2011 - %3, August

Self-Defeating Health Care Reform

| Tue Aug. 30, 2011 2:20 PM EDT

It seemed like a good idea at the time: a key piece of the Patient Protection and Affordable Care Act (ACA), known as the medical loss ratio (MLR), would require insurance companies to spend 80-85 percent of their customers' premium payments on medical costs.

If insurance companies spent more on quality care and less on administrative and overhead costs, the thinking went, patients would stand to benefit. Insurers that didn't meet the MLR would have to pay out rebates to customers.

But insurance agents argued that the MLR will put a crimp on business. And a recent analysis by the Government Accountability Office (GAO) seems to bear that out. The report finds that some insurers are lowering premiums or leaving rates unchanged to help them comply with the MLR rules. Most directly affected are insurance agents and brokers, The Hill explains:

Commissions to agents and brokers fall into the 15 or 20 percent of revenues that insurance companies can use for administrative expenses and profit. Brokers are worried that insurance companies will cut commissions and redirect that money toward their own bottom lines.

The GAO said "almost all" of the insurers it interviewed are cutting commissions. Those cuts enabled the plans to change their premiums.

While the MLR may push down premiums for customers, it could also limit their coverage choices, according to the GAO report:

One insurer said that they have considered exiting the individual market in some states in which they did not expect to meet the PPACA MLR requirements, while several other insurers said that the PPACA MLR requirements will not affect where they do business.

So even as health care becomes more affordable, consumers could potentially find a less diverse marketplace.

Some health policy analysts anticipate more conflicts like this as implementation of the ACA moves along (or doesn't). Micah Weinberg, a senior policy advisor at the Bay Are Council and a proponent of the ACA, points out that the law was crafted to help change the financial incentives of the health care industry—to, in essence, make it more profitable to cover sicker people. In theory, insurers that comply with the ACA's provisions and keep their customers healthy stand to reap major profits.

But if those same insurers exceed the MLR's 15% limit on administrative costs—a not-altogether-implausible result of expanding coverage—the ratio penalizes them. By fixing insurers to the MLR, in other words, the ACA penalizes insurers for following the law, according to Weinberg.

Health care reform represented "1,000 of the best ideas that people have had about health care policy over the past thirty years, all rolled into one big burrito," he says. "Though any of them would be fine in isolation, some of those are pretty directly contradictory...the medical loss ratio negates a lot of what we're trying to do through the bill."

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Is Flood Insurance Stupid?

| Tue Aug. 30, 2011 2:12 PM EDT

Matt Yglesias thinks that offering flood insurance to people who build houses in floodplains is idiotic:

The National Flood Insurance Program [NFIP] offers sub-market insurance rates to people who want to build houses in very flood prone areas. It’d be as if we had a special program to offer subsidized health insurance to people who refuse to wear seatbelts. Sounds nuts? And yet there it is.

Naturally, I was thinking about this over the past few days as Hurricane Irene was powering its way north, and I think the words we choose have an important effect on how we think about this stuff. If you call it "subsidized" flood insurance, it sounds like a boondoggle for morons. But what if you simply think of it as a safety net program for rare but unavoidable natural disasters? Then it doesn't sound so bad.

And that's probably the right way to think about it. There are a lot of floodplains in America, many of them in places that are economically important. If you think we should depopulate all of them, that's one thing. But assuming you don't think that, then there has to be some way to handle widespread flood damage when it occurs. Unfortunately, the private sector won't do it for the same reason the private sector won't offer individual health coverage to most people. Don Taylor explains:

Private companies could not compel the purchase of their product absent legislation, so would face tremendous adverse selection problems and/or no one buying their insurance. Into this situation stepped the federal government in 1968, and with a variety of modifications, it has remained the only flood insurance provider in the United States for the past four-plus decades.

NFIP can compel the purchase of insurance. If you live in a designated floodplain, you have an individual mandate to purchase flood insurance. And most of it isn't subsidized. Taylor again: "Around 80% of covered properties are assessed full-risk premiums based on Army Corps of Engineers models; the other 20% have subsidized premiums because the covered dwelling was built prior to the identification of SFHAs in 1974."

This doesn't eliminate the question of whether federal flood insurance is a good idea, whether any of it should be subsidized, or whether the public/private nature of NFIP is a good idea. But it does suggest that NFIP isn't flatly nuts. There are millions of dwellings currently insured for flood damage in over 20,000 towns and cities. There's just no way to take a wrecker to all those houses and raze all those towns. That means insurance has to be available to them, and the only entity capable of spreading the risk widely enough to make flood insurance efficient is the federal government. Thus NFIP.

No, We Didn't Shoot Down a Libyan Scud

| Tue Aug. 30, 2011 1:33 PM EDT

Remember a week ago, when some mainstream media outlets reported that NATO airplanes had intercepted and shot down a Qaddafi-launched Scud missile? Never happened, concludes Jeffrey Lewis, a professor at the Monterey Institute of International Studies and expert on nonproliferation issues. In a fantastic post over at his blog, Arms Control Wonk, Lewis explains 1) how shooting down a ballistic missile from a fighter jet is not possible—yet—and 2) how one unsourced rumor on Al Jazeera snowballed into a big journalistic game of Telephone:

Al Jazeera TV initially reported "A NATO warplane shot down a scud missile fired from Sirte, Muammar Gaddafi’s home city east of Tripoli."...Yasmine Saleh at Reuters picked up the Al Jazeera TV report...In a separate Reuters story, however, a different reporter named Phil Stewart got a "US defense official" on condition of anonymity to confirm "Forces loyal to Libyan leader Muammar Gaddafi fired a suspected scud missile." Stewart's story, however, does not mention any intercept. These two separate Reuters articles got tangled, leading lots of other reporters, like Molly Hennessy-Fiske at the Los Angeles Times, to claim that Reuters had confirmed the shoot-down...

Surely most of the blame must go to Al Jazeera for its bad reporting. But some of the blames also falls on the practice, widespread, of attributing a story to a news wire or a papers rather than the individual reporters.

A good cautionary tale, for security journalists and hawkish alarmists alike.

Only An Idiot Turns Down Free Money

| Tue Aug. 30, 2011 1:29 PM EDT

Some decisions are hard and some decisions are easy. When someone offers you a thousand dollars on the condition that you pay back $900 in seven years, that's one of the easy ones. But as Ezra Klein writes today, that's the position we're in right now. The federal government's long-term borrowing rate is -0.34%:

Here’s what this means: If we can think of any investments we can make over the next seven years that have a return of zero percent — yes, you read that right — or more, it would be foolish not to borrow this money and make them.

....Our infrastructure is crumbling, and we know we’ll have to rebuild it in the coming years. Why do it later, when it will cost us more and we very likely won’t have massive unemployment in the construction sector, as opposed to now, when the market will pay us to invest in our infrastructure and we have an unemployment crisis to address?

....Everyone knows we have worthwhile investments to make. The real reason we won’t take advantage of this remarkable opportunity is ideology: Republicans argue that deficits are the only thing that matters for our recovery — unless anyone attempts to close them through tax increases, and then tax rates are the only thing that matters for our recovery. And Democrats have stopped even attempting to challenge them.

It's true that this money still has to be paid back, and principal repayments are as real as interest costs. Still, we're being offered free money. Only an idiot would turn it down.

No Expertise Please, We're Republicans

| Tue Aug. 30, 2011 12:14 PM EDT

Jonah Goldberg isn't happy about all the attention some of us pay to so-called experts:

The cult of experts has acolytes in all ideological camps, but its most institutionalized following is on the left. The left needs to believe in the authority of experts because without that authority, almost no economic intervention can be justified. If you concede that you have no idea whether your remedy will work, it's going to be hard to sell it to the patient. Market-based ideologies don't have that problem because markets expect events in ways experts never can.

No president since Woodrow Wilson or Franklin Roosevelt has been more enamored with the cult of expertise than Obama. That none of his economic predictions have panned out is not surprising. What is surprising is that so many people are surprised.

What's remarkable about this column is that Goldberg isn't disparaging a particular kind of expertise or a particular kind of bias he finds endemic. His specific shots are limited to economists and climate scientists, but the column is basically a takedown of all expertise. (Which he conflates with prediction, but never mind.) In the conservative world Goldberg prefers, it's apparently much better to ignore the experts and just let events unfold.

Next week's column will undoubtedly be an attack on liberals for claiming that Republicans are anti-science — with no sense of irony at all. I can't wait.

Watch: National Guard Needs an Irene Rescue (Video)

| Tue Aug. 30, 2011 11:29 AM EDT

You'd like to think that the National Guard is there to help in a natural disaster. But not everyone who wears the uniform is cut out for such work. Via Mark Thompson at Time's Battleland blog, here's an incredible amateur video of what appear to be two New Jersey National Guard heavy cargo trucks crossing the flooded JFK Boulevard in Manville, N.J., getting swamped, bailing, and calling the state troopers for a bailout:

They look like they just might make it at first, plodding on with gusto in this suburban burg a half-hour south of New York. "How is that possible?" one bystander asks. A friend replies, "It's the Army, bro."

Except that it isn't possible. Note to Guard motor-pool trainers: Tell future recruits that, when in doubt, you don't plow your government-issue cargo truck through 10-foot floodwater. Especially if you can't swim.

The absolute highlight: After the four soldiers flee their flooded cabs and reach safety atop their vehicles—the soft laughter of civilian bystanders is audible in the foreground—one soaked service member carefully shouts out a number for the others to call. It's the dispatch line for the New Jersey State Police headquarters on Route 22 in Bridgewater. Hopefully, the troopers had access to a boat.

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Science and Human Life

| Tue Aug. 30, 2011 11:23 AM EDT

Pascal-Emmanuel Gobry on the great abortion question of our time:

The biological, moral and legal status of the unborn child isn't a question of metaphysics.

Whether life begins at conception isn't a matter of religious faith, it's a scientific question, and the answer isn't very hard. Of course, you can choose to disbelieve it, just like you can choose to not to believe that CO2 molecules redirect infrared variations.

Now, science isn't a moral guide. The fact that a fetus is a living human being doesn't necessarily entail that it should receive legal protection. But again, resolving this issue requires no recourse to metaphysics.

It requires asking what are the criteria for qualifying as a person endowed with rights.

I'm afraid there's some semantic hairsplitting going on here. Of course a fetus is life; so is a human egg, and so is a human sperm. That's never been at issue. But in the context of abortion, life is just shorthand for human life, and whether a blastocyst or a fetus qualifies as human is very much a religious and metaphysical question. It's certainly not a scientific one.

The list of criteria for being a person endowed with rights starts with being a human being. Those of us in the pro-choice camp don't believe that the mere presence of cellular machinery and a human genome makes one a human being. Those in the pro-life camp do — though I'd note that for many of them, their actions don't back up this professed belief.1 But whichever camp you're in, this isn't a question that science can answer. Pretending otherwise is little more than a tawdry rhetorical trick designed to give your arguments an authority they haven't earned.

1If you really, truly believe that a fertilized egg is a human life, your opposition to abortion will be absolute with the sole exception of abortion that's necessary to save a mother's life. You won't support exceptions for rape and incest any more than you'd allow the killing of a child who was the product of rape or incest. You'll also oppose fertility treatments, which routinely create and destroy more fertilized eggs than they use.

Some pro-lifers do indeed feel this way. But many don't. At a visceral level, these semi-opposers obviously have an aversion to abortion that stems from some source other than a belief that human life begins at conception.

Attack of the Monsanto Superinsects

| Tue Aug. 30, 2011 6:04 AM EDT

Over the past decade and a half, as Monsanto built up its globe-spanning, multi-billion-dollar genetically modified seed empire, it made two major pitches to farmers.

The first involved weeds. Leave the weed management to us, Monsanto insisted. We've engineered plants that can survive our very own herbicide. Just pay up for our patented, premium-priced seeds, spray your fields with our Roundup herbicide whenever the fancy strikes, and—voilà!—no more weeds.

The second involved crop-eating insects. We've isolated the toxic gene of a commonly used bacterial pesticide called Bt, Monsanto announced, and spliced it directly into crops. Along with corn and soy, you will literally be growing the pesticide that protects them. Plant our seeds, and watch your crops thrive while their pests shrivel and die.

Are Virginia's New Abortion Rules the Worst Yet?

| Tue Aug. 30, 2011 6:00 AM EDT

On Friday evening, Virginia's Department of Health issued a strict new set of rules for abortion clinics—and women's health advocates fear that facilities that can't comply could be shuttered. 

The regulations require Virginia's 22 clinics to meet strict new physical standards; pre-op rooms, for example, must measure at least 80 square feet, and operating rooms must measure 250 square feet. Hallways must be at least five feet wide. The requirements are based on the state's 2010 guidelines for new outpatient surgical facilities.

Tarina Keene, executive director of NARAL Pro-Choice Virginia, told Mother Jones on Monday that the new rules may actually be the most strict regulations in the United States. "It would be challenging for the majority of our facilities to continue offering first-trimester care," Keene said. "These are designed to really cease first-trimester abortion services in the Commonwealth of Virginia."

The president of Washington, D.C.'s Planned Parenthood chapter has already told the Washington Post that she doesn't believe that a clinic in Falls Church, Virginia, will be able to meet all of those requirements. Keene said that many other clinics in the state won't be able to meet them, either—which she thinks is exactly the reason the Department of Health wrote them that way. "There's no doubt in my mind that this is an attack on Roe," said Keene. "You can ban abortion by making it inaccessible."

Virginia isn't the first to release a set of rules like this. Abortion rights advocates often refer to them as TRAP ("targeted regulation of abortion providers") laws. Kansas got a got a good deal of attention in June when it released new rules that would have shut down all but one clinic in the state. A judge blocked those rules from taking effect, but the court battle over them continues.

Abortion rights advocates argue that the rules aren't necessary; first-trimester abortions can and are performed safely in doctors' offices like other outpatient services (for example, vasectomies). "These laws have nothing to do with improving patient outcomes and everything to do with making it more difficult to provide abortion services," said Elizabeth Nash, a public policy associate with the Guttmacher Institute.

The Virginia rules come after the state legislature passed a law back in February that reclassified abortion clinics as hospitals. The law directed the state board of health to establish new rules specifically for abortion clinics, and because it was passed as "emergency" legislation, the state was expected to have them put in place within 280 days.

The rules released on Friday are the draft version; the board is slated to vote on the rules at a public meeting on September 15. After that, Gov. Bob McDonnell must sign them into law, which he is expected to do before the end of the year. Since these are emergency regulations, the board would then have to draft the permanent regulations, a process expected to take 12 to 18 months. Abortion rights advocates worry, though, that the emergency regulations could force clinics to shut down in the interim.

We're Still at War: Photo of the Day for August 30, 2011

Tue Aug. 30, 2011 5:57 AM EDT

Soldiers of the 713th Combat Engineer Company (Sapper), headquartered in Valparaiso, conduct route clearance, scanning for roadside bombs, board a Mine Resistant Ambush Protected Vehicle during a combat training exercise at Camp Atterbury Joint Maneuver Training Center in central Indiana, Aug. 22, 2011. The 713th is training for a deployment to Afghanistan scheduled later this year. Indiana National Guard photo by Sgt. John Crosby.