ROBERT F. GRAYBOYES

Beginning in 2014, the Patient Protection and Affordable Care Act  (PPACA) hands the Secretary of the U.S. Department of Health and Human Services a joystick – the Essential Health Benefits package – with the potential to rocket small-business health insurance premiums skyward. EHB is the menu of goods and services that must be covered under all exchange-purchased insurance plans and non-grandfathered small-group and individual insurance plans. By vesting one set of hands with control over EHB, small business faces permanent administrative uncertainty. At the same time, the brunt of EHB appears largely to bypass big business, unions, and governments.

EHB, Ban on Limits, Actuarial Value
Beginning in 2014, PPACA (§1302) makes EHB a mandatory feature of most insurance plans purchased by America’s 6 million small businesses and 21 million self-employed individuals. Exceptions initially include businesses with more than 100 employees and those with grandfathered policies. The EHB requirements apply to policies purchased both in exchanges and in non-exchange small-group or individual markets.

In the small-group and individual markets, annual or lifetime coverage limits on all EHB items are forbidden. And plans must have an actuarial value (AV) of at least 60 percent, meaning the plan’s total reimbursements must be at least 60 percent of the total qualifying health care costs incurred.

Section 1302 empowers the Secretary of HHS to define EHB, but gives little specificity beyond requiring that EHB include 10 general categories (e.g., ambulatory patient services) and “the items and services covered within the categories;” the Secretary is to also assure that EHB includes “benefits typically covered” by a “typical employer plan.” The meaning of these words in quotation marks is left to the Secretary (and future Secretaries) to define and redefine. The fluid definitions and concentrated discretion mean uncertainty, which carries a financial cost for small business.

State Mandates as Precedent
The Council for Affordable Health Insurance lists 2,156 state mandates in 2010. These included benefit mandates (e.g., reimbursement for smoking cessation), provider mandates (e.g., reimbursement for services provided by acupuncturists), and covered-person mandates (e.g., inclusion of stepchildren under family policies).

Some mandates are less controversial than others. But every mandate benefits some patients. The problem is that mandates, no matter how well-intentioned, mean higher costs.

At least with state mandates, the legislative process restrains proliferation. Typically, a new mandate has to wend its way through a state legislature, with attendant impact estimates, public hearings, recorded votes, and so forth. Disease groups and provider groups can lobby for additional covered benefits, but so can groups representing consumers and taxpayers. In the end, legislators have to weigh both costs and benefits of mandates or else incur the wrath of financially pressed voters. Importantly, with state mandates, cross-state comparisons provide evidence of how the mandates affect costs and health outcomes. One can measure the difference in costs between Rhode Island’s 69 mandates and Idaho’s 13 mandates.

For small business, a perpetual irritation is the fact that state mandates apply mostly to small businesses and individuals (including the self-employed). Most big businesses, labor unions, and governments are self-insured, and, therefore, exempt under ERISA. EHB appears to compound this inequity.

Federal Mandates under PPACA
Effectively, §1302 creates national benefit mandates. Most small-group and individual policies must cover the entire EHB package, with no coverage limits and an AV of 60 percent or higher. States will still have the discretion to add additional mandates on top of the EHB package. In contrast, plans obtained in the self-insured and fully-insured large-group (over 100) markets apparently do not have to include all EHB items. They can’t impose annual or lifetime coverage limits on any EHB services that they do cover, but it appears that they can omit EHB items from their coverage. This would seem to create a powerful motive to omit EHB items that are rare, but terribly expensive – a luxury small business will not share.

Unlike most state benefit and provider mandates, designing and altering the EHB package will require no legislative action. PPACA specifies simply that the Secretary of HHS “shall define the essential health benefits” after commissioning some data collection from the Labor Department.  (In the current process, HHS also turned to the Institute of Medicine for advice in crafting the EHB.) Since EHB is national, there will be no cross-state comparisons of costs and health effects of the actual EHB with any other design. According to the law:

“The Secretary shall ensure that the scope of the [EHB] is equal to the scope of benefits provided under a typical employer plan, as determined by the Secretary. To inform this determination, the Secretary of Labor shall conduct a survey of employer-sponsored coverage to determine the benefits typically covered by employers, including multiemployer plans, and provide a report on such survey to the Secretary.” … In defining [EHB], the Secretary shall … ensure that such essential health benefits reflect an appropriate balance among the categories … so that benefits are not unduly weighted toward any category.”

The Labor Department’s survey of April 2011 cites problems with employer plan data. The document notes, for example, variation in how plans define items such as “infertility treatments.” The report warns: “Unfortunately, this review indicated that it is not possible to produce reliable data for many of the services due to the lack of detail that characterizes many plan documents. Services may or may not be covered when they are not mentioned in plan documents.” Hence, the Secretary will have to layer subjective judgment on top of inadequate data.

But even if the data were adequate, the vagueness of PPACA’s instructions creates considerable uncertainty for small business. How is the Secretary to define a “typical employer?” Should a shoe store’s employee plan depend on the “typical” coverage offered by an investment bank, a white-shoe law firm, a federal agency, or a union shipyard? Or, since EHB affects small businesses most directly, should the shoe store’s requirements square with other small firms in the fully insured market? The Secretary’s thoughts apparently carry the day.

What are “benefits typically covered?” Suppose 1/3 of the employers surveyed offer “Cadillac” coverage (high-end), while 1/3 offer what we can call “Corolla” coverage (middle-of-the-road), and 1/3 offer “Kia” coverage (bare-bones, but decent). Does the Secretary decide that since 2/3 of employers offer Corolla coverage or better, then that should define the EHB? Businesses with Cadillac or Corolla plans will be relatively unaffected. Only those companies with the Kia policies will see their premiums rise, and it’s likely that these will include many small businesses and perhaps especially start-ups. In other words, those hardest hit will be the incubators of America’s job growth.

How finely will the Secretary define the required benefits? The Secretary’s wide discretion is described in a bulletin from the American Cancer Society:

While it requires coverage for each of [ten] categories of benefits, the law does not name the specific services that must be covered or the amount, duration, and scope of covered services. The Secretary will define the specific benefits within each of the categories and will update the package to address gaps or to respond to changing medical practices. … [W]ill the Secretary determine how many counseling sessions are covered for smoking cessation, or whether medications are included, and which ones? Or will a plan be permitted to decide the number of covered sessions and medications? The Secretary will need to make critical decisions about the level of discretion to leave to health plans. … While the law enumerates certain considerations that must be taken into account, the Secretary retains wide authority in making determinations on covered services. And while the law requires an opportunity for public comment, it does not define a procedure for involving stakeholders like cancer patients, clinicians, or experts in cancer care. Advocates, therefore, will need to seek out opportunities to weigh in to make sure important benefits are included.

As an example of the lobbying to come, a Cancer Society spokesman wrote, “If a patient requires chemotherapy every week for a year… they should not be hindered by an arbitrary rule about only getting 35 visits.” In contrast, America’s Health Insurance Plans urged HHS not to get into “the details of each category of care” and suggested that HHS permit restrictions on the number of visits in certain situations to hold down costs. Medical merits aside, these two policies have very different cost impacts. And small business shares the Cancer Society’s concern that the law defines no procedure to involve stakeholders – including small business.

Section 1302 also requires the Secretary to update the EHB at least annually. When a new benefit is added, will outstanding insurance contracts have to comply immediately? If so, then insurers are going to have to build extra margins of safety into their premiums, and costs will rise.

Conclusion
The Essential Health Benefits package is a ganglion of uncertainty for small business. Disease and provider lobbies, with admirable intent, will tout the benefits of expanded coverage and ignore the costs.  Small business will wonder how “typical coverage” is defined and who the “typical employers” are against whom they are measured. The jobs and the wages of their employees will depend on the whims of whoever happens to be Secretary of HHS at the time. They will look with envy as big business, labor unions, and governments go unscathed. And with certainty, their premiums will rise.

Robert F. Graboyes, PhD, is Senior Healthcare Advisor at the National Federation of Independent Business (NFIB). He also teaches health economics in master’s and doctoral programs at Virginia Commonwealth University, the University of Virginia, and George Mason University.

What’s in a name? Everything, it would appear, when it comes to describing Rep. Paul Ryan’s plan to privatize Medicare, which the Republican-controlled House of Representatives backed in its budget resolution late last month. The plan would subsidize seniors’ purchase of private insurance plans instead of enrolling in traditional government-financed Medicare, although that would be preserved as an option. The government would finance a portion of the purchase.

Architects of the plan call it “premium support.” Opponents call it a voucher, which they say will over time lag behind medical inflation and force seniors to pay an ever-growing share of their health care bills.

Ten Republicans joined every Democrat in voting against the resolution, which passed 228-191. The Republican apostates abandoned their majority colleagues largely because they were afraid of being tarred with the voucher label during this fall’s re-election campaign.

And it was that label that Republicans on the House Ways and Means health subcommittee repeatedly attacked during Friday’s hearing on the Republican plan, which has not yet been introduced as legislation. Its details have not yet been scrutinized by health care experts or, more significantly, the Congressional Budget Office. “Premium support is not a voucher,” Ryan, R-Wis., said at the hearing.

The latest outline of the Ryan plan, which was co-authored with Sen. Ron Wyden, D-Ore., backtracked from the stringent caps on government support contained in the House Republicans’ original plan, which was released last year. The CBO said seniors would eventually pay 68 percent of their health care costs under the original Ryan plan.

Chairman Wally Herger, R-Cal., never used the “V” word in his opening comments in support of the latest Ryan plan. But in his printed statement and accompanying timeline showing bi-partisan support for the concept since the 1990s, his press office turned “Premium Support” into a proper noun.

Rep. Sam Johnson (R-Tex.), a returned Vietnam War prisoner now in his 11th term, demanded to know, “Is premium support a voucher?” The witness, the Brookings Institution’s Alice Rivlin – a former Congressional Budget Office chief, a centrist Democrat and co-author of a premium support plan with former Republican Sen. Pete Domenici that is similar to the Ryan-Wyden plan – said “no.”

However, she confirmed that the structure of her premium support proposal, like the Ryan-Wyden plan, would shift more of the risk for rising health care costs onto beneficiaries. “Our proposal would cap the per enrollee government premium contribution over time at the rate of growth of the per capita gross domestic product plus one percent,” she testified. Most years, although not recently, Medicare expenditures grow faster than that.

Rep. Ron Kind, a Democrat from western Wisconsin, whose district has some of the lowest Medicare costs in the country, was ready to stop quibbling over the wording. “Let’s not call it a voucher program,” he said. “I call it the ‘more out of your own pocket’ program. No one has denied that.”

The irony of Republicans complaining about the voucher label – the party has long backed vouchers for many public services, especially in public education – wasn’t lost on Kind, now in his eighth term. He recalled the bipartisan support for legislation he co-sponsored earlier in his career that would have allowed Medicare to reimburse physicians for providing counseling to seniors who wanted to write health care “end-of-life” directives. Republicans branded such counseling “death panels” in their attacks on Obamacare.

The Republicans had few questions for Brookings’ Henry Aaron other than to acknowledge his presence as evidence of bipartisan support for the concept. Aaron was one of the original inventors of the premium support approach to Medicare in the mid-1990s.

But, he explained during his opening comments, he doesn’t support it now. His earlier work was in the context of a health care reform effort under President Bill Clinton (dubbed Hillarycare after the First Lady, who led the effort) that failed. Health care costs were rising rapidly and nothing was on the horizon to hold them in check.

Today is very different, he said. The Affordable Care Act has numerous provisions aimed at holding down costs such as the creation of accountable care organizations and bundled payments. Congress should see if those reforms work before starting all over again with unproven private plans, especially since the existing private plans in Medicare – Medicare Advantage, which already cover a quarter of all Medicare beneficiaries – wound up costing more than traditional fee-for-service Medicare.

“If they (private plans) don’t work, who bears the risk if costs rise faster?” he asked. “Under premium support, those risks are shouldered by Medicare beneficiaries who will pay higher out-of-pocket costs. That is the fundamental choice” between the two approaches.

Merrill Goozner has been writing about economics and health care for many years. The former chief economics correspondent for the Chicago Tribune, Merrill has written for a long list of publications including the New York Times, The American Prospect, The Washington Post and The Fiscal Times. You can read more pieces by him at GoozNews, where this post first appeared.

According to an article in the current Journal of Health Politics, Policy, and Law, public opinion polls on health reform are at best incomplete and at worst misleading due to a systematic bias in non-responses. [1] Authors Berinsky and Margolis argue that, in the context of the healthcare debate at least, non-responses (e.g., answers like “Don’t know”) are more likely to come from individuals of lower socioeconomic status, and that “these same individuals who are victims of resource inequalities are natural supporters of the welfare state and, therefore, are more likely to back health care reform.”

The authors write that, to ensure full representation of views, nonresponses should not be ignored. Instead, the analysis “should incorporate information from respondents’ answers to other questions on the survey to understand what they might have said had they answered the question.”

Imputing the views and attitudes of non-respondents is a generally acceptable method for removing bias, provided it is done carefully using suitable assumptions. Berinsky and Margolis use income as the predictive variable. According to their analysis, for example, people making less than $30,000 annually are more likely to support health reform than those making more than $100,000.

So after analyzing data from the Kaiser Family Foundation’s 2010 health reform tracking poll and imputing the views of those who did not respond, is it the case that Americans do overwhelmingly support the President’s healthcare reform after all? No. As it turns out, imputing opinions for non-responders shifts the tracking poll’s figures only slightly toward the Obama-Axelrod side of the debate—between 1 percent and 4 percent, depending on the month.

The authors acknowledge that there can be multiple causes of “don’t know” responses. For example, respondents may find it difficult to form a judgment about a challenging issue. They may find the question hard to understand, or they may regard giving an answer as too personal or too revealing in some way. Studies have shown that the behavior of the interviewer can also affect the likelihood of item nonresponse.

On matters political, might question wording outdo them all? Consider issues such as healthcare where the options presented to us feature a false dichotomy already baked in. What can an advocate of free-market medicine and limited government say to the yes/no/don’t-know question, “Does the healthcare system need reform?” Answer no and one is counted among those who defend a status quo in which nearly half of the nation’s healthcare dollars are already controlled by the government; answer yes and be counted among those who support more government controls over industry and even more spending. In other words, no for big government, and yes for bigger government. I’ve answered “don’t know” before on exactly this question, despite having a very strong opinion on the issue and a willingness to share it.

How many of these types of nonresponses do conventional answer choices generate? That might be a more interesting number to impute.

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1 Berinsky, A. and M. Margolis, “Missing Voices: Polling and Health Care,” Journal of Health Politics, Policy and Law, Dec. 2011 36(6):975-987.

Jared M. Rhoads is the director of the Center for Objective Health Policy, whose mission is to advance rational, rights-respecting ideas in healthcare. The Center provides commentary and raises money to provide free books to medical students who are interested in learning about the moral and economic case for capitalism. He works as a senior research specialist in the healthcare division of a large consulting firm in Massachusetts.

You probably missed this one, but this bit of legislation will have profound implications not only for your health, but the health of our economy. A provision of the Patient Protection and Affordable Care Act (PPACA) created a 15-member Independent Payment Advisory Board (IPAB), delegating to it the responsibility to develop specific proposals to contain the growth rate of Medicare spending if it is projected to exceed targets also established by the law. These proposals are transmitted to Congress in the form of legislative proposals that must be enacted or substituted on a legislatively mandated basis.

Once it is in place, IPAB can be discontinued only by a joint resolution that must be introduced in January 2017. Since IPAB is not a government agency, and is not promulgating regulations, it is subject neither to open meetings or public comment requirements. There are no options for appealing the IPAB recommendations. The provisions for judicial review appear to be limited to the recommendations issued by IPAB based upon deliberations that are not open to the public. Judicial or administrative review of the Secretary’s implementation of those recommendations is prohibited. The clear intent of the law is to insulate the board and its decision from the full range of traditional democratic processes.

The IPAB approach to problem solving in a democracy is unwarranted under all but the most dire of circumstances. Moreover, if enabled, an approach such as IPAB should have a reasonable chance of solving the stated problem. It does not. The dire circumstance of “unsustainable” health care expenditures that IPAB is built to help resolve is truly a manufactured crisis. That statement may resonate as heresy to established dogma to many readers, but the facts support the statement.

The health care sector is a vibrant part of our national economy. It creates more jobs than any other sector, including those hard-to-find unskilled jobs that are protected from global competition. It also has a much sought after manufacturing base which, with encouragement, could help to correct our export imbalance. It contributes to wealth creation (protestations to the contrary notwithstanding). And the best kept secret? The United States has a world class health services research and development infrastructure that can meet future consumer demand here and abroad if we stop systematically trying to drown it in the bathtub.

On consumer demand: It will continue to grow at a rapid rate for the foreseeable future — driven by the aging of a baby boomer cohort that is healthier than any senior population yet seen on this planet, and an emergent market of new consumers, including the previously uninsured and minorities who have historically under-consumed healthcare. These consumers will use their political clout to demand better service in the healthcare marketplace. In other sectors of our economy, we would be celebrating rising consumer demand, and the market would be rushing to meet the need. For reasons that can only be viewed as perverse, growing consumer demand in health care is viewed as a curse, and efforts to crush it with IPAB-like initiatives abound.

The health care reform initiative undertaken by President Obama and Congress has taken a good first step in addressing the financial inequities that have kept some consumers out of the health care market. Much more needs to be done. Rather than employing an IPAB to suppress prices by cutting payments to providers or finding other ways to reduce consumer demand, Congress and the president must be proactive in encouraging the market to make more strategic investments by rewarding innovations that will improve the quality of care and reduce health care expenditures. Technological advances will be expensive and incremental. But in due course, as we bring real solutions to the diseases that currently compromise our nation’s health, reductions in expenditures can be anticipated. If IPAB is not allowed to frustrate improvement and innovation, future generations will be spared the medical and financial challenges that currently beset this generation.

To be sure, it will be a generational struggle, but we can and must succeed. Along the way we cannot allow rhetoric on either side of this discussion to mask the real issues at stake here: America must invest in the health and productivity of the American worker, American families and American communities; and our American government, the manifestation of our collective will, must not be permitted to lose faith in the ability of the market to correct, to ultimately drive down health care costs.

Gary A. Puckrein, PhD, is the founder and president of the National Minority Quality Forum. The Forum is a not-for-profit organization dedicated to assuring that high quality healthcare is available for and provided to all populations.

Call it the Scott Walkering of America.

Even though tax revenues are finally rising faster than expenses, governors across the nation are recommending more austerity in the budgets they’re presenting to state legislatures this year, the latest survey from the National Governors Association shows.

For the fiscal year beginning July 1, governors are recommending a 2.2 percent increase to $683 billion in general revenue fund spending. That’s down from the 3.3 percent increase in state spending in 2012. Revenue, meanwhile, is projected to rise four percent during the coming fiscal year.

“The public sector has even more uncertainty at this time than the private sector,” said Dan Crippen, executive director of the NGA and former head of the Congressional Budget Office. Citing the looming Supreme Court decision on health care reform, the uncertain levels of federal aid from the “fiscal cliff” negotiations, and talk of tax reform that could cut tax expenditures that benefit state and local governments, “it’s pretty hard for states to plan,” he said.

One of the biggest drivers of state uncertainty is the future of Medicaid. Even without reform, millions of Americans turned to the program for health care after losing jobs during the recession. The downturn and slow recovery caused state Medicaid budgets to soar 23 percent in 2010 and 20 percent in 2011.The Obama administration’s 2009 stimulus program covered most of those early costs. But after the Republicans took over the House in 2011, they cut aid that helped states cope with soaring Medicaid budgets, which now account for nearly a quarter of all state spending.On the bright side, the rapid increases in Medicaid appear to be over (nearly all of the increased coverage under the Affordable Care Act, which doesn’t go into effect until 2014, will be picked up by the federal government). State officials projected their Medicaid budgets will rise only four percent next year.

“States have undertaken numerous actions to contain Medicaid costs, including reducing provider payments, cutting prescription drug benefits, limiting benefits, reforming delivery systems, expanding managed care and enhancing program integrity efforts,” Crippen said. “These efforts alone, however, cannot stop the growth of Medicaid.”

The latest round of state belt-tightening comes after a year of modest recovery in state spending, the survey showed. The 3.3 percent increase in the current fiscal year allowed a number of states to rebuild their rainy day funds.

States like Alaska, Texas, West Virginia and North Dakota that benefit from taxes on the natural resource extraction were especially fortunate. North Dakota recently proposed eliminating its property taxes, while Alaska and Texas budgets soared 27.3 percent and 13.4 percent, respectively this year. Next year, however, both states are projecting large declines in their state budgets because of lower taxes from falling oil prices.

Some of the states hardest hit by the recession are finally seeing an end to the deep cuts. California, for instance, after decreasing its state budget 5.5 percent this year, is projecting a 7 percent increase next year. Michigan’s state budget grew 9 percent this year – the auto industry was an early beneficiary of the Obama stimulus plan – and is projecting another 2 percent increase in state spending next year.

Even states hammered by the real estate crash have finally hit bottom. The governor of Florida, for instance, which cut its budget by 1.7 percent this year, is seeking a 5.9 percent increase in state spending for 2013. Nevada, whose state budget declined by 10 percent in 2012, is expected modest growth in state spending next year.

“Governors are very cautious fiscally and I believe prudent to be providing a cushion to be prepared for rather tepid growth,” said Scott Pattison, executive director of the National Association of State Budget Officers.

Merrill Goozner has been writing about economics and health care for many years. The former chief economics correspondent for the Chicago Tribune, Merrill has written for a long list of publications including the New York Times, The American Prospect, The Washington Post and The Fiscal Times. You can read more pieces by him at GoozNews.

As best as I can tell, the arguments at the Supreme Court did not touch on a critical part of the discussion about government’s role in health care: the broken market for private insurance. And I think I know why.

A key assumption underlying the arguments, questions and answers was that all uninsured people are uninsured by choice. Sure, some very ill people with preexisting conditions do not qualify. But the implication was clear: Most uninsured people either do not want to pay for insurance or cannot afford it. Justice Samuel Alito said, “You can get health insurance.” Justice Ruth Bader Ginsburg made the point that people who don’t participate are making it more expensive for others, that their “free choice” affects others. The “free rider” problem is thoroughly examined.

It was as if the court forgot that the private insurance market does not function as a normal market. If you are not employed and you want to purchase insurance in the private market, you cannot unilaterally decide to do so. An insurer has to accept you as a customer. And quite often, they don’t. Insurers prefer group plans, with lots of people enrolled to spread the risk. Can you blame them? The individual consumer is a lot of work, is a higher risk and produces relatively little revenue.

The Government Accountability Office studied this problem last year and found a range of denial rates that vary by state and by insurer. On average, 19 percent of applications nationwide are denied. One-quarter of insurers denied more than 40 percent of the applications they considered. These denials are not limited to deadly illnesses but include many minor reasons. Expect to be denied if you have asthma, if you take just about any prescription medication, if you are more than 15 percent overweight. Expect to be denied if a doctor has recommended any procedure for you, no matter how insignificant. Basically, expect to be denied.

I’m astonished that this information was not laid out in oral argument and that no questions were asked about it. I believe that lawyers on both sides of this argument, and the justices hearing the case, have always been employed and always been covered by employer-provided health insurance. Perhaps it simply does not occur to them that if they were to try to purchase insurance, they might not be able to.

The justices repeatedly asked: If the government can require you to purchase insurance, what else could it require you to do? What are the limiting conditions to this breadth of control?

The government muffed its response. To me, the answer is obvious. There are two simple limiting conditions, both of which must be present: (1) it must be a service or product that everybody must have at some point in their lives and (2) the market for that service or product does not function, meaning that sellers turn away buyers. In other words, you need something, but you may not be able to buy it.

Let’s test the examples presented to the high court: Can the government force you to eat broccoli? This proposition fails on both counts. Nobody must eat broccoli during their lives, and the market for broccoli is normal. If you want broccoli, go buy it. Nothing stops you.

Can the government force you to join a health club? Again, double failure. You don’t need to join a health club. Maybe you should, but you don’t have to. And, if you want to join one, plenty of clubs would be happy to admit you. Indeed, can you imagine a health club turning people down because they are too fat, the way insurers turn people down because they are too sick?

How about burial services? While this example passes the first condition — it is a service that everybody will need — it fails the second. There is a clearly functioning market for burial services. If you want to purchase a burial or a cremation, no seller of those services will turn you away.

The health insurance market meets both criteria. Everybody will need health services at some point. And as long as the United States doesn’t provide national health care, the only reasonable method for most people to pay for those services is through insurance. But here, the market simply does not work. Sellers of health insurance turn away purchasers, and in great numbers.

Although the Affordable Care Act is huge and enormously complex, the point of the legislation is straightforward. It aims to fix the market for health insurance by prohibiting sellers of the service from declining buyers. Why did Congress not pass a simple law just requiring insurance companies to accept all applications? Because such a law would not repair the market and would probably make it worse. With only sick people seeking insurance — because healthy people would wait until they got sick, knowing that insurance was guaranteed — coverage would become overwhelmingly expensive and impossible for most Americans to afford.

The only answer is to expand the pool and spread the risk, which lets insurers have a rational business model. Short of government-provided health services or a government-sponsored national insurance plan, the Affordable Care Act is the next best shot at fixing this broken market.

Donna Dubinsky is chief executive of the software technology company Numenta. This post first appeared in the Washington Post.

This morning’s wretched jobs report tells a now-familiar tale: Employment has risen nicely in health care (a net gain of more than 340,000 jobs between May 2011 and May 2012). But almost every other sector has been flat or worse.

You might think that would mean that new-graduate nurses are having an easy time finding work. That’s still true in rural areas — but elsewhere, no.

In many U.S. cities, especially on the west coast, there’s real evidence of a nursing glut. The most recent survey conducted by the National Student Nurses’ Association found that more than 30 percent of recent graduates had failed to find jobs.

How is that possible?

While demand for nurses has been rising, it actually hasn’t risen as fast as most scholars had projected. Meanwhile, the supply of nurses has spiked unexpectedly, at both ends of the age scale: Older nurses have delayed retirement, often because the recession has thrown their spouses out of work. And people in their early twenties are earning nursing degrees at a rate not seen in decades. We’re now in the sixth year in which health-care employment has far outshone every other sector, and college students have read those tea leaves.

So what will happen next? Here are crude sketches of two possible futures:

I. THE NURSING SHORTAGE OF 2020

(This scenario draws from a talk that Vanderbilt University’s Peter Buerhaus gave two weeks ago at the U. of Maryland School of Nursing. Buerhaus still sees a shortage coming, though a less severe one than the shortage that he and two colleagues had predicted in a widely-cited 2000 paper.)

• In June 2012, the Supreme Court upholds the Affordable Care Act, and Republicans never manage to do much to weaken the law. Tens of millions of Americans gain access to insurance, and the demand for nurses rises in tandem.
• Some time around 2014, the general labor market finally recovers. There’s less desperation in the air. Sixty-year-old nurses are more likely to retire, and twenty-year-old college students who aren’t actually that interested in nursing go back to majoring in anthropology or accounting or whatever, because they’re reasonably sure they’ll find jobs.
• The millions of soon-to-retire Baby Boomers utilize Medicare at rates similar to previous cohorts of 70-year-olds.
• Changes in health care delivery mean that nurses and nurse practitioners are heavily deployed to provide primary care and to coordinate patients’ services.

II. THE NURSING GLUT OF 2020

• In June, the Supreme Court strikes down the ACA’s insurance mandate. Mitt Romney wins the 2012 election and pushes his health proposals through Congress. In this scenario, at least 45 million fewer people have health insurance than would have been the case with an intact ACA.
• The EU zone goes to hell, and the ensuing financial crisis means that the U.S. labor market stays miserable for years. College students continue to pour into health care fields, because that’s the one sector with better-than-zero growth.
• The millions of soon-to-retire Baby Boomers utilize Medicare at significantly lower rates than previous cohorts of 70-year-olds. (Unlike the other items on this list, this one is good news.)
• Changes in health care delivery don’t lead to a relative increase in the deployment of nurses and nurse practitioners. Accountable Care Organizations use social workers and other non-nurses to coordinate patients’ care across providers.

What will actually happen? Probably something in between, of course. (Or maybe the Yellowstone volcano will erupt and this will all be moot.)

We had better hope that it is something close to halfway in between. Both shortages and gluts are bad for patients and bad for the nursing profession. Nursing shortages, because patients are even more likely than usual to face understaffed units and overstretched nurses. Nursing gluts, because nurses are so afraid of unemployment that they don’t speak up about problems on their units.

David Glenn is a student at the University of Maryland School of Nursing and author of the blog, Notes on Nursing, where this post originally appeared.

President Franklin D. Roosevelt reacted with fury when major legislative pillars of his New Deal were declared unconstitutional by a Supreme Court anchored by four ideological conservatives. He lashed out at the justices, accusing them of practicing crass politics disguised as constitutional law.

Seventy-five years ago last month, FDR proposed his ill-fated court-packing plan that would have allowed him to stack the court with new appointees sympathetic to the New Deal.

Will history be repeated this term when the Roberts court decides the constitutional fate of President Obama’s signature legislation, the Affordable Health Care Act?

The justices will hear five-and-a-half hours of arguments over three days, March 26-28, on the healthcare law and deliver their judgment by the end of the term. If the court strikes down all or part of the law, Obama, like FDR before him, will almost certainly denounce the court’s decision. After all, he has already had practice in publicly criticizing the court. At his 2010 State of the Union address, with the justices sitting directly in front of him, he accused the court majority in the Citizens United decision of reversing a century of constitutional law to open “the floodgates for special interests… to spend without limit in our elections.”

Besides the willingness of both FDR and Obama to criticize the court, there are other parallels between the two Democratic presidents. Both came to office as liberal reformers who envisioned a large role for the federal government in promoting the nation’s welfare. But in defending their policies, they revealed their very different political styles and temperaments.

During his first term, Roosevelt, a supremely confident, aggressive politician, proudly brandished his liberalism as a blunt instrument against his sworn conservative enemies in the business community, whom he labeled “economic royalists.” For most of Obama’s first term, the cool, controlled president has downplayed his liberalism, seeking to bring conservative lawmakers to the bargaining table, without notable success. Only in the past few months has he been willing to aggressively confront his political opponents.

There also are notable parallels between the two chief justices, Charles Hughes and John Roberts, separated by 75 years of American history. Both were brilliant lawyers appointed to the court by Republican presidents. And both inherited formidable conservative blocs of justices whose judicial opinions demonstrated a hostility to the policies of the Democratic presidents in office.

In the 1930s, the four most conservative members of the court, known as “the four horsemen,” consistently voted to strike down far-reaching New Deal economic legislation. The Roberts court’s most conservative justices, Samuel Alito, Antonin Scalia, and Clarence Thomas, all appointed by Republican presidents, have voted together on polarizing issues (such as campaign financing in Citizens United) in favor of corporate interests.

The conspicuous differences between FDR and Obama are matched by the leaders of the two courts, Chief Justices Hughes and Roberts. Neither Roberts nor, perhaps, anyone else who has served on the modern court, could rival Hughes in the breadth of his career. Hughes was appointed chief justice by President Herbert Hoover in 1930 after a distinguished career as a lawyer, investigator of special interests, reform governor of New York, Supreme Court justice and secretary of State. His only failure in public life was his narrow defeat as the Republican candidate for president in 1916 by the incumbent, Woodrow Wilson.

More significantly, Hughes, unlike Roberts, could not be easily categorized by the interests he advocated. As a lawyer, he defended large corporate interests but also five Socialists who had been expelled from the New York legislature because of their political convictions.

As chief justice, Hughes was a centrist, often appearing to split the difference between the two warring conservative and liberal factions on the court. He wrote opinions upholding some New Deal statutes, but also voted with the majority to strike down the National Recovery Administration and the Agriculture Adjustment Act. At the same time, Hughes burnished his longstanding reputation as a stalwart civil libertarian, writing groundbreaking opinions protecting freedom of the press and association.

In contrast, Roberts earned a reputation as a fierce advocate on behalf of conservative causes before his appointment to the court by President George W. Bush in 2005. And as chief justice, he has aligned himself consistently with the most conservative members of the court.

The balance of power on the Roberts court in closely divided constitutional cases has not resided with the chief justice, as it did with the Hughes court’s centrists, the chief justice and Justice Owen Roberts. Instead, the pivotal vote has usually been cast by Justice Anthony M. Kennedy, who often, but not always, sides with his more ideologically conservative brethren. If the justices divide along conservative-liberal lines on the constitutionality of the federal healthcare law, Kennedy, not Roberts, will likely determine the outcome.

Obama’s recent boldness in confronting his Republican opponents, as FDR routinely did throughout his presidency, suggests that he, like Roosevelt, will attack the Roberts court if it throws out his major policy initiative, the Affordable Health Care Act. But however aggressive his attack, he is not likely to emulate Roosevelt in proposing a court-packing plan to add justices more to his liking.

Most historians have rated FDR’s court-packing plan as one of the worst mistakes of his presidency, a judgment that will not be lost on Obama, a careful student of American history.

Even if the justices uphold the healthcare statute, the Roberts court may well be a central issue in the fall presidential campaign. Both Obama and his potential Republican opponents have said that the 2012 presidential election will be about the future direction of the country.

The U.S. Supreme Court will play a prominent role in that future. The victor in the November presidential election may have the opportunity to appoint one or more justices to the Court (four justices are older than 70). If there are vacancies during the next presidential term, the president’s appointments are likely to determine the future direction of the court and of the nation.

James F. Simon, Dean Emeritus at New York Law School, is the author of “FDR and Chief Justice Hughes: The President, the Supreme Court, and the Epic Battle Over the New Deal,” published by Simon and Schuster last month. This post first appeared at cnn.com.

The Affordable Care Act faced a possibly fatal challenge when the constitutionality of its individual mandate provision was argued in the Supreme Court.

Much of the terrain was easy going. Neither the justices nor the lawyers doubted that the healthcare and healthcare insurance markets involve interstate commerce — insurance and healthcare providers are usually national or at least regional operations, folks who cross state lines get sick and must be cared for away from home regularly, and people are often unable to relocate to another state for fear of losing employer-based coverage. Nor was it disputed that the mandate was sincerely motivated by and closely related to the regulation of these interstate markets. Those two conclusions are usually sufficient to justify the exercise of congressional power under the commerce clause of the Constitution.

But then things got more treacherous. The problem, suggested by numerous questions from the conservative justices on the court, was the slippery slope they saw created by the mandate — the idea that Congress was requiring individuals to buy something. If the feds can require each person to buy health insurance, what can’t they force people to purchase?

Some justices worried: Would Congress also be able to force people to buy cellphones, or broccoli, or burial services? Once you start allowing Congress to compel people to purchase goods or services, aren’t you in a free fall that has only one conceivable end point — a world with no limits to the federal government’s commerce-clause power to regulate the lives of all Americans?

Strangely missing from these exchanges was any recognition that we are already poised on equally treacherous slopes in interpreting the commerce clause, and the court has demonstrated that it has plenty of pitons available to it to arrest our slide and limit the scope of federal power.

To understand this, remember that the court has already determined Congress has authority to prohibit people from possessing things under the commerce clause. Just seven years ago in Gonzales vs. Raich, the court held that the feds can ban the possession of marijuana. It didn’t matter how a person obtained the marijuana, how much he or she possessed or whether he or she planned to consume rather than sell it. Possession itself could be prohibited.

Talk about slippery slopes! Does the Raich case mean Congress can also ban possession of cars, televisions, clothes, the gingerbread cookies that Grandma baked and brought over last week, the tomatoes you grew in your garden or the broccoli in the refrigerator? What can’t the federal government do, if it can ban the possession of goods?

Don’t panic. The government’s power to ban possession of things is not unlimited. As Justice Antonin Scalia observed in his concurring opinion in Raich, the possession of marijuana in particular can be punished because such penalties are necessary to carry out a comprehensive regulatory scheme — the Controlled Substances Act — that governs interstate commerce. Without that comprehensive regulatory scheme as an anchor and a clear tie connecting the ban on possession to the regulation of the market in illicit drugs, the ban on marijuana possession would exceed Congress’ commerce-clause power.

Of course, such an argument cuts in favor of, not against, the individual mandate in the healthcare reform law. The Affordable Care Act is a comprehensive regulatory scheme governing interstate commerce and the individual mandate plays an important role in furthering that regulatory framework.

In other words, upholding the mandate in the Affordable Care Act does not mean upholding any and every random, hypothetical mandate a crazy Congress might enact, assuming such a rogue Congress could survive in office.

Or consider another example. No one doubts that the government can often regulate ongoing economic activity — the sale and purchase of goods and services. Once we enter commerce as producers, sellers or buyers, the government can regulate our economic transactions and activities. No one denies this.

Again, think about the slippery slopes created by this acknowledged power. Go back to buying broccoli, the example of choice during the oral arguments. Congress might try to prohibit grocery stores from selling any vegetable — or any food — other than broccoli. Or it might require people to purchase broccoli as a condition of purchasing other food. Want a hamburger? Gotta buy some healthy broccoli too. What if Congress required car dealers to sell a trunkful of broccoli with every new vehicle? Can Congress pull us down this cliff? If so, then who cares whether Congress can compel specific purchases directly? It can effectively compel people to buy designated goods by regu-lating or prohibiting consumer decisions to purchase other things.

Happily, we do not think the American people have cause for serious concern here either. Some commercial regulations lack the constitutionally required minimal rationality. In the extremely unlikely event Congress passed a “healthy trunks” law, there is still no rational basis for requiring auto dealerships to sell broccoli as a package with new cars. Moreover, some connections between a particular piece of a law and the larger comprehensive scheme regulating commerce are too attenuated to be upheld as constitutional.

The key point here is that these slippery slopes already exist. We have been standing on them for years under long-accepted interpretations of the commerce clause and have held our position without tumbling into the abyss of unlimited federal regulatory authority.

There is no intellectually honest basis for concluding that the individual mandate will create a steeper slope less susceptible to judicial or political handholds and footholds than those slopes that already exist under current and accepted doctrine. Even those justices most concerned about boundless congressional power cannot deny that.

Vikram Amar is a professor and the associate dean of the UC Davis School of Law. Alan Brownstein is a constitutional law professor at Davis. He holds a chair for the study and teaching of freedom and equality. This piece first appeared at the latimes.com.

During the health reform debate, there was controversy and disappointment over the failure to include a public option in the Affordable Care Act. Not only did the public option idea not die, it is alive and well in California.

In northern California last week, Kaiser Health News correspondent Sarah Varney interviewed the CEO of the Alameda Alliance for Health, Ingrid Lamirault, about their intention to participate in the California Health Benefit Exchange when it goes live in 2014. The Alameda Alliance is a non-profit insurer (governed locally) that competes with private for-profit plans in the county to deliver health services to Medicaid beneficiaries (called “Medi-Cal”) and public employees.

California does not have a monolithic or centralized Medicaid program. There are a variety of innovative programs that deliver cost-effective high quality care to Medi-Cal beneficiaries. Alameda Alliance is one of fourteen “two plan” counties that serve 3 million beneficiaries. Alameda has to market to Medi-Cal members in competition with a commercial plan. These public plans have been competing with the private sector for over a decade, and despite initial concern from both the left and the right, Medi-Cal beneficiaries and providers are pretty satisfied with the program, which has been able to live within its budgetary limits.

Members can walk into the local office of Alameda Alliance and talk to a real person; they can get a home visit from a doctor or pharmacist; they get to choose their provider. Because of their success, some of these “public option” programs are now considering expanding their services to a broader population through the Exchange.

The other main model of Medicaid managed care in California is a six county program called County Organized Health Systems or COHS. These programs have the “franchise” to treat Medi-Cal beneficiaries within their county boundaries without having to compete with any other plan. Because they don’t have to spend money on marketing, the COHS plans are able to save money on administrative overhead and return some of those savings to the providers in the form of bonuses for delivering quality of care as well as providing additional services to their members. Some of the larger COHS plans may decide to participate in the Exchange, and people who live in those counties can only “hope” they get a chance to choose these plans when 2014 rolls around.

Why is this important and is it “news”? It’s important because many of us felt all along that public options could still spring up at the state level, despite lack of support from Washington. The fact that the Alameda Alliance wants to participate in the Exchange as a public option is validation of that hope. It’s news because, although many of California’s managed care Medi-Cal programs have been working successfully for over a decade (and I have written about them here), this is the first time that we have heard publicly that one of these programs will expand its services to the broader public because of health reform. Even though it’s a small step, and only a few counties may participate at first, it should give encouragement to those who have been so strongly supportive of a public option and single payer program in health reform.

Linda Bergthold, PhD, is an independent health policy consultant and researcher and Senior Advisor at the Center for Medical Technology Policy. She currently serves as on various boards and committees to evaluate new technologies and review research from the consumer perspective. Follow her on Twitter: @lab08