Avalere Health has quantified how narrow networks are in Obamacare exchange plans, as shown in the figure below.

According to Avalere CEO President Dan Mendelson: “Plans continue to test new benefit designs in the exchange market. Given the new requirements put in place by the ACA, network design is one way plans can drive value-based care and keep premiums low.”

Well, that is one way to look at it, and I hope Mr. Mendelson is right.

On the other hand, there are other indications that insurers are designing plans to attract healthy applicants and shun sick ones. I fear that this research builds on that case, because the networks of specialists (oncologists, cardiologists) are much narrower than the networks of general practitioners.

That is what you would do if you were designing a network for the healthy — ensure adequate access for those who need only their annual preventive visit (free under Obamacare) but reduce access for patients who need specialty treatment.

I don’t want to go overboard here. It may well be that there are greater differences in quality among specialists than general practitioners, in which case it would be quite reasonable to characterize a very narrow network of specialists as high value.

* * *

For the pivotal alternative to Obamacare, please see the Independent Institute’s new book, A Better Choice: Healthcare Solutions for America, by John C. Goodman.

The media have reported that 6.6 million “taxpayers” paid the Obamacare penalty (tax) for not obeying the individual mandate to buy federally qualified health insurance in 2014. However, the actual figure must be much larger.

The report by the Taxpayer Advocate discusses “returns,” although not individual taxpayers. It reports that 2.6 million 2014 returns claimed Obamacare’s premium tax credits, totaling $7.7 billion paid out, and an average pay out of $3,000 (page 39, figure 3.3.1).

We know from other sources that about 6.14 million individuals claimed tax credits for Obamacare coverage last year (87 percent of 7.06 million individuals). (And that is only if we count people who signed up during open enrollment, which ended in March 2014. Because special enrollment continued throughout the year, most of those who signed up later would also have claimed tax credits.)

So it looks like we have at least 2.36 Obamacare-enrolled individuals per household filing a tax return claiming a premium tax credit. Although, the U.S. Department of Health and Human Services reports an average tax credit of $264 per individual per month, which would add up to $3,168 per year – about the same as the Taxpayer Advocate reports for the average return. Of course, only about half of Obamacare enrollees stay enrolled for the whole year, so maybe these dollar figures are not as confusing as they initially appear.

Anyway, if we flip around the number of individuals per return, we would guesstimate that those 6.6 million returns that paid penalties for not obeying Obamacare represent about 18 million individuals.

* * *

For the pivotal alternative to Obamacare, please see the Independent Institute’s new book, A Better Choice: Healthcare Solutions for America, by John C. Goodman.

Since a crazed, hate-filled and cowardly gunman killed nine black Christians in Charleston, South Carolina, the PC police have been in attack mode on anything  associated with the Confederate States of America.  The South Carolina General Assembly quickly voted to removed the Battle Flag from a Confederate Soldiers’ Memorial on the State House grounds.  Now, critics want  to destroy a massive carving on Stone Mountain outside of Atlanta featuring Confederate heroes Jefferson Davis, Robert E. Lee and Thomas “Stonewall” Jackson.  Some are even demanding the rethinking of events associated with Thomas Jefferson, Andrew Jackson, and others because they were slave owners.

Ben Hallman at the Huffington Post tells us how we are supposed to think: “The Confederacy was the most vile and harmful political invention in United States history. It was founded on the explicit principle that slavery is the ‘natural and normal condition’ of black people, and that they should be ruthlessly exploited to the benefit of their white masters.”  Hallman and others see Confederacy as synonymous with slavery and racism, and tell us to despise all things Confederate.  His is a very simplistic view of history.

Slavery was a horrible institution that most of us, thankfully, cannot begin understand.  But if we are going to remove symbols and emblems associated with it, we better look at the Stars and Stripes before hunting down anything with the initials CSA.  Slavery, of course, existed in the United States from colonial times until ratification of the 13th Amendment.  Twelve presidents owned slaves at one time or another, including George Washington and U.S. Grant.  Actually, slavery existed longer in the Union than the CSA, since the Emancipation Proclamation did not apply to slaveholding states remaining loyal to the Union.  For a good study on the war, causes, and effects, see Robert Higgs, “The Bloody Hinge of American History.” For anyone interested in the growth of the federal government under Lincoln and the Republicans, see Joseph R. Stromberg, “Civil War and the American Political Economy.” For a scholarly argument that war was not necessary to gain emancipation, see Jeffrey Rogers Hummel, Emancipating the Slaves, Enslaving Free Men.  A review of the book can be found here. 

Of course, the Stars and Stripes has also presided over many horrific acts and policies dealing with removal of American Indians, imprisonment of Japanese Americans in WWII, and the torturing of prisoners at Gitmo.  Such examples are abundant.

If we want to hold the USA and CSA to our modern standards and sensibilities, both will be found lacking.  But in both the CSA and the USA we can find men and ideas worth studying and considering.  Libertarians have long realized this.  For example, Professor Randall Holcombe points to many provisions of the Confederate Constitution that limited government power and that would serve us well today.  Robert E. Lee rightly remains internationally respected as a brilliant tactician, a gentleman, and  man of honor.  The Independent Institute has long championed William Lloyd Garrison, his demands for the abolition of slavery, and his contributions to liberty.

Bottom line: We need to pause before we banish all symbols of our past that don’t comport with modern thinking.  Our history has rough edges and embarrassments we don’t want to repeat.  But there’s plenty to learn from great men of the North and the South, the Blue and the Gray.

For most of human history, love and marriage had positively nothing to do with each other. Marriages were arranged in order to strengthen alliances, end family feuds, and secure political power. You were lucky if you liked your spouse, let alone loved them!

In the United States today, we don’t see marriages for political power (though it’s an interesting thought experiment to think about what would happen if one of President Obama’s daughters married one of Mitt Romney’s sons). But we do see marriages that, more than likely, aren’t for love. The late Anna Nicole Smith, for example, made headlines when she married the 89-year-old oil tycoon J. Howard Marshall. She was 26 at the time. Needless to say, the union of a former Playboy model to a man 63 years her senior raised some questions—until people found out Marshall’s net worth was a cool $1.6 billion.

According to the CDC, approximately 2.1 million marriages occurred in the United States in 2011. My guess is that some of these did not happen for love.

One interesting instance of such a transaction involves a special type of immigration visa—and highlights how government policy induces people to take desperate measures to improve their lives.

A K-1 visa is issued to individuals living outside the United States and allows him or her to immigrate in order to marry a U.S. citizen. I’ve written elsewhere about the complexities of the immigration process and how for many people in developing countries, their chances to obtaining entry for work or asylum are slim to none. Even those who can obtain work visas may spend years waiting in line. This has led people to undertake dangerous journeys and send even their children thousands of miles away alone–all in hopes of a better life.

As such, it should come as no surprise that more than one person has figured out they can get to the States by marrying a U.S. citizen. This issue received some attention recently with the release of the second season of the TLC reality show, “90 Day Fiance.” As the title of the show implies, the K-1 visa allows for a foreign fiancé to enter the country, but requires he or she to marry their betrothed within three months. In nearly every case, the family members of the American were skeptical, some asking point blank if their fiancé was “just in it for the green card.”

This is not to say that everyone who is issued a K-1 visa is solely seeking citizenship, but without a doubt, some people who enter the U.S. on K-1 visas are just in it for the green card. Understandably, there isn’t data on how many marriages take place every year just so a foreigner can obtain citizenship.

This got me thinking, why would someone marry a U.S. citizen if they were just looking to enter the U.S.? Is it easier than the alternatives?

Let’s look at the process for a K-1 visa. Assume the foreign partner is just trying to get a green card.

Add to this process the following. If you are just in it for the green card, you need to find someone to marry you. You can A.) manipulate another person and trick him or her into marrying you. This takes time, effort, and spending copious amounts of time without someone for whom you have no feelings. B.) You can find someone who will agree to marry you if you pay him (The amount of money this takes varies. I’ve seen estimates from less than $10,000 to $25,000+). This requires additional time and effort, though perhaps less time  on the back end with someone you don’t really care about (though you have to fake it well enough to fool immigration). C.) You can find someone who is particularly sympathetic to your plight and get him to agree to marry you. You forgo paying them, perhaps, but still incur the costs noted above.

This process should seem insane–because it is! It requires time, money, and fraud. Yet, as economics tells us, individuals would not undertake these transactions if the benefits were not greater than the cost.

This means that the above process, all of it, is more appealing than going through the other U.S. immigration processes. If that doesn’t indicate a need to reform the current immigration system, I don’t know what does!

Last April, Arizona governor Doug Ducey signed a law that allows patients to order lab tests directly from a lab, without physician intermediation. The tests will be self-paid: No government nor private health plan has to pay for them.

The legislation was backed by one of the most exciting diagnostic companies in the market: Theranos, founded by an incredibly entrepreneurial young billionaire, Elizabeth Holmes. The firm’s technology allows a battery of tests to be run on a single drop of blood, instead of the long draws we are used to undergoing.

Ms. Holmes’ business strategy necessitates disrupting the very staid world of clinical laboratories, which has been protected from innovation by the government-driven payment model. Instead of lobbying to get inside the model, Ms. Holmes lobbied to be exempt from the model. We need more people like that in health care.

This brings us to an interesting dispute between another billionaire, Mark Cuban, and the journalistic and medical establishment. Mr. Cuban advises everyone who can afford it to have his or her blood tested quarterly. His opponents say that’s overkill. Arizona’s new law makes their opposition obsolete.

(Recall that the Obama Administration has issued a rule allowing anyone direct access to lab results. I was not quite comfortable with it because of a concern for federalism. I have no such concerns with Arizona’s new law.)

Fellow Forbes contributor and health care entrepreneur Dan Munro has taken advantage of the new law. It was a positive experience:

The Theranos process really has removed much of the friction I associate with blood tests I have taken in the past. Access is through a familiar retail facility with pharmacy hours. Billing is a typical retail transaction with credit, debit and HSA cards (or cash/check). The lowest price blood test is $2.70 (Glucose) and Theranos advertises that their pricing is at least 50% below Medicare reimbursement rates for all tests.

The highest price test on the Theranos order form was $59.95 ‒ a comprehensive test for Sexual Health. For comparison purposes, RequestATest (which appears to be an online, front-end for using LabCorp locations around the country), charges $199 for a comprehensive STD test and AnyLabTest Now (with 3 locations in the Phoenix metro) charges $229 for a comprehensive STD test.

The Obama administration is a fan of getting clinical data in the hands of patients. Here is a great opportunity for it to do something I’ve advocated forever: Tell Medicare beneficiaries in Arizona that if they can find a blood test for half the cost of the fee Medicare pays, Medicare will split the savings between the patient and taxpayers, adding some share of the savings to the patient’s Social Security deposit. (Note: Medicare would not recommend or endorse Theranos specifically. Theranos and Walgreens would take care of promoting the option.)

I’d bet that if Medicare adopted such a policy, and beneficiaries in Arizona told their friends on Medicare around the country, other state legislatures would pass laws mimicking Arizona’s pretty quickly.

The Independent Institute’s Love Gov videos offer an amusing look at the raw deal government policies give to America’s youth.  In the videos, sometimes government tempts young people into bad deals, such as student loans, and other times it offers them little choice but to take bad deals, as with health insurance.  But the videos understate the magnitude of forced transfers from younger Americans to elders.

Social Security, Medicare, and Medicaid make up 60% of the federal budget, and those programs are transfers from the taxpayers who fund them to recipients.  Social Security and Medicare are only for older Americans, and a major share of Medicaid also goes to older Americans.  Younger Americans pay the taxes; older Americans get the benefits.

Things are getting worse for young Americans.  As Jonathan Gruber noted, it is because of “the stupidity of the American voter” that Obamacare charges artificially higher premiums to younger people so that older people can have lower premiums.

So sure, government tempts young people to take out excessive student loans, to take on home mortgages beyond their abilities to afford them, and do other irresponsible things, but government also forces even the most responsible American youth to sacrifice some of their own well-being to support older Americans.

Government does many things.  One is: it systematically plunders American youth for the benefit of older Americans.  Is this fair?  Ironically, programs that support the old at the expense of the young are more politically popular among the young than the old.

America is a country founded on the principle—regardless of how imperfectly carried out in practice—that all men* are created equal. We celebrate and honor the value of the individual, endowed irrevocably with the rights to life, liberty, and the pursuit of happiness.

We cherish the American Dream that, regardless of the circumstances of birth, with grit and determination, anyone can succeed.

And while we may not yet be there, we strive to fulfill Martin Luther King’s dream of a nation in which all are judged solely by the content of our character, not by the color of our skin.

How un-American, therefore, to witness Donald Trump as a candidate for the Presidency of the U.S. practicing identity politics, lumping together and branding an entire population—illegal immigrants from Mexico—as rapists and murderers.

And he goes farther. Trump lays the blame for the moribund American economy at others’ doors: “[The unemployed] can’t get jobs, because there are no jobs, because China has our jobs and Mexico has our jobs.”

Witnessing cheers for such scaremongering should strike fear in the hearts of everyone who loves liberty. We’ve seen before a country weary of economic malaise cheer a charismatic leader rallying his followers against a scapegoat: Hitler laying the blame for Germany’s economic crisis on the Jews.

And just as disastrous German economic and monetary policies exacerbating the punitive Treaty of Versailles—not “the Jews”—produced Germany’s ills, so Trump and the American people need look to our own dysfunctional government—not Mexicans—as the primary producer of our economic stagnation.

A government peddling mediocrity and class warfare in the place of “public” education; a government erecting increasingly insurmountable barriers to economic opportunity and entrepreneurship; a government bankrupting the middle class and inuring dependency.

A land of opportunity has no fear of more people—we recognize them as a source of wealth—human capital, growing our economy.

American Conservatives cheering Trump have forgotten that their patron saints—Milton Friedman and Ronald Reagan—both recognized Mexican immigrants as a benefit to the U.S.

Friedman famously tempered his support for immigration—

Now, that Mexican immigration, over the border, is a good thing. It’s a good thing for the illegal immigrants. It’s a good thing for the United States. It’s a good thing for the citizens of the country. But, it’s only good so long as it’s illegal.

—with warnings on the costs of welfare: advocating illegal immigration, since illegal immigrants are not eligible for welfare. Thus, he rightly called for the abolition of the Welfare State—not the abolition of immigration.

Yet even accounting for the costs of public benefits, numerous studies from Independent Institute and others find that immigration produces a net benefit to the U.S. economy, and a restriction on immigration especially hurts small business.

As more than 500 economists, including 5 Nobel Laureates, agree:

Immigrants do not take American jobs. The American economy can create as many jobs as there are workers willing to work so long as labor markets remain free, flexible and open to all workers on an equal basis.

So this is the cry around which all Americans should be rallying: dismantle the horrific government programs that are producing an ill-educated citizenry, blocking opportunity and entrepreneurship, and replacing our culture of valuing every individual as possessing unique and unlimited potential with one that classifies and brands us by race, creed, national origin, and gender.

Americans should indeed stretch out our right arms—not in “Heil” for Trump’s ridiculous scapegoating—but to raise high the lamp of liberty, a welcoming beacon for all who yearn to breathe free.

———
*”Man” is our genus: human being, and encompasses male and female.

Iowa has become the tenth state to enact the Interstate Medical Licensure Compact. This is a great achievement for the medical profession and state sovereignty. For almost a year now, I have been supporting this effort, and I am glad to see it succeeding.

Licensure itself is problematic, because it confers monopoly power on a profession. A better solution is certification, which prevents unqualified practitioners from using a title claiming certification but does not prevent them from practicing. However, physician licensing is not going away, and as long as it is with us we should applaud developments that facilitate the practice of medicine across state lines.

On June 24, I attended a briefing held after seven states joined the compact. That milestone started the wheels turning to establish a commission that will execute and administer the interstate licensing of physicians. At the meeting I learned a few things, a couple of which surprised me:

First, the impetus for the interstate compact was growing anxiety among physicians that Congress would assert a federal power to license physicians. If state medical boards did not solve the problem of interstate licensing, then they would lose the initiative. This did not surprise me.

Second, they do not need legislation in Congress to authorize the compact. The states that have signed on can move right ahead. This surprised me a little.

Third, the compact is not about telemedicine. This surprised me a lot. I had thought it was all about telemedicine. On the contrary, doctors sometimes visit patients across state lines, and they want easy and responsible licensing in many states. One group at the meeting was from the University of Pittsburgh Medical Center. Its affiliated physicians will sometimes have cause to practice in, for example, West Virginia.

This made me think the compact is not just for physicians in rural areas. There are plenty of physicians who cross state lines between, for example, Virginia, the District of Columbia, and Maryland; or New Jersey and New York; or New York and Connecticut who would benefit from the compact.

Following the recent news, I’m not sure under what conditions a baker can decline to provide a cake to potential customers.  I’ve seen this story in which an Oregon bakery was fined $135,000 for declining to make a cake for a same-sex wedding, but I’ve also seen this one in which a Wal-Mart refused to make a cake decorated with a Confederate flag for a customer, but did bake a cake with the ISIS battle flag on it, and to add to the confusion, then apologized for providing what the customer wanted.

Is it legal for a baker to refuse to make a Confederate flag cake, but illegal to refuse to make a same-sex wedding cake?  Or, did Wal-Mart violate the law when it refused to bake the Confederate flag cake, and then apologize for abiding by the law when it made the ISIS cake?  Debbie Wasserman Schultz says “You shouldn’t be able to turn people away based on who they are,” and I presume that would apply to Southerners just as much as to gays.

When is it legal, and when is it politically correct, to refuse to bake a cake to a customer’s specifications?  It appears that sometimes it is mandatory to bake a cake to a customer’s specifications, and sometimes it is prohibited, regardless of the preferences of the baker.  Cake politics has become quite confusing lately.

Obamacare’s best frenemy, Dr. Ezekiel Emanuel, and his colleagues at the Center for American Progress, gave up on Obamacare last year. In yesterday’s Wall Street Journal, he and Topher Spiro emphasize that Accountable Care Organizations, which Obamacare established to co-ordinate care and lower costs in Medicare, are failing to achieve either goal:

The Obama administration recently announced a laudable goal: 50% of Medicare payments will be made under new payment models by 2018. But to reach this goal, the administration must change tactics and use the authority given to it under the law to rapidly expand payment reforms.

While many reforms are being tested, the administration’s main focus has been on creating “accountable care organizations.” ACOs are groups of medical providers that are rewarded for achieving savings on their total spending while improving quality.

A cost-control strategy that relies on expanding the number of ACOs won’t be successful. Before it is too late, the Obama administration must focus on a reform that can be scaled. Medicare should lump together physician services, hospital costs, tests, medical devices, drugs and rehabilitation services related to common ailments—such as broken hips, heart stents and cancer treatments—into a bundle. It could then pay a medical provider a discounted amount for the whole array of services.

(Ezekiel Emanuel and Topher Spiro, “The Coming Shock in Health-Care Cost increases,” Wall Street Journal, July 8, 2015)

I am not quite sure what they are getting at, because Medicare did establish bundled payments in 2013. It is not clear what Dr. Emanuel and Dr. Topher believe the current model lacks. Here’s my summary of the difference between government-dictated “accountable care” and “bundled payments”: The former is for healthy patients and the latter is for sick patients.

Anyway, this invites the question: If current bundling and accountability, as determined by the federal administration are failing, then why would we expect the Obama administration to do a better job? Why would we expect a future administration to do a better job?

In which other line of business would we expect an insurer, a third-party, to determine what should be bundled and what should be sold independently? Do auto insurers decide whether radios should be standard in cars? Do homeowners’ insurers decide whether homes should be built with kitchen appliances included?

The only way to ensure that bundled care is bundled right is to let patients control the dollars and let providers experiment with collaborating on different bundles of care. That would mean turning Medicare into “some kind of voucher,” as President Obama has put it.

* * *

For the pivotal alternative to Obamacare, please see the Independent Institute’s new book, A Better Choice: Healthcare Solutions for America, by John C. Goodman.