Obamacare’s Benefits Go Far Beyond the Individual Mandate
If the Supreme Court finds that the individual mandate in the federal health-care law is unconstitutional, the court may also decide the rest of the law is so inextricably tied to it, everything must go. That would bring the nation back to square one on health-care reform.
Opponents of the law say it would be fine to turn back the clock and start from scratch. In fact, in our polarized political climate, a do-over is unimaginable. What’s more, the Patient Protection and Affordable Care Act contains many specific provisions that would be painful to lose.
Without the law, insurance companies could keep turning away people with preexisting conditions or charging them higher premiums. They could maintain annual caps and restore lifetime caps on how much they spend on care for an individual policyholder. They could stop paying the full cost of preventive services such as mammograms, flu shots, and well-child visits. And young adults would no longer be guaranteed coverage on their parents’ plan until age 26.
We couldn’t look forward to state insurance exchanges, those competitive online marketplaces where, starting in 2014, people without coverage from employers should be able to buy health insurance using federal subsidies. And, with no subsidies and no expansion of Medicaid, we’d give up on the promise of insuring 32 million more Americans.
Many less-often-discussed pieces of the 2,000-page law are valuable as well. Consider the “medical loss ratio”—the requirement that for every dollar insurance companies collect in premiums, they spend no more than 15 cents to 20 cents on administration and profits. The rest has to go toward medical claims. Before the law, insurance companies often spent 25 percent to 30 percent of the money on administrative costs and profits.
Think, too, of the law’s charge to the Food and Drug Administration to arrange for speedy approval of “biosimilars”— cheaper versions of expensive, complex drugs derived from living organisms, including vaccines and gene therapies, that are used to treat conditions from arthritis to cancer. Biosimilars are needed to bring down the exorbitant cost of using biologic drugs. A three-month course of the melanoma treatment Yervoy, for example, a biologic made by Bristol-Myers Squibb (BMY), costs $120,000. Last month, the FDA released its draft guidance, suggesting that makers of biosimilars could in some cases save the time and expense of human trials.
Other opportunities to improve care while saving money would be lost as well. Under the Affordable Care Act, Medicare payments to hospitals are to be reduced if too many of their patients contract infections while they’re in the hospital or if too many of them, after their release from care, are quickly readmitted. Extra payments to private insurance companies for Medicare Advantage policies will be gradually eliminated. The law also provides for curtailing increases in other Medicare spending over 10 years, so that, all things considered, it saves the program almost $500 billion.
The law is not perfect, of course; nothing with so many facets could be. But it takes a great many small steps in the right direction—toward a health-care system that provides good-quality care at a reasonable price for the largest possible number of people.
Give Dublin Time to Repay Its Debts, But Insist on a Corruption Crackdown
On May 31, Ireland will hold a referendum on the European Union’s new fiscal compact. A “no” vote won’t stop the agreement from taking effect, but it would undermine the pact’s legitimacy. Irish voters’ grievances need to be addressed before they become a threat not just to Irish democracy but also to the wider European project.
Item one on the list is Ireland’s effort to amend a government obligation to the Irish Bank Resolution Corp., the entity Dublin built to contain the failed Anglo Irish Bank (and a couple smaller, equally broken institutions). This unusual debt —called a promissory note—pays cash to the IBRC, which in turn services a debt to the Irish central bank under an emergency liquidity program. The government wants to defer its next payment of about €3 billion (2 percent of national output) which is due March 31, and reschedule the obligation in future years.
The European Commission and European Central Bank are resisting. The debt must be serviced as promised, they say. Rules are rules.
This is a mistake. An exception should be made for Ireland because the terms of the Irish bank bailout were themselves both exceptional and unfair.
With the EU’s encouragement, the Irish government burdened its taxpayers with a debt equivalent to 20 percent of gross domestic product so that the failed bank’s unsecured creditors and bondholders could be made whole. Nothing on that scale was done elsewhere. Lately, Ireland has cut its budget deficit sharply. Unlike Greece, it can’t be accused of backsliding. And it isn’t asking for its obligation to the ECB to be forgiven, merely extended. The March 31 payment should be deferred, and the future schedule of payments restructured.
In turn, the Irish can do something for Europe—and themselves: Undertake a domestic political cleansing. A long-running official inquiry has declared that corruption in Irish political life is “both systemic and endemic.” Ireland needs stiffer punishment for bribe-payers and bribe-takers, and full disclosure of political donations. New laws to this effect are under consideration, which is good, but a fresh zeal in enforcement matters even more. Irish public figures need to rethink what’s acceptable, and Irish voters need to insist that they do.