Professional Documents
Culture Documents
1AC---Economy
Advantage 1 is the Economy
Increasing coverage is key to faster growth –it solves workforce productivity, job
lock, and bankruptcies
Liam Malloy 16, Ph.D. in Economics from the University of Maryland, Assistant Professor in the
Economics Department at the University of Rhode Island, et al., 2016, “State Sponsored Health Insurance
and State Economic and Employment Growth,”
http://digitalcommons.uri.edu/cgi/viewcontent.cgi?article=1004&context=ecn_facpubs
We find that in both panels increased health insurance coverage is associated with faster economic growth . In the
United States, we find evidence that Medicaid coverage increases both macroeconomic growth and employment growth. However, our results
also suggest that in their efforts to capitalize on the economic benefits of expanding health insurance, legislators would be wise to implement
policies that control per-enrollee costs. To the extent that the economic implications of increased state-supported health care coverage are a key
aspect of the ongoing debate in the health insurance policy arena, our findings could inform future reforms. ¶ Social Policy and Economic Growth¶
Previous studies of the relationship between social policies and state economic growth find inconsistent
effects (see e.g., Blair and Premus 1987; Crain and Lee 1999; Dye 1980; Erickson 1987; Fisher 1997; Helms 1985; Jiwattanakulpaisarn et al.
2009; Jones 1990; Jones and Vedlitz 1988; Newman 1983; Schneider 1987). Some find positive relationships between spending and economic
growth, others a negative relationship, and still others find no relationship at all.2 Work on the specific relationship between health spending and
economic growth is very limited. For example, a report issued by the Department of Health and Human Services (2008, 47) reviewing the
literature on government health spending and economic growth concluded that “[g]iven that most
of the literature in this area is
based on anecdotal reports or descriptive evidence, there is significant scope for improving the current
methods by using longitudinal data and more rigorous empirical analysis.” Their own empirical tests using a
panel dataset including 13 years of state spending data suggested a positive relationship between government expenditures on health and state
economic growth, a result contrary to that found in Jones (1990).¶ Because health problems worsen when unaddressed, cities paying for
emergency care of uninsured populations may pay significantly more for the health problems that result from putting off care than places that pay
upfront for preventative care (Baicker and Chandra 2006 Baker, Fisher, and Wennberg 2008; Bamezai and Melnick 2006). In fact, Baicker and
Chandra (2004, 184) find that spending and health outcomes are inversely related perhaps because “the use of intensive, costly care…crowds out
the use of more effective care.” Scholarship on the relationship between health care spending in health outcomes suggests a complex relationship.
Fisher and others (2007) find that additional spending on Medicare patients tends to be associated with higher numbers of procedures rather than
improved health outcomes. Other research suggests that health care spending does produce improved outcomes but only in particular populations
(i.e., infants due to a decrease in infant mortality) (Gallet and Doucouliagos 2015). While the relationship between health care spending and
health outcomes is complex, the relationship between spending on health insurance and health care outcomes may be more straightforward.
Health insurance may lead to more desirable health care outcomes directly (through care which addresses extant diseases/infirmities) and
indirectly (through preventative care), and healthcare spending is not a simple proxy for the prevalence of health care insurance (see Anderson
and Frogner 2008; Anderson and Poullier 1999).¶ Over the last decade, there has been an increase in attention to assessing social programs to see
if they “work.” In the health care policy arena, these assessments tend to focus on one of two primary criteria: (1) health outcomes, or (2) fiscal
efficiency. If health insurance is supposed to make people healthier, we can evaluate Medicaid (for example) based on the health related
outcomes of program participants (e.g., Baiker et al. 2013). But states (and politicians) also have to weigh if a program is “worth the cost” given
that there are other calls on the public purse. These assessments focus more on if a program saves more money than it spends over time or leads
to economic growth that helps the state recoup its costs (in terms of making up lost or increasing tax revenue for example) or an increase in
employment growth that makes the state economy stronger. If providing public health insurance strengthens the economy and reduces the net cost
of the program, it should enjoy broader support. Policy experts disagree about the net costs of existing state-sponsored health insurance programs,
the focal point of this article. Below, we review these arguments. ¶ Pro: Expanding State Sponsored Health Insurance is Worth the Cost¶ First,
increasing access to health insurance could positively affect labor supply and demand . Access to health
insurance increases the ability of people to remain in the workforce because it keeps them healthier and
increases the likelihood that they will be available for work. While this can increase overall lifetime earnings
and decrease employee turnover, it also could reduce the number of people reliant on other government
social programs such as social security, food stamps, housing assistance, etc. Moreover, access to health
insurance, particularly through the government may eliminate “job lock ” and encourage entrepreneurial
activities such as starting a new business or investing in research that could create more jobs for others (see
e.g., Sterret, Bender, and Palmer 2014). ¶ Likewise, larger government sponsored programs could alleviate some inequalities in the system
(Sterret, Bender, and Palmer 2014). For example, under an employee-sponsored health insurance regime, firms with more elderly or disabled
employees, pregnant women, and so on, pay more for health care than firms who have employees that are cheaper to cover. The financial
incentives generated by this insurance regime may encourage firms to either discriminate against certain workers (American Civil Liberties
Union 2002), decrease wages (Gruber 1994) and investments, or decrease hiring additional workers (especially new full time workers) (Baicker
and Chandra 2006) as health care costs become a larger percentage of labor costs. For these reasons, increasing government sponsored health
insurance could increase employment and economic growth by increasing the labor supply and eliminating market inefficiencies. ¶ Looking
specifically at Medicaid, some evidence suggests that expanding Medicaid coverage could increase economic and employment growth. Baiker
and others (2013) harnessed he unique “experimental” expansion of Medicaid in Oregon to test how Medicaid coverage affected individual health
outcome and economic security. While Medicaid access did not improve all health outcomes, “Medicaid coverage decreased the probability of a
positive screening for depression, increased the use of many preventive services, and nearly eliminated catastrophic out-of-pocket medical
expenditures” (Baiker et al. 2013). A related study demonstrated that those participating in the Medicaid expansion had “lower out-of-pocket
medical expenditures and medical debt (including fewer bills sent to collection), and better self-reported physical and mental health than the
control group” (Finkelstein et al. 2012).3¶ State-sponsored health insurance may boost economic growth through
other means as well. Providing lower income individuals with state health insurance can increase tax
revenues by keeping families and individuals out of debt that would otherwise keep them from paying
their taxes. For example, as the cost of health care has increased in the United States, lack of health insurance has become
the largest driver of bankruptcy (Himmelstein et al. 2009). Expenses associated with significant health issues also
decrease the ability of families to invest in activities that would increase their economic position and thus
increase taxable income. For example, a study by Collins and others (2012) found that 36 percent of young adults had medical debt, and
of those 31 percent had put off education and career plans, 28 percent were unable to meet their basic financial obligations because of medical
bills, and 32 percent could not make their student loan or tuition payments. ¶ Athird mechanism through which state sponsored health
insurance could bolster economic growth is as a direct economic stimulus (see e.g., Pauly 2003): expenditures on health
care increase both wages and the number of jobs in the health care sector. To the extent that expenditures on health
care lead to new treatments and cures that decrease morbidity and infirmity, spending can result in a large financial gain for
the country. (Aaron 2003; Murphy and Topel 2006).z
Coverage gaps threaten economic decline – stabilizing insurance markets is key
Sara Rosenbaum 10, JD from Boston University, Jonathan Gruber, Buying Health Care, the
Individual Mandate, and the Constitution, The New England Journal of Medicine,
http://www.nejm.org/doi/pdf/10.1056/NEJMp1005897
From an economics standpoint, pose of the ACA is to regulate how Americans buy health care, which is clearly economic conduct. Above all, the
ACA’s fundamental goal is to stabilize the vast U.S. market for health care services — which accounts for 17.5% of the gross domestic product,
according to Congress — along with the health insurance system on which nonelderly Americans rely as a principal means for financing their
health care. The law’s goal is revealed through extensive legislative findings that are set forth in the ACA. The
goal also can be seen in
the act’s provisions that collectively are aimed at making the insurance market work for millions of
Americans who, because of their income, health status, or both, have been locked out of affordable,
accessible, and stable coverage and must therefore try to pay for care at the point of service.¶ The existing
system has broad economic implications for both the insured and the uninsured. Far from being passive and
noneconomic, the uninsured consume more than $50 billion in uncompensated care, the costs of which are
passed through health care institutions to insured Americans. Moreover, medical expenses not covered by
insurance are one of the leading causes of bankruptcy in the United States, and the costs of resolving
those bankruptcies are borne throughout the U.S. economy. In addition, the lack of health insurance leads
to poorer health, which can, in turn, reduce workplace productivity. Even the possibility of losing health
insurance makes many workers afraid to leave their jobs for more productive positions elsewhere, so the
current system reduces the over all productivity of the U.S. labor force.¶ The changes made by the ACA to stabilize
the insurance market are fundamentally economic. The legislation’s core is its mandate to end pervasive discriminatory insurance practices while
making care affordable. But such change
is not possible without an individual mandate. If people who are in better
health can opt out of the market and effectively gamble that they can pay for whatever health care they
need at the point of service, prices rise for those who are in poorer health, leading to an “adverse
selection” spiral that raises insurance prices for all. This is not an idle conjecture . Five states have tried to
undertake reforms of the nongroup insurance market like those in the ACA without enacting an individual mandate; those five states are now
among the eight states with the most expensive nongroup health insurance.¶ In the end, the
ACA is all about altering individual
economic conduct, and its importance lies in the way it changes the when and how of health care
purchasing. By ensuring access to affordable coverage for most Americans, the law seeks to rationalize
our economic behavior while providing the regulatory and subsidization tools to make this rationalization
possible. To characterize the ACA as a law aimed at anything other than individual economic conduct is to fundamentally miss the point of the
legislation.
Small businesses are key to reverse economic stagnation – solves weak job growth
and labor outflows
Boyd Nash-Stacey 16, Economist at BBVA Compas, MA in Economics from the University of
Houston, 6/22/2016, Running on fumes: remaining gap in Beveridge Curve a matter of structural forces,
https://www.bbvaresearch.com/wp-content/uploads/2016/06/160622_US_EW_RunningOnFumes.pdf
As the U.S. economy enters its 28th consecutive quarter of expansion (4th longest since the great
depression), there is ongoing debate as to whether labor markets, and for that matter, the broader
economy is nearing the end of the expansion cycle. While there is evidence that expansions do not die of old age, there are
signs that the labor market recovery is nearing retirement, similar to a growing share of the labor force. 1
For example, a recent report from the BLS suggested that job growth was the lowest in six and half years.
Moreover, the auspicious signs of strong flows back into the labor force reversed course dramatically. While
these measures can be volatile, there are many signs that cyclical recovery is nearing its peak at a moment when
conditions remain below the economy’s pre-crisis potential.¶ That being said, a broad view of the labor market suggests
that conditions could not be better. The economy has added an average of 226K jobs per month since 2014, and the unemployment rate now
stands at 4.7%—the lowest rate in nine years. In addition, the number of people choosing to re-enter the labor force and begin work was at an all-
time high in April, pushing up the labor force participation rate, a trend that had coincided with wage gains and tighter labor market conditions. ¶
To assess if there is remaining slack in the labor market or if the remaining headwinds are structural in nature, we exploit the empirical
relationship between the unemployment rate and jobs vacancies, known as the Beveridge Curve (BC), and a time-series derivation of the gap in
the BC referred to as the “curve shifter.” Theory suggests that higher levels of unemployment (larger pool of job seekers) is associated with a
lower number of vacancies given that a higher supply of job seekers and greater demand for employees will increase the likelihood of employers
finding a match for their vacant positions. As a result, traditional business cycles produce movements along the curve. However, during the
recession and recovery, there has been a persistent outward shift in the curve, which is unlikely to be
explained by normal cyclical forces.¶ To put this into perspective relative to the pre-crisis, for any given
job vacancy rate, there was a 2pp higher unemployment rate (UR). For sectors most acutely impacted by
the crisis, such as construction and transportation and utility, the gaps were 5.1pp and 2.3pp larger,
respectively. Although there have been some indications of improvements, based on a derivation of this
gap or shift in the BC, there appear to be remaining frictions.¶ Using this reduced form representation of the curve shifter,
we confirm previously established relationships between productivity (Lubik 2012), uncertainty (Liu & Leduc 2015), and secular shifts in labor
force activity a la Bova et al (2016). However, we find that access to credit, in addition to significant fiscal policy tightening, are the key elements
in the breakdown of labor market matching. Moreover, we find heterogeneous impacts across firm size and age, and industries. In fact, the
reduced form representation of the factors that can “shift the curve” a la Pissarides (2000) and Liu & Leduc (2015) shows that despite a handful
of cyclical indicators suggesting vast improvements in the labor market, there remain significant structural forces at play.¶ Usual suspects explain
remaining gap in labor market¶ After controlling for changes in unemployment benefits (extension of unemployment insurance claims) due to the
financial crisis, we found that there were three key factors that explain the significant and persistent outward shift in the BC: labor force outflows
of those 55 and older, cyclical fiscal policy tightening and credit availability. In fact, over a four year cycle, increased willingness of banks to
lend in the commercial and industrial (C&I) and commercial real estate loans (CRE) spaces explains 35% of the shift, while cyclical fiscal policy
shocks explain 31% of the movement, productivity explains 15%, and retiree outflows from the labor force explain an additional 13%. Unlike Liu
& Leduc (2015), we find that policy uncertainty explains only a small portion of the shift (3.0%). On a short time horizon (four quarters),
however, productivity plays a more important role in matching, explaining nearly 50% of the shift, with labor force outflows explaining an
additional 17%.¶ These results
imply that factors that are cyclical by nature can have lasting effects on broader
labor market activity. A process sometimes referred to as hysteresis. For example, fiscal policy shocks and credit availability tend to ebb
and flow with the business cycles, leading to predictable movements along the BC. However, without offsetting shocks to other determining
factors, e.g. lower uncertainty or higher productivity, the impact can persist for years, and in some cases never fully recover. In addition, to the
extent that credit and fiscal policy have experienced a permanent shift, and the fact that monetary policy is becoming a less effective tool, it will
be hard to envisage any significant reduction in the gap in the medium-term. ¶ In addition, we tested the impact hiring rates have on BC across
firm age, size and industry. In the short run, large and incumbent firms have the largest impact on the BC. However, after six quarters, the
impact that startups and small firms have on the BC is more significant and persistent. In fact, at 16 quarters, the
impact that startup hiring has on BC compared to old firms is 10 times greater; for small firms, in a
similar vein, the impact is 250% greater at 16 quarters versus four quarters from the initial shock. With this
in mind, creating an environment that encourages small business formation and risk taking could counteract
headwinds plaguing the labor market. ¶ Firms at all levels are susceptible to credit cycles and cash flow volatility. However, these
factors are amplified for new entrants or small firms, imparting a larger influence on the broader labor market, particularly in keystone sectors
such as retail, real estate and construction. In other words, hiring slowdowns in these sectors have the largest and most persistent effect on the BC
shifter. For instance, a one standard deviation drop in the hiring rates in these sectors would shift the BC outwards by approximately 10%. To put
this into perspective, in the aftermath of the crisis, the BC shifter increased by 30% from peak-trough. Moreover, unlike other industries that are
more apt at weathering cycles and have greater access to credit such as manufacturing, these industries are generally slow to respond and as a
result, accumulate losses over a longer time period, and in some cases, never recover. ¶ This
finding has substantial implication for
the health of the broader economy given the fact that small and new firms are the dominant force in net job
creation in the U.S.; whereas, larger (500+ employees) and older (11+ years) firms are historically net job destroyers. Moreover,
startups and small businesses hire at a rate between 1 to 2.5 times higher than older and larger firms. Labor-
intensive service sectors such as retail also have persistently higher levels of hiring, in some cases 50-75bp higher than other sectors. More
specifically, startup hiring rates in industries such as finance and insurance, manufacturing and information are 380%, 330% and 270% higher,
respectively, than their industry peers. Small and young firms in arts and entertainment, agriculture and accommodation hire at rates 200%-400%
has also shown that only 3% of businesses can be classified as “high
higher than the national average. Research
growth businesses,” but they are responsible for a disproportionate share of growth. Moreover, small
businesses are essential parts of U.S. supply chains given that can lower logistical costs, are nimble
problem solvers and are better equipped to partner on joint innovations. ¶ There is additional upside to
targeting small businesses and startups given that as outflows from the labor market intensify, there could
be adverse effects for aggregate productivity as new entrants take time to develop skills. As a result, focusing
on new business hires could help to accelerate the demographic transition.
Small businesses solves competitiveness – reverses offshoring
Karen Mills 13, MBA from Harvard Business School, SBA’s Karen Mills: U.S. competitiveness hinges
on the strength of small business suppliers, The Washington Post,
https://www.washingtonpost.com/business/on-small-business/sbas-karen-mills-us-competitiveness-
hinges-on-the-strength-of-small-business-suppliers/2013/05/06/03f517b8-b412-11e2-9a98-
4be1688d7d84_story.html?utm_term=.86664a9b8ab1
¶However, according to Gary Pisano and Willy Shih of Harvard Business School, for decades, companies operating in the
United States were steadily outsourcing development and manufacturing work to specialists abroad and
cutting their spending here at home. Over time, this outsourcing moved up from low value tasks to more
sophisticated engineering and manufacturing.¶ ¶ This has hurt America’s competitiveness and our
ability to innovate .¶ ¶ Economy & Business Alerts¶ Breaking news about economic and business issues.¶ Sign up¶ But the trend is
shifting, and across the Obama administration, we have put in place programs that attract more production, more investment and more jobs
back to our shores.¶ ¶ Caterpillar, GE and Ford, for example, are among those that have recently announced they are shifting some manufacturing
operations back to the United States.¶ ¶ The reasons are clear. In an article about onshoring GE’s appliance manufacturing to Kentucky, CEO Jeff
Immelt wrote that “engineering and manufacturing are hands-on and iterative, and our most innovative
appliance-design work is done in the United States. At a time when speed to market is everything,
separating design and development from manufacturing didn’t make sense.”¶ ¶ This trend is likely to
continue as companies recognize higher U.S. worker productivity, rising labor and energy costs abroad
and logistical advantages here at home. Couple that with global demand for high quality American-made products, and it is hard
not to be bullish about America’s long-term opportunities.¶ ¶ The key now is building capacity and investing in our
country’s small business supplier base so that these firms can better support global manufacturers and
help bring more jobs back to the United States — and both the government and the private sector have a
role to play in making this possible.¶ The United States has some of the world’s most innovative small
suppliers and entrepreneurs. We have the types of small businesses that, with the right support, can go
toe-to-toe with China (particularly on the higher end of the value chain) or with Germany’s famed Middlestand
companies.¶ Businesses around the world are taking notice. Foreign companies like Lenovo, Ikea, Nissan,
Airbus, Siemens are starting or growing U.S. operations, and they are looking for networks of U.S.-based
suppliers to support them.¶ So how do we build on this momentum?¶ Related: How to land contracts with corporate clients¶ Today,
U.S.-based, forward-thinking companies are looking at their supply chains very differently. They are
working together to co-innovate, they are helping supply the capital and skills their small suppliers need,
and they are operating as partners.¶ At the U.S. Small Business Administration, we are leading a government-wide effort called the
American Supplier Initiative to support small suppliers.¶ Between 250,000 and 750,000 U.S. businesses are part of commercial and government
supply chains. We are using our experience and the best practices we have developed overseeing the federal government’s $100 billion small
business contracting program to help more small firms be successful commercial suppliers. Here’s how: ¶ Making connections: We are connecting
small and large businesses together through matchmaking activities and through public private partnerships like IBM’s Supplier Connection, a
portal that makes it easier for small businesses to connect to supply chain opportunities. ¶ Access and opportunity: The Washington Post
highlighted a recent Massachusetts Institute of Technology (MIT) report that concluded that the “future of manufacturing will consist of smaller
firms that may not always have enough money to train workers, commercialize new products and procure financing on their own.Ӧ Our agency
has a $100 billion loan portfolio to help get capital to these businesses. We also train and counsel more than a million business owners each year.
And, as I highlighted in the second blog in this series, the president’s budget proposes $40 million for intensive entrepreneurial training to support
established firms that are well positioned for growth. The training is tailored to ensure that entrepreneurs get the skills, resources, counseling and
long-term business planning advice they need to be part of corporate supply chains.¶ Creating ecosystems: A key component of a thriving
manufacturing base is a network of nimble suppliers. At the SBA, we launched the first official federal government cluster initiative in 2010;
today, the federal government is invested in more than 50 clusters across the country.¶ The goal of these clusters is to leverage, integrate and
better align all of a region’s assets (local industries, skill base of local workforce, economic development agencies, universities and community
colleges). These ecosystems are a proven tool for attracting and strengthening regional manufacturing and for boosting exports.¶ In addition, as
part of the American Supplier Initiative, the SBA is supporting efforts to fund supply chain mapping techniques.¶ This is only the beginning. All
across the country there
are small suppliers ready, able and willing to make America’s corporations more
productive, more innovative and more globally competitive. As those supplier networks grow and
connect, they will serve as a magnet to bring more manufacturing and more jobs back to our shores.¶
That’s how we can accelerate economic growth, strengthen the middle class and make America more
globally competitive.
its burgeoning debt, crumbling infrastructure, second-rate primary and secondary schools, outdated immigration system, and slow economic growth –
in short, the domestic foundations of American power. Readers in other countries may be tempted to react to this judgment with a dose of
schadenfreude, finding more than a little satisfaction in America’s difficulties. Such a response should not be surprising. The US and those representing it have been
guilty of hubris (the US may often be the indispensable nation, but it would be better if others pointed this out), and examples of inconsistency between America’s
practices and its principles understandably provoke charges of hypocrisy. When America does not adhere to the principles that it preaches to others, it breeds
resentment. But, like most temptations, the urge to gloat at America’s imperfections and struggles ought to be resisted. People around the globe should be careful what
they wish for. America’s
failure to deal with its internal challenges would come at a steep price. Indeed, the rest of
the world’s stake in American success is nearly as large as that of the US itself. Part of the reason is economic. The
US economy still accounts for about one-quarter of global output. If US growth accelerates, America’s
capacity to consume other countries’ goods and services will increase, thereby boosting growth around
the world. At a time when Europe is drifting and Asia is slowing, only the US (or, more broadly, North America) has
the potential to drive global economic recovery. The US remains a unique source of innovation. Most of the
world’s citizens communicate with mobile devices based on technology developed in Silicon Valley; likewise, the Internet was made in America. More recently, new
technologies developed in the US greatly increase the ability to extract oil and natural gas from underground formations. This technology is now making its way
around the globe, allowing other societies to increase their energy production and decrease both their reliance on costly imports and their carbon emissions. The US is
also an invaluable source of ideas. Its world-class universities educate a significant percentage of future world leaders. More fundamentally, the US has long been a
People and governments around the world are far
leading example of what market economies anddemocratic politics can accomplish.
more likely to become more open if the American model is perceived to be succeeding. Finally, the world
faces many serious challenges, ranging from the need to halt the spread of weapons of mass
destruction, fight climate change, and maintain a functioning world economic order that promotes trade and investment
to regulating practices incyberspace, improving global health, and preventing armed conflicts. These problems will not simply
go away or sort themselves out. While Adam Smith’s “invisible hand” may ensure the success of free markets, it ispowerless in the world of
geopolitics. Order requires the visible hand of leadership to formulate and realize global responses to global
challenges. Don’t get me wrong: None of this is meant to suggest that the US can deal effectively with the world’s problems on its own. Unilateralism rarely
works. It is not just that the US lacks the means; the very nature of contemporary global problems suggests that only collective responses stand a good chance of
succeeding. But multilateralism is much easier to advocate than to design and implement. Right now there is
only one candidate for this role: the US. No other country has the necessary combination of capability and
outlook. This brings me back to the argument that the US must put its house in order – economically, physically, socially, and
politically – if it is to have the resources needed to promote order in the world. Everyone should hope that it does: The
alternative to a world led by the US is not a world led by China, Europe, Russia, Japan, India, or any other country, but rather a world that
is not led at all. Such a world would almost certainly be characterized by chronic crisis and conflict. That
would be bad not just for Americans, but for the vast majority of the planet’s inhabitants.
The US-led liberal order is key to solve global conflict – economic foundations are
key
Robert Kagan 17, Senior Fellow in Foreign Policy, Project on International Order and Strategy,
Brookings Institution, “The twilight of the liberal world order,” 1/24/17,
https://www.brookings.edu/research/the-twilight-of-the-liberal-world-order/
However, it is the two great powers, China
and Russia, that pose the greatest challenge to the relatively peaceful and
prosperous international order created and sustained by the United States. If they were to accomplish
their aims of establishing hegemony in their desired spheres of influence, the world would return to the condition
it was in at the end of the 19th century , with competing great powers clashing over inevitably
intersecting and overlapping spheres of interest. These were the unsettled, disordered conditions that produced the
fertile ground for the two destructive world wars of the first half of the 20th century. The collapse of the
British-dominated world order on the oceans, the disruption of the uneasy balance of power on the European continent due to the rise of a
powerful unified Germany, combined with the rise of Japanese power in East Asia all contributed to a highly competitive international
environment in which dissatisfied
great powers took the opportunity to pursue their ambitions in the absence of
any power or group of powers to unite in checking them. The result was an unprecedented global calamity. It
has been the great accomplishment of the U.S.-led world order in the 70 years since the end of the Second World War that this kind of
competition has been held in check and great power conflicts have been avoided.
The role of the United States, however, has been critical. Until recently, the dissatisfied great and medium-size powers have faced
considerable and indeed almost insuperable obstacles to achieving their objectives. The chief obstacle has been the power and coherence of the
order itself and of its principal promoter and defender. The
American-led system of political and military alliances,
especially in the two critical regions of Europe and East Asia, has
presented China and Russia with what Dean Acheson once
referred to as “situations of strength” in their regions that have required them to pursue their ambitions
cautiously and in most respects to defer serious efforts to disrupt the international system. The system has served as a
check on their ambitions in both positive and negative ways. They have been participants in and for the most part beneficiaries of the open
international economic system the United States created and helped sustain and, so long as that system was functioning, have had more to gain by
playing in it than by challenging and overturning it. The same cannot be said of the political and strategic aspects of the order, both of which have
worked to their detriment. The growth and vibrancy of democratic government in the two decades following the collapse of Soviet communism
have posed a continual threat to the ability of rulers in Beijing and Moscow to maintain control, and since the end of the Cold War they have
regarded every advance of democratic institutions, including especially the geographical advance close to their borders, as an existential threat—
and with reason. The continual threat to the basis of their rule posed by the U.S.-supported order has made them hostile both to the order and to
the United States. However, it has also been a source of weakness and vulnerability. Chinese rulers in particular have had to worry about what an
unsuccessful confrontation with the United States might do to their sources of legitimacy at home. And although Vladimir Putin has to some
extent used a calculated foreign adventurism to maintain his hold on domestic power, he has taken a more cautious approach when met with
determined U.S. and European opposition, as in the case of Ukraine, and pushed forward, as in Syria, only when invited to do so by U.S. and
Western passivity. Autocratic rulers in a liberal democratic world have had to be careful.
The greatest check on Chinese and Russian ambitions, however, has come from the combined military power of the United States and its allies in
Europe and Asia. China, although increasingly powerful itself, has had to contemplate facing the combined military strength of the world’s
superpower and some very formidable regional powers linked by alliance or common strategic interest, including Japan, India, and South Korea,
as well as smaller but still potent nations like Vietnam and Australia. Russia has had to face the United States and its NATO allies. When united,
these military powers present a daunting challenge to a revisionist power that can call on no allies of its own for assistance. Even were the
Chinese to score an early victory in a conflict, they would have to contend over time with the combined industrial productive capacities of some
of the world’s richest and most technologically advanced nations. A weaker Russia would face an even greater challenge.
The system has depended, however, on will, capacity, and coherence at the heart of the liberal world
order. The United States had to be willing and able to play its part as the principal guarantor of the order,
especially in the military and strategic realm. The order’s ideological and economic core —the democracies of Europe and East Asia
and the Pacific—had to remain relatively healthy and relatively confident. In such circumstances, the combined
political, economic, and military power of the liberal world would be too great to be seriously challenged by the great powers, much less by the
smaller dissatisfied powers.
Cost and certainty on the individual exchanges is key to solve job lock – studies
Bradley T. Heim 17, Professor in the School of Public and Environmental Affairs at Indiana University,
PhD in Economics from Northwestern University, Lang Kate Yang, 4/272017, The impact of the
Affordable Care Act on self-employment, Health Economics, accessed via Wiley Online Library
It is well known that the cost and availability (or lack thereof) of health insurance has the potential to impact self-
employment decisions, since leaving a wage and salary job often entails the loss of employer sponsored
health insurance. Further, surveys performed by the National Federation of Independent Business find that the
rising cost of health insurance is perennially a top concern among small business owners. 1 As a result, laws that
reform the health insurance market, particularly for those who are self-employed, may impact the level of
self-employment in the United States. In this paper, we use data from the Current Population Survey to provide evidence on whether the most recent of such reforms, the Affordable Care
Act (ACA), has impacted the level of self-employment in the United States.¶ ¶ Self-employed individuals who do not receive an offer of employer-sponsored or government insurance 2 (either directly or through a spouse) and who
wish to purchase insurance generally must do so in the nongroup health insurance market. Prior to the ACA, even healthy insurance seekers on the private nongroup market often faced high premiums due to adverse selection in the
market, and those with poor health or preexisting conditions generally faced even higher risk-rated premiums or were unable to purchase a policy altogether.¶ ¶ The ACA makes several federal-level changes to regulations in the
private nongroup health insurance market. 3 For health insurance policies that begin in January 2014, it implements modified community rating regulations, which limit the extent to which insurance companies may charge different
premiums based on health status, and guaranteed issue regulations, which prevent insurance companies from excluding anyone based on preexisting conditions. In addition, it contains subsidies for low-income taxpayers with family
income up to 400% of the federal poverty level (FPL) to purchase health insurance and for small firms to provide health insurance for their employees. Beginning on October 1, 2013, these insurance policies were offered on health
insurance exchanges, some of which were operated by individual states and some of which were operated by the federal government.¶ ¶ The first year of exchange operation was marred by numerous well-publicized difficulties in the
function of the federal exchange and many state exchanges, but the second year of exchange operation went more smoothly. 4 However, numerous state and federal lawmakers have called for repeal of the ACA. In addition, a number
of markets have recently experienced decreased participation by insurers as some large insurers have pulled out of participating in the exchanges, 5 and a number of state cooperative insurers have become insolvent, 6 which may call
through an exchange policy, the availability of guaranteed issue and community rated insurance in the
nongroup market would be expected to make health insurance coverage more accessible and affordable,
increasing the attractiveness of self-employment. However, the poor functioning of the exchanges in the first
year of operation, combined with uncertainty surrounding whether the law will remain in effect and whether the exchanges will continue to be viable over the long term, would tend to
temper such effects. Further, it may take time for individuals to switch from wage and salary employment to self-employment, which may delay any effect.¶ ¶ In this study, we
analyze data from the 2010 to 2015 Current Population Survey (CPS) to provide evidence on the impact
of the ACA on the level of self-employment. The CPS is a nationally representative survey of U.S.
households and is administered every month. Its timeliness and inclusion of labor force participation
information make CPS an appropriate data source for analyzing changes in self-employment upon the
implementation of the ACA.¶ ¶ We pursue two identification strategies. In the first, we utilize the fact that the pre-ACA individual health insurance environment differed across states regarding
community rating and guaranteed issue regulations. To identify the impact of the ACA on self-employment, we compare the change in self-employment rates pre- and post-ACA implementation in states that had no such regulations
(or had a subset of these regulations) and for which the ACA is a substantial change in policy, to states that had regulations similar to the ACA regulations and for which the ACA is a smaller change in policy. The former group
constitutes the treatment states, while the latter the comparison states. ¶ ¶ In the second identification strategy, we utilize differences across individuals in whether they had employer-sponsored health insurance (ESI) prior to 2014, and
examine, among those who had such insurance, whether having a characteristic (spousal coverage, older age, or a large family) that would make them more (less) likely to be insurable if they left their job is associated with higher
(lower) levels of transitions to self-employment. Such a relationship has previously been interpreted as evidence of entrepreneurship lock. 7 We test this difference-in-differences analysis in the pre-ACA period (from November 2010
to December 2013) and the results confirm the expected impact of the aforementioned individual characteristics on entrepreneurship lock. We then adopt a triple-differences strategy with pre- and post-ACA implementation as the
third level of difference to investigate whether the estimated prevalence of entrepreneurship lock has declined following the implementation of the ACA.¶ ¶ Our results suggest that the implementation of the nongroup market reforms
and establishment of health insurance exchanges due to the ACA in 2014 did not lead to an overall increase in self-employment in states that lacked similar provisions in their individual health insurance markets prior to 2014. We also
do not find that the ACA differentially increased self-employment among individuals who may have been likely to face entrepreneurship-lock in the pre-ACA period. We do, however, find statistically significant positive impacts in
states that lacked the ACA nongroup market provisions in the second year of implementation (when exchanges functioned properly and people had sufficient time to adjust their employment status) among individuals eligible for
results suggest that the ACA led to increased self-employment only in cases in which
insurance subsidies. Taken together, these
the uncertainty surrounding the exchanges was sufficiently reduced (due to the exchanges functioning properly), the cost of
insurance was sufficiently low (among low- and moderate-income individuals who qualified for subsidies), and individuals had time to adjust.
The US is leading the biotech race now but China is on the brink of taking over---
data ownership is key
Eleonore Pauwels 17, Senior Associate and Scholar at Woodrow Wilson International Center for
Scholars, Apratim Vidyarthi, Business Technology Analyst at Deloitte Consulting, “Who Will Own The
Secrets In Our Genes? A U.S. – China Race in Artificial Intelligence and Genomics,” February 2017,
Wilson Center,
https://www.wilsoncenter.org/sites/default/files/who_will_own_the_secrets_in_our_genes.pdf
The United States has been precision medicine’s worldwide champion, conducting most of the research that first
deciphered our genome about fifteen years ago. This could change with China’s heavy investment and capacity-
building in the increasing convergence of artificial intelligence (AI) and new genetic technologies. This
golden combination of AI and genomics data has the potential to drive precision medicine to new heights by helping unravel the mysteries of why
our bodies react to different chemicals, viruses, and environments, thus recommending the best medicines and treatments. As
China
establishes itself as a real competitive force in precision medicine, the U.S. needs to anticipate and
understand what this competition means in terms of ownership of medical innovation and personal data
protection. Which nation will be the first to own and patent cancer diagnostics and therapeutics vital to our future? Can our science policy and
diplomacy encourage U.S.-China collaborative research efforts? The stakes are also high in terms of biosecurity, as genetic
and computing research is inherently dual-use and therefore a strategic piece in a nation’s security
arsenal . While it will be crucial to leverage genomic data for future health, economic and biodefense
capital, these data will also have to be well managed and protected. How do we foster, at a science policy level, a U.S.-China dialogue,
involving norms and values, about personal data-sharing and protection? In life sciences and genomics, the answer will require creativity and
anticipation with the goal of building collaborative practices instead of walls. Which political and economic incentives can help us make this
commitment to collaboration a win-win game for both nations?
the Chinese government launched a $9 billion and 15-year effort that aims at turning China into a
In 2016,
global leader in harnessing computing and AI technologies for interpreting genetic and health data.1 This
investment eclipses a similar precision medicine initiative by the Obama administration which started with a
$215 million investment in the President’s 2016 Budget2 and might not be pursued by President Trump’s new administration. But this is more
than a race in numbers.
Working with companies in China and abroad, most of them in the U.S., Chinese investors and tech leaders are
getting access to ever growing amounts of patients’ genetic data and developing the machine-learning tools needed
to turn these data into sophisticated diagnostics and therapeutics. Liquid biopsies for diagnosing cancer, for instance, are predicted to become the
next commercial gold rush in healthcare. By one estimate, the market is expected to be worth $40 billion in 2017.3 Increasingly, the
U.S.-
China relationship will not be defined by the ownership of 20th century manufacturing industries but by
a race in genetic and computing innovation that will drive the economy of the future.
We are on the edge of a dramatic revolution in precision medicine, with the increasing convergence of
new genetic technologies and artificial intelligence (AI). AI is a new field relying on super-computing platforms that can
recognize relationships between different big-data sets.4 Imagine an artificial intelligent system powerful enough to predict your health status in
real-time by running algorithms through your most intimate genetic, physiological, behavioral and lifestyle data. Founded by prodigy Jun Wang
in 2015, the Shenzhen company iCarbonX is developing software that can learn to detect useful patterns between huge amounts of individuals’
biological, medical, behavioral and psychological data.5 Such a data-ecosystem will connect the biology and experience of millions of
individuals to understand how their genes interact and mutate, how diseases and aging manifest in their cells and bodies over time, how their
everyday lifestyle choices affect morbidity, and how these personal susceptibilities play a role in a wide range of treatments. This ecosystem is
not only handling personal data but also potentially vulnerable data as it uses a smartphone application, Meum, for customers to enter insights and
consult health advices. iCarbonX has now raised more than US $600 million6 for its digital ecosystem, which might dwarf efforts by other U.S.
Internet giants at the nexus of genomics and AI. According to CB insights, iCarbonX has a $1 billion valuation, making it one of the wealthiest
healthcare start-ups in China.7
Increasing certainty over the ACA is key to precision medicine and biotech—
temporary reprieve can’t generate long-run investments
Rajib Ghosh 17, Chief Data and Transformation Officer, Community Health Center Network,
Columnist at Analytics Magazine, “Taming the challenges in healthcare with artificial intelligence: A
pragmatic approach,” 2017, Analytics, http://analytics-magazine.org/taming-challenges-healthcare-
artificial-intelligence-pragmatic-approach/
At last there is some respite for those of us in the healthcare analytics and technology business. The
never-ending uncertainty and word storms emanating from the nation’s capital is now silent. Perhaps
temporarily but what a relief. We now can make strategies and plan for execution for the next six months to
a year . In the meantime, if you would like to know about how the Affordable Care Act touched many lives for the better read this article in the
Huffington Post. A Senate healthcare bill is now dead, and the hope of fixing what is not working in
healthcare in a pragmatic bipartisan way is now rising. That’s the good news.
Now is a good time to focus on the future of healthcare analytics. Among my friends and colleagues in the industry, I
have observed that the discussions in this area have somewhat moved from “big data analytics” to “artificial
intelligence (AI).” Analytics bolsters performance of AI. Machine learning makes AI become smarter. In my last couple of columns, I
have described the visible euphoria among the innovator and investor communities, which has led a large
number of startups to work on AI-based solutions for healthcare. So far, success has been limited , yet I love the
enthusiasm; that’s what makes America great. When hundreds of great minds start working on a problem everyone wins. But before I go any
further let’s do a quick recap of the state of the industry.
A recently published investment report from Silicon Valley Bank showed that tech-focused investment firms are aggressively investing in
healthcare companies that are developing artificial intelligence and machine learning technologies for biopharma and diagnosis tools (see Figure
1).
Another report from the healthcare startup accelerator Rock Health shows that during
the first half of the year 2017 investment
in digital health technology companies remained strong with nine deals worth $100 million. None of
those are AI companies . In February 2017, CB Insights reported that there are 106 AI startups in healthcare backed by various
small, medium and large venture firms. Not all will make it at the end, but it is interesting to see how startups are now trying to offer “actions”
rather than just platforms for “big data” analytics.
The million-dollar question is: How to create value using AI in healthcare? IBM created its massive “Watson” expert system a few years back.
The hope was very high that this “supercomputer,” with almost bottomless knowledge and fast learning ability, would make doctors “irrelevant.”
That, however, has not happened . . . yet. The first few larger pilots failed to produce results. The cost was high, just like the “big data” projects
that usually work for large, deep-pocketed health systems in the country. Costly
deployments are meant to solve the most
complex problems in healthcare such as developing precision medicine for cancer patients. That is a giant
leap but not so pragmatic in the short term. Later on, IBM took Watson to the cloud and started offering its services in the
“utility” business model for smaller-scale use cases and for smaller organizations.
So what is wrong in this picture about Watson, the so-called poster child for application of AI in healthcare? Simply put, to make Watson do its
job, it needs certain types and volumes of data as the training data set. Humans, essentially doctors, would have to find time out of their already
crammed schedule to build the knowledge base for the AI and connect the dots for Watson before the AI can perform on its own as an assistant.
That’s proved to be a tall order for various reasons as evident from MD Anderson Cancer Research Institution’s walk away from the Watson
project earlier this year. Recently, the CEO of Social Capital venture fund referred to Watson as a “joke” in a CNBC interview. IBM later did a
rebuttal; the technology is real, but clearly it is over hyped. PR and corporate marketing departments often get ahead of themselves, and there lies
the problem. The AI industry needs focus, steady wins without undesired exuberance or marketing hype. The technology needs to be robust, and
it needs to solve real-world problems consistently at an affordable cost. Innovators need to understand the real problems, preferably firsthand. AI
needs to create real business opportunities or unleash new tangible and quantifiable efficiencies.
In the long term, precision medicine for treating disease conditions is a very apt use case for AI. Watson,
for example, can identify six different kinds of cancer. As the genomic data for a large population becomes more readily available, precise
detection of gene mutation and corresponding medication (or gene therapy) can be identified by AI in near real
time. NIH has defined that as a “cancer moonshot” program with the objective to advance research for cancer therapies by 2020. In the short
term, however, there are other use cases where first generation AI can bring value to the healthcare. A few of them are listed below”
Automated image analysis. Radiology is perhaps one of the most suitable fields for the application of AI. Image analysis is an established area for
machine learning. IBM Watson is already being used for this use case by one imaging vendor. This area will see significant growth in the coming
years.
Intelligent patient triage and first level of primary care. Luckily, the ACA has survived for now . But owing to ACA, the demand for
primary care is increasing. There is a shortage of primary care physicians. While other transformational care delivery models using nurses instead
of physicians are deployed in a limited way, an opportunity exists to deliver basic primary care via intelligent agents (AI) at retail clinic settings.
Intelligent agents in mental healthcare. In a recent paper published by researchers from Stanford School of Medicine and Woebot Lab
demonstrated how fully automated agents (i.e., AI) produces efficacy in the treatment of anxiety and depression among young adults (18-28).
Given the nationwide shortage of behavioral health providers, this use case for AI could have major impact.
Overall, AI in healthcare still has a long way to go. Unlike consumer marketing or the advertising industry,
healthcare is a difficult domain to penetrate. In healthcare, appropriate and adequate “signals” are harder
to get to train AI quickly and continuously. I have no doubt that given the rate of exponential technology growth, a decade from now AI will
become an integral part of the healthcare delivery. But for the time being I would like to share a dose of pragmatism with my
colleagues who are getting inundated with the euphoria and PR campaigns coming from all directions
about AI taking over healthcare soon.
Uncertainty over the ACA crushes planning---causes shift away from risky tech
development to basic care
Ruth Simon 17, Senior Special Writer at the Wall Street Journal, 5/24/2017, Health-Tech Startups Pivot
as Obamacare Uncertainty Mounts; Some firms tweak products to focus on consumers; funding to such
startups has fallen to lowest since 2011, accessed via Proquest
As Congress grapples with possible repeal of the Affordable Care Act, political uncertainty is prompting
some health-technology startups to revamp their sales pitches or products, while others are finding it tougher
to attract fresh capital.
The challenges are likely to be greatest for very young firms with limited resources, companies tied directly to the
insurance market or that sell to hospitals facing potential cuts in Medicaid, say some investors and others that work with startups.
It is still too early to tell how repeal of the ACA might play out--or even whether it will happen. Republicans
in the Senate have said they plan to put their own stamp on the bill that cleared the House earlier this month, though the debate is expected to be
contentious.
"One of the big advantages of a startup is to be able to pivot and fall into new opportunity," said Hubert Zajicek, chief executive of Health
Wildcatters LLC, a Dallas health-care startup accelerator. "But this is change that has spelled more uncertainty. That is
not change you can prepare for."
Some startups are shifting strategies to focus more on direct sales to consumers. Pillsy Inc., a maker of Bluetooth-
enabled smart pill bottles, has stepped up efforts to sell its product online and in pharmacies and is spending less time marketing to health-care
providers. The Seattle-based company is spending heavily on digital advertising and has hired a public-relations firm instead of sending an
employee to conferences, said CEO Jeff LeBrun.
Venture-capital investors poured $4.9 billion into health-care startups in the first quarter of 2017, up from
$3.6 billion a year earlier, according to Dow Jones VentureSource. Nearly 70% of those funds went to drug-development
and medical-device ventures.
Political uncertainty has made some investors and customers more cautious about digital health
companies. "The funding bar went up" after the election, said Anne DeGheest, an investor and founder of San Francisco-
based HealthTech Capital. Investors are "asking for a higher level of sales and market validation."
The number of digital health startups receiving funding dropped to 124 in the first quarter of 2017, the
lowest quarterly total since the first quarter of 2011, according to StartUp Health, a startup mentor. The amount raised was
comparable to last year's total, as investors funneled bigger sums into later-stage startups.
Many entrepreneurs say the appetite for health-care technologies that cut costs and improve quality will remain strong regardless of the political
climate. The response to uncertainty is to "lean even harder on the clinical literature backing up what we do and the return on investment business
case," said Adam Brickman, a spokesman for Omada Health Inc., a six-year-old startup that provides digital tools for diabetes prevention. The
San Francisco-based company currently works with roughly 70 employers, health plans and health systems.
And some hospitals will continue to invest in new technologies regardless of what happens to Medicaid and the ACA, said Lee Perlman,
president of GNYHA Ventures Inc., the for-profit arm of the Greater New York Hospital Association.
But others will only look to technologies "with short-term impacts that will allow them to do more with
less."
"Inthe end, it will be a scalability issue," Mr. Perlman said. "If forced to choose between providing basic patient
care and new investment, basic patient care will win ."
Juan Pablo Segura, founder of Babyscripts, which uses an app and internet-connected medical devices to remotely track the health of pregnant
women, has seen a shift in mood.
"Thereare plenty of health systems out there investing in the future, but there just isn't that massive
push we felt before ," said Mr. Segura, whose Washington startup currently works with more than a dozen hospital systems.
Given the uncertainty about the ACA, Babyscripts is focusing its sales efforts on the large hospitals that are early adopters of new technologies
and less on smaller private practices more likely to be unsettled by changes in health care reimbursement laws.
Dallas-based Take Command Health was working on software that would help professionals without employer coverage find a better health plan.
With the future of the ACA and health care exchanges in doubt, the company is focusing more on using its platform to help small businesses take
advantage of a different law, passed with bipartisan support in late 2016, that allows them to use pretax dollars to reimburse employees for
health-care costs.
After the election, "we felt like the rug got pulled out from under us," said the three-year-old company's founder,
Jack Hooper. "We found a safe harbor with this law that is already passed."
In April, the San Francisco-based company raised $25 million from Highland Capital Management, Accel and others. Investor discussions helped
lead Amino, which initially focused on analyzing specialty care,to apply its analytical tools to mammograms and other primary care services.
" Your product priorities change ," said Mr. Vivero. Before the election, "we wouldn't have found it to be useful to profile the cost
of preventive services that would otherwise be free under every plan in America."
The mere possibility of repeal and replace tanks investment in biotech---causes the
overall sector to decline
Michael Kramer 17, Founder of Mott Capital Management, premium author of Reading The Market,
3-23-2017, "Stalling Healthcare Reform May Be Holding Up the Rally," Investopedia,
http://www.investopedia.com/news/stalling-healthcare-reform-may-be-holding-rally/
Nobody can deny that healthcare and biotech have been among the best-performing sectors of the market so far
in 2017. In fact, you can make a strong argument that these two areas have been leading the most recent leg of the equity rally. The fun
may be over, however, given the shaky and uncertain Obamacare repeal-and-replace game in
Washington, as well as comments from President Trump regarding drug pricing.
One can easily see that biotech and healthcare as measured by the SPDR S&P Biotech ETF (XBI), the iShares Nasdaq Biotechnology ETF (IBB),
and the Health Care Select Sector SPDR (XLV) have easily outperformed the SPDR S&P 500 ETF (SPY). In fact, these three ETFs make up
three of the top four performing groups in 2017. With
the replacement of Obamacare possibly imminent, the sector
has started deteriorating over recent sessions.
In fact, the selling has picked up and volatility, as measured by the standard deviation of the daily percent change in the ETF, has
increased as well.
The XBI and IBB have been leading the market lower over the course of the past three trading sessions. In fact, the Financial Selector Sector
SPDR ETF (XLF) and Industrial Select Sector SPDR ETF (XLI) has also been lower. These sectors have been at the heart of the Trump trade for
reflation bets. The
market appears to be getting nervous about Trump's economic agenda given the stall of
the new healthcare bill, which will also likely stall out tax reform.
In a breakdown of the IBB, we see there has been straight selling across the board in the IBB, with little to no discrimination. In fact, we see the
same indiscriminate selling happening in the XBI.
This means investors are unloading in the sector despite any fundamental story component companies may possess. The losses of stocks within
the IBB and XBI over the past week have been painful. The XLV is certainly no better.
However, the losses within the XLV have not been nearly as steep as the ones seen with the XBI and IBB.
The selling in the SPY has also been tough. In fact, note the bottom six stocks: financials. It tells you exactly what's transpiring in the market at
the moment.
Remember how the market would torture the Fed every time it tried to raise rates? Well, now it's Washington's turn. The markets will now force
the hand and punish politicians until a bill is passed.
It probably would not be wise to dip your toe into the healthcare or broader markets until there is
more clarity on the vote. Otherwise, both you and Congress will be taken out with the tide.
Development in health care is key – data ownership is key for downstream biotech
applications
Edward H You 17, Committee Member at the Forum on Microbial threats at the National Academies,
Special Agent at the FBI, MS in Biochemistry and Molecular Biology at USC, Ben Shobert, Senior
Associate for International Health at the National Bureau of Asian Research, MBA from Duke,
3/16/2017, Panel III Question and Answer,
https://www.uscc.gov/sites/default/files/transcripts/March%20Transcript.pdf
Your second question, is this a good thing, yeah, it should be. And I think to the extent that right now we have a little bit of cynicism about
globalization in general, there's
reasons to look at biotech and say there are good things that could very well
come out of China, but a lot of the concerns that have been voiced today do need to be addressed, and they
need to be addressed in a timely fashion because this is an industry that moves very quickly.¶
COMMISSIONER STIVERS: Thank you.¶ Dr. Oye.¶ DR. OYE: I'd like to see, to take that question, is it a good thing, and the answer is that if
people discover a cure for cancer or a cure for these tiny little personalized problems, it's good. The issue that it raises in American context is
who's or how much do we pay for those cures and access to those cures? And I'm going to put my co-panelists on the spot. I know we're not
allowed to do it this way. But you were talking about India and Brazil and compulsory licensing. And the question that I want to ask to you is that
if China came up with a cure for cancer, how long do you think it would take for us to engage in a wee bit of compulsory licensing if they were
asking a lot for it?¶ [Laughter.]¶ DR. OYE: I also want to note that in this very room, I believe, Senator Schumer began talking about the need for
compulsory licensing of Cipro during the anthrax scare because Bayer wasn't producing it fast enough. But--¶ MR. SHOBERT: You could use the
minute hand on your watch.¶ [Laughter.]¶ COMMISSIONER STIVERS: Thank you.¶ Mr. You.¶ MR. YOU: I'll caveat my response with two
things. One is you just outlined that anywhere else in the world where there's an absolute incentive to make this happen, you've just heard it.
There's enormous pressure to be able to address some very near-term risks for that part of the world. So there is a
huge need and a huge push to overcome some of these immediate challenges.¶ And then also the other caveat is, again, the
FBI recognizes that all of the things that we've just articulated, especially with precision medicine--and by the way, precision medicine, as
I said, is just one really powerful proof of concept--there's a lot of activity happening in other parts of
academia and the private sector looking at what other data holdings do they have and how can those be
monetized and leveraged. And most of the near-term application is in health.¶ So with all of that, we need that to
happen, but, yes, if there is a global increase in health and quality of life, absolutely, that's a good thing. But I
would classify that a near-term issue, and I'll take Dr. Oye's comments one step further, is how much will that cost? And I'm not
talking about at an individual level.¶ If there is an overall increase benefit in health, is it okay if the U.S. is second
or third fiddle on the global pharmaceutical stage? Are we okay with that? Is the U.S. from a national security
standpoint okay with being completely reliant on another source of potential healthcare or health innovation
or pharmaceutical innovation? Are we okay with that?¶ So it does pose that we need to be asking what the second, third order
effects are going to be based on this. It's one thing to look at the immediate application and what the benefits are,
and some of the costs and risks are going to be somewhat self-evident. But we need to take a step back and look at what are
the further downstream impacts going to be? Because these are the questions we're asking for today. We need to ask
where is the technology going to take us five years from now? Ten years from now? 20 years from now?
It's going to be a completely different environment.¶ But the data is going to be the same . What's going to be different is how
we're able to analyze that data and then turn that around into a useful application.
If China pursues human genetic enhancement and the US retreats under a conservative government, it
could create a divide between the modified and the not, sewing the seeds of global conflict.
While Time magazine recently chose President-Elect Donald Trump as its Person of the Year, CRISPR gene editing pioneers were a runner-up
choice. Few
innovations in the last millennium carry such transformative prospects as the ability to edit our
own genome and make ourselves into fundamentally something else. Some experts think genetic editing might be the key to curing all
disease and achieving perfect health.
Unlike other epic scientific advances—like the 1945 explosion of the first atomic bomb in New Mexico—the immediate effect of genetic
editing technology is not dangerous. Yet, it stands to be just as divisive to humans as the 70-year proliferation
of nuclear weaponry . On one hand, you have secular-minded China and its scientists leading the gene
editing revolution, openly modifying the human genome in hopes of improving the human being. On the
other hand, you have a soon-to-be broadly Republican US administration and Congress that appear to be strongly Christian—conservatives who
often insist humans should remain just as God created them.
Therein lies a great coming conflict, one that I'm sure will lead to street protests, riots, and civil strife—
the kind described explicitly in my novel The Transhumanist Wager, where a religious-fundamentalist government shuts down extreme science in
the name of conservatism. The playing field of geopolitics is pretty simple: If
China or another country vows to increase its
children's intelligence via genetic editing (which I estimate they will be able to do in 5-10 years time), and America
chooses to remain "au naturel" because they insist that's how God made them, a conflict species-deep will quickly
arise. If this scenario seems too bizarre to happen, just consider the Russian Olympic track and field team
that was banned in the recent 2016 Games for supposed doping.
It's quite possible the same accusatory flavor of "banning" could happen between China and America in the
game of life—between its workers, its politicians, is people, its artists, and its media. I wonder if America—approximately 70 percent who
identify as Christians—will put up with beings who modified themselves by science to be smarter and more functional entities.
This type of idea takes racism and immigration to a whole new level. Will America close off its borders,
its jobs, its schools, and its general openness to the world to stay pure, old-fashioned human? Will we stop trading,
befriending, and even starting families with those who are modified?
In short, will genetic editing start a new cold war? One that bears much finger pointing and verbal reprimands, including the use
of derogatory terms like mutants, cyborgs, and transhumanists. Think the videogame Dues Ex, but with modified people taking all the best jobs.
So, now that we know what can happen if America won't embrace the most important science to emerge this century, how can we avoid
it?
First—and this is wishful thinking, since 100 percent of the US Congress and the Supreme Court appear to be religious at the moment—is we
could just embrace genetic editing and be better at it than the Chinese. This is the exact scenario I
suggest. Yes, it will lead to a place where beings are similar to those in Star Wars and Star Trek, but after all, we love those movies because
we want to reach that super-science age. And in the long run, such evolution of the species is inevitable anyway, so long as we don't kill ourselves
first in a nuclear war or an environmental catastrophe.
In a second scenario, America could focus more on technology and less on biology and genetics. On my recent 4-month long Immortality Bus
tour across America, I found conservative people seem more inclined to use tech accessories or wear a special headset that would make them
smarter (for example, by connecting their thoughts Matrix-style into the cloud and AI)—as opposed to structurally changing their brains, as the
Chinese likely will do. America could innovate that accessory tech that would keep us ahead of the biological modifications of other nations. I'll
accept that—reluctantly—if the first scenario I presented is a no-go.
A third way—and this is the blatant transhumanist nightmare—is we could establish a non-modification policy across all countries, similar to
how we have created the Paris Treaty for climate change or rules of war that ban chemical weapons. The major nations of the world, sensing a
significant global legal issue in genetic editing, could come together as a species and criminalize the science.
The front desk of BGI-Tianjin. BGI is one of the leading genetic research companies in China and the world, and is actively pursuing the genetic
basis of human intelligence. Image: Wei ta - Imaginechina/Associated Press
To some extent, this has already happened, because as soon as the world realized the Chinese had experimented on the human genome, calls were
made to put a stop on some of this science. Such a reaction is not dissimilar from what George W. Bush did with stem cells when his religious
values made him shut down federal funding on all but a tiny portion of the research in America. Stem cells have since been shown to be one of
the most important medical applications in the world, and those lost years of science have potentially negatively affected millions of lives.
Sadly, the third option of a general or even partial moratorium on genetic editing will surely harm innovation. The great thing with gene editing is
we can likely do many wondrous things with it, such as potentially cure cancer, halt aging, grow better organs, and overcome disability by better
repairing ourselves. Beyond making ourselves superhuman, we can simply make ourselves better fit for Earth, including dealing with a changing
environment.
I also don't think the third option will work in the long run. More than ever, science is the hands of individuals, who can buy amazing bio-testing
kits on eBay for just a $1000—as well as incredibly powerful computers to analyze the data. Citizen scientists would just create the new gene
editing tech and begin doing it themselves—perhaps more dangerously had the government not been overseeing the research from the start.
I argue for the first path. Let's allow good, old-fashioned scientific competition with China to proceed. Let's see
which country can create the best enhancements for their citizenry, and let's share the best of our work with one another
in the end to make it so all peoples are as equal as possible. If we're too closed-minded about such radical science, we
might find ourselves embroiled in a state of hostile speciation, where another new cold war swallows
a generation.
America is hurtling toward strategic insolvency .1 For two decades after the Cold War, Washington enjoyed essentially
uncontested military dominance and a historically favorable global environment—all at a comparatively low military and financial price. Now,
however, America confronts military and geopolitical chal-lenges more numerous and severe than at any
time in at least a quarter century —precisely as disinvestment in defense has left US military resources far scarcer than before.
The result is a creeping crisis of American military primacy , as Washington’s margin of superiority is diminished, and
the gap between US commitments and capabilities grows. “Superpowers don’t bluff,” went a common Obama-era refrain—
but today, America is being left with a strategy of bluff as its preeminence wanes and its military means
come out of alignment with its geopolitical ends.
Foreign policy, Walter Lippmann wrote, entails “bringing into balance, with a comfortable surplus of power in reserve, the nation’s commitments
and the nation’s power.” If a statesman fails to preserve strategic solvency, if he fails to “bring his ends and means into balance,” Lippmann
added, “he will follow a course that leads to disaster.”2 America’s
current state of strategic insolvency is indeed fraught
with peril. It will undermine US alliances by raising doubts about the cred-ibility of American
guarantees. It will weaken deterrence by tempting adversaries to think aggression may be successful or
go unopposed. Should conflict actually erupt in key areas, the United States may be unable to uphold existing commitments or only be able
to do so at prohibitive cost. Finally, as the shadows cast by US military power grow shorter, American diplomacy is
likely to become less availing, and the global system less responsive, to US influence. The US military
remains far superior to any single competitor, but its power is becoming dangerously insufficient for the
grand strategy and international order it supports.
Great powers facing strategic insolvency have three basic options. First, they can decrease commitments thereby restoring equilibrium with
diminished resources. Second, they can live with greater risk by gambling that their enemies will not test vulnerable commitments or by
employing riskier approaches—such as nuclear escalation—to sustain commitments on the cheap. Third, they can expand capabilities, thereby
restoring strategic solvency. Today, this approach would prob-ably require a concerted, long-term defense buildup comparable to the efforts of
Presidents Jimmy Carter and Ronald Reagan near the end of the Cold War.3
Much contemporary commentary favors the first option— reducing commitments—and denounces the third as financially ruinous and perhaps
impossible.4 Yet significantly expanding American capa-bilities would not be nearly as economically onerous as it may seem.
Compared to the alternatives, in fact, this approach represents the best option for sustaining American primacy and
preventing a slide into strategic bankruptcy which will eventually be punished.
I
Since the Cold War, America has been committed to maintaining overwhelming military primacy. The idea, as
George W. Bush declared, that America must possess “strengths beyond challenge” has been featured in every major US strategy document and
reflected in con-crete terms.5 Since the early 1990s, for example, the United States has accounted for 35–45 percent of world defense spending
and maintained peerless global power-projection capabilities.6 Perhaps more important, US primacy was unrivaled in key strategic regions such
as Europe, East Asia, and the Middle East. From thrashing Saddam Hussein’s million-man Iraqi military during Operation Desert Storm (1991) to
deploying two carrier strike groups off Taiwan during the third Taiwan Strait crisis (1995–96) with impunity, Washington has been able to
project military power superior to anything a regional rival could employ, even on its own geopolitical doorstep.
This military dominance has constituted the hard-power backbone of an ambitious global strategy. After the
Cold War, US policymakers committed to averting a return to the unstable multipolarity of earlier eras and to perpetuating the more favorable
unipolar order. They committed to fostering a global environment in which liberal values and an open international economy could flourish and
in which international scourges such as rogue states, nuclear proliferation, and catastrophic terrorism would be suppressed. And because they saw
military force as the ultima ratio regum, they understood the centrality of military preponderance.
Washington would need the military power to underwrite world-wide alliance commitments and preserve substantial overmatch versus any
potential great-power rival. The United States must be able to answer the sharpest challenges to the international system, such as Saddam’s
invasion of Kuwait in 1990 or jihadist extremism today. Finally, because prevailing global norms reflect hard-power realities, America would
need superiority to assure its own values remain ascendant. Saying US strategy and the international order required “strengths beyond chal-lenge”
was impolitic, but it was not inaccurate.7
American primacy, moreover, has been eminently affordable. At the height of the Cold War, the United States spent over 12 percent of gross
domestic product (GDP) on defense; since the mid-1990s, the number has usually been 3–4 percent.8 In a historically favorable international
environment, Washington has enjoyed primacy—and its geopolitical fruits—on the cheap.
Until recently, US strategy also heeded the limits of how cheaply primacy could be had. The American military shrank significantly during the
1990s, but US officials understood that if
Washington cut back too far, US primacy would erode to a point where it
ceased to deliver its geopolitical benefits. Alliances would lose credibility, stability of key regions
would be eroded, rivals would be emboldened, and inter-national crises would go unaddressed .
American primacy was thus like a reasonably priced insurance policy, requiring nontrivial expenditures— and protecting against far costlier
outcomes.9 Washington paid the premiums for two decades after the Cold War. But more recently American primacy and strategic solvency have
been imperiled.
II
For most of the post-Cold War era, the international system was— by historical standards—remarkably benign. Dangers existed, and as the
terrorist attacks on September 11, 2001 demonstrated, they could mani-fest with horrific effect. But for two decades after the Soviet collapse, the
world was characterized by remarkably low levels of great-power competition, high levels of security in key theaters such as Europe and East
Asia, and the comparative weakness of “rogue” actors—Iran, Iraq, North Korea, and al-Qaeda—who most aggressively challenged American
power. Now, however, the strategic landscape is darkening due to four factors.
First, great-power military competition is back. The world’s two leading authoritarian powers—China and Russia—are
seeking regional hegemony, contesting global norms such as nonaggression and freedom of navigation, and
developing the military punch to underwrite these ambitions. Notwithstanding severe economic and demographic problems, Russia has
conducted major military modernization empha-sizing nuclear weapons, high-end conventional
capabilities, and rapid-deployment and special operations forces—and utilized many of these capabilities in Ukraine and
Syria.10 China, meanwhile, has carried out a buildup of historic proportions, with constant-dollar defense
outlays rising from $26 billion in 1995 to $215 billion in 2015.11 Ominously, these expenditures have funded power-
projection and anti-access/area denial (A2/AD) tools necessary to threaten China’s neighbors and complicate US intervention on their behalf.
Washington has grown accustomed to having a generational military lead; Russian and Chinese modernization efforts are now creating a far more
competitive environment.
Second, international outlaws are no longer so weak. North Korea’s conventional forces have atrophied, but Pyongyang has
amassed a growing nuclear arsenal and is developing intercontinental delivery capability.12 Iran remains a nuclear threshold state, which
continues to develop ballistic missiles and A2/AD capabilities while employing sectarian and proxy forces across the Middle East. The Islamic
State is headed for defeat, but has displayed military capabilities unprecedented for any terrorist group and shown that counterterrorism will
continue to place significant operational demands on US forces. Rogue actors have long preoccupied American planners, but the rogues are now
more capable than at any time in decades.
Third, the
democratization of technology has allowed more actors to contest American superiority in
dangerous ways. The spread of antisatellite and cyberwarfare capabilities, the proliferation of man-portable air defense systems and
ballistic missiles, and the increasing availability of key elements of the precision-strike complex have had a military-leveling effect by giving
weaker actors capabilities formerly unique to technologically advanced states. Indeed, as these capabili-ties spread, fourth- generation systems,
such as F-15s and F-16s, may provide decreasing utility against even nongreat-power competitors, and far more fifth-generation capabilities may
be needed to perpetuate American overmatch.
Finally, the number of challenges has multiplied. During the 1990s and early 2000s, Washington faced rogue states and jihadist
extremism but not intense great-power rivalry. America faced conflicts in the Middle East, but East Asia and Europe were comparatively secure.
Now, old threats still exist, but the more permissive conditions have vanished. The United States confronts rogue states, lethal jihadist
organizations, and great-power competition; there are severe challenges in all three Eurasian theaters. The United States thus faces not just more
significant but also more numerous challenges to its military dominance than it has for at least a quarter century.
III
One might expect the leader of a historically favorable international system to respond to such developments by increasing its relatively modest
investments in maintaining the system. In recent years, however, Washington has markedly disinvested in defense. Constant-dollar defense
spending fell by nearly one-fourth, from $768 billion in 2010 to $595 billion in 2015.13 Defense spending as a share of GDP fell from 4.7 percent
to 3.3 percent, with Congressional Budget Office projections showing military outlays falling to 2.6 percent by 2024—the lowest level since
before World War II.14
Defense spending always declines after major wars, of course. Yet from 2010 onward, this pressure was compounded by the legacy of Bush-era
budget deficits, the impact of the Great Recession (2007–9), and President Obama’s decision to transfer resources from national security to
domestic priorities. These forces, in turn, were exacerbated by the terms of the Budget Control Act of 2011 and the sequester mechanism.
Defense absorbed roughly 50 percent of these spending cuts, despite accounting for less than 20 percent of federal spending. By walling off most
personnel costs and severely limiting flexibility in how cuts could be made, moreover, the sequester caused the Department of Defense to make
reductions in blunt, nonstrategic fashion.15
This budgetary buzz saw has taken a toll. Readiness has suffered alarmingly with all services struggling to conduct current counterterrorism
operations while also preparing for the ever-growing danger of great-power war. “The services are very good at counterinsurgency,” the House
Armed Services Committee noted in 2016, “but they are not prepared to endure a long fight against higher order threats from near-peer
competitors.”16 Modernization has also been compromised; the ability to develop and field promising future capabilities has been sharply
constrained by budget caps and uncertainty. This problem will only get worse—in the 2020s, a “bow wave” of deferred investments in the
nuclear triad and high-end conventional capabilities will come due.17
Finally, force structure has been sacrificed. The Army has fared worst—it is slated to decline to 450,000 personnel by 2018, or 30,000 personnel
fewer than prior to 9/11.18 But all the services are at or near post-World War II lows in end strength, and the US military is signifi-cantly smaller
than the 1990s-era “base force,” which was designed as the “minimum force . . . below which the nation should not go if it was to remain a
globally engaged superpower.”19 “Strategy wears a dollar sign,” Bernard Brodie wrote, and Washington is paying for less capability relative to
the threats it faces than at any time in decades.20
IV
Cumulatively, these
developments have resulted in a creeping crisis of US military primacy. Washington still
possesses vastly more military power than any challenger, particularly in global power-projection capa-
bilities. Yet even this global primacy is declining. The United States faces a Russia with significant extraregional power-
projection capabilities as well as near-peer capabilities in areas such as strategic nuclear forces and cyberwarfare. China’s military budget is now
more than one-third of the US budget, and Beijing is developing its own advanced power-projection capabilities.21 Perhaps more importantly,
US global primacy is also increasingly irrelevant, because today’s crucial geopolitical competitions are regional contests, and here the trends have
been decidedly adverse.
In East Asia, China’s two-decade military buildup has allowed Beijing to contest seriously US power projection within the first island chain.
“The balance of power between the United States and China may be approaching a series of tipping
points,” RAND Corporation analysts observe.22 The situation in Eastern Europe is worse. Here, unfa-vorable geography and aggressive
Russian modernization have created significant Russian overmatch in the Baltic; US and North Atlantic Treaty Organization (NATO) forces are
“outnumbered and outgunned” along NATO’s eastern flank.23 In the Middle East, the balance remains more favorable, but Iranian A2/AD and
ballistic missile capabilities could significantly complicate US operations, while the reemergence of Russian military power has narrowed US
freedom of action. In key areas across Eurasia, the US military edge has eroded.
This erosion, in turn, has profound implications for American strategy. For one thing, US forces will face far harder fights should
conflict occur. War against Iran or North Korea would be daunting enough, given their asymmetrical capabilities. Even Iran, for instance,
could use its ballistic missile capabilities to attack US bases and allies, employ swarming tactics and precision-guided munitions against US naval
forces in the Persian Gulf, and activate Shīʿite militias and proxy forces, all as a way of inflicting higher costs on the United States.24
Conflict against Russia or China would be something else entirely. Fighting a near-peer competitor armed with high-end conventional weapons
and precision -strike capabilities would subject the US military to an environment of enormous lethality, “the likes of which,” Army Chief of
Staff General Mark A. Milley has commented, it “has not experienced . . . since World War II.”25 American forces might still win—albeit on a
longer time line and at a painfully high cost in lives— but they might not.
According to open -source analysis, US
and forces would have little chance of halting a determined Russian assault
on the Baltic states. Facing severe disadvantages in tanks, ground-based fires, and airpower and air defenses, those forces would likely be
destroyed in place. NATO would then face an agonizing dilemma—whether to mobilize its resources for a
protracted war that would risk nuclear escalation, or acquiesce to an alliance-destroying fait accompli.26
Similarly, whereas the United States would have dominated any plau-sible conflict with China in the 1990s, according to recent assessments the
most likely conflicts would be nearer run things today. Consider a conflict over Taiwan. Beijing
might not be able to defeat
Washington in a long war, but it could establish air and maritime superiority early in a conflict and
thereby impose unacceptable losses on US air and naval forces. The crucial tipping point in a Taiwan contingency could
come as early as 2020 or even 2017; in the Spratly Islands, it could come within another decade.27 As US superiority erodes, America runs a
higher risk of being unable to meet its obligations.
In fact, Washington’s ability to execute its standing global defense strategy is increasingly doubtful. After
the Cold War, the United States adopted a two major regional contingency standard geared toward preventing an adversary in one region from
undertaking opportunistic aggression to exploit US preoccupation in another. By 2012, budget cuts had already forced the Obama administration
to shift to a 1.5 or 1.7 war standard premised on decisively defeating one opponent while “imposing unacceptable costs” on another.28 Yet the
US capacity to execute even this less ambitious strategy is under strain, just as the international environment raises questions about whether the
strategy is ambitious enough.
This doubt has arisen because the Obama administration’s 2012 defense strategy was announced prior to sequestration, and prior to Russian
aggression in Ukraine in 2014—which raised the disturbing possibility that one of America’s wars might be against a nuclear-armed, great-power
competitor. And beyond these issues, events in Europe and the Middle East since 2012 have raised doubts about whether a 1.7 war standard is
sufficient given the possibility the Pentagon might confront conflicts in three strategic theaters—against Russia in Europe, Iran or an Islamic
State-like actor in the Middle East, and China or North Korea in East Asia—on overlapping time frames. In sum, the
United States is
rapidly reaching, if it has not already reached, the point of strategic insolvency. And even beyond the
aforementioned risks, this situation poses fundamental strategic challenges.
The cohesion of US alliances will likely suffer, as American allies lose confidence in Washington’s ability to protect them.
Adversaries, in turn, will become more likely to test US commitments, to gauge Washington’s willingness
to make good on increasingly tenuous promises, and to exploit its declining ability to respond decisively. Russian
intimidation of the Baltic states, Iranian expansionism in the Middle East, and increasingly aggressive
Chinese coercion of the Philippines and Japan illustrate these dynamics in action.
Probably the more important discussion is business unusual or business interrupted forecast. So, there is
obviously a lot of pricing and insurer participation issues in the marketplace today, going into 2018. One of
the biggest things that we look at, is the CSR, which there is some uncertainty about the future funding of
that. The reason the CSR is important — it’s not because just the dollar amount that goes towards it, but more
importantly it is paid to the insurance companies after the fact. So, the insurance company on day one,
accepts members who are CSR eligible and stop paying out claims based on the fact that they will receive
a CSR. The only receive the federal government funding for the CSR later on. So, insurance companies
don’t want to be in the situation where they find out six months into the year, hey, guess what, you don’t
get that money anymore. What we expect to happen are two options available to insurance companies. One, they would price with what we are calling
an uncertainty buffer. So, let’s say they were expecting to price high single digit premium increases for next year. They will probably tack on a little bit of this
uncertainty buffer, because they don’t know what is going to happen. They can load the silver plan with the CSR that they are not going to get. So, you will see the
silver plan premiums go up. The second option, which is probably a little more drastic, is they get more selective about participating. If
there is greater
amount of uncertainty, they could decide to pull out of certain counties or certain states. And the third one, which
is probably important to mention too, that the marketplace has a set of rules. If the rules are changed after you are already playing
the game, it becomes harder to adjust. So, rules like the individual mandate or the special enrollment periods,
enforcement of that will also be critical for the future stabilization of the marketplace. Perhaps we will talk about
(indiscernible) later on, when questions come up.
SARAH DASH: Thank you so much, Deep, and let me turn it over to Cori Uccello. Thanks.
CORI UCCELLO: First I would like to thank Sarah and the Alliance for inviting me to participate today.
As others have already pointed out, we are in a different situation today then maybe we were a couple days ago, but I am going to still focus my remarks at a fairly
general level and discuss the kinds of actions that are needed to improve the stability and sustainability of the individual market. Before getting to those potential
improvements, I think it’s important for us to know what the goals are.
This leads me to the actions that should be taken to improve the market. I feel like I’m piling on here, but first and
foremost is the need to fund the cautionary reductions. Not paying for these reductions or even uncertainty about
whether they will be funded, could lead to higher premiums. As Karen said, the Kaiser Family Foundation has estimated that on
average, not paying for those CSRs could result in premium increases of nearly 20%. That’s on top of the premium increases that will already occur due to medical
inflation and other factors.
Second, the individual mandate needs to be enforced. The mandate is intended to increase enrollment and
encourage even healthy people to enroll. That’s what’s needed for a balanced risk pool. As Karen mentioned, the mandate itself is
already fairly weak, because the financial penalty is low, many people are exempt from the penalty and enforcement itself is weak. But
further weakening it, would make it less effective and would lead to higher premiums. Strengthening it could improve the risk profile and
put downward pressure on premiums. But enforcement itself isn’t enough. I think there are a lot of people out there who don’t even realize the
mandate is still in play. And so, it also needs to be publicized in order to be effective. Alternatives to the mandate are being explored,
such as the continuous coverage requirements that were in the house passed bill. But it’s difficult to
structure those kinds of mechanisms, so that they encourage healthy people to enroll sooner rather than later,
while still providing protections to people with preexisting conditions.
More external funding in the form of higher
So, if the mandate is the stick to encourage enrollment, premium subsidies are the carrots.
premium subsidies, or funding that will offset the cost of high cost enrollees, such a through high risk
pools or these invisible high risk pools, or reinsurance, could help improve the pool. It’s important to note that there
are many — we use the word “high risk pools” a lot, but there are actually several different ways that high risk pools can be structured. In your packets, there is a
paper from the academy that talks about the different ways that that could be done. Like I said, they could be done in terms of the traditional high risk pools that were
in place prior to the ACA, they could be invisible risk pools so that the person enrolling in the private market stays in that plan, but their claims are paid through this
external funding, and that could be their eligibility for those risk pools, could be based on either having certain conditions or having spending that exceeds a particular
threshold.
Finally, it’s
important to not only take actions to improve the market, but also avoid actions that could make
things worse. So, for instance, allowing the sales of insurance across state lines, or expanding the
availability of association health plans, could actually lead to market fragmentation and higher premiums .
So, with that, I will turn things over to Brian.
Millions are paying the penalty now – strengthening the mandate changes the
incentive structure
Steve Walker 16, JD from George Washington University, former Vice President of the Healthcare
Investment Banking Division of Merril Lynch, 10/28/2016, Millions choose to pay Obamacare fines
rather than enroll; Simple solution–higher fines or…, Monday Morning,
http://mondaymorning.com/2016/10/28/millions-choose-to-pay-obamacare-fines-rather-than-enroll-
simple-solution-higher-fines-or/
The architects of the Affordable Care Act thought they had a blunt instrument to force people–even the
young and invincible–to buy insurance through the law’s online marketplaces: a tax penalty for those who
remain uninsured. It hasn’t worked all that well, according to The New York Times, and that is at least partly to blame
for soaring premiums next year on some of the health law’s insurance exchanges. The full weight of the
penalty will not be felt until next April, says The Times, when those who have avoided buying insurance will face penalties in the
neighborhood of $700 a person. But even that might be insufficient: For the young and healthy who are
desperately needed to make the exchanges work, it sometimes makes more sense for them to pay the
Internal Revenue Service than an insurance company charging large premiums, with huge deductibles. “In
my experience, the penalty has not been large enough to motivate people to sign up for insurance ,” said
Christine Speidel, a tax lawyer at Vermont Legal Aid. Some do sign up, especially those with low incomes who receive the most generous
subsidies, Ms. Speidel said. But others, she said, find that they cannot afford insurance, even with subsidies, so “they grudgingly take the
penalty.” The IRS says
that 8.1 million returns included penalty payments for people who went without
insurance in 2014, the first year in which most people were required to have coverage. A preliminary report on the latest tax-filing season,
tabulating data through April, said that 5.6 million returns included penalties averaging $442 a return for people uninsured in 2015. With the
health law’s fourth open-enrollment season beginning next Tuesday, Nov. 1, consumers are fretfully weighing their options, says The Times.
When Congress was drafting the Affordable Care Act in 2009 and 2010, lawmakers tried to adopt a carrot or stick approach: subsidies to induce
people to buy insurance and tax penalties “to ensure compliance,” in the words of the Senate Finance Committee. But the requirement for people
to carry insurance is one of the most unpopular provisions of the health law, and the Obama administration has been cautious about enforcing it.
The IRS portrays the decision to go without insurance as a permissible option, not as a violation of federal law. The law “requires you and each
member of your family to have qualifying healthcare coverage (called minimum essential coverage), qualify for a coverage exemption, or make
an individual shared responsibility payment when you file your federal income tax return,” the IRS says at its website. Some consumers who buy
insurance on the exchanges still feel vulnerable. Deductibles are so high, they say, that the insurance seems useless. So some think that whether
they send hundreds of dollars to the IRS or thousands to an insurance company, they are essentially paying something for nothing, The Times
points out. Obama administration officials say that perception is wrong. Even people with high deductibles have protection against catastrophic
costs, they say, and many insurance plans cover common health care services before consumers meet their deductibles. In addition, even when
consumers pay most or all of a hospital bill, they often get the benefit of discounts negotiated by their insurers. The health law authorized certain
exemptions from the coverage requirement, and the Obama administration has expanded that list through rules and policy directives. More than
12 million taxpayers claimed one or more coverage exemptions last year because, for instance, they were homeless, had received a shut-off notice
from a utility company or were experiencing other hardships. “The penalty for violating the individual mandate has not
been very effective,” said Joseph J. Thorndike, the director of the tax history project at Tax Analysts, a nonprofit publisher of tax
information. “If it were effective, we would have higher enrollment, and the population buying policies in the
insurance exchange would be healthier and younger.” “If you make the penalties tougher, you need to
make financial assistance broader and deeper ,” said Michael Miller, the policy director of Community Catalyst, a consumer
group seeking health care for all. Steve’s Take: With the exception of the “repeal and replace” camp, practically everyone agrees that
insurance companies are a necessary ingredient in the exchanges for the ACA to function the way it was
intended. And, for insurance companies to remain in the exchange, they need more healthy people, fewer
sick people or a combination of the two. Both sides of the aisle agree that insurance companies should not
be able to reject people with pre-existing conditions, which means sick people in need of care will remain,
according to Forbes. That means a stronger mandate is required to get healthy people into the
insurance pools . Unfortunately, neither party seems to be discussing this possibility.
The plan is key--- insurers just commited to exchanges and jacked up premiums –
addressing the mandates and CSRs solves
Benjy Sarlin 9-27, NBC News, "Obamacare Repeal Failed, but the Damage Is Already Done", 2017,
https://www.nbcnews.com/politics/congress/obamacare-repeal-failed-some-damage-already-done-
n804956
insurance market from the lengthy repeal debate is done — with higher premiums and fewer
choices already baked into Obamacare’s 2018 exchanges .¶ Now Republican leaders and President Donald Trump have to decide what to do
about it.¶ Do they keep trying repeal over and over and hope something eventually sticks? Or do they talk to Democrats about securing a shaky truce? Could they try to make Obamacare work
insurers are spooked ¶ Any conversation needs to reckon with the current state of
for the most people possible in the meantime? Perhaps they try to sabotage it?¶ Why
Obamacare’s health insurance exchanges, which are still struggling to attract insurers even as their profits
improved last year. While no counties are slated to go without coverage in 2018, almost half will have just one
option next year.¶ The problem has a lot to do with the last eight months of repeal efforts.¶ For months, insurers warned that the ongoing
turmoil in Congress and threats from the White House to undermine Obamacare would force them to charge customers more —
or not offer plans at all — in 2018.¶ "They say insurers don’t like uncertainty and things could not be any more
uncertain," said Sabrina Corlette, a Research Professor at the Center on Health Insurance Reforms at
Georgetown University.¶ In a report this month, the Congressional Budget Office estimated this confusion would be responsible for a
15 percent increase in premiums next year .¶ Looking to calm the waters, Senate HELP Committee Chairman Sen. Lamar
Alexander, R-Tenn., led bipartisan talks this month on a bill to stabilize the insurance market. The emerging plan was to guarantee cost-
sharing reduction payments — which Trump has threatened to cut off over legal concerns — in exchange for concessions from Democrats on loosening Obamacare regulations.¶ But
those talks were frozen once Graham-Cassidy put the GOP back in repeal mode and now it’s too late to pass
anything that will affect 2018. Insurers will finalize their plans this week, after which they will not be able to change
rates for the year.¶ "At this point the clock has basically run out," said Larry Levitt, senior vice president at the Kaiser Family Foundation.¶
Premium hikes on the horizon¶ Already, state insurance regulators are approving big rate increases based
on the assumption that Trump will discontinue CSR payments and Congress will not appropriate them.¶ In
Connecticut, insurers and state officials agreed to premium hikes of 27.7 percent with one insurer and 31.7 percent with
another, with both sides citing volatility around CSRs. In Michigan, officials assumed no CSR payments
while approving an average 27.6 percent increase. And in Mississippi, state Insurance Commissioner Mike Chaney approved a
whopping 47.4 percent boost in premiums for the state’s lone Obamacare insurer, according to the Wall Street Journal. He said it would have
been 17.9 percent if the CSR payments were not in question.¶ It’s not just the CSR’s raising rates. Industry analysts say companies
are also pricing in doubts about whether the White House will enforce the Obamacare individual mandate , which
requires people to maintain coverage.¶ The Department of Health and Human Services recently announced it would slash its advertising budget by 90 percent for the 45-day enrollment period,
which begins November 1. The lack of outreach is stoking fears that Trump, who has talked about allowing Obamacare "implode" to force Democrats to come to the table, may be on a broader
The uncertainty in the markets continued throughout this process and will
mission to sabotage the law.¶ "
continue in the future if there are no resolutions around CSR and the individual mandate ," S&P analyst
Deep Banerjee told NBC News.
2AC
T
Counterinterpretation – NHI requires two things – a legal requirement for
insurance and universality – the ACA currently fails this test but the plan makes it
NHI
Thomas Bodenheimer 16, MD, MPH, Founding Director of the Center for Excellence in Primary
Care, University of California-San Francisco; and Kevin Grumbach, MD, Founding Director of the
Center for Excellence in Primary Care, University of California-San Francisco, 2016, Understanding
Health Policy: A Clinical Approach, Seventh Edition, p. 185-196
The subject of national health insurance has seen six periods of intense activity, alternating with times of political inattention. From 1912 to 1916, 1946 to 1949, 1963 to 1965, 1970 to 1974, 1991 to 1994, and 2009 to 2015 it was the
topic of major national debate. In 1916, 1949, 1974, and 1994, national health insurance was defeated and temporarily consigned to the nation’s back burner. Guaranteed health coverage for two groups—the elderly and some of the
with the passage of the Patient Protection and Affordable Care Act, also known as the Affordable Care Act (ACA) or “Obamacare,” the
poor—was enacted in 1965 through Medicare and Medicaid. In 2010,
stage was set for the expansion of coverage to millions of uninsured people. National health insurance means
the guarantee of health insurance for all the nation’s residents —what is commonly referred to as “universal
coverage .” Much of the focus, as well as the political contentiousness, of national health insurance proposals concern how to pay for universal coverage. N ational h ealth i nsurance proposals may
also address provider payment and cost containment .¶ The controversies that erupt over universal health care coverage become simpler to understand if one
returns to the four basic modes of health care financing outlined in Chapter 2: out-of-pocket payment, individual private
insurance, employment-based private insurance, and government financing. There is general agreement that out-of-
pocket payment does not work as a sole financing method for costly contemporary health care. National health insurance
involves the replacement of out-of-pocket payments by one, or a mixture, of the other three financing
modes .¶ Under government-financed national health insurance plans, funds are collected by a government or quasigovernmental fund,
which in turn pays hospitals, physicians, health maintenance organizations (HMOs), and other health care providers. Under private individual or employment-
based n ational h ealth i nsurance, funds are collected by private insurance companies, which then pay providers of care.¶ Historically,
health care financing in the United States began with out-of-pocket payment and progressed through individual private insurance, then employment-based insurance, and finally government financing for Medicare and Medicaid (see
Chapter 2). In the history of US national health insurance, the chronologic sequence is reversed. Early attempts at national health insurance legislation proposed government programs; private employment-based national health
insurance was not seriously entertained until 1971, and individually purchased universal coverage was not suggested until the 1980s (Table 15-1). Following this historical progression, we shall first discuss government-financed
The ACA represents a pluralistic approach that draws on all three of these
national health insurance, followed by private employment-based and then individually purchased coverage.
financing models: government financing, employment-based private insurance, and individually purchased private
insurance.¶ GOVERNMENT-FINANCED NATIONAL HEALTH INSURANCE¶ The American Association for Labor Legislation Plan¶ In the early 1900s, 25 to 40% of people who became sick did not receive any
medical care. In 1915, the American Association for Labor Legislation (AALL) published a national health insurance proposal to provide medical care, sick pay, and funeral expenses to lower-paid workers—those earning less than
$1,200 a year—and to their dependents. The program would be run by states rather than the federal government and would be financed by a payroll tax–like contribution from employers and employees, perhaps with an additional
contribution from state governments. Government-controlled regional funds would pay physicians and hospitals. Thus, the first national health insurance proposal in the United States was a government-financed program (Starr,
1982).¶ In 1910, Edgar Peoples worked as a clerk for Standard Oil, earning $800 a year. He lived with his wife and three sons. Under the AALL proposal, Standard Oil and Mr. Peoples would each pay $13 per year into the regional
fund, with the state government contributing $6. The total of $32 (4% of wages) would cover the Peoples family. ¶ The AALL’s road to national health insurance followed the example of European nations, which often began their
programs with lower-paid workers and gradually extended coverage to other groups in the population. Key to the financing of national health insurance was its compulsory nature; mandatory payments were to be made on behalf of
every eligible person, ensuring sufficient funds to pay for people who fell sick.¶ The AALL proposal initially had the support of the American Medical Association (AMA) leadership. However, the AMA reversed its position and the
conservative branch of labor, the American Federation of Labor, along with business interests, opposed the plan (Starr, 1982). The first attempt at national health insurance failed. ¶ The Wagner–Murray–Dingell Bill¶ In 1943,
Democratic Senators Robert Wagner of New York and James Murray of Montana, and Representative John Dingell of Michigan introduced a health insurance plan based on the social security system enacted in 1935. Employer and
employee contributions to cover physician and hospital care would be paid to the federal social insurance trust fund, which would in turn pay health providers. The Wagner–Murray–Dingell bill had its lineage in the New Deal reforms
enacted during the administration of President Franklin Delano Roosevelt. ¶ In the 1940s, Edgar Peoples’ daughter Elena worked in a General Motors plant manufacturing trucks to be used in World War II. Elena earned $3,500 per
year. Under the 1943 Wagner–Murray–Dingell bill, General Motors would pay 6% of her wages up to $3,000 into the social insurance trust fund for retirement, disability, unemployment, and health insurance. An identical 6% would
be taken out of Elena’s check for the same purpose. One-fourth of this total amount ($90) would be dedicated to the health insurance portion of social security. If Elena or her children became sick, the social insurance trust fund would
reimburse their physician and hospital.¶ Edgar Peoples, in his seventies, would also receive health insurance under the Wagner–Murray–Dingell bill, because he was a social security beneficiary. ¶ Elena’s younger brother Marvin was
permanently disabled and unable to work. Under the Wagner–Murray–Dingell bill he would not have received government health insurance unless his state added unemployed people to the program. ¶ As discussed in Chapter 2,
government-financed health insurance can be divided into two categories. Under the social insurance
model, only those who pay into the program, usually through social security contributions, are eligible for the program’s benefits.
Under the public assistance (welfare) model, eligibility is based on a means test; those below a certain income
may receive assistance. In the welfare model, those who benefit may not contribute, and those who contribute (usually through taxes) may not benefit (Bodenheimer & Grumbach, 1992). The Wagner–
Murray–Dingell bill, like the AALL proposal, was a social insurance proposal. Working people and their dependents were eligible because they made social security contributions, and retired people receiving social security benefits
were eligible because they paid into social security prior to their retirement. The permanently unemployed were not eligible. ¶ In 1945, President Truman, embracing the general principles of the Wagner–Murray–Dingell legislation,
became the first US president to strongly champion national health insurance. After Truman’s surprise election in 1948, the AMA succeeded in a massive campaign to defeat the Wagner–Murray–Dingell bill. In 1950, national health
insurance returned to obscurity (Starr, 1982).¶ Medicare and Medicaid¶ In the late 1950s, less than 15% of the elderly had health insurance (see Chapter 2) and a strong social movement clamored for the federal government to come
up with a solution. The Medicare law of 1965 took the Wagner–Murray–Dingell approach to national health insurance, narrowing it to people 65 years and older. Medicare was financed through social security contributions, federal
income taxes, and individual premiums. Congress also enacted the Medicaid program in 1965, a public assistance or “welfare” model of government insurance that covered a portion of the low-income population. Medicaid was paid
for by federal and state taxes.¶ In 1966, at age 66, Elena Peoples was automatically enrolled in the federal government’s Medicare Part A hospital insurance plan, and she chose to sign up for the Medicare Part B physician insurance
plan by paying a $3 monthly premium to the Social Security Administration. Elena’s son, Tom, and Tom’s employer helped to finance Medicare Part A; each paid 0.5% of wages (up to a wage level of $6,600 per year) into a
Medicare trust fund within the social security system. Elena’s Part B coverage was financed in part by federal income taxes and in part by Elena’s monthly premiums. In case of illness, Medicare would pay for most of Elena’s hospital
and physician bills.¶ Elena’s disabled younger brother, Marvin, age 60, was too young to qualify for Medicare in 1966. Marvin instead became a recipient of Medicaid, the federal–state program for certain groups of low-income
Medicare is
people. When Marvin required medical care, the state Medicaid program paid the hospital, physician, and pharmacy, and a substantial portion of the state’s costs were picked up by the federal government.¶
a social insurance program, requiring individuals or families to have made social security contributions to gain
eligibility to the plan. Medicaid, in contrast, is a public assistance program that does not require recipients to
make contributions but instead is financed from general tax revenues. Because of the rapid increase in Medicare costs, the social security contribution
has risen substantially. In 1966, Medicare took 1% of wages, up to a $6,600 wage level (0.5% each from employer and employee); in 2015, the payments had risen to 2.9% of all wages, higher for wealthy people. The Part B premium
has jumped from $3 per month in 1966 to $104.90 per month in 2015, higher for wealthy people. ¶ The 1970 Kennedy Bill and the Single-Payer Plan of the 1990s¶ Many people believed that Medicare
and Medicaid were a first step toward universal health insurance. European nations started their national health insurance programs by covering a portion of
the population and later extending coverage to more people. Medicare and Medicaid seemed to fit that tradition. Shortly after Medicare and Medicaid became law, the labor movement, Senator Edward Kennedy of Massachusetts, and
Representative Martha Griffiths of Michigan drafted legislation to cover the entire population through a national health insurance program. The 1970 Kennedy–Griffiths Health Security Act followed in the footsteps of the Wagner–
Murray–Dingell bill, calling for a single federally operated health insurance system that would replace all public and private health insurance plans.¶ Under the Kennedy–Griffiths 1970 Health Security Program, Tom Peoples, who
worked for Great Books, a small book publisher, would continue to see his family physician as before. Rather than receiving payment from Tom’s private insurance company, his physician would be paid by the federal government.
Tom’s employer would no longer make a social security contribution to Medicare (which would be folded into the Health Security Program) and would instead make a larger contribution of 3% of wages up to a wage level of $15,000
for each employee. Tom’s employee contribution was set at 1% up to a wage level of $15,000. These social insurance contributions would pay for approximately 60% of the program; federal income taxes would pay for the other
40%.¶ Tom’s Uncle Marvin, on Medicaid since 1966, would be included in the Health Security Program, as would all residents of the United States. Medicaid would be phased out as a separate public assistance program. ¶ The Health
Security Act went one step further than the AALL and Wagner–Murray–Dingell proposals: It combined the social insurance and public assistance approaches into one unified program. In part because of the staunch opposition of the
government-financed
AMA and the private insurance industry, the legislation went the way of its predecessors: political defeat. ¶ In 1989, Physicians for a National Health Program offered a new
national health insurance proposal. The plan came to be known as the “ single-payer ” program, because it would establish a
single government fund within each state to pay hospitals, physicians, and other health care providers,
replacing the multipayer system of private insurance companies (Himmelstein & Woolhandler, 1989). Several versions of the single-payer plan were
introduced into Congress in the 1990s, each bringing the entire population together into one health care financing system, merging the social insurance and public assistance approaches (Table 15-2). The California Legislature, with
the backing of the California Nurses Association, passed a single-payer plan in 2006 and 2008, but the proposals were vetoed by the Governor.¶ THE EMPLOYER-MANDATE
MODEL OF NATIONAL HEALTH INSURANCE ¶ In response to Democratic Senator Kennedy’s introduction of the 1970 Health Security Act, President Nixon, a
Republican, countered with a plan of his own, the nation’s first employment-based, privately administered national health insurance proposal. For 3 years, the Nixon and Kennedy approaches competed in the congressional
battleground; however, because most of the population was covered under private insurance, Medicare, or Medicaid, there was relatively little public pressure on Congress. In 1974, the momentum for national health insurance
The essence of the Nixon proposal was the employer mandate, under which the federal
collapsed, not to be seriously revived until the 1990s.
government requires (or mandates) employers to purchase private health insurance for their employees.¶ Tom Peoples’ cousin
Blanche was a receptionist in a physician’s office in 1971. The physician did not provide health insurance to his employees. Under Nixon’s 1971 plan, Blanche’s employer would be required to pay 75% of the private health insurance
premium for his employees; the employees would pay the other 25%. ¶ Blanche’s boyfriend, Al, had been laid off from his job in 1970 and was receiving unemployment benefits. He had no health insurance. Under Nixon’s proposal,
financing. Employer mandate plans preserve and enlarge the role of the private health insurance
industry rather than replacing it with tax-financed government-administered plans. The Nixon proposal changed the entire
political landscape of national health insurance, moving it toward the private sector. ¶ During the 1980s and 1990s, the number of people in the United States without any health insurance rose from 25 million to more than 40 million
Clinton submitted
(see Chapter 3). Approximately three-quarters of the uninsured were employed or dependents of employed persons. In response to this crisis in health care access, President
legislation to Congress in 1993 calling for universal health insurance through an employer mandate . Like the Nixon proposal,
the essence of the Clinton plan was the requirement that employers pay for most of their employees’ private insurance
premiums. The proposal failed.¶ A variation on the employer mandate type of national health insurance is the voluntary approach. Rather than requiring employers to purchase health insurance for employees,
employers are given incentives such as tax credits to cover employees voluntarily. The attempt of some states to implement this type
of voluntary approach has failed to significantly reduce the numbers of uninsured workers. ¶ THE INDIVIDUAL-MANDATE MODEL OF NATIONAL
HEALTH INSURANCE¶ In 1989, a new species of national health insurance appeared, sponsored by the conservative Heritage Foundation: the individual mandate. Just as many states require motor
vehicle drivers to purchase automobile insurance, the Heritage plan called for the federal government to require all US residents to purchase
individual health insurance policies. Tax credits would be made available on a sliding scale to individuals and
families too poor to afford health insurance premiums (Butler, 1991). Under the most ambitious versions of the individual mandate, employer-
credits may vary widely in their amount depending on characteristics such as household income and how much of a subsidy the architects of individual mandate proposals build into the
plan. In a generous case, a family might receive a $10,000 tax credit, subsidizing much of its health insurance premium. Another version of individual health insurance expansion is the voluntary concept, supported by President
George W. Bush during his presidency. Uninsured individuals would not be required to purchase individual insurance but would receive a tax credit if they chose to purchase insurance. The tax credits in the Bush plan were small
compared to the cost of most health insurance policies, with the result that these voluntary approaches if enacted would have induced few uninsured people to purchase coverage.¶ The Massachusetts Individual Mandate Plan of 2006¶
The Massachusetts
Nearly 20 years after the Heritage Foundation’s individual mandate proposal, Massachusetts enacted a state-level health coverage bill implementing the nation’s first individual mandate.
plan, enacted under Republican Governor Mitt Romney, mandated that every state resident must have health insurance meeting a
minimum standard set by the state or pay a penalty. The law provided state subsidies for purchase of private health insurance coverage to individuals with incomes below
300% of the federal poverty level if they are not covered by Medicaid or through employment-based insurance. The law did not eliminate existing employer-based or
7. Themeaning of "ordain and establish" thus conveys a sense of newly erected institutions, established
on a permanent basis (and seemingly rules out reliance on the existing state courts). See Collins, Article HI Cases, at 124-25; Liebman
& Ryan, at 735.
Mandate PIC
2AC – Mandate PIC
Subsidies alone fail—mandate is key to induce low-risk individuals – studies
Juergen Jung 11, Assistant Professor of Economics, Towson University, PhD in Economics from
Indiana University, Chung Tran, 1/29/2011, Market Inefficiency, Insurance Mandate and Welfare: U.S.
Health Care Reform 2010∗, https://editorialexpress.com/cgi-
bin/conference/download.cgi?db_name=mmm2011&paper_id=52
In this section we
study the role of the penalties for not having insurance and the subsidies as enforcement
mechanisms of the insurance mandate. We first consider a situation without any penalties for uninsured
individuals and second, we analyze the effects of the policy without subsidies to low income individuals.¶ Insurance mandate
enforced only by subsidies to low income families (no penalty). We set the penalty rate for uninsured individuals to
zero and re-run the experiment under the three financing regimes: (i) payroll tax, (ii) government
consumption, and (iii) consumption tax. We report the results in table 7. We find that subsidies alone increase the
private insurance coverage rates only to 72 percent leaving a large portion of the population uninsured. This indicates
that the subsidies alone have a small effect on insurance take-up rates and if health insurance is not
enforced by a tax penalty on people without health insurance, the low risk type agents will opt out of insurance. This
result is in line with empirical evidence reported in Gruber and Washington (2005) who find that
subsidies have a very small effect on insurance take up, but tend to make people buy more expensive
health insurances. From column 2 in table 7 we also see that in the absence of the penalty, the payroll tax to
finance the reform is actually slightly higher than in the benchmark regime and the negative efficiency
effects (measured as drop in output) are slightly larger. This result carries an important policy implication.
If the reform is enacted using a flawed process (i.e. absence of real enforcement of the mandate) the
outcomes of the reform do not meet the target to significantly increase the population with health
insurance, while also worsening the growth prospects of the economy.
Can’t solve balanced risk pool – high income individuals have low demand elasticity
to subsidies which makes penalties key
Jesse M Hinde 16, PhD Candidate in Public Policy, University of North Carolina at Chapel Hill,
Incentive(less)? October 2016, The Effectiveness of Tax Credits and Cost-Sharing Subsidies in the
Affordable Care Act,
http://jessehinde.web.unc.edu/files/2014/08/hinde_2016_aca_tax_credits_october2016.pdf
While similar tax credits have been used in past programs related to self-employment and for recently
unemployed individuals, the results here suggest that these ACA tax credits may have broader appeal for
lower-income individuals. The estimated elasticities are also on the high end of existing estimates,
suggesting low-income individuals may be more price responsive than previous studies have found. There
is no evidence for changes in IPI coverage at 250% FPL and weak evidence for changes at 400% FPL, consistent with
existing low elasticity estimates for higher income individuals. ¶ One policy implication is that the APTC
and CSR levels would need to be raised at higher incomes to induce more participation. Furthermore, these
results suggest the long-term impact beyond the lowest-income group could be minimal. However, given
that the individual mandate penalty and the exchange premium increases in 2015 could further incentivize
participation, consumer awareness of and responsiveness to these changes are a key determinant of how much
the APTC and CSR levels would need to be raised in the future.
K
2AC – Trump K
Permutation do both –refuse complicity in the Trump regime but opportunistically
engage in policy during the Trump administration—this is a single ethos of
opposition which is critical in the post-Trump era – the alt alone fails
Joshua Cherniss 17, Assistant Professor of Government at Georgetown University, 2/1/2017,
Compromising with Trump, http://www.publicseminar.org/2017/02/compromising-with-
trump/#.WMoTpm8rJEY
It is now abundantly clear that, as many warned, President Trump constitutes a threat to American institutions and values. The deep
hostility to criticism, vindictiveness towards opponents, and the contempt for the law, political norms, and
basic decency flaunted by candidate Trump, validated (in his eyes and those of his supporters, at any rate) by his electoral victory, have already
marked his short time in office. We face an authoritarian turn in American politics, an upheaval in our
institutions and a crisis in our norms. Under such circumstances, all who support democratic values and
institutions must seek to oppose the present administration — and must look for examples that might guide resistance to it, whether by
progressive, or by patriotic and law-respecting Republican, opponents.¶ Some critics of Trump have called for intransigent resistance ;
others have counseled openness to compromise in the hopes of taming or co-opting the administration. Even those who doubt that President Trump will prove to be the pragmatic problem-solver
he and some supporters have promised must recognize the hunger to believe such promises. President Obama and others speak for many Americans when they express the hope that a President
Trump will move away from his divisive and abusive stances when governing. Repudiating these hopes, however strong the basis for doing so is, may carry political costs.¶ In thinking
about the choice between compromise and intransigence, it is useful to turn to examples of those who
have astutely analyzed and effectively opposed authoritarian regimes. In particular, we can gain insight from the
example of the dissidents who opposed the Communist autocracies of Eastern Europe. These dissidents offer an
instructive model, not because conditions under a Trump administration are likely to resemble those under Communism, but because they show us how elements of
moral intransigence and pragmatic compromise may be combined into a single strategy, a single
ethos of opposition. They held out under extreme moral and material pressure — public condemnation,
ostracism, blackmail, imprisonment, impoverishment, exile, and violence. And then they negotiated with
their former jailers to bring about peaceful transitions to democracy. What do they have to teach us about how to
fight, and compromise with, authoritarian rulers?¶ There are, I think, five lessons that Eastern European dissident thinkers drew from their
experience, and which they offer us. They are: 1) the necessity of seeking compromises and accepting disappointments and
defeats when engaging in politics; 2) that the ability to make acceptable compromises depends on trustworthy opponents who themselves accept and uphold fair
conditions of political contestation; 3) that opposition movements should be ready to compromise on matters of policy , but
not on matters of truth or basic principles ; 4) that those who oppose unjust and tyrannical regimes
should beware of the dangers of self-righteousness and fury, and avoid emulating the methods and spirit
of their opponents; and 5) the importance of creativity and resilience in engaging in long-term political struggles.¶ While these dissidents were models of morally-inspired
protest, their example shows that that compromise will be necessary — and that responsible participation in politics
demands an ability both to reach out to opponents, and to tolerate disagreement and disappointment. This
means foregoing self-righteousness as a guide to action. The Polish dissident Adam Michnik warned his comrades to “stop thinking in terms of how right you are,” and to “learn the
difficult art of compromise, without which authentic pluralism will not be possible.” Such pluralism was
necessary for the success of the opposition, which required that those who disagreed over both values and
strategy find a way to work together. It was also necessary for the success of democracy in Poland and other post-Communist countries, which required that those
who had taken different sides during the battle between the opposition and the regime be able to live together peacefully. Stigmatizing all opponents as crooked
or bigoted was both politically counter-productive, and fostered a mentality of self-righteousness and
suspicion which perverted the opposition’s own values.¶ But openness to the claims of opponents is not
the same as trust in them, or a willingness to cooperate with them in all circumstances
.For there to be compromise, rather than mere surrender to force, there must be the possibility of open,
fair political competition and conflict, the outcome of which is not predetermined. If freedom of speech and association, the
ability to disagree with and criticize those in power, the requirements of proper judicial procedure, and the integrity of the electoral process, are not respected, political cooperation becomes
meaningless ¶ Not only the political background, but the character and conduct of potential bargaining-partners, matters. To again quote Michnik, “A policy of conciliation makes sense only if
both sides take it seriously.” Making agreements with “people who treat the very concept of ‘agreements’ completely arbitrarily, who regularly go back on their promises, and for whom lies are
their daily bread, is contrary to common sense.” Cooperation simply will not work when one side regards the other as “material to work with,” as persons who can be “either bought or
intimidated.” A leader who demonstrates contempt for the truth, encourages violence, or threatens to strip dissenters of the basic rights of citizenship, is unlikely to be a viable political partner.
The deeply pathological character exhibited by President Trump gives us reason to think that viewing him as a partner in compromise will be a mistake.¶ A related lesson from the anti-
Communist opposition is to be ready to compromise on policy, but not on narrative or truth. A central strategy of authoritarian regimes is to render their subjects confused, by flooding them with
misinformation and conspiracy theories, and complicit, by forcing them to repeat officially-sanctioned untruths. Eastern European dissidents therefore embraced a strategy of what the Czech
dissident leader (and later President of democratic Czechoslovakia) Vaclav Havel called “living in truth.” This meant a willingness to identify lies as lies, threats as threats, crimes as crimes, and
hate as hate. As the political theorist Jacob Levy, drawing on Havel and others, has recently reminded us, “insisting on the difference between truth and lies is itself a part of the defense of
freedom.Ӧ President Trump and his allies will have good reason to seek to compromise with his opponents (or to manipulate them into compromising themselves). Blind intransigence is likely
to be politically costly for opponents of the Trump administration, but allowing themselves to be co-opted and compromised, even for the sake of short-term successes, may be just as costly. But
what if, despite their misgivings, President Trump’s opponents conclude that they should seek compromise with him?¶ Following the example of Eastern European dissidents, they should set
conditions and limits on such cooperation. In dealing with a President Trump, political opponents (both Democrats, and Republicans who disagree with his policies and conduct) should make
clear what is up for discussion — and what isn’t — ahead of time. And they should hold themselves to such commitments. (A recent example of such an approach is provided by Republican
Senator John McCain, who, while accepting Trump as President-elect and leader of his party, has drawn a line in the sand regarding torture). Such political opponents would be well advised to
make it clear from the beginning that the onus is on the President to win their trust — not on them to win his forbearance The same applies to those journalists on whom the President and his
sycophants have rained contempt.¶ Insistence on basic standards of truth, decent treatment of opponents, and fair process are not matters of moralistic blindness to political reality; they reflect a
Trump should, however, beware of such defiance shading into an alienating self-righteousness and
intolerance. In his powerful essay “Maggots and Angels,” Michnik — himself once a prisoner of conscience — defended the
“maggots” who compromised with the Communist regime, and attacked the self-regarding “angels” who
condemned all compromise. The problem with such “angels” wasn’t that their approach was wrong, but
that they thought it was the only right approach. In fact, there was a need both for those who “saved what
could be saved” under the regime, by going about their ordinary lives and performing their public duties
as best they could, and those who loudly said “No!” to any cooperation with the authorities.¶ This call for
humility and tolerance among opponents of the regime did not mean relaxing moral standards. To the
contrary, Michnik and other dissidents insisted that both those who took the path of cooperation and those
who took the path of outright resistance recognize common limits on acceptable action. These limits were defined by the
individual rights of others, rights that made it wrong, on the one hand, to actively assist the regime in violence and terror and, on the other, to use violence and terror to combat the regime.¶
Following this model, those who engage in protest against Trump’s actions should be sure to respect the law, as well as the sentiments and physical integrity of their fellow-citizens. They must
eschew both violence and puerile gestures like flag-burning. Those who oppose the Trump administration’s policies and tenor but choose to take the path of cooperation — by serving in federal
office, for example — should draw the line ahead of time at participating in illegal and immoral actions, and be ready to publicly resign if they are commanded to act against basic standards of
legality or decency. Those who adopt one strategy in fighting Trump’s policies should respect those who adopt
different strategies, as long as these strategies have a plausible chance of doing good, and do not involve
violating the rights of others.¶ Another lesson from Communist Eastern Europe is that an effective opposition must be active rather
than reactive . Trump himself shows that sometimes audacious offensives are more effective than a cautious game of defense. This is not to suggest that those who oppose him should
sink to the level of gutter-politics — this will only confirm Trump’s mastery of the political field. But they would do well to emulate his boldness,
finding creative ways to advance their agenda and combat abuses of power. Above all they should, as Havel warned, avoid
becoming embroiled in polemics over abstruse theoretical points or matters of abstract principle; they should focus instead on “concrete causes, and be prepared to fight for them unswervingly.”¶
Creative initiatives can and should take many forms, including, but not limited to , conventional political
channels . Here again, Eastern European dissidents offer a useful example of political innovation. In particular,
they pursued a strategy of engaging in what they termed “social work”: providing the social services and
cultural resources — legal defense and financial assistance to victims of the regime, private venues for
education and free discussion, an independent underground press — that the state failed to provide. If a Trump
administration and Congressional Republicans make good on promises to roll-back and privatize public services, there may be broadly similar opportunities for progressive organizations in
America.¶ Trump’s opponents have already suffered significant defeats; they can expect to suffer more in the years ahead. In the face of such defeats, they should remember a final lesson from
self-control, determination, and resilience; finding ways to win small, cumulative victories, will require a
great deal of creativity, clarity, and courage from political leaders and activists. Past experience may not
make us optimistic about finding such qualities. But opponents of the Trump administration must now
cultivate — and demand — them.
Moral absolutism undermines political effectiveness---you should judge the
desirability of an action by its consequences
Jeffrey C. Isaac 2, James H. Rudy Professor of Political Science and Director of the Center for the
Study of Democracy and Public Life at Indiana University, Spring 2002, Dissent, Vol. 49, No. 2
As writers such as Niccolo Machiavelli, Max Weber, Reinhold Niebuhr, and Hannah Arendt have taught, an unyielding concern
with moral goodness undercuts political responsibility. The concern may be morally laudable,
reflecting a kind of personal integrity, but it suffers from three fatal flaws: (1) It fails to see that the purity of one's
intention does not ensure the achievement of what one intends . Abjuring violence or refusing to make
common cause with morally compromised parties may seem like the right thing; but if such tactics
entail impotence, then it is hard to view them as serving any moral good beyond the clean conscience of their
supporters; (2) it fails to see that in a world of real violence and injustice, moral purity is not simply a form of
powerlessness; it is often a form of complicity in injustice . This is why, from the standpoint of politics--as opposed to
religion--pacifism is always a potentially immoral stand. In categorically repudiating violence, it refuses in principle to oppose certain violent
injustices with any effect; and (3) it fails to see that politics
is as much about unintended consequences as it is about
intentions; it is the effects of action, rather than the motives of action, that is most significant. Just as the
alignment with "good" may engender impotence, it is often the pursuit of "good" that generates evil . This is the lesson of
communism in the twentieth century: it is not enough that one's goals be sincere or idealistic; it is equally
important, always, to ask about the effects of pursuing these goals and to judge these effects in
pragmatic and historically contextualized ways. Moral absolutism inhibits this judgment. It alienates those who are not true
believers. It promotes arrogance. And it undermines political effectiveness .
States
2AC---TL
States fail---can’t predict Trump actions, cover less people, can’t solve CSRs and
public perception
Nathaniel Weixel 17, Health Reporter at The Hill, 8-13-2017, "States enter the breach to protect
ObamaCare," The Hill, http://thehill.com/policy/healthcare/346256-states-enter-the-breach-to-protect-
obamacare
State officials are using every tool at their disposal to try to keep their insurance marketplaces stable in
the face of uncertainty from the Trump administration over the future of ObamaCare.¶ Insurance commissioners are working
with providers, advocates and insurance companies to help keep the system running, but it’s an uphill climb. ¶ Insurers are skittish and
pleading for certainty from Washington. They want assurances that they will continue to receive cost-
sharing reduction (CSR) payments from the federal government, which total about $7 billion this year. Those payments
reimburse insurers for providing discounted insurance to low-income ObamaCare enrollees.¶ They also want assurances that the
administration will enforce the mandate requiring people to have insurance or pay a penalty.¶ States don’t
have a lot of options , but some officials are actively trying to make sure the public is shielded as much as possible from the
consequences if Trump follows through on his promise to let ObamaCare “implode.” ¶ “In general there’s not a whole lot they can
do, because states don’t have any more information about what the Trump administration is doing than
insurance companies,” said Cynthia Cox of the Kaiser Family Foundation.¶ Some states are letting plans file multiple sets of rates to
account for the uncertainty. The strategy can work, Cox said, if all insurers are on the same page. ¶ “The concern is that one company assumes the
worst case scenario and adds 40 percentage points on for uncertainty, and another assumes the best case and prices significantly lower,” Cox said.
¶The administration has been sending mixed signals about whether it will take the dramatic step of ending
payments to insurers. The CSRs have been paid on a monthly basis, but the administration has not promised that will continue. ¶ If the
administration does cut off the CSRs, some states will add a surcharge onto certain plans to cover the cost of losing those payments. ¶ California,
North Carolina and Pennsylvania, for example, say they will increase the cost of all the mid-level “silver” health plans that consumers can buy on
the exchange. ¶ The idea is that by making the silver plans more expensive, the other plans will be cushioned from the price increase. If the price
of a silver plan increases, tax credits that help customers purchase insurance will also increase. ¶ But states will have to educate consumers about
why the change is taking place.¶ “Customers are going to be confused and [insurance] carriers will have to explain” why one plan is so much
more expensive than the others, Katherine Hempstead, senior adviser to the executive vice president at Robert Wood Johnson Foundation, said. ¶
So-called “silver loading” isn’t a new idea, Hempstead said, but if states decide they can’t wait for the administration to make a decision, it
becomes “more and more likely this is the situation states are going to be in.” ¶ Pennsylvania is telling insurers to price as if there was no
uncertainty, but Pennsylvania Insurance Commissioner Teresa Miller told The Hill that may have to change.¶ “We were
hoping we could keep rates in single digits but if we don’t get certainty [from the administration] we will
have to let [insurers] build it in,” she said¶ If the CSRs were funded, rates would only increase an average of
8.8 percent in the state’s plans. Without CSRs, Miller said rates would rise over 20 percent on average. ¶ States
are also preparing for the possibility that the administration stops spending money to promote enrollment in the exchanges. ¶ The Obama
administration ran advertisements to encourage enrollment, but Trump officials have signaled that promotion effort might come to an end. If that
happens, states could spend their own money on outreach and promotion.¶ Some states are better prepared for such a campaign than others; blue
states with an insurance department that supports the law are likely to have more resources available. ¶ Miller said her state is planning a massive
outreach effort. ¶ The goal is “to encourage Pennsylvanians to enroll in coverage and highlight the benefits if they do,” Miller said. "We’re
working with various stakeholders to develop and coordinate messaging.” ¶ Miller said she wasn’t sure the state could reach
as many people as the federal government. ¶ “If all of us have the same messaging, the same materials ... the hope is that we
can reach a lot of people. I don’t know if we can fill this gap completely, but we’re going to do everything we can,” she said. ¶
Michelle Osborne, chief deputy insurance commissioner of North Carolina, said the state’s General Assembly would have to appropriate money
thing states can’t do anything
for the department to engage in outreach, but wouldn’t speculate if that might happen. ¶ One
about is the possibility that the Trump administration will stop enforcing the individual mandate.¶
Without a mandate, insurers fear that only sick people would remain in the market, causing premium
increases.¶ According to a recent Kaiser Family Foundation analysis, insurers factoring in the possibility that the
administration will not enforce the individual mandate increased their rates an additional 1.2 to 20
percent. ¶ Cox said part of the problem is public perception.¶ “It’s not just that insurers assume [the mandate]
won’t be enforced, it’s a public perception that it won’t be. That’s a harder issue for states to address ,”
she said.
Basic principles of federalism suggest the need for a strong federal role in certain circumstances.
National uniformity promotes efficiency, while state-by-state variation can be costly for interstate actors.
National standards minimize border issues and reduce the likelihood of negative externalities—letting the
problems in one state flow “downstream” to the next. Higher levels of government are better able to
redistribute resources because they can reach a broader tax base and need not be as concerned that
businesses and taxpayers will flee to other jurisdictions.
Federalism principles also describe situations where there is a need for state and local involvement. A state role is warranted when circumstances
vary around the country and when local values and preferences need to be reflected in public policy. State government can be more responsive to
local conditions and adopt policies that are more closely tailored to those circumstances.6
The U.S. health care system has attributes that fall into each of these categories. Patients, doctors, and other health professionals routinely cross
state lines. Pharmaceutical and medical supply companies operate in national and international markets, while many hospitals, nursing homes,
and other institutions are owned by multistate organizations. Employers and insurance companies operate in multiple states. And extending
coverage to those without health insurance involves redistribution of resources at the individual and regional levels.7 Meanwhile, health care
markets, practice patterns, availability of health care services, and design of delivery systems all vary around the country. Decisions regarding the
role and scale of government in financing coverage, design of benefits for public insurance programs, and willingness to regulate private markets
all reflect values that vary from place to place.
Previous Section
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Despite its many strengths, there is overwhelming evidence that the U.S. health care system underperforms its potential along all major
dimensions: access, quality, efficiency, and equity.8 How, within our federal system, can we create an environment with the greatest likelihood
for improvement?
Theories of federalism say little about which level of government should lead the way when policy changes are needed. Federalism analysis is
largely static: a certain level of government should play a particular role because it is more efficient or effective than another. Yet one of the most
compelling federalism metaphors is dynamic. When people
argue that states should function as the “laboratories of
democracy,” state action is not viewed as an end in itself but, rather, as a mechanism for determining
effective policy, which can then be adopted or rejected by other states or the nation as a whole.9
This pragmatic approach to federalism is compelling—but only if it accurately describes reality. If the nation is going to rely upon state
laboratories as the favored path to solve what ails the health care system, we should consider whether the metaphor is apt and, where it falls short,
what could be done to make it so.
Previous Section
Next Section
While states have accomplished a great deal with their reform efforts targeting access and quality, there
is little about state health policy that resembles the conditions of a laboratory. Scientists in laboratories
develop hypotheses, conduct experiments, collect and analyze data, and reach conclusions that are then applied to real-world conditions. State
health policy development, by contrast, is episodic. Sometimes the spread of ideas is based on political
trends that shift much more rapidly than the knowledge base that would support a policy shift. Examples
can be found in state-level adoption of managed care regulation, regulation of the small-group insurance
market, the wholesale adoption of managed care in Medicaid, and the growing application of cost sharing
in public programs.
Limited use of experiments.
Very few state health policy changes are studied using experimental methods. Despite the fact that Medicaid
Section 1115 waivers are for the purpose of “research and demonstration,” these waivers are often granted primarily to enable states to make
program changes with a very small research component. Indeed, the Deficit Reduction Act (DRA) of 2006 converted options that once required a
waiver into authority to act without a waiver, despite the fact that no experiments have ever been conducted regarding the likely effects of many
of the changes the DRA anticipates. For example, no
experiments have been conducted on the effects of providing
very-low-income people with scaled-back benefit packages; carving out Early and Periodic Screening,
Diagnosis, and Treatment (EPSDT) benefits from overall Medicaid coverage for children; or denial of
services when enrollees fail to pay a copayment at the point of service.
The state of health care experimentation stands in stark contrast to the experience prior to the adoption of
national welfare reform in 1996. With much federal funding and guidance, states truly experimented with their welfare programs in
the early 1990s. Starting with well-defined hypotheses about the possible effects of various changes in welfare policy—most notably, a shift away
from supporting general skill development to requiring work upon enrollment—state policies were subject to random-assignment experiments in
multiple locations with extensive data on outcomes collected over a period of years. These
experiments led to a change in
thinking about what made for effective welfare policies, and that new thinking was embodied in the new
federal welfare law.10 There is no comparable story for state health policy.
None of this is to minimize the tremendous contribution to our understanding of health policy made by the large volume of high-quality health
services research—much of it supported by private foundations. However, researchers are constrained in the methods they can use when the
research endeavor is not built into the program design. The continued extensive reliance upon the twenty-five-year-old RAND Health Insurance
Experiment (HIE) for evidence regarding the effects of cost sharing is a sign of how infrequently critical health policy topics are subjected to
formal evaluation.11
The laboratory metaphor also implies the transfer of knowledge learned—either to shape national policy
or to shape other states’ choices. Here again, the metaphor is more powerful than the reality. The
diffusion of policy innovations is slow and sometimes does not occur at all.
Federal health policy certainly learns from and follows state experiences. Medicare Part D, the prescription drug benefit, was enacted only after
almost half of the states had developed pharmacy assistance programs.12 But the learning ended there. Two key features of the federal law—the
doughnut hole benefit design and the instantaneous enrollment of 6.4 million dually eligible (Medicare and Medicaid) enrollees 1 January 2006—
diverge sharply from the lessons states learned implementing their programs.
The current impasse over the State Children’s Health Insurance Program (SCHIP) also demonstrates the
limitations of federal learning from state experience . SCHIP has been evaluated
through a congressionally mandated study and a number of privately funded initiatives.13 By every
criterion set forth in the original statute, the program is a success. Yet reauthorization of the program has
been held up because of major ideological disagreements regarding the program’s design. Thus, even in
state experience does not necessarily pave the way for
the best case, evidence from
prompt federal action.
States frequently look to each other when deciding on their own policies. The Centers for Medicare and Medicaid Services (CMS) and the
Agency for Healthcare Research and Quality (AHRQ) Office of Communications and Knowledge Transfer support a variety of evaluation and
interstate communication efforts. Private foundations and dues-paying states support a handful of organizations that devote sizeable resources to
promoting transfer of knowledge from one state to another. Unfortunately, the scale of these efforts does not match the number of natural
experiments that varied state policies would permit. A recent analysis of one area ripe for interstate learning—Section 1115 waivers—found little
evidence of that occurring.14
Trump Cred Add-On---2AC
Status quo failure on health care destroys Trump’s international credibility---causes
a laundry list of hotspot impacts---the plan is key to reverse it
Dov Zakheim 17, former Under Secretary for Defense, 3/27/17, “The Dangerous National Security
Implications of Trump’s Obamacare Fiasco,” http://foreignpolicy.com/2017/03/27/the-national-security-
implications-of-trumps-obamacare-fiasco-china-iran/
Whatever his staff might say, however much the White House finger may be pointed at Speaker Paul Ryan, it is President Donald Trump who is
the biggest loser in the Republican failure to bring Obamacare repeal to a vote in the House of Representatives. Trump promised America’s
voters that he would rid them of Obamacare. He asserted that
only he , as an outsider, had the ability to negotiate a
replacement for the health care program. He has failed , at least for now, and his credibility has taken a major
jolt .
Beyond the Obamacare defeat, for that is what it is, the president has yet to make good on his new immigration proposals. A single judge in
Washington state stopped his first executive order, and two judges, in Hawaii and Maryland stopped his second. The decision not to have a vote
on a replacement for Obamacare renders problematic Trump’s ability to bring about tax reform or modernize America’s aging infrastructure, two
more of his critical priorities.
The collapse of the Republican effort to reform Obamacare has international ramifications , as well.
Though he kept his promise to withdraw from the Trans Pacific Partnership (TPP), Trump has yet to offer a substitute of any kind. He has thereby
opened the door for China to create an alternative trading bloc that excludes the United States. He has yet to declare China a currency
manipulator. He has yet to renegotiate NAFTA, or the Transatlantic Trade and Investment Partnership. He is unlikely to be moving the American
embassy from Tel Aviv to Jerusalem. And he has yet to explain how he will fund a wall with Mexico, for which that country certainly will not
contribute as much as a peso.
Clearly, Trump has a credibility problem that goes far beyond his tweets, which foreign leaders have begun to
recognize that they can simply ignore. Whereas until now it appeared that America’s NATO partners were
being frightened into spending 2 percent of GDP on defense needs, they may no longer have to do so.
The Chinese may feel more confident about maintaining, or even building upon, their aggressive posture in
the S outh C hina S ea. The Israelis may now look for clever ways to circumvent the president’s admonition not to
build more settlements, knowing that their support in Congress — where Trump’s influence clearly has taken a blow — will remain as
solid as ever. The Russians may surmise that they have little incentive to reach an understanding over
Ukraine, Syria, or anywhere else. The Iranians may act on their threat to abandon the so-called Joint
Comprehensive Plan of Action ( JCPOA ) if, as expected Congress passes new sanctions against the Tehran regime. And, most dangerously,
the mad Kim Jong Un may conclude that Secretary of State Rex Tillerson’s threats of military action are baseless ,
and that he has nothing to fear from an administration that cannot even mobilize its own party in
Congress to pass the president’s high-priority legislation .
The House non-vote also has serious ramifications for the administration’s national security budget proposals. The administration’s budget
reflected the president’s priorities: it called for a $25 billion increase in the Fiscal Year 2017 budget and a $54 billion increase in the Fiscal Year
2018 national security budget, of which $52 billion was allocated to the Department of Defense, while reducing the budgets of dozens of
domestic programs. Congressional opposition to the president’s proposals, emanating from some Republicans as well as Democrats, was
mounting even before the Obamacare debacle. In its aftermath, there will be more resistance to the domestic program cuts, which in turn will
mean either that the defense budget be reduced, or that the sequester be lifted. The latter prospect has just become more difficult, meaning that the
president’s promises to bolster America’s forces also may ring hollow. Should that be the case, it will fuel international cynicism about the
president’s ability to deliver on his promises.
Congressional inaction on Obamacare was clearly a defeat for the president, but having only been in office less
than 100 days, he certainly has time to recover. There question is whether he, or his advisors, will recognize that
blaming the speaker of the House is not the solution, and that the true “art of the deal,” is to tone down the rhetoric and
find real ways to find common ground with the Congress, including moderate
begin to
Democrats , at least insofar as international security is concerned. This will not be an easy transformation for President Trump.
Nevertheless, unless he stops reveling in his outsider image, his fate will be that of that other outsider president — Jimmy Carter, whose record in
the White House was nothing short of dismal. It is a prospect that the president and his aides surely will wish to avoid at all costs.
2AC -- Subsidies
The CP spikes state budgets and they’re already tight
Jordan Weissmann 17, Slate’s senior business and economics correspondent, 5-9-2017, "If Trumpcare
Becomes Law, Living in a Blue State Won’t Save You," Slate Magazine,
http://www.slate.com/blogs/moneybox/2017/05/09/living_in_a_blue_state_won_t_save_you_from_the_re
publican_health_care_bill.html
The problem is that Obamacare's market rules likely won't work well without its coverage subsidies, which
Republicans would slash for many families. Requiring
insurers to cover a wide array of basic services makes
insurance more expensive, and forcing them to charge sick customers the same rates as everybody else
drives up the cost for healthier men and women. The ACA makes up for all of this (or tries to, anyway) by
offering tax credits that are more generous for people with lower incomes or who live in places where coverage tends
to be more expensive. But the GOP's bill offers much skimpier financial support to the young and relatively poor, likely pricing them out of
Obamacare-style plans.
Some large states like New York or California could theoretically offer their own subsidies or pass a state-level
individual mandate, just as Massachusetts did under Romneycare. But state budgets are already tight, and legislators
will already have to grapple with the cuts to Medicaid that the GOP is planning. Will pols in Albany or Sacramento
be willing to raise taxes to preserve the Obamacare status quo? I wouldn't necessarily count on it. And if not, their only other choice may be to
apply for a waiver.
Bizcon
2AC --- Biz Con Low
Confidence is shot and will continue to fall
Steven Rattner 7/20 is a Wall Street executive and a contributing opinion writer, NYT Opinions, “The
Fading Trump Bump,” 2017, https://www.nytimes.com/2017/07/20/opinion/the-fading-trump-bump.html
While Mr. Trump did get a post-election bump according to a number of metrics, that glow has faded.
Trump voters appear to be increasingly frustrated with everything from the new administration’s failure to
enact significant legislation to Mr. Trump’s tweets.
This University of Michigan chart shows how consumer expectations jumped immediately after the
election but have since dropped back to below where they were last November and close to recent lows.
Declining confidence may be part of why retail sales growth has recently been slowing. As this chart
shows, retail spending had been increasing steadily at 3.5 percent to 5 percent. Here again, President
Trump may have gotten a post-election bump, but more recently, core retail sales growth has dropped to
2.6 percent, the lowest in more than three years.
Other indicators, like the second-quarter forecast for gross domestic product, have been steadily revised
downward because of the lack of progress on policy priorities and continued Washington dysfunction.
This has dashed hopes for the 3 percent sustained growth rate promised by the Trump administration and
contributed to growing concern among economists.
Late last year, about 40 percent of economists surveyed by The Wall Street Journal thought the economy
was more likely to underperform their growth forecasts. After the election, that percentage dropped to 25
percent. Now it is up to 57 percent, the highest since before November of last year.
2AC – Resilient
Biz con resilient---nothing can decrease it
Brian O’Connell 17, former Wall Street bond trader and writer for Advisor News, “Confidence Should
Keep Markets Humming for Rest of 2017,” 7/31/17, https://advisornews.com/innarticle/confidence-keep-
markets-humming-rest-2017
Money managers looking for indicators that the stock market will keep rolling for the second half of 2017 only need to look at the “confidence”
barometers – specifically, consumer and business confidence.
“Right now,consumer and business confidence show resilience ,” said Jason Pride, director of investment strategy at
Glenmede Trust Company in Philadelphia. “ Fundamental data globally points toward an ongoing expansion.”
'Still Upbeat'
“Overall, consumers anticipate the economy will continue expanding in the months ahead, but they do not foresee the pace of growth
accelerating.”
That’s good news for the stock market, which has already enjoyed a robust first half of the year (the Dow Jones Industrial Average
is up 10 percent through July). A strong consumer confidence sentiment would continue to tamp down volatility, which should increase market
confidence, and gains, experts say.
“Valuation ratios are at an all-time high,” said Charles Trzcinka, a professor of finance at the Indiana University Kelley School of Business. “It’s
not the time to jump in with full force. But there is no question that consumer confidence has been very good. The net effect has been a reduction
in volatility – just see the VIX for the evidence.”
The VIX -- which measures the volatility index -- has inched up from -30 percent to -20 percent in the last month as consumer confidence in the
U.S. economy has climbed.
The VIX is the “big mystery” of the Trump administration to date, Trzcinka said.
an attack was unlikely to succeed because of the "huge amounts of resiliency built into the [electrical]
system that makes that kind of catastrophic thing very difficult" (Capaccio 2012). This optimistic view is supported by
an electrical grid that has proven to be robust in the face of large natural catastrophes. Complex systems like the electrical grid
in the U.S. are prone to failures and the U.S. grid fails frequently. Despite efforts to reduce the risk out power outages, the risk is always present.
Power outages that affect more than 50.000 people have occurred steadily over the last 20 years at a rate of 12% annually and the frequency of
large catastrophes remains relatively high and outages the size of the 2003 blackout are predicted to occur every 25 years (Minkel 2008). In a complex system that is
always at risk of disruption, the
effect is mitigated by policies and procedures that are meant to restore services as
quickly as possible. The most visible of these policies is the interstate Emergency Management Assistance Compact, a legally binding agreement allowing
combined resources to be quickly deployed in response to a catastrophic disaster such as power outages following a severe hurricane (Kapucu, Augustin and Garayev
2009).¶ The
electrical grid suffers service interruptions regularly, it is a large and complex system supporting the largest economy in
and yet commerce does not collapse (Lewis 2010). Despite blizzards, earthquakes, fires, and hurricanes that cause blackouts, the
the world,
economy is affected but does not collapse and even after massive damage like that caused by Hurricane Katrina,
national security is not affected because U.S. military capability is not degraded (Lewis 2010).¶ Cyber-security is
an ever-increasing concern in an increasingly electronic and interconnected world. Cyber-security is a high priority "economic and national security challenge"
(National Security Council n.d.) because cyber-attacks are expected to become the top national security threat (Robert S. Mueller 2012). In response to the threat
Congress is crafting legislation to enhance cyber-security (Brito and Watkins 2012) and the Department of Homeland Security budget for cyber-security has been
significantly increased (U.S. Senate Committee on Homeland Security and Governmental Affairs 2012). ¶ This increased focus on cyber-security
has led to concern that the perceived risk is greater than the actual risk , a situation that has resulted in an imbalance between
security and privacy and civil liberties (American Civil Liberties Union 2012). In 1993 a Rand Corporation paper predicted that "cyberwar is coming" and twenty
years later the prediction is the same and critics argue that cyber-war is "more hype than hazard" (Rid 2012). A review of high profile
cyber-attacks shows that, with the exception of Stuxnet and the limited Israeli disruption of Syrian air defense networks, most cyber-attacks are
categorized as information theft, network compromise, or website defacement (Lewis 2012). Even the high
profile threat of an "Electronic Pearl Harbor" (Bronk 2009). despite being repeated by senior government
officials like U.S. Defense Secretary Leon Panetta (Rid 2012) , has been found to be only a slight possibility (Wilson 2005).
2AC – UQ
Federalism violated now---drug laws, tort reform, sanctuary cities, gun control, the
commerce clause, spending power
Robert Levy 17, PhD in business from the American University, Chairman of Cato, director of the
Institute for Justice, the Foundation for Government Accountability, March/April 2017, “Volte-Face:
Federalism in the Age of Trump,” https://www.cato.org/policy-report/marchapril-2017/volte-face-
federalism-age-trump
In the aftermath of the Trump election, liberals seem to have rediscovered federalism — although
grounded less on principle than on the conviction that states’ rights might better serve the progressive agenda.
Not to be outdone, Republicans, who now control both legislative and executive branches, appear willing to abandon
federalist principles in favor of strong central government freshly enabled to advance conservative
preferences.
That role reversal is reflected in positions on issues such as drug legalization, tort reform, sanctuary cities,
and gun control — reinforced by flawed views of the Constitution’s Commerce Clause, spending power,
and the Second Amendment.
Let’s start with Congress’s power to regulate interstate commerce. Marijuana in some form is now legal
in 44 states. But under federal law, the use, possession, sale, cultivation, and transportation of marijuana is illegal. What say
our conservative champions of federalism? Republican drug warriors — buttressed by liberal Justice John Paul Stevens’s 2005 opinion
in Raich v. Gonzales — have invoked the infinitely elastic Commerce Clause to justify national prohibition.
Indeed, Attorney General Jeff Sessions criticized President Barack Obama for not being tough enough on
marijuana, saying “You have to have leadership from Washington.” And White House press secretary Sean Spicer confirmed on February 23
that the Justice Department will be doing more to enforce federal marijuana laws.
Never mind the warning from conservative Justice Clarence Thomas, who dissented in Raich despite his antidrug
predilections. Thomas wrote that Raich used marijuana that had never been bought or sold, had never crossed
state lines, and had no demonstrated effect on the national market. He added, if Congress can regulate
that under the Commerce Clause, then it could regulate virtually anything — quilting bees, clothes
drives, and potluck suppers.
Or consider tort reform — especially malpractice cases, in which the litigants are almost always from the same state. Nowhere in the
Constitution is there a federal power to set rules that control lawsuits by in-state plaintiffs against instate doctors for in-state malpractice. Some
malpractice awards may be shocking, and the impact may be widespread. But not
every national problem is a federal problem.
Nonetheless, House Speaker Paul Ryan and Tom Price, secretary of health and human services, have
pledged to include tort reform in their replacement for the Affordable Care Act. They say frivolous
lawsuits are inflating malpractice insurance premiums, which raise health care costs. The remedy:
nationalize malpractice relief. So much for the federalist notion that the states should serve as 50 experimental laboratories.
Ditto when it comes to the spending power and sanctuary cities . Mayors in several cities — including Los
Angeles, Chicago, and New York — have refused to cooperate with federal immigration authorities in detaining
and deporting illegal aliens. In response, President Trump has promised to cut federal funding for those
cities. That threat ignores two principles of federalism.
First, while federal law supersedes conflicting state law, and states may not impede federal enforcement,
neither the president nor Congress can commandeer state officials to execute federal law. Second, the
feds may not deny funding to states in a manner that essentially compels cooperation. That’s how the Obama
administration tried to force states to expand Medicaid — by withholding all Medicaid funding if a state said no. The Supreme Court reminded
the administration that a coercive condition imposed on receipt of federal funds is incompatible with federalism and thus unconstitutional.
Finally, consider the Second Amendment and the right to bear arms . On November 8, voters in
California, Nevada, and Washington opted for stricter gun control. Some conservatives demand national
gun control standards. But Second Amendment rights are not absolute. Local jurisdictions retain the ability to
regulate the manner of carrying guns, prohibit carrying in sensitive places, bar weapons that are not covered by the Second Amendment, and
disqualify possession by dangerous individuals. And federalism dictates that what’s allowed in the hills of Montana
need not be allowed in downtown Chicago.
Recall that the essence of federalism is dual sovereignty — shared authority between federal and state
governments to shield individuals from concentrations of power. Justice Anthony Kennedy in United States v. Bondput it
this way: “By denying any one government complete jurisdiction over all the concerns of public life,
federalism protects the liberty of the individual.” That means the proper balance between federal and state
power must be rooted in the Constitution’s embrace of limited government and individual liberty — not
liberal or conservative politics.
the European project is currently teetering on the edge of failure. Growth is anemic at best
And yet, for all this success,
and socio-economic inequality is on the rise. The countries of Eastern and Central Europe, even relatively successful
Poland, have failed to bridge the income gap with the richer half of the continent. And the highly indebted
periphery is in revolt. Politically, the center may not hold and things seem to be falling apart. From the left, parties like
Syriza in Greece are challenging the EU’s prescriptions of austerity. From the right, Euroskeptic parties are taking aim at the entire quasi-
federal model. Racism and xenophobia are gaining ever more adherents, even in previously placid regions like Scandinavia. Perhaps the
primary social challenge facing Europe at the moment, however, is the surging popularity of Islamophobia, the latest
“socialism of fools.” From the killings at the Munich Olympics in 1972 to the recent attacks at Charlie Hebdo and a kosher supermarket in Paris, wars in the Middle East have long inspired proxy
Today, however, the continent finds itself ever more divided between a handful of would-be
battles in Europe.
combatants who claim the mantle of true Islam and an ever-growing contingent who believe Islam—all of
Islam—has no place in Europe. The fracturing European Union of 2015 is not the Europe that political scientist Frances Fukuyama imagined when, in 1989, he so
famously predicted “the end of history,” as well as the ultimate triumph of liberal democracy and the bureaucracy in Brussels, the EU’s headquarters, that now oversees continental affairs. Nor is
it the Europe that British Prime Minister Margaret Thatcher imagined when, in the 1980s, she spoke of the global triumph of TINA (“there is no alternative”) and of her brand of market
liberalism. Instead, today’s Europe increasingly harkens back to the period between the two world wars when politicians of the far right and left polarized public debate, economies went into a
the potential for regime collapse: that is, the end of the Eurozone and the unraveling of regional integration. Its possible dystopian future can be glimpsed in what has
happened in its eastern borderlands. There, federal structures binding together culturally diverse people have had a lousy track record over the last quarter-century. After all, the Soviet Union
imploded in 1991; Czechoslovakia divorced in 1993; and Yugoslavia was torn asunder in a series of wars later in the 1990s. If its economic, political and social structures succumb to
fractiousness, the European Union could well follow the Soviet Union and Yugoslavia into the waste bin of failed federalisms. Europe as a continent will remain, its nation-states will continue to
enjoy varying degrees of prosperity, but Europe as an idea will be over. Worse yet, if, in the end, the EU snatches defeat from the jaws of its Cold War victory, it will have no one to blame but
itself. The Rise and Fall of TINA The Cold War was an era of alternatives. The United States offered its version of freewheeling capitalism, while the Soviet Union peddled its brand of
centralized planning. In the middle, continental Europe offered the compromise of a social market: capitalism with a touch of planning and a deepening concern for the welfare of all members of
society. Cooperation, not competition, was the byword of the European alternative. Americans could have their dog-eat-dog, frontier capitalism. Europeans would instead stress greater
coordination between labor and management and the European Community (the precursor to the EU) would put genuine effort into bringing its new members up to the economic and political
level of its core countries. Then, at a point in the 1980s when the Soviet model had ceased to exert any influence at all glo bally, along came TINA. At the time, British Prime Minister Margaret
Thatcher and American President Ronald Reagan were ramping up their campaigns to shrink government, while what later became known as globalization—knocking down trade walls and
opening up new opportunities for the financial sector—began to be felt everywhere. Thatcher summed up this brave new world with her TINA acronym: the planet no longer had any alternative
to globalized market democracy. Not surprisingly, then, in the post-Cold War era, European integration shifted its focus toward removing barriers to the flow of capital. As a result, the expansion
of Europe no longer came with an implied guarantee of eventual equality. The deals that Ireland (1973) and Portugal (1986) had received on accession were now, like the post-World War II
Marshall Plan, artifacts of another era. The sheer number of potential new members knocking on Europe’s door put a strain on the EU’s coffers, particularly since the economic performance of
countries like Romania and Bulgaria was so far below the European average. But even if the EU had been overflowing with funds, it might not have mattered, since the new “neoliberal” spirit of
capitalism now animated its headquarters in Brussels where the order of the day had become: cut government, unleash the market. At the heart of Europe, as well as of this new orthodoxy, lies
Germany, the exemplar of continental fiscal rectitude. Yet in the 1990s, that newly reunified nation engaged in enormous deficit spending, even if packaged under a different name, to bring the
former East Germany up to the level of the rest of the country. It did not, however, care to apply this “reunification exception” to other former members of the Soviet bloc. Acting as the effective
central bank for the European Union, Germany instead demanded balanced budgets and austerity from all newcomers (and some old timers as well) as the only effective answer to debt and fears
of a future depression. The rest of the old Warsaw Pact has had access to some EU funds for infrastructure development, but nothing on the order of the East German deal. As such, they remain
in a kind of economic halfway house. The standard of living in Hungary, 25 years after the fall of Communism, remains approximately half that of neighboring Austria. Similarly, it took
Romania fourteen years just to regain the gross national product (GDP) it had in 1989 and it remains stuck at the bottom of the European Union. People who visit only the capital cities of Eastern
and Central Europe come away with a distorted view of the economic situation there, since Warsaw and Bratislava are wealthier than Vienna, and Budapest nearly on a par with it, even though
Poland, Slovakia and Hungary all remain economically far behind Austria. What those countries experienced after 1989—one course of “shock therapy” after another—became the medicine of
choice for all EU members at risk of default following the financial crisis of 2007 and then the sovereign debt crisis of 2009. Forget deficit spending to enable countries to grow their way out of
economic crisis. Forget debt renegotiation. The unemployment rate in Greece and Spain now hovers around 25 percent, with youth unemployment over 50 percent and all the EU members
subjected to heavy doses of austerity have witnessed a steep rise in the number of people living below the poverty line. The recent European Central Bank announcement of “quantitative
easing”—a monetary sleight-of-hand to pump money into the Eurozone—is too little, too late. The major principle of European integration has been reversed. Instead of Eastern and Central
Europe catching up to the rest of the EU, pockets of the “west” have begun to fall behind the “east.” The GDP per capita of Greece, for example, has slipped below that of Slovenia and, when
measured in terms of purchasing power, even Slovakia, both former Communist countries. The Axis of Illiberalism Europeans are beginning to realize that Margaret Thatcher was wrong and
there are alternatives—to liberalism and European integration. The most notorious example of this new illiberalism is Hungary. On July 26, 2014, in a speech to his party faithful, Prime Minister
Viktor Orban confided that he intended a thorough reorganization of the country. The reform model Orban had in mind, however, had nothing to do with the United States, Britain, or France.
Rather, he aspired to create what he bluntly called an “illiberal state” in the very heart of Europe, one strong on Christian values and light on the libertine ways of the West. More precisely, what
he wanted was to turn Hungary into a mini-Russia or mini-China. “Societies founded upon the principle of the liberal way,” Orban intoned,“will not be able to sustain their world-competitiveness
in the following years, and more likely they will suffer a setback, unless they will be able to substantially reform themselves.” He was also eager to reorient to the east, relying ever less on
Brussels and ever more on potentially lucrative markets in and investments from Russia, China and the Middle East. That July speech represented a truly Oedipal moment, for Orban was eager to
drive a stake right through the heart of the ideology that had fathered him. As a young man more than 25 years earlier, he had led the Alliance of Young Democrats—Fidesz—one of the region’s
most promising liberal parties. In the intervening years, sensing political opportunity elsewhere on the political spectrum, he had guided Fidesz out of the Liberal International and into the
European People’s Party, alongside German Chancellor Angela Merkel’s Christian Democrats. Now, however, he was on the move again and his new role model wasn’t Merkel, but Russian
President Vladimir Putin and his iron-fisted style of politics. Given the disappointing performance of liberal economic reforms and the stinginess of the EU, it was hardly surprising that Orban
had decided to hedge his bets by looking east. The European Union has responded by harshly criticizing Orban’s government for pushing through a raft of constitutional changes that restrict the
media and compromise the independence of the judiciary. Racism and xenophobia are on the uptick in Hungary, particularly anti-Roma sentiment and anti-Semitism. And the state has taken
steps to reassert control over the economy and impose controls on foreign investment. For some, the relationship between Hungary and the rest of Europe is reminiscent of the moment in the
1960s when Albania fled the Soviet bloc and, in an act of transcontinental audacity, aligned itself with Communist China. But Albania was then a marginal player and China still a poor peasant
country. Hungary is an important EU member and China’s illiberal development model, which has vaulted it to the top of the global economy, now has increasing international influence. This, in
other words, is no Albanian mouse that roared. A new illiberal axis connecting Budapest to Beijing and Moscow would have far-reaching implications. The Hungarian prime minister, after all,
has many European allies in his Euroskeptical project. Far right parties are climbing in the polls across the continent. With 25 percent of the votes, Marine Le Pen’s National Front, for instance,
topped the French elections for the European parliament last May. In local elections in 2014, it also seized twelve mayoralties, and polls show that Le Pen would win the 2017 presidential race if
it were held today. In the wake of the Charlie Hebdo shootings, the National Front has been pushing a range of policies from reinstating the death penalty to closing borders that would
deliberately challenge the whole European project. In Denmark, the far-right People’s Party also won the most votes in the European parliamentary elections. In November, it topped opinion
polls for the first time. The People’s Party has called for Denmark to slam shut its open-door policy toward refugees and re-introduce border controls. Much as the Green Party did in Germany in
the 1970s, groupings like Great Britain’s Independence Party, the Finns Party and even Sweden’s Democrats are shattering the comfortable conservative-social democratic duopoly that has
rotated in power throughout Europe during the Cold War and in its aftermath. The Islamophobia that has surged in the wake of the murders in France provides an even more potent arrow in the
quiver of these parties as they take on the mainstream. The sentiment currently expressed against Islam—at rallies, in the media and in the occasional criminal act—recalls a Europe of long ago,
when armed pilgrims set out on a multiple crusades against Muslim powers, when early nation-states mobilized against the Ottoman Empire, and when European unity was forged not out of
economic interest or political agreement but as a “civilizational” response to the infidel. Please support our journalism. Get a digital subscription for just $9.50! The Europe of today is, of course,
a far more multicultural place and regional integration depends on “unity in diversity,” as the EU’s motto puts it. As a result, rising anti-Islamic sentiment challenges the inclusive nature of the
European project. If the EU cannot accommodate Islam, the complex balancing act among all its different ethnic, religious and cultural groups will be thrown into question. Euroskepticism
doesn’t only come from the right side of the political spectrum. In Greece, the Syriza party has challenged liberalism from the left, as it leads protests against EU and International Monetary Fund
austerity programs that have plunged the population into recession and revolt. As elsewhere in Europe, the far right might have taken advantage of this economic crisis, too, had the government
not arrested the Golden Dawn leadership on murder and other charges. In parliamentary elections on Sunday, Syriza won an overwhelming victory, coming only a couple seats short of an
absolute majority. In a sign of the ongoing realignment of European politics, that party then formed a new government not with the center-left, but with the right-wing Independent Greeks, which
is similarly anti-austerity but also skeptical of the EU and in favor of a crackdown on illegal immigration. European integration continues to be a bipartisan project for the parties that straddle the
middle of the political spectrum, but the Euroskeptics are now winning votes with their anti-federalist rhetoric. Though they tend to moderate their more apocalyptic rhetoric about “despotic
Brussels” as they get closer to power, by pulling on a loose thread here and another there, they could very well unravel the European tapestry. When the Virtuous Turn Vicious For decades,
European integration created a virtuous circle—prosperity generating political support for further integration that, in turn, grew the European economy. It was a winning formula in a competitive
world. However, as the European model has become associated with austerity, not prosperity, that virtuous circle has turned vicious. A challenge to the Eurozone in one country, a repeal of open
borders in another, the reinstitution of the death penalty in a third—it, too, is a process that could feed on itself, potentially sending the EU into a death spiral, even if, at first, no member states
take the fateful step of withdrawing. In Eastern and Central Europe, the growing crew who distrust the EU complain that Brussels has simply taken the place of Moscow in the post-Soviet era.
(The Euroskeptics in the former Yugoslavia prefer to cite Belgrade.) Brussels, they insist, establishes the parameters of economic policy that its member states ignore at their peril, while
Eurozone members find themselves with ever less control over their finances. Even if the edicts coming from Brussels are construed as economically sensible and possessed of a modicum of
Soviet and Yugoslav federations have begun to erode popular support for the European Union. Aside from Poland
and Germany, where enthusiasm remains strong, sentiment toward the EU remains lukewarm at best across much of the rest
of the continent, despite a post-euro crisis rebound. Its popularity now hovers at around 50 percent in many member states and below that in places like
Italy and Greece. The European Union has without question been a remarkable achievement of modern statecraft. It turned a continent that seemed destined to wallow in “ancestral hatreds” into
of the EU has proven fragile in the absence of a strong external threat like the one that the Cold War provided. Another
economic shock or a coordinated political challenge could tip it over the edge. Unity in diversity may be an appealing concept,
but the EU needs more than pretty rhetoric and good intentions to stay glued together. If it doesn’t come up with a
better recipe for dealing with economic inequality, political extremism and social intolerance, its opponents will
soon have the power to hit the rewind button on European integration. The ensuing regime collapse would not only be a tragedy for
Europe, but for all those who hope to overcome the dangerous rivalries of the past and provide shelter from the murderous conflicts of the present.
AT: Filibuster – UQ
GOP will win but gaining a filibuster proof majority is unlikely
Harry Enten 17, Senior Political Analyst at FiveThirtyEight, 5/22/2017, “Why The 2018 Senate
Elections Are Looking Bad For Both Parties”, FiveThirtyEight, https://fivethirtyeight.com/features/why-
the-2018-senate-elections-are-looking-bad-for-both-parties/
The 2018 midterms are a story of two chambers. Democrats are in the best position they’ve been in since 2010 to win a majority of seats in the
House of Representatives. The Senate map, on the other hand, is so tilted toward the GOP that most political analysts have all but dismissed
Democrats’ chances of winning the chamber before 2020. It has even been suggested that Republicans could gain enough
Senate seats (eight) in 2018 to amass a filibuster-proof majority (60 seats).¶ This is normally the part of the article
where I push back on the conventional wisdom and argue something like, actually, the 2018 Senate map isn’t that bad for Democrats. But no,
it’s pretty bad: Democrats are a long shot to take back the Senate.¶ What I will argue, however, is that it’ll also be
difficult for the GOP to pick up a bunch of seats. Republicans would need to oust incumbent Democrats,
and it’s extremely difficult to beat an incumbent senator in a midterm when his or her party doesn’t
control the White House.¶ It may seem a little nuts to suggest that Senate Minority Leader Chuck Schumer can keep losses to a
minimum in 2018. Democrats hold 23 of the 33 seats up for a vote. There are 10 Democratic senators running in states that
President Trump won, five of whom (Sens. Joe Donnelly of Indiana, Heidi Heitkamp of North Dakota, Joe Manchin of West Virginia, Claire
McCaskill of Missouri and Jon Tester of Montana) are from states that Trump won by about 20 percentage points or more. Meanwhile, there are
only two Republican senators (Arizona’s Jeff Flake and Nevada’s Dean Heller) up for re-election in states Hillary Clinton came within 5 points of
a lot of Democrats are up for re-election in red states, there’s also a Republican in
winning in 2016.¶ But while
the White House, and incumbent senators1 in the opposition party — for simplicity, let’s call them
“opposition senators” — tend to survive in those situations.¶ There have been 114 opposition senators
who have run in a midterm general election2 since 1982. Only four of the 114 (4 percent) lost. Most won
by wide margins, with the average opposition senator beating the candidate of the president’s party3 by
28 percentage points. Even in the worst year for opposition senators (1998), 86 percent were re-elected. If
86 percent of incumbent Democrats win in 2018, the party would lose three seats.4 That would leave
Republicans with 55 seats, a more comfortable majority but far short of filibuster-proof.
AT: Dodd Frank
Republicans would never make a move to repeal Dodd Frank
David Dayen 17, Writer at Salon, 6/7/2017, “Republicans Can’t Really Repeal Dodd-Frank”,
https://www.thenation.com/article/republicans-cant-really-repeal-dodd-frank/
Republicans have no interest in bending on principle. The House has spent half a year making the same kinds of messaging
votes they did when they knew Barack Obama would veto the finished product. There’s probably a bill out there that would
reduce Dodd-Frank rules for community banks (although there’s plenty of tailoring in bank supervision already) that could pass Congress;
in fact, here is that bill. But Republicans don’t want to make the choice of getting that done without freeing the
big banks as well. So they pass the CHOICE Act, and it falls into the ether, and they can say to their
lobbyist pals that they tried.
This is ultimately why congressional Republicans have full legislative control in Washington but no legislative accomplishments. It’s highly
unusual for a dominant political party to do nothing with that power. But Republicans in Congress are
more interested in making
speeches than in making laws. And that cedes the playing field for governing almost entirely to Donald Trump.
In the case of financial regulation, the administration’s goals align with the intentions of the Choice Act.
Trump has continually selected a rogue’s gallery of bank executives and corporate lawyers to oversee the industries where they used to work. Just
this week, he picked Joseph Otting, the former CEO of OneWest Bank, to run the Office of the Comptroller of the Currency. So both OneWest
CEOs in the bank’s ignominious history, Otting and Steve Mnuchin, command top regulatory positions. SEC chair Jay Clayton, former law
partner at Sullivan and Cromwell, just hired Steven Peikin, former law partner at Sullivan and Cromwell, to run the agency’s enforcement
division.
Other scholars have proposed classifications of healthcare systems “on base 4” [8–11]: each of these proposals, however, uses different
classification criteria, and different labels to identify the four types.
Wendt et al. [12] went as far as theorising the existence of 27 different possible healthcare system “combinations”. However, 24 of these
combinations can be considered hybrid forms, leaving only three pure models (and thus returning, even in this case, to a trichotomous
classification). Böhm et al. [13] analysed the 27 combinations mentioned above and pointed out that many of them are “scarcely plausible” from
a logical viewpoint, and that, in practice, some types are not applicable in the real world: healthcare systems in OECD countries can therefore be
grouped under five main models.
Regardless of whether the classification is on base 3, 4 or 5, all the foregoing proposals seem to have – some more, some less – the
same limits: (1) they end up including in the same category healthcare systems that differ from one another (some
typologies also result in the opposite problem, in that similar systems fall into different categories); (2) for each country, only the
prevailing model is taken into account, which risks being an oversimplification. Let us discuss a few examples.
Some classifications place the healthcare systems of Australia and Canada in the same category as those of countries like the UK, Italy or New
Zealand [3,11,13–15]. But the Canadian and Australian systems are not organised like the British or the Italian NHS [16,17].
In many research works, Switzerland is listed with social health insurance countries like France or Germany [3,13,18,19]. But the Swiss model is
substantially different from the classic Bismarckian prototype and adheres to different logics [13,20].
The United States is another example. Labelling the American system as a simple case of “voluntary private insurance” is an obvious over-
simplification. The American system is a very complex patchwork [21], where government intervention is anything but minor, as demonstrated
by the fact that, in the USA, public health expenditure is around 7.9% of GDP [22]; it is therefore higher than that of “universalist” countries such
as the UK, Spain, Italy or Canada. Given its complex architecture, the US system cannot be classified as a mere private insurance system.
These few problematic cases – but there are many others – lead us to consider the classifications of healthcare
systems proposed to date in the literature as not fully satisfactory. In this work, we ask ourselves whether we can go
further.
We ought to clarify right from the start that the author does not consider the classic tripartite classification and the other types proposed so far
wrong, or useless: they are certainly helpful. However, it all depends on the type of analysis that one wants to make. If a certain degree of
simplification is acceptable, then the classifications proposed so far, starting from the standard tripartition, are adequate. Conversely, a deeper
analysis that places greater emphasis on the differences between systems, and aims at fully
understanding the architecture of each healthcare system, requires the adoption of a more sophisticated
conceptual scheme .
In the following sections we shall outline 10 models of healthcare organisation: these types in part take up and in part develop the classification
proposals already presented in the literature. However, this work is not limited to proposing a new typology, but rather aims to suggest a
classification logic that differs from traditional pigeonholing. The classic
classification logic starts off by defining some ideal
models, and then tries to make the different objects of analysis – in our case, the national healthcare systems – fit into
one, and only one, of the identified models, so as to obtain classes as homogeneous as possible [23]. It is, however, generally
agreed that national healthcare systems are, in actual fact, hybrid and composite systems that mix and
combine elements inspired by different models [1,8,12,13,24,25]. Grouping countries on the sole basis of the
prevalent model thus risks producing simplistic descriptions of the national systems that are quite far from
the actual state of affairs.
To avoid this limitation, we propose to make a different use of the typology. The ideal types will serve primarily to identify and label the different
elements composing each national healthcare system. The typology will therefore be the common analytical framework through which we can put
the system's components into focus, understand how each component works and grasp the relationships between the various subsystems. This
will make it possible to compose a concise overview, revealing the logic underlying the overall design of each healthcare system. We shall refer
to this way of proceeding as the “identikit logic”: indeed, it aims at providing more accurate and realistic descriptions of each single national
healthcare system, reconstructing the various combinations based on which it was designed.
Some healthcare system classifications made in the past almost exclusively consider the financing dimension [1,25,27]. Many authors, however,
believe that focussing only on financing is reductive, and that a proper classification should also include the service provision dimension
[2,4,12,26,28]. Sure enough, financing mechanisms on the one side and provision methods on the other are considered the two “core dimensions”
[13] required to classify healthcare systems [2,11,14,26,29]. Fully agreeing with this approach, in this work we shall take these two dimensions
into account, first discussing them separately and then intercrossing them.
In Section 2, we shall start from healthcare service financing mechanisms, comparing five different financing systems. In Section 3, we shall
discuss the provision of healthcare services and, in particular, the relationship between providers and insurers. We shall therefore make a
distinction between integrated and separated systems. By intersecting the financing and service provision dimensions, we obtain 10 different
types of healthcare organisation.
As already mentioned, at this point, however, the logic will not be to pigeonhole the various national systems into these 10 types. The operation
suggested in this work will rather be to draw up an identikit picture of each single healthcare system. The concepts of “population segmentation”
and “healthcare segmentation”, as defined in Section 4, will be key to reasoning according to the identikit logic. Section 5 will attempt to
elucidate the usefulness of the framework proposed here, providing some concrete examples of “identikit” pictures. The last section will wrap up
the discussion, underscoring the elements of greater originality of this work.
2. Financing models
Multiple criteria can be used to classify the financing mechanisms of healthcare systems.
A first, widely used criterion concerns the public or private nature of the insurance scheme [25,30]: insurers may
indeed be public, private for-profit or private non-profit entities [6,12,26].
A second criterion refers to the level of compulsoriness of the insurance scheme [14,25], hence the freedom of
choice granted to the insured [31]: there are indeed voluntary insurance programs, compulsory schemes where it is possible to choose
the insurer, and systems that leave no choice to the citizen, who is required by law to take out an insurance and is assigned by law to a given
insurer.
We can thus make a distinction between single- or multi-payer systems [27]. In the case of multi-payer systems, it is
important to determine whether the relationship between insurers is competitive or not [25,26].
Another criterion used to categorise the different health insurance schemes is the basis for eligibility[1,24,26]: belonging to a particular insurance
scheme may, indeed, depend on being residents in a particular country, having paid regular contributions, belonging to certain “weak” or
“privileged” categories [24]. The eligibility criterion usually influences the rate of insurance coverage of the population [2,4], and this represents
a further classification criterion.
Financing schemes can finally be compared according to the level and modes of regulation of financing bodies and the insurance market [25];
public regulation can be more or less stringent [6].
Trying to
condense the foregoing criteria, three ideal types of financing systems were developed : (1)
voluntary insurance (called both “private health insurance” and “voluntary health insurance”); (2) social health insurance; (3)
universal coverage.
The proposal put forward in this article is to keep the three models mentioned above and add two more : the category of
“ residual” programs, and national health insurance . For the sake of completeness, we should not forgo mentioning that
some authors have identified an additional financing model: the Medical Savings Accounts (MSAs) [7,26,27,32]. This latter model is still
scarcely widespread. It has been adopted in Singapore and – to a lesser extent – in the United States, South Africa and China. However, the MSA
system is not autonomous in any of these countries: it is always combined with some other form of insurance coverage. For this reason, MSAs
will not be discussed in this work.
We shall therefore focus on five financing models. Let us consider them individually.
The voluntary insurance model does not envisage the obligation to obtain insurance coverage against health risks.
Tax or cash incentives may be provided to those who opt for insurance [26], whereas penalties may be imposed on those who, despite having the
economic means, decide against insurance. In any event, citizens are basically free to choose whether or not to sign up for insurance [25].
Those who cannot or do not want to get insurance coverage will pay for the required healthcare services out-
of-pocket.
Conversely, those wishing to take out a health insurance policy can choose from a number of private insurers. The latter are in competition with
one another, and can offer policies tailored to individual subscribers. Insurers may be for-profit insurance companies or non-profit institutions and
funds [33]. In the former case, the premium will probably be risk rated, i.e., calculated on the basis of the individual risk of each single subscriber
[4]. Nothing prevents non-profit insurance entities from calculating premiums based on individual risk, but they often prefer community rated or
group rated insurance premiums [26], meaning that they discriminate on the basis of the characteristics of larger groups (all belonging to a given
group thus contribute in the same way), rather than of individual subscribers.
The basic principle behind the social health insurance (SHI) model is that the state requires certain categories of
workers to pay contributions from their salary into a sickness fund. Sickness funds are quasi-public, non-profit
organisations subject to strict governmental regulation, appointed to collect their subscribers’ contributions [18]; in exchange, sickness fund
subscribers receive total or partial reimbursement of the medical expenses incurred.
The SHI model therefore divides the population into two groups, who have different levels of freedom. On the one hand,
there are those who, as members of certain professions, must pay mandatory contributions. They cannot choose
whether or not to sign up for the health insurance scheme as they are forced to do so. On the other hand, there are those who are not
subject to any obligations; they may, if they wish, take out a voluntary insurance policy, or bear out-of-pocket
spending for their healthcare.
The classic SHI model – for the sake of clarity, the one introduced by the late 19th-century Bismarckian legislation – provides for different
sickness funds, not in competition with one another, to be operative within the same country: workers are assigned to a given fund by law,
depending on their profession. Only in recent times, some countries have introduced a variant of the original model: the worker is entitled to
choose his/her own sickness fund [34]. In these countries, including Germany, it is mandatory to pay contributions, but one can choose which
sickness fund to sign up for.
A key difference between residual programs and other financing models is that in the latter those who pay earn the right to benefit from the
program being financed. In the case of residual programs, this is not necessarily true: beneficiaries coincide only in part (or not at all) with those
who finance such programs. A healthcare program for the unemployed, for example, is financed by tax payers who do have a job; healthcare for
prisoners is paid by those who are not in prison; a program designed for minors is financed by adults who pay taxes, and so on. Residual
programs are, in short, programs financed by the community, but only available to particular categories.
The label “ national health insurance” has been used in the literature with multiple meanings [11,13,14,24,37].
It is therefore necessary to immediately clear up possible misunderstandings . In this work, national health
insurance (NHI) is understood as the principle according to which the state requires all residents to take out a
private health insurance policy covering essential healthcare services, using individual resources. There
not being one single public scheme into which contributions can be paid, the policy has to be taken out
with different, for-profit or non-profit insurers in competition with one another. The NHI is therefore a multi-
payer system , in which citizens can choose their insurers.
The state may provide subsidies for low-income citizens (who might otherwise find it difficult to pay the insurance
premium regularly), and may impose a regulation, even a very strict one, of the insurance market. The insurance packages
usually differ from one another, and may provide coverage additional to the minimum required by law; we must therefore bear in mind that there
may be differences between the services provided to individual healthcare users.
A universalist system is defined as a single-payer insurance scheme (therefore, one for the entire population)
covering all residents and financed through taxation. The universalist system, as we shall see later, is not synonymous with
the National Health Service.
From the point of view of those who have to contribute financially, the universalist system does not grant freedom of choice. Aside from the few
countries where some form of opting out is possible, residents cannot choose whether or not to finance the universalist scheme: they are required
to pay taxes, and therefore also to finance the program. And, given that (direct) taxes are usually paid more than proportionally with respect to
income, the universalist scheme turns out to be a typically progressive financing system [26,27].
It is important to underscore that, unlike the SHI model, the universalist system envisages taxation not only on earned income, but on all forms of
income. Financing of the universalist scheme therefore has a clear redistributive intent: the richest end up paying, at least in part, the healthcare
services provided to the poorer citizens.
Bizcon
1AR --- Not K2 Econ
Doesn’t affect growth
Josh Mitchell 3-15, Wall Street Journal, Economic Growth Lags Behind Rising Confidence Data;
Measures of economic activity like retail sales look sluggish while sentiment gauges are pointing up,
2017, WSJ
The stock market is booming and businesses and households are near their most confident in years. Yet the U.S. economy
shows few signs of breaking out of its long stretch of subpar growth.¶ The latest evidence came Wednesday when
the government reported that sales at the nation's retailers -- a key measure of consumer spending -- rose
just 0.1% in February from a month earlier. Americans cut spending on clothing, sporting goods, electronics and restaurant
outings, leading to the smallest gain in retail sales since last summer.¶ Earlier reports showed a surging
trade deficit in January and a recent drop in home sales, as measured by contract signings. Taken together,
the economy appears to be stumbling once again in the first months of the year, despite unusually
warm weather that might otherwise boost spending and the absence of major crises overseas, as
happened in the past.¶ Forecasting firm Macroeconomic Advisers on Wednesday downgraded its projection of
economic growth in the current quarter to an annual rate of 1.3%, from 1.4%. Barclays projected 1.4%
growth, compared with 1.6% earlier. The Federal Reserve Bank of Atlanta's GDPNow model lowered its
estimate to 0.9% from 1.2%. Growth has averaged about 2% in the current expansion. Economic output
expanded at a 1.9% rate in the fourth quarter and 3.5% rate in the third.¶ The data highlight a dichotomy
of how people and businesses say they feel and how the economy is actually performing . Measures of
optimism such as the University of Michigan's consumer sentiment reading are pointing up while
measures of economic output are slowing .¶ Economists attribute the former to promises by President
Donald Trump to stimulate growth by easing rules on businesses, boosting government spending and
simplifying the tax code.¶ "We have an environment in which confidence is elevated but largely riding
on expectations ," said economist Gregory Daco of Oxford Economics. "Expectations of lower taxes. Expectations of
infrastructure spending. Expectations of deregulation. All these pro-growth elements are promises and
very little has been actually delivered upon ."¶ It's not uncommon for the economy to experience quarterly slowdowns, and
many economists expect higher growth in coming quarters, eventually reverting to a 2% expansion. Indeed, measures like retail sales look
stronger over a broader period, rising 5.7% in February compared with a year earlier. Employers continue to hire steadily, and inflation continues
to pick up, two factors that led the Federal Reserve to raise short-term interest rates Wednesday.¶ But the
combination of a tighter
labor market and weak output could be a sign the economy is nearing its capacity to grow without
stoking too much inflation. That suggests an aging population and a slowdown in productivity are
indeed restraining the economy's ability to lift Americans' living standards at the pace it did in the
middle of last century and in the 1990s.