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Rational Irrationality

Obamacare Supreme Court Case is a Bad Joke

Forgive me if a wry tone eludes me when it comes to today’s proceedings in the Supreme Court. As far as I am concerned the whole thing is absurd—yet another example of how America’s antiquated system of government, and its determined refusal to accept the economic realities of the modern world, is undermining its future.

Early on in this morning’s session, Justice Anthony Kennedy, the swing vote on the court, said that the U. S. government had a “very heavy burden of justification” to show that an individual mandate to purchase health-care insurance was constitutional. Really? Only if Kennedy and his Republican-appointed colleagues are willing to throw out economic logic as well as seventy years of legal precedent, which, judging by their harsh questioning of Solicitor General Donald Verrilli, Jr., they may well be.

The economics isn’t very complicated. The health-care industry, which makes up about a sixth of the economy, is rife with inefficiency, waste, and coverage gaps. In seeking to remedy some of these problems, the Obama Administration made a deal with the private-insurance industry—the same deal Mitt Romney made when he was governor of Massachusetts. On the one hand, the federal government barred the insurers from discriminating against the sick and the elderly, thereby raising the industry’s costs.

On the other hand, the feds obliged uninsured individuals to purchase coverage, thereby expanding the insurers’ revenues. We can argue whether this was the best way to proceed. (At the time the bill was passed, I raised some doubts about how much it would cost.) But it was a straightforward instance of the central government seeking to redress the failures of the private market—something akin to imposing fuel standards on auto manufacturers, providing state pensions, and forcing banks to hold adequate capital reserves.

In a modern, interconnected economy, activist government policies to remedy market failures are essential. Rather than confronting this argument head-on, which would involve publicly defending the actions of the banks, the insurers, and the industrial polluters, the right has settled on a strategy of trying to undermine the government through the courts, where its pro-corporate agenda can be repackaged as a defense of ancient freedoms.

But, of course, this case isn’t ultimately about the law—it is about politics. The four ultra-conservative justices on the court—Alito, Roberts, Scalia, and Thomas—are in the vanguard of a movement to roll back the federal government and undermine its authority to tackle market failures. The movement began in the nineteen-eighties, when the Federalist Society got its start and Ronald Reagan appointed one of its members, Scalia, to the court—and for thirty years it has been gathering strength.

Thus the creation of a new legal theory to sink Obamacare: the idea that while the federal government might well have the authority to regulate economic activity, it doesn’t have the right to regulate inactivity—such as sitting around and refusing to buy health insurance. Now, it is as plain as the spectacles on Antonin Scalia’s nose that opting out of the health-care market is about as realistic as opting out of dying. But necessity is the mother of invention. And, judging by his questions this morning, it is this invention that Kennedy has fastened on.

As I said at the beginning, it’s a bad joke—upon us all.

 

Cobra Subsidies are Expiring for the Unemployed

Millions of unemployed Americans face the prospect of a huge increase in health insurance costs, thanks to the looming expiration of a government subsidy.

The American Recovery and Reinvestment Act, passed in February, launched a temporary government program to subsidize the often crippling cost of buying health insurance through a former employer’s plan after a layoff.

However, the so-called COBRA subsidy was designed to last no more than nine months for each person who was unemployed. Hundreds of thousands who got this subsidy when it was first made available in March are slated to roll off the program today.

The insurance subsidy will also no longer be available for Americans who lose their jobs starting today.

If the subsidy is not extended, hundreds of thousands will lose the subsidy each month, forcing them to pay health insurance premiums that are three times higher than what they’re currently paying.

Medical Bills Bankrupt Many Americans

WEST PALM BEACH, Florida (CNN) — Leslie Elder’s eyelids fluttered open, and through the fog of pain medication, she saw the emergency room doctors pull back the curtain in her room.

Leslie and Jim Elder

She could tell that the news was bad.

“They didn’t have to say a word. I knew from their faces that something wasn’t right,” said Elder, 60, who hours earlier had stumbled into the ER with a stabbing pain in her abdomen. “Then one doctor said, ‘Your right kidney … it’s breaking apart. You have a tumor … and you also have a tumor in your left kidney.’ ”

The words “You have a tumor” were not new to Elder; her grim financial situation was.

Elder had cancer twice before — in 1988, doctors found a tumor in her right breast, and in 2001, they found one in her left breast — except back then, she was insured. By the time she learned that she had kidney cancer in September 2005, she was uninsured.

“All I could think of was ‘Oh, my god, I’m going to go broke. We’ll be living in a cardboard house,’ ” Elder said. ” ‘How am I going to do this?’ It was the most honest feeling of powerlessness.”

Elder and her husband, Jim, say their health insurance carrier, Nationwide Insurance, forced them into an impossible situation by raising the rates on their policy over several years. Eventually, they were forced to cancel.

The Elders are broke and on the cusp of bankruptcy because of medical bills, and they’re not alone. A study published in the June issue of the American Journal of Medicine found that in 2007, 62 percent of personal bankruptcies were because of medical debts. The same study indicated that in 1981, only 8 percent of bankruptcy filings could be traced to medical bills.

The Elders boil it down to health insurance companies putting profits ahead of human life.

The Elders did not always have such a contentious relationship with their health insurance carrier, and they were not always broke. In fact, before their insurance troubles, they were solidly middle-class business owners.

However, in 1988, things began changing. It was the year of Elder’s first breast cancer diagnosis. When the family’s plan required payment of a $250 deductible and a 20 percent share of the costs of medical care, the Elders could afford it.

Years after that first diagnosis, things started getting shaky. Jim Elder says the premiums crept up slowly at first and then more dramatically.

“You do ask why, why, why,” Jim Elder said. “Why are we stuck with all these huge bills when we’re supposedly covered?”

Health Insurance Scam

WellPoint health insurance company, which has encouraged its employees to lobby against health care reform, is now cutting their benefits.

The insurance giant plans to raise deductibles and premiums for some of its employee health benefits. “Your cost per paycheck will probably increase,” said a memo to Wellpoint employees that was obtained by Bloomberg News.

The company blamed the recession for the cuts. “Like many employers in today’s economic environment, we are looking at all aspects of our business,” including benefits, “and making adjustments to ensure we can continue to operate competitively in the future,” wrote Chief Human Resources Officer Randy Brown.

WellPoint’s CEO, Angela Braly, made nearly $10 million in 2008.

A House investigation found that WellPoint also rewarded employees for finding ways to drop policyholders who developed expensive conditions — a practice known as rescission.

No Health Care is Causing 45,000 Deaths Yearly

Nearly 45,000 people die in the United States each year — one every 12 minutes — in large part because they lack health insurance and can not get good care, Harvard Medical School researchers found in an analysis released on Thursday.

“We’re losing more Americans every day because of inaction … than drunk driving and homicide combined,” Dr. David Himmelstein, a co-author of the study and an associate professor of medicine at Harvard, said in an interview with Reuters.

Overall, researchers said American adults age 64 and younger who lack health insurance have a 40 percent higher risk of death than those who have coverage.

The findings come amid a fierce debate over Democrats’ efforts to reform the nation’s $2.5 trillion U.S. healthcare industry by expanding coverage and reducing healthcare costs

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President Barack Obama’s has made the overhaul a top domestic policy priority, but his plan has been besieged by critics and slowed by intense political battles in Congress, with the insurance and healthcare industries fighting some parts of the plan.

The Harvard study, funded by a federal research grant, was published in the online edition of the American Journal of Public Health. It was released by Physicians for a National Health Program, which favors government-backed or “single-payer” health insurance.

An similar study in 1993 found those without insurance had a 25 percent greater risk of death, according to the Harvard group. The Institute of Medicine later used that data in its 2002 estimate showing about 18,000 people a year died because they lacked coverage.