Wonkbook: How insurers see Obamacare

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(Photo by Daniel Acker/Bloomberg)

Wonkbook's Numbers of the Day: $20 million. That's how much Americans for Prosperity has spent on an anti-Obamacare ad buy.

Wonkbook's Charts of the Day: 40 that explain the world.

Wonkbook's Top 5 Stories: (1) Obamacare marches on; (2) House Republicans are ready to reopen the immigration conversation; (3) House discovers it doesn't have to be that way; (4) Obama taps Congress for NSA ideas; and (5) expect more tapering.

1. Top story: Insurers and Obamacare

Health insurers think Obamacare is going to be fine. "'Our view is we’re still in the early innings,' Cigna chief executive David Cordani told a standing-room only crowd of investors at the J.P. Morgan Healthcare Conference. “The first couple of years will be choppy, and we’re learning whether it can find its legs.” Health insurers arguably have the biggest financial stake in the exchanges’ success. They are the ones who are selling products on the new marketplaces, and who would have to bear the costs of covering a sicker-than-expected exchange population." Sarah Kliff in The Washington Post.

Interview: ‘Over time, this will work out’: Wellpoint CEO Joe Swedish on ObamacareSarah Kliff in The Washington Post.

@sarahkliff: Here's why insurers like Obamacare: Aetna projects, if it can get 1M exchange members, it will generate $3 billion in revenue. #jpm14

Reforms proposed for chronically ill in Medicare. "A bipartisan group of lawmakers is proposing a series of reforms to improve how Medicare treats its sickest and most expensive patients. New legislation from Sens. Ron Wyden (D-Ore.) and Johnny Isakson (R-Ga.) and Reps. Erik Paulsen (R-Minn.) and Peter Welch (D-Vt.) would attempt to improve care for chronically ill seniors by revamping how their providers are paid. Under the bill, voluntary "Better Care" plans and practices would specialize in treating patients with multiple chronic conditions. In return, they would receive specially tailored payments that reward good outcomes." Elise Viebeck in The Hill.

Obamacare sees the age goalposts move. "White House officials consistently—and accurately—argue that the most important metric for Obamacare's success this year is the mix of young and old enrollees. But they're backing away from their own goals for that mix. Getting young people into the system is critical to holding down premiums, and therefore to keeping each state's insurance market stable. Administration officials previously said their target was for young adults to make up about 38 percent of Obamacare enrollees. Now that standard is down to about 30 percent. Or maybe even 24 percent—where the mix stands now." Sam Baker in NationalJournal.

@jeffzeleny: Senate Dems meet with POTUS at 5. There's a lot on their minds, above all: Can you lend a hand on Obamacare defense? We're taking on water.

Bare-bones survive through quirk in law. "AlliedBarton Security Services, a closely held firm that employs more than 63,000 people nationwide, has offered a modestly updated version of its so-called mini-med plan to employees this year and it intends to do so in 2015 as well, even though the cheap coverage fails to meet requirements of the Affordable Care Act...What makes it possible under the health law: As long as companies offer at least one plan that complies with the law's requirements, they are free to keep offering ones that don't. That has enabled companies to find ways to comply with the law while minimizing increases in their health-care costs. The result has been an increase in lean insurance offerings such as "fixed-indemnity" plans...Such plans, which might cost an employee just $80 a month in premiums, generally pay a set amount for specific medical services—$70 for a doctor's visit, for example, or $20 for a prescription—without regard to the underlying cost. They limit the amount of payments or care available in a year, and can exclude entire areas of coverage, such as mental-health care. When catastrophic injury or illness strikes, they often pay little." Theo Francis in The Wall Street Journal.

Doug Holtz-Eakin is starting a new health-care think tank. "Republican policy analyst Douglas Holtz-Eakin thinks the time will come when his party will stop trying to repeal the Affordable Care Act and Democrats will start trying to fix it. When that day arrives, both sides will need help charting a path through the health policy wilderness. So Holtz-Eakin, a former director of the nonpartisan Congressional Budget Office, this week opened the virtual doors of a new think tank known as the Center for Health and Economy. Unlike your average think tank, the center is not dedicated to developing its own policy prescriptions. Instead, it is intended to help lawmakers, members of the media and the public assess ideas put forward by others." Lori Montgomery in The Washington Post.

@SuzyKhimm: Cancelled plans to help mom sign up for Obamacare. Can't fix a typo on the form to finish app. Now she'll prolly be uninsured Feb 1. #argh

Democrats are being wildly outspent on Obamacare political ads. "Americans for Prosperity, a group financed in part by the billionaire Koch brothers, has spent an estimated $20 million on television advertising that calls out House and Senate Democrats by name for their support of the Affordable Care Act. The unusually aggressive early run of television ads, which has been supplemented by other conservative initiatives, has gone largely unanswered, and strategists in both parties agree it is taking a toll on its targets." Carl Hulse in The New York Times.

Judge upholds health law subsidies. "A federal judge in the District rejected a lawsuit Wednesday that would have gutted President Obama’s health-care law by preventing the government from giving out subsidies to people buying health insurance in dozens of states...The plaintiffs, three private employers and four individual taxpayers, had argued that people were only entitled to the subsidies if they lived in states that opted to set up their own insurance exchanges. Thirty-four states did not, leaving the task to the federal government. They cited language in the law that said the subsidies would be available to those “enrolled through an Exchange established by the State.”" Sandhya Somashekhar in The Washington Post.

A resounding victory for the administration in the exchange litigation. "Friedman also points out that the statutory text has to be construed in context. Part of that context is the language of section 1321 itself. The judge notes that, when a state fails to establish a workable exchange, the ACA instructs the Secretary to establish “such exchange.” That little word “such” clarifies that an exchange established by the federal government is a 1311 exchange. “In other words,” Friedman says, “if a state will not or cannot establish its own Exchange, the ACA directs the Secretary of HHS to step in and create ‘such Exchange’—that is, by definition under the statute, ‘an American Health Benefit Exchange established under [section 1311].’” To reinforce the point, Friedman walks through provisions of the ACA that would make little sense if federal tax credits were unavailable on the exchanges." Nicholas Bagley for "The Incidental Economist" blog.

@brianbeutler: "Are you stupid, or merely dishonest?" -federal judge to Obamacare haters, basically

Context on this decision: "The effort to kill Obamacare through the courts didn't end when Chief Justice John Roberts declared the law constitutional in June of 2012. More recently, Cato's Michael Cannon has been crisscrossing the nation arguing that a plain reading of the ACA statute suggests that the IRS can't offer subsidies through the federal exchanges. If the courts agree with him, then more than 30 states would see their subsidies choked off unless and until they built their own insurance exchange. Legal scholars have been skeptical of this lawsuit, but after the unexpectedly strong initial challenge to Obamacare, no one has wanted to write it off." Ezra Klein in The Washington Post.

Music recommendations interlude: Andrew Bird, "Imitosis."

Top opinion

BERNSTEIN: The wrong guidepost on unemployment. "[C]ontinuing labor market weakness has led millions of potential workers to leave the labor force and thus not be counted in the unemployment rate. (You’re counted only if you’re looking for work.)  There’s some disagreement about how much of the labor force decline is due to weak demand — rather than reflecting dropouts who probably would have left anyway, like retiring boomers — but I don’t know anyone who thinks 6.7 percent is representative of the amount of slack on the current job market." Jared Bernstein in The New York Times.

BLEVINS: Calm down. The courts didn’t just end the open Internet. "The reports of network neutrality’s death have been greatly exaggerated. Yes, the D.C Circuit Court of Appeals vacated the heart of the FCC’s open Internet rules. But it also, more quietly, ruled that the FCC has authority to regulate broadband providers to protect Internet openness.  In doing so, the court may have handed the FCC — and the public — a victory that goes well beyond network neutrality...The court vacated only these particular rules, not the FCC’s ability to act in the future. Specifically, it concluded that the FCC could regulate Internet providers under a statute known as Section 706, which authorizes the FCC to take various steps to promote broadband deployment." John Blevins in The Washington Post.

DIONNE: The lost art of tough liberalism. "[George Miller] hails from a time when liberals didn’t apologize for trying to make the country fairer and notes that he won his first race on the basis of only two promises: “to end the Vietnam War and to enact single-payer health care.” He thus sees Obamacare as a giant step, “the biggest gift to economic security for families since Social Security.” But if Miller does not whine, he’s a realist about how much has changed during his four decades in Congress." E. J. Dionne in The Washington Post.

Great headlines interlude: "Fargo Man Arrested For Clearing Snow With Flamethrower."

2. House Republicans to release immigration principles

Inside the House GOP's immigration push. "House Republican leaders are within weeks of releasing their principles for immigration reform — a blueprint that will detail positions on everything from border security to legal status. The document, which has been kept under wraps until now, will call for beefed-up border security and interior enforcement, a worker verification system for employers and earned legal status for the nation’s undocumented immigrants, according to multiple sources familiar with the discussions. It will also call for reforms to visa programs and a system to track those in the country legally. The draft principles will also include a promise that immigration reform will be done on a step-by-step basis and will foreclose the possibility of entering into conference negotiations using the Senate’s comprehensive package — pledges that could soothe some Republicans." Jake Sherman and Seung Min Kim in Politico.

Republican ideas could legalize 4.4 million to 6.5 million, a study says. "Between 4.4 million and 6.5 million immigrants illegally in the United States could gain an eventual pathway to citizenship under proposals being discussed by Republicans in the House of Representatives, according to an estimate published Tuesday by the National Foundation for American Policy, a nonpartisan research group in Washington. The estimate is based on policy ideas that have been put forward by Representative Robert W. Goodlatte of Virginia, a Republican who is chairman of the House Judiciary Committee...The foundation’s report, prepared by Stuart Anderson, its executive director, finds that even without major changes to current immigration law, 3.1 million to 4.4 million immigrants now illegally in the United States would be eligible for green cards because they are parents of American citizens. As many as 600,000 could gain green cards as spouses of citizens and legal residents, and up to 45,000 could receive green cards within two decades as low-skilled workers." Julia Preston in The New York Times.

Prosecutorial discretion on the rise in immigration courts. "Immigrants facing deportation are increasingly likely to have their cases dismissed because of mitigating factors such as having U.S. citizen children, according to an analysis by researchers at Syracuse University. In some courts, at least 20% of case closures involved prosecutorial discretion. Of the roughly 35,000 cases closed in Los Angeles over the last two years, nearly 24% were prosecutorial discretion cases. In Houston, however, only 1.7 % of immigration case closures were due to prosecutorial discretion. In New York City, the rate was 3.7%." Cindy Chang in The Los Angeles Times.

Those young whippersnappers interlude: This kid came up with sandless sandbags, and they work.

3. House discovers it doesn't always have to be that way

House approves $1.1 trillion spending plan, sends it to Senate. "[T]he spending bill easily passed the House 359 to 67 with broad support from both Republicans and Democrats. The measure moves to the Senate, where it is expected to pass easily before heading to President Obama for his signature...64 Republicans — most of them ardent fiscal conservatives — voted against the agreement." Ed O'Keefe in The Washington Post.

Explainer: The House’s massive $1.1 trillion spending bill: The Post’s guideThe Washington Post.

Republicans are still trying to save traditional lightbulbs. It likely won’t work. "Congress is getting ready to vote on a $1.012 trillion spending bill for 2014 that would bar all funding for enforcement of the new lightbulb standards. That rider had been pushed by Republicans for years. Now they may finally get it passed. The catch? It probably won't make much practical difference to U.S. manufacturers, who have largely switched over to making newer, more efficient bulbs. But it could create a loophole for anyone who wants to import the old bulbs." Brad Plumer in The Washington Post.

No means no interlude: A dog doesn't want to go to his kennel.

4. Rather than for their phone conversations, Obama to tap Congress for NSA reform ideas

Obama expected to turn to Congress to help decide fate of NSA phone data collection. "President Obama on Friday is expected to announce some new limits on the National Security Agency program that collects billions of Americans’ phone records, but he will call on Congress to help determine the program’s future, according to current and former officials familiar with the administration’s plans. Obama has concluded that the program has value as a counterterrorism tool, the officials said, but is also confronting difficult political realities. The program’s sweeping nature has prompted serious privacy concerns, and a divided Congress is unlikely to renew it when the law underpinning the program expires next year...White House officials said Obama’s speech is still being crafted and declined to comment. He will deliver the address at the Justice Department in his first appearance there — a symbolic choice to signal the administration’s commitment to the rule of law even in the secret world of surveillance." Ellen Nakashima and David Nakamura in The Washington Post.

What restrictions will Obama back? ""Mr. Obama plans to increase limits on access to bulk telephone data, call for privacy safeguards for foreigners and propose the creation of a public advocate to represent privacy concerns at a secret intelligence court. But he will not endorse leaving bulk data in the custody of telecommunications firms, nor will he require court permission for all so-called national security letters seeking business records." Peter Baker and Charlie Savage in The New York Times.

Wow interlude: 2013 in extreme sports.

5. Fed likely to reduce pace of bond-buying by another $10 billion a month

The taper is still on track, Fed says. "Federal Reserve officials are shrugging off surprisingly weak December hiring and arguing in favor of winding down their bond-buying program this year. Several policy makers, including both supporters and critics of the program, said this week that the disappointing employment figures haven't shaken their view that the recovery is gaining steam and will gather momentum this year." Michael S. Derby in The Wall Street Journal.

Fed's Beige Book: Job market is firming up. "The latest beige book, which describes economic conditions across the central bank's 12 districts, painted a picture of firming labor markets across the U.S. as economic growth accelerates and major sectors such as real estate and manufacturing recover from the housing downturn and recession...In all, two-thirds of districts reported "small to moderate" increases in hiring, according to the report, and many companies were optimistic as 2014 began." Ben Luebsdorf in The Wall Street Journal.

Obama announces $140 million partnership to launch N.C. manufacturing institute. "President Obama on Wednesday launched a new effort to boost jobs and a healthier foundation for economic growth, announcing a $140 million partnership with local companies and universities in establishing a manufacturing institute that can help preserve the United States as a global leader in energy innovation...The institute is the second launched by Obama, and his administration is working swiftly to launch two more – all part of an initiative announced in last year’s State of the Union address to improve this long-beleaguered sector of the economy. However, the three institutes fall short of the 45 institutes that Obama has promoted as a top goal." Zachary A. Goldfarb in The Washington Post.

Obama picks Maria Contreras-Sweet to head SBA. "President Obama on Wednesday plans to nominate Maria Contreras-Sweet, the founder and board chairman of a Latino-owned community bank in Los Angeles, as the head of the Small Business Administration , according to a White House official...The selection of Contreras-Sweet, 58, fills the final slot in the president’s second-term Cabinet. The post of SBA administrator has been vacant since August, when Karen Mills accepted joint posts at Harvard Business School and Harvard’s Kennedy School of Government. The nomination also serves to address diversity concerns raised by some Democratic supporters of the president." Juliet Eilperin in The Washington Post.

Poverty is literally making people sick because they can't afford food. "That's what a new paper in Health Affairs by Hilary Seligman, Ann Bolger, David Guzman, Andrea López, and Kirsten Bibbins-Domingo found they looked at when people go to the hospital for hypoglycemia (low blood sugar). The basic idea is that people struggling to make it paycheck-to-paycheck (or benefits-to-benefits) might run out of money at the end of the month—and have to cut back on food. If they have diabetes, this hunger could turn into an even more severe health problem: low blood sugar. So we should expect a surge of hypoglycemia cases at the end of each month for low-income people, but not for anybody else. That's what researchers found when they looked at the numbers for California between 2000 and 2008. As you can see in their chart below, low-income people (red line) were <27 percent more likely to be hospitalized for hypoglycemia in the last week of the month than in the first." Matthew O'Brien in The Atlantic.

Anti-homelessness program hits a milestone in Arizona. "Today they are neighbors and participants in a program that White House officials have said has led Phoenix to become the first community in the country to end homelessness among veterans with long or recurrent histories of living on the streets...This month, Salt Lake City placed the last of its chronically homeless veterans in housing, its mayor, Ralph Becker, announced...These milestones are the first significant achievements by individual communities in the federal government’s plan to end homelessness among veterans by 2015, part of its ambitious and complex push to eliminate homelessness over all by 2020." Fernanda Santos in The New York Times.

Maryland’s O’Malley will push for minimum wage hike. "Maryland Gov. Martin O’Malley (D) and Lt. Gov. Anthony G. Brown (D) on Tuesday embraced a plan to raise the state’s minimum wage to $10.10 an hour by 2016 and tie further increases to inflation...[T]he legislation would also increase the requirement for tipped workers to 70 percent of the hourly minimum...Legislative leaders say there are still details to be worked out, including whether to allow individual jurisdictions to have a higher minimum wage than the state." John Wagner in The Washington Post.

Obama administration retreating from demands for environmental protections in trade agreement. "Environmentalists said that the draft appears to signal that the United States will retreat on a variety of environmental protections — including legally binding pollution control requirements and logging regulations and a ban on harvesting sharks’ fins — to advance a trade deal that is a top priority for Mr. Obama. Ilana Solomon, the director of the Sierra Club’s Responsible Trade Program, said the draft omits crucial language ensuring that increased trade will not lead to further environmental destruction." Coral Davenport in The New York Times.

Primary source: The leaked environmental portions of the trade agreement, via WikiLeaks.

IMF head warns of rising deflation risk. "The head of the International Monetary Fund on Wednesday warned that deflation in advanced economies threatens to derail a strengthening, but still fragile global recovery this year, requiring central banks in the U.S. and Europe to keep easy money flowing. "With inflation running below many central banks' targets, we see rising risks of deflation, which could prove disastrous for the recovery," IMF Managing Director Christine Lagarde said in a speech at the National Press Club." Ian Talley in The Wall Street Journal.

Republicans block shift of IMF power to developing nations. "U.S. lawmakers refused to allow the International Monetary Fund to shift power within the organization to emerging market nations, a move that frustrates an effort to give countries like China, Brazil and India greater say in the emergency lender's operations. The realignment has been in the works since 2010 and the U.S., the IMF's largest shareholder, is the only country that hasn't authorized the changes. Congress could have acted on the IMF matter in a compromise spending bill unveiled Monday night, but Republicans opposed to the changes blocked its inclusion." Ian Talley in The Wall Street Journal.

Which countries are most vulnerable to the Fed's taper? "When judged by their perceived ability to repay short-term foreign borrowings the countries particularly exposed to the fallout of tapering are South Africa, Turkey, Brazil, India, Indonesia, Hungary, Chile and Poland, data processed by Schroders and the Financial Times show...One metric increasingly adopted to assess emerging market vulnerability compares the size of a country’s foreign exchange reserves to the sum of its short-term external debt and its current account deficit, called the gross external financing requirement (GEFR)." James Kynge in The Financial Times.

Trade group backs down on lawsuit as regulators revise Volcker rule provision. "The American Bankers Association said Wednesday that it would withdraw a legal request for emergency relief from a portion of the Volcker rule, a controversial regulation that bars banks from trading for their own benefit. The trade group filed a lawsuit in late December to block a provision of the rule that would have forced community banks to shed a commonly held investment, but dialed back the fight after government regulators amended the provision Tuesday. The bankers association, however, said it will not drop the lawsuit until it completes a full analysis of the rule. Late Tuesday, five regulatory agencies said banks with less than $15 billion in assets could retain collateralized debt obligations backed by trust-preferred securities (TruPS CDOs) — a financial instrument with hybrid characteristics of both debt and equity. The decision reversed a ban on banks owning such financial instruments." Danielle Douglas in The Washington Post.

Why the world shouldn’t fear the taper. "A new report by the World Bank suggests that the withdrawal won’t be as painful as many investors have feared. The Fed pushed long-term interest rates to record lows over the past year as it pumped money into the U.S. economy. Now, the World Bank is projecting a slow and steady rise in global interest rates to 3.6 percent by mid-2016." Ylan Q. Mui in The Washington Post.

Lawmakers seek curbs on bank trading of physical commodities. "On Tuesday, the Fed said it was considering some new rules and issued a request for public comment. In part, the Fed wants to determine whether the financial system could be hurt if banks incurred large losses in the volatile commodities markets...[M]embers of the Senate subcommittee on financial institutions and consumer protection faulted the Fed for being overly focused on the internal workings of banks. In doing so, lawmakers said the Fed overlooked the effect that the banks’ commodities activities may have had on prices paid by the public." David Kocieniewski in The New York Times.

Federal contracts plunge, squeezing private sector. "After spiraling higher for much of the last decade, the value of federal contracts awarded to companies is falling rapidly. In the fiscal year that ended Sept. 30, the total fell by $58 billion, or roughly 11 percent. It was the steepest decline — in percentage and nominal terms — in at least a decade, according to an analysis of federal contract data by The New York Times...For the 2013 fiscal year, the total was $460 billion." Danielle Ivory in The New York Times.

Seems that 1.3 million people losing unemployment insurance hurts economic confidence. "A couple weeks ago, 1.3 million people lost the unemployment insurance benefits they'd been receiving for months, casting them into a shaky job market with no support. Over time, obviously, that's likely to depress their feelings about the economy. Now, courtesy of a new-ish measuring tool developed by CivicScience and the consulting firm Hamilton Place Strategies, we've got a reasonably concrete indicator that it already has." Lydia DePillis in The Washington Post.

Reading material interlude: The best sentences Wonkblog read today.

Wonkblog Roundup

40 charts that explain the worldDylan Matthews.

‘Over time, this will work out’: Wellpoint CEO Joe Swedish on ObamacareSarah Kliff.

There’s one big legal challenge left against Obamacare. But a D.C. judge just ruled against itEzra Klein.

Seems that 1.3 million people losing unemployment insurance hurts economic confidenceLydia DePillis.

Don’t believe the hype: Health insurers think Obamacare is going to be fineSarah Kliff.

Republicans are still trying to save traditional lightbulbs. It likely won’t workBrad Plumer.

What garden hoses, mobile homes and tapas tell us about the economy. Ylan Q. Mui.

Retail in the age of Amazon: Scenes from an industry running scaredLydia DePillis.

Calm down. The courts didn’t just end the open InternetEzra Klein.

Democrat Brian Schweitzer thinks he can win in 2016 — by running against ObamaEzra Klein.

Doug Holtz-Eakin is starting a new health-care think tankLori Montgomery.

Why the world shouldn’t fear the taper. Ylan Q. Mui.

Et Cetera

The N.H. House just became the first state body to OK pot sales, group saysNiraj Chokshi in The Washington Post.

Obama fighting perception that administration is out of time to make progress on prioritiesZachary A. Goldfarb in The Washington Post.

Some states are easing up on one-party ruleAdam Nagourney in The New York Times.

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

Wonkbook is produced with help from Michelle Williams.

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