The Heritage Insider: ObamaCare is causing non-group premiums to rise almost everywhere, ObamaCare is basically more Medicaid, what the media get wrong about that new PEW report, and more
October 25, 2014
Latest Studies
36 new items, including a Mercatus study finding eminent domain use has no impact on expanding the tax base and a Manhattan Institute report on the challenges to consumer-directed care under ObamaCare
Notes on the Week
ObamaCare is causing non-group premiums to rise almost everywhere, ObamaCare is basically more Medicaid, what the media get wrong about that new PEW report, and more
To Do
Find out if ObamaCare is headed back to the high court
Latest Studies
Budget & Taxation
• Canada’s Personal Income Tax Rates: Time for Reform – Fraser Institute
• Eliminating Waste and Controlling Government Spending – The Heritage Foundation
• How Tax Reform Would Help American Families – The Heritage Foundation
• Tax Reform in the UK Reversed the Tide of Corporate Tax Inversions – Tax Foundation
Crime, Justice & the Law
• Civil Justice Reform: Suggested Changes for Tennessee – The Heritage Foundation
• The Problematic Use of Nonprosecution and Deferred Prosecution Agreements to Benefit Third Parties – The Heritage Foundation
• Appeals Court Confirms Expert Testimony Must Offer Scientific Proof of Causation, Not a Hypothesis – Washington Legal Foundation
• High Court’s Cert Denial Foments Greater Confusion Over Removal of Mass Actions Under Federal Law – Washington Legal Foundation
Economic and Political Thought
• The Conservative Mind of Russell Kirk – The Heritage Foundation
Economic Growth
• Free Market Economics: Second Edition – Institute of Economic Affairs
• Takings and Tax Revenue: Fiscal Impacts of Eminent Domain – Mercatus Center
Education
• Managing the Law in Education: Strategies for Education Leaders and the Organizations That Support Them – American Enterprise Institute
• Ten Thousand Lifeboats: Improving Students’ Educational Futures via Pennsylvania’s Scholarship Tax Credit Programs – Commonwealth Foundation for Public Policy Alternatives
• Accountability in Education: Who Is Responsible? – Texas Public Policy Foundation
Elections, Transparency, & Accountability
• The “Vast Left-Wing Conspiracy”: George Soros’s Democracy Alliance Remains a Potent Force in the 2014 Elections – Capital Research Center
Foreign Policy/International Affairs
• Countering Russian Propaganda Abroad – The Heritage Foundation
• Does the U.S. Need a “Plan Central America”? – The Heritage Foundation
Health Care
• Primer: The Small Business Health Options Program (SHOP) – American Action Forum
• “Official Time” and the Veterans Affairs Scandal – Capital Research Center
• Ebola: U.S. Government Civilian and Military Assistance in West Africa – The Heritage Foundation
• Obamacare’s Enrollment Increase: Mainly Due to Medicaid Expansion – The Heritage Foundation
• Doc Fix Problems and Solutions – Independent Women’s Forum
• Health Savings Accounts Under the Affordable Care Act: Challenges and Opportunities for Consumer-Directed Plans – Manhattan Institute
Immigration
• Refuge and Asylum: President Obama Should Not Abuse One of America’s Great Humanitarian Tools – The Heritage Foundation
Information Technology
• Open Internet and the Law, or Removing the Cart from Afore the Horse – Free State Foundation
• The Unpredictable FCC: Politicizing Communications Policy and Its Threat to Broadband Investment – Phoenix Center for Advanced Legal and Economic Public Policy Studies
International Trade/Finance
• Why Intellectual Property Should Be Included in Trade Agreements – Institute for Policy Innovation
Labor
• Minimum Wage Increases in the States are Unrelated to Job Growth – Washington Policy Center
Natural Resources, Energy, Environment, & Science
• Major Energy Producing States Have Fared Better During Recovery – American Action Forum
• Denton and Other Texas Cities Shouldn’t Ban Fracking – Texas Public Policy Foundation
• Are EPA and the Army Corps Navigating New Waters with Their Controversial Proposal? – Washington Legal Foundation
Philanthropy
• Both More and No More: The Historical Split between Charity and Philanthropy – Hudson Institute
Retirement/Social Security
• Growing the UK Pension Pot: The Case for Privatisation – Institute of Economic Affairs
The Constitution/Civil Liberties
• Congress Must Stop Yet Another Attempt to Muffle Free Speech – The Heritage Foundation
Welfare
• SSDI Reform: Promoting Gainful Employment while Preserving Economic Security – Cato Institute
• The War on Poverty Turns 50: Are We Winning Yet? – Cato Institute
Notes on the Week
ObamaCare is causing non-group health insurance premiums to rise almost everywhere. That’s what a new study by Amanda Kowalski has found. [“The Early Impact of the Affordable Care Act State-by-State,” by Amanda Kowalski, The Brookings Institution, September 2014]
The above chart is from Chris Conover who breaks down the study:
Clearly, the adverse impact of Obamacare on non-group premiums varies sizably across states. The law is estimated to result in lower premiums in only 6 states. However, it should be noted that while the author presented premium estimates for California and New Jersey, the data for these two states is incomplete due to anomalous data reporting requirements. Thus, the large estimated premium decline of 37.5% in New Jersey likely would be different were full data available, but there is no way of telling by how much.
What is disturbing is to see premium increases in excess of 35% in 9 states, including some of the nation’s largest states (Florida and Texas). Remember, these are increases above and beyond normal premium trends. No one can credibly claim that these massive premium increases would have happened anyway since the study was specifically designed to isolate the law’s impacts from all the other factors that have driven up premiums in recent years. [Forbes, October 23]
Conover also notes that the study is of very high quality, because it examines the overall impact of ObamaCare on the non-group market instead of just in exchange plans and it isolates the effect of ObamaCare from other factors that can cause premiums to change.
ObamaCare is mostly about expanding the most dysfunctional part of the health care system. Edmund Haislmaier and Drew Gonshorowski:
While most of the attention has focused on the new health insurance exchanges, the data indicate that a significant share of exchange enrollments were likely the result of a substitution effect—meaning that most of those who enrolled in new coverage through the exchanges during the open enrollment period already had coverage through an individual-market or employer-group plan. Given that increased enrollment in Medicaid accounted for 71 percent of the net growth in health insurance coverage during the first half of 2014, the inescapable conclusion is that, at least when it comes to covering the uninsured, Obamacare so far is mainly a simple expansion of Medicaid. [“Obamacare’s Enrollment Increase: Mainly Due to Medicaid Expansion,” by Edmund F. Haislmaier and Drew Gonshorowski, The Heritage Foundation, October 22]
And this would be a good time to remember that coverage does not equal care, especially if you are in Medicaid. Kevin Dayaratna did an extensive literature review a couple years ago, finding:
Academic literature has consistently illustrated that Medicaid patients—adults and children—have inferior access to health care, and notably poorer health outcomes, than privately insured patients. Due to the program's low reimbursement rates, more and more doctors are refusing to even accept Medicaid. As a result, it is becoming increasingly difficult for Medicaid patients to find access to primary and specialty care physicians. [“Studies Show: Medicaid Patients Have Worse Access and Outcomes than the Privately Insured,” by Kevin Dayaratna, The Heritage Foundation, November 7, 2012]
It’s time for the Supreme Court to weigh in on whether words have meaning. The Supreme Court, says Michael Carvin, should hear the appeal in King v. Burwell and answer once and for all the question of whether ObamaCare, as its wording indicates, limits its subsidy and penalty scheme to states with state-established exchanges or whether they operate in states with federally established exchanges, too. Here is a snippet from Carvin’s strong brief to the court:
In 2011, the Eleventh Circuit became the first Circuit to invalidate the ACA’s individual mandate. Although that provision had survived other parallel challenges and was not even scheduled to take effect for more than two years, the Government recognized the imperative to “put these challenges to rest.” It therefore eschewed en banc review and asked this Court for definitive resolution. Drawn-out litigation over the legality of a central plank of this landmark legislation, the Government understood, would paralyze the Nation and disserve its citizens.
So too here. Indeed, the subsidies that the IRS has illegally expanded have already begun to flow, meaning billions of taxpayer dollars are pouring out of the Treasury absent congressional authorization and millions of Americans are ordering their lives around an impugned regulation. Yet the Government is content to leave the spigots of cash open and the Nation in limbo in the hopes that (i) the en banc D.C. Circuit reverses the Halbig panel, and (ii) no other Circuit enforces the Act’s plain text. All to avoid this Court’s scrutiny.
That is irresponsible. Whatever the outcome at the D.C. Circuit, rehearing will fracture that court, propagating rather than eliminating the uncertainty hanging over the IRS Rule. And identical challenges will inevitably follow across the country, creating chaos as other courts—like one in Oklahoma two weeks ago—strike down the subsidies, destabilizing insurance markets and threatening Americans with a bait-and-switch on subsidized health insurance.
The question is therefore not whether the Court should resolve this issue, but when. It can do so now, thus minimizing potential unfairness, providing maximum clarity to those subject to the Act, and preserving the integrity of federal expenditures. Or it can do so in 2016 or 2017, after tens of billions of Treasury funds are irretrievably spent, after the insurance industry restructures to adapt to the new regime, after employers lay off countless workers (or cut their hours) to avoid the employer mandate, and after millions of Americans buy insurance because they believe it will be subsidized (or because they are forced to under an individual mandate from which they are properly exempt).
Denial of this petition might be appropriate, if at all, only if every Circuit were expected to accept the Government’s meritless defense of its Rule. That is why the Opposition spends so long trying to dress up that defense with unexplained statutory references, garbled explication, and minutiae of irrelevant provisions—to give the appearance of respectable statutory construction. But this case is strikingly simple. As the Oklahoma court remarked after reviewing both King and Halbig, the Government’s argument “leads us down a path toward Alice’s Wonderland, where up is down and down is up, and words mean anything.”
And such “interpretation” cannot be justified by contrived statutory anomalies, absence of legislative history, or bald assertions of a “subsidies-above-all” purpose found nowhere in the Act—as even the court below admitted. [King v. Burwell, Petioners’ Reply to Brief in Opposition of a Writ of Certiorari, October 2014]
The new progressive mortar will shatter the constitutional edifice. “Repointing” is a stone mason’s term for cleaning out and replacing old mortar from brickwork. Stone masons understand that when an older building needs repointing, it is critical to replace the old mortar with material of similar qualities; use a harder, more unyielding mortar and you risk cracking the old bricks. That idea provides Judge Janice Rogers Brown with her metaphor for discussing the Constitution at this year’s Joseph Story Distinguished Lecture:
The United States could stop “inversions” by reforming its corporate taxes the way Great Britain did. The Obama Treasury Department is trying to stem a wave of “corporate inversions” with new rules that limit the benefits of the practice. “Inversion” is the term for the practice of restructuring a company under a foreign parent in order to avoid domestic taxes. Did American companies suddenly become more greedy, or did the U.S. tax code become more uncompetitive against the rest of the world?
The experience of Great Britain points to the lesson that fewer “corporate inversions” happen when a country brings its corporate tax levels in line with the rest of the world and ceases the practice of taxing domestic companies on their foreign earnings. Since the 1980s, the UK has lowered its corporate taxes in a series of small steps from 52 percent to 21. Other countries in the Organisation for Economic Development and Cooperation have followed a similar pattern of cuts; the OECD average rate now stands at 25 percent. Companies in the United States, however, now face an average combined federal-state corporate tax rate of 39.1 percent. The UK also switched from a worldwide to territorial taxation system in 2009. William McBride notes that those reforms are working well for Great Britain:
On balance, it appears the reforms have made the UK more attractive as a place to do business, especially international business. Many UK companies that had left or threatened to leave have announced plans to return or stay. Additionally, the UK has become a favorite destination for U.S. corporate inversions, such as the recent Pfizer deal (which fell through), Liberty Global in 2013, Rowan and Aon in 2012, and Ensco in 2009. Earlier this year, Ernst & Young found that “approximately 60 multi-national companies are considering relocating either their global headquarters or a regional headquarters to the UK as a result of the Chancellor’s reducing corporation tax policy.”
The UK corporate sector is growing in other ways as well, not just through corporate inversions. In contrast to the U.S., the total number of UK corporations has grown fairly steadily throughout the last few decades, as shown in Figure 2. After a brief pause from 2005 to 2009, UK corporations are now growing in number by about 8 percent per year. In the most recent year of data, 2012, the total number of UK corporations was about 1.1 million, rivaling the number of U.S. corporations. Extrapolating the trend out, the UK is on track to overtake the U.S. in terms of the number of corporations by 2017. [Internal citations omitted.]
M. Stanton Evans has done a lot for the conservative movement. M. Stanton Evans wrote the Sharon Statement in 1960, the classic statement of the fusionist philosophy that formed the modern conservative movement. In the 1970s, as chairman of the American Conservative Union, he helped make Ronald Reagan a household name. He’s done great journalism and taught many thousands how to do be great journalists themselves. And he’s written important books like The Theme Is Freedom, and Blacklisted by History: The Untold Story of Senator Joseph McCarthy and His Fight Against America’s Enemies. For those reasons and more the Heartland Institute awarded Evans its annual Heartland Liberty Prize last month:
What the media get wrong about that new PEW report: The liberal media are very concerned about political polarization in the country, and they are just certain that the cause of it is conservatives sitting on the couch watching nothing but Fox News all day.
The Washington Post’s Jose DelReal, for example, writes that conservatives “are much more likely to receive their news from a single news source and generally distrust the media” than are liberals. [Washington Post, October 21]
And the New Republic’s Danny Vinik writes that there is a “the right-wing echo chamber—the tendency of conservatives to get the vast majority of their news coverage from Fox News or conservative radio stations, distrust all other news sources, and have mostly like-minded friends.” [New Republic, October 21]
What has prompted these descriptions of conservatives as lazy news consumers is a new PEW survey of media consumption habits, helpfully titled “Political Polarization & Media Habits.”
Here’s a funny thing about this reporting: While the PEW report does find that conservatives get news from fewer sources than liberals, these reporters both cite the wrong set of data to make the difference seem bigger than it is. They note PEW’s finding that 47 percent of conservatives name Fox News as their top source for government and political news while liberals are more evenly divided between CNN (15 percent), NPR (13 percent), MSNBC (12 percent), and the New York Times (10 percent).
Those data show that a conservative is more likely to share a choice of top news source with another conservative than a liberal is to share the same choice with another liberal; but, contrary to DelReal and Vinik, they say nothing about the overall variety of news consumed by the average conservative and the average liberal.
It’s easy to see how those data became the focus. The PEW authors themselves seem to have crafted that part of their report to point to those conclusions, writing that conservatives “[a]re tightly clustered around a single news source” while “[c]onsistent liberals, on the other hand, volunteer a wider range of main sources for political news.”
But if you dig past the top line summary, you find that the real comparison is not 47 versus 15/13/12/10. Instead it is 5.4 versus 6.7. PEW found the average consistent conservative gets his news from 5.4 different sources each week while the average consistent liberal gets his news from 6.7 different sources each week.
So there’s a difference, but it’s hardly the case that conservatives watch only Fox News. And DelReal’s claim is completely unsupported, as the PEW study contains no data on how many conservatives get news from just one source.
Of course, the point of consuming news is to get accurate information. And the point of exposing yourself to different perspectives is to make sure you are not just selecting the information that confirms your views. But are liberals who consult 1.3 more sources per week really getting a greater diversity of views? Does consulting CNN, NPR, MSNBC, and the New York Times count as getting more than one point of view?
Here are two other facts not mentioned by DelReal and Vinik:
If relying on more sources makes you better informed, then conservatives are better informed than those who are apolitical. PEW found that those with mixed views get news from only 4.5 different sources each week. Maybe more of those folks should start watching Fox News.
And if conservatives have a greater tendency to filter out disconfirming information than do liberals, then why doesn’t it carry over into how conservatives interact with people as individuals? PEW found that liberals are slightly more likely than conservatives to unfriend someone online or discontinue a friendship because of disagreements over politics.
Perhaps the PEW report is not so much a measure of what’s wrong with conservatives as what’s wrong with the media. Only 7 percent of conservatives tell PEW they trust the Washington Post. If the Post wants more conservative readers, it should try to avoid the practice of misrepresenting data simply so that it can confirm its liberal readership’s biases about conservatives.
You have religious liberty—unless you want to run a business, too. The deputy city attorney of Coeur d’Alene, Idaho, has told Donald and Evelyn Knapp that if their chapel, The Hitching Post, doesn’t perform same-sex wedding ceremonies, it will be in violation of the city’s anti-discrimination law. While the Knapps are ordained ministers, the Hitching Post is not a church; it performs civil ceremonies. According to the city attorney, that makes them subject to the law preventing discrimination based on sexual orientation by public accommodations. Late last week, one gay couple did ask the Hitching Post to marry them, and the Knapps declined. Eugene Volokh agrees that the Knapp’s rights will be violated if the city decides its non-discrimination law applies to providers of marriage ceremonies:
Friday, the Knapps moved for a temporary restraining order, arguing that applying the antidiscrimination ordinance to them would be unconstitutional and would also violate Idaho’s Religious Freedom Restoration Act. I think that has to be right: compelling them to speak words in ceremonies that they think are immoral is an unconstitutional speech compulsion. Given that the Free Speech Clause bars the government from requiring public school students to say the pledge of allegiance, or even from requiring drivers to display a slogan on their license plates (Wooley v. Maynard (1977)), the government can’t require ministers—or other private citizens—to speak the words in a ceremony, on pain of either having to close their business or face fines and jail time. (If the minister is required to conduct a ceremony that contains religious language, that would violate the Establishment Clause as well.)
I think the Knapps are also entitled to an exemption under the Idaho RFRA. The Knapps allege that “sincerely held religious beliefs prohibit them from performing, officiating, or solemnizing a wedding ceremony between anyone other than one man and one woman”; I know of no reason to think they’re lying about their beliefs. Requiring them to violate their beliefs (or close their business) is a substantial burden on their religious practice. [Washington Post, October 18]
Clearly, there are other ministers and judges who are willing to perform same-sex marriages, so nobody is being prevented from having a same-sex wedding by the Knapp’s refusal to participate. Since the only thing the city and the gay couple are accomplishing here is forcing someone else to choose between acting contrary to their beliefs or getting out of the marriage business, it is hard to avoid the conclusion that that is exactly the point. As Stan Evans says, “Liberals don’t care what you do, as long as it’s compulsory.”
To Do: Find Out if ObamaCare Is Headed Back to the High Court
• Examine the legal cases challenging the Internal Revenue Service’s expansion of ObamaCare’s entitlement scheme. A half-day conference at the Cato Institute will examine the cases in the District of Columbia, Indiana, Oklahoma, and Virginia. The conference will begin at 9 a.m. on October 30.
• Take a sober look at what the United States can and should do to minimize the Ebola outbreak. The Heritage Foundation’s Steven Bucci and Charlotte Florance, Robert Kadlec of RPK consulting, and Tevi Troy of the American Health Policy Institute will examine the options. The discussion will begin at noon on October 27 at The Heritage Foundation.
• Discover The Seven Deadly Virtues. At the American Enterprise Institute, Jonathan Last, Jonah Goldberg, James Lileks, Rob Long, P.J. O’Rourke, and Christina Rosen will remix William Bennett’s Book of Virtues. The moral revival will begin with wine and cheese at 5 p.m. on October 28.
• Drink to innovation at the James Madison Institute’s “Hoppy Hour.” Five dollars will get you in to hear some discussion of innovation, plus your first drink and an exclusive JMI/Intuition Ale Works glass to keep. The “Hoppy Hour” will run from 5:30 p.m. to 7:30 p.m. on October 30 at Intuition Ale Works in Jacksonville, Florida.
• Houston Mayor Annise Parker wants some sermons, so send her your favorites. When the city was sued for not letting a ballot initiatve on gender-identity and bathroom use appear on the ballot, the mayor thought it would be a good idea to subpoena the sermons of pastors who may have spoken about the issue. If you know of a good sermon for the mayor, send it her way: Mayor Annise D. Parker, City of Houston, 901 Bagby St., Houston, TX 77002, email: mayor@houstontx.gov.
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