy-adjusted” age of 65, with at least 43 years of previous adult-like financial independence!

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Categories:  Economic Policy, Retirement and Social Security   |   Tags:

Thomas P. Miller

Going over the constitutional speed limit? Or is timing everything on the regulatory radar gun? (Part III)

By Thomas P. Miller

April 3, 2012, 11:05 am

Is it all over but for the waiting (and then the wailing) over the Supreme Court’s decision later this June on whether the individual mandate in the Affordable Care Act is unconstitutional?

 Sifting through the Evidence

In ancient times, soothsayers used anomalies in animal entrails to predict or divine future events. The technical term for such ritual slaughters in special ceremonies was “extispicy” (not to be confused with “extra spicy”).

Most media reporters and analysts are more sophisticated today when it comes to forecasting how the Supreme Court will rule. With apologies to Warner Wolf, their gut reactions usually start with the phrase, “Let’s Go to the Audio Tape!”

Although the questions and comments of the nine justices (uh, make that eight, while Clarence Thomas remains within his individual Cone of Silence) during last week’s oral argument are only possible early indicators of how they finally will vote, they supply the speculative markers for the latest Washington parlor game.

Scalia Takes the Lead

Justice Antonin Scalia undoubtedly took the lead in pointing out the many holes in the government’s constitutional case for the mandate:

• The regulation of health insurance purchasing has to be “proper,”

• The relevant market here is not health care,

• It’s a self-created problem for the government, and

• If the federal government can do this, “what else can it not do?”

 Key Justices

But in putting together an effective 5-4 majority, the key justices are Anthony Kennedy and John Roberts. Justice Kennedy’s remarks during the opening rounds of argument last Tuesday raised the most concerns among defenders of the individual mandate. They should be afraid, be very afraid:

• “Can you create commerce in order to regulate it?”

• “Assume for the moment that this is unprecedented, this is a step beyond what our cases have allowed, the affirmative duty to go into commerce.”

• If so, doesn’t the federal government have “a heavy burden of justification” under the Constitution “when you are changing the relation of the individual to the government in this …unique way?”

• “And here the government is saying that the Federal Government has a duty to tell the individual citizen that it must act, and that is different from what we have in previous cases.”

• “[T]he reason this is concerning is because it requires the individual to do an affirmative act.”

• “Can you identify for us some limits on the Commerce Clause?”

Of course, Justice Kennedy would have disappointed if he did not also toss out a few more ambiguous “on the one hand, but on the other hand” comments:

• “I’m not sure which way it cuts, if the Congress has alternative means…In one sense, it can be argued that this is what the government is doing [use the tax power to raise revenue and just have a single payer]; it ought to be honest about the power that it’s using and use the correct power. On the other hand, it means that since the Court can do it anyway – Congress can do it anyway, we give a certain amount of latitude.”

Whatever.

Although even his past clerks often cannot predict which way Justice Kennedy will vote, his judicial weather vane seems to be pointing more in an “unconstitutional mandate” direction.

Chief Justice Roberts is seen as skeptical about the constitutional bona fides of the mandate but also looking to ensure that any final Court ruling can be understood and accepted by the general public. His comments reveal concerns about opening a new door to congressional power that cannot be subject to constitutional limits in unanticipated future cases.

• “[T]he states are not limited to enumerated powers. The Federal Government is.”

• “[I}t’s critical how you define the market….But your theory is that there is a market in which everyone participates because somebody might need a certain range of health care services, and yet you’re requiring people who are not – never going to need pediatric or maternity services to participate in that market.”

• “Is your argument limited to insurance or means of paying for health care? …But once we say that there is a market and Congress can require people to participate in it …it seems to me that we can’t say there are limitations on what Congress can do under its commerce power, … all bets are off, and you could regulate that market in any rational way.”

• “But next year, they can decide everybody’s in this market; we’re going to look at a different problem now, and this is how we’re going to regulate it. And we can compel people to do things – purchase insurance, in this case; something else in the next case – because…we’ve accepted the argument that this is a market in which everybody participates.”

• “[O]nce we say this is within Congress’s commerce power, there’s no reason other than our own arbitrary judgment to say all they can regulate is the method of payment. They can regulate other things that affect this now-conceded interstate market in health care in which everybody participates.”

• “But what I’m concerned about is, once we accept the principle that everybody is in this market, I don’t see why Congress’s power is limited to regulating the method of payment and doesn’t include as it does in any other area… [O]nce you’re in the interstate commerce and can regulate it, pretty much all bets are off.”

 Better Make that “LifeCall”

The old betting line for the individual mandate and the Affordable Care Act has shifted. ObamaCare is the underdog and can’t just run out the judicial clock. It’s on the downhill side of a slippery slope, perhaps one Supreme Court vote away from admitting that it’s “fallen and can’t get up.”

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Categories:  Economic Policy, Law and the Constitution, Supreme Court   |   Tags: ,

Thomas P. Miller

The individual mandate: Going over the limit? Or is timing everything? (Part II)

By Thomas P. Miller

April 2, 2012, 2:44 pm

Is the individual mandate in the Affordable Care Act unconstitutional because its reliance on the congressional power to regulate interstate commerce lacks any clear “limiting principle?” What sort of constitutional law test should be applied that would distinguish this type of economic regulation from other ones that have been judged valid in past Supreme Court cases?

Many observers concluded that Solicitor General Donald Verrilli failed to convince a majority of the nine Supreme Court justices in last week’s oral argument that the individual mandate should be upheld. How did the lead attorneys for those challenging the mandate fare in making the case for striking it down?

Paul Clement represented the 26 states challenging the mandate and the rest of the ACA in the Florida v. HHS case. His part of the oral argument dealt primarily with rebutting the economic and health policy rationales used by the federal government to justify the individual mandate as a necessary and proper way to execute the constitutional power of Congress to regulate health insurance as part of interstate commerce. Clement’s role was to soften up the premises behind the mandate. However, his arguments would not be the crucial ones for reaching any final decision on the mandate’s constitutionality. The Supreme Court generally defers to whatever Congress claims it is doing, as long as it has a “rational basis” for its policy judgments. Given the past record of Congress, grading on the curve usually will produce a social promotion in the legal sense, no matter how tenuous the evidence base it uses turns out to be. (Beware the soft bigotry of low expectations under such constitutional analysis…)

Congress and its legal defenders tried to build a “cost shifting” case (no matter how exaggerated and empirically challenged) for why the individual mandate was needed both to reduce the economic burden that millions of uninsured Americans impose on private insurance premium payers and to ensure the effectiveness of the ACA’s other insurance regulations.

Clement’s argument suggested that several other policy alternatives could accomplish those objectives better, without running afoul of the U.S. Constitution. He noted that cost shifting is not uniquely confined to the health market. There are other markets that “affect everyone” or produce costly economic effects on other parties when someone fails to purchase, or pay for, a product. Clement described two kinds of cost shifting at play in the sort of markets involved in this case. He explained that the much bigger amount of cost shifting would occur if the federal government could successfully force healthy people into the health insurance market through a mandate. He observed that such people are not likely to seek uncompensated emergency care, and they are not likely to use the insurance they would be forced to buy.

Clement emphasized that Congress really was trying to force individuals into the health insurance market in order to subsidize those who are already in it and lower their rates. But Congress could do this in a constitutionally appropriate manner by raising taxes and subsidizing insurers to cover high-risk individuals, instead of mandating that private individuals foot this bill.

Clement added that all sorts of people will not use health care in the next year, which is the relevant period for an insurance market that generally operates with annual contracts. He also distinguished the case of state-mandated automobile insurance from that of the ACA’s individual mandate for health insurance. State residents retain the option of “withdrawing” from the automobile, and auto insurance, markets (or moving to another state).

The more important arguments against the individual mandate last Tuesday came from Michael Carvin, counsel for the National Federation of Independent Businesses and several private individuals in the Florida v. HHS case. He sharpened the case for why the ACA’s individual mandate is unprecedented, unlimited, and unconstitutional. Carvin pointed out that every purchase compelled by law could “promote commerce,” but it would not make such laws constitutional. Compelling the creation of commerce is not the same as regulating it in a permissible manner. He noted the government’s argument that almost everyone will have to enter the health care market. Carvin responded that if simply being born is entering the market, then “that literally means they can regulate every human activity from cradle to grave.” (Or, perhaps at least past the point of viability, under post-Roe v. Wade jurisprudence?)

The key constitutional law distinction is between regulating participants after they have entered into a contract or otherwise engaged in commerce, and compelling them to do so beforehand, according to Carvin. He turned a question from Justice Kagan (who asked whether the “activity vs. inactivity” distinction set limits on the commerce power) on its head by saying that the key word is “commerce,” which is in the text of the Constitution. He then underscored that the federal government’s alternative “bogus” limiting principle for the commerce power simply tried to draw distinctions among different industries.

Carvin also criticized how the ACA’s mandate really was aimed at making young, healthy people subsidize insurance premiums to cover the additional cost that the law’s nondiscrimination provisions added to insurance premiums. He suggested that the massive cross-subsidies created by the mandate illustrate the dangers of giving Congress such plenary powers to compel commercial activity, because it can always leverage them to support other public policy goals. Without some constitutional limit of such powers, Congress could compel you to buy ANY product, because any purchase is going to benefit commerce.

Carvin’s best concluding argument against the constitutionality of the individual mandate was that it failed to meet a very simple test: “Are you buying the product, or is Congress compelling you to buy the product?”

That increasingly looks like a line the Court will not allow the ACA’s individual mandate to cross.

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Thomas P. Miller

Obamacare’s individual mandate: Going over the limit? Or is timing everything? (Part I)

By Thomas P. Miller

April 2, 2012, 9:38 am

The instant analysis of last week’s three days of oral argument is over. Let’s take a closer look at how the players at the Supreme Court viewed the individual mandate at the heart of the Affordable Care Act. The constitutional law argument essentially came down to whether Congress (finally) had gone too far over the limit in stretching federal power to regulate interstate commerce in unprecedented and unbounded ways. Or was this power play just a matter of timing – in regulating the inevitable more effectively by doing so earlier in time?

We start with Solicitor General Donald Verrilli, Jr.’s case for the individual mandate. Verrilli insisted that Congress used the individual mandate and its penalty provisions merely to regulate how people pay for health services that they are virtually certain to use at some point in their lives. He noted that even the opposing side’s attorneys had conceded that Congress could require that individuals have insurance in order to get health care at the point of sale (or point of service). But that limited type of just-in-time insurance requirement would not work very well. It still would cause substantial costs to be shifted from the uninsured to other parties. (No one in court brought up how retroactive enrollment in Medicaid actually operates in many hospital settings to “insure” low-income, uninsured patients when they show up and receive treatment).

Does the federal government therefore have authority to ensure that people have a better way to pay for health care – through insurance – in advance of that point? Vercelli emphasized that the market for health care is very unique. Participation by an individual at any particular time is often unpredictable and often involuntary. You often don’t know before you go into this market what you will need (sort of like opening up Forrest Gump’s metaphorical box of chocolates). And you still might get it even if you can’t (or won’t) pay for it.

Admittedly, U.S. health policy has a long history of paying one person’s health care bills with someone else’s money — whether through third-party insurance dollars, taxpayer-financed entitlement programs, federally-mandated emergency care, or uncompensated care subsidies. Indeed, the requirement to pay far in advance has been stretched even further in the case of Medicare – across several generations – with no secure guarantee that younger “contributors” will receive fair value in return for their taxes and debt repayments, many decades ahead. (No refunds are allowed, either, in such underfunded, pay-as-you-go schemes). But even the latter Ponzi scheme (“It’s good to be the king…”) is legally authorized under the power of Congress to tax, not its power to regulate commerce

Verrilli assured the Court that the commerce power was not completely unlimited. Congress could not rely on it to justify forced purchases of commodities for the purpose of stimulating demand. (We have to rely on the Federal Reserve and deficit spending to handle that job less directly). Nor would it even justify purchases of insurance in situations in which insurance doesn’t serve as the “method of payment” for a particular type of service.

Verrilli went so far as to claim that use of the commerce power in this case did not go further, and justify the “creation” of commerce (a fundamental point that the states and individuals opposing the individual mandate would challenge). The mandate to purchase insurance before health care services were received was just a question of “timing.” And those services would, sooner or later, have a substantial effect on interstate commerce.

One might recall the old joke about someone who claims to be the world’s most famous comedian. He is asked by an interviewer, “What is the secret of your success as the world’s most …..” “Timing,” he replies.

The Solicitor General tried to build a case for the individual mandate as just another necessary part of the execution of fully-constitutional federal insurance regulation. For example, he pointed to the statutory and regulatory requirements of federal laws like ERISA and HIPAA. But both of those laws involve regulating commerce that already has occurred, rather than compelling it to take place initially.

Verrilli’s oral argument also included a recycling of the weak argument that the individual mandate and its penalty for non-compliance should be upheld as part of the congressional power to levy taxes. It did not appear to overcome two major hurdles with most of the Supreme Court justices. (1) On Monday, he had to try to explain why the mandate was not a tax for purposes of the Anti-Injunction Act (AIA), which otherwise might delay consideration of the entire case for several more years. Even though the tests for a “tax” under the AIA are somewhat different from those for whether a tax enacted by Congress is authorized under the Constitution, it’s a tricky dance routine to pull off on successive days of the week in the same case. (2) Particularly when Congress went out of its way in the ACA to insist that the individual mandate was NOT a tax, but just a penalty. Congress even included in the law its findings of fact (or fiction, depending on one’s perspective) that were intended to support the claim that it was relying on its power to regulate commerce in enacting the individual mandate.

When Verrilli was asked why President Obama said the mandate was not a tax (while Congress was still considering whether to pass the ACA), he could only respond, “I don’t think it’s fair to infer from that anything about whether that is an exercise of the tax power or not.” (in other words, but not his: “Who are you going to believe – me or the moving lips of the President and Congress that supported the ACA’s mandate and insisted it did not raise taxes?”)

The Solicitor General’s most difficult assignment was to frame and articulate a clear limiting principle in constitutional law that would authorize the individual mandate but not leave future use of the congressional power to regulate commerce so sweeping that it would be essentially unlimited and authorize the forced purchase of many other goods and services beyond just health insurance. Verrilli’s attempts to do so under questioning by several justices were not very successful. His best version offered two limiting principles.

· When Congress approves a comprehensive regulatory scheme that it already has constitutional authority to enact (like regulation of health insurance or the purchase of health care), the Necessary and Proper clause of the U.S. Constitution gives it authority to include regulation of this kind – to counteract risks attributable to the scheme itself, and

· With just its commerce power alone, Congress can regulate the method of payment for health care by imposing an insurance requirement in advance of the time that a health care service is consumed, when the “class” to which the requirement applies either is, or is virtually certain to be, in that market.

But the bottom line is that it appears that a majority of the Court did not find these efforts at framing a limiting principle in constitutional terms clear, consistent, or sustainable. And they did not get the joke in the ACA’s mandate argument. Wrong time, wrong court, wrong law.

Coming up next, the legal case for the other side, and how the various justices reacted.

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Thomas P. Miller

Myths about healthcare myths

By Thomas P. Miller

March 28, 2012, 6:31 am

Shortly in advance of yesterday’s Supreme Court oral argument on the constitutionality of the individual mandate, the ever-helpful Washington Post published an Outlook piece by former solicitor general (“he was only ‘acting’”) Walter Dellinger that was clearly aimed at bolstering the position of the Affordable Care Act’s (ACA’s) defenders.

As an initial act of full disclosure, Professor Dellinger tried to teach me his version of constitutional law at Duke Law School in the early 1970s. (He failed at that in the long run, although I received a very high grade from him). He was an engaging lecturer, popular with students, still early in his career, and a quite energetic advocate. But I have no conflict of interest in this case. When it comes to his second-hand understanding of health policy, and the legal position he pushes too far, he’s wrong. And his myths are as good as a mile off base.

– Does the individual mandate force everyone to buy health insurance? Dellinger’s argument actually underscores how weak the mandate in the ACA really is, without admitting that this will limit its effectiveness. However, that did not stop the Congressional Budget Office from basing most of its overly optimistic estimates of increased health insurance coverage under the law to the apparent lemmings-like compliance with a similar mandate in Massachusetts because “it’s the law!” The ACA mandate actually would apply to everyone who is not exempt (mostly due to something about “unaffordable” coverage, I hear), including the vast majority of Americans who already are insured, but would be subject to its penalties if they ever lost or dared to drop their existing coverage.

– What would invalidating the individual mandate affect in the rest of the health law? Dellinger adopts the selective severability stance of the Obama administration, which argues that losing the mandate would jeopardize all the “good stuff” that people want from the ACA’s insurance regulations (guaranteed issue and community rating) and jeopardize the private insurance market (demonized as greedy and heartless on other days of the week), but nothing else. The legal problem with this argument is that it fails to square with the two primary rules for severability of unconstitutional provisions from a larger and more complex law. (1) Would Congress have enacted this law without the constitutionally invalid provision (the mandate)? (2) Can the provisions in the rest of the law function as intended without this unconstitutional provision?

The best legal answer to the first question is “No way.” The law barely passed, with no margin to spare, and neither the House nor Senate was permitted to vote to amend, or drop, the individual mandate. Hence, any complete review of the legislative bargain involved in passing the ACA would invalidate the entire law. But the Supreme Court doesn’t always reach the simplest decision when other factors are in play. It would be, not quite in Vice President Biden’s off-mike words, a really big deal for the Court to take down the entire health law and leave nothing standing. So, when we turn to the second test, it’s a bit more complicated. The Court does not want to act as a super-legislature and pick and choose among many pieces of a badly interconnected contraption posing as the latest congressional work of off-kilter art (think of Picasso as the primary drafter, rather than someone from the Impressionist school).

The approach advocated by Dellinger, and the current solicitor general in briefs filed with the Court, attempts to be too clever by half. It in effect says that the individual mandate is inextricably tied to the success of several health insurance regulations that Congress clearly had constitutional authority to enact (thereby bolstering the broader commerce power argument for the constitutionality of the mandate itself—either as necessary and proper to execute such regulation or, as in the recent Raich case language upholding federal regulation of home-grown medical marijuana, “an essential part of the larger regulatory scheme” for carrying out constitutionally valid federal purposes).

The health policy problem here is that two wrongs do not make a right (except in Congress). Guaranteed issue and community rating have disrupted insurance markets in states that adopted such regulations because they don’t make economic sense and only try to shift the higher costs they produce on to other unwilling parties. Compelling such transactions through the coercion of a government-enforced individual mandate may redistribute temporarily those higher costs through less visible cross-subsidies and price distortions, but it doesn’t reduce them overall.

As a constitutional law matter, the individual mandate is not “necessary” for executing those insurance regulations; it’s just used to get other parties to pay (off-budget) for the increased costs they produce for the primary targets of regulation. Nor is it “proper” as an ordinary mechanism for carrying out commerce power regulation, let alone consistent with the traditional allocation of constitutional powers and liberties between the federal government, the States, and the people. Indeed, the mandate—compelling someone to enter into commerce and then buy a government-approved private product—is unprecedented and unbounded by any effective limiting principle.

Moreover, Dellinger’s suggested line to be drawn for severability is far too arbitrary and politically opportunistic. The better functional dividing line for the ACA provisions that cannot operate as intended, without an individual mandate, extends at least across all of the health coverage and insurance regulation provisions—not just the “popular” ones—in title I of the ACA (as I have argued with several other health policy and health law colleagues in an amicus brief submitted in this case).

– Dellinger tries to dismiss the argument that, if the unprecedented mandate is upheld as constitutional, there will be no remaining constitutional law boundaries limiting what a future Congress could do in the name of regulating commerce. The Tuesday morning questioning by a number of Supreme Court justices suggests that they’re having a harder time finding any limiting principle in the federal government’s legal argument for an individual mandate. (I’m buying options on broccoli futures, to hedge my bets). Healthcare is different in one sense—it is more regulated, politicized, and financed with other people’s money than just about any other good or service in our still-largely market-based economy. But the modest amount of cost shifting that actually occurs in healthcare, as well as the uncertainties, risk of high costs, asymmetric information, and imperfect competition that Americans potentially face for healthcare, are present in a number of other markets for goods and services. And the ACA simply uses government coercion, hidden cross subsidies, and price controls to redistribute and shift healthcare costs on an even larger scale through political means from one group of Americans to another. (That would be the conservative definition of “freeloading” through the political system).

– Is the law “socialist”? Dellinger trots out this straw man to recycle a different myth; that the mandate is just a good old-fashioned Republican idea first developed by the type of GOP leaders who used to be good losers and dutiful tax collectors for the welfare state. (Their best ideas used to be called “Constructive Republican Alternative Proposals” in the old days, but better described in their shorter, acronym form). I’ve written elsewhere about the real past history of some Republicans’ bad blind date with a mandate in the early 1990s, when RINOs still roamed across a larger stretch of the watering holes for the GOP’s ruling class. As once was said during the second Reagan administration, “Mistakes were made,” but not at the grassroots level where support for the mandate never existed to the degree it might have been imagined in Washington. The Massachusetts detour into a mandate last decade was well outside mainstream Republican thinking, and the state’s former governor still has to choreograph his own dance steps around it. I’m also still waiting for that Washington Post story that points out that reducing marginal income tax rates was a Democratic idea—at least during the Kennedy administration! (Don’t hold your breath).

– Have we seen this all before? Dellinger’s final myth is that this latest “threat to liberty” soon shall pass, as did earlier objections to social security, Medicare, and minimum wage laws. (He shows remarkable restraint in not tossing in civil rights laws for gratuitous effect). He obscures the constitutional law distinction that those expansions of federal power flowed from the less restrictive nature of the power of Congress to raise taxes and spend money to enhance the general welfare (though not exclusively limited to expanding the welfare state, to be sure) or to regulate the terms of interstate commerce when it actually takes place. Somehow, the apologists for the view that politics alone will provide the necessary checks and balances to restrain unwise or excessive exercise of such sweeping federal power nevertheless stop short of that stance when their more-favored constitutional rights and limits on government power are on the line elsewhere—like, say, free speech under the First Amendment, or whatever greater level of equality and new rights can be coaxed out of the 14th Amendment, or whenever any other emanations from penumbras can be found. The Tenth Amendment appears to be another part of outdated fly-over land in their more modern Constitution.

At least that’s more or less how I recall it in some of the law school classes in Durham that I’ve been able to leave behind as well, or at least update based on a broader evidence base.

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Thomas P. Miller

Obamacare goes to court, part three: We won’t have the Anti-Injunction Act to kick around in this case anymore

By Thomas P. Miller

March 27, 2012, 9:59 am

In Monday morning’s oral argument at the Supreme Court, Solicitor General Donald Verrilli, Jr. juggled several legal balls in the air simultaneously while keeping a straight face. And he probably provided the most workable path for the Court to conclude that the Anti-Injunction Act (AIA) will not keep it from reaching a decision on the merits in the constitutional law challenges to the individual mandate under the Affordable Care Act (ACA).

Verrilli first had to insist that the 19th century AIA is a jurisdictional limit on courts, and not just a claims processing rule, regarding pre-enforcement challenges to the assessment or collection of any “tax” before it is due. As a general rule, the federal government does not want to concede its broad powers to collect revenue without facing early interference by prospective taxpayers. Nor did Verrilli want to abandon completely the Obama administration’s fading argument that the individual mandate still could be upheld as part of the constitutional powers of Congress to raise taxes and spend money to promote the general welfare (instead of as part of the power of Congress to regulate interstate commerce).

To the naked eye, it might appear that the government’s position was that the mandate was a “tax” when it needed to be one, and a “penalty” imposed to enforce the regulation of interstate commerce when it needed to be something else; i.e., for political reasons on one day, and for legal reasons on another day.

Think of the Decepticons in the “Transformers” movies and you’ve figured out how politically malleable, reversible, and misleading the Obama administration wants the mandate to be. Or just close your eyes and wish upon a falling star…

Nevertheless, Verrilli insisted that the precise language Congress used in the ACA and related provisions in the Internal Revenue Code is “determinative.” Then Justice Alito shot back, “…today you are arguing that the penalty is not a tax. Tomorrow you are going to be back and you will be arguing that the penalty is a tax.”

Verrilli explained that something (hint — the individual mandate and its penalties) can be a constitutional exercise of the taxing power, whether or not it is called a tax. But determining whether the court has jurisdiction relative to an AIA-based challenge requires construing the statutory text and its precise choice of words more closely.

In this case, Verrilli and the federal government (finally) decided to argue that the penalty for violating the individual mandate did not involve a “tax” that’s subject to the AIA.

The solicitor general also insisted that the ACA provides no other consequence apart from the tax penalty for someone who violates the individual mandate. Hence, he dismissed the argument made by the private appellees in this case that they were challenging only the individual mandate itself, and not enforcement of the related tax penalty. Verrilli concluded that if there was no penalty, then there would be no other legal obligation for someone to purchase minimum essential health coverage.

Chief Justice Roberts in particular seemed skeptical that the mandate alone could be enforced as a legal requirement without use of the accompanying tax penalty. “It seems very artificial to separate the punishment from the crime,” he observed.

The attorney for NFIB and other private plaintiffs, Greg Katsas, first tried to argue (without great success) that the AIA does not involve jurisdiction but rather procedural instructions to courts. He then pointed out more effectively that Congress separated out mandate exceptions from penalty exceptions (they applied to different categories of people, respectively). And he observed that Congress believed that at least some people would comply with the mandate simply because “it is the law.” (CBO actually based some of its questionable budget estimates on this premise.)

Another argument by Katsas appeared to fall flat (at least with Justices Kagan and Ginsburg): that the states were injured by the mandate because it would cause more people to enroll in their Medicaid programs than if they had a “voluntary” choice, and the states would have to spend more money than before to cover them.

Several other supportive arguments against holding that the AIA prevented further consideration of this case were filed in legal briefs with the Court but not highlighted specifically during oral argument. They include:

•    Congress determined in the ACA not to apply the full panoply of statutory rules governing taxes to the individual mandate penalty,

•    The Internal Revenue Code, in a number of  its sections, treats a penalty different than a tax, and

•    The federal government in the ACA tried to use the individual mandate to pay for its new regulatory impositions in an “off-budget” manner — without the political accountability that comes with new taxes.

The bottom line on the intersection of the ACA and AIA is: The tedious statutory construction analysis involved suggests that Congress did not intend to prohibit early consideration of this legal challenge to the individual mandate. And this case is Too Big to Fail to reach a decision on the merits by the Supreme Court later this year.

Next up: the individual mandate and the most important constitutional law issues in this case on Tuesday morning.

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Thomas P. Miller

Obamacare goes to court, part two: Are we talking about a penalty or a tax?

By Thomas P. Miller

March 26, 2012, 6:37 pm

This morning at the Supreme Court’s legal tour of the Affordable Care Act (“If it’s Monday, it must be the Anti-Injunction Act”), the court-appointed amicus curiae Robert Long ran into multiple rounds of skepticism from almost all of the nine justices. The Court seemed particularly skeptical that the issue involving the individual mandate penalty was one of its “jurisdiction” to hear the case. Past Supreme Court decisions had been rather inconsistent in how it treated the AIA, particularly involving whether the federal government could “waive” its provisions in particular cases, or that courts could make “equitable exceptions” in unusual circumstances.

Justice Breyer focused less on the jurisdiction issue and more on how Congress had gone to great lengths in treating the individual mandate in the Affordable Care Act (ACA) as a “penalty” rather than a “tax.” Justice Kagan pointed out how other “fees and penalties” in the health law were placed in parts of the Internal Revenue Code where the AIA would apply. On the other hand, the individual mandate operated much more like a regulatory command, with a penalty attached to it.

Long’s response was that the penalty could not be separated from the mandate. In other words, one could not just be in violation of the mandate without also incurring the penalty. (Technically, that’s not quite right, because some people could be exempt from the penalties without being exempt from the mandate.) His better point was that the penalty was the sole means provided in the ACA for enforcing the minimum coverage mandate. He also pointed out that definition of a “tax” for purposes of the AIA barrier to lawsuits is different than the definition of a tax for purposes of determining the constitutional authority of Congress to impose an individual insurance coverage mandate.

Although Long relied heavily on language in the ACA that provided that the penalties under the individual mandate would be assessed and collected in the same manner as the taxes, Justice Breyer pointed out that Congress used other language that had nothing to do with the Internal Revenue Code and it did not use the word “tax” in connection with the ACA mandate.

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Thomas P. Miller

Obamacare goes to court, part one: Can we even consider this case?

By Thomas P. Miller

March 26, 2012, 5:23 pm

Today’s 90-minute opener for three days of oral argument involves the dullest and most technical of issues: Can the Supreme Court even consider this case? Does it have jurisdiction?

In other words, after inviting everyone over for a gigantic constitutional law party, does it have to end shortly after serving a few hors d’oeuvres? What about that tasty main course involving the individual mandate?

Don’t worry. The argument will get better, and more interesting, tomorrow. And the Court appears unlikely to dismiss the case challenging the Affordable Care Act’s (ACA’s) individual mandate on jurisdictional grounds.

The technical issue up for argument today is whether or not the 19th century Anti-Injunction Act bars this legal challenge from proceeding until the individual mandate actually is implemented in January 2014, and its penalties for non-compliance begin to be enforced after April 15, 2015. The 1867 AIA (later amended) provides that no lawsuit to restrain the assessment or collection of any tax shall be maintained in any court by any person. In other words, pay first, then sue later.

Today’s oral argument was even more unusual because the federal government already has conceded the jurisdictional point in several federal appellate courts and in its briefs before the Supreme Court. Obama administration attorneys basically agree with the states and other private parties challenging the ACA on this issue—although for somewhat different reasons.

The administration used to say that the mandate was enforced by a “tax,” but then decided it was a “penalty”—depending on whether the issue involved jurisdiction or the constitutional authority of Congress to enact it. “A foolish consistency is the hobgoblin of small minds,” or at least antithetical to serving the political agenda of the Obama administration.

But because the 4th Circuit Court of Appeals upheld the AIA as a barrier to a similar lawsuit challenging the health law, the Supreme Court appointed an outside attorney to serve as a special amicus to argue for that position. The actual case before the Court today stems from the 11th Circuit court decision that overturned the individual mandate, and did not deal specifically with the AIA argument against doing so.

The respective attorneys have made a number of arguments for and against this case, but the key ones involve how the provisions for a “penalty” for violating the individual mandate were written by Congress in passing the ACA and how they should be interpreted. More on that in my next post.

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Thomas P. Miller

13 questions that need to be answered if Wyden-Ryan is going to work

By Thomas P. Miller

December 20, 2011, 11:59 am

The initial debate over premium-support-style reform of Medicare, as most recently embodied by last week’s Ryan-Wyden proposal, remains largely driven by ideological passions, oversimplified budgetary scoring models, and policy concepts devoid of structural details. Hence, it too quickly descends into the sort of no-holds-barred fight for political dominance that Butch Cassidy faced when challenged by Harvey Logan for control of the Hole-in-the-Wall gang in the 1969 movie, “Butch Cassidy and the Sundance Kid.”

If only the president and Congress could settle Medicare reform issues as quickly and as elegantly! Perhaps we should take a little more time to re-examine past assumptions, determine priorities, and present tradeoffs more honestly. Most of all, let’s stop assuming that we can get from point A to point Z without spelling out and using many more letters of the health policy alphabet to settle on some rules of engagement. The Ryan-Wyden proposal makes an honest effort to start this process at the “high-concept” level. But even that political movie will need a more detailed script that begins to answer at least 13 more questions.

Consider what remains mostly unknown, uncertain, or unresolved—if not simply airbrushed out of the fuzzy picture—regarding a baker’s dozen of elements of a premium support plan that could be implemented, made operational, and not contradict its promises:

(1)    Is the primary policy goal of premium support (or other Medicare reform alternatives) to achieve more efficient and higher-value health care? Or is it simply to lower the future rate of growth of Medicare spending? Or, more cravenly, just to keep currently happy beneficiaries reassured of little if any disruption to their existing health care arrangements? If we pretend that none of those goals are in any conflict with each other, the resulting prescription for solving several simultaneous equations remains likely to be contradictory, unaffordable, and unsustainable.

(2)    Clearer answers to resolve the tradeoffs between those major policy goals and their relative order of precedence will go a long way in determining other settings for the various elements of premium support. For example, promising too many “guarantees” to beneficiaries of generous benefits, limited cost sharing, protective regulation, and standardized coverage will negate other policy objectives. They will conflict with efforts to achieve lower Medicare spending growth rates, reduce tax burdens on younger workers, shrink massive budget deficits, and increase choice and competition through better private plan alternatives.

(3)    Just how “low-income” will low-income Medicare beneficiaries needing greater premium support turn out to be? Ryan-Wyden tends to start drawing special assistance income-level ceilings at dual-eligible seniors covered by Medicaid as well Medicare. Subsidies that creep further up the income ladder will hit younger taxpayers harder and reduce beneficiary incentives to make more cost-conscious care and coverage choices on the margin.

(4)     Recent rhetorical boasts that a reformed Medicare program under Ryan-Wyden will provide the “toughest consumer protections” ever might send a chill down the spines of those hoping for more differentiated coverage choices and more vigorous competition among Medicare insurers and health care providers. Ensuring necessary regulation is not the same as reupholstering traditional Medicare regulation with additional layers of edicts from CMS.

(5)    Competitive bidding mechanisms conceptually should determine relative levels of premium support by taxpayers in different health care market areas. But they need clear operating rules guided by key policy goals. If the foremost goal is lower costs, setting the winning bid price at the least-costly one submitted might drive down premiums over time, at the risk of failing to ensure sufficient capacity to serve all beneficiaries. At the opposite end, using competitive bidding to arrive at an “average” price of subsidized coverage based on all bids would keep more “competitors” in business, more beneficiaries happy, and the traditional Medicare program more insulated from competition. But that would come at the expense of reduced pressure for greater efficiency gains and resulting higher Medicare costs to be picked up mostly by taxpayers, and increasingly by Medicare premium payers as well. Ryan-Wyden suggests that it might favor using the lower of the second-lowest bid in a market area, or the cost of traditional Medicare fee-for-service (FFS), to set the premium support amount. The 1999 bipartisan Medicare commission’s model relied more on an enrollment-weighted average of all competitive bids. (Is anyone else out in Medicare nerd land considering a reverse second-item auction, if not a Dutch auction, but for the unfortunate imagery of reduced plan choices?)

(6)    The tradeoffs between taxpayer costs, Medicare spending levels, beneficiary insulation from market–based price tags, and relative stability on the supply side of health care also will shape such policy design decisions. What percentage of total Medicare premiums will be subsidized (the 1999 bipartisan commission started at 88 percent)?

(7)    Could a supplemental tier of separately-priced benefits also be offered by private insurers that first must follow bidding rules in selling an initial common core of standard Medicare benefits?

(8)    How much variation (“actuarial equivalence”) will be allowed in offering basic benefits?

(9)    How might levels of premium support be adjusted downward in later years (to meet budgetary targets)?

(10)    What degree of means testing for access to greater taxpayer subsidies will prove both economically necessary and politically tolerable?

(11)    The power of competitive pressure unleashed through a premium support reform might be shaped by design factors  that could overcome the ingrained inertia of most Medicare beneficiaries to choose one plan and stick with it as long as possible. For example, initial random assignment of newly eligible Medicare enrollees into both private plans and Medicare FFS—as a default setting subject to informed consent and opt-out guarantees—might reduce the passive bias of the current program toward enrollment in the dominant incumbent option, the traditional FFS public program. On the other hand, the limits of political tolerance will be tested by premium spikes in Medicare FFS in some markets where it is less cost-competitive, or by the absence of private plan options in other areas (such as several rural states represented by members of the Senate Finance Committee?) where limited health care provider options make network contracting by private insurers less viable.

(12)    Another unaddressed issue in many premium-support-style proposals involves how the administrative managers of Medicare FFS might be empowered (i.e., turned loose) to adjust their program configurations to respond to new competitive pressure from private plan alternatives. Political resistance to untying the hands of government  “bureaucrats” in order to allow them to act like managers seeking to retain or expand market share (if not “profits”) is strongest among the many micromanagers of Medicare on Capitol Hill. But it also strikes a chord among risk-averse FFS beneficiaries. On balance, level-playing-field competition between the public and private faces of Medicare requires that past constraints on the former’s flexibility to adjust premiums, cost sharing, and benefits, plus selectively contract with providers, should be relaxed from congressional shackles as long as sufficient disclosure of new policies and practices is ensured and the FFS program is broken up into regional, if not smaller, units.

(13)    The biggest challenge may involve the need to deliver Medicare cost savings soon enough and large enough. That would mean applying premium support to newly eligible enrollees earlier rather than later, or even to current enrollees, so that the “benefits” of  competitive cost pressures make a difference before fiscal pressures overwhelm the program another ten years from now. The Ryan-Wyden plan, like most other “reform” proposals, takes a dive on this issue, even though this contradicts the purported message that choice and competitive should be good for everyone, not just new beneficiaries much further over the election year horizon.

The above policy menu is complex and relatively uncharted. It certainly merits much more discussion, initial experimentation, and careful monitoring, but those uncertainties should not dissuade policymakers from allowing it to unfold sooner rather than later. (Even health policy analysts at several Washington-based think tanks have gotten into the Medicare reform act, under the nomenclature of “defined contribution” financing for Medicare.) What is more certain is not only that the status quo is unsustainable, but that a more cautious move in the direction of premium support should and could  have started over a decade ago, as proposed both by a majority of a 1999 presidential commission and in several bills offered by then-senators John Breaux and Bill First.

In any case, the public service done by Representative Ryan and Senator Wyden is not to offer the ideal, intricately-designed version of Medicare reform, but rather to help unlock the mostly stale policy discussion about how to avoid dealing with the growing mismatch between our past political promises to older Americans and our future institutional and economic capabilities to deliver them through traditional mechanisms.  Medicare is destined to change substantially, by necessity. Ryan and Wyden suggest a pathway for doing this more intelligently, compassionately, and sustainably, in accord with our broader values and the rest of a hopefully more competitive and market-driven health care system. But there’s lots more heavy lifting and serious work ahead than just a quick “clean and jerk” move toward more exaggeration, wishful thinking, and blame-shifting. Denial is no longer an option.

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Thomas P. Miller

Ryan-Wyden: Building a more sustainable foundation for Medicare reform

By Thomas P. Miller

December 19, 2011, 9:31 am

The first flurry of political reactions to last week’s Ryan-Wyden proposal for a revamped premium-support version of Medicare reform suggests that old habits die hard—particularly the bipolar tendency to view such modest adjustments either as a fundamental threat to guaranteed benefits and protections of the traditional Medicare program under current law or as a definitive step to vigorous choice and competition that ensures seniors will receive healthcare of better value at lower costs.

The initial stance of the Obama White House was a predictable recycle of past political hyperbole, with spokesman Dan Pfeiffer claiming that the new plan would end Medicare as we know it, raise premiums, and cause the traditional Medicare program to “wither on the vine.” (At least there was no direct mention of its failing to relieve the heartbreak of psoriasis….).

A slightly more temperate discussion of “premium support” was staged at the Brookings Institution on Friday morning, but even a balanced panel of longtime health policy experts appeared to be speaking from parallel universe frames of reference.

The traditionalist home team still favors lots of regulation, standardized benefits, taxpayer cross-subsidies, and top-down management. Nearly every senior is portrayed as potentially about to be victimized by rapacious private health insurance scoundrels, but for the vigilant protection of the Medicare bureaucracy and its political defenders. The reformist visiting team wants more privately supplied variation, cost-conscious consumer choice, and means-tested floor guarantees, but fewer price-controlled ceilings—without seeming too hard-hearted or radical.

However, the Strurm und Drang of well-rehearsed Medicare politics posing as policy analysis should not obscure some serious achievements signaled by the new Ryan-Wyden collaboration that make the next stage of Medicare reform they propose more realistic and likely, albeit less transformative.

First, the revised premium support proposal acknowledges that the traditional Medicare fee-for-service program cannot, will not, and should not be abolished ten years from now, even for new entrants, from a cold start. The more relevant issue is how should both the “public” and “private” arms of Medicare change to adjust to economic reality and respond to increased competitive pressure to perform more efficiently and less expensively. The only workable mechanism for moving in this direction that does not become politically arbitrary and less defensible involves establishing need-adjusted levels of taxpayer subsidies for somewhat more diverse Medicare coverage options (“premium support”) that are anchored to the actual costs to deliver a common, baseline health benefit in better ways.

Second, Ryan-Wyden avoids trying to guarantee the market share of any particular way—public or private—to deliver politically promised benefits. Instead of steering future competition one way or another, it would allow Medicare beneficiaries to decide for themselves, within more realistic and sustainable fiscal limits. The key is to get the structure of competition in Medicare right, in order to reveal how much of a gap there might be between what voters might like to “guarantee” as coverage, how much it is likely to cost, and how much taxpayers are ready and willing to pay to support it. (Hint—those lines do not cross until they first become more transparent and then are bent by the forces of choice, competition, and compromise).

Third, Ryan-Wyden begins to move away from earlier temptations to assure cost savings through arbitrary formulas to index the future rate of growth of Medicare program spending (but not entirely; there is some backsliding toward a GDP + one percent annual growth ceiling, potentially enforced by a congressional fallback mechanism). The petty tyranny of federal budget scoring rules usually produces the illusion of aggregate fiscal progress that is sustainable only on a spreadsheet, and melts away in the real world of political give-and-take and economic uncertainty. Lasting Medicare savings will have to be achieved the old-fashioned way, through efficiency, innovation, and reallocation of resources used for healthcare consumption and delivery (including—gasp—even toward non-healthcare services alternatives, on occasion).

Fourth, Ryan-Wyden signals additional convergence toward a growing policy consensus on such Medicare housekeeping measures as (1) consolidating cost sharing across parts A, B, and D, and any other as-yet unused letters of the alphabet, (2) offering full cash rebates to beneficiaries who choose lower-cost plan options below premium support benchmark levels, and (3) re-targeting the exhaustible supply of  taxpayer subsidies to be more sensitive to relative levels of health risk and income among beneficiaries.

All told, this is close enough for government work, but that would subject vital Medicare reform to the soft bigotry of low expectations. We still have to do even better, despite the political obstacles ahead, before external constraints reduce our future policy options. More on that tomorrow.

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Thomas P. Miller

The Ryan-Wyden plan for Medicare reform: Necessary, not sufficient, but a better restart

By Thomas P. Miller

December 16, 2011, 12:06 pm

Yesterday’s outline of a bipartisan path to Medicare reform, as described by Representative Paul Ryan (R-Wisconsin) and Senator Ron Wyden (D-Oregon), does not mean that peace is at hand in the chronic Medicare policy wars of the last two decades. Although it only takes two (from different parties) to offer a “bi”partisan plan, it will require many more members and their supporters to change course and seek a sustainable and effective compromise. Nevertheless, the Ryan-Wyden vision of “Guaranteed Choices to Strengthen Medicare and Health Security for All” provides the opportunity for a change in tone and a search for common ground that offers more light than heat. Political conflict could evolve from arguing over WHETHER there are unavoidable problems in traditional Medicare that require substantial structural changes to debating WHY certain reforms are necessary and HOW best to implement them.

The full origins of longstanding descriptions of the fatal flaws of the Republican and Democratic parties, respectively, remain in dispute and reach back to Everett Dirksen and even John Stuart Mill. However, I usually prefer to go with the version articulated by one of my first mentors in Washington—author and columnist Stan Evans—who once explained:

We have two parties here, and only two. One is the evil party, and the other is the stupid party. I’m very proud to be a member of the stupid party. Occasionally, the two parties get together to do something that’s both evil and stupid. That’s called bipartisanship.

But every rule of thumb has its exceptions. And in this case, Paul Ryan is leading congressional Republicans in an intelligent direction. Ron Wyden is departing from his party’s reactionary defense of the welfare state’s road to fiscal perdition and intergenerational theft.

It’s too soon to say whether “this is the beginning of a beautiful friendship” (see the Wyden-Bennett health reform bill of several years ago and how that movie concluded), but it signals a shift in momentum and a new phase of Medicare reform based more on substance than political posturing by the usual suspects.

“Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”

The latest Ryan-Wyden proposal for Medicare is stronger on flashy political symbolism than on the heavy lifting of long-overdue structural re-design. In subsequent posts, I’ll first highlight its initial achievements in finding areas of convergence on policy and abandoning unrealistic postures. Then, I’ll discuss where Ryan-Wyden still needs to go to transcend half-finished shortcuts that lead to policy roundabouts and political dead ends, whether it can deliver its political guarantees, and how to begin to answer the much harder questions ahead.

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Thomas P. Miller

Firing warning shots with ‘blank’ bullets

By Thomas P. Miller

November 21, 2011, 4:23 pm

The incredibly sloppy and hurried drafting of the Patient Protection and Affordable Care Act (PPACA) is the gift that keeps on giving to opponents of ObamaCare. A “glitch” in drafting provisions for premium assistance in the healthcare law approved by Congress in March 2010 was first identified at an AEI forum that December by Vanderbilt law professor James Blumstein and former Justice Department attorney Thomas Christina, and later reported in early September by David Hogberg of Investor’s Business Daily. It was highlighted again last week in a Wall Street Journal op-ed by Jonathan Adler and Michael Cannon (“Another ObamaCare Glitch”). But the larger story is the continuing pattern by Obama administration officials and leaders of the previous Congress to stretch the law until it breaks and to try to bluff their way past political barriers to a sweeping, over-reaching health policy agenda.

ObamaCare hopes to use new insurance-coverage tax credits for tens of millions of Americans as a carrot to draw them into expanded coverage for Medicaid and highly regulated “exchange” plans. It also provides a stick to force employers to offer “qualified” coverage or face penalties, and to compel states to establish their own exchanges under tight federal rules or face a takeover by exchanges run directly from Washington. But the rush to pass something by any means necessary in the previous Congress in early 2010 meant that all the wires to this fiscal and regulatory bomb were not connected. It’s going to be another dud. The employer mandate penalty won’t apply in states where there is no state exchange established to distribute the tax credits. The threat of federally run exchanges is hollow without any money available from taxpayers. And the individual mandate has many other problems of its own (It’s unconstitutional, unpopular, weak, and largely unenforceable—but otherwise doing just swell).

Similar fiascos over the last year have included (1) the crash of the CLASS Act Ponzi scam for an inherently unsustainable long-term care program, (2) redefining “affordability” for employer coverage as applying only to the cost of single premiums for workers with dependents, (3) limiting grandfathering rules so narrowly that most workers will no longer be able to keep their coverage they like, (4) defining income eligibility rules for Medicaid so poorly that many higher-income, early retirees with Social Security benefits could also qualify for Medicaid and exchange-plan subsidies, and (5) having to waive broadly around annual limits for employers’ insurance benefits to prevent disastrous loss of more limited coverage for thousands of plans and millions of workers.

Folks, we are not making this up (but cannot rule out the possibility that the architects and advocates of ObamaCare continue to hope that they can continue to do so with a straight face). The provisions of the PPACA include more “oops” moments than a Rick Perry presidential debate response.

As Hardy once said to Laurel, so too should each voter keep reminding the designers of ObamaCare: “Well, here’s another nice mess you’ve gotten me into.”

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Thomas P. Miller

ObamaCare’s legal opponents fail to score in federal appeals court

By Thomas P. Miller

November 8, 2011, 7:36 pm

Some of the Washington Redskins’ offensive woes appear to have rubbed off on the latest local team challenging the constitutionality of the Patient Protection and Affordable Care Act (PPACA) in court. Earlier today, a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit posted a shutout in dismissing the latest significant case claiming that the law’s individual mandate is unconstitutional (the current won-lost record at the federal appellate level is either 1 and 2 or 1 and 4, depending on whether you score dismissals for lack of standing as a tie).

Initial hopes that an apparently favorable panel of two judicial “conservatives”—Judge Lawrence Silberman and Judge Brett Kavanaugh—would agree with an earlier anti-mandate ruling in the 11th circuit were dashed when Silberman and Judge Harry Edwards upheld the mandate as a constitutional exercise of the powers of Congress to regulate interstate commerce. Kavanaugh’s “dissenting” opinion did not reach the constitutional merits because he found that federal courts lacked jurisdiction over the issue at this time, concluding that they cannot enjoin the collection of mandate penalties by the Internal Revenue Service in advance of when they first are collected (in 2014).

In the battle between quick-kick punts (Silberman—hardly devoting ten pages to the main constitutional law argument in the lead opinion) and overheated waffles (Kavanaugh—firing up the iron at the International House of Judicial Pancakes), no one stepped up to the need to overturn 70 years of chronically bad Supreme Court precedent, which centers on the New Deal era case of Wickard v. Filburn (1942).

Today’s forecast from this legal meteorologist predicts that the eventual Supreme Court decision next June will come down to how Justice Anthony Kennedy (not Chief Justice John Roberts) lines up. If the anti-mandate legal team’s targeted appeal to Kennedy’s past embrace of structural federalism as a bulwark of constitutional liberty doesn’t work, the chief justice is most likely to resist staying in the minority (four justices appointed by Democratic presidents are “in the bank” to uphold the PPACA with few questions asked) and instead join Kennedy in a 6-3 vote to keep the PPACA alive (before it dies of other, politically self-inflicted wounds?).

But if Kennedy stays in line with some of his past opinions (and doesn’t read the NY Times the day before voting in conference), Roberts would be “inspired” to join a 5-4 decision to strike down just the individual mandate, and perhaps a few related health insurance regulatory provisions—in order to shape the scope of such a ruling more narrowly. And, if you don’t like today’s prediction, just wait. There undoubtedly will be other ones forthcoming as the constitutional arguments and surrounding political atmospherics swing back and forth in the months ahead.

What those of us who fondly remember a previous vintage of the U.S. Constitution (the one with enumerated powers that limited the scope and scale of the federal government) actually need are justices willing to be less deferential to bad court precedents and more willing to take some public heat. That’s how the Warren Court created such a long line of periodically outrageous, new constitutional “law.” Reversing it, and rolling back similar extensions of the federal government’s powers, cannot be expected to look very pretty. But getting legally cute and finding new exceptions to past contortions (activity vs. inactivity, economic vs. non-economic, penalty vs. tax) is just as hard (although more tempting; hence the many indecipherable 5-4 decisions authored by former Justice O’Connor and other judicial weathervanes in the past).

Elections have consequences, too, and there’s a particularly ugly one coming up next year. Instead of hitting the pause button while wishing that five Supreme Court justices will deliver fleeting relief from the pain of ObamaCare, it looks like it’s time to diversify the investment portfolio and think about a return to regular politics by more transparent means. Repeal, replace, revise, rewind. Any of the above might be better than none of the above.

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Thomas P. Miller

After CLASS: What to do next about ObamaCare

By Thomas P. Miller

October 15, 2011, 3:56 pm

Rather than just crow briefly “we told you so,” ObamaCare opponents on Capitol Hill should think more strategically about how to exploit and expand this political opportunity:

1. The actual legal authority for the program remains on the books without further action. One should never leave a partly loaded gun on the table, even if most of the chambers are empty or just house blanks. The CLASS provisions in the Affordable Care Act should be formally repealed, but not before several hearings and/or investigations to drag its administration enablers before public scrutiny on the record. The program is emblematic of the only slightly less sustainable assumptions behind the rest of ObamaCare, and a full autopsy could provide an excellent tutorial for voters and officeholders.

2. The Congressional Budget Office has informally signaled that abandonment of the CLASS program will not have any budgetary costs, because it turns out that its advance premiums cannot be collected in any legally enforceable manner given the statute’s requirements for 75-year solvency. However, Republican congressional leaders should insist on an updated budgetary estimate of the “net” effects of the ACA over the next ten years without the previously assumed revenue gains from the CLASS program premiums. CBO is not ordinarily obligated to update its overall budgetary baseline until this winter as part of the next annual White House budget plan for fiscal year 2012, but a request from House Budget chairman Paul Ryan for an earlier letter estimate in this regard would be difficult to ignore. Its findings would further tarnish the questionable basis for the earlier budgetary savings claims made in 2009 and 2010 for ObamaCare.

3. A more aggressive move on Capitol Hill would involve tying formal repeal of the CLASS provisions to several related flaws in the original ACA legislation that have come to light subsequently—with significant budgetary implications. This could revive momentum for repealing and replacing most, if not all, of the ACA. ObamaCare opponents need more actual votes on the record in legislative committees and on the floor of both houses of Congress, not just press releases and throwaway rhetoric. Several possible items that could be added on as side cars to the CLASS repeal locomotive—particularly as part of the upcoming recommendations to the deficit reduction “supercommittee”—include:

• Re-confirm that the statutory drafting error in the ACA that apparently does not allow taxpayer subsidies to flow to any  federally run health benefits exchanges (instead of state-run exchanges) remains the case (for nerds scoring at home, highlighting the difference between section 1311 and section 1321 would both produce possible  budgetary savings, and stiffen the resolve of states to resist implementing their own exchanges that comply too obediently with proposed HHS regulations).

• Correct the drafting error that eliminated the value of early-retiree social security benefits income from calculations of eligibility for future exchange subsidies (another budget savings item).

• Confirm that the definition of “affordable” under the ACA refers to the cost of single coverage alone, rather than to family coverage as applicable to a worker, in determining the mandated coverage requirement for the worker’s employer and determining the worker’s (and his dependents’) access to taxpayer-subsidized exchange  coverage. (This has substantial budgetary implications, and will drive supporters of more expanded exchange coverage, and employer dumping of coverage, nuts!)

• Impose a moratorium on enforcement of “maintenance of effort” requirements for post-March 2010 state Medicaid program provisions, or at least re-define it in aggregate budgetary terms rather than on an increasing, per-beneficiary basis. (This not only will relieve overburdened state budgets, but reduce  matching federal payments proportionately.)

4. As long as we are loading up the next legislative train in this regard, there might even be some room on board for a fairly popular provision to repeal the Independent Payment Advisory Board (the upcoming committee of 15 unaccountable “expert” price fixers and reimbursement slashers) before it ever gets off the ground.

To paraphrase and update the advice of former White House Chief of Staff Rahm Emanuel, “You never want a serious, slow, and ugly death of just one legislative provision to go to waste.”

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Thomas P. Miller

Let’s bury the CLASS Act cadaver (after a full autopsy)

By Thomas P. Miller

October 15, 2011, 8:45 am

Yesterday, the Obama administration finally bowed to the inevitable and acknowledged that it can’t figure out any way to implement its fatally flawed government program for voluntary, long-term care insurance. Budget Committee chairman Kent Conrad (D-ND) had labeled the so-called CLASS Act (short for Community Living Assistance Services and Support) “a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of,” when it was first drafted two years ago as part of the Affordable Care Act (ACA, aka “ObamaCare”).

Yet even after the office of the actuary for the Centers for Medicare and Medicaid Services concluded in April 2010 that “there is a very serious risk that the program would become unsustainable as a result of adverse selection by participants,” and almost all independent outside observers questioned its actuarial soundness, the Department of Health and Human Services (HHS) pretended that it could craft a plan to launch CLASS and keep it solvent for 75 years (as required by the new law).

After several weeks of rumors and leaked messages that the HHS office to implement the CLASS program was about to be closed, Secretary Kathleen Sebelius issued a Friday afternoon letter to congressional leaders that “I do not see a viable path forward to CLASS implementation at this time.” But note that this statement only classified the program as brain dead, without formally pulling the plug and burying it. (Does the Obama administration have a secret plan to commute Madoff’s prison sentence during the president’s second term and assign Bernie the job of resurrecting the program while on parole?)

Up to now, the primary political reasons for keeping the fiction of implementing the CLASS program alive involved not just maintaining the longtime dream of its primary congressional supporter (the late Senator Edward Kennedy) and like-minded liberal advocates that it could eventually mutate/metastasize into a larger, permanent entitlement program for all Americans; it also helped make the short-term budgetary score for the ACA look better than it really was. By collecting premiums up front for five years, once implemented, before paying out initial benefits, CLASS produced the illusion of “scoreable savings” of roughly $70 billion for the new health law’s initial ten-year budget window. (Après FY 2019, le deluge, but who’s still counting that far out?)

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Thomas P. Miller

PolitiFudge: Reliable Sources Start Advocacy

By Thomas P. Miller

July 29, 2011, 4:02 pm

Perhaps it’s the figuratively overheated political debate of this month, or maybe it’s just the literal heat of Washington, but even some generally reliable sources of policy analysis are starting to overshoot the mark and push the advocacy envelope when making otherwise defensible points. Consider three examples within the last week or so involving whether small employers are more likely to drop health insurance coverage, how much private-sector job growth has slowed, and whether Social Security checks will still be paid if the U.S. debt ceiling is not raised.

On Monday, the Wall Street Journal editorial page highlighted the findings of a new survey of small businesses by the National Federation of Independent Business, which suggested that 57 percent of a cross-section of companies employing 50 or fewer workers and currently offering health insurance coverage may stop doing so, in part due to a future “flight to the exchanges” triggered by the Affordable Care Act, also known as Obamacare. The actual NFIB report was more carefully nuanced in explaining several factors behind future reductions in health insurance offers by small businesses. However, the Journal editorial overstated the scope of eligibility for heavily subsidized insurance in the future state-based health benefits exchanges, asserting that “small-business workers are eligible for exchange subsidies even if they can get job-based coverage.” (Emphasis added.)

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Thomas P. Miller

Race to the Exits, Before the Taxpayer Subsidy Doors Close

By Thomas P. Miller

June 8, 2011, 8:23 am

Television viewers of a certain age will recall a recurring circus manipulation act on their small screens, most notably on the Ed Sullivan show of the 1960s. It involved a person frantically spinning more and more plates and other flat objects on poles, without them ever falling off.

This comes to mind again in light of the latest projections for how well and for how long ObamaCare’s contorted compromises and complex implementation schemes can keep private health insurance arrangements spinning along without falling and breaking apart. This week, several management consultants at McKinsey & Company concluded that the forthcoming shift away from employer-provided health insurance under the new health law will be vastly greater than expected because (at least on paper) it will make sense for many companies and lower-income workers alike. The incentives provided by the web of new taxpayer subsidies, insurance mandates, and regulatory burdens under the Affordable Care Act (ACA) will trigger a “radical restructuring” of employer-sponsored health insurance (ESI) benefits.

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Thomas P. Miller

‘Hoist with His Own Petard’ — The Individual Mandate Blows Up ObamaCare

By Thomas P. Miller

February 2, 2011, 8:08 am

At the heart of Monday’s sweeping ruling by U.S. District Judge Roger Vinson, which declared the Patient Protection and Affordable Care Act unconstitutional, is this irony: The court used the too-clever-by-half legal arguments of the Obama administration’s lawyers not just to undermine their desperate defense of the law’s mandate on individuals to purchase health insurance, but to overturn the entire law.

Judge Vinson first provided an extensive review of the periodically tortured history of the Commerce Clause in U.S. constitutional law jurisprudence. He concluded that using this source of congressional power to require individuals to buy a private product (insurance) from a private company was not just novel and unprecedented federal action: it would be a “radical departure from existing case law” to hold that Congress can regulate “inactivity” under the Commerce Clause. Moreover, if Congress could do this, it would be difficult to perceive any remaining constitutional limits on federal power to regulate.

This part of the decision in Florida—that the individual mandate was unconstitutional—was not a particular surprise. A previous ruling and several hearings in the case foreshadowed that result.

Much more interesting was Judge Vinson’s decision that the rest of the health law was not “severable” and could not survive the constitutional flaws of the individual mandate provision.

Attorneys for the Obama administration had constructed a complicated and contradictory defense strategy from which they could not escape. The Florida district court noted how their legal briefs strongly insisted again and again how absolutely “necessary” and “essential” the individual mandate was for the overall Act to operate as it was intended by Congress. “I accept that it is,” said Judge Vinson.

The defense team had concluded that its best chance for defending the unprecedented individual mandate was to tie it inextricably to the health law’s other health insurance provisions, as part of the “regulatory scheme” necessary to achieve other more constitutionally permissible (and politically popular) objectives. But this legal gambit turned out to be analogous to strapping the dynamite of an irredeemably flawed mandate to their chests and daring judicial onlookers not to take any steps closer unless they wanted to risk blowing up the entire healthcare law.

After all, this not-so-veiled threat also meant that the various legal wires holding this politically explosive package together were connected so inextricably that, if and when the individual mandate’s unconstitutionality actually was tripped, everything else in the law actually might go up in smoke as well.

The defendants, as well as congressional supporters of the legislation, even conceded the key points that the Act’s health insurance reforms cannot survive without the individual mandate, and its various insurance provisions are the very heart of the Act itself.

Hence, when Judge Vinson approached the issue of whether he could sever the constitutional pieces of the health law from its unconstitutional ones, he concluded that it remained uncertain, if not doubtful, whether Congress would have passed the former ones without the individual mandate. He refused to play the role of King Solomon in daring to slice this legislative baby in two (or many more pieces), because he could not determine what would survive. Rewriting complex and convoluted statutes remains a salvage job for Congress, not a federal court (although a high-speed paper shredder might do, in a pinch).

The court noted that the Affordable Care Act has been analogized to a finely crafted watch. But Judge Vinson’s opinion added that one of its essential pieces—the individual mandate—is defective and must be removed. However, there were too many moving parts inside for a court to repair, and the new watchmakers in Congress have other design plans these days.

It turns out that the hands of this watch are stopped by the Constitution, and they really are signaling that “it’s time to go” for ObamaCare.

Readers of Shakespearian tragedies may recall the original source of the proverbial phrase, “hoist with his own petard,” comes from a table-turning change of words in a death warrant letter in Hamlet. In the military engineering language of the time, a “petard” was a small bomb and the original bomb maker was thrown up into the air (“hoist”) when his own bomb exploded ahead of schedule. (For a modern translation, see also two federal court rulings, November 2010 congressional elections, and “repeal and replace.”)

An additional irony is that our current president and many of his Democratic Party allies in Congress and elsewhere have relied for many years on using the courts aggressively, as well as ambitiously extending regulatory interpretations beyond the original text of statutes, to achieve what they could not win through more transparent and accountable, but less malleable, political processes. Their admonition to critics then has been, “But it’s the law, and you must follow it.” Yet now they must try to duck, dodge, bob, and weave around a clear and unequivocal ruling in federal court, covering 26 states as plaintiffs, that the entire ObamaCare enterprise is unconstitutional—even as they hope to keep defining and implementing its many provisions and insisting on its “inevitable permanence” in our lives.

Although some sort of judicial stay of the immediate effects of the Florida court’s declaratory judgment may be sought on appeal, in the meantime administration officials implausibly sound like traffic cops at a serious accident scene, telling rubber-necking passers-by: “Move along. There’s nothing to see here. Go about your business, citizens.”

Shakespeare reminds us of the transience of life (in this case, political life):

To regulate activity or inactivity (not to be), that is the question…

Alas, poor ObamaCare, I knew it. (Hold up skull, then exit stage left)

Tom Miller is also coauthor of a forthcoming book on ObamaCare that includes his chapter on its effects on our constitutional rights.

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Thomas P. Miller

Another Empty Promise of ObamaCare: More Jobs

By Thomas P. Miller

October 2, 2010, 6:00 am

obama-care-jobsOn September 23, the calendar signaled it was time for a six-month anniversary celebration of the Patient Protection and Affordable Care Act, aka PPACA. (No similar salute was planned for the end of the month, for the bill’s accompanying reconciliation provisions, which were signed into law a week later, on March 30). Not only did the honeymoon never get started, growing numbers of voters are checking out the terms of the pre-nuptial agreement and considering options ranging from trial separation to annulment.

With the Obama administration suffering low approval ratings not just for botched healthcare reform, but also for a sluggish economy, what was it to do? Perhaps try out the latest audacity of hype and spin PPACA as a jobs-creating machine.

Continue reading here.

Image by the Federal Emergency Management Facility.

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Thomas P. Miller

It Depends What the Definition of ‘Uninsured’ Is

By Thomas P. Miller

September 15, 2010, 4:42 pm

One of the annual rituals in the health policy community is the release of Census Bureau estimates of the number of uninsured Americans. The latest factoids from its Current Population Survey (CPS) should be arriving in simplified news headlines shortly. For critics of our partially “private,” if not market-based, healthcare system, and for the somewhat smaller set of enthusiasts for a more centrally planned universal coverage regime (coming soon, in 2014, courtesy of the Patient Protection and Affordable Care Act and its avalanche of regulations, coverage mandates, and financial cross-subsidies), awaiting the CPS data is a mixed blessing. On the one hand, an increase in the uninsured means that more people are missing out on the blessings of expensive insurance coverage, whether they want it or not. On the other hand, a larger spike in those lacking coverage provides a stronger argument to “fix” the current system with stronger medicine and blame private insurers and taxpayers for leaving too many Americans uncovered. Of course, predicting a greater disaster that never quite arrives leaves some in a quandary. Particularly when the early stages of ObamaCare treatment are delivered in slow-acting, time-release capsules that tend to increase coverage costs and uncertainty in early years before larger doses of taxpayer dollars and coverage mandates arrive later.

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Thomas P. Miller

Plugging the Leaks in High-Risk Pools

By Thomas P. Miller

July 1, 2010, 3:23 pm

This week, the Obama administration finally launches a poorly designed, hastily constructed, and severely underfunded high-risk pool program across the 50 states. It’s a shallow attempt to appear to be doing “something” soon to help Americans without health insurance due to pre-existing health conditions. But apart from its stumbling start, it’s also the initial poster child for the core flaws of ObamaCare. It misrepresents the real problem, promises more than it can deliver, tries to hide the real costs, and gives sensible reforms a bad name—all because the administration is more committed to its long-term vision of central government control than to actually building a sustainable solution.

High-risk pools can address pre-existing conditions without the costs and burdens of the heavy-handed federal regulation of insurance planned for 2014. In short, we can do more by doing less, in a transparent, targeted, and adequately funded manner.

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Thomas P. Miller

No Straw Man Left Behind

By Thomas P. Miller

February 26, 2010, 6:49 am

“Will you walk into my parlour?” said the Spider to the Fly.

Did the tactical gambit of a Blair House health summit work for President Obama? Once the initial (and periodically recurring) bloviating ended, the respective objectives of the Democratic and Republican sides took shape, as expected. The president’s two-tiered strategy was first to repeatedly paint a number of differences between Democrats and Republicans as not all that great, as soon as the latter agreed even more with the former’s final offer. And on some easily oversimplified issues of “insurance reform” on which congressional Republicans remain either uncomfortable or don’t know how to articulate more nuanced market-based positions, Obama scored some cheap points. His frequent negotiation offer was “Just how much regulation do you want to accept?” as in “We all know what we politicians are, now let’s just settle on the price.” Then, cue the usual letters and anecdotes, while the violin section tunes up. Along with another recycling of countless statistical factoids that turn out to be flawed or distorted (but only when you examine them more closely).

The president’s second approach was to depict (sometimes subtly, sometimes not) remaining opposition to his ideas and those of his congressional allies as simply wrongheaded, untrue, unreasonable, and/or partisan—to prime more public support for the forthcoming procedural end around of a budget reconciliation bill attempt next month in the Senate and House.

Although President Obama clearly signaled earlier this week his resolve to press ahead for a reupholstered version of the Senate’s legislative furniture (left parked on the curb last month), he hoped to put a fresh façade of open-mindedness to any new idea that mimicked his old ones. At times, he jabbed back at Republican critiques quite effectively, although he struggled with containing an “I’m the smartest guy in the room” urge to rebut too much and at too great length, while outrunning his knowledge base. He also left no straw man argument unvoiced, again and again. He even concluded by recycling the race to the bottom credit card fable. Key message—We’re not proposing a full government takeover of your healthcare (yet).

On the minority side, the initial hope was to establish that Republican healthcare ideas was not a null set. Mission accomplished. Particularly effective in fleshing out some policy substance were Senator Tom Coburn—HOW we get to similar objectives differently, Senator Mike Enzi—how real bipartisan legislation is developed, Senator John  Barrasso—why patients, not third parties, need to be in charge, Rep. Charles Boustany—explaining House Republican proposals, and Rep. Marsha Blackburn—explaining interstate insurance purchasing in commonsense language. Minority Whip John Kyl scored repeatedly in pointing out to the president what the Senate bill actually did to raise individual insurance premiums and consign “grandfathered” coverage to an early death (it always helps to read bill language before you talk about it…). The highlight for this observer and many others was Rep. Paul Ryan’s cool and clear explanation of both the fiscal and personal long-term consequences of the respective versions of health overhaul, plus the limits of the Congressional Budget Office’s GIGO (garbage in, garbage out) scoring.

Although there were a few knockdowns, the final decision will have to be scored on points. On that front, the congressional minority has a majority among current voters. The White House and the current congressional majority can pull out some heartrending stories and narrow policy themes, but it continues to be tone deaf to what most of the country keeps saying: We want real health reform, but this legislative dog won’t hunt. It just barks a lot.

We watch these summits so the rest of you don’t have to gag.

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Thomas P. Miller

Ceasefire Is Another ‘Once in a Lifetime’ Chance for Reform

By Thomas P. Miller

January 20, 2010, 9:05 am

The most honest analysis of last night’s shocker in Massachusetts is “Wow, I didn’t see that one coming (until everyone else did just a few days ago).” But there will be no shortage of profoundly updated analyses (and excuses) by the many pundits who got most of this past year’s health policy debate and its larger political context wrong. On the other side, one can find exaggerated claims of a mandate to move in an opposite direction, rather than simply calling a timeout and reflecting before reloading.

Hence, before the next round of clichés and conventional wisdom, a much humbler reflection would start with recognizing the profound disconnection between, on the one hand, the relentless push of the White House and the current congressional majority’s leadership for a sweeping and contorted mix of healthcare overhaul provisions by any means necessary, and, on the other hand, the growing majority of overburdened Americans hoping for something better someday but willing to accept a political ceasefire. We do not have sustainable political majorities for any destabilizing policy changes. Trying to do less in Washington would accomplish more everywhere else.

We will know more over the next week about the calculated response of the president and Democratic leaders to seeing their defeat on this front snatched from the jaws of imminent victory. The temptation to double down, Vegas-style, on an unwise bet to make health policy history through more procedural shortcuts and backroom deals remains great (at least inside the central command bunker), but pursuing this course would not only be self-defeating, it would stress the larger political culture in which all parties must live and succeed. The alternative of cobbling together a scaled-down, less partisan compromise amid the overcharged atmosphere of 2010 remains equally unlikely. 

For the moment, we are stuck in another stage of political stalemate despite a serious need for limited, but essential, health policy reforms. However, there remain several past historical examples of health policy changes that followed initially disastrous overreaches by majorities that misread their mandates. In 1996, a more limited set of reforms under the Health Insurance Portability and Accountability Act was passed on a bipartisan basis—just two years after the collapse of ClintonCare. In 1997, the Balanced Budget Act incorporated many of the Medicare policy changes so vigorously resisted when proposed by a new Republican-controlled Congress in 1995. (To be sure, these were much more political process accomplishments, because the actual policy provisions were of neither great value nor catastrophic harm . . . which often is close enough for government work.)

If and when the adults re-enter the health policy discussion, I hope they will encourage an end to the artificial urgency and apocalyptic desperation of the current debate. We need to restart with neither a blank page nor an overcrowded pile of 2,500 pages. After we listen more carefully to the often-contradictory messages coming from anxious voters and count more of their ballots this November, a healthier restart and reconnection with them is both possible and necessary—next year. That will be the next annual “once in a lifetime” opportunity.

Last night, Scott Brown reminded us that “we can do better.” This past year, we’ve already nearly done worse.

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Thomas P. Miller

The Triumph and Tragedy of Health Politics

By Thomas P. Miller

December 22, 2009, 12:59 pm

navy_nurse_on_haven_off_korea_1952By now, almost all the arguments—pro, con, and equivocal—regarding health policy overhaul in name, if not in substance, have been recycled and nearly exhausted. And the relentlessly winding procession toward a near-term political disaster for many Democratic officeholders and a potentially longer-term policy disaster for most Americans will roll on, beyond a tedious House-Senate conference in the new year. Any foreseeable final product promises to make complaints about our current healthcare pale by comparison—we’ll see higher taxes, budget deficits, regulatory burdens, disruptions of current insurance coverage, and political hijacking of personal medical decisions.

However, as one listened to Democratic Senate leaders alternately wax and drone on in this weekend’s late-night floor debate, their four most dominant themes stood out. First, private insurers are villains to be demonized (or “Don’t hate us as much as you despise them!”). Second, after many decades in the political desert, the end of a long, multigenerational crusade to establish the guarantee of healthcare insurance as a fundamental right is in sight. Third, just look and marvel at what we politicians are “giving” you (just don’t ask who actually pays for this holiday fruitcake and whether you come out ahead). Fourth, this is just the beginning of healthcare politics 24/7/365 to perfect the imperfectable. Rather than reform a handful of fundamentally flawed incentives in health policy and empower individuals to make better choices, both the Senate and House bills fall back on the fatal conceit that a few hundred designated chosen experts can overcome the ingrained preferences, instincts, and self-interests of more than 300 million Americans.

The Republican resistance to this great leap backward has been spirited and surprisingly persistent. However, it relied predominantly on an avalanche of disturbing numerical criticisms (costs more, less filling; with more losers than winners) and spotlights on unseemly deals, delays, and detours. Republicans mostly rode the wave of mounting negative opinion about the apparent contradiction of “health reform.” With a few exceptions, they failed to present effectively an alternative vision. The latter stance may have been necessary to provide unity and tactical effectiveness for an outgunned minority, but it left a void. Americans expected to be offered the possibility of something better, rather than just less bad, for their future health.

The mounting difficulty of credibly accomplishing that goal will be even greater if and when the current legislation moves past its current cusp, but the political path ahead is not a one-way street. Exaggerated promises of greater “fairness” will collapse under the pressure and conflicts of zero-sum redistribution schemes. As healthcare markets are short-circuited and their posted price tags become even more distorted than before, the rules of engagement will change and make better paths not taken harder to find and steeper to climb.

So the prospects for changing course and achieving health policy reform that is more rational, effective, and (most of all) humble have regrettably moved further off into the future. But the self-appointed managers of hyper-politicized healthcare have taken ownership of a basket full of liabilities and toxic assets. Every complaint about the current healthcare system will be magnified by the deeper disappointment ahead over promises unfulfilled, problems compounded, and options foreclosed. Pushing through sweeping legislation despite a popular majority’s opposition is never a good career move for politicians.

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Thomas P. Miller

Fatal Flaws: Five Healthcare Questions for President Obama

By Thomas P. Miller

June 24, 2009, 6:44 am

ABC News is preparing a primetime town hall special on June 24 with President Obama on his healthcare reform plan. Here are a few suggested questions:

(1) President Obama, you promised just last week, in a speech to the American Medical Association, “no matter how we reform healthcare . . . you will be able to keep your doctor . . . and you will be able to keep your healthcare plan. Period. No one will take it away.” Does that promise mean that your reform plan still won’t make it harder to keep what I like, if my doctor practices medicine differently than more powerful federal regulators prefer or if my health plan doesn’t cover everything under the same terms that your plan would require? Will individual Americans still be able to spend their own money for the healthcare that they and their personal physician decide is best for them?

(2) During your presidential campaign, you said flatly that “every American has the right to affordable healthcare.”  Then why did you write a letter to Senators Kennedy and Baucus earlier this month that, although you were open to a mandate on individuals to purchase insurance and a mandate on employers to offer such coverage, those mandates must exempt Americans who cannot afford that coverage, even after new public subsidies are approved by Congress? Did you run out of money to make good on your earlier promise, or are some Americans less deserving of affordable coverage?

(3) During your presidential campaign, you told voters at a town hall meeting: “If I were designing a system from scratch, I would probably go ahead with a single-payer system.” Is it your position today that we should move toward a single-payer system, but just can’t get there politically in the near term, or that it’s important to maintain private health insurance coverage for the rest of your presidency and the decades beyond it for the majority of Americans not already covered by the Medicare and Medicaid public programs?

(4) Mr. President, you have said that we need to include a public plan “option” in this year’s insurance coverage reforms for non-elderly Americans. How would that public plan be able to offer coverage to Americans at a lower cost, unless (like Medicare and Medicaid) it paid physicians and other medical providers at significantly lower rates than private insurers do; unless it operated under different rules than those for private insurers regarding capital reserves, voluntary participation by physicians, and state-based licensing; and unless it soon grew to dominate the “market” for insurance coverage of the non-poor and non-elderly? Once the public option grew that large and dominant, who then would keep it “honest” and “competitive”?

(5) During your campaign and your presidency, you have promised Americans that healthcare reform will mean that they will pay less, not more, for the coverage they prefer; that taxes on Americans earning less than $250,000 a year will not be increased; and that health reform will be budget-deficit-neutral. The Congressional Budget Office seems to differ with you and congressional leaders on the latter, give or take a trillion dollars or more over the next ten years. If and when you are able to deliver on those promises, could you explain which Americans might end up paying more, and receiving less in benefits, than they currently do? And please explain whether our current health cost problems stem from Americans spending too much on healthcare, spending too little on it, or spending it on the “wrong things,” in your opinion?

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