Convicts and convictions: some lessons from transportation for health reform.

• Author: Hyman, David A.

INTRODUCTION I. CONVICT TRANSPORTATION II. THE THREE "I"S OF TRANSPORTATION: INCENTIVES, INSTITUTIONS, AND INDIVIDUALS A. Incentives B. Institutions C. Individuals D. Implications for Health Reform III. THREE MORE "I"s: IGNORANCE, INCOMPETENCE, AND IDEOLOGY A. Ignorance B. Incompetence 1. Front-Loading of Insurance Reform for Children 2. Failure to Include a Severability Clause 3. Behavioral Biases 4. Other Examples C. Ideology IV. SUSTAINABILITY CONCLUSION [I]ncentives are more reliable than moral exhortations in changing behavior.

George F. Will (1)

INTRODUCTION

It wasn't supposed to go this way. The Democrats had taken both houses of Congress in 2006 and the presidency in 2008. With a filibuster-proof majority in the Senate and a sizeable majority in the House, the decades-long road to Democratic delivery of comprehensive health reform had finally come to an end (along with conservatism and the Republican party). President Obama had promised to deliver health reform--although he allowed that if you liked your existing arrangements, you could keep them. Polls indicated that Democrats had maintained their traditional edge over Republicans in public trust to handle health care. Pharmaceutical companies and insurers had been bought off or intimidated into silence, ensuring there would not be a repeat of the "Harry and Louise" commercials that helped sink the Clinton health reform effort. (2) The path to success was clear, as long as the Administration let Congress write the bill. Once Congress enacted the Patient Protection and Affordable Care Act (PPACA), (3) Democrats would receive the thanks of a grateful nation, and their electoral dominance would be assured. (4) The only real question was whether to include a public option to placate the left; everything else appeared to be a done deal.

Reality intruded, as it always does. The enactment of PPACA was an excruciating and extended process, with twists and turns that a novelist would have been embarrassed to include in a work of fiction. Former Senate Majority Leader Tom Daschle, the President's first choice to lead the Department of Health and Human Services and run the health reform effort, was forced to withdraw his nomination after it emerged that he had underpaid his taxes by more than $100,000. (5) Opposition to PPACA led to loud and rancorous public meetings between legislators and their constituents during the summer of 2009. (6) Opponents accused proponents of lying about whether people could keep their health care coverage and whether PPACA would cut Medicare; proponents accused opponents of lying about "death panels" and the "government takeover" of health care. (7) The "public option" was in, then out, then (maybe) back in again. (8) Medicare for the near-elderly was in, then out. (9)

When Senator McCain proposed to tax employment-based coverage during the 2008 presidential election and to provide an offsetting tax credit, the Obama campaign savaged the proposal--but PPACA included a similar provision (an excise tax on "Cadillac health plans"). (10)

It took seven months after the 2008 election for the Democrats to get a filibuster-proof majority in the Senate, with Al Franken finally declared the winner in the Minnesota race. (11) The House then passed one bill on November 7, 2009 (the Affordable Health Care for America Act), (12) and the Senate passed a substantially different bill (PPACA) on December 24, 2009. (13)

The Democratic filibuster-proof majority, however, was short lived. Before his death in August 2009, Senator Edward Kennedy convinced the Massachusetts legislature to change its election laws to allow the governor to appoint a successor until a special election was held if a Senate seat became vacant--which would be unremarkable, except that in 2004 he had pressed the Massachusetts legislature to enact legislation to keep the governor from appointing a successor until a special election was held. (14) When the special election was held in January 2010, Scott Brown, a Republican, won the seat by campaigning against PPACA. (15)

With Brown's victory, PPACA appeared to be dead as a doornail, and then Wellpoint announced that it was increasing premiums on individual policies in Indiana and California by "up to 39%"--triggering a firestorm of criticism. (16) After flirting with "deem and pass" (i.e., "passing" the Senate bill without actually voting on it), (17) the House ultimately passed PPACA on a party-line vote, along with a "sidecar" reconciliation bill amending PPACA that the Senate passed a week later. (18) President Obama signed PPACA on March 23, 2010, (19) and the sidecar (the Health Care and Education Reconciliation Act of 2010) (20) on March 30, 2010. (21)

Post-enactment, the twists and turns continued. President Obama nominated Dr. Donald Berwick to head the Center for Medicare and Medicaid Services on April 19, 2010; used a recess appointment on July 7, 2010, to place Berwick in the position before a confirmation hearing could even be scheduled; resubmitted his name for consideration for a permanent appointment on July 19, 2010; and resubmitted it once again on January 26, 2011. (22) To date, there has not been a confirmation hearing, and it appears there will not be one--meaning Berwick will have to step down by December 31, 2011. (23)

The 2010 midterm elections became nationalized over the issue of health reform. As the results of this election made clear, PPACA actually did include a death panel--but it targeted Democrats running for reelection. (24) An August 2010 briefing by Administration allies suggested that proponents should stop claiming PPACA would reduce health care spending and the deficit (two of the principal selling points, ceaselessly repeated by PPACA's proponents) and rely instead on personal anecdotes and promises to "improve" the legislation. (25) During the fall of 2010, some Democrats ran advertisements on health reform--but most of those were highlighting the fact that they voted against it. (26) In Iowa, the Democratic Governors' Association sent out mailers and ran television advertisements claiming that the Republican gubernatorial candidate (Terry Branstad) was too much like President Obama on health care! (27)

Twenty-one states immediately filed suit claiming that PPACA was unconstitutional; the Department of Justice (DOJ) responded by arguing, inter alia, that the penalty for noncompliance was a tax, even though President Obama had previously stated in an interview, "I ab solutely reject that notion." (28) PPACA's supporters asserted that these lawsuits were objectively frivolous, but attempts by the DOJ to have the cases dismissed resulted in a split decision with judges in Michigan, (29) Virginia, (30) and the District of Columbia (31) upholding the law; a judge in Virginia striking down the individual mandate (but not all of PPACA); (32) and a judge in Florida striking down the entirety of PPACA. (33) In state referenda, voters in Arizona, Missouri, and Oklahoma disapproved of PPACA's individual mandate. (34) Voters in Colorado rejected a similar initiative by a narrow margin. (35)

President Obama had promised that PPACA would not affect anyone's coverage, (36) but attempts to celebrate the six-month anniversary of PPACA's enactment were overshadowed by announcements that some insurers were withdrawing from the health insurance market entirely, (37) other insurers would no longer issue child-only policies, (38) and many were hiking their premiums to deal with the mandates and adverse-selection problems PPACA created." (39) Front-page news stories announced that PPACA's restrictions on medical loss ratios might cause major employers to drop coverage entirely unless they could obtain a waiver. (40) The Administration responded by expressing "outrage" at insurers' failure to recognize that PPACA represents the triumph of good over evil and that insurers' days of acting like price-gouging sociopaths were over. (41) Behind the scenes, HHS granted scores of waivers in an increasingly frantic attempt to keep the bad press from overwhelming the celebration (42)--a figure that climbed to more than 1000 in the intervening months. (43) The Administration announced the waivers on a webpage with the Orwellian heading, "Helping Americans Keep the Coverage They Have." (44) For those keeping track at home, the sequence is as follows:

1. Promise everyone they can keep their coverage if PPACA is enacted; (45)

2. Enact PPACA, which forces people to change their coverage because their insurer has responded to PPACA by with drawing coverage entirely or threatening to do so; (46)

3. Provide a waiver from PPACA to ensure that people won't lose their coverage; (47)

4. Brag that you are "Helping Americans Keep the Coverage They Have" by providing a waiver from the law you enacted with the promise that people wouldn't lose their coverage. (48)

   Even PPACA's boosters acknowledge the daunting implementation challenges that lie ahead. (49)

   Despite--and perhaps because of--this record, PPACA functions as a political Rorschach test. To its enthusiasts, PPACA is a historic transformation that will dramatically broaden access, lower costs, reduce the deficit, and eliminate health care fraud, waste, and abuse. To its critics on the right, PPACA is a catastrophically misguided, ineffective, and unaffordable monstrosity, crammed down the throats of an unwilling public by special deals and legislative chicanery. To its critics on the left, PPACA is a disappointment of epic proportions; with control of the presidency and the House and a filibuster-proof majority in the Senate, the Democrats couldn't even deliver a public "option," let alone a single payer.

   PPACA has given rise to a massive amount of commentary--much of it devoted to an in-depth explication of why the writer's interpretation of PPACA (almost always chosen from one of the three options offered above) is the "correct" one. These explanatory efforts have...