Do Coverage Expansions Save Lives? ¯\_(ツ)_/¯

A few weeks after two studies called into question whether one particular element of Obamacare—its hospital readmissions program—may have increased mortality rates nationwide, another study released by several economists expressed doubt about whether the law’s more than $1 trillion in spending on coverage expansions actually reduced mortality. Moreover, the latest study also raises fundamental questions about whether any coverage expansion will generate measurable reductions in mortality rates.

Coming in a week when Democrats prepare to release the latest version of their single-payer legislation, which estimates suggest could cost at least $30 trillion, the study raises an obvious question: What exactly will Americans receive for all the trillions of dollars in new government spending the left proposes? The study basically shrugs.

Effects of Medicaid Expansion

The analysis showed the problems inherent with attributing changes in mortality rates to expansions in insurance coverage. The study noted that “if one simply compares the…difference in mortality rates for non-expansion versus full-expansion states…it would appear that Medicaid expansion has a large, immediate effect in reducing mortality.” But in reality, mortality rates among those two groups of states had begun to move in opposite directions before the main provisions of Obamacare took effect in 2014. “There is little additional divergence during 2014-2016.”

The researchers’ work highlights the inherent flaws in this field of study. Because mortality is by definition a rare event (particularly for younger populations), and because so many different factors affect mortality, it becomes exceedingly difficult to attribute any change in mortality rates to changes in insurance coverage.

For instance, the opioid crisis, which has led to a decrease in life expectancy, hit just before Obamacare’s coverage expansions took effect, and in many cases affected the same populations. This and other similar factors introduce statistical “noise” that make it difficult to conclude with any certainty that expanded coverage (as opposed to some other factor) impacted mortality rates.

Simulations Expose Flaws

In most cases, the “power analysis” simulations concluded that, to find a statistically significant reduction in mortality rates at least 80 percent of the time, the coverage expansions would have to reduce mortality by more than 100 percent—a statistically impossible result. Because Obamacare reduced the uninsured rate by only a few percentage points, and because most available data sets lack corresponding income and insurance information—to prove, for instance, that X person had Y type of insurance and Z income over a certain number of years—the researchers could not make conclusive assertions about coverage expansions’ effects on mortality.

As it is, the uninsured already receive significant amounts of health care. One 2017 study found they consume nearly 80 percent of the care used by Americans with health insurance. Therefore, to test the effects of coverage expansions on mortality, researchers either need an incredibly large increase in the number of insured individuals—tens of millions, if not hundreds of millions, of Americans—or much more precise data about the income and coverage sources of those who gain insurance.

Liberals’ Alarmist Rhetoric

The authors caution that “our analysis should not be interpreted as evidence that health insurance does not affect mortality or health, either overall or for particular diseases or subgroups.” (Emphasis original.) However, the analysis does demonstrate that health insurance likely has a small and difficult to quantify effect on mortality rates. The study therefore proves how liberal claims two years ago that Republican “repeal-and-replace” legislation would kill tens of thousands of individuals annually had little bearing in reality.

This post was originally published at The Federalist.

“Repeal and Replace” Becomes “Repeal vs. Replace”

In the past few weeks, various articles summarizing Republican moves on health care have attempted to analyze the factions and dynamics driving the debate. Why, some reporters have asked, are Republicans struggling to draft a consensus alternative to Obamacare, given that the party had seven years to create such a plan?

Apart from the point that Democrats faced their own not-insignificant divisions on health care eight years ago, much of the debate within Republican ranks has its roots in fundamental disagreement about what an alternative to Obamacare should do. If two people or factions can’t agree about the ultimate goals of legislation, it shouldn’t be surprising to find them disagreeing on the policies to include in said bill.

For all the emphasis on the “repeal and replace” slogan since the day Obamacare passed Congress in March 2010, the current debate might be characterized as “repeal vs. replace.” Repealers focus more on eradicating the law, while replacers wish to make sure that an alternative does not leave many of Obamacare’s newly covered uninsured.

Repealers
The repeal faction generally comes from the conservative wing of the party. It wants every word of Obamacare repealed — lock, stock, and barrel — and, in some cases at least, is willing to consider blowing up the Senate filibuster (aka the “nuclear option”) to do it. Repealers generally do not want to maintain many, or any, federal regulations on health insurance, deferring to the states (as was largely the case prior to Obamacare).

When it comes to alternative policies, some repealers don’t care about “replacing” Obamacare at all and would content themselves with a return to the status quo ante. Other repealers would focus more on enacting reforms to lower health-care costs rather than expanding coverage or providing subsidies to previous Obamacare recipients. Some repealers would go beyond repeal to examine prior federal encroachments on health policy that preceded President Obama’s tenure.

Of particular import: Repealers believe that repeal means the elimination of all of Obamacare’s taxes and spending — and that these should go away, not to return. That directly contrasts with the approach of replacers, who focus on another policy objective.

Replacers
Whereas repealers want to eradicate the health law’s spending and taxes — to use the Washington lingo, they would return to the pre-Obamacare fiscal baseline — replacers focus on maintaining, or at least not eliminating, Obamacare’s coverage baseline. They would like an alternative to Obamacare to at least be competitive with current law when it comes to the number of individuals with health insurance — although for different reasons. Some replacers believe in the goal of universal health coverage, while others simply believe that an alternative, to be politically viable must offer something to those currently covered by Obamacare.

Coming from more moderate or establishment wings of the Republican party, replacers focus on preserving coverage gains as an objective of any alternative legislation, whereas repealers focus solely on lowering health-care costs. To preserve Obamacare’s expansion of coverage (albeit perhaps with reduced benefits), replacers would either preserve some of Obamacare’s tax increases, or repeal them all but institute new measures to raise revenue in their place.

Replacers also would maintain a greater level of federal oversight of health insurance than repealers. They would attempt to preserve policies such as Obamacare’s under-26 insurance mandate, ban on annual and lifetime limits, and the ban on preexisting conditions; repealers would either devolve these policies to the states or scrap them entirely.

As for the president, he has — as on many issues — given mixed messages. His public statements — “insurance for everybody,” “simultaneous repeal-and-replace” — tend to put him in the replacer camp. But candidate Trump’s platform on health care, with a minimalist approach focused largely on reducing health-care costs, emphasized the repealer elements of his agenda during the contentious Republican primaries last spring.

Rorschach Test
It is perhaps oversimplifying matters to view these two schools of thought as diametrically opposed. Members of Congress could agree with elements of both factions, depending on the specific issue.

But it does not oversimplify to say that the question of emphasis — who cares more about repeal, and who cares more about replace? — has driven much of the debate since the November 8 election results gave Republicans an opportunity to impose their will on health care. It explains why some replacers have argued in favor of keeping some or all of Obamacare’s tax increases, and it explains why conservative repealers have expressed opposition to replacing Obamacare’s subsidies with another system of refundable tax credits.

The New York Times recently profiled Josh Holmes, the former aide to Senator Mitch McConnell who coined the “repeal-and-replace” phrase when working for the Republican leader seven years ago. But while the phrase proved catchy among elected leaders, it did not solve the debate about which policies to include in an alternative plan. Instead, by creating a new Rorschach test, in which candidates could emphasize either the “repeal” or the “replace” elements depending on their political views and the audience of the moment, it effectively postponed the day of decision within the party.

With views on Obamacare alternatives not fully litigated during the 2016 campaign cycle (or, for that matter, the cycles preceding it), that day of reckoning has finally arrived. Whether and how Republicans resolve the conflict between the repealers and the replacers will help determine whether the catchy phrase “repeal-and-replace” gets dubbed with a catchphrase of its own: Too cute by half.

This post was originally published at National Review.

John Cornyn Illustrates Republicans’ Obamacare Problem in One Tweet

As the Senate’s second-ranking Republican, John Cornyn holds significant sway in policy-making circles. In his third term, and serving on both the judiciary and finance committees—the latter of which has jurisdiction over Medicare and Medicaid—Cornyn should have a good working knowledge of health policy.

All of that makes this tweet, sent Friday from his account, so surprising.

The tweet essentially complains that Obamacare wreaked massive havoc on the health care system, while leaving 30 million uninsured. It’s similar to the Catskills joke cited by Woody Allen in “Annie Hall”: “The food at this place is really terrible—and such small portions!”

Observers on Twitter noted the irony. Some asked Cornyn to support more government spending on subsidies; some asked him to have his home state of Texas expand Medicaid; some asked for a single-payer system that would “end” the problem of uninsurance entirely.

For that matter, increasing the mandate tax to thousands of dollars, or putting people in jail if they do not purchase coverage, would also reduce the number of uninsured. Does that mean Cornyn would support those efforts?

It’s the Costs, Stupid!

Insurance Does Not Equal Access: The narrow networks and high deductibles plaguing Obamacare exchange plans—imposed because federally mandated benefits force insurers to find other ways to cut costs—impede access to care, making finding an in-network physician both more difficult and more costly.

Similarly for Medicaid—the prime source of Obamacare’s coverage expansions—beneficiaries themselves don’t even consider a Medicaid card “real insurance,” because they cannot find a physician who will treat them: “You feel so helpless thinking, something’s wrong with this child and I can’t even get her into a doctor….When we had real insurance, we would call and come in at the drop of a hat.”

Insurance Does Not Equal Better Health: The Oregon Health Insurance Experiment compared a group of individuals selected from a random lottery to enroll in Medicaid with similarly situated individuals who did not win the lottery and did not enroll in coverage. It found that Medicaid coverage brought no measurable improvement in physical health outcomes. Likewise, prior studies have suggested that, for health outcomes Medicaid coverage may be worse than having no health insurance at all.

Obama Promised to Lower Costs—And Failed to Deliver: During his 2008 campaign, Barack Obama didn’t promise to reduce the number of uninsured by a certain amount. He did, however, promise to cut the average family’s health insurance costs and premiums by an average of $2,500 per year. On that count, his health law failed miserably. Since the law passed, employer-sponsored coverage has risen by more than $4,300 per family. Exchange policies spiked dramatically in 2014, when the law’s mandated benefits took effect, and are set to rise again this coming year.

Voters Care Most About Costs: Prior polling data indicates that, by a more than two-to-one margin, voters prioritize the cost of health care (45 percent) over the lack of universal coverage (19 percent). Likewise, voters prefer a health plan that would lower costs without guaranteeing universal coverage to a plan that would create universal coverage while increasing costs by a 13-point margin.

Buying into a Liberal Shibboleth

The responses from liberals to Cornyn’s tweet indicate the extent to which health coverage has become a shibboleth on the Left. There are few things liberals will not do—from spending more money on subsidies, to creating a single-payer system, to expanding coverage to illegal immigrants—to ensure everyone has a health insurance card. (Some liberals might object to putting people in jail for not buying health coverage. Might.)

So, apparently, does John Cornyn. Rather than pledging to lower health costs—Americans’ top health care goal—or questioning the effectiveness of Democrats’ focus on health insurance above all else, his tweet looks like pure kvetching about a problem he has no interest in solving. If one wants to understand Republicans’ problems on health care—both their poor messaging, and their single-minded policy focus on replicating liberal solutions in a slightly-less-costly manner—they need look no further than this one tweet.

This post was originally published at The Federalist.

On Health Care, It’s the Costs, Stupid

At his first post-election press conference Monday, President Obama attempted to sound gracious on the topic of repealing his signature health law, while simultaneously laying down a clear policy gauntlet: the number of Americans with insurance coverage under a Republican replacement.

If they can come up with something better that actually works, a year or two after they’ve replaced [Obamacare] with their own plan, and 25 million people have health insurance and it’s cheaper and better and running smoothly, I’ll be the first one to say that’s great. Congratulations.

In other words, as I noted last month, the president will happily support others’ legislation—so long as it accomplishes exactly what he wants. Ironically enough, when campaigning for the presidency eight years ago, Barack Obama campaigned on one number, but one that had nothing to do with the number of Americans with health coverage. It was $2,500—the premium reduction he promised to the average family.

Obamaspeak: ‘Lower Premiums’ Means Massive Increases

President Obama’s 2016 focus on how many people have health insurance coverage stands in stark contrast to candidate Obama, circa 2008. In the Democratic primaries against Hillary Clinton, he famously opposed an individual mandate to purchase health insurance, because “the reason people don’t have health insurance isn’t because they don’t want it; it’s because they can’t afford it.”

While then-senator Obama did not promise to achieve a certain level of health insurance coverage, he did make a very specific promise to lower premiums. As the video shows, Obama promised—over and over and over again—that his health-care plan would lower premiums by an average of $2,500 per family:

Note also that Obama promised to “lower” and “cut” premiums. That means he didn’t promise that premiums would rise by slightly less than predicted—he pledged to reduce them in absolute terms.

On any count, President Obama’s pledge lies in tatters. Since he signed Obamacare in 2010, the average employer-sponsored health plan has risen by more than $3,300 per family—from $13,770 in 2010 to $18,142 this year. Obamacare’s massive benefit mandates raised the average premium for individually purchased coverage by about 40 percent overnight, as the main provisions of the law took effect in 2014. Premiums are also set to spike on Obamacare exchanges again, with an average of another 25 percent rise for the plan year beginning January 1.

Cost Is Voters’ Top Concern

In reality, Obamacare stands as living proof that affordability matters most for health care and health insurance. While the Medicaid rolls have exploded far beyond most states’ original estimates—perhaps because the program charges no premiums to most beneficiaries—enrollment in exchange plans remains far below projections. Obamacare’s benefit mandates have so raised the cost of coverage that everyone but individuals qualifying for the richest subsidies has stayed away from the exchanges in droves.

Polling data also speaks to voters’ concern about reducing health costs. A survey conducted for America Next in February 2014 (while I served as America Next’s policy director) reveals that voters judge costs as a larger concern than universal coverage by a more than two-to one margin. In addition, by 13 percentage points voters prefer a system that lowers costs but does not guarantee coverage over a system that guarantees health insurance but increases costs:

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The Media Is Out of Touch with Americans

In covering a post-Obamacare universe, most media stories in the past week have focused solely on the number of individuals with health insurance. That’s one key metric, but so are whether health insurance results in access to actual health care, whether coverage improves health outcomes, and the extent to which individuals value health insurance over other goods.

Voters care most about reducing the underlying cost of health care. Only lowering costs, not creating new ways for the federal government to subsidize them, will make health care fiscally sustainable in the long term, while increasing the number of Americans with health coverage. That’s the prime metric for judging Obamacare, a metric by which, according to its eponymous creator, it has fallen short, and the metric for judging Republican proposals to replace it.

This post was originally published at The Federalist.