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Hoover Daily Report by topic: Blog

February 25, 2014 | Economix (New York Times)

The Affordable Care Act’s Multiple Taxes

December 15, 2013 | Grumpy Economist

Chris Demuth on Obamacare

November 26, 2013 | Corner (National Review Online)

Affordable Care or Patient Protection or Obamacare?

There are some rumors that the administration wants to distance itself from the slang “Obamacare,” a term the president embraced in the 2012 campaign but now finds hurtful to his polls and his colleagues in the Congress. But what would be alternatives? We know the official name, “The Patient Protection and Affordable Care Act,” has now become Orwellian and simply cannot be used. Millions of patients are not being protected, but losing their coverage — with more to come. So far those receiving notices of steep premium hikes outnumber those who are handed the promised “$2,500” year in savings. At least, I have not heard of too many Americans who received notices apprising them of “affordable” expanded coverage at a $208 savings per month in their premiums. If for the foreseeable future Obamacare is not protecting patients or making policies more affordable, and we are not supposed to call it “Obamacare” until it fulfills its promises, what is left? A formal rebrand like “The Fundamental Transformation of Health Care Act” is too long. I think we might hear floated something more informal like, “The Emanuel Brothers Bill,” or “Hope and Change Care,” or the “Pelosi-Reid Change of Policy Act.”
November 19, 2013 | Grumpy Economist

After the ACA -- Crafting an Alternative to Obamacare

November 13, 2013 | Corner (National Review Online)

Obamacare Is Dead. Long Live Obamacare!

In the next 90 days, the Obama administration will have to declare victory and then abandon most of Obamacare.  The legislation defies the laws of physics—more and broader coverage for more people at less cost—as well as logic: Young people, on average as a cohort with higher debt and less employment, will pay more for coverage they do not use much to subsidize others, often better off, to pay less for coverage they use a lot. It will be interesting how the administration pulls it off, given its past record of often being successful at this sort of dissimulation. The “Patient Protection and Affordable Care Act”—despite the euphemistic name, the legislation has caused millions to lose their coverage and upped the costs for millions more—is a stone around the necks of Democratic congressional candidates, and something political will have to be done within the next year to address it. The Obama administration’s first impulse will probably be haphazard and periodic non-compliance with the law in the manner of its treatment of the employer mandate, and, for that matter, all sorts of other “settled” legislation that, for political reasons, it simply chose not to enforce, from pre-election border enforcement and the Defense of Marriage Act to the contractual order of the Chrysler creditors. In that regard, the administration might table the individual mandate or administratively change the wording of required insurance protocols to let people keep their old plans that were recently dismissed as “bad apples” or “junk.” Maybe they could call all that “pro-choice,” or “good apples.” A second and previously popular Obama strategy—cf. the war on terror rebranded with “workplace violence,” “largely secular,” “man-caused disasters,” and “overseas contingency operations”—would be just to scrap most of the law and keep a tiny sliver like the front-ended goodies (such as not losing your insurance for preexisting conditions or keeping children on parental plans until 26) and restamping that tiny change as the old Patient Protection and Affordable Care Act, while quietly dismantling the program piecemeal.  Each time Obama has had to square the circle—e.g., keeping or expanding the hated Bush-Cheney anti-terrorism protocols while still demagoguing them—he has resorted to philology and simply changed the meanings of things. He will probably tell us the naked health-care emperor is fully dressed in the way that the tenfold expansion of the drone program was a legacy of Bush, or the willingness to exceed the U.N. in Libya, ignore it in Syria, and undermine it with Iran is “working with the UN.” I don’t see as viable the third, and no doubt favored, solution: a stealth attempt by fiat to implement a single-payer system. Assuring the people that the problem with Obamacare was not enough government rather than too much does not seem like a winner. Somehow the Obama administration took public distrust of insurance companies and transmogrified that suspicion into greater distrust of government. And when they talk of drafting techies to the rescue of the website, they seem not to be talking about more GS somethings, but hip Silicon Valleyites from the correct part of the private sector. For now there can be no more presidential sweeping statements about not losing this or not paying more for that, but probably silence, as administration lawyers administratively chart non-compliance strategies and the usual politicos find ways to call that a smashing success.
November 3, 2013 | National Review Online

Obamacare and Human Nature

Obamacare was predicated on the idea that it would be techie-driven and noble in inspiration, and therefore, presto, just had to work. But the entire program, whether one likes it or not, assumes things that simply are contrary to human nature, and therefore, unless modified, will never offer the necessary incentives for Americans. It can only operate through increasing coercion. If people can’t get online, why should they continue to try? (Sort of like calling a 1-800 fix-it number, getting put on hold by someone in India, and then swearing never to do that again.) Each time an administration official assures the public that the latest glitch is about fixed, and each time that it is not, a few more hundred thousand will give up. And if, for many, the penalty is cheaper than the premium and the latter can be retroactively paid after a sickness, then why pay the cost upfront? If people can get a known Medicaid package free without too much scrutiny about the actual facts of their income and status, why would they prefer to pay for an unknown Obamacare plan? If younger people feel both broke and invincible, why expect them to flock to pay for something that costs and that they won’t often use? If people don’t like premium hikes coupled with reduced coverage, why should they be won over by arguments that they should pay more money for more coverage of the sort they will never use? And if some are sick and need costly care and cannot obtain insurance or afford to pay the full cost of insurance for their conditions, why would they not rush to sign up even more rapidly than their antitheses would avoid signing up? If a program is said to be both superior and universal in providing excellent coverage for all, why would there be any exemptions whatsoever for anyone, especially for those who support or even helped pass the legislation? If insurance companies would go broke selling life insurance of a reasonable cost to those with preexisting conditions, or affordable car insurance to those with numerous citations, why would they not do the same with Obamacare? If the program was passed through coercion, noble lies, and subterfuge, and ushered in with the same, why would anyone believe it will not operate in the same spirit and practice? Why should everyone who has insurance expect to believe that he was simply given it and that everyone who doesn’t was deprived of it, when millions made difficult and costly choices not to play the odds while at least a few million others in no different circumstances embraced different choices? To counter all of the above, Obamacare would have to assume that it is hip, knows best, is not worried about Neanderthal human nature, and has the power to force what it wishes anyway—and there we have what we have.
October 28, 2013 | Grumpy Economist

The Next Obamacare Fiasco

October 24, 2013 | Corner (National Review Online)

Obamacare Redefines the Shutdown

Democratic senators up for reelection in 13 months are now embracing, in their calls to delay Obamacare, the same themes as did the House Republicans and a few senators a few weeks ago—hoping to preempt mounting criticism. In this surreal landscape, three weeks ago Obamacare was unquestioned “settled” law (despite the fact that the president himself unsettled the law by suspending the employer mandate) that only dead-ender “anarchists” and “hostage takers” wished to stop or amend. Now some Democrats apparently think the law still is fluid, and thus, as we were once reminded, want to go against the administration’s mandate of the last election, the ruling of the Supreme Court, and the majority of the Senate in stopping the federalization of health care. If the rollout of Obamacare gets any more incoherent, soon Barack Obama may be echoing the same concerns of Ted Cruz and the former naysayers in his willingness to suspend or delay his own signature legislation. At that point, do the tea-party “Taliban” become rebranded as prescient, sober and judicious legislators who provided a model for what Democrats now in Johnny-come-lately fashion emulate—or do Democrats up for reelection become obstructionists who need to get over it and move on? 
June 23, 2013 | Becker-Posner Blog

Medical Competition and the Cost of Medical Care

January 29, 2013 |

The Era Of Mandates: President Obama’s Unfortunate Legacy