The Senate health care bill takes an axe to Medicaid, but it also does a ton of damage to private insurance purchased on the exchanges. It does this in five ways:1
Tax subsidies are reduced right out of the gate by changing the benchmark used from “second-lowest cost silver plan” to “applicable median cost benchmark plan.” The “applicable” median plan has an actuarial value of 58 percent, compared to a minimum of 70 percent for a silver plan. This makes it much cheaper, and thus makes the benchmark subsidies lower.
Subsidies stop entirely at an income of about $42,000, compared to $48,000 currently.
The age band is increased from 3:1 to 5:1, which will increase premiums for older workers.
Obamacare’s essential health benefits are eliminated, which allows insurers to offer crappier insurance.
CSR subsidies are eliminated, which will substantially increase deductibles and copays for poor people.
The end result of all this is that subsidies will go down, coverage will get worse, and deductibles and copays will get higher. Older people will also see an increase in their premiums.
How much does all this add up to? Quite a bit, I’m sure, but we’ll have to wait for the CBO score to put a solid number on it.
1That’s how many I’ve discovered so far, anyway. There are probably other little gems hidden inside the bill that I haven’t caught. I’ll add them to the list when I hear about them.
UPDATE: My original post used the wrong excerpt of the bill to illustrate the elimination of essential benefits. It’s actually part of something called a “1332 waiver,” which allows states to apply for an exemption to some of Obamacare’s requirements. Among other things, this exemption can include essential benefits.
Two of the nation’s top intelligence officials told Special Counsel Robert Mueller’s team and Senate investigators, in separate meetings last week, that President Donald Trump suggested they say publicly there was no collusion between his campaign and the Russians, according to multiple sources.
Director of National Intelligence Dan Coats and National Security Agency Director Adm. Mike Rogers described their interactions with the President about the Russia investigation as odd and uncomfortable, but said they did not believe the President gave them orders to interfere, according to multiple sources familiar with their accounts.
This goes further than what Trump asked James Comey to do. He wanted Comey to publicly acknowledge that Trump himself wasn’t under investigation, which was at least true. But he apparently asked the intelligence chiefs to say that his campaign didn’t collude with the Russians, which is precisely what’s under investigation. That’s like asking the district attorney to publicly exonerate a murder suspect while police are still collecting evidence.
This may not have been an order to interfere with an ongoing investigation, but it was sure as hell inappropriate, as both Coats and Rogers obviously knew.
The Stanford Policing Project is a massive effort to collect data on police stops nationwide. It’s basically an attempt to find out whether police unfairly stop and search blacks and Hispanics at greater rates than whites, and they’ve now released the data they have so far.
What they find is that police stop Hispanics at about the same rate as whites, but stop blacks at a somewhat higher rate. Once stopped, both groups are ticketed, searched, and arrested at significantly higher rates than whites. But is this because of racial discrimination? The Stanford researchers used two different tests to find out.
First up is what’s called an “outcome test.” If, say, police search blacks at twice the rate of whites, but also find contraband at twice the rate, it suggests there’s no bias in who they choose to search. They’re using a roughly equal standard of suspicion for both. Here are the results of that test. Note that the dashed black line represents white searches, while the dashed red line is my eyeball guess at the difference for blacks and Hispanics:
Although police search blacks more often than they search whites, they find contraband at about the same rate. They appear to be using similar criteria for both. However, they find contraband at a lower rate in searches of Hispanic drivers. This suggests they’re using a tougher standard of suspicion against Hispanics.
But that’s not all. There’s also something called a “threshold test.” This is a more direct measure of the standard police use to search drivers they stop. Here are the results:
When this more sensitive test of outcomes is applied, it shows that the threshold for a search is lower for both blacks and Hispanics. Very roughly speaking, it appears that police need about a third less suspicion to search black and Hispanic drivers compared to white drivers.
I’m not sure how this compares to previous studies. My initial sense is that it’s less than I would have guessed. Overall, police do stop and search black and Hispanic drivers at unfairly high rates, but not at enormously higher rates—although it’s obvious that in certain communities the stop rate of minority drivers is far, far higher and the standard of suspicion is far, far lower than it is for white drivers:
We’ll certainly find out more about this in the future, since the Stanford researchers have placed their massive database online and made it available to anyone who wants to dive more deeply into the data. They also continue to collect information from police departments around the country.
I’ve just taken a quick look at the Senate health care bill. Neither preexisting nor continuous are anywhere in the bill. None of the section titles deal with preexisting conditions. It doesn’t appear that the Senate bill affects Obamacare’s protections for preexisting conditions at all. This is almost certainly because the Senate parliamentarian ruled that it had nothing to do with spending or outlays, and therefore couldn’t be included in a reconciliation bill.
The Senate bill also abolishes Obamacare’s individual mandate penalties. The net result is that if this bill passes, people will be free to go without insurance while they’re healthy, and then buy insurance if and when they get seriously ill. This is a disaster for the health insurance industry.
I don’t see how insurance companies can continue to dither at this point. The Senate bill would almost certainly be a huge financial blow to anyone who stays in the individual insurance business, and since the wording is driven by reconciliation rules it means that any final bill negotiated with the House would have to be the same. They can’t possibly accept this, can they?
Thirteen senators have labored mightily and brough forth a mouse. The Senate version of Obamacare repeal dropped today, and it’s pretty much the same as the House version:
It’s a huge tax cut for the rich.
It slashes Medicaid for the poor.
It allows states to cut back on essential benefits.
It abolishes the individual mandate.
Unlike the House bill, it keeps Obamacare’s income-based subsidies, which makes it a little more friendly to the working poor. However, it also cuts back on those subsidies.
I’ll have more details later as they become available. But the bottom line is pretty simple: it cuts a trillion dollars in taxes on the rich, which means it also cuts a trillion dollars in spending on the poor and working class. That’s simple arithmetic. As a result, it’s going to take health insurance away from a lot of people. It might be 23 million, like the House bill, or it might be slightly more or slightly less. The CBO will tell us in a few days. But whatever the answer, this is pretty much the same horrific bill that the House has already passed.
One other note: I don’t know yet how it handles pre-existing conditions. Thanks to reconciliation rules, I don’t think it can change them much. More on this later.
Watch Elizabeth Warren tear into her Republican colleagues in the Senate.
Prominent liberals didn’t oppose immigration a decade ago. Most acknowledged its benefits to America’s economy and culture. They supported a path to citizenship for the undocumented. Still, they routinely asserted that low-skilled immigrants depressed the wages of low-skilled American workers and strained America’s welfare state. And they were far more likely than liberals today are to acknowledge that, as Krugman put it, “immigration is an intensely painful topic … because it places basic principles in conflict.”
Today, little of that ambivalence remains. In 2008, the Democratic platform…referred three times to people entering the country “illegally.” The immigration section of the 2016 platform didn’t use the word illegal, or any variation of it, at all.
Why did the left move even further left on immigration? Beinart chalks it up to politics: Democrats began to believe they’d dominate elections forever if they could sew up the Hispanic vote, and that motivated them to become ever less compromising on issues important to their Hispanic base.
I suppose that’s part of it, but I’m surprised that Beinart doesn’t mention the obvious: there have been two big attempts in the past decade to pass a moderate, compromise immigration bill. The first time was in 2006, when both the House and Senate passed bills by large margins. But thanks to a backlash from talk radio and social conservatives, the bills never went to conference and the effort died.
The second time was in 2013. A bill passed the Senate by a large, bipartisan majority, but once again it hit a backlash from the tea-party wing of the Republican Party. John Boehner never allowed the bill to come up for a vote in the House, and the effort died again.
These two episodes have made it clear that compromise on immigration is pointless. That being the case, why bother playing Hamlet about the effect of illegal immigration on the wages of low-skilled natives? Especially since it’s largely a red herring anyway: it’s true that undocumented immigrants have an impact on the wages of low-skill native workers, but the effect is pretty moderate.
UPDATE: My initial post used the wrong numbers for the effect of immigration on wages. The estimates below, along with the chart, have been corrected. Thanks to Jason Richwine for pointing out the error.
Beinart repeatedly mentions the findings of a National Academies of Sciences report on immigration and the economy, but never mentions the precise number it comes up with: for low-skill native workers, an average of all studies suggests that an influx of even a million immigrants would only lower wages about 4.6 percent in the short run.1
The same is true for state and local spending. The NAS report estimates that new immigrants cost states a net of about $1,600 per year.2 This means that an influx of a million immigrants would create a net burden of $1.6 billion. That’s less than one-tenth of one percent of all state and local spending. It’s a rounding error.
These numbers are small, and are used mostly as intellectual cover by opponents of illegal immigration. They are not even remotely the reason for opposition to comprehensive immigration reform, which comes mostly from educated native whites whose wages and taxes aren’t impacted more than a hair by illegal immigration. The real reason is almost purely cultural: dislike of non-English speakers, an inchoate fear of crime, and a vague sense that white America is fading away. But hardly anyone wants to admit that these are the real terms of the argument.
Quite a bit of new research has been done over the past decade, and the result has been, if anything, a reduction in the perceived economic effects of illegal immigration. The wage effects are roughly zero overall, and even for low-skill workers are fairly small in the short run—and get smaller over time. The fiscal effects are even smaller, and become zero over the long run. Given all this, it’s hardly a surprise that supporters of comprehensive immigration reform no longer give economic arguments much attention.31This is the average of all studies in Table 5-2 that focus on high school dropouts. The mean result was a wage effect of -0.56 percent for an increase in the low-skill labor supply of 1 percent, which amounts to about 120,000 workers. That comes to -4.66 percent per million new immigrants.
2Table 9-6.
3This is not the post I intended to write when I started out. But after reading the NAS report, it’s the one I ended up with. Maybe tomorrow I’ll write the post I originally had in mind.
Looking for cheap eats in Orange County? My go-to burger place is Duke’s, on the corner of Fairview and Warner in Santa Ana. The burgers are actually so-so, but the fries range from good to fantastic, depending on how the cook is feeling. This adds a nice frisson of anticipation every time I go there. Will it be a good fries day or a great fries day? There’s only one way to find out!
NOTE: I have received no compensation from, nor do I hold any equity stake in, The Duke’s Corporation or any of its subsidiaries or affiliates. I just like their fries.
Brad DeLong points to the latest study of employment in Seattle as it steadily increases its minimum wage to $15 per hour. As usual, what we want to know is not what absolute employment in Seattle looks like, but how it compares to a similar city with a lower minimum wage.
But what is a “similar” city? The obvious candidates are cities just over the border from Seattle. But those aren’t perfect, since they might have different demographics. The latest and greatest technique, then, is to create a “synthetic” city made up of various other places similar to Seattle. If you do this properly, you get a control that tells you how Seattle is doing compared to how it would be doing with a lower minimum wage. Here’s the result for the food service industry, which is a heavy user of minimum wage labor:
As you can see, synthetic Seattle is identical to real Seattle prior to the minimum wage hike. That suggests it’s a pretty accurate composite. After the minimum wage hike, they stay pretty similar. In fact, real Seattle has slightly higher employment. The obvious conclusion is that raising its minimum wage hasn’t depressed employment in Seattle at all. DeLong comments:
Low-end labor markets simply do not appear to work like competitive markets. Rather, they work like markets in which employers have substantial market power—and thus minimum wage laws have the same efficiency benefits as does natural-monopoly rate regulation. Why low-end labor markets do not appear to work like competitive markets is a very interesting—and, I believe, unsolved—question. But it is in all likelihood a fact to deal with.
I’d add an obvious caveat to this: it’s possible that a modestly higher minimum wage has little effect when the economy is doing well. We don’t know yet how employment in Seattle will respond when the economy turns down.
This is a reference to yesterday’s election in Georgia, where Karen Handel ran endless ads linking Jon Ossoff to Pelosi. Here’s the thing. When you and I hear “Nancy Pelosi,” we think of this:
When Karen Handel’s voters hear “Nancy Pelosi,” they think of something like this:
Donald Trump’s son-in-law and chief Middle East adviser, Jared Kushner, has arrived in Israel and the occupied Palestinian Territories for a whistlestop visit aimed at restarting the long-dormant Israeli-Palestinian peace talks. Kushner’s carefully managed visit – conducted far from media scrutiny and lasting less than a day – comes amid scant indication of any imminent breakthrough between the two sides in a peace process that has been moribund since 2014.
Sure, whatever. I think Benjamin Netanyahu knows how to handle the likes of Kushner:
היום החלו העבודות בשטח, כפי שהבטחתי, להקמת היישוב החדש למתיישבי עמונה. אחרי עשרות שנים, יש לי הזכות להיות רה״מ שבונה יישוב חדש ביו״ש pic.twitter.com/sNDKlDzaCu
Israel’s prime minister, Benjamin Netanyahu, has announced the beginning of building work on the first new Jewish settlement in the occupied West Bank in 25 years, a day before a visit by Donald Trump’s son-in-law and envoy, Jared Kushner, aimed at reinvigorating the stalled peace process. The new settlement, known as Amichai, is being built to house about 300 hardline residents of the illegal West Bank Jewish outpost of Amona who were evicted by police in February after a court ruled their houses were on privately owned Palestinian land.
If you believe the timing is just coincidental, you might want to ask Joe Biden for his opinion.
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