Wonkbook: Obamacare’s early checkup

May 28

Welcome to Wonkbook, Wonkblog’s morning policy news primer by Puneet Kollipara. To subscribe by e-mail, click here. Send comments, criticism or ideas to Wonkbook at Washpost dot com. To read more by the Wonkblog team, click here.


(Photo by Jessica Rinaldi/Reuters)

Wonkbook’s Number of the Day: 20.2 percent. That's the percentage of U.S. consumers who think their incomes will grow in the next six months, the highest since 2007.

Wonkbook’s Chart of the Day: For the first time in 50 years, health costs are barely growing.

Wonkbook's Top 5 Stories: (1) Obamacare's early checkup; (2) Silicon Valley can't win; (3) is college worth it?; (4) still the status quo on gun control; and (5) minimum wage fight goes to minimum-sized jurisdictions.

1. Top story: The Obamacare exchanges' full checkup may need to wait a bit longer

It's still way too early to calculate the exchanges' success. "Over $7 billion of taxpayer money went into creating the health law’s insurance marketplaces, and about 8 million people signed up. But some experts say it's actually still too early to declare these markets a success or failure. So, what can we say about what the public is getting for its money? The marketplaces, including Healthcare.gov and 14 state-run exchanges, are long-term investments. They have to work in the short-term, but also be desirable places for buyers and sellers to get together for years going forward." Eric Whitney in Kaiser Health News.

Interesting analogy: It's like a health care flea market. Eric Whitney in Kaiser Health News and NPR.

Why a major test for Obamacare premiums might wait until 2017. "His projections, shared first with the Washington Post, find an increase in individual plan enrollment in 2015 and 2016, before sharply dropping off in 2017 and then slowly decreasing below 2015 levels by 2024. At the same time, he projects a steady decrease in employer coverage that will be steeper than the gains in Medicaid enrollment, resulting in a greater number of uninsured 10 years out....He cites two major factors: the scheduled expiration of ACA programs meant to blunt major rate hikes and the phasing in of new health plan requirements as old health plans come to an end." Jason Millman in The Washington Post.

Explainers:

21 things you never knew Obamacare did. Adrianna McIntyre in Vox.

The White House is trumpeting slower growth in health costs. "The White House officials cited both public and private data to argue that cost growth is happening more slowly. The price of healthcare goods and services rose just 0.9 percent in the last year, the slowest rate of increase in the last 50 years, according to the federal Bureau of Economic Analysis. Meanwhile, Automatic Data Processing (ADP), a human resources firm, reported that premiums for large-employer health plans grew 1.7 percent from 2013 to 2014, compared to 3.1 percent in the previous year. Economists generally attribute slower healthcare cost growth to the dragging economy, though some argue ObamaCare is playing a role." Elise Viebeck in The Hill.

Chart: For the first time in 50 years, health costs are barely growing. Sarah Kliff in Vox.

Sticker shock unlikely for most in 2015. "As health plans begin next month to submit their 2015 rate increases...it’s unlikely most of these individuals will have sticker shock, several reports and statements from health insurance executives indicate. The Urban Institute...just last week threw cold water on the prospect of 'skyrocketing premiums.'...Another report out this week indicated health insurance companies are under pressure to keep the rates low particularly given the most popular choice of individuals purchasing coverage on exchanges was the so-called silver plans, which generally cover 70 percent of medical care costs." Bruce Japsen in Forbes.

Poll: But Obamacare still unpopular. Mario Trujillo in The Hill.

Hospitals do want poor people to buy exchange insurance. "Hospital systems around the country have started scaling back financial assistance for lower- and middle-income people without health insurance, hoping to push them into signing up for coverage through the new online marketplaces created under the Affordable Care Act. The trend is troubling to advocates for the uninsured, who say raising fees will inevitably cause some to skip care rather than buy insurance that they consider unaffordable. Though the number of hospitals tightening access to free or discounted care appears limited so far, many say they are considering doing so, and experts predict that stricter policies will become increasingly common." Abby Goodnough in The New York Times.

But the IRS doesn't want your employer to dump you onto the exchanges. "Many employers had thought they could shift health costs to the government by sending their employees to a health insurance exchange with a tax-free contribution of cash to help pay premiums, but the Obama administration has squelched the idea in a new ruling. Such arrangements do not satisfy the health care law, the administration said, and employers may be subject to a tax penalty of $100 a day — or $36,500 a year — for each employee who goes into the individual marketplace. The ruling this month, by the Internal Revenue Service, blocks any wholesale move by employers to dump employees into the exchanges." Robert Pear in The New York Times.

Insurers that were sitting out of the exchanges now want in. "In a sign of the growing potential under the federal health care law, several insurers that have been sitting on the sidelines say they will sell policies on the new exchanges in the coming year, and others plan to expand their offerings to more states. 'Insurers continue to see this as a good business opportunity,' said Larry Levitt, a health policy expert at the Kaiser Family Foundation. 'They see it as an attractive market, with enrollment expected to ramp up in the second year.'...Estimates put next year’s enrollment around 13 million." Reed Abelson in The New York Times.

How enrollees are using their coverage. "It's pretty clear that the uninsured rate has dropped since Obamacare's coverage expansion took effect, though there are still questions about by how much and where new coverage is coming from. Just as importantly, though, there are questions about how people are using their new coverage. We still don't have a clear answer on that yet, but some new data this week suggests that primary care doctors haven't been overly burdened with newly insured patients since Affordable Care Act coverage took effect in January." Jason Millman in The Washington Post.

How's the small-business exchange working? "Six months have passed since the Obama administration announced that the launch of the health care law’s online insurance marketplace for small businesses would be delayed until November, more than a year after its originally scheduled start. So, how is the work coming? Six months from now, can small employers across the country expect to finally sign on to a fully functioning health insurance exchange? So far, the answer seems to be yes — with an asterisk." J.D. Harrison in The Washington Post.

Other health care reads:

New costs from health law snarl union contract talks. Kris Maher and Melanie Trottman in The Wall Street Journal.

Could Obamacare help close the gender wage gap? Clara Ritger in National Journal.

Explainer: Why the new health chief is sailing to confirmation. Elise Viebeck in The Hill.

Veterans with 30-day waits will have private options, VA says. Richard Simon in the Los Angeles Times.

Wisconsin abortion providers challenge admitting-privileges law. Associated Press.

KLEIN: Another scandal in American health care. The investigation is ongoing, but as of now, it looks like overwhelmed VA hospitals shunted some veterans onto secret wait lists and delayed their care (read Vox's explainer here). The revelations are correctly being treated by both parties as a national scandal....It's a relief to see so much outrage over poor access to government-provided health-care benefits. But it would be nice to see bipartisan outrage extend to another unfolding health-care scandal in this country: the 4.8 million people living under the poverty line who are eligible for Medicaid but won't get it because their state has refused Obamacare's Medicaid expansion." Ezra Klein in Vox.

FRAKT: Health cost sharing works, up to a point. "My colleague Aaron Carroll wrote last week that directly charging consumers for part of their health care costs (the practice known as cost-sharing) can harm the health of poorer or sicker people. But for the rest of us, it seems to reduce spending without harming health. This is the basic conclusion of a famous 1970s experiment funded by the RAND Corporation that randomly assigned families to different levels of responsibility for medical costs. But would even more cost-sharing lead to savings as significant as those already seen? Recent studies suggest not." Austin Frakt in The New York Times.

Top opinion

SILVER: Why you should be skeptical of both Piketty and his critics. "It can be tempting to assume that the information contained in a spreadsheet or a database is pure or clean or beyond reproach. But this is almost never the case....This is another way of saying that almost all data is subject to human error. It’s important both to reduce the error rate and to develop methods that are more robust to the presence of error. And it’s important to keep expectations in check....A lot of apparently damning critiques prove to be less so when you assume from the start that data analysis and empirical research, like other forms of intellectual endeavor, are not free from human error." Nate Silver in FiveThirtyEight.

McARDLE: Why Obama can't fix the VA scandal. "I believe the administration’s supporters when they say that this scandal was a long time in the making, and that no one president can be entirely to blame. Fundamentally, this points to the difficulty of reforming any institution, and especially a government agency. Yet it also points to one of the cardinal weaknesses of Obama’s presidency....This is not something that could have been averted by caring harder or being really smart and committed to good government — which is what Obama seems to have assumed. That’s not his fault. A better understanding of how hard crucial parts were likely to be might have resulted in a more modest reform with better results." Megan McArdle in Bloomberg View.

CASSIDY: Parsing Piketty — is wealth inequality rising in the U.S.? "After parsing and redoing some of Piketty’s numbers, Giles says, 'there is little evidence in Prof Piketty’s original sources to bear out the thesis that an increasing share of total wealth is held by the few.'...In the United States, he suggests, inequality of wealth has stayed more or less constant....The broad pattern from nearly all of the studies is one of rising wealth inequality, which is the story that Piketty tells. Some of the details are still hazy, it should be conceded. But, as far as the United States goes, the concerns that Giles raises don’t knock down the Piketty thesis." John Cassidy in The New Yorker.

PETHOKOUKIS: What conservatives don't understand about the modern U.S. economy. "A new manifesto making the rounds in conservative circles is as much a time-travel tale as the new comic-book movie, X-Men: Days of Future Past. Activists hope that embracing supposedly timeless economic policies, such as tax cuts and balanced budgets, will unite and then ignite the Republican Party. Reagan-era nostalgia, unfortunately, is not much of a superpower. Without recognition that new economic challenges require new thinking and new solutions, this tired GOP sequel is unlikely to attract much of an audience." James Pethokoukis in The Week.

VANCE: The missing case against reparations. "I must admit that when I picked up Ta-Nehisi Coates’s piece on reparations, I expected to read a defense of reparations. Reparations, for the uninitiated, are payments made to compensate black Americans for slavery and related crimes. West Germany paid some form of reparations to Jewish victims of the Holocaust, and Coates wants America to implement something similar today. Yet Coates scarcely reaches the question of reparations in his long, emotionally harrowing essay....His essay, of course, still has value as a reminder of the lingering effects of discrimination." J.D. Vance in National Review.

Animals interlude: Otters play the keyboard at the national zoo.

2. Why can't Silicon Valley win in Washington?

Privacy advocates gird up for fight of the summer on NSA reform. "Civil libertarians who say the House didn’t go far enough to reform the National Security Agency are mounting a renewed effort in the Senate to shift momentum in their direction. After compromises in the House bill, the NSA’s critics are buckling down for a months-long fight in the Senate that they hope will lead to an end to government snooping on Americans....One factor working in the reformers’ favor is the strong support of Senate Judiciary Chairman Patrick Leahy (D-Vt.)....The fact that Leahy controls the committee gavel means he should be able to guide the bill through when it comes up for discussion next month." Julian Hattem in The Hill.

Video: So, this is what the end of the (net-neutrality) world looks like. Kaveh Waddell in National Journal.

Immigration reform is still languishing. "A growing chorus of immigration groups is sending the same message to President Barack Obama: No executive action until August at the earliest, to allow Congress time to act. The coalition of influential advocacy organizations — spanning from religious groups to labor — issued a statement Tuesday that urged the House Republican leadership to act on immigration during a 'real window of opportunity' from now until August. During that time, Obama should hold off on announcing any changes to how his administration enforces immigration laws, the groups said." Seung Min Kim in Politico.

Ask, and you shall receive. Deportation review delayed. Seung Min Kim in Politico.

New front in war on patent trolls in absence of Congress. "Advocates are scrambling for new ways to crack down on 'patent trolls,' the companies that profit by threatening meritless patent-infringement lawsuits, after hopes for a comprehensive reform bill expired in the Senate. One idea gaining traction in both chambers is going after 'demand letters,' which are the often-vague letters that patent trolls send in bulk, threatening to sue for infringement, in the hopes of getting recipients to pay costly licensing fees to avoid going to court." Kate Tummarello in The Hill.

From NSA to patents to immigration, Silicon Valley just can't win. "Silicon Valley just can’t win in Washington. A surveillance reform bill easily survived a House vote [last] week, but it barely resembles the measure that Google, Facebook and others once touted as a way to restore Americans’ trust. Quick changes to patent law now seem impossible after the Senate shelved the issue days earlier. And immigration reform and the industry’s pursuit of more high-skilled visas long ago had devolved into a war of words between congressional Democrats and Republicans." Tony Romm in Politico.

Lobbying and policy change explain it. "What Silicon Valley is learning is that even though money talks in Washington, it's incredibly difficult to shout down the din of status quo bias. In other words, if you want to make change happen in congress you're probably going to lose — no matter how much you spend....On most issues there's at least some meaningful money on both sides — patent reform, for example, pits technology companies against pharmaceutical companies and some lawyers — and one bloc of businesses trying to outspend another doesn't work very well." Matthew Yglesias in Vox.

Data brokers lack transparency, FTC says. "Data brokers lack transparency and Congress should consider laws giving consumers more control over personal information, the Federal Trade Commission said after studying companies including Acxiom Corp. and CoreLogic Inc. Data brokers collect and share 'vast amounts' of information, typically behind the scenes without consumer knowledge, the U.S. agency said in a report yesterday. Some store data indefinitely, creating potential security risks, the FTC said." Todd Shields and David McLaughlin in Bloomberg.

Primary source: The FTC's report.

Other tech reads:

Tech firms press Congress to tighten privacy laws. Elena Schneider in The New York Times.

Science interlude: Photos of Obama looking fascinated by kids' science projects.

3. With all that student debt, is college worth it?

Is higher education worth it? New data say, clearly. "Yes, college is worth it, and it’s not even close. For all the struggles that many young college graduates face, a four-year degree has probably never been more valuable. The pay gap between college graduates and everyone else reached a record high last year, according to the new data, which is based on an analysis of Labor Department statistics by the Economic Policy Institute in Washington. Americans with four-year college degrees made 98 percent more an hour on average in 2013 than people without a degree. That’s up from 89 percent five years earlier, 85 percent a decade earlier and 64 percent in the early 1980s." David Leonhardt in The New York Times.

Once you tackle all that student debt, that is. "Figuring out the best way to pay for college can be overwhelming even for the savviest families. A new survey suggest many people have no idea where to start. Almost half (48 percent) of the people surveyed by the Credit Union National Association, a national trade association for credit unions, said they don't know how many loans their children will need to take out to pay for college. About a quarter of families were also clueless on the total dollar amount their children would need to borrow over the years....And here's the reality: the average college student graduating this year will walk away with $26,500 in student loan debt." Jonnelle Marte in The Washington Post.

The economic ripple effects of student debt. "What are the roads not taken because students must take out loans for college? A collection of studies shows that the burden of student debt may well cause people to make different decisions than they would otherwise — affecting not just individual lives but also the entire economy. For one thing, it appears that people with student loans are less likely to start businesses of their own. A new study has found that areas with higher relative growth in student debt show lower growth in the formation of small businesses (in this case, firms with one to four employees)." Phyllis Korkki in The New York Times.

Explainer: 4 ways to reduce the financial bite of rising student loan rates. Reyna Gobel in Forbes.

Not so fast — is college really worth it? "I don't see how this kind of data can possibly support the wide-ranging conclusions Leonhardt draws about whether or not college is 'worth it.' After all, this isn't the outcome of a randomized trial. To understand whether college is 'worth it' — or, more precisely, which colleges are worth it to which students — we would need some much more fine-grained data. How do college graduates fare in the labor market compared to people who were otherwise similar at age 18 in terms of SAT scores, non-cognitive skills, parental socioeconomic status, etc?" Matthew Yglesias in Vox.

Background reading: The tuition is too damn high. Dylan Matthews in The Washington Post.

Other education reads:

Title IX: The new transparency fight. Josh Gerstein in Politico.

Senators see rape prosecutions in combating campus sexual assaults. John Lauerman in Bloomberg.

Proposed rule would hurt poor students, for-profit colleges say. Elvina Nawaguna in Reuters.

The college graduation rate is flawed — and hard to fix. Libby Nelson in Vox.

Mass collection of student data raises privacy concerns. Anya Kamenetz in NPR.

Baby interlude: Dog is jealous of this baby.

4. Why the latest mass shooting also won't result in major gun-law changes

The status quo reigns supreme in Congress. "After the shooting at University of California, Santa Barbara on Friday, a rampage that left six students dead from gun or knife wounds, many parents and politicians found the federal government's past responses to similar tragedies to be one of the culprits....The statements felt familiar — we've heard similar exhortations for Congress to pass new gun legislation after many mass shootings. However, we also hear arguments for loosening gun restrictions, arguments that have proved far more successful. Since 13 people were killed at Columbine High School in 1999, Congress has passed one major law strengthening gun control in the aftermath of a mass shooting." Jaime Fuller in The Washington Post.

Explainer: Elliot Rodger's shooting spree: what happened. Philip Rucker in The Washington Post.

Richard Martinez’s grief won't change the gun debate. It just won't. "By now, you've likely seen or read the angry denunciations of Congress and the gun industry by Richard Martinez, whose son, Chris, was killed in a shooting in Isla Vista, Calif., over the Memorial Day weekend....His grief and anger is hard to look away from....But it almost certainly won't be that galvanizing moment. In the same way that the attempted assassination of then-Arizona Rep. Gabrielle Giffords wasn't. In the same way the deaths of 20 children in Newtown wasn't. (In fact, since Newtown, more states have loosened gun laws than have tightened them.)" Chris Cillizza in The Washington Post.

Charts: Mass shootings on campuses are getting more common, and more deadly. Libby Nelson in Vox.

Surgeon general pick still blocked by NRA over his gun-violence views. "The White House’s pick to serve as the nation’s top doctor has been stalled since February because the National Rifle Association opposes him. There’s no sign of movement and no clear strategy to get a Senate vote on Vivek Murthy as surgeon general....He’s strongly backed by several health constituencies, such as public health advocates, research organizations and physician groups. Yet the NRA, as well as some Republicans, say past Murthy statements in support of gun control indicate that he could use the surgeon general job to promote anti-gun policies. Murthy has stated that he would not focus on gun violence in the position." Jennifer Haberkorn in Politico.

Don't conflate mental health intervention and violence provention. "The question of whether law enforcement and mental health professionals hadn’t failed in their duty to their communities by failing to forcibly detain those who would go on to commit mass shootings has been raised after most recent episodes of such violence." Jeff Deeney in The Atlantic.

Other legal reads:

Divided high court strikes down IQ rules in Fla. death penalty case. Nina Totenberg in NPR.

NBA interlude: An NBA playoffs flash mob.

5. All (minimum-wage) politics are local

Minimum-wage fights are moving to the state and local levels. "Congressional action to raise the minimum wage may have stalled, but a grass-roots campaign to lift basic pay is picking up steam at city halls and state legislatures....Cities nationwide, including San Diego and Seattle, are considering passing ordinances or facing ballot measures that would raise the minimum wage to $10 to $15 an hour, well above the federal rate of $7.25. The efforts mark an important strategic shift in the campaign to raise the minimum wage. Though efforts in Congress to boost the federal minimum wage to $10.10 haven't died, they have faced fierce lobbying by opponents." Ricardo Lopez in the Los Angeles Times.

Michigan raises its minimum wage in bipartisan move. "Michigan lawmakers on Tuesday voted to raise the minimum wage to $9.25 per hour by 2018, joining other U.S. states and municipalities that have considered increases in the minimum wage this year....In Michigan, the approval of the minimum-wage hike came a day before a deadline for a group to turn in signatures to put a ballot proposal before voters to raise the minimum wage to $10.10 per hour by 2017 and index wage increases to inflation." Reuters.

One slight problem with Democrats minimum-wage strategy. "Democrats trying to win back the U.S. House of Representatives this year, or at least increase the number of seats they hold, have seized on the issue of income inequality. Party leaders have worked to keep the widening gap between rich and poor in the news since President Obama made it the centerpiece of his State of the Union address in January. There’s just one drawback to this strategy: Income inequality is greater in Democratic congressional districts than in those held by Republicans." Michael C. Bender, Joshua Green, Wei Lu, and Eric Chemi in Bloomberg Businessweek.

Other economic/financial reads:

U.S. factory, confidence data boost growth prospects. Lucia Mutikani in Reuters.

IMF's Lagarde says banking reforms slowed by fierce industry pushback. Huw Jones in Reuters.

SEC vows more use of little-used tool. Peter J. Henning in The New York Times.

Baseball interlude: 50 Cent's terrible first pitch.

Wonkblog roundup

How Wal-Mart and Google could steal young customers from traditional banks. Danielle Douglas.

Why the major test for Obamacare premiums might wait until 2017. Jason Millman.

The frustrating inadequacy of numbers about violence against women. Emily Badger.

Inequality and political polarization have been rising in tandem for three decades. Christopher Ingraham.

How to fix our broken system of ranking colleges. Jonnelle Marte.

Colleges are getting millions to steer students toward certain banks. Danielle Douglas.

Et Cetera

New safety requirements set for Keystone XL pipelines. Joan Lowy in the Associated Press.

First lady says it's time to fight the fight for school lunch program. Tom Hamburger in The Washington Post.

Environmentalists lose challenge in EPA acid-rain rulemaking case. Andrew Zajac in Bloomberg.

Got tips, additions, or comments? E-mail us.

Wonkbook is produced with help from Michelle Williams and Ryan McCarthy.

Comments
Show Comments
Most Read Business
Next Story
Danielle Douglas-Gabriel · May 27