Local and State: How’s It Going?

Toward the tail-end of one of our open threads yesterday, there was some discussion about how the Democratic Party is performing at the local and state level. I suspect many of us care deeply about this and are involved in our districts. But we don’t discuss it a lot here because this is a sprawling, global, almost-top-10K blog, and these issues are hyper-local.

But it’s worth discussing because the party has lost a shit-ton of ground at the local and state level over the years. There are many reasons for that, including a concerted effort by Republicans to destroy unions, which used to form a pillar of institutional support for Democrats, and a hyper-national focus among party members. We have to address it, and I know many of us are involved in that struggle.

So let’s talk about it: How’s it going in your local meth laboratory of democracy? Is your county-level party effective? How about the state level? Is the DNC helpful, or are they AWOL? What’s your understanding of their role? How do you see governor and state legislature campaigns shaking out? How are you directing contributions, if any? What non-party political organizations do you support?

I’ll start us off by answering these questions for my area. Our county party has done a terrific job; we’ve steadily made progress electing Democrats and ousting Republicans. After the election, the party had to find larger meeting spaces because so many more people became involved. There have been challenges harnessing all that new energy, but I am hopeful.

At the state level, I’m worried, but that’s nothing new. We’ve fielded such crappy candidates for governor that an obvious crook like Rick Scott was able to win not once but twice, albeit with less than 50% of the vote both times. And it looks like we might be getting ready to screw the pooch again, unless the state’s most famous ambulance chaser decides to throw his hat in the ring as a celebrity candidate for the Democrats. We could do worse, to be honest, but it frustrates me that we can’t do so much better.

I believe the outlook at the state legislative level is better. We recently won a special election in a district that Republicans thought was safe and where the Democrat was heavily outspent. County parties did phone banking across the state to help make that happen, and disgust with Trump is thought to have been a key factor too.

As for the DNC, I confess I don’t really know how much to expect of them at the state and local level. Maybe someone who understands how that’s supposed to work can enlighten me. I was an early supporter of Tom Perez for party chair, but the jury is out on his performance so far, IMO. Since I focus on ground-level stuff, I have no real sense what’s going on there except what I read in the media, which is geared toward peddling “Dems in Disarray!” narratives.

In addition to my local party, I’m involved in political organizations that support women’s rights, LGBTQ equality and immigrants’ rights, and I donate paltry sums to those causes. I also contribute to and volunteer for organizations that protect enfranchisement. (Reading this over, I realize it sounds like I do a lot, but that’s not really true — I probably spend more time watching cooking shows and sports than I do on all of these activities combined. I should be doing more.)

Anyhoo, before turning it over to you, a plea: Let’s not rehash the 2016 primary in this thread. I realize lingering hard feelings among factions within the party might be relevant to your response, and if so, please feel free to describe that. But gratuitous bashing will just derail the thread, so can we not? Thanks!



Tuesday Morning Open Thread: Not the Onion, edition 3,567

As if Texas needed any more grief right now!…

… Sen. Lindsey O. Graham (R-S.C.), who has been involved in previous bipartisan immigration reform efforts, said he would support Trump’s plan to end DACA after a six-month delay. In a statement, Graham said the program amounted to “presidential overreach” by President Barack Obama, who created it by executive action in 2012…

House Minority Leader Nancy Pelosi (D-Calif.) said Trump is poised to “break the hearts and offend the morals of all who believe in justice and human dignity.” She called on Republicans to pursue legislation to protect dreamers “from the senseless cruelty of deportation and shield families from separation and heartbreak.”

Trump’s decision to include a six-month delay could be a bid to shift some of the political pressure and consequences over the dreamers onto congressional Republicans. House Speaker Paul D. Ryan (Wis.), Sen. Orrin G. Hatch (Utah) and several other GOP leaders have urged Trump not to end the program and to let Congress pursue its own course of action.

The president and his senior advisers continued to deliberate Monday afternoon, and aides cautioned that Trump could still change his mind ahead of the announcement. Important details such as whether the administration would continue to accept DACA applications and issue renewals for two-year work permits during the six-month delay remained unresolved…

Meanwhile, leading Democrats have said privately that they think Trump has been boxed in politically. His inability to secure funding for the border wall is wearing down support among his base, these Democrats said, while his hard-line immigration rhetoric is hurting him with moderates.

When rumors about Trump’s expected actions on DACA first surfaced nearly two weeks ago, Senate Minority Leader Charles E. Schumer (D-N.Y.) tweeted that dreamers “are not a bargaining chip for the border wall” funding or to pay for an “inhumane deportation force.” …

Apart from bracing for fresh horrors, what’s on the agenda as we start an abbreviated work week?



More From Arizona…

Update: I swear that when I started writing this DougJ’s post was not in the queue.  Anyway…we’re all grownups here (Schpeake Fer Yerself!–ed) so I’m guessing we can read one piece and then another.  Or not. Enjoy!

__________________

Joe Arpaio is now on his way to being an old lag, and if that conclusion is decades late, it still behoves us to get our schadenfreude on:

The longest-serving lawman of the state’s most populous county, where he became a national figure known for immigration raids and sweeps aimed at rounding up illegal migrants, was found guilty Monday of contempt of court. He faces up to six months in jail.

Arpaio’s crime, you’ll probably recall, was to keep on doing what he’d been doing after a federal judge told him to stop:

Arpaio had conducted the sweeps under the federal 287 G Program, which enables some local law-enforcement offices to act as quasi-immigration agents. In 2009, the federal government rescinded this power, but Arpaio refused to stop. In 2012, Arizona U.S. District Court Judge Murray Snow, ordered an injunction against Arpaio’s office aimed at ending the sweeps, but still, Arpaio refused.

I fortunately don’t have any personal experience here, but I have it on good authority that judges really, really don’t like it when you ignore them.

Arpaio tried two lines of defense:

During the criminal trial, which consisted of a five-day trial in June and July, Arpaio’s attorney’s argued that Snow’s order was unclear and that though the sheriff had made mistakes, they weren’t willful violations of the order. He also argued that Arpaio delegated much of of the enforcement responsibilities to his subordinates, and that he should not be held responsible for their actions.

Again, I don’t think telling a judge that they f**ked up in their legal writing is a terribly persuasive strategy, and as for the “my employees suck, I don’t” argument, I’m reminded once again that the Party of Personal Responsibility™ is a f**king crock.  Hence, the man’s a convict.

It is, alas, apparently unlikely that white supremacist poster child Arpaio will actually go to jail for his crime.

But whatever his sentence, this outcome makes me smile.

 

Here’s Loki, the Trickster God, in the glass I’ll raise when the clock hits 0-whiskey-00 this evening.

Image:  Egon Schiele, The Door is Open, 1912.



Iowa is covered

The Des Moines Register reports that Medica is planning to stay in Iowa. They are requesting a 43% rate increase for the individual market.

“When you find yourself as the only ones between people getting access to care and people not getting access to care, your view of the situation becomes very different,” Medica Vice President Geoff Bartsh said in a prepared statement. “We’ve filed with the intent to provide access to insurance for all Iowans, whether they are farmers, small business owners or other individuals who need coverage.”

The relatively small, Minnesota-based carrier told Iowa regulators Monday that in order to stay in the market, they would need to increase premiums by an average of 43.5 percent….
Monday was the deadline for carriers to file proposed rates for individual health-insurance policies in Iowa for 2018. Medica was the only carrier to file, state regulators said.

I was wrong on being wrong. Iowa is now a single carrier state. There are no risk adjustment problems. The only risk that Medica is bearing is that their actuaries are projecting the state market wrong or there is a cavalcade of clown cars crashing. It is a rational solution to a market design problem.

The single carrier can raise their rates high enough to cover this catastrophic claim while the post-subsidy price is low enough to actually attract normal risk as well. The off-exchange market can be competitive especially if the single on-Exchange carrier splits their filing IDs so they can use different actuarial assumptions for a more normal market.

I am not seeing anything saying that Medica is splitting their plan into an on-Exchange entity and an off-Exchange only entity. So the people who are not subsidized will be paying a lot more for their insurance.

They also need to change their strategy. In 2017, in all counties in Iowa, they offered two Silver plans. The two Silver plans have the same regulatory actuarial value at 70.7%. The two plans have minor differences in price. For a 40 year old in Warren County, there is a $6 spread between the least expensive and the new Benchmark Silvers offered by Medica. With the price increase, that will lead to a $9 spread. Medica should offer a low actuarial value plan at 66% or 67% AV with a higher deductible and keep one of the two current plans as the actual benchmark. This will lead to s bit less price shock for the off-Exchange buyers and a better deal for subsidized buyers.

The last thing of interest to me is that this makes the 1332 waiver that Iowa wants as a “rescue mission” even more contradictory in their assumptions.

There are four major guide posts for a 1332 waiver. The waiver must provide at coverage at least as comprehensive as the baseline ACA, with cost sharing protections at least as good as the ACA to at least the same number of people at no more net federal costs than the ACA.

Iowa’s argument is one of choosing a favorable counterfactual. Their counterfactual will be that their plan will meet the coverage requirements of at least as good for as many people as the ACA if one assumes that the ACA will cover no one on the Exchange because there will be no insurers on the Exchange. That is a plausible counter-factual. It is one that can be defended with a straight face.

However, let’s think about the implication of that counterfactual. In this scenario, the ACA will cover no one. Covering no one means the federal government spends no money….

Iowa has a lot of money that could be available for state innovation or BHP programs with Medica staying in the market. But now they can’t meet the qualification that the cost sharing be no worse for people under a 1332 than under the ACA. If Iowa continues down the path of a 1332, there will be even more lawyers.



Show me the waiver

The California State Senate passed the single payer bill. This is hopefully the start of the process of exploring what that actually means and how it can actually be done in a state with resources and technical sophistication.

Michael Hiltzik in the LA Times identifies the key implementation challenges:

Under the Senate bill, the “Healthy California” program would take over payment for almost all medical spending in the state. It would absorb funding currently going to federal and state programs, and relieve employers, their workers and buyers in the individual market of premiums, deductibles and co-pays….

They need multiple waivers from the federal government to refashion Medicaid (known in California as Medi-Cal), Medicare and other federally funded health programs and redirect federal dollars into their own systems….(emphasis mine)

Show me the waivers.

If there aren’t waivers, this plan is vaporware.
Read more



States, single payer and recessions

New York and California are both advancing single payer plans through their legislatures. I have a lot of questions. They both assume incredible waiver authority will be given to them. These hypothetical waivers would direct federal program funding** to a state operated pass through entity to pay for healthcare. But each of these proposals will rely on some state level general taxation.

How do these programs work in a recession?

Depending on how one does the counting, between forty six and forty nine states have a balanced budget constraint. California and New York have balanced budget constraints. There is wiggle room for a bad year or two on the margins but it is incremental.

State tax revenue tends to be cyclical. Consumption and income taxes tend to go up when the economy is growing and down when the economy is in a recession. California heavily relies on capital gains taxation. New York relies on taxing Wall Street bonuses. Both of those are cyclical revenue sources.

Healthcare demand is responsive to recessions as well. Bad times lead to fewer elective surgeries and for more things to be deferred until they really are needed. The primary channel for that is through the increase in cost-sharing. The California and New York proposals don’t have the cost sharing that could shift demand in time.

So my question is what happens to a state with a reasonably strong balanced budget constraint and state run single payer when there is a significant recession? Demand and costs will stay roughly constant. Revenue crashes. This dynamic opens a big financing gap. That gap must be closed. The methods to close that gap are massive provider payment cuts, increased taxes (which is probably a bad choice on a cyclical basis), increased cost-sharing, eliminating some covered services or borrowing for operational reasons. States have some wiggle room to borrow for operational costs but they don’t have the ability to borrow 20% of their operational budget in a year for several years straight. Is it reasonable to assume that the states can access federal fiscal capacity to borrow as they have already accessed all federal healthcare money in a hypothetical waiver?

How does this work in a recession?

Help me out here, please!

** By the way, does that federal waiver money come with Hyde restrictions?

*** Any state single payer proposal post should always end in a Cato-esque “ERISA delenda est”



California single payer

California is studying a single payer system. It is doing the homework to make explicit the assumptions that are needed to make the system work. Modern Healthcare has some details:

SB562 would guarantee health coverage with no out-of-pocket costs for all California residents, including people living in the country illegally. The state would contract with hospitals, doctors and other healthcare providers and pay the bills for all residents similar to the way the federal government covers seniors through Medicare.

The measure envisions using all public money spent on healthcare — from Medicare, Medicaid, federal public health funds and “Obamacare” subsidies. That’s enough to cover about half of the $400 billion cost, according to the legislative analysis.

The rest would come from higher taxes on businesses, residents or both. It would take a 15% payroll tax to raise enough money, the analysis said.

Matt Bruenig makes one very good point before I want to look at some details:

After the implementation of single payer, the report says, health expenditures in the state of California would total $400 billion per year, or 15 percent of the state’s GDP. This is 3 percentage points lower than the share of GDP the US overall spends on health care.

I have a couple of questions about the finances.

Does the analysis assume or not assume the AHCA will be passed? If it does not assume the AHCA, there is a potential $10 billion Medicaid annual gap in the financing. More importantly it is assuming some incredibly complex and currently not authorized in law much less by rule making waivers.

What happens when there is a recession? California has a balance budget constraint. Wage and capital gains income taxes tend to be pro-cyclical. They go up in good times and crash in bad times. How is this program financed in bad years?

Finally, we need to look at the distributional fight inherent within universal access programs. Single payer is exceptional for the fifty two year old making $11 an hour with either no benefits or Bronze level benefits. It is not as good of a deal for a twenty nine year old independent contractor making $39,000 a year who has a cheap policy in the individual market. It is a really bad deal for the mid-40s couple making $200,000 with exceptional coverage through work.

The American political system is most responsive to people who have a lot to lose, people who have power and people who can mobilize significant resources. In this case, that is an apt set of descriptors for the mid-40s couple making very good money.

Single payer is hard. California is trying to make explicit the trade-offs needed to get a single payer system off the ground. There are choices to be made with winners and losers from each choice made. And each set of people whose current situation is changed for the worse will scream.

Update 1 And oh yeah, how does this play nicely with ERISA, the controlling law on most employer sponsored benefits including health insurance?