January 18th, 2017

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The more important headline in the CBO Report on Repeal and No Replace

The headlines were full of reporting on the Congressional Budget Office (CBO) report on the impact of repeal of the ACA (aka Obamacare). You can find the Report here: https://www.cbo.gov/publication/52371

As usual, everyone obsesses over the wrong headline from an advocacy perspective. Sure, 18 million people losing insurance is pretty awful -- especially if you are one of the 18 million. But the more significant headline is that everyone else with insurance is likely to experience a 25% increase in premiums.

Everyone. All those people who don't think it impacts them. It totally impacts them.

Why? Because of the way insurance works. The CBO used the 2015 repeal bill as the baseline for analysis. That bill eliminates a bunch of things like the individual mandate and the subsidies and the Medicaid expansion but keeps things like the ban on denying coverage based on pre-existing conditions. So costs for insurance providers will go up, and they will have many fewer customers over whome they can spread those costs. So the costs go up for everyone still in the pool.

Yes, this is a death spiral. This was true before 2010. Trying to get out of that death spiral was one of the reasons why the healthcare industry was interested in some kind of reform. The death spiral problem is now even worse, because the ACA did a lot to change the fundamentals of the industry and reallocate various costs. Eliminate a bunch of changes while keeping other things in place dramatically accelerates the death spiral for everyone. Not just the uninsured. Not just the rural hospitals. Not just the drug companies. Everyone.

It is against these funding issues that the plans proposed by Republicans must be measured. It is uninteresting to most people whether a "health savings account" gives people they don't know real health insurance coverage so they can continue to afford care or not. It is of great interest to almost all people if they will experience a 25% hike in premiums next year.

Likewise, insurance companies themselves are not indifferent to these price increases, and do not have absolute freedom to charge as they please. The large ones are aware that a 25% across the board hike makes them a target of state insurance regulators and popular anger. That won't stop them, of course, because cash is cash. But they will pressure members of Congress to come up with better ways to address the problems.

It has not yet appeared to penetrate most Republicans that a solution that results in a 25% insurance premium hike for all their constituents in 2018 is not a politically viable solution -- even if you can pass it. They may hope to blame it on Democrats. Who knows, they may even succeed. But Republicans appear unaware of the scope of the gamble they are taking, or how difficult it may be to undo the damage once it happens. It would help considerably if advocates worked to educate them -- and the public at large -- that we are all in this together. 
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Vox Article On Resegregation Seems Ass Backward

Came across this on Vox which purports to show the resegregation of America.
http://www.vox.com/2017/1/18/14296126/white-segregated-suburb-neighborhood-cartoon

The article claims that unlike white flight, where a few African Americans or Latinos moving into a neighborhood prompted white Americans to flee to the suburbs in the 1960s, "resegregation" in the suburbs is occurring more gradually largely based on decisions by individuals when they chose to move. In particular, the article focuses on the fact that white people are more likely to have ideas about black majority neighborhoods (similar to the way Trump keeps thinking they are all like Fort Apache, the Bronx).

But the article is very poorly sourced and seems to be drawing the wrong conclusion. The lead example is Worthington, MN, which went from a population of 9,000 nearly 100% to 12,000 of whome 1/3 are Latino.

What happened was a new meat processing plant opened in Worthington. As a result, Latinos came to work there. They communicated to friends and family looking for work that there was a big meat packing plant expanding. So the town grew.

The changing demographic had nothing to do with white flight, or even white sauntering, and everything to do with the Latino migration practices. Whites living in Worthington still lived there. Indeed, the rate of decrease in the white population overall slowed. True, other whites did not increase their migration along with Latinos, but why should they have? There were particularly things that attracted a new population of Latinos fairly quickly. There was nothing particularly new or interesting to attract non-Latinos, assuming they had even heard of Worthington, to move there.

Nor is the pattern described a particularly novel pattern. It is only novel when compared with demogrtaphic drivers of the 1960s and 1970s.

There is a reason why you can find towns in whatever geographic region we put the Dakotas and MN that are all Swedish, or all German, or all of some other particular white ehtnicity. Migrants tend to go to where there are other, similar migrants. True, this tends to be mostly urban areas -- because that's where the jobs are. This leads to some odd distributions that most people rarely notice, like a comparatively large Somali population in Minneapolis.

The article also fails to cover the most dramatic counter-example of its thesis: gentrification. Anyone in major urban hubs of San Francisco and New York City and DC know that white people are moving like crazy into primarily African American communities because of more affordable housing. This puts pressure on housing prices, which tends to push out the original residents. While creating resegregation, it is not because white people are afraid to move into Oakland or the Bronx.

There are so many other things wrong with this thesis that I need to stop myself. The more I look at it, the sloppier it appears.
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Insanely Boring Trade Association Produces Super Rational, Boring Solution For ACA Problems.

The American Academy of Actuaries has now issued a report on: "How Can the ACA Actually Work So That People Have Affordable Insurance and Stuff."
http://www.actuary.org/files/publications/Acad_eval_indiv_mkt_011817.pdf

it basically provides a substantive, boring critique of the current ACA (summary: "still not enough people buying enough insurance to be sustainable, based on the general ACA rules about non-discrimination and minimum standards) and comes up with a very boring list of what you would do if you actually wanted to solve the problems and have a working ACA.

Most people will not even hear about this, never mind understand why it is important. But this is likely to be an extremely important document in the behind the scenes debate on "WTF do we do now?" for both Ds and Rs.