So Step Away With Your Fist Fight Ways

This ain’t back in the day:

Many Americans can’t remember anything other than an economy with skyrocketing inequality, in which living standards for most Americans are stagnating and the rich are pulling away. It feels inevitable.

But it’s not.

A well-known team of inequality researchers — Thomas Piketty, Emmanuel Saez and Gabriel Zucman — has been getting some attention recently for a chart it produced. It shows the change in income between 1980 and 2014 for every point on the distribution, and it neatly summarizes the recent soaring of inequality.

It’s been 40 years since the right wing long game to destroy the middle class and the poor began, and they are winning. Unprecedented propaganda efforts have coal miners slapping “Friends of Coal” bumper stickers on their cars, broken workers are chanting “right to work” as they struggle to crush the unions that would and once did protect them, and the courts have been stocked with corporate friendly judges. In my state, literally. There are things we can do about it (if we band together and chip away at the GOP stranglehold in Washington):

The problem is that wealth and capital income are not distributed evenly. In 2014, the average wealth of the bottom half was $349. For the top one percent, it was over $16 million.

Rich people in our society don’t just have high capital income levels. They also have high capital income shares. That is, a large portion of the income collected at the top of our society comes from capital rather than from labor. In 2014, just 5.1 percent of the bottom half’s income came from capital. For the top one percent, around 58.9 percent of income came from capital.

It is worth emphasizing just how much income at the top of society comes from passive ownership of investments rather than from working. The top 0.01 percent of individuals in society have an average income of $28 million. Three-fourths of that income, or $21 million, came from capital in 2014.

If we want to get serious about creating a fair and egalitarian society, we must confront capital directly. Wage levels are important. Benefit levels are important. But getting those things right will not be enough so long as nearly one-third of the national income flows out passively to a handful of people at the top of society.

Current liberal efforts to tackle wealth inequality are woefully inadequate. Policies aimed at building the assets of low-income families, the typical approach to this issue, rarely succeed on their own terms and, even if they did succeed, would only be an insignificant drop in the bucket. For wealth and capital income to become more fairly distributed throughout society, the ownership of existing assets must be reordered towards that end.

But, as we know, the perfect was the enemy of the good in the last election, and we have this:

Different policies could produce a different outcome. My list would start with a tax code that does less to favor the affluent, a better-functioning education system, more bargaining power for workers and less tolerance for corporate consolidation.

Remarkably, President Trump and the Republican leaders in Congress are trying to go in the other direction. They spent months trying to take away health insurance from millions of middle-class and poor families. Their initial tax-reform plans would reduce taxes for the rich much more than for everyone else. And they want to cut spending on schools, even though education is the single best way to improve middle-class living standards over the long term.

Most Americans would look at these charts and conclude that inequality is out of control. The president, on the other hand, seems to think that inequality isn’t big enough.

I don’t know what it is going to take to unite “the left”- whatever that means anymore. Hell, I don’t even know what to call myself anymore because I support single payer, higher tax rates, higher capital gains, decriminalization, demilitarization, reinstatement of the draft, am pro-choice, etc., ad nauseum, but because I voted for Hillary I’m apparently a neoliberal. At any rate, I thought the election of Trump would unify “the left,” but it has apparently made us more fractious than ever. But we need to get our shit together, because things done changed.

More Byrd droppings

Following on on Betty’s post this morning, keep on calling.

Senator Sanders in his role as the ranking member of the Senate Budget Committee has had his staff arguing hard to the parliamentarian over the past few weeks. They are arguing over every point in the Senate bill(s) that are still be scrawled on napkins in the Senate dining room on whether or not provisions are directly budget related and therefore only need a 50 vote threshold or are primarily policy and need a 60 vote threshold. They’ve won some big fights. It looks like they won an even bigger one this morning.

What that means is the waiver provisions need 60 votes. This is important from a policy perspective as the current waiver system in the ACA allows states to experiment if they can insure as many people, at the same or better actuarial value while protecting the most vulnerable and costing the federal government no more money. The provision that is now subject to a 60 vote threshold would allow the state to do whatever it wanted just as long as it cost the federal government no more money.

Politically this is important because the Senate leadership, Secretary of Health and Human Services Price and CMS Administrator Verma have been promising Republican senators that they’ll issue magical waivers that will give enough flexibility to states to keep everyone or at least enough people whole despite pulling out $750 billion dollars in Medicaid funding and several hundred billion net dollars from the individual market. That is a fantasy of the least interesting tripe but it waivers of unimaginable power are being pushed behind the scene. Those waivers can’t be part of the bill.

And if they are part of the bill, that means the legislative filibuster is dead which should help when we have to clean up this mess.

It’s Baaaaacccckkkk (Sort Of, Maybe)

It is impossible to overstate the Republican commitment to ripping health care from millions, while taking a chainsaw to our medical system.

Rand Paul has just announced that he will vote “Yes” on the Trumpcare motion to proceed as long as he is given a clean vote on his amendment, which would simply repeal the ACA (which, given the CBO evaluation of a similar proposal, would lead to something on the order of 17 million without health care next year, and 32 million Americans left in the cold by 2026).

That’s still not enough to get Trumpcare to the floor if the other declared “Noes” hold out, but each senator McConnell can peel away significantly increases the pressure on those who remain opposed.  And certainly, Paul’s cave reminds us that counting on any Republican to maintain a party-base-unpopular position as a matter of principle is a mug’s game.

This won’t be over until the GOP loses its majority in one house or the other.

Image: Workshop of Lucas Cranach the Elder, Massacre of the Innocents, c. 1515

Recapping the revised Senate bill

The Senate released their revised bill.

The biggest and only important news is that there is fundamentally nothing different with Medicaid. It is still being destroyed. It won’t be destroyed as quickly in Louisiana in this version as it would have in the previous versions, but Medicaid will see a 25% reduction in federal funding by 2025 and 35% reduction in annual federal funding by 2036.

Everything else is a detail. There is an Alaska pay-off for more state stabilization funds. There is a provision for Florida.

There is the Cruz amendment.

Regarding the Cruz amendment, I just can’t deal with it. It is not exasperation, it is an incomprehension as to how this amendment actually works on any level without a fractured market. Maybe that is the entire point of the amendment.

Fundamentally things were tweaked around the edges of a bill that will produce incredible suffering without altering that basic fact.

HDHPs and diabetes control

High deductible health plans (HDHP)s  are supposed to incentivize consumers nee patients to shop more effectively for their care and choose only high value care at good prices.  As we looked at yesterday, there is a significant problem in that most people in the health insurance market sphere aren’t touched by the phase transition from high actuarial value plans with low cost sharing to lower actuarial value plans with higher deductibles.  The amount of money at risk due to the incentive changes of a HDHP regime is not a plurality of total spending.

More importantly, we also need to exclude people from the previous calculation who don’t have resources to actually fund their HDHPs. Academy Health has an interesting poster with the promise of a paper that I want to read as soon as it comes out.  It looks at the conversion of people from low deductible to high deductible plans who have a common chronic condition.  It then sees if there are savings and changes in utilization patterns.  It then splits the sample into “low income” and “high income” groups.

We used a controlled interrupted time series design to examine employer-mandated HDHP transitions, minimizing selection bias. The intervention group comprised 26,674 HDHP members with diabetes age 12-64 included between 2003-2012. HDHP members were enrolled for 1 year in a low deductible (≤$500) plan followed by 1 year in a HDHP (≥$1000) and propensity score matched 1:1 to diabetes patients with low deductibles. Low income HDHP members (n=9641) were a subgroup of interest….

Principal Findings:

HDHP members experienced small pre-to-post reductions in ED visits (-3.1% [-3.9,-2.3]), hospitalizations (- 4.2% [-5.5,-2.8]), and total healthcare expenditures (-3.6% [-4.3,-3.0]) relative to controls, and no changes in measures of adverse outcomes. However, low income HDHP members experienced relative increases in high severity ED visit expenditures (8.1% [3.0,13.2]) and high severity hospitalization days (26.1% [19.7,32.5]) at follow-up compared to baseline.

People with higher incomes seem to have had very good results.  They shifted consumption dollars towards out of pocket spending.  Here they were price sensitive with no adverse impacts.  However people with low incomes but employer sponsored insurance saw dramatic adverse events.  My theory and speculation is that they did not have the readily available resources that could easily be shifted.  They are resource constrained and the implied income of health insurance covering maintenance medication was an important part of the family budget.

There are a couple of important policy caveats that we have to take from this study as we think through current legislation.  The first is the size of the deductible shift.  Here the researchers are defining a large deductible as more than $1,000.  In ACA terms, a $1,000 deductible plan is a 2018 Platinum plan assuming no other cost sharing.  When this study was started, a $1,000 deductible was probably a weak Gold plan.  That is not the type of plan under discussion.

A 2018 58% AV plan has a deductible of $7,000 before any claims are paid.  This is, in my opinion, a significant difference past that of degree and towards a difference in kind.  People who could absorb an additional $500 or $1,000 annual net income shock as they transitioned from a low deductible plan to a $1,000 deductible plan will find it far more difficult to come up with several thousand more dollars for their maintenance medications.

The second policy caveat that we have to draw out is the population.  This is a population that received their insurance through work.  We know that the employer sponsored insurance (ESI) covered population tends to be healthier than the general population and also tends to have more income.  They have fewer complex co-morbidities and a greater ability to absorb a fiscal shock. And yet, even the low income segment of  this subgroup is in trouble in a shift from small to still fairly small deductibles in the context of the BCRA.

How does this generalize to the Medicaid population?  We know that the Medicaid population is income and asset constrained by eligibility requirements. We know that the Medicaid population tends to have more complex care needs for the same diagnosis for a variety of reasons. So how does this generalize?

My bet is that we would see the same negative impacts of increased adverse events and lower adherence to care plans because adhering to the care plan and avoiding adverse events requires resources that people on Medicaid are far less likely to have compared to people who have ESI insurance.

The BCRA even in its most generous potential implementation with states fully funding their portion of the stability funds and then dedictating the entire pool to enhanced cost sharing subsidies that match the ACA in actuarial value bumps (24% for people under 150% FPL for example) will still move people from Medicaid with de minimas deductibles to plans with $1,850 deductibles or higher.  If the Medicaid population is anything like the low income ESI population, we should expect more adverse events from this financing regime change.

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Time to call the Senate re: Medicaid

Delaying massive cuts and eligibility restrictions is still voting for massive cuts and suffering.

Call the Senate

ACHA review

Here are a few lowlights of the AHCA Congressional Budget Office score. I’ll try to keep this non-technical.

  • Medicaid is still getting changed from an entitlement that is responsive to changing needs to a block grant
  • 23 million people will lose coverage compared to current law projections
  • The MacArthur/Upton waivers are expected to destroy the individual markets that cover 15% of the country
  • Most of the premium decreases are due to older and sicker people being priced out of the market
    • Real easy to have low premiums when you don’t cover anyone who is likely to need services
  • Pre-existing condition protection is effectively destroyed by splitting the risk pool.

Relevant tweets below the fold:
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