Saturday, January 3, 2015

What Oregon legislators were (and were not) thinking when they passed the insurance exchange

The Oregonian recently ran a story on Michael Cannon and his crusade to screw over the middle class in states that didn't set up their own health insurance exchange.  His challenge to the tax credits people receive now relies on the premise that his understanding of the law is the only possible rational interpretation.  If the law is only ambiguous then he has no case

Given that, I wanted to see what Oregon legislators were thinking when they enacted SB99 which created Oregon's exchange.  Did they understand that they were enabling Oregonians to receive tax credits?  The following quotes from Senators and Representatives are from discussions preceding the votes.  Transcriptions and any errors are mine, as is the emphasis.
  
Senate vote on 4/25/11 (SB99 discussion starts at 17:00 mark). 

Senator Morse
… as we all know, the federal patient protection and affordable care act was passed in 2010, which mandates the implementation of state based insurance exchanges by January 1, 2014.  In the event states do not implement an exchange the federal government will do it for them.

Senator Monnes Anderson 
if Oregon does not develop its own health exchange, insurance exchange, the federal government will create one.  This legislation is our own plan that takes our states' specific needs into account with a consumer driven mission and local control. The health insurance exchange will give Oregonians more health care options, a greater number of affordable plans, and more information about which one will best meet their needs.

Senator Kruse
When we went at this proposal, we made it very clear on the front end that regardless of what happened at the federal level we wanted to create something that would work for Oregon, and that has been our intent all the way through on this is to make something that works for Oregon.  Now knowing full well that at some point in time the feds are gonna define a few things like what an exchange actually looks like from their perspective, what a basic benefit plan actually looks like from their perspective, but colleagues those are things that are undefined at this point in time.  It was incumbent on us to do something Oregon specific because quite honestly I don't want the federal government coming in and running things in the state of Oregon.  So this was our option.

Senator Bates
This act says that starting in 2014 every state has to have an exchange.  If the state doesn't do it the federal government will do it.  And we have some very special things in this state that other states don't have.  Managed care plans in Medicaid.  Different kinds of DCBS systems.  And if we don't have our own actual exchange put together we're going to have trouble making the federal one work and it's going to cost us a lot of money to make it work.  So we need to do this ourselves and we need to do it for Oregon and we need to do it fairly quickly...
...My biggest worry is this goes to the house and dies and we are stuck in 18 months to 24 months from now with a federal exchange that we can't make work in this state without us spending huge amounts of money, to put an IT program together, and to make it wedge into a system we have here in this state that's so unusual and actually more effective.

House vote on 6/17/11 (SB99 discussion starts at 2:43:50 mark).


Representative Thompson
Congress provided funds for early adopters, and indicated that if no action was taken by a state to create the exchange, the federal government would create and operate the exchange on behalf of the state.

Representative Cannon
The choice we have today is whether to allow the bureaucrats in the Hubert Humphrey building in Washington to design a health insurance exchange or to put Oregonians to work designing a health insurance exchange that works for Oregonians.  That's the issue.  By adopting SB99, we don't know precisely what this exchange will look like, it's several years from being operational, but at least we'll give ourselves the chance to move forward with an Oregon solution to the national problem of health care and affordability and accessibility.

Representative Thompson (speaking a second time)
...We also know that in January of 2013 the feds are going to move in and do an exchange.  This is not a question of whether or not we have an exchange, whether you like it or not.  It's in the federal law that that's what's going to happen.  They have the right to do that in January and we don't even meet in our long session until February to do anything additionally about this.  So the stakes are relatively high.  The issues of tax credits and navigators and what not are not really germane to this discussion.  That's in the federal legislation.  We're going to get all of that when the feds come in and do their plan for us.  I wish I could wave the magic wand and give a tax credit to anybody who buys insurance anywhere for their employees.  We can't do that.  But the feds did do it.  And they set it up with rules.  We can tuck those rules into our bill and use them, in our plan, or not.  But it's in the federal legislation and your vote today doesn't affect whether or not certain individuals will get tax credits for using an exchange or not.  They're going to get the tax credit because the federal will take precedence over ours if we don't do anything.

A total of 13 Senators and Representatives spoke before the votes.  None of them suggested they thought this would impact tax credits.  Two supporters of the law, one a Democrat and the other a Republican, talked explicitly about what would happen if Oregon didn't build an exchange.  If anyone was going to talk about the impact on tax credits, they would.  What they said speaks for itself.

I think this proves that as a factual matter, neither Republicans nor Democrats in the Oregon legislature held Michael Cannon's interpretation of the ACA.  And to accept Cannon's case, it isn't enough to say they just had different interpretations.  One has to say that the Oregon legislature, both Republicans and Democrats, held to an irrational interpretation of the ACA.

In a comment under the Oregonian story, Steve Buckstein describes a meeting months after these votes where Cannon tried to get Oregon legislators to reject building their own exchange even though this would deprive residents of tax credits.  There are some problems with that story (the timing makes no sense), but if it's even half right I think it says a lot about Michael Cannon.  He sought to strip Oregonians of tax credits, and as a consequence access to health care, in order to score political points for the Republican Party.  Think about that for a second.

The Oregon legislature was wrong about a lot of things when it came to Cover Oregon.  But as wrong as they were, I trust them a hell of a lot more than I trust someone like Michael Cannon.

Saturday, December 27, 2014

2014 Wrap up

Facebook suggests reviewing 2014 through photos, I'm going to take a stab at reviewing the year in terms of reading and writing.

Looking back at my notes, one theme jumps out.  I spent a lot of time reading about late nineteenth century America.  How did we go from ending slavery to starting Jim Crow?  From Radical Republicans to Imperialism?  What role did industrialization and technology development play? 

I wouldn't attempt to answer those questions here, but I'd offer some quotes I found meaningful.

C Van Woodward describes the agreement giving Rutherford Hayes the presidency as a watershed moment comparable with the development of the constitution.  To Woodward, both acts were to some extent betrayals of the revolutions that preceded them, and that wasn't a bad thing:
… the year 1877 was not attuned to the revolutionary fervors of the years 1861 and 1866.  The Men of 1877 were rather like the Men of 1787.  They were of smaller stature than the great Federalists, to be sure, and their work was less celebrated and certainly less known.  But if the Men of 1787 made the Thermidor of the First American Revolution, the Men of 1877 fulfilled a corresponding part in the Second American Revolution.  They were the men who come at the end of periods of revolutionary upheaval, when the great hopes and soaring ideals have lagged and failed, and the fervors have burned themselves out.  They come to say that disorder has gone too far and the extremists must be got in hand, that order and peace must be established at any price.  And in their deliberations they generally have been more concerned with preserving the pragmatic and practical gains and ends of revolutions than the more idealistic aims.  In this respect the Men of 1877 were not unlike those who had been cast in the same historical role before them.
Woodward cites 1787 approvingly, as a means of legitimizing politicians a century later.  Lawrence Goldstone inverts that relationship, blaming the founding fathers for creating an arbitrary and unaccountable Supreme Court.  The court's perverted interpretation of the 14th amendment in those years had horrific consequences for African Americans, and still troubles us today:
If the Court's complicity in the subversion of equal rights had been due to rogue justices, or was an aberration of jurisprudence, Americans of the current day might merely shake their heads, deplore a shameful episode in their history, and congratulate themselves that the United States was no longer that nation.  If, however, the Court's actions were not aberrant at all, but simply examples of ongoing practice, in which justices subordinate the role that Hamilton espoused for them to the exigencies of popular politics- or worse, their own personal beliefs and prejudices- the equal rights decisions of the latter decades of the nineteenth century become expressions of issues deeper, more disturbing.  For then the United States Supreme Court would have, in a very real sense, eschewed the dispassion that the Founders thought so vital and become merely a third political arm of government.  The long-maligned and discredited Brutus then becomes the more effective prognosticator of the pitfalls inherent in Article III, which allows Supreme Court justices to serve for life, virtually without oversight or supervision.  Lack of accountability does not, as Hamilton insisted, constitute a bedrock of liberty, but rather a profound defect in our constitutional fabric.
If politically the nation was ossifying, culturally (for whites) it was liquefying under the influence of industrialization.  Cities offered an alternative to the farm or home town, factories offered work that didn't depend on skill, technology and mass production provided a new world of consumer goods.  TJ Jackson Lears describes it in terms of money:
The alchemical promise of sudden self-transformation gave money a centrifugal force and a corrosive edge.  It could dissolve settled communities and social bonds, send young men spinning off from ancestral seats in search of fresh possibilities, clothe reprobates and rakes in raiments of respectability.  A universal standard of value, money was also a universal solvent of other standards of value.  Custom, tradition, morality - all dissolved, as Karl Marx and Friedrich Engels said, "in the icy waters of egotistical calculation."
What lead me to look at this era?  I'm not sure.  Maybe it's because inequality is rising to levels not seen since the gilded age.  Maybe it's because I think information technology can alter society as radically as industrialization did before it.  And maybe it's because I'm looking for reassurance that as messed up as the nation seems these days, it's not the first time this has been so and it's possible for things to get better.  We'll see what we see in 2015.

Saturday, November 8, 2014

King v. Burwell, or life sucks under Republican governance

The Supreme Court announced it would hear King v. Burwell.  In short this case is a challenge to the ACA, protesting the subsidies granted to people buying policies through a federally managed exchange.  Those people live in the 36 states that didn't create their own exchange, states that did set up an exchange wouldn't be impacted.

I've seen a lot of teeth gnashing about what would happen if the courts upheld this challenge.  People argue that it would undo the ACA because without subsidies people wouldn't be able to afford policies, and the resulting adverse selection would kill the market.  I think those arguments are entirely correct.  I also think that's not something worth spending a lot of time worrying about.

If the challenge is upheld, states have an obvious and easy remedy.  They can create an exchange.  It doesn't need to be a big complicated web site, it just needs to meet whatever certification threshold the feds set.  And so long as the President is a Democrat that threshold will likely be low.  

States may opt not to do this, they might prefer having more uninsureds and less access to health care.  That sucks if you live in such a state, but I don't feel sorry for you.  Collectively, the people in your state empowered asshole Republicans to run it.  That has consequences, and those consequences aren't any secret.  An earlier Supreme Court ruling (by  Republicans) gave states the right to turn away free money and keep a large segment of their adult population uninsured.  About half the states, overwhelmingly red ones, took the court up on the offer.  So it's known that Republicans would rather shit on a poor family than help them.  Republicans who reject exchange subsidies are merely extending that treatment to the middle class.  

That sucks for people on the receiving end, but it sucks no worse than for the low income population.  Why should the middle class be treated better?  Why is it a bigger problem that people with incomes between 1.33 and 4 times federal poverty level can't get insurance than people with lower income?  Is cancer worse if you make 40 grand a year instead of 15?  Does heart disease care what's in your wallet?

I just don't see it.  King v. Burwell isn't a problem for the ACA, it's a problem for the people living under Republican governance.  Sorry, but you shouldn't order a turd sandwich if you don't want to eat one.

Sunday, September 28, 2014

An Open Letter to Portland Public School Board on Boundary Review

Portland Public School Board Members,

I'm writing to urge you to complete the District Wide Boundary Review Process as soon as possible.  At [my neighborhood school] overcrowding is materially degrading educational quality and school leadership is not adequate to deal with the problem on its own.  Boundary Review offers immediate relief for enrollment disparities.  But it isn't enough.

Within PPS there are currently high reputation or "good" schools that are overcrowded, and low reputation or "bad" schools that suffer from under-enrollment.  Merely increasing the catchment area of "bad" schools and shrinking the catchment of "good" schools won't work in the long term.  The reputations still exist and families will react by finding a way to enroll in the "good" school such as by moving or maintaining an address in the new catchment area, or they'll switch to a charter school or out of PPS entirely.  I don't think you'll ever convince parents with means to go to a "bad" school.  Enrollment balancing in the long term requires addressing the reputations that make schools "good" or "bad" in the first place.

Reputation in my view is primarily a function of parents.  Reputation doesn't matter to kids, they don't care about financial hierarchy or relative privilege.  Nor are they in a position to make decisions based on reputation, they go where their parents send them.  It is parents who create and react to school reputation.  Breaking down the process that creates "good" schools and "bad" schools requires changing the way parents interact with schools. 

From my experience the two institutions that most involve parents are the PTA and Foundations.  Generally speaking, the former is a mechanism by which parents can improve their schools through donations of time and skills, the latter is a way to improve schools through donations of money.  Both resources materially impact the student experience, providing some factual basis for differences in reputation.  Disparity is reinforced psychologically; participants in parent groups commit to "their" school, they make sacrifices for "their" school.  People are proud of their sacrifices and attribute to them value and distinction, which contributes to a negative view of schools lacking that distinction.  And disparity is reinforced socially, because parents who are passionate enough about schools to make sacrifices on their behalf want to be with other parents similarly engaged.  Those dynamics create a positive feedback loop, particularly when applied to a backdrop of economic segregation in which some neighborhoods have much greater resources to donate to schools than others.  The end result is schools with disparate reputations, often wildly out of sync with the underlying reality.

I think the solution to this problem is to loosen the connection between parent organizations and specific schools.  Instead of silos defined by school, PTAs and Foundations should be organized over a wider area with a mission to promote the welfare of all schools within that area equally.  Dividing the district into four or five areas, each would be broad enough to incorporate an economically diverse population and to retain that diversity over the long term. 

Resources would be spread more evenly, rather than being concentrated in the neighborhoods where those with money or the ability to have a stay at home parent happen to live.  It would allow those who are passionate about schools to find community and support regardless of where they live.  And it would retain a degree of autonomy and local connection.  Parents wouldn't be donating to an anonymous, monolithic "PPS" but to the local area schools that that their children or friends of their children attended.  If boundary rebalancing were broken down by area, they would also be the schools parents' children might attend in the future as a result of enrollment balancing.  I think this would create a culture of investment in schools, directed not just where people with resources live but where investment is needed. 

With regards to boundary changes, it would make the switch to a different school far less intimidating.  The new school would be familiar and less likely to carry stigma.  At the same time there would be less social loss, parents would maintain connections with those at the old school through the broader parent organizations and have the same access to their resources.  Families subject to boundary change would be grounded and supported by community, instead of feeling like they're being voted off the island like they are now.

It could be argued that this approach is geared too much towards the subset of parents that are active in PTA and Foundations.  But I'd argue it is exactly that group that is most influential in determining school reputation.  They are the ones who care enough about educational quality to act on it.  They're the ones least likely to accept going to a "bad" school and who will not only pursue alternatives, but promote them to all their friends reinforcing disparities in reputation.  People seek community one way or another.

So in summary, please complete the boundary changes as quickly as possible.  But don't stop there, because it won't be enough.  Look at the dynamics that make rebalancing such a traumatic process and find ways to ameliorate them.  I think doing that will create a stronger, more equitable school system positioned to thrive rather than merely survive.  For the 21st century, Portland needs no less.

Saturday, September 13, 2014

Consumer choices vs. Community choices

I came across this quote in Ravitch's book.  It's part of a discussion of school choice, but I think it applies to Oregon measure 90 as well.  Emphasis mine:
The market undermines traditional values and traditional ties;  it undermines morals, which rest on community consensus.  If there is no community consensus, then one person's sense of morals is as good as the next, and neither takes precedence.  This may be great for the entertainment industry, but it is not healthy for children, who need to grow up surrounded by the mores and values of their community.  As consumers, we should be free to choose.  As citizens, we should have connections to the place we live and be prepared to work together with our neighbors on common problems.  When neighbors have no common meeting ground, it is difficult for them to organize on behalf of their own self-interest and their community.
What is the top-two concept but an attack on political parties?  And what are political parties but the vehicle by which residents organize and collaborate for political activity?  I think parties are exactly the common ground Ravitch references above.  Without that common ground, we're just a bunch of individuals screaming in the wind.

Sunday, September 7, 2014

Elected Officials are not Cheeseburgers

I think there are multiple reasons to dislike this Oregon's ballot Measure 90, which would create a top two primary.  It essentially discards our current system by doing away with primaries as we know them, moving the real election to May, and relegating November to a mandatory runoff.  It tosses out a century of work at opening party primaries, replacing them with an amorphous endorsement process whose value is unclear.  If current party primaries are bad because of limited participation, how much worse will an endorsement process be which has no rules or customs?  If most people don't vote in the pre-election now how many will vote in the pre-pre-election?  And for what?  To tread water on overall voter participation?

But I want to focus on one particular aspect of arguments for Measure 90, the idea that it increases competition and that this is unambiguously good. A recent Oregonian editorial was dedicated to the concept, and it's a common element in arguments for the measure.  But is it right?  Is an uncompetitive election necessarily bad?

We have good reason to take the idea for granted.  For most consumer decisions it holds true, having more choices allows a more specific decision that better aligns with our preferences.  The more restaurants that serve cheeseburger, the more likely it is that one of them serves the exact combination of product and price that you want.  But are elected officials like cheeseburgers?  Not really.
  • The decision to buy a cheeseburger is individual, one person makes the choice and immediately gets what they asked for.  Elections are a community decision.  Votes are cast by individuals, but they are cast for one office and only one individual wins.  In the end everyone will be served the same thing.
  • The timing of the decision to buy a cheeseburger is entirely at individual discretion.  One can buy cheeseburgers as often as one wants, it can be centennial or hourly or anywhere in between.  Elections are on fixed schedules and the decision generally lasts for a fixed term.
  • Cheeseburgers have a price constraint.  That constraint overrides any other preference, one cannot buy what one cannot afford.  The price constraint doesn't apply to voting, there is no cost to choosing one candidate over another.
Put those elements together and think about what a cheeseburger decision would look like if it had the same properties as an election.  Communities would decide by majority rule what cheeseburger everyone would have to eat, over a term of years.  They would have to make this decision without a cost constraint, so any topping, ingredient, style, or quality level would be allowed.

That would be a miserable decision even for just a married couple.  It would be miserable because in effect the only reason one couldn't get their "dream burger", one that matched exactly to what they wanted, would be the constraint of getting their spouse's agreement.  And the spouse would have the exact same problem.  Now expand the voting pool to an entire community and you can see why elections are contentious, even violent, things.  Unlike the individual's decision to buy a cheeseburger, I think communities need some structure to effectively reach a decision.  That's where parties and primaries come in.  They facilitate coalitions and compromises, they provide organization to what would otherwise be a war of all against all.

As an example of how this plays out consider approval ratings.  Who would you guess has higher ratings, an incumbent running unchallenged or a newly minted freshman who won a narrow victory?  Which election did the public feel better about, George W Bush's ultra-narrow victory in 2000 or the dominant wins by Reagan in 1980 or Obama in 2008?  The closer an election, the more competitive it is, the more people necessarily are unhappy with the outcome.

When measure 90 supporters uncritically support competition they are using the wrong model.  Elections aren't consumption decisions, elected officials aren't cheeseburgers.  An election is much more like a hiring decision, the community is hiring someone to do a job.  Competition isn't totally irrelevant to making a good hire, but it's significance depends on the circumstances:  is it an open position or already filled?  If the latter is the person competent?  Are they so incompetent that it warrants firing them in favor of an unknown?

Looking at it that way it's easy to see why many elected offices aren't always competitive, it's because voters are reasonably good at filling them.  What's wrong with that?

Thursday, March 27, 2014

Do you know your doctor's expiration date?

CMS is considering new rules to protect seniors if their Medicare Advantage Plan drops their physician.  I think that's a great idea, and wish everyone had such protection from network changes.  I was pretty sure I'd written something about that, but couldn't find it posted.  After digging through old files, here it is.

January, 2012

Imagine going to buy milk at the store, only to find that none of the cartons are marked with an expiration date.  You ask a clerk about it, only to be told that the dates exist, the store knows what they are, but that they are a trade secret and they can't disclose them to you.  All they will tell you is that the milk is not expired as of today.  "How," you ask, "will I know if it is safe to drink tomorrow?" 

"Check back tomorrow", is the answer.  "All we can ever tell you is whether your milk is expired as of the day you ask."


Such an arrangement would be absurd on its face, and if a store attempted to impose such conditions a regulatory or legislative remedy would surely not be far behind.  But in one industry such absurdity is the norm.  Do you know your doctor's expiration date?


Most private health insurance plans are circumscribed by networks.  Go outside the network and you face a steep increase in out of pocket expense through  copays or deductibles. In some plans the out of network coverage is so restricted that patients are functionally uninsured.  Most people know this and quickly learn to identify in-network providers.  But those networks change over time, depending on whether or not doctors and insurers continue agreeing to terms.  And included in those agreements are expiration dates.  If no renewal agreement is reached the contract expires and the provider drops out of network.


What notice do patients get when that happens?  Whatever their doctor feels like giving them.  Maybe they'll tell you when you make your next appointment, or maybe not.  As the paperwork repeats ad infinitum, patients are solely responsible for managing their insurance, and patients are solely responsible for payment.  Even if you've seen a doctor a hundred times and checked your insurer's web site to verify their network status yesterday, nothing guarantees that they are in network on the day of your appointment save checking with your insurer on that day.  Realistically, you probably won't find out until you get an Explanation of Benefits statement from your insurer stamped "Out of Network" followed by a hefty out of pocket medical bill.


What makes such circumstances frustrating is how unnecessary they are.  By simply disclosing the expiration date of the provider-insurer agreement, people would know when they needed to check to see if it renewed.  Not only could they avoid hundreds or even thousands of dollars in out of pocket expenses by being better able to avoid out-of-network physicians, they could improve the continuity of care.  Knowing at once if a provider had dropped out of network would allow more time for selecting and transferring records to a new provider, it could be done ahead of time rather than starting the process on the day you realize you need treatment and go to make an appointment.  All that, just from disclosing a date.


The only argument I've seen against such disclosure is that contracts between insurers and providers are trade secrets.  According to that logic, the contracts must remain secret to prevent collusion on prices.  I won't argue for or against that point, but I'd observe that the contract expiration date has no bearing on it.  What is the harm in disclosing an expiration date?  Is the market for milk screwed up because people know ahead of time when a particular carton will go bad? 


It's worth thinking about, because paying medical bills out of pocket because a physician's office didn't disclose they dropped your insurance  stinks worse than rotten milk.