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22 Feb 2010

Health Care Legislation, Part 14:
Obama's January 22 proposal

by Richard Belzer

in , ,

President Obama announced a televised meeting for Thursday to discuss all options for health care legislation. Overnight, the White House released "The Obama Plan: Stability & Security For All Americans," which the President intends to be the focal point for the event. Although this Plan is short, the White House also released a one-page summary.

The January 22 Obama Plan is not accompanied by legislative text. Thus, it can only be analyzed in qualitative terms. We do that below the jump.

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6 Jan 2010

Health Care Legislation, Part 13:
Would the Senate bill prevent a future Congress from repealing the law?

by Richard Belzer

in ,

It has been reported widely that the version of health care legislation passed by the Senate (HR 3590, as amended) includes provisions that would prevent a future Congress from changing or repealing it.

A careful review of the bill shows that these reports are incorrect.

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5 Jan 2010

Health Care Legislation, Part 12:

by Richard Belzer

in ,

Cartoonist Lisa Benson explains the "individual mandate."



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4 Jan 2010

The Market Failure in Mail-Order Brides:
Can State regulation help?

by Richard Belzer

in ,

Washington Examiner reporter Alan Suderman says "Maryland lawmakers are pushing for tighter regulations on the mail-order bride industry."

There is no question Maryland can write more regulations. But can regulation solve market failure?

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2 Jan 2010

Airline Security after Abdulmutallab:
Is TSA behaving rationally?

by Richard Belzer

in ,

After Umar Farouk Abdulmutallab failed to blow up Northwest Airlines Flight 253 on Christmas Day, the Transportation Security Administration issued a directive requiring airlines to immediately make major changes in their operations.

Travel bloggers Christopher Elliott and Steve Frischling published the directive. On December 29, both were served with subpoenas demanding the surrender by December 31 of all private records that might reveal the identity of the source. Frischling surrendered his computer to federal agents on December 30. Predictably, they destroyed it rather than return it. Elliott contested the subpoena and TSA withdrew them on December 31.

Whether TSA's actions were legal (or should have been illegal) is an interesting question. What is more immediately interesting is that the directive itself implies a higher concern about the appearance of safety than safety itself. Nothing in the directive would have prevented Abdulmutallab from bombing Flight 253 or prevent a similarly equipped terrorist from blowing up an airliner tomorrow.

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28 Dec 2009

Health Care Legislation, Part 11:
Insight from the funny papers

by Richard Belzer

in , ,

Both the Senate and House versions of health care legislation include provisions that would prohibit insurers from declining to underwrite people with preexisting conditions and prevent them from imposing annual or lifetime caps on coverage.

Today's Shoe illustrates one of the problems with these proposed restrictions.

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22 Dec 2009

Health Care Legislation, Part 10:
The bill that passed cloture

by Richard Belzer

in , ,

We've delayed publishing analysis of the Senate's health care bill until a version could garner 60 votes, and thus survive a cloture vote to cut off debate. That bill is Majority Leader Reid's manager's amendment to HR 3590.

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30 Nov 2009

Health Care Legislation, Part 9:
Why supporters insist on the individual mandate

by Richard Belzer

in , ,

In its debate over health care legislation, the Senate and the Obama administration must contend with conflicting forces and incentives. There appears to be a political consensus among supporters that "guaranteed issue" and "community rating" are essential features of any bill. ("Guaranteed issue" means people cannot be denied coverage no matter how risky they are. "Community rating" means people with low health risks have to subsidize them.)

As we have noted several times now, keeping these features requires that everyone have health insurance. This means people with low health risks must be compelled to buy (and pay too much for) health insurance.

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27 Nov 2009

Health Care Legislation, Part 8:
Is an 'individual mandate' constitutional? Necessary?

by Richard Belzer

in , ,

Proposed health care legislation includes both employer mandates and an "individual mandate." Anyone not covered by employer-provided health insurance would be required by law to buy a qualifying health insurance plan or pay a tax.

An interesting debate has arisen concerning whether Congress has authority under the Constitution to require individuals to purchase health insurance. David B. Rivkin Jr. and Lee A. Casey are perhaps the most prominent opponents:

[C]an Congress require every American to buy health insurance?

In short, no. The Constitution assigns only limited, enumerated powers to Congress and none, including the power to regulate interstate commerce or to impose taxes, would support a federal mandate requiring anyone who is otherwise without health insurance to buy it.

Washington Post columnist Ruth Marcus recently defended the proposition that such a law would pass constitutional muster.

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21 Nov 2009

The Government's New Recommendations for Breast Cancer Screening, Part 2:
Bipartisan complaints with ironic consequences

by Richard Belzer

in ,

The US Preventive Services Task Force recommendation that women without any risk factors for breast cancer obtain mammograms less frequently has elicited furious complaints by both Republican and Democratic Members of Congress. We blogged on the report when it was released.

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18 Nov 2009

The Government's New Recommendations for Breast Cancer Screening:
Sensible advice or incipient rationing?

by Richard Belzer

in ,

The US Preventive Services Task Force issued a report with revised recommendations calling for much less frequent use of mammograms for screening women with no risk factors for breast cancer. The announcement triggered an extraordinary reaction, most of which was negative.

Few of those reacting had actually read the report. In many cases, the complaints were factually inaccurate -- by that we mean they objected to things that were not in the report.

What happened?

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11 Nov 2009

Health Care Legislation, Part 6:
The argument for the individual mandate

by Richard Belzer

in ,

Janet Trautwein, CEO of the National Association of Health Underwriters, explains why private insurers need a strong individual mandate in federal health care legislation.

The problem, as she sees it, is one of adverse selection: Only high-risk individuals will voluntarily purchase the insurance Congress proposes to require them to issue. That makes the insurance market fatally unstable.

She is correct that fatal adverse selection would arise if the bill lacks highly coercive employer and individual mandates. What she only alludes to, but is the crux of the problem, is the combination of guaranteed issue and community rating.

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The AIG Bonuses, Part 12:
Pay limits affecting recruitment and retention

by Richard Belzer

in ,

We've published a long series on the controversy over retentions bonuses paid by AIG and other firms. (To see the entire series, search for "The AIG Bonuses" using the Google search utility in the upper right corner.)

There are three general problems with executive pay restrictions. First, pay restrictions have no effect on those who were responsible for decisions that went south if they no longer work for the institutions in question.

Second, when imposed retroactively, pay restrictions impair legal contracts. This is both constitutionally suspect and creates serious economic and financial uncertainty. Markets perform poorly when parties cannot rely on the rule of law--including contract law.

Third, pay restrictions deter the recruitment and retention of the most qualified people. Some will be motivated by nonfinancial considerations such as a sense of duty or public spiritedness. However, these motivations are undermined when the public or its representatives treat them as if they were culpable for the problems they have agreed to serve, often without pay, to correct.

Today's Wall Street Journal suggests that AIG now faces this government-induced dilemma.

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28 Oct 2009

Health Care Legislation, Part 5:
What happens to private insurance?

by Richard Belzer

in , ,

Recently we have posted on the so-called "public option" (see here and here). Today we look at the effect of proposed health care legislation on the private market.

By necessity, it is private insurers that have both the interest and comparative advantage to estimate these effects. The federal government, and especially the Congressional Budget Office, is almost exclusively concerned with federal budget outlays, not social costs and benefits. To keep federal outlays down, legislators focus on shifting costs off budget -- typically, onto private insurers and their customers.

Analyses recently made public by one private insurer are instructive.

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27 Oct 2009

Health Care Legislation, Part 4:
The 'public option' and 'choice architecture'

by Richard Belzer

in , ,

The health care legislation debate over the past few days increasingly contains an odd twist: Should the "public option" be made ... optional?

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