Economist's View

Paul Krugman: Trapped by Their Own Lies

"health care isn’t the only issue on which lies are coming back to bite the liars":

Trapped by Their Own Lies, by Paul Krugman, NY Times: ...Republicans have spent years routinely lying for the sake of political advantage. And now — not just on health care, but across the board — they are trapped by their own lies, forced into trying to enact policies they know won’t work.

...“You know, I could maybe give you 10 reasons why this bill shouldn’t be considered,” said Senator Chuck Grassley of Iowa. “But,” he continued, “Republicans have campaigned on this,” meaning repeal-and-replace, and had to fulfill their promise.

But repealing the Affordable Care Act wasn’t the only thing Republicans promised; they also promised to replace it with something better and cheaper ... without creating any new problems. ...

Yet Republicans never had any idea how to fulfill that promise ... without taking insurance away from tens of millions..., they were lying about health care all along.

And the base, both the grass roots and the big money, believed the lies. Hence the trap in which Republicans find themselves.

The thing is, health care isn’t the only issue on which lies are coming back to bite the liars. ...

The next big item on the G.O.P. agenda is taxes. ... But Republicans ... have ... spent years posing as the party of fiscal responsibility, and they have no idea how to cut taxes without blowing up the deficit.

As with health care, the party has masked its lack of good ideas with lies... But as with health care, these lies will be revealed once actual legislation is unveiled. ...

So tax policy, like health care, will be hobbled by a legacy of lies.

Wait, there’s more.

Foreign policy ... lies have put the Trump administration in a box over things like the Iran nuclear deal: Canceling the deal would create huge problems, yet not canceling it would amount to an admission that the criticisms were dishonest.

And soon the G.O.P. may even start to pay a price for lying about climate change. As hurricanes get ever more severe — just as climate scientists predicted — climate denial is looking increasingly out of touch. Yet donors and the base would react with fury to any admission that the threat is real, after all.

The bottom line is that the bill for cynicism seems to be coming due. For years, flat-out lies about policy served Republicans well, helping them win back control of Congress and, eventually, the White House. But those same lies now leave them unable to govern.

Paul Krugman: Cruelty, Incompetence and Lies

"the evasions and lies we’re seeing on this bill have been standard G.O.P. operating procedure for years":

Cruelty, Incompetence and Lies, by Paul Krugman: Graham-Cassidy, the health bill the Senate may vote on next week, is stunningly cruel. It’s also incompetently drafted: The bill’s sponsors clearly had no idea what they were doing... Furthermore, their efforts to sell the bill involve obvious, blatant lies.

Nonetheless, the bill could pass. And that says a lot about today’s Republican Party, none of it good. ...

Did Graham-Cassidy’s sponsors know what they were doing when putting this bill together? Almost surely not, or they wouldn’t have produced something that everyone, and I mean everyone, who knows anything about health care warns would cause chaos.

It’s not just progressives: The American Medical Association, the insurance industry and Blue Cross/Blue Shield have all warned that markets would be destabilized and millions would lose coverage. ...

Lindsey Graham, Bill Cassidy, and the bill’s other sponsors have responded to these critiques the old-fashioned way — with lies.

Both Cassidy and Graham insist that their bill would continue to protect Americans with pre-existing conditions — a claim that will come as news to the A.M.A., Blue Cross and everyone else who has read the bill...

Cassidy has also circulated a spreadsheet that purports to show most states actually getting increased funding under his bill. ... Independent analyses find that most states would, in fact, experience serious cuts... — and everyone would face huge cuts after 2027.

So we’re looking at an incompetently drafted bill that would hurt millions of people, whose sponsors are trying to sell it with transparently false claims. How is it that this bill might nonetheless pass the Senate?

One answer is that Republicans are desperate to destroy President Barack Obama’s legacy ... no matter how many American lives they ruin...

Another answer is that most Republican legislators neither know nor care about policy substance. ... Vox asked a number of G.O.P. senators to explain what Graham-Cassidy does; the answers ranged from incoherence to belligerence to belligerent incoherence.

I’d add that the evasions and lies we’re seeing on this bill have been standard G.O.P. operating procedure for years. ... Graham-Cassidy isn’t an aberration; it’s more like the distilled essence of everything wrong with modern Republicans.

Will this awful bill become law? I have no idea. But even if the handful of Republican senators who retain some conscience block it — we’re looking at you, John McCain — the underlying sickness of the G.O.P. will remain.

It’s sort of a pre-existing condition, and it’s poisoning America.

Paul Krugman: Complacency Could Kill Health Care

"there is a real chance that Graham-Cassidy ... will ... become law, because not enough people are taking it seriously":

Complacency Could Kill Health Care, by Paul Krugman, NY Times: ...last year far too many people were complacent; they assumed that Trump couldn’t possibly become president, so they felt free to engage in trivial pursuits. Then they woke up to find that the inconceivable had happened.

Is something similar about to go down with health care?

Republican attempts to destroy Obamacare have repeatedly failed, and for very good reason. Their attacks on the Affordable Care Act were always based on lies, and they have never come up with a decent alternative. ...

The sponsors of the Graham-Cassidy bill now working its way toward a Senate vote claim to be offering a moderate approach that preserves the good things about Obamacare. In other words, they are maintaining the G.O.P. norm of lying both about the content of Obamacare and about what would replace it.

In reality, Graham-Cassidy is the opposite of moderate. It contains, in exaggerated and almost caricature form, all the elements that made previous Republican proposals so cruel and destructive. ... It would eliminate the individual mandate, undermine if not effectively eliminate protection for people with pre-existing conditions, and slash funding for subsidies and Medicaid. There are a few additional twists, but they’re all bad...

Yet there is a real chance that Graham-Cassidy ... will nonetheless become law, because not enough people are taking it seriously. ...

The main reason Republican leaders couldn’t do that on previous health bills was public outrage and activism. Letters and phone calls, demonstrators and crowds at town halls, made it clear that many Americans were aware of the stakes, and that politicians who voted to take health care away from millions would be held accountable.

Now, however, the news cycle has moved on, taking public attention with it. Many progressives have already begun taking Obamacare’s achievements for granted, and are moving on from protest against right-wing schemes to dreams of single-payer. Unfortunately, that’s exactly the kind of environment in which swing senators, no longer in the spotlight, might be bribed or bullied into voting for a truly terrible bill.

The good news is that for technical reasons of parliamentary procedure, Graham-Cassidy has to pass by the end of this month, or not at all. The bad news is that such passage is a real possibility.

So if you care about preserving the huge gains the A.C.A. has brought, make your voice heard. Otherwise we may wake up to another terrible morning after.

Paul Krugman: Politicians, Promises, and Getting Real

Paul Krugman:

Politicians, Promises, and Getting Real, by Paul Krugman, NY Times: On Wednesday Donald Trump demanded that Congress move quickly to enact his tax reform plan. But so far he has not, in fact, offered any such plan...

Meanwhile, 17 Senate Democrats ... have signed on to Bernie Sanders’s call for expanding Medicare to cover the whole population. So far, however, Sanders hasn’t produced either an estimate of how much that would cost or a specific proposal about how to pay for it.

I don’t mean to suggest that these cases are comparable: The distinctive Trumpian mix of ignorance and fraudulence has no counterpart among Democrats. Still, both stories raise the question of how much ... policy clarity matters for politicians’ ability to win elections and ... govern.

About elections: The fact that Trump is in the White House suggests that politicians can get away with telling voters just about anything that sounds good. ...

On the other hand, the ignominious failure of Trumpcare shows that reality sometimes does matter. ... Once the public realized that tens of millions would lose coverage..., there was a huge backlash...

The story of tax reform ... is starting to look a bit similar. ...

In fact, Trump himself seems to be experiencing cognitive dissonance. “The rich will not be gaining at all with this plan,” he declared Wednesday. ... Is he oblivious, lying, or both? ...

The contrast between what he’s claiming and anything Republicans in Congress will be willing to support is so great as to practically invite ridicule and another popular backlash. ...

But is the push for single-payer health care taking Democrats down a similar path?

Unlike just about everything Trump and company are proposing, Medicare for all is a substantively good idea. Yet actually making it happen would probably mean ... a serious political backlash. For one..., it would require a substantial increase in taxes. For another, it would mean telling scores of millions of Americans who get health coverage though their employers, and are generally satisfied..., that they need to give it up and accept something different. ...

Democrats could eventually find themselves facing a Trumpcare-type debacle, unable either to implement their unrealistic vision or to let it go.

The point is that while unrealistic promises may not hurt you in elections, they can become a big problem when you try to govern. Having a vision for the future is good, but being real about the difficulties is also good. Democrats, take heed.

Is Poor Health Hindering Economic Growth?

Ellyn Terry at the Atlanta Fed's macroblog:

Is Poor Health Hindering Economic Growth?: It is well known that poor health is bad for an individual's income, partially because it can lower the propensity to participate in the labor market. In fact, 5.4 percent of prime-age individuals (those 25–54 years old) reported being too sick or disabled to work in the second quarter of 2017. This is the most commonly cited reason prime-age men do not want a job, and for prime-age women, it is the second most often cited reason behind family responsibilities (see the chart). (Throughout this article, I use the measure "not wanting a job because of poor health or disability" as a proxy for serious health problems.)

In addition to being prevalent, the share of the prime-age population citing poor health or disability as the main reason for not wanting a job has increased significantly during the past two decades and tends to be higher among those with less education (see the chart).

Yet by some standards, the health of Americans is improving. For example, compared to two decades ago the average American is living two years longer, and the likelihood of dying from cancer or cardiovascular disease has fallen. These specific outcomes, however, may have more to do with improvements in the treatment of chronic disease (and the resulting reduction in mortality rates) than improvements in the incidence of health problems.

Another puzzle—which is perhaps also a clue—is the considerable variation across states in the rates of being too sick or disabled to work. For example, people living in Mississippi, Alabama, Kentucky, or West Virginia in 2016 were more than three times likelier to indicate being too sick or disabled to work than residents of Utah, North Dakota, Iowa, or Minnesota (see the maps below).

This cross-state variation is useful because it allows state-by-state comparisons of the prevalence of specific health problems. Among a list of more than 30 health indicators, the two factors that most correlate with the share of a state's population too sick or disabled to work were high blood pressure (a correlation of 0.86) and diabetes (a correlation of 0.83). Both of these conditions are associated with risk factors such as family history, race, inactivity, poor diet, and obesity. Both of these health issues have increased significantly on a national basis in recent years.

So how might poor health hinder economic growth? Health factors accounts for a significant part of the decline in labor force participation since at least the late 1990s. After controlling for demographic changes, the share of people too sick or disabled to work is about 1.6 percentage points higher today than it was two decades ago (see the interactive charts on our website). Other things equal, if this trend reversed itself during the next year, it could increase the workforce by up to 4 million people, and add around 2.6 percentage points to gross domestic product (calculated using our Labor Market Sliders).

Of course, such a sudden and large reversal in health is highly unlikely. Nonetheless, significant improvements to the health of the working-age population would help lessen the drag on growth of the labor supply coming from an aging population. Public policy efforts centered on both prevention and treatment of work-impeding health conditions could play an important role in bolstering the nation's workforce.

Paul Krugman: What’s Next for Progressives?

There's more than one way to get to universal coverage:

What’s Next for Progressives?, by Paul Krugman, NY Times: ...If Democrats regain control of Congress and the White House, what will they do with the opportunity?

Well, some progressives — by and large people who supported Bernie Sanders... — are already trying to revive one of his signature proposals: expanding Medicare to cover everyone. Some even want to make support for single-payer a litmus test for Democratic candidates.

So it’s time for a little pushback. ...

Look at the latest report by the nonpartisan Commonwealth Fund, comparing health care performance among advanced nations. America is at the bottom; the top three performers are Britain, Australia, and the Netherlands. And the thing is, these three leaders have very different systems.

Britain has true socialized medicine: The government provides health care directly through the National Health Service. Australia has a single-payer system, basically Medicare for All... But the Dutch have what we might call Obamacare done right: individuals are required to buy coverage from regulated private insurers, with subsidies to help them afford the premiums.

And the Dutch system works, which suggests that a lot could be accomplished via incremental improvements in the A.C.A...

Meanwhile, the political logic that led to Obamacare rather than Medicare for all still applies. ... The ... 156 million people who currently get insurance through their employer ... are largely satisfied with their coverage. Moving to single-payer would mean taking away this coverage and imposing new taxes;... you’d have to convince most of these people both that they would save more in premiums than they pay in additional taxes, and that their new coverage would be just as good...

This might in fact be true, but it would be one heck of a hard sell. Is this really where progressives want to spend their political capital?

What would I do instead? I’d enhance the A.C.A., not replace it, although I would strongly support reintroducing some form of public option ... that could eventually lead to single-payer.

Meanwhile, progressives should move beyond health care and focus on other holes in the U.S. safety net.

When you compare the U.S. social welfare system with those of other wealthy countries, what really stands out now is our neglect of children. ...

I have nothing against single-payer; it’s what I’d support if we were starting fresh. But we aren’t: Getting there from here would be very hard... Even idealists need to set priorities, and Medicare-for-all shouldn’t be at the top of the list.

Paul Krugman: Obamacare Rage in Retrospect

"What was Obamacare rage about?":

Obamacare Rage in Retrospect, by Paul Krugman, NY Times: I guess it ain’t over until the portly golfer sings, but it does look as if Obamacare will survive. ...

It’s true that the tweeter in chief retains considerable ability to sabotage care, but Republicans are basically begging him to stop, believing — correctly — that the public will blame them for any future deterioration in coverage.

Why did Obamacare survive? The shocking answer: It’s still here because it does so much good. ...

Which raises a big question: Why did the prospect of health reform produce so much popular rage in 2009 and 2010?

I’m not talking about the rage of G.O.P. apparatchiks, who hated and feared the A.C.A., not because they thought it would fail, but because they were afraid it would work. (It has.) Nor am I talking about the rage of some wealthy people furious that their taxes were going up to pay for lesser mortals’ care.

No, I’m talking about the people who screamed at their congressional representatives in town halls... What was Obamacare rage about?

Much of it was orchestrated by pressure groups like Freedom Works, and it’s a good guess that some of the “ordinary citizens” who appeared at town halls were actually right-wing activists. Still, there was plenty of genuine popular rage, stoked by misinformation and outright lies from the usual suspects: Fox News, talk radio and so on. ...

The question then becomes why so many people believed these lies. The answer, I believe, comes down to a combination of identity politics and affinity fraud.

Whenever I see someone castigating liberals for engaging in identity politics, I wonder what such people imagine the right has been doing all these years. For generations, conservatives have conditioned many Americans to believe that safety-net programs are all about taking things away from white people and giving stuff to minorities.

And those who stoked Obamacare rage were believed because they seemed to some Americans like their kind of people — that is, white people defending them against you-know-who.

So what’s the moral of this story? ...

It’s certainly not encouraging to realize how easily many Americans were duped by right-wing lies, pushed into screaming rage against a reform that would actually improve their lives.

On the other hand, the truth did eventually prevail, and Republicans’ inability to handle that truth is turning into a real political liability. And in the meantime, Obamacare has made America a better place.

Paul Krugman: Health Care Is Still in Danger

"The latest round of falsehoods about health care, combined with the defamation of the C.B.O., may be gaining some political traction":

Health Care Is Still in Danger, by Paul Krugman, NY Times: Will Senate Republicans try to destroy health care under cover of a constitutional crisis? That’s a serious question, based in part on what happened in the House...

As you may remember, back in March attempts to repeal and replace the Affordable Care Act seemed dead after the Congressional Budget Office released a devastating assessment..., the House Republican bill would lead to 23 million more uninsured Americans. Faced with intense media scrutiny and an outpouring of public opposition, House leaders pulled their bill, and the debate seemed over.

But then media attention moved on to presidential tweets and other outrages — and with the spotlight off, House leaders bullied and bribed enough holdouts to narrowly pass a bill after all.

Could something similar happen in the Senate? A few days ago the Senate’s equally awful version of repeal and replace ... seemed dead. And media attention has visibly shifted off the subject, focusing on juicier topics like the Russia-Trump story. ...

One particular concern is that the latest round of falsehoods about health care, combined with the defamation of the C.B.O., may be gaining some political traction. ... In particular, the claim is that its prediction of huge losses in coverage is outlandish, and that to the extent that fewer people would be covered, it would be due to their voluntary choices.

In reality, those C.B.O. predictions of coverage losses are totally reasonable, given the ... drastic cuts to Medicaid...

And on those claims that it’s O.K. if people drop coverage, because that would be their own choice... Current law provides enough in subsidies that an individual with an income of $26,500 can afford a plan covering 70 percent of medical expenses, which ... implies an $800 deductible. The Senate bill reduces that standard of coverage to 58 percent, which would raise the implied deductible to $13,000, making the insurance effectively useless. Would deciding not to buy that useless insurance really be a “choice”? ...

In short, the Senate bill is every bit as cruel and grotesque as its critics say. But we need to keep reminding wavering senators and their constituents of that fact, lest they be snowed by a blizzard of lies. ...

And while ordinary citizens can’t yet do much about the looming constitutional crisis, their calls, letters, and protests can still make all the difference on health care. Don’t let the bad guys in the Senate do terrible things because you weren’t paying attention!

Paul Krugman: Health Care in a Time of Sabotage

"It’s basically about spite":

Health Care in a Time of Sabotage, by Paul Krugman, NY Times: Is Trumpcare finally dead? Even now, it’s hard to be sure, especially given Republican moderates’ long track record of caving in to extremists at crucial moments. But it does look as if the frontal assault on the Affordable Care Act has failed.

And let’s be clear: The reason this assault failed wasn’t that Donald Trump did a poor selling job, or that Mitch McConnell mishandled the legislative strategy. Obamacare survived because it has worked — because it brought about a dramatic reduction in the number of Americans without health insurance, and voters ... don’t want to lose those gains.

Unfortunately, some of those gains will probably be lost all the same: The number of uninsured Americans is likely to tick up over the next few years. So it’s important to say clearly, in advance, why this is about to happen. It won’t be because the Affordable Care Act is failing..., when Trump threatens to “let Obamacare fail,” what he’s really threatening is to make it fail.

On Wednesday The Times reported on three ways the Trump administration is, in effect, sabotaging the A.C.A.... First, the administration is weakening enforcement of the requirement that healthy people buy coverage. Second, it’s letting states impose onerous rules like work requirements on people seeking Medicaid. Third, it has backed off on advertising and outreach designed to let people know about options for coverage. ...

And there may be worse to come: Insurance companies, which are required by law to limit out-of-pocket expenses of low-income customers, are already raising premiums sharply because they’re worried about a possible cutoff of the crucial federal “cost-sharing reduction” subsidies that help them meet that requirement.

The truly amazing thing about these sabotage efforts is that they don’t serve any obvious purpose. They won’t save money — in fact, cutting off those subsidies ... would probably end up costing taxpayers more money than keeping them. They’re unlikely to revive Trumpcare’s political prospects.

So this isn’t about policy, or even politics in the normal sense. It’s basically about spite: Trump and his allies may have suffered a humiliating political defeat, but at least they can make millions of other people suffer.

Can anything be done to protect Americans from this temper tantrum? In some cases, I believe, state governments can insulate their citizens from malfeasance at H.H.S. But the most important thing, surely, is to place the blame where it belongs. No, Mr. Trump, Obamacare isn’t failing; you are.

This Ridiculous Republican Propaganda is Exactly Why We Need the CBO

Catherine Rampell:

This ridiculous Republican propaganda is exactly why we need the CBO: Tuesday I wrote about the GOP’s systematic efforts to discredit and disempower any independent voice — media, the Congressional Budget Office, the Office of Government Ethics — that tries to hold government accountable.

Today we have a great example of the ridiculous propaganda that Republicans expect the public to swallow in the absence of such independent critics and scorekeepers.

The Washington Examiner has gotten its hands on a Trump administration “analysis” (I use that word loosely) of the Consumer Freedom Amendment, a proposal from Sen. Ted Cruz (R-Tex.). ...

Talk to literally any economist, including conservative ones, and you’ll learn that this idea would lead to adverse selection, a huge spike in premiums for sick people..., a proliferation of mini-med junk plans that cover virtually nothing..., and a possible death spiral. A more detailed explanation of this phenomenon is here. ...

Contrary to the predictions of economists everywhere, the HHS propaganda document claims that the Cruz amendment would cause insurance coverage to go up and premiums to fall. Astoundingly, even premiums for people in the Obamacare-compliant plans — which, again, economic theory suggests would get stuck with only the very sickest, most expensive Americans — would allegedly decline relative to current law. ...

This is garbage, and exactly why we need nonpartisan scorekeepers like the CBO. ...

Paul Krugman: The Cruelty and Fraudulence of Mitch McConnell’s Health Bill

"the last act in a long con":

The Cruelty and Fraudulence of Mitch McConnell’s Health Bill, by Paul Krugman, NY Times: A few days ago the tweeter in chief demanded that Congress enact “a beautiful new HealthCare bill” before it goes into recess. But now we’ve seen Mitch McConnell’s latest version of health “reform,” and “beautiful” is hardly the word for it. In fact, it’s surpassingly ugly, intellectually and morally. Previous iterations of Trumpcare were terrible, but this one is, incredibly, even worse. ...

The most important change in the bill ... is the way it would effectively gut protection for people with pre-existing medical conditions. The Affordable Care Act put minimum standards on the kinds of policies insurers were allowed to offer; the new Senate bill gives in to demands by Ted Cruz that insurers be allowed to offer skimpy plans that cover very little, with very high deductibles that would make them useless to most people.

The effects of this change would be disastrous. Don’t take my word for it: It’s what the insurers themselves say. ...

Or to put it another way, this bill would send insurance markets into a classic death spiral. Republicans have been predicting such a spiral for years, but keep being wrong: ...Obamacare ... is stabilizing, and doing pretty well in states that support it. But this bill would effectively sabotage all that progress.

And let’s be clear: Many of the victims of this sabotage would be members of the white working class, people who voted for Donald Trump in the belief that he really meant it when he promised that there would be no cuts to Medicaid and that everyone would get better, cheaper insurance. So why ... is there even a chance that it might become law?

The main answer, I’d argue, is that ... conservative ideology always denied the proposition that people are entitled to health care; the Republican elite considered and still considers people on Medicaid, in particular, “takers” who are effectively stealing from the deserving rich.

And the conservative view has always been that Americans have health insurance that is too good, that they should pay more in deductibles and co-pays, giving them “skin in the game,” and thus an incentive to control costs.

So what we’re seeing here is supposed to be the last act in a long con, the moment when the fraudsters cash in, and their victims discover how completely they’ve been fooled. The only question is whether they’ll really get away with it. We’ll find out very soon.

Paul Krugman: Three Legs Good, No Legs Bad

There are three good reasons why Republicans, in their quest to fund tax cuts for the wealthy, can't find an alternative to Obamacare that avoids "a huge rise in the number of uninsured":

Three Legs Good, No Legs Bad, by Paul Krugman, NY Times: Will 50 Republican senators be willing to inflict grievous harm on their constituents in the name of party loyalty? I have no idea.

But this seems like a good moment to review why Republicans can’t come up with a non-disastrous alternative to Obamacare...

Suppose you want to make health coverage available to everyone..., the Affordable Care Act went for ... the so-called three-legged stool.

It starts by requiring that insurers offer the same plans, at the same prices, to everyone... This deals with the problem of pre-existing conditions. On its own, however, this would lead to a “death spiral”: healthy people would wait until they got sick to sign up, so those who did sign up would be relatively unhealthy, driving up premiums, which would in turn drive out more healthy people, and so on.

So insurance regulation has to be accompanied by the individual mandate, a requirement that people sign up for insurance, even if they’re currently healthy. And the insurance must meet minimum standards: Buying a cheap policy that barely covers anything is functionally the same as not buying insurance at all.

But what if people can’t afford insurance? The third leg of the stool is subsidies ... for those with lower incomes. For those with the lowest incomes, the subsidy is 100 percent, and takes the form of an expansion of Medicaid.

The key point is that all three legs of this stool are necessary...

 Republicans ... ideas involve sawing off one or more legs of that three-legged stool.

First, they’re dead set on repealing the individual mandate...

Second, they’re determined to slash subsidies — including making savage cuts to Medicaid — in order to free up money ... to cut taxes on the wealthy. The result would be a drastic rise in net premiums for most families.

Finally, we’re now hearing a lot about the Cruz amendment, which would let insurers offer bare-bones plans with minimal coverage and high deductibles. These would be useless to people with pre-existing conditions, who would find themselves segregated into a high-cost market — effectively sawing off the third leg of the stool.

So which parts of their plan would Republicans have to abandon to avoid a huge rise in the number of uninsured? The answer is, all of them.

After all these years of denouncing Obamacare, then, Republicans have no idea how to do better. Or, actually, they have no ideas at all.

Paul Krugman: Attack of the Republican Decepticons

Conservatives "keep scaling new heights of dishonesty in their attempt to sell their reverse-Robin Hood agenda":

Attack of the Republican Decepticons, by Paul Krugman, NY Times: Does anyone remember the “reformicons”? A couple of years back there was much talk about a new generation of Republicans who would ... move their party off its cruel and mindless agenda of tax cuts for the rich and pain for the poor, bringing back the intellectual seriousness that supposedly used to characterize the conservative movement.

But the rise of the reformicons never happened. What we got instead was the (further) rise of the decepticons..., conservatives who keep scaling new heights of dishonesty in their attempt to sell their reverse-Robin Hood agenda.

Consider ... Republican leaders’ strategy on health care..., here are a few low points. ...

Despite encountering some significant problems, the Affordable Care Act has ... extended health insurance to millions of Americans... And these numbers translate into dramatic positive impacts on real lives. ...

How do Republicans argue against this success? You can get a good overview by looking at the Twitter feed of Tom Price,... secretary of health and human services...

First, he points to the fact that fewer people than expected have signed up on the exchanges ... and portrays this as a sign of dire failure. But a lot of this shortfall is the result of good news: Fewer employers than predicted chose to drop coverage and shift their workers onto exchange plans. ...

Second, he points to the 28 million U.S. residents who remain uninsured... But nobody expected Obamacare to cover everyone... And you have to wonder how Price can look himself in the mirror ... when his own party’s plans would vastly increase the number of uninsured.

Which brings us to Republicans’ efforts to obscure the nature of their own plans. ...

On one side, they claim that a cut is not a cut, because dollar spending on Medicaid would still rise over time. ...

On the other side ... senior Republicans ... dismiss declines in the number of people with coverage as no big deal, because they would represent voluntary choices not to buy insurance.

How is this supposed to apply to the 15 million people the C.B.O. predicts would lose Medicaid? ...

Political spin used to have its limits: Politicians who wanted to be taken seriously wouldn’t go around claiming that up is down and black is white.

Yet today’s Republicans hardly ever do anything else. It’s not just Donald Trump: The whole G.O.P. has become a post-truth party. And I see no sign that it will ever improve.

Pure Class Warfare, With Extra Contempt

Paul Krugman:

Pure Class Warfare, With Extra Contempt: The Senate version of Trumpcare – the Better Care Reconciliation Act – is out. The substance is terrible: tens of millions of people will experience financial distress if this passes, and tens if not hundreds of thousands will die premature deaths, all for the sake of tax cuts for a handful of wealthy people. What’s even more amazing is that Republicans are making almost no effort to justify this massive upward redistribution of income. They’re doing it because they can, because they believe that the tribalism of their voters is strong enough that they will continue to support politicians who are ruining their lives.

In this sense – and in only this sense – what we’re seeing now is a departure from previous Republican practice.

In the past, laws that would take from the poor and working class while giving to the rich came with excuses. Tax cuts, their sponsors declared, would unleash market dynamism and make everyone more prosperous. Deregulation would increase efficiency and lower prices. It was all voodoo; the promises never came true. But at least there was some pretense of working for the common good.

Now we have none of this. This bill does nothing to reduce health care costs. It does nothing to improve the functioning of health insurance markets – in fact, it will send them into death spirals by reducing subsidies and eliminating the individual mandate. There is nothing at all in the bill that will make health care more affordable for those currently having trouble paying for it. And it will gradually squeeze Medicaid, eventually destroying any possibility of insurance for millions. ...

But Republican leaders believe that their voters are tribal enough, sufficiently walled off from information, that they’ll ignore the attack on their lives and keep voting R – indeed, that as they lose health care, get hit with crushing out-of-pocket bills, see their friends and neighbors face ruin, they’ll blame it on Democrats.

I wish I were sure that this belief was false.

Paul Krugman: Zombies, Vampires and Republicans

"The one obvious payoff to taking health care away from millions: a big tax cut for the wealthy":

Zombies, Vampires and Republicans, by Paul Krugman, NY Times: Zombies have long ruled the Republican Party. ... What are these zombies of which I speak? Among wonks, the term refers to policy ideas that should have been abandoned long ago in the face of evidence and experience, but just keep shambling along.

The right’s zombie-in-chief is the insistence that low taxes on the rich are the key to prosperity. This doctrine should have died...

Despite the consistent wrongness of their predictions, however, tax-cut fanatics just kept gaining influence in the G.O.P. — until the disaster in Kansas...

Will this banish the tax-cut zombie? Maybe — although the economists behind the Kansas debacle, who have of course learned nothing, appear to be the principal movers behind the Trump tax plan, such as it is.

But even as the zombies move offstage, vampire policies — so-called not so much because of their bloodsucking nature, although that too, as because they can’t survive daylight — have taken their place.

Consider what’s happening right now on health care.

Last month House Republicans rammed through one of the worst, cruelest pieces of legislation in history. ...

This bill is, as it should be, wildly unpopular. Nonetheless, Republican Senate leaders are now trying to ram through their own version of the A.H.C.A., one that, all reports suggest, will differ only in minor, cosmetic ways. And they’re trying to do it in total secrecy. ...

Clearly, the goal is to pass legislation that will have devastating effects on tens of millions of Americans without giving those expected to pass it, let alone the general public, any real chance to understand what they’re voting for. ...

This is unprecedented...

Of course..., the one obvious payoff to taking health care away from millions: a big tax cut for the wealthy. As I said, while bloodsucking isn’t the main reason to call this a vampire policy, it’s part of the picture....

You can blame Donald Trump for many things, including the fact that he will surely sign whatever bad bill is put in front of him. But as far as health care is concerned, he’s just an ignorant bystander...

So this isn’t a Trump story; it’s about the cynicism and corruption of the whole congressional G.O.P. Remember, it would take just a few conservatives with conscience — specifically, three Republican senators — to stop this outrage in its tracks. But right now, it looks as if those principled Republicans don’t exist.

I’ve Covered Obamacare Since Day One. I’ve Never Seen Lying and Obstruction Like This.

Sarah Kliff:

I’ve covered Obamacare since day one. I’ve never seen lying and obstruction like this, Vox.com: Republicans do not want the country to know what is in their health care bill.

This has become more evident each day, as the Senate plots out a secretive path toward Obamacare repeal — and top White House officials (including the president) consistently lie about what the House bill actually does. ...

My biggest concern isn’t the hypocrisy; there is plenty of that in Washington. It’s that the process will lead to devastating results for millions of Americans who won’t know to speak up until the damage is done. So far, the few details that have leaked out paint a picture of a bill sure to cover millions fewer people and raise costs on those with preexisting conditions.

The plan is expected to be far-reaching, potentially bringing lifetime limits back to employer-sponsored coverage, which could mean a death sentence for some chronically ill patients who exhaust their insurance benefits. ...

It’s Time to Worry about Health Care in the Senate

David Leonhardt

It’s Time to Worry about Health Care in the Senate, NY Times: While the rest of the country has been transfixed by Trumpian chaos, members of the Senate have spent the last two weeks talking about taking health insurance from millions of Americans.

There is an alarmingly large chance that they’ll decide to do so. But if they do, they will almost certainly rely on a political sleight of hand to disguise their bill’s damage. Understanding that sleight of hand — and calling attention to it — offers the best hope for defeating the bill.

The effort to take health insurance from the middle class and poor and funnel the savings into tax cuts for the rich is a little like mold. It grows best in the dark. ...

If secrecy is the first part of the strategy, distraction is the second. ...

The final part of the strategy will be arm-twisting. If victory is in sight, McConnell will invoke party loyalty to cajole his colleagues... Being the Republican who brought down Trumpcare wouldn’t be fun.

So the current period is important. It’s a time for all those groups that oppose the bill, and for the engaged progressive base, to put senators on notice. ...

A small group of Senate Republicans has shown signs of being persuadable, and only three are likely needed to stop a bill. The group includes Lamar Alexander, Shelley Moore Capito, Bill Cassidy, Susan Collins, Dean Heller, Lisa Murkowski and Rob Portman.

They should hear a loud message that Americans aren’t in favor of taking health insurance from their fellow citizens. The senators work for those citizens, not for Mitch McConnell, Paul Ryan and Donald Trump.

Paul Krugman: Republicans Party Like It’s 1984

"This is an act of deliberate betrayal":

Republicans Party Like It’s 1984, by Paul Krugman, NY Times: There have been many bad laws in U.S. history. ... But has there ever been anything like Trumpcare...? It’s a miserably designed law, full of unintended consequences. It’s a moral disaster, snatching health care from tens of millions mainly to give the very wealthy a near-trillion-dollar tax cut.

What really stands out, however, is the Orwell-level dishonesty of the whole effort. As far as I can tell, every word Republicans, from Trump on down, have said about their bill — about why they want to replace Obamacare, about what their replacement would do, and about how it would work — is a lie, including “a,” “and” and “the.”

And what does it say about the state of American politics that a majority of the representatives of one of our major political parties have gone along with this nightmarish process? ... Trumpcare breaks every promise Republicans ever made about health ... and ... they are doing so with intent. ... This is an act of deliberate betrayal.

...Why are they doing this, and why do they think they can get away with it?

Part of the answer to the first question is, presumably, simple greed. Tens of millions would lose access to health coverage, but ... people with incomes over $1 million would save an average of more than $50,000 a year.

And there is a powerful faction within the G.O.P. for whom cutting taxes on the rich is more or less the only thing that matters. ...

As for why they think they can get away with it: Well, isn’t recent history on their side? The general shape of what the G.O.P. would do to health care, for the white working class in particular, has long been obvious, yet many people who were sure to lose, bigly, voted Trump anyway.Why shouldn’t Republicans believe they can convince those same voters that the terrible things that will happen if Trumpcare becomes law are somehow liberals’ fault?

And for that matter, how confident are you that mainstream media will resist the temptation of both-sides-ism, the urge to produce “balanced” reporting that blurs the awful reality of what Trumpcare will do if enacted?

In any case, let’s be clear: What just happened on health care shouldn’t be treated as just another case of cynical political deal making. This was a Freedom is Slavery, Ignorance is Strength moment. And it may be the shape of things to come.

Paul Krugman: The Balloon, the Box and Health Care

If they persist in trying to fit the balloon in the box, eventually it will pop:

The Balloon, the Box and Health Care, by Paul Krugman, NY Times: Imagine a man who for some reason is determined to stuff a balloon into a box — a box that, aside from being the wrong shape, just isn’t big enough. He starts working at one corner, pushing the balloon into position. But then he realizes that the air he’s squeezed out at one end has caused the balloon to expand elsewhere. So he tries at the opposite corner, but this undoes his original work.

If he’s stupid or obsessive enough, he can spend a long time at this exercise, trying it from various different angles, and maybe even briefly convince himself that he’s making progress. But he’s kidding himself: No matter what he does, the balloon isn’t going to fit in that box.

Now you understand what’s happening to G.O.P. efforts to repeal and replace the Affordable Care Act.

Republicans have spent many years denouncing Obamacare as a terrible, horrible, no good law and insisting that they can do much better. They successfully convinced many voters that they could preserve the good stuff — the dramatic expansion of coverage that has brought the percentage of Americans without health insurance to a record low — while reducing premiums, shrinking deductibles and, of course, doing away with the taxes on high incomes that pay for the program.

Those promises basically define the box into which they’re trying to stuff health care. ...

Again and again, we read news reports to the effect that Republicans are closing in on a plan that will break the political deadlock..., the latest idea being floated, they’ll let insurance companies raise premiums on people with pre-existing conditions and compensate by creating special high-risk pools! ...

And because the task Republicans have set for themselves is basically impossible, their ongoing debacle over health care isn’t about political tactics or leadership..., this thing just can’t work. ...

All of this raises the obvious question: If Republicans never had a plausible alternative to Obamacare, if this debacle was so inevitable, what was the constant refrain of “repeal and replace” all about?

The answer, surely, is that it began as a cynical ploy; at first, the Republicans hoped to kill health reform before it really got started. And now they’ve trapped themselves: They can’t admit that they have no ideas without, in effect, admitting that they were lying all along.

And the result is that they just keep trying to stuff the balloon into that box.

Paul Krugman: Can Trump Take Health Care Hostage?

With the extent to which Trump is cashing in on his presidency, I suppose we could say the buck stops at the White House. Trump doesn't seem to understand that's true more broadly:

Can Trump Take Health Care Hostage?, by Paul Krugman, NY Times: Three weeks have passed since the Trumpcare debacle. After eight years spent denouncing the Affordable Care Act, the G.O.P. finally found itself in a position to do what it had promised, and deliver something better. But it couldn’t.

And Republicans, President Trump very much included, had nobody but themselves to blame. ...

But Mr. Trump, as you may have noticed, isn’t big on accepting responsibility for his failures. Instead, he has decided to blame Democrats for not cooperating in the destruction of their proudest achievement in decades. And on Wednesday, in an interview with The Wall Street Journal, he openly threatened to sabotage health care for millions if the opposition party doesn’t give him what he wants. ...

It’s a nasty political tactic. It’s also remarkably stupid.

The nastiness should be obvious, but let’s spell it out. Mr. Trump is trying to bully Democrats by threatening to hurt millions of innocent bystanders — ordinary American families who have gained coverage thanks to health reform. ...

Why does Mr. Trump even imagine that this threat might work? Implicitly, he’s saying that hurting innocent people doesn’t bother him as much as it bothers his opponents. Actually, this is probably true...

What makes Mr. Trump’s tactic stupid as well as nasty is the reality that Democrats have no incentive whatsoever to give in. ...

Maybe Mr. Trump believes that he could somehow shift the blame for the devastation he has threatened to wreak onto Democrats. “See, there’s the death spiral I predicted!” But that probably wouldn’t work even if he hadn’t effectively proclaimed his own guilt in advance. Voters tend to blame whoever holds the White House for bad things, and in this case they’d be right: ...

So the Trump health care threat is, as I said, stupid as well as nasty. And it’s hard to believe that it will be carried out.

But here’s the thing: Even if Mr. Trump wimps out, as he is doing on so many other issues, he may already have done much of the threatened damage. Insurers are deciding right now whether to participate in the 2018 Obamacare exchanges. Mr. Trump’s tough talk is creating a lot of uncertainty, which in itself may undermine coverage for many Americans.

There is, of course, a good chance that Mr. Trump doesn’t understand any of this. Unfortunately, when you’re in the White House, what you don’t know can hurt a lot of people.

Paul Krugman: How to Build on Obamacare

"If Mr. Trump really wanted to honor his campaign promises about improving health coverage..., there’s a lot he could do":

How to Build on Obamacare, by Paul Krugman, NY Times: “Nobody knew that health care could be so complicated.” So declared Donald Trump three weeks before wimping out on his promise to repeal Obamacare. ...

Actually, though, health care isn’t all that complicated. Basically, you need to induce people who don’t currently need medical treatment to pay the bills for those who do, with the promise that the favor will be returned if necessary.

Unfortunately, Republicans have spent eight years angrily denying that simple proposition. ... But put politics aside..., what could be done to make health care work better...?

The Affordable Care Act deals with the fundamental issue of health care provision in two ways. More than half of the gains in coverage have come from expanding Medicaid... And that part of the program is working fine, except in Republican-controlled states that won’t let the federal government aid their residents.

But Medicaid only covers the lowest-income families. Above that level, the A.C.A. relies on private insurance companies, using a combination of regulations and subsidies to keep policies affordable. This has worked well in some places. ...

Overall, however, too few healthy people have purchased insurance, despite the penalty for failing to sign up... As a result, some companies have pulled out of the market. And this has left some areas, especially rural counties in small states, with few or no insurers.

No, it’s not a “death spiral”... But the system could and should be improved. ...

What about the problem of inadequate insurance industry competition? ... At the very least, there ought to be public plans available in areas no private insurer wants to serve. There are other more technical things we should do too...

So if Mr. Trump really wanted to honor his campaign promises about improving health coverage..., there’s a lot he could do... And he would get plenty of cooperation from Democrats along the way.

Needless to say, I don’t expect to see that happen. ...

And the tweeter-in-chief’s initial reaction to health care humiliation was, predictably, vindictive. He blamed Democrats, whom he never consulted, for Trumpcare’s political failure, predicted that “ObamaCare will explode,” and that when it does Democrats will “own it.” Since his own administration is responsible for administering the law, that sounds a lot like a promise to sabotage Americans’ health care and blame other people for the disaster.

The point, however, is that building on Obamacare wouldn’t be hard, and wouldn’t even be all that complicated.

Paul Krugman: The Scammers, the Scammed and America’s Fate

"The destructive effects of false symmetry in reporting":

The Scammers, the Scammed and America’s Fate, by Paul Krugman, NY Times: ...Mr. Ryan’s proposed Obamacare replacement ... is one of the worst bills ever presented to Congress.

It would deprive tens of millions of health insurance — the decline in the number of insured Americans would be larger than ... simple repeal of Obamacare! — while sharply raising expenses for many of those who remain. It would be especially punitive for lower-income, older, rural voters.

In return, we would get a small reduction in the budget deficit. Oh, and a tax cut, perhaps as much as $1 trillion, for the wealthy.

This is terrible stuff. It’s made worse by the lies Mr. Ryan has been telling about his plan. ...

Some people seem startled both by the awfulness of Mr. Ryan’s plan and by the raw dishonesty of his sales pitch. But why..., he’s still the same guy I wrote about back in 2010, in a column titled “The Flimflam Man.”

I wrote that column in response to what turned out to be the first of a series of high-profile Ryan budget proposals. ... It was a con job all the way.

So how did Mr. Ryan reach a position where his actions may reshape the lives of so many ... for the worse? The answer lies in the ... news media, who made him what he is.

You see, until very recently both news coverage and political punditry were dominated by the convention of “balance.” ... And this ... meant that it was necessary to point to serious, honest, knowledgeable proponents of conservative positions.

Enter Mr. Ryan, who isn’t actually a serious, honest policy expert, but plays one on TV. He rolls up his sleeves! He uses PowerPoint! He must be the real deal! So that became the media’s narrative. And media adulation, more than anything else, propelled him to his current position.

Now, however, the flimflam has hit a wall. ... The C.B.O. told the devastating truth about his plan, and his evasions and lies were too obvious to ignore.

There’s an important lesson here, and it’s not just about health care or Mr. Ryan; it’s about the destructive effects of false symmetry in reporting at a time of vast asymmetry in reality.

This false symmetry — downplaying the awfulness of some candidates, vastly exaggerating the flaws of their opponents — isn’t the only reason America is in the mess it’s in. But it’s an important part of the story. And now we’re all about to pay the price.

The World's Easiest Chart to Make

In case you were wondering (any your probably weren't), from Kevin Drum:

Well, This Was the World's Easiest Chart to Make: CBPP has calculated how much tax money you'll save if Obamacare is repealed. Behold:

You know what really gets me? Even among the millionaires, repeal will only net them about $50,000. That's like finding spare change in the sofa cushions for this crowd. Is clawing back a few nickels and dimes really worth immiserating 20 million people?

Populism and the Politics of Health

Paul Krugman:

Populism and the Politics of Health: What’s next on health care? Truly, I have no idea. The AHCA is a real stinker... But ... starting off the Trump legislative era with the crashing and burning of Obamacare repeal would deeply damage Trump... So they will pull out all the stops.

But why are Republicans having so much trouble? Health reform is hard... But there’s a more fundamental issue: who is being served?

Obamacare helped a large number of people at the expense of a small, affluent minority: basically, taxes on 2% of the population to cover a lot of people and assure coverage to many more. Trumpcare would reverse that, hurting a lot of people (many of whom voted Trump) so as to cut taxes for a handful of wealthy people. That’s a difference that goes beyond political strategy. ...

And yet, and yet: Trump did in fact win over white working-class voters, who thought they were voting for a populist...

This ties in with an important recent piece by Zack Beauchamp on the striking degree to which left-wing economics fails, in practice, to counter right-wing populism... Why?

The answer, presumably, is that what we call populism is really in large degree white identity politics, which can’t be addressed by promising universal benefits. Among other things, these “populist” voters now live in a media bubble, getting their news from sources that play to their identity-politics desires, which means that even if you offer them a better deal, they won’t hear about it or believe it if told. For sure many if not most of those who gained health coverage thanks to Obamacare have no idea that’s what happened.

That said, taking the benefits away would probably get their attention, and maybe even open their eyes to the extent to which they are suffering to provide tax cuts to the rich. ...

... Trumpism is faux populism that appeals to white identity but actually serves plutocrats. That fundamental contradiction is now out in the open.

Life Expectancy and Health Expenditure

Life Expectancy and Health Expenditure per capita, 1970-2014

Source: Esteban Ortiz-Ospina and Max Roser, Financing Healthcare, 2017. Published online at OurWorldInData.org.

 

Life Expectancy and Health Expenditure per capita (2011 international dollars, PPP-adjusted), 2014

Sources: World Bank and authors' calculations.

More here: Improving U.S. Healthcare and Coverage - Cecchetti & Schoenholtz

Why the Republican Health Care Plan Is Destined to Fail

I have a new column:

Why the Republican Health Care Plan Is Destined to Fail:

“It is the general social consensus, clearly, that the laissez-faire solution for medicine is intolerable.” – Kenneth Arrow, 1963.

As Republicans struggle to find an acceptable replacement for Obamacare, a task that does not yet appear to be complete given the growing opposition to their recent proposal, they would do well to remember the words of the person who invented healthcare economics, Kenneth Arrow.

Professor Arrow, a Nobel Prize-winning economist who recently passed away at the age of 95, argued that the market for healthcare is not like other markets for several reasons. ...

The AHCA’s Mandate Replacement Doesn’t Make Sense

Aaron Carroll:

The AHCA’s mandate replacement doesn’t make sense to me: ...The Republicans hate the individual mandate. I get that. I don’t necessarily understand their rationale, but I accept it. They also, however, understand the need for some sort of carrot/stick to get healthy people to buy insurance so that we don’t get adverse selection and see the private insurance market enter a death spiral. So they need to replace it.

We have discussed this before. There are many ways to solve this adverse selection problem without a mandate. ...

Moreover, the incentive is totally in the wrong direction. The individual mandate punishes those who don’t buy insurance – every year. As long as I remain uninsured, I will be penalized. I will be hit again and again, until I buy insurance. That’s a stick.

The new AHCA penalty works in the opposite direction. Once I’m out of the market, I’m left alone. It’s not until I re-enter that I’m hit with the penalty. The longer I stay out, the longer I avoid the pain. It’s an inducement to remain uninsured.

We know what needs to happen to reduce adverse selection. We need to make the carrots and/or sticks stronger. This seems to do the opposite. I don’t get it.

A Plan Set Up To Fail

Paul Krugman:

A Plan Set Up To Fail: So now we know what Republicans have to offer as an Obamacare replacement. Let me try to avoid value judgments for a few minutes, and describe what seems to have happened here.

The structure of the Affordable Care Act comes out of a straightforward analysis of the logic of coverage. ...

And the result has been a sharp decline in the number of uninsured, with costs coming in well below expectations. Roughly speaking, 20 million Americans gained coverage at a cost of around 0.6 percent of GDP.

Republicans have nonetheless denounced the law as a monstrosity, and promised to replace it with something totally different and far better. Which makes what they’ve actually come up … interesting.

For the GOP proposal basically accepts the logic of Obamacare. ... Conservatives calling the plan Obamacare 2.0 definitely have a point.

But a better designation would be Obamacare 0.5, because it’s really about replacing relatively solid pillars with half-measures, severely and probably fatally weakening the whole structure.

First, the individual mandate – already too weak, so that too many healthy people opt out – is replaced by a penalty imposed if and only if the uninsured decide to enter the market later. This wouldn’t do much.

Second, the ACA subsidies, which are linked both to income and to the cost of insurance, are replaced by flat tax credits which would be worth much less to lower-income Americans, the very people most likely to need help buying insurance.

Taken together, these moves would almost surely lead to a death spiral. Healthy individuals, especially low-income households no longer receiving adequate aid, would opt out, worsening the risk pool. Premiums would soar – without the cushion created by the current, price-linked subsidy formula — leading more healthy people to exit. In much of the country, the individual markets would probably collapse.

The House leadership seems to realize all of this; that’s why it reportedly plans to rush the bill through committee before CBO even gets a chance to score it.

It’s an amazing spectacle. Obviously, Republicans backed themselves into a corner: after all those years denouncing Obamacare, they felt they had to do something, but in fact had no good ideas about what to offer as a replacement. So they went with really bad ideas instead.

 Kevin Drum notes one reason why the bill is structured as it is:

The GOP Health Care Law Is Missing a Surprising Number of Tea Party Hobbyhorses: I was reading through the Republican health care bill last night, and it struck me that a lot of Republican hobbyhorses are missing. ...

I'm pretty sure the bill doesn't include any of the following:

-No tort reform. ...

-No insurance sales across state lines. ...

-No change to the essential benefits required of all health care plans. ...

-Obamacare is chockablock with regulations of all kinds, including incentives to reduce costs and rules about how doctors are paid. These appear to be intact under the Republican bill.

Why is this? If you look carefully, you'll see what these things all have in common: they don't directly affect the federal budget, which means they can't be passed via reconciliation. They have to be passed in a separate bill under regular order, which means Democrats can filibuster them. Republicans don't have 60 votes in the Senate to overcome a filibuster, so they can't do any of this stuff.

Republicans can starve the subsidies to make Obamacare virtually useless for the poor, but they can't repeal the entire law. The result of such a partial repeal is likely to be such obvious chaos that they'll be lucky to get their bill passed in the House, let alone the Senate. There are bound to be at least three senators who just aren't willing to clap loudly and pretend that everything is OK. It's very hard to see a path to passage for this bill.

Trumpdoesn'tcare

The "Trumpdoesn'tcare" health care proposal has been released (calling it "Trumpcare" implies he, and the GOP, do care -- they don't). Here's Krugman's quick take on Twitter:

Paul Krugman: Can't do full analysis until tomorrow. But GOP now basically accepts logic of ACA - just determined to offer an inferior version

Paul Krugman: Philosophical case for free markets has been abandoned (because it's so obviously wrong here) Mean spiritedness is all that's left.

Paul Krugman: It's not Obamacare 2.0. It's Obamacare 0.5 - a half-assed attempt to preserve ACA successes without spending nearly enough money

Guess who does well, and who is hurt? More details here and here.

Paul Krugman: A Party Not Ready to Govern

"They have no idea how to turn their slogans into actual legislation

A Party Not Ready to Govern, by Paul Krugman, NY Times: According to Politico, a Trump confidante says that the man in the Oval Office — or more often at Mar-a-Lago — is “tired of everyone thinking his presidency is screwed up.” Pro tip: The best way to combat perceptions that you’re screwing up is, you know, to stop screwing up.

But he can’t, of course. And it’s not just a personal problem.

It goes without saying that Donald Trump is the least qualified individual, temperamentally or intellectually, ever installed in the White House. ... Thanks, Comey.

But the broader Republican quagmire — the party’s failure so far to make significant progress toward any of its policy promises — isn’t just about Mr. Trump’s inadequacies. The whole party, it turns out, has been faking it for years. Its leaders’ rhetoric was empty; they have no idea how to turn their slogans into actual legislation, because they’ve never bothered to understand how anything important works.

Take the two lead items in the congressional G.O.P.’s agenda: undoing the Affordable Care Act and reforming corporate taxes. In each case Republicans seem utterly shocked to find themselves facing reality.

The story of Obamacare repeal would be funny if the health care — and, in many cases, the lives — of millions of Americans weren’t at stake. ...

Then there’s corporate tax reform — an issue where the plan being advanced by Paul Ryan ... is actually not too bad, at least in principle. ...

But Mr. Ryan has failed spectacularly to make his case either to colleagues or to powerful interest groups. Why? As best I can tell, it’s because he himself doesn’t understand the point of the reform. ...

At this point, then, major Republican initiatives are bogged down for reasons that have nothing to do with the personality flaws of the tweeter in chief, and everything to do with the broader, more fundamental fecklessness of his party.

Does this mean that nothing substantive will happen on the policy front? Not necessarily. Republicans may decide to ram through a health plan that causes mass suffering, and hope to blame it on Mr. Obama. They may give up on anything resembling a principled tax reform, and just throw a few trillion dollars at rich people instead.

But whatever the eventual outcome, what we’re witnessing is what happens when a party that gave up hard thinking in favor of empty sloganeering ends up in charge of actual policy. And it’s not a pretty sight.

The Real Test for the Republican Health Care Plan

I have a new column:

The Real Test for the Republican Health Care Plan: The Republicans’ rallying cry on health care reform is that the marketplace – relying on the forces of supply and demand – is the best way to run our healthcare system. Government involvement in health care interferes with the magic of markets and makes us all worse off.

The problem with this argument is that markets for health insurance are subject to significant market failures. Without regulatory intervention to fix these problems the market system will not provide what the market systems promises, widely available health care at the lowest possible price. ...

Interestingly, despite their public rhetoric Republicans seem to recognize that these features will be needed in whatever health care reform package they put forward, assuming they can eventually agree on a plan. ... So far, however, although there has been evolution, the proposal is still bad news for those with low incomes and – surprise! – it is very beneficial to those with considerable means. ...

Paul Krugman: Death and Tax Cuts

"So why do Republicans hate Obamacare so much?":

Death and Tax Cuts, by Paul Krugman, NY Times: Across the country, Republicans have been facing crowds demanding to know how they will protect the 20 million Americans who gained health insurance thanks to the Affordable Care Act... And after all that inveighing against the evils of Obamacare, it turns out that they’ve got nothing. ...

After years to prepare, Mr. Ryan finally unveiled what was supposedly the outline of a health care plan. It was basically a sick joke: flat tax credits, unrelated to income, that could be applied to the purchase of insurance.

These credits would be obviously inadequate for the lower- and even middle-income families..., so it would cause a huge surge in the number of uninsured. Meanwhile, the affluent would receive a nice windfall. Funny how that seems to happen in every plan Mr. Ryan proposes.

That was last week. This week, perhaps realizing how flat his effort fell, he began tweeting about freedom, which he defined as “the ability to buy what you want to fit what you need.” Give me consumer sovereignty or give me death! And Obamacare, he declared, is bad because it deprives Americans of that freedom by doing things like establishing minimum standards for insurance policies.

I very much doubt that this is going to fly, now that ordinary Americans are starting to realize just how devastating loss of coverage would be. But for the record, let me remind everyone what we’ve been saying for years: Any plan that makes essential care available to everyone has to involve some restriction of choice. ...

So yes, Obamacare somewhat restricts choice — not because meddling bureaucrats want to run your life, but because some restrictions are necessary as part of a package that in many ways sets Americans free.

For health reform has been a hugely liberating experience for millions. ...

So why do Republicans hate Obamacare so much? It’s not because they have better ideas; as we’ve seen..., they’re coming up empty-handed on the “replace” part of “repeal and replace.” It’s not, I’m sorry to say, because they are deeply committed to Americans’ right to buy the insurance policy of their choice.

No, mainly they hate Obamacare for two reasons: It demonstrates that the government can make people’s lives better, and it’s paid for in large part with taxes on the wealthy. Their overriding goal is to make those taxes go away. And if getting those taxes cut means that quite a few people end up dying, remember: freedom!

Justifying Health Insurance

Jonathan Baron at RegBlog:

Justifying Health Insurance: Recent discussions about revising or replacing the Affordable Care Act (ACA) raise philosophical questions about the rationale for having a health insurance system. Among these philosophical questions are the extent to which such insurance should be compulsory, and, relatedly, the extent to which the cost of compulsory insurance should depend on risk and ability to pay. As lawmakers continue to debate the path forward for health policy, it is helpful to review the economic and moral justifications for health insurance.

From a utilitarian, or “welfare economics,” perspective, the main purpose of insurance is redistribution. Insurance redistributes money collected from a broad group to those who suffer some misfortune that can be mitigated with money, such as a treatable illness. Those who suffer such misfortunes find greater utility from the money than those who pay premiums but have no misfortune, so this redistribution increases total utility.

An increase in total utility also justifies other forms of redistribution. ...

The Economics of the Affordable Care Act

Dean Baker at INET:

The Economics of the Affordable Care Act: The Affordable Care Act (ACA), which President-elect Donald Trump and the Republican-controlled Congress have vowed to repeal, was crafted to overcome two basic problems in the provision of health care... First, the costs are incredibly skewed, with just 10 percent of patients accounting for almost two thirds of the nation’s healthcare spending. The other problem is asymmetric information: Patients have far more knowledge about the state of their own health than insurers do. This means that the people with the largest costs are the ones most likely to sign up for insurance. These two problems make it impossible to get to universal coverage under a purely market-based system. ...

Covering the least costly 90 percent of patients is manageable, but the cost of covering the least healthy 10 percent is exorbitant. ...

The ACA gets around this problem by requiring that everyone buy insurance — a mandate that allows people with serious health problems to get insurance at a reasonably affordable price. Since many people cannot afford an insurance policy even if it’s based on average costs, the ACA also provided subsidies to low and moderate income people. It pays for the subsidies primarily through a tax on the wealthiest households, those with incomes over $200,000.

Thus far, the ACA has actually worked better than expected in most respects. ...

Insofar as the ACA has run into problems, those have been attributable to too few healthy people in the health care exchanges, and too little competition among insurers. Many commentators have wrongly blamed the problem in the exchanges on a failure of young healthy people to sign up for insurance. This is not the cause of the problem, since more people are getting insured than had been projected. The reason fewer healthy people are showing up on the exchanges is that fewer employers dropped insurance than had been projected. ... By continuing to provide insurance for their workers despite the ACA, employers are effectively keeping healthy people out of the exchanges.

The other problem with the exchanges has been limited competition, as many insurers have dropped out after the first few years. The loss of competition has meant higher prices. ...

One way to make insurance more affordable would be to reduce the costs of the health care system as a whole. Americans pay twice as much per person as people in other wealthy countries, with few obvious benefits in terms of outcomes. But such cost cutting would mean reducing the incomes of drug companies, doctors, and insurance companies — the big winners under the current system. It seems unlikely the Republicans will go this route. They are more likely to restore a version of the pre-ACA situation, in which many more people are uninsured and most workers know that their insurance is only as secure as their job.

Paul Krugman: Donald Trump’s Medical Delusions

Repeal and hope to blame the Democrats:

Donald Trump’s Medical Delusions, by Paul Krugman, NY Times: ...Some Republicans appear to be realizing that their long con on Obamacare has reached its limit. Chanting “repeal and replace” may have worked as a political strategy, but coming up with a conservative replacement for the Affordable Care Act — one that doesn’t take away coverage from tens of millions of Americans — isn’t easy. In fact, it’s impossible.

But it seems that nobody told Mr. Trump. In Wednesday’s news conference, he asserted that he would submit a replacement plan, “probably the same day” as Obamacare’s repeal — “could be the same hour” — that will be “far less expensive and far better”; also, with much lower deductibles.

This is crazy, on multiple levels.

The truth is that even if Republicans were settled on the broad outlines of a health care plan — the way Democrats were when President Obama took office — turning such an outline into real legislation is a time-consuming process.

In any case, however, the G.O.P. has spent seven years denouncing the Affordable Care Act without ever producing even the ghost of an alternative. That’s not going to change in the next few weeks, or ever. For the anti-Obamacare campaign has always been based on lies that can’t survive actual repeal. ...

Republicans don’t have a health care plan, but they do have a philosophy — and it’s all about less. Less regulation, so that insurers can turn you down if you have a pre-existing condition. Less government support, so if you can’t afford coverage, too bad. And less coverage in general: Republican ideas about cost control are all about “skin in the game,” requiring people to pay more out of pocket (which somehow doesn’t stop them from complaining about high deductibles).

Implementing this philosophy would deliver a big windfall to the wealthy, who would get a huge tax cut from Obamacare repeal...

But the idea that it would lead to big cost savings over all is pure fantasy, and it would have a devastating effect on the millions who have gained coverage during the Obama years.

As I said, it looks as if some Republicans realize this. They may go ahead with repeal-but-don’t-replace anyway, but they’ll probably do it because they believe they can find some way to blame Democrats for the ensuing disaster.

Mr. Trump, on the other hand, gives every impression of having no idea whatsoever what the issues are. But then, is there any area of policy where he does?

There Will Be No Obamacare Replacement

Paul Krugman:

There Will Be No Obamacare Replacement: You may be surprised at the evident panic now seizing Republicans, who finally — thanks to James Comey and Vladimir Putin — are in a position to do what they always wanted, and kill Obamacare. How can it be that they’re not ready with a replacement plan?

That is, you may be surprised if you spent the entire Obama era paying no attention to the substantive policy issues — which is a pretty good description of the Republicans, now that you think about it.

From the beginning, those of us who did think it through realized that anything like universal coverage could only be achieved in one of two ways: single payer, which was not going to be politically possible, or a three-legged stool of regulation, mandates, and subsidies. Here’s how I put it exactly 7 years ago...

It’s actually amazing how thoroughly the right turned a blind eye to this logic, and some — maybe even a majority — are still in denial. But this is as ironclad a policy argument as I’ve ever seen; and it means that you can’t tamper with the basic structure without throwing tens of millions of people out of coverage. You can’t even scale back the spending very much — Obamacare is somewhat underfunded as is.

Will they decide to go ahead anyway, and risk opening the eyes of working-class voters to the way they’ve been scammed? I have no idea. But if Republicans do end up paying a big political price for their willful policy ignorance, it couldn’t happen to more deserving people.

Paul Krugman: The Art of the Scam

Republicans have promised to repeal Obamacare, but they haven't told us what their replacement would look like. Why not?:

The Art of the Scam, by Paul Krugman, NY Times: ...While many Americans say they disapprove of Obamacare, large majorities approve of the things the Affordable Care Act does, notably ensuring that people with pre-existing medical conditions can still buy insurance. And there’s no way to achieve these things without either a major expansion of government health programs — hardly a Republican priority — or something very much like the law Democrats passed.

Worse yet, from the Republican point of view, Obamacare has worked. .. And Americans newly insured thanks to Obamacare are highly satisfied with their coverage.

So what can the G.O.P. offer as an alternative? We know what Republicans want: a free-for-all in which insurance companies can discriminate as they like, with minimal regulation and drastic cuts in government aid. Going there would, however, cause millions of Americans — many of them people who voted for Trump, believing that their recent gains were safe — to lose coverage. The political blowback would be terrible.

Yet failing to repeal Obamacare would also bring heavy political costs. So the emerging Republican health care strategy, according to news reports, is “repeal and delay” — vote to kill Obamacare, but with the effective date pushed back until after the 2018 midterm elections. By then, G.O.P. leaders promise, they’ll have come up with the replacement they haven’t been able to devise over the past seven years.

There will, of course, be no replacement. And there’s likely to be chaos in health care markets well before Obamacare’s official expiration date, as insurance companies exit markets they know will soon collapse. But the political thinking seems to be that they can find a way to blame Democrats for the debacle.

It’s all very Trumpian, if you think about it. An honest memoir of the president-elect’s business career would be titled “The art of the scam.” After all, his hallmark has been turning a profit on failed business projects, because he finds a way to leave other people holding the bag.

In this case, the effort to replace Obamacare will clearly fail miserably in terms of serving the American people... But it could nonetheless be a political success if the public can be convinced to blame the wrong people.

You might think that this would be impossible, given the obviousness of the ploy. But given what we’ve seen so far, you have to take seriously the possibility that they’ll get away with it.

The Future of Aid for Health

Larry Summers:

The Future of Aid for Health: Yesterday, I gave a keynote speech at the World Innovation Summit for Health on “The Future of Aid for Health”. When I agreed to give the speech, which built on the work of a Commission I chaired several years ago on Global Health 2035, I did not imagine the degree of uncertainty that the US election would bring to the global health area and indeed to the global community.

We are in uncharted territory. No one can know what the attitude of the new US administration will be to funding foreign assistance of any kind or to global cooperation in the health area.  Certainly an “America first” strategy is not highly propitious. Global health has been an area of bipartisan cooperation with major initiatives launched during  both Democratic and Republican administrations and has some Congressional champions in both parties so perhaps things will work out.

Rather than dwelling on political uncertainties I could not dispel, I chose to concentrate on something that should be a priority for those concerned with reducing premature death around the world, for those looking to foreign assistance as forward defense of US interests, and to those primarily interested in reducing budgets—assuring the optimal allocation of aid resources.

My argument was simple. The world needs to move decisively away from the current regime where 80 percent of health assistance is devoted to supporting national health care delivery and only 20 percent is devoted to global service delivery towards a model where half of assistance is devoted to global goods. ...

While I have often disagreed with particular judgments or been distressed that political considerations sometime carried the day my experience in policymaking in the United States and at the international level is that reason has always had its day in court and usually carried the day.

I desperately hope this tradition continues. But when the President of the United States is someone who believes that vaccines cause autism, that Barack Obama was born in Kenya, and that global climate change is a hoax, I am far from certain how decisions will be made going forward.

Paul Krugman: The Medicare Killers

Why do Republicans want to dismantle Medicare?:

The Medicare Killers, by Paul Krugman, NY Times: During the campaign, Donald Trump often promised to ... represent the interests of working-class voters who depend on major government programs. “I’m not going to cut Social Security like every other Republican and I’m not going to cut Medicare or Medicaid,” he declared, under the headline “Why Donald Trump Won’t Touch Your Entitlements.”

It was, of course, a lie. The transition team’s point man on Social Security is a longtime advocate of privatization, and all indications are that the incoming administration is getting ready to kill Medicare, replacing it with vouchers that can be applied to the purchase of private insurance. Oh, and it’s also likely to raise the age of Medicare eligibility. ...

While Medicare is an essential program for a great majority of Americans, it’s especially important for the white working-class voters who supported Mr. Trump most strongly. ... People like Paul Ryan ... have often managed to bamboozle the media into believing that their efforts to dismantle Medicare and other programs are driven by valid economic concerns. They aren’t.

It has been obvious for a long time that Medicare is actually more efficient than private insurance, mainly because it doesn’t spend large sums on overhead and marketing, and, of course, it needn’t make room for profits.

What’s not widely known is that the cost-saving measures included in ... Obamacare, have been remarkably successful in their efforts to ... rein in the long-term rise in Medicare expenses. ... This success is one main reason long-term budget projections have dramatically improved.

So why try to destroy this successful program...? ... It would be very helpful for opponents of government to do away with a program that clearly demonstrates the power of government to improve people’s lives.

And there’s an additional benefit to the right from Medicare privatization: It would create a lot of opportunities for private profits, earned by diverting dollars that could have been used to provide health care. ...

You might think this would make the whole idea a non-starter. And this push will, in fact, fail — just like Social Security privatization in 2005 — if voters realize what’s happening.

What’s crucial now is to make sure that voters do, in fact, realize what’s going on. And this isn’t just a job for politicians. It’s also a chance for the news media, which failed so badly during the campaign, to start doing its job.

Is the Obamacare Problem a Public or a Private Problem?

Jared Bernstein:

Is the Obamacare problem a public or a private problem?: My WSJ greets me on the front stoop this AM with the banner headline on the “Depth of Health Law Woes,” based on the rise of “thin” markets with too few private insurers to generate cost-saving competition. ...

First, while the Journal article is surely informative, it violates my rule #1 in this space: when writing about private exchanges, declare up front that we’re talking about 7 percent of the population. That’s the share that get coverage through the ... the exchanges. ...

Those shares don’t negate the thin market problem at all, but they do give it essential context. Most people still get their coverage through their employer (about 50 percent) and Medicare or Medicaid (34 percent).

But my question today is whether this spate of articles is accurately framing this problem. That is, diminished competition among insurers in various markets is invariably framed as an architectural flaw in Obamacare, and thus, a government failure. But it could just as easily be seen as market failure, or more specifically, a pricing-calibration problem. If so, the problem isn’t too much government intervention; it’s too little.

The theory of the case when the law was being crafted was, for both policy and political reasons—the latter being buy-in from private insurers, whose powerful lobby couldn’t be ignored—that the exchanges would be populated by private insurers competing for customers in the (relatively small!) non-group market.

The insurers would get a bunch more customers, most of whom would come to the table with a tax credit to help pay the cost of their subsidy, a non-trivial deal sweetener for the private insurers (not to mention the mandate, further nudging customers into the exchanges). In return, they’d have to accept a set of rules designed to promote adequate coverage, like accepting applicants with pre-existing conditions and “community rating:” no price discrimination based on health status.

At the time, there was a robust argument about the wisdom of this path. While it was the least disruptive to a major industry, the long history of the uneasy relationship between health care and markets, along with the experience of other advanced economies, led many to worry that private insurers could not be depended on to meet the demands of a newly regulated individual market. They had an incentive, for example, to set their initial prices too low to get customers, which would mean actuarial losses and a big jump in premiums (one solution was to add a program to limit losses to such insurers: the so-called “risk corridors”).

This was partially the motivation for adding a public option, but the politics blocked that option (some will argue that the administration, of which I was then a member, didn’t push hard enough; I’d argue the votes just weren’t there). The private folks didn’t want to compete with anything like Medicare, which consistently posts lower price growth than the privates—it is non-profit, after all—and their message was thus, “we got this.”

Well, it turns out they don’t got this, though again, this is less a failure in the structure of the program than growing pains as insurers learn to price their products based on the health of those coming into the exchanges. If there’s a structural flaw in Obamacare, it’s that it doesn’t include the public option. Those of us who pulled for it had it right in that we saw the need for just such a backstop.

To be fair, a public option is itself a tricky bit of work, and it’s too easy to make it sound like a hand-wave, miracle solution (see Jacob Hacker’s excellent discussion of these issues here). But you know what else is a big, old hand wave?: the miracle of competition, allegedly solving everything that ails the health care market.

Obamacare is a public/private hybrid, and this recent episode with the 2017 premiums should teach us that dialing back the public side is not the way forward. To the contrary, the private sector never has and never will provide the health care Americans want and need on its own.

Paul Krugman: Obamacare Hits a Pothole

"If health costs are looking good, what’s with the spike in premiums?":

Obamacare Hits a Pothole, by Paul Krugman, NY Times: ...Obamacare ... has hit a pothole: After several years of coming in far below predictions, premiums on covered plans have shot up by more than 20 percent.

So how bad is the picture? ... Health reform had two big goals: to cover the uninsured and to rein in the overall growth of health care costs... Sure enough, the fraction of Americans without health insurance has declined to its lowest level in history, while health cost growth has plunged...

But if health costs are looking good, what’s with the spike in premiums? It only applies to one piece of the health care system — the “exchanges”... established for people who aren’t covered either by their employers or by government programs, mainly Medicare and Medicaid.

The way the exchanges were supposed to work was that both healthy and less-healthy people would sign up, providing insurers with a good mix of risks that let them offer reasonably priced policies. ...

In many states, however, not enough healthy people signed up — and now insurers are either pulling out or hiking their premiums to reflect the not-so-good risk pool. Since premiums have until now been well below projections, this only brings them back up to expected levels. But it’s clearly not good news.

How many people are hurt by these premium hikes? Not as many as you may think..., a fraction of a fraction of the population (which admittedly may still be several million people). Oh, and bear in mind that many of those affected ... have pre-existing conditions, which means that without Obamacare they wouldn’t be insured at all. ...

Can the current problems be fixed? As a technical matter, the answer is clearly yes. Strengthen the mandate; expand the subsidies; close the loopholes that have allowed some insurers to bypass the exchanges; take a more active role in setting standards and reaching out to families to make them aware of their options. Some states are doing much better than others, and it wouldn’t take a lot of money to expand best practices to the nation as a whole.

The trouble is that Congress would have to vote to spend that money. So unless Democrats manage to take the House (unlikely) or Republicans are willing to cooperate in the public interest (even more unlikely), the easy fix ... will have to wait for a while.

So, is the latest health care news disappointing? Yes. Is it catastrophic? Not at all.

Paul Krugman: States of Cruelty

Why are some states unwilling to help the poor?:

States of Cruelty, by Paul Krugman, NY Times: ...While many people are focused on national politics, with reason — one sociopath in the White House can ruin your whole day — many crucial decisions are taken at the state and local levels. If the people we elect to these offices are irresponsible, cruel, or both, they can do a lot of damage.

This is especially true when it comes to health care. Even before the Affordable Care Act went into effect, there was wide variation in state policies, especially toward the poor and near-poor. Medicaid has always been a joint federal-state program... States with consistently conservative governments generally offered benefits to as few people as the law allowed, sometimes only to adults with children in truly dire poverty. States with more liberal governments extended benefits much more widely. These policy differences were one main reason for a huge divergence in the percentage of the population without insurance, with Texas consistently coming in first in that dismal ranking.

And the gaps have only grown wider since Obamacare went into effect... This should be a no-brainer: If Washington is willing to provide health insurance to many of your state’s residents — and in so doing pump dollars into your state’s economy — why wouldn’t you say yes? But 19 states, Texas among them, are still refusing free money, denying health care to millions. ...

But why are states like Texas so dead-set against helping the unfortunate, even if the feds are willing to pick up the tab? ...

A large part of the answer, surely, is the usual one: It’s about race. Medicaid expansion disproportionately benefits nonwhite Americans; so does spending on public health more generally. And opposition to these programs is concentrated in states where voters in local elections don’t like the idea of helping neighbors who don’t look like them.

In the specific case of Planned Parenthood, this usual answer is overlaid with other, equally nasty issues, including — or so I’d say — a substantial infusion of misogyny.

But it doesn’t have to be this way. Most Americans are, I believe, far more generous than the politicians leading many of our states. The problem is that too many of us don’t vote in state and local elections, or realize how much cruelty is being carried out in our name. The point is that America would become a better place if more of us started paying attention to politics beyond the presidential race.

Paul Krugman: Obamacare Hits a Bump

The problems with Obamacare would be easy to fix, the real problem is Congress:

Obamacare Hits a Bump, by Paul Krugman, NY Times: More than two and half years have gone by since the Affordable Care Act, a.k.a. Obamacare, went fully into effect. Most of the news about health reform since then has been good, defying the dire predictions of right-wing doomsayers. But this week has brought some genuine bad news: The giant insurer Aetna announced that it would be pulling out of many of the “exchanges,” the special insurance markets the law established. ...

So what’s the problem?

Well, Obamacare is a system that relies on private insurance companies to provide much of its expanded coverage... And many of these private insurers are now finding themselves losing money, because previously uninsured Americans ... turn out to have been sicker and more in need of costly care than we realized. ...

The bad news mainly hits states that have small populations and/or have governments hostile to reform, where the exit of insurers may leave markets without adequate competition. That’s not the whole country, but it would be a significant setback.

But it would be quite easy to fix the system. It seems clear that subsidies for purchasing insurance, and in some cases for insurers themselves, should be somewhat bigger — an affordable proposition given that the program so far has come in under budget... There should also be a reinforced effort to ensure that healthy Americans buy insurance, as the law requires, rather than them waiting until they get sick. Such measures would go a long way toward getting things back on track.

Beyond all that, what about the public option?

The idea of allowing the government to offer a health plan directly to families was blocked in 2010 because private insurers didn’t want to face the competition. But if those insurers aren’t actually interested in providing insurance, why not let the government step in (as Hillary Clinton is in fact proposing)?

The trouble, of course, is Congress...

That said, there may still be room for action at the executive level. And I’m hearing suggestions that states may be able to offer their own public options; if these proved successful, they might gradually become the norm.

However this plays out, it’s important to realize that as far as anyone can tell, there’s nothing wrong with Obamacare that couldn’t be fairly easily fixed with a bit of bipartisan cooperation. The only thing that makes this hard is the blocking power of politicians who want reform to fail.

A Shameless Deception in Paul Ryan’s Obamacare Replacement Plan

Republicans sabotage government programs, then complain they don't work:

A shameless deception in Paul Ryan’s Obamacare replacement plan, by By Stephen Stromberg: ... Paul Ryan (R-Wis.) released an Obamacare replacement plan on Wednesday that, among other things, complains that the ACA leaves people out. ... Then it blames the gap on “Obamacare’s poor design and incentives.”

This is an outrageous distortion. The coverage gap ... is the direct result of anti-Obamacare hysteria in Ryan’s party.

After the ACA passed, the Supreme Court ruled that the Medicaid expansion must be optional for states. The terms were so good for state leaders — the federal government promised to pay nearly the whole cost to cover lots of vulnerable people — it seemed inconceivable that any of them would refuse to expand Medicaid... But this thinking did not account for the anti-Obamacare tantrum... Nineteen states have refused to expand Medicaid in rote Republican opposition to the ACA. ...

Republicans ... could have simply expanded Medicaid in their states... Or Republicans in Congress could have agreed to extend eligibility for marketplace subsidies downward, solving this gross and unnecessary inequity without requiring the states to do a thing. ...

Republicans chose not only to create the gap, but also to keep it in place. Their continued inaction hurts low-income people in those 19 states. And Ryan has the nerve to complain about it — even to use it as evidence that the ACA is fatally flawed. ...

Is Health Insurance Good for Your Financial Health?

Nicole Dussault, Maxim Pinkovskiy, and Basit Zafar at the NY Fed's Liberty Street Economics blog:

Is Health Insurance Good for Your Financial Health?: What is the purpose of health care? What is the purpose of health insurance? When people fall ill, they seek health care in order to get better. But insurance has a slightly different function: Its main role is not to protect our health per se, but to protect our finances. For most people, lifetime health expenditures are quite low. However, some people have enormous health costs owing to major illnesses or health conditions. And this is where health insurance comes in—its goal (like that of any other form of insurance) is to protect these individuals against large, and sometimes ruinous, health expenditures. Has the recent health reform served this purpose?

Protection against financial hardship was one of the drivers behind passage of the 2010 Patient Protection and Affordable Care Act, commonly known as the Affordable Care Act (ACA). ...

In this blog post, we discuss the results of a research project that examines the effect of the Affordable Care Act’s Medicaid expansion on personal financial indicators. We find suggestive evidence that after the implementation of the ACA in the first quarter of 2014, counties with a high uninsurance burden pre-reform in states that subsequently expanded Medicaid had a decrease in average debt sent to collections agencies compared with such counties in states that did not expand Medicaid.

Our findings are consistent with prior research that has provided evidence that health insurance is good for individual finances...

Conclusion
While the full effects of the Affordable Care Act on financial health are yet to be seen, and while the effects of the ACA—positive or negative—are not restricted to financial health, we offer suggestive early evidence that the Medicaid expansion is fulfilling the goal of health insurance: providing “peace of mind” by protecting against financial hardship. ...

Why Obamacare's "Cadillac Tax" is so Contentious

I have a new article at CBS MoneyWatch:

Why Obamacare's "Cadillac tax" is so contentious: President Obama's signature health care law is called the Affordable Care Act... One of its provisions that aimed at chipping away health care's high costs is a tax that attempts to remove a hidden subsidy for the most expensive employer-paid health insurance plans.

The highly controversial 40 percent surcharge on these plans quickly became known as the "Cadillac tax," but its implementation has been anything but quick: Congress has delayed its effective date from 2018 to 2020, given the misgivings many lawmakers have about its wisdom -- and possible effects. Indeed, it's not at all clear that the provision will ever become effective.

The Republican opposition is based upon the party's overwhelming aversion to everything about Obamacare, and the Democrats' resistance arises from concerns over how the tax will affect employee benefits. Unions are also concerned that health insurance benefit increases they've bargained for in lieu of wage increases will be lost.

Of course, economists have opinions on this topic as well, with a recent poll of economists finding strong support for the Cadillac tax on high-price employer-provided health plans.

The tax was intended to raise revenues to help fund Obamacare and, because it provides an incentive for employers to reduce their spending on health care, function as a cost-control measure. ...

High-Risk Pools Don't Work, Have Never Worked, and Won't Work in the Future

 Kevin Drum:

High-Risk Pools Don't Work, Have Never Worked, and Won't Work in the Future: Even among conservative voters, Obamacare's protection of people with pre-existing conditions has always been popular. ... But popular or not, Paul Ryan wants nothing to do with it:

..."Less than 10 percent of people under 65 are what we call people with pre-existing conditions, who are really kind of uninsurable," Ryan, a Wisconsin Republican, told a student audience at Georgetown University. "Let's fund risk pools at the state level to subsidize their coverage, so that they can get affordable coverage," he said. "You dramatically lower the price for everybody else. You make health insurance so much more affordable, so much more competitive and open up competition."

It's true that the cost of covering sick people raises the price of insurance for healthy people. That's how insurance works. But there's no magic here. It costs the same to treat sick people whether you do it through Obamacare or through a high-risk pool—and it doesn't matter whether you fund it via taxes for Obamacare or taxes for something else. However, there are some differences:

• Handling everyone through a single system is more efficient and more convenient.
• High-risk pools have a lousy history. They just don't work.
• Implementing them at the state level guarantees a race to the bottom, since no state wants to attract lots of sick people into its program.
• Ryan's promise to fund high-risk pools is empty. He will never support the taxes it would take to do it properly, and he knows it.

This is just more hand waving. Everyone with even a passing knowledge of the health care business knows that high-risk pools are a disaster, but Republicans like Ryan keep pitching them anyway as some kind of bold, new, free-market alternative to Obamacare. They aren't. They've been around forever and everyone knows they don't work.

See also Shorter Paul Ryan to Cancer Patients: Die Quickly from Charles Gaba.

Sorry, that's really the only headline which came to mind when I read this story...

The magic solution to the problem, according to Ryan and the GOP, is "high risk pools", which simply means separating out the sickest, most expensive people in the country and dumping them into a separate program.

With the "bad apples" (ie, human beings with terrible medical problems) safely tucked out of the way, the average cost of treating everyone else supposedly suddenly becomes less pricey.

This is the exact opposite of the entire point of health insurance in the first place...spreading the risk. In addition, as Jean P. Hall notes in this Commonwealth Fund analysis, it doesn't actually save anyone a dime...

Harold Pollack put it far more succinctly for the Twitter age:

@charlesornstein @LenMNichols @Reuters_Health high risk pools are among the very worst ideas in health policy.

— Harold Pollack (@haroldpollack) April 28, 2016

Debunking Republican Health Care Myths

From the NY Times editorial board:

Debunking Republican Health Care Myths: “Disaster.” “Incredible economic burden.” “The biggest job-killer in this country.”

Central to the presidential campaigns of Donald Trump and Ted Cruz has been the claim that the Affordable Care Act has been a complete failure, and that the only way to save the country from this scourge is to replace it with something they design.

It’s worth examining the big myths they are peddling about the Affordable Care Act and also their ill-conceived plans of what might replace it. ...

In inventing problems that don’t exist and proposing solutions that won’t help, Donald Trump and Ted Cruz show that they don’t care about helping Americans get health care, which has never been their interest. They want to trash the Affordable Care Act, and they’re willing to mislead the public any way they can.

Why Is the CBO Concocting a Phony Debt Crisis?

Lifted from Brad DeLong at Equitablog:

Why Is the CBO Concocting a Phony Debt Crisis?: Must-Read: Ari Rabin-Havt: Why Is the CBO Concocting a Phony Debt Crisis?: “The CBO assumes that Social Security and Medicare Part A will draw on the general fund of the US Treasury…

…to cover benefit shortfalls following the depletion of their trust funds, which at the current rate will occur in 2034. That would obviously lead to an exploding debt, but it’s a scenario prohibited by law. In the case of both programs, benefits must be paid either from revenue collected via payroll taxes or from accumulated savings in the programs’ trust funds. When those funds run out, full benefits will simply not be paid. ‘Because there is no borrowing authority, there is really a hard stop,’ said Goss.

Congress could pass a law saying that Social Security and Medicare Part A would begin drawing on the US Treasury general fund after 2034. Or, Congress could preemptively pass laws to avert the situation before the deadline; it could take the approach favored by progressives and increase revenue to the programs by lifting the payroll tax cap, or alternatively raise the retirement age and lower benefits. But the bottom line is the CBO projections disregard the actual law and assume a worst-case legislative scenario—and one that is politically unlikely, to boot…

Paul Krugman: Who Hates Obamacare?

The left's attack on Obamacare could be harmful:

Who Hates Obamacare?, by Paul Krugman, Commentary, NY Times: ...the Affordable Care Act is already doing enormous good. ... Why, then, do we hear not just conservatives but also many progressives trashing President Obama’s biggest policy achievement?

Part of the answer is that Bernie Sanders has chosen to make re-litigating reform, and trying for single-payer, a centerpiece of his presidential campaign. So some Sanders supporters have taken to attacking Obamacare as a failed system. ... And some of these critiques have merit. Others don’t.

Let’s start with the good critiques...

The number of uninsured Americans has dropped sharply... But millions are still uncovered, and in some cases high deductibles make coverage less useful than it should be.

This isn’t inherent in a non-single-payer system: Other countries with Obamacare-type systems, like the Netherlands and Switzerland, do have near-universal coverage even though they rely on private insurers. But Obamacare as currently constituted doesn’t seem likely to get there, perhaps because it’s somewhat underfunded.

Meanwhile, although cost control is looking better than even reform advocates expected, America’s health care remains much more expensive than anyone else’s.

So yes, there are real issues with Obamacare. The question is how to address those issues in a politically feasible way.

But a lot of what I hear from the left is not so much a complaint about how the reform falls short as outrage that private insurers get to play any role. The idea seems to be that any role for the profit motive taints the whole effort.

That is, however, a really bad critique..., the fact that some insurers are making money from reform (and their profits are not ... all that large) isn’t a reason to oppose that reform. The point is to help the uninsured, not to punish or demonize insurance companies.

And speaking of demonization: One unpleasant, ugly side of this debate has been the tendency of some Sanders supporters, and sometimes the campaign itself, to suggest that anyone raising questions about the senator’s proposals must be a corrupt tool of vested interests. ...

And let’s be clear: This kind of thing can do real harm. The truth is that whomever the Democrats nominate, the general election is mainly going to be a referendum on whether we preserve the real if incomplete progress we’ve made on health, financial reform and the environment. The last thing progressives should be doing is trash-talking that progress and impugning the motives of people who are fundamentally on their side.