Finding woodworkers in Louisiana

Louisiana is expanding Medicaid with the new eligibility date starting on July 1st.  The Times Picayune  reports that Louisiana is using its SNAP (food stamp) database as a means of identifying individuals who are Expansion eligible and then automatically signing them up.

Department of Health and Hospitals officials are “highly confident” they’ll receive federal approval to use data from food stamp applications to qualify people for Medicaid, the first state in the country to use such a method through what’s known as a state plan amendment….

Kennedy said DHH is preparing to send out about 100,000 letters to people that the agency has determined are eligible for Medicaid but aren’t among the state’s 1.4 million enrollees. All the recipients will have to do is respond to the letter, Kennedy said, and they’ll be added to the program….

DHH officials had previously said they would use a “fast track” approach to Medicaid expansion enrollment, but the food stamp enrollment is particularly significant because the federal government had never before approved using food stamp data to qualify Medicaid recipients.

I think this is interesting from a few angles.

First it is an example of a government that wants to do well by maximizing the data that it already holds.  The state of Louisiana in a variety of data sources that it owns already has an excellent idea of who is eligible for Medicaid based on income and who is not.  The challenge has always been integrating those data sources into a coherent information stream.  Using the SNAP database is an excellent starting point.

Secondly, it makes sense that Louisiana is doing this for an expansion roll-out.  All else being equal, an individual who otherwise would not have signed up for Medicaid Expansion without being automatically enrolled will be healthier and less expensive once they are signed up via the letter than people who actively sought out enrollment into Medicaid.  The active seekers are more worried about their health care costs because they know themselves to have a good reason to worry about paying for health care services.  This will lower the average cost on a capitated basis.

The most interesting angle to me is how does this outreach change the Medicaid cost savings for Louisiana.  The woodworkers have a FY2017 62/38 Federal/state split on their costs.  The Expansion eligible individuals have a CY2016 100/0 split on their costs.  A large rush of legacy woodworkers will eat up most of the cost savings gained through lower charity care appropriations, and shifting of voluntary Legacy Medicaid qualified individuals to Expansion eligibility groups.

This is a good problem to have, as more people covered with the Feds picking up most of the tab is a good thing in and of itself.  However the problem is Louisiana has a balanced budget constraint and a large structural deficit.  Medicaid expansion is taking a decent chunk out of the structural deficit caused by Jindal’s decision to destroy Louisiana to boost his Presidential chances but a 100% Medicaid Eligibility uptake rate would take away most of the savings.

 



Hacking the Exchanges

This is a non-ironic tweet from last night:

I spent some time last night playing the the actuarial value calculator and found a corner case that has significant negative public policy problems and a probable flaw in the CMS model.

This is a hack that companies can use to spam the Exchanges in states with very light regulation.  Here is the 2017 AV calculator to check my work.

A deductible can be thought of as a first dollar 100% co-insurance where the patient is responsible for all of the contracted rate expenses.  It is logically equal and it should be mathematically equal to a 100% co-insurance rate.  Logically a deductible of X which is also equal to the same out of pocket maximum  is the same thing as a 100% coinsurance rate with an out of pocket maximum of X.

The policy problem is the definition of substantial difference for plan differentiation allows for the addition of a plan design by a company if there is a significant difference in deductible.  going from a $3,750 deductible to a $0 deductible qualifies as a significant difference.     Companies can submit their first plan with a deductible only cost sharing design and then submit the same exact plan with a 100% coinsurance design to the same out of pocket maximum.  For plans that are not the first or second Silver there is no value from the point of view of the company.  However if this is done for the plan that is the first Silver, the cloned plan becomes the second Silver at the same price point.  It is an illusion of choice.

Health Sherpa search toolsI believe the 100% co-insurance design would significantly outsell the 100% deductible design because the current set of decision support tools prioritizes low deductible plans.  This is an Search exploit as well as a Subsidy exploit.

Ambetter in Chicago actively spammed the Exchanges with functional isomorphs of their Silvers so that cost-sensitive buyers could be fully subsidized on an Ambetter product only and then pay significant incremental premiums to go to any other insurer.  However there was at least some gap between the first Silver and the second Silver.  This plan design strategy eliminates that gap.  The AV calculator allows for this plan design strategy to occur.  There is a single “Are you sure” message box to ward against data entry errors on 100% co-insurance but no hard prohibitions.

plan design hack

 

This hack would not work in all states.

California with their active purchaser model has a very high substantially different standard.  A cloned plan design fails that standard miserably.  Washington state only allows a maximum 50% co-insurance rate.  My state’s regulators have broad discretion to laugh at us and reject one of the two plan designs.  However not all states have active or empowered regulators.  If the plan design meets model requirements, they will approve anything.  This is a special concern for the states that have outsourced all regulatory authority for the individual market to the federal government.  Those plans have to meet very minimal standards, and these plans will meet those standards.

Finally on a technical note, I think there is a problem in the AV calculator as the co-insurance design has a lower actuarial value than the full deductible design.  In my opinion, the model should produce the same actuarial value with these two inputs.



Insert Clever Title About Glacial Speed

Seriously- that was quick:

The Panama Papers leaks apparently resulted in a political casualty Tuesday when Icelandic Prime Minister Sigmundur David Gunnlaugsson resigned.

Sigurdur Ingi Johannsson, the deputy chair of the Progressive Party, announced Gunnlaugsson’s resignation Tuesday on Iceland’s national public service broadcaster RUV.

Gunnlaugsson had been under intense pressure to step down since leaked documents hacked from a Panamanian law firm revealed his links to an offshore company, triggering mass protests in the capital.

Senior political figures in the Nordic nation have been holding emergency talks amid fallout from the Panama Papers leaks.
Critics said the revelations surrounding the offshore company, which allegedly had holdings in Iceland’s collapsed banks, shattered public confidence in Gunnlaugsson’s leadership and could harm the country’s international reputation.

Hee’s a decent explainer of the Panama Papers. this being an election year, I would be remiss if I did not add this:

The Panama Papers leak, that reveals how the rich and powerful rely on a secretive law firm to hide their wealth in tax havens, has drawn attention to a 2011 speech by Senator Bernie Sanders against the Panama-United States Trade Promotion Agreement, which became law in 2012. He noted that Panama’s entire economic output at the time was so low that the pact seemed unlikely to benefit American workers. The real reason for the agreement, Sanders argued, is that “Panama is a world leader when it comes to allowing wealthy Americans and large corporations to evade taxes.” Sanders said the trade agreement “will make this bad situation much worse.” We get reaction from Michael Hudson, senior editor at the International Consortium of Investigative Journalists, which published the Panama Papers, and Frederik Obermaier, investigative reporter at Germany’s leading newspaper, the Munich-based Süddeutsche Zeitung. He is co-author of the book “Panama Papers: The Story of a Worldwide Revelation.”

This is going to end up being the international story of the year.



The Company He Keeps

Look who Ted Cruz has recruited as his economic advisor:

If it’s true that a man can be judged by the company he keeps, what are we to make of the appointment of former Sen. Phil Gramm as economic advisor to the Presidential campaign of Ted Cruz?

Cruz made the appointment Friday, when he collected Gramm’s endorsement of his quest for the Presidency.

As Micheal Hiltzik points out in his coverage of this — what’s the word?– curious appointment, Gramm is exactly whom you’d choose if one global financial meltdown just wasn’t delicious enough:

Gramm left a long record as a dedicated financial deregulator on Capitol Hill, with much of his effort aimed at freeing up trading in derivatives. That’s why he’s often identified as one of the godfathers of the 2008 financial crisis, which was spurred in part by banks’ imprudent trading and investing in these extremely complex financial instruments.

JMWTurner_Sunrise_with_Sea_Monsters

Gramm himself is undeterred by his own disastrous record, and clearly Cruz is equally unbothered.  That would be why both men are ignoring Gramm’s last appearance as a campaign surrogate:

Gramm’s previous stint as a Presidential campaign advisor ended inauspiciously. That was in 2008, when he served as co-chairman of John McCain’s Presidential run.

Gramm’s most notable moment in that position came on July 10, 2008, when he dismissed the developing economic crisis as “a mental recession” in an interview–and video–released by the conservative Washington Times. “We’ve never been more dominant,” he said. “We’ve never had more natural advantages than we have today. We’ve sort of become a nation of whiners.” McCain immediately disavowed the remarks, and a few days later Gramm stepped down as his campaign co-chairman.

I’m assuming that Ted Cruz does actually hope to become president, and thus makes his choices in the belief that they will advance him to that end.  So I can only see two possible interpretations for this exhuming of one of the most egregious poster children for GOP economic failure.

One is that this is what epistemic closure looks like when it’s at home.  It takes a hermetic seal between you and reality to think the “nation of whiners” trope is a winner this year (or ever, really, but especially now).

The other is that this is just trolling, or rather yet one more instance of believing an action is simply good in itself, transcendently so, if it pisses liberals off.  Which lands Cruz — and the GOP — in exactly the same place as option one: doubling down on the crazy for reasons extremely clear only to those with the correct implants in their upper left second molar.

All of which is to say that I remain firm in my belief that the entity identifying itself as Senator Cruz is in fact one of these guys.

“Where are we going?”

“Galt’s Gulch”

“When?”

“Real soon!”

Image:  J. W. M. Turner, Sunrise With Sea Monsters, 1845



Today’s Smart Read…

…comes from Thomas Edsall at The New York Times

He answers his question “Why Trump Now?” by looking at the material reasons for working-class white disaffection, not just with the post-civil-rights Democratic Party, but with the cabal to whom that group turned in increasing numbers from 1968 forward.  He writes:

The share of the gross national product going to labor as opposed to the share going to capital fell from 68.8 percent in 1970 to 60.7 percent by 2013, according to Loukas Karabarbounis, an economics professor at the University of Chicago’s Booth School of Business.

Even more devastating, the number of manufacturing jobs dropped by 36 percent, from 19.3 million in 1979 to 12.3 million in 2015, while the population increased by 43 percent, from 225 million to 321 million.

The postwar boom, when measured by the purchasing power of the average paycheck, continued into the early 1970s and then abruptly stopped (see the accompanying chart).

In other words, the economic basis for voter anger has been building over forty years. Starting in 2000, two related developments added to worsening conditions for the middle and working classes…

Distribution_of_Loaves_to_the_Poor_David_Vinckbooms

Read the whole thing.

If you’re too busy the TL:DR of those two developments are the interrelated facts that from the year 2ooo, upward mobility reversed itself, with more people falling into the middle class and poverty and fewer making it up the ladder — and the impact of China and its increasing integration into a world-wide free-trade regimen.  Edsall’s reporting on the China development — with its accompanying misreading by free-trade elites — is particularly sharp.

Add to that, as Edsall does, the TARP bailout after the elite-engineered collapse of 2007-8 and the Citizens United decision and you have specific and plausible reasons for Republican working class voters (and everyone else, of course) to see their chosen political leaders as shills and swindlers:

By opening the door to the creation of SuperPACs and giving Wall Street and other major financial sectors new ways to buy political outcomes, the courts gave the impression, to say the least, that they favored establishment interests over those of the less well off.

Edsall’s conclusion?

The tragedy of the 2016 campaign is that Trump has mobilized a constituency with legitimate grievances on a fool’s errand.

The crux for this year is exactly that:  Lots of Americans have been screwed — systematically, with comprehensive effect — for decades.  The material losses they – we — have suffered are real.  The responses Trump offers, such as they are, may be hopelessly at odds with any actual redress of those wrongs.  But any campaign (are you listening, Hillary?) that ignores the fact that two generations of Americans now have seen the basic expectations of life reversed is going to have hard time winning, just by pointing out that Trump’s bloviating won’t help either.

Image: David Vinckbooms, Distribution of Loaves to the Poor, first half of the 17th century.



Bifurcation of America

Minnesota and New York are getting to the levels of universal coverage that most European nations have. They are tweaking their systems and prepping waiver requests to extend coverage to currently excluded populations and improve affordability.

We get graphs like the following:

 

And then we have Texas (via the Texas Tribune)

For the first time in more than a decade, Texas’ uninsured rate dipped below 20 percent, analysts said Wednesday following the release of U.S. Census data.

Slightly more than 5 million Texans were uninsured in 2014 — a 700,000 decrease from the year before. That represented a 3-point dip in the percentage of Texans without health insurance, to 19 percent — the largest gain in health care coverage in Texas since 1999, according to the left-leaning Center for Public Policy Priorities….

the Census sampling, known as the American Community Survey, lends new credibility to earlier claims that Texas continues to lead the nation in the raw number — and rate — of people without health insurance.

We have a framework that can reduce the ranks of the uninsured to near OECD (Organization of Economic Cooperation and Development — the industrialized countries of the world) standards.  It can be implemented and it can work.  It mainly requires political elites to give a shit.

 



Not even hiding your disdain

The governor of Wyoming wants to expand Medicaid. Governor Mead (R-WY) has wanted to do that for a couple of years. The basic reason is that it is a combination of the right thing to do and it solves a lot of budgetary problems without any hard trade-offs. The Republican Legislature is opposed to Medicaid Expansion.  Instead they want to spend money on a study for Medicaid expansion alternatives.  This study is supposed to be fairly comprehensive:

Senate File 86 …. bill would require the Legislature’s Management Council to direct the design of a program providing medical assistance to people who cannot afford adequate health care.

That program would seek to …“shall seek to provide greater health status improvements than those provided by the Medicaid program,” according to the bill’s text.

The program also would coordinate with other public assistance programs with the aim of providing “incentive (for participants) to improve their earnings and economic status,” and would include a work requirement for those able to work.

SF 86 also stipulates the program shall consider the use of health savings accounts or similar accounts, and seek to “avoid spending monies that Wyoming does not have and … avoid the creation of any uncontrolled entitlement.”

The bill also stipulates Wyoming shall not seek approval from the federal government of any Medicaid expansion until the medical assistance program has been designed and reviewed by the Legislature.

It is a bill that freezes everything in place while a study is conducted.

This study is supposed to be looking at a lot of things.  It requires significant knowledge of the Wyoming legislative history, Wyoming social welfare policies, employment training policies, economic development policies and the Wyoming budgetary process.  This is a big scope of work.

And $20,000 is being provided for the entire study.

$20,000 is not even enough money to pay one graduate student a research stipend for a year.  $20,000 pays for a single policy analyst for a month or two of their time.  $20,000 pays for a single consultant for a month.  $20,000 is nothing.

The only way a “study” could be conducted for that amount of money is to give the money to a “research” group where their interns and junior fellows copy and paste articles into a Word document, a senior writer puts in the appropriate ideological language and hopefully has someone look at subject-verb agreement before sending it out the door.

This is pure disdain for the entire idea of society taking care of the working poor.