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On Health Care, Trump Takes an Important First Step

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(John Hinderaker)

In the wake of the Republican Congress’s historic failure to carry out its pledge to repeal Obamacare, President Trump today signed an executive order intended to promote choice and competition in health care markets. The order is a practical and positive step forward that will benefit millions of Americans.

Why am I so sure of that? Because a key portion of the order is based in part on work done by Peter Nelson, my colleague at Center of the American Experiment, one of the country’s top health care experts. Some of the ideas incorporated into today’s executive order have been advocated in large part by him. Perhaps the most important part of the order directs federal agencies to give employers greater flexibility over how they can use accounts to reimburse employee health expenses. Peter’s legal analysis provides the most complete legal basis for this portion of the order. In fact, his exhaustive legal critique of Obama-era guidance that restricted how employers fund employee health care is the only substantive analysis that I know of on this issue.

So what does the order do? I will turn the floor over to Peter:

In just three short years, Obamacare has severely damaged health insurance markets across the country, leaving some markets on the brink of total collapse. Going into 2018, consumers will have access to just one health carrier in nearly half of the counties across America. In many cases, this sole health carrier does not include local doctors in its network, forcing people to switch doctors and drive long distances for care. Average premiums on the individual health insurance market have doubled since 2013, escalating premiums beyond what most people can afford.

To address these severe problems, Trump’s executive order directs executive agencies to take three major steps. First, the order directs the Secretary of Labor to consider expanding access to association health plans. This move has the potential to allow Americans to more easily form groups through existing organizations—such as a trade organization—to gain access to more insurance options at lower rates in the large group market or on a self-funded basis.

Second, the order directs agencies to consider expanding access to lower cost health coverage options by easing restrictions on short-term limited duration insurance. This type of insurance generally exists to provide health coverage to people between jobs. After Obamacare became law, the Obama administration shortened the allowable duration of these plans from 364 to 90 days, a move opposed by the National Association of Insurance Commissioners. Because these plans are not subject to costly Obamacare regulations, they cost remarkably less than standard coverage. Moreover, as normally structured, they provide access to any doctor, a very important benefit for people living in those counties with very narrow networks.

As I said, practical solutions that don’t sound glamorous but will help millions of Americans.

Third, the order directs agencies to consider giving employers more flexibility in designing and offering health reimbursement arrangements (HRAs) to their employees. Prior to Obamacare, HRAs were health care accounts employers could create for employees to fund a broad array of health care expenses on a pre-tax basis, including individual health insurance premiums. The Obama administration, however, banned employers from using HRAs and other arrangements to fund individual market premiums pre-tax.

This final directive should reverse this ban and allow employers to establish defined contribution health plans that provide employees with cash to go into the individual market and choose their own health plan with pre-tax dollars. Importantly, this type of health plan would be portable from job to job.

This is an issue that Peter has worked on for some time, patiently making the case for defined contribution, portable health plans that are driven by patient choice. This seems like an obviously good idea, but it never would have been implemented in a Democratic administration, because the Democrats don’t want success. They want failure, to pave the way for socialized medicine (single payer).

I’ve taken a particular interest in this issue because a move toward individually-owned health plans would help remove one of the major distortions in the health care system. Because the federal tax code preferences employer-sponsored health coverage, no one really shops for health insurance. That means there’s very little competitive pressure for health insurers to meet the demands of individual consumers and, in particular, demands for lower cost care. Instead, insurers focus on satisfying employers.

The Trump administration is on sound legal footing to roll back this ban. As far as I’ve seen, I’m the only attorney to subject Obama’s ban to serious legal scrutiny before Trump took office. In a detailed white paper on the issue, I concluded the ban “contradicts prior federal court and agency holdings and, moreover, conflicts with provisions in the ACA that show Congress intended to continue allowing employers to fund individual premiums pre-tax.” Simply put, the ACA never empowered the Obama administration to bar employers from funding individual health insurance. Trump’s executive order will correct this.

Peter Nelson’s white paper was one of the keys to the HRA reform that is embodied in today’s executive order. Is today’s order perfect? Of course not. As Peter writes, “it is only a first step. America still needs a more complete solution to address Obamacare’s failures.” But Trump’s executive order shows that not all Republicans are ineffective dreamers who can’t govern. It represents an important move away from the disaster of Obamacare.

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darrylhiestand
35 days ago
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Fake Science Gets Smoked—and What It Means for Climate Change

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(Steven Hayward)

Cast your mind back to the late 1990s, when trial lawyers and state attorneys general were after the tobacco companies for what resulted in the “Master Settlement Agreement” by which the tobacco companies agreed to pay tribute of billions of dollars to the states for decades to come in exchange for relief from the uncertainty of endless private and public litigation. I think it was a great deal for Big Tobacco (how do I know? Just check tobacco stocks since the agreement was struck), and I teach this episode to students as an example of “how the sausage is made” in real politics in the U.S. (especially the lingering constitutional question of whether this agreement violates the Constitution’s state compact clause of Article I, section 10).

In the middle of all this political maneuvering, the Clinton EPA came out with a finding that “second-hand smoke” was nearly as bad for you as first hand smoke, which merely reinforced my view that you should always get your smoke first hand: why take chances? However, like the “social cost of carbon” calculation of the Obama EPA used to justify their so-called “Clean Power Plan,” the EPA depended on some statistical latitude that the late Justice Scalia would rightly have called “jiggery-pokery.” In one sentence, the EPA relaxed the standard test for statistical significance in order to generate their “finding.” Because the standard statistical test found little or no effect from second-hand smoke. Hey—when there’s billions of dollars in tobacco money to loot at stake, what scientific rigor among friends? How convenient that the government would come out with such a finding at a key moment. I’m sure it was just a coincidence.

This kind of statistical exactitude is over the heads of most Americans and all mainstream media journalists, so the EPA got away with it, just as they are trying to get away with the “social cost of carbon.” (Aside: The Trump Administration ought to commission an OMB study of the “social cost of bureaucrats.”) When scientifically literate observes tried to blow the whistle on the EPA’s relaxing of standard tests of statistical significance, the anti-smoking lobby called the critics “tobacco deniers,” a prelude to linking climate skeptics to “tobacco deniers,” which is quite wrong, though the media rolls with it, naturally.

This is all prelude to a terrific story at Slate that demolishes the second-hand smoke thesis. Slate. Let that sink in. It’s a long story, detailing how one semi-anecdotal “Helena study” of a spurious correlation was used to justify anti-smoking measures around the world, but turns out to be total crap.  Kudos to Slate for this.  It’s a long story and you should read the whole thing if you can, but here are some extensive excerpts:

We Used Terrible Science to Justify Smoking Bans

By Jacob Grier

. . . When the Helena study and its heirs were originally published, a few scientists noted that the results were wildly implausible and the methodologies deeply flawed. So did a handful of journalists, including Jacob Sullum writing for Reason (to which I am also a contributor) and Christopher Snowdon in England. Yet their criticism was generally ignored. Studies reporting miraculous declines in heart attacks made global headlines; when better studies came along contradicting those results, they barely registered a blip in the media. As Jonathan Swift said in an apt aphorism, “Falsehood flies, and truth comes limping after it.” Too late to help smokers banished from public life.

There were good reasons from the beginning to doubt that smoking bans could really deliver the promised results, but anti-smoking advocacy groups eagerly embraced alarmism to shape public perception. Today’s tobacco control movement is guided by ideology as much as it is by science, prone to hyping politically convenient studies regardless of their merit and ostracizing detractors. . .

Read the whole thing, which is devastating to the anti-smoking advocates.

No serious person thinks smoking is not bad for your health. But the overreach on second-hand smoke is a perfect case study of what happens when an issue become badly politicized. There were no “smoking deniers”—just  some scrupulous people who noted scientists and policy makers were cutting corners, but who got slimed for doing so. That’s what so-called “climate deniers” are doing today, and the same thing is going to become apparent about the climate change cabal someday, and for the same reasons. This is why I have complete contempt for the “climatistas,” even if warming turns out to be a serious problem. The issue doesn’t deserve the mountebanks who have perverted the science and policy of the whole domain.

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darrylhiestand
273 days ago
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From the Annals of Scientific Objectivity

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(Steven Hayward)

In the last few years the virtues of a low-fat diet have gradually come undone, though some “nutritional anthropologists” keep the faith like those Japanese soldiers in the island jungles who refused be believe World War II was over. Yesterday the Washington Post reported on how the full data from a major nutrition study that helped cement the old conventional wisdom was never fully analyzed, but might have saved us from error (and saved some lives) if it had been:

It was one of the largest, most rigorous experiments ever conducted on an important diet question: How do fatty foods affect our health? Yet it took more than 40 years  — that is, until today —  for a clear picture of the results to reach the public. . .

Today, the principles of that special diet — less saturated fat, more vegetable oils — are included in the Dietary Guidelines for Americans, the government’s official diet advice book. Yet the fuller accounting of the data indicates that the advice is, at best, unsupported by the massive trial. In fact, it appears to show just the opposite:  Patients who lowered their cholesterol, presumably because of the special diet, actually suffered more heart-related deaths than those who did not. . .

The new researchers, led by investigators from the National Institutes of Health and the University of North Carolina, conclude that the absence of the data over the past 40 years or so may have led to a misunderstanding of this key dietary issue.

“Incomplete publication has contributed to the overestimation of benefits and underestimation of potential risks” of the special diet, they wrote.

Good thing this could never happen with climate science. What’s that you say?

But Broste suggested that at least part of the reason for the incomplete publication of the data might have been human nature. The Minnesota investigators had a theory that they believed in — that reducing blood cholesterol would make people healthier. Indeed, the idea was widespread and would soon be adopted by the federal government in the first dietary recommendations. So when the data they collected from the mental patients conflicted with this theory, the scientists may have been reluctant to believe what their experiment had turned up.

“The results flew in the face of what people believed at the time,” said Broste. “Everyone thought cholesterol was the culprit. This theory was so widely held and so firmly believed — and then it wasn’t borne out by the data. The question then became: Was it a bad theory? Or was it bad data? … My perception was they were hung up trying to understand the results.”

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darrylhiestand
583 days ago
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