Consumer Power Report #317
The news last week from the states is about continued pushback against President Barack Obama’s conscience overreach, as seven states filed suit against the administration for its latest mandate on all institutions to cover contraception, sterilization, and abortifacient services. Nebraska Attorney General Jon Bruning took the lead in the case, with South Carolina, Michigan, Texas, Florida, Ohio, and Oklahoma joining in the suit:
Seven states sued the Obama administration Thursday over its requirement that employers cover contraception in workers’ health plans.
The lawsuit, led by Nebraska’s attorney general, contends that the proposed rule violates Roman Catholic institutions’ rights under the First Amendment to express their beliefs and practice their religion.
The move is the first legal action by state attorneys general in the heated debate over the requirement. It follows lawsuits brought by three religiously affiliated universities and a Catholic television network, as well as actions in some state legislatures to try to avoid the federal requirement.
“The federal government’s regulation is an unprecedented invasion of the plaintiffs’ First Amendment rights to free speech, free exercise of religion, and free association,” the legal complaint says.
A coincidental circumstance in Washington state last week highlighted the divide on issues of conscience when it comes to employers and providers. The legislature there is considering House Bill 2330, which would require all insurers who cover maternity services to also cover abortion services. Yet in the same state, in the same week, a Tacoma district judge decided pharmacists don’t have any legal obligation to fulfill prescriptions for the morning after pill, and that a state mandate to do so violates their religious freedom.
U.S. District Judge Ronald Leighton in Tacoma issued his decision Wednesday. He said the state’s real goal in adopting its rule was not to promote timely access to Plan B and other medicine, but to infringe on the religious freedom of pharmacists who believe that life begins at conception.
Washington’s rule requires pharmacies to sell any drug that’s in demand, with some exceptions for business reasons. The judge said that if the state allows exceptions for non-religious reasons, it must allow religious or moral exceptions as well.
In the 48-page ruling, Leighton found the state rules were unconstitutional on their face and ordered that pharmacists be permitted to not provide the drug.
Judge Leighton’s decision is here. What is instructive about this circumstance is that it serves as a reminder of the true nature of this governmental overreach. It’s not an issue of contraception or its legality–every pharmacist in the country stocks contraception, and it can be purchased over the counter for a minimal cost. Rather, it’s an issue of liberty. Either the state has an unlimited right to order institutions and individuals to compromise their beliefs in order to remain in this country or it does not. Unfortunately, it now appears the courts will once again end up having to decide whether to maintain principles in law that have been in existence since the very founding of the nation.
— Benjamin Domenech
IN THIS ISSUE:
Sometimes you have to pass a bill to find out what’s in it:
72 percent of Americans believe the individual mandate in the health care reform package is unconstitutional, while 20 percent believe it is constitutional.
Along party lines, a majority of Democrats – 56 percent – believe the health care mandate is unconstitutional and 37 percent defend it as constitutional. Among Republicans, 94 percent view that part of the law as unconstitutional.
One response to the mandate worth reading today is the amicus brief from the American Action Forum, signed by an enormous number of economists. They are highly skeptical of the effects of the mandate, writing:
Taking those numbers into account, the maximum share of uncompensated care attributable to the mandate’s target class would be approximately $16 billion, a far cry from $43 billion.
Yet that number remains over-inclusive because it counts the costs of uncompensated care for those who, despite the law, will not comply with the mandate. The CBO estimates that four million of the currently uninsured who are subject to the penalty linked to the mandate will nonetheless not purchase health insurance when the mandate comes into effect. Accordingly, an appropriate measure of the mandate’s impact must exclude the uncompensated costs from those who fail to comply with the mandate.
The Economist Amici have estimated that figure by determining that, according to the MEPS data, approximately 17.3 million people are uninsured, healthy, over 133 percent of the poverty line, and not undocumented aliens. The CBO estimates that 90% percent of those who pay the penalty will have incomes over the poverty line and 75% will have incomes more than twice the poverty line. Those figures are unsurprising given that the healthy and those not eligible for Medicaid are far more likely to make the rational decision to pay the penalty tied to the mandate rather than pay for health insurance. Thus, roughly 80% of those who pay the penalty rather than comply with the individual mandate are likely to be uninsured, healthy and over 133 percent of the poverty line. As a result, the $16 billion figure–which represents the maximum possible reduction in uncompensated care fairly resulting from the mandate–should be further reduced by approximately 20 percent to account for the continued uncompensated care rendered to the voluntarily uninsured who do not comply with the mandate. Thus, the individual mandate will actually have an impact on no more than $12.8 billion of the total $43 billion figure, and this small fraction represents only one-half of one percent of total annual healthcare spending in the United States.
Only 14 states have made meaningful progress toward establishing health insurance exchanges under Obama’s law.
States are lagging in the creation of health insurance exchanges, the supermarkets where millions of consumers are supposed to buy subsidized private coverage under President Obama’s health care overhaul.
Many states are waiting for a Supreme Court decision or even the November election results, to see whether central elements of the new law might be overturned or repealed. But that will be too late to start work. By Jan. 1, 2013, the Obama administration will decide whether each state is ready to run its own exchange or whether the federal government should do the job instead.
Republican governors and state legislators across the country are split. Some want to set up rudimentary exchanges with limited features – as a defensive tactical maneuver – rather than cede control to Washington. More-conservative Republicans do not want to do anything at all.
After a great deal of bickering and bargaining, the insurance exchanges emerged as a centerpiece of the 2010 health care law, crucial to achieving Mr. Obama’s promise of affordable coverage for all Americans.
The issue was a major topic of discussion over the weekend at the winter meeting of the National Governors Association here, and it is expected to come up Monday when governors meet with Mr. Obama at the White House.
Gov. Dave Heineman of Nebraska, a Republican who is chairman of the governors association, said his state would not “default to the federal government.” But he said “it would be a costly mistake to spend millions of taxpayer dollars” building an exchange before the Supreme Court issues its decision in a challenge to the health care law, which is expected in late June.
“Let’s just wait,” Mr. Heineman said.
Our friends at Americans For Prosperity have a new Web site focused on exchanges, particularly looking at activity in Arizona, Arkansas, Michigan, Missouri, Montana, Nebraska, and Ohio.
SOURCE: New York Times
The difficulty of making cuts in Medicaid at the state level is leaving doctors and providers holding the bag.
Washington’s legislature last spring ordered the Medicaid agency to cut spending on unnecessary ER visits, spurred by a budget shortfall then projected at $2 billion. Officials say too much routine care is given in ERs, often the most expensive setting, and that this plan would save the state $17 million a year.
Doctors and hospitals, which got an earlier version of the plan blocked on procedural grounds after suing the state, say the new effort goes too far. They say the cuts would put them in a bind because federal law requires them to screen and stabilize all patients, which may involve imaging and lab tests.
Moreover, because of ethical and liability concerns, hospitals often will have to treat some conditions the state considers nonurgent, such as urinary-tract infections, they say. The upshot, they say, is they will be forced to do unpaid work, and the costs ultimately could be shifted to private health-care payers.
“If you fall down the stairs, and your ankle is twice its normal size, and I X-ray it and it’s broken, they’ll pay me, and if I X-ray it and it’s not broken, they won’t,” said Stephen Anderson, president of the Washington chapter of the American College of Emergency Physicians.
The doctors say that patients, even though they face no bills themselves, may feel pressure to avoid coming to the hospital even if they urgently need care due in part to publicity about the state’s effort. They also argue that a number of diagnoses on the list are relatively serious conditions, such as candidal endocarditis, which involves fungal infection of the heart.
State officials say that for many situations, emergency-room staff can make a quick assessment and steer patients toward a lower-cost venue, like an urgent-care clinic, without extensive testing. For ankle pain, for example, doctors have evaluation guidelines, and “screening procedures don’t need to go on to X-rays” in all cases, said Jeff Thompson, chief medical officer of the state agency that oversees Medicaid, the Health Care Authority.
SOURCE: Wall Street Journal
This latest from The Heritage Foundation is worth considering. I am particularly interested in number four, that “Medicare’s drug benefit, the prototype for premium support, is not a success story.”
For a long time, opponents of markets in health care argued that no evidence shows that competition controls cost growth. This was before Congress enacted the Medicare drug benefit (Medicare Part D), which is designed as a premium support program for prescription drug coverage. At the time of enactment, opponents said it would never work. Some said it would fail because private plans would decline to participate without a guaranteed share of the market. Others said the beneficiaries would not sign up for the voluntary benefit because the competitive structure would be too complex to navigate. Still others said that program costs would explode without government-imposed price controls.
All these predictions were dead wrong. The program has achieved widespread coverage, scores of plans participate and compete against each other, and costs have grown at a very moderate pace.
Opponents have since resorted to trying to discredit the clear evidence that the competitive design of the drug benefit has worked incredibly well. Their arguments still do not hold water.
For instance, some have suggested that the moderate rise in drug costs in Medicare is unrelated to the benefit’s design, but simply a reflection of moderating spending growth systemwide. While cost growth has moderated across the board for prescription drugs, the slowdown has been more pronounced in Medicare. Today, the actuaries at the Centers for Medicare and Medicaid Services project that Medicare prescription drug spending over the first decade of the program will come in about 40 percent below the projections at the time of enactment. At the time of the drug benefit’s enactment, the actuaries issued projections of national health expenditures indicating that total retail spending on prescription drugs for the ensuing decade would reach about $3.5 trillion. In early 2010, the actuaries released new projections for the same 10-year period and put total drug spending at about $2.4 trillion–31 percent below the previous projection. Of course, these projections of total national spending on drugs also include prescription drug spending for the elderly. When the elderly, who account for about one-third of all spending, are removed from the estimate, the drop in projected spending for everyone else was less pronounced, only about 27 percent, well below the 40 percent reduction for the Medicare drug benefit.
Moreover, the real question is what precipitated the fall in projected systemwide spending. Obamacare apologists are constantly arguing that changes in Medicare have the potential to influence the entire health care market. If this is the case, Medicare Part D should also affect the entire market. For instance, Part D plans have aggressively pushed generic substitution as a way to lower premiums with considerable success. This trend among the elderly has also likely influenced how physicians and pharmacists behave with the rest of their patients.
SOURCE: The Heritage Foundation
South Carolina Republican Senator Jim DeMint in the Washington Examiner:
President Obama’s new mandate requiring all employers to purchase insurance coverage for their employees that includes abortion-inducing drugs, sterilization and contraception is an outrage, of course.
But what kind of outrage is it? Most of the public outcry has understandably centered around the mandate’s assault on religious liberty. The mandate forces every businessman or non-profit executive with religious objections to these products to buy them anyway, or pay a fine. The mandate is unconstitutional, for its violation of the First Amendment’s “free exercise” clause. It is also illegal, for its violation of the 1993 Religious Freedom Restoration Act.
Some of the outrage has been rightly directed specifically at the president, as both the mandate and the underlying law, ObamaCare, are his doing. Indeed, many pro-life citizens and members of Congress only supported ObamaCare’s passage because the president assured them that conscience rights would be protected. Thus the mandate is also a personal betrayal.
And some of the outrage is more practical. The Obama administration’s mathematically impossible assertion that abortion drugs, sterilization and contraception will somehow now simply be “free,” and thus not paid for by morally opposed insurance customers, suggests the president believes in magic.
All of these affronts to the rights and intelligence of the American people are enough to warrant the criticism the new mandate has invited. The violation of conscience rights is simultaneously unconstitutional, illegal, and ridiculous – any one of which are sufficient grounds for its immediate rescission. Yet, it is still not our true cause of concern. Ultimately, the character and ideology of the president, and the particular constitutional provisions being trampled by this one mandate are incidental, compared to the manifest threat to freedom intrinsic to ObamaCare itself.
SOURCE: Washington Examiner