"Skinny" Bill in "Critical Condition"

The "skinny" bill is proving to be an exercise in "squaring the circle"; in other words, an impossibility.

Enough senators are on record -- for instance, McCain and his buddy Lindsey Graham -- saying that they will only vote "Yes" on the "skinny" --  a bill that would repeal only those parts of the Affordable Care Act that mandate that individuals have health insurance and that large employers provide insurance to their employees -- if GOP House leadership guarantees a House-Senate conference to reconcile its bill with the Senate's.

McConnell is hoping to pass the "skinny" based on a promise of a conference, but it is becoming apparent that the GOP House leadership intends to take up the "skinny" as is and pass it as such, sending it on to Trump for a quick signature. R.I.P. Obamacare.

The insurance lobby has sniffed the skunk in the air and is now mobilizing to kill the "skinny."

If that were not enough of a headache for McConnell, he has to prove to the Senate parliamentarian that the "skinny" meets specific deficit reduction targets in order pass it with a simple majority; thereby avoiding the necessity of having to wrangle 60 votes. It is not clear how McConnell can do this.

All in all it looks like the "skinny" bill is in "critical condition."

One good thing is that it appears Medicaid is safe.

GOP Got What it Needed from the CBO

The GOP got the score it wanted from the CBO. Not the 24 million people without health insurance by 2026, but the $337 billion reduction in the federal deficit over ten years. Now the Freedom Caucus, who has been calling the House plan to repeal the Affordable Care Act, "Obamacare-lite," can more easily support the bill.

I don't have a clear sense if the Republicans can whip this out of the House. If they are able to, it will be an enormous defeat for the post-election Democratic reboot and campaigns like #ResistanceRecess.

What appears to be happening is that there is a lot of legitimate grassroots organizing going on, but it is having difficulty projecting its power because it is either aligned with or butting up against the established institution of the Democratic Party.

We'll have a front-row seat for this conflict in my city when a progressive coalition that goes by the name "Trump Proof Seattle" attempts to push a citywide wealth tax through the city council of 1.5% on every dollar over $250,000 of annual income. The coalition will soon realize that politicians, even at the district level of a smallish large city like Seattle, are captive to an elite donor class.

What then for the "Resistance"? A mass movement to anarchism? That would be nice. Greater though are the odds that activism will go the way of the anti-war movement of the last decade, receding into a cyber-Panglossian tending of one's own garden.

The End of Obamacare

To read Robert Pear, longtime health-care policy reporter for The New York Times, over the last year is to know that Obama's signature achievement, the Affordable Care Act (ACA), also known as Obamacare, is in real trouble. I'm not sure if the Gray Lady's shift from booster to skeptic happened last year or the year before, but the conversion is now fully upon us. Paul Krugman, who for many years would devote at least one column per week to the wonders of Obamacare, has largely gone silent on the issue.

For a good overview of why the ACA is headed for the dustbin read "Obamacare: The Neoliberal Model Comes Home to Roost in the United States—If We Let It," by Howard Waitzkin and Ida Hellander, which appeared in the May issue of Monthly Review. In a nutshell, the Affordable Care Act is not affordable. There is no way to control costs. Premiums, deductibles and co-pays are all on the rise, and the increases in costs are not sustainable.

Pear's story in yesterday's paper, "Obama Offers Ways to Improve His Health Care Law," dealt with the lengthy, academic apologia for the ACA penned by Obama and which appears online in the Journal of the American Medical Association. "United States Health Care Reform: Progress to Date and Next Steps," was too long for me to ingest. But the conclusion from the abstract reads as follows:

Conclusions and Relevance Policy makers should build on progress made by the Affordable Care Act by continuing to implement the Health Insurance Marketplaces and delivery system reform, increasing federal financial assistance for Marketplace enrollees, introducing a public plan option in areas lacking individual market competition, and taking actions to reduce prescription drug costs. Although partisanship and special interest opposition remain, experience with the Affordable Care Act demonstrates that positive change is achievable on some of the nation’s most complex challenges.

My coworker asked me incredulously yesterday after seeing the story online, "Can you believe Obama is backing public option now?" Pear shares her incredulity:

White House officials said that Mr. Obama’s purpose in writing the article was to start a discussion and suggest a direction for elected officials and future policy makers, but that he would not be offering detailed new legislative proposals to carry out his ideas. 

Based on his experience in the last few years, Mr. Obama said, Congress should establish “a public plan to compete alongside private insurers in areas of the country where competition is limited.” 

Most of the country has benefited from competition in the marketplaces, and 88 percent of the people who have enrolled live in counties where at least three insurers offer plans, Mr. Obama said. But, he said, the remaining 12 percent are in areas with only one or two insurers. 

Jason Furman, the chairman of Mr. Obama’s Council of Economic Advisers, said, “A public option would be one way to make sure that there was competition everywhere.” 

In the debate on health care in 2009 and 2010, Mr. Obama said he supported the idea of a public option, but he did not always insist on it, and the administration sent mixed signals about how important it was.

Besides the expansion of Medicaid, the key component of Obamacare is the provision of federal subsidies for people to purchase insurance in the online marketplaces:

The online exchanges will be a viable source of coverage “for decades to come,” Mr. Obama said, but “further adjustments and recalibrations will likely be needed.” 

Of the 11 million people with marketplace coverage, 85 percent receive tax credits that, on average, cover nearly three-fourths of their premium costs. But for some, said Kristie Canegallo, a deputy chief of staff at the White House, the “tax credits aren’t big enough.”

Obama is whistling past the graveyard on this one, as Carl Hulse reports in "How an Arcane Spending Fight Could Alter the Federal Balance of Power." The Obama administration has been funding the health insurance subsidies without Congressional authorization: "The final word may come in federal court, where a district judge has already found the spending to be unconstitutional. The administration is appealing that decision."

The administration is likely to lose. Even with the premium subsidies, health insurance is too expensive for most because of the high deductibles and co-insurance. Without the subsidies the online marketplace collapses. All that will remain of Obamacare is the Medicaid expansion for those states that opted in.

Hippies vs. Punks: The Yardbirds

In order for a society to move forward it has to be able to generate a popular vision of the future -- A WAY OUT. What makes our present age so perilous is we have lost our ability to produce a collective perception of a way out. Our current neoliberal neoconservative cultural dead end predominantly manufactures dystopian fantasies (The Walking Dead, Breaking Bad) or historical paeans (Vikings, Mad Men).

The Hippie was the new man the Western World produced at the zenith of its 1960s post-war prosperity. The Punk was the new man spawned in reaction to the Hippie's failure. The Hip Hop artist has been our new man here in the West for decades -- really since Grunge quickly collapsed under the weight of its commercial excesses twenty years ago.

I don't think there is a finer, more sensitive, honest, hopeful vision of the future -- a discourse on possibility itself -- than Michelangelo Antonioni's Blowup (1966). This is what the Western World looked like when there was still hope and the future was open. Starring a Dylanesque David Hemmings as a fashion photographer in "Swinging London," The Yardbirds appear in the middle of the film performing "Stroll On." Antonioni wanted The Who because he was entranced by Pete Townshend's guitar-smashing routine. The Who declined. Antonioni then tried to get The Velvet Underground but was unable to either because of the band's inability to secure a work permit in the UK or the prohibitive cost of transatlantic travel. So he settled on The Yardbirds; Jeff Beck did the guitar smashing.

When I last saw this film, my unemployment spring of 2011, I was struck by how fresh and new the band looked, as if they truly were pioneering new territory with no attachments to binding constraints of the past.

The Yardbirds, along with The Who, were the new men of the middle 1960s. They as much as anyone else created the Hippies and the Hippie era. This is Lester Bangs' take. The Yardbirds changed music. They brought fraying, shattering guitar distortion to the fore, and they perfected a heavy-bottom backbeat. This inspired countless imitators and knockoffs ("Punks," such as Count Five of Bangs' title essay in Psychotic Reactions and Carburetor Dung) across the broad expanse of Great Society suburban American. Out of the suburban garage emerges the Hippie.

Bangs' spontaneous-prose-style analysis is basically in line with an academic study by Michael Hicks titled Sixties Rock: Garage, Psychedelic and Other Satisfactions (1999) I read last summer.

We all know that out of the ashes of The Yardbirds Jimmy Page forms the Hippie supergroup Led Zeppelin, an endless source of Bangs' ire (so too for the Punks) because of the band's artistic pretensions and superstar status demanding hero worship and mindless fan obeisance.

****

Last night I attended a union meeting. We voted on a tentative agreement (TA) that will more than likely result in the loss of our current health plan in favor of a cheaper one. This means that for those of us who seek medical attention regularly there will be a significant increase in out-of-pocket expenses.

I voted against the TA. Our bargaining team only met with the employer group twice, and then basically rolled over and presented us with a TA that is nothing but givebacks.

I understand that the costs to our current health have shot through the roof -- a 29% jump this year alone -- and that it cannot be maintained and in the long run we will have to move to another plan. But year after year the only thing that we focused on in our bargaining was maintaining the health plan. Now in less than two full bargaining sessions we are caving in. Unacceptable.

Nonetheless, the tentative agreement passed, and it passed by a healthy margin. People are scared and beat down and have no fight left in them. Our union representative, who is also the head of the union local and our chief negotiator with the employer as well as a trustee of our foundering health plan, took the employer's side. The message, simply put, was that we all are a bunch of monkeys easily replaced, and we are lucky to have whatever the employer gives us. So we should shut our fucking traps and take was is being offered pronto.

Needless to say, it was an unpleasant experience. One interesting sidebar was our union representative's opinion that the Affordable Care Act (ACA), a.k.a., Obamacare is proving to be very damaging to union Taft-Hartley regulated health plans. There is a firewall between Taft-Hartley plans and the ACA insurance exchange; they cannot buy insurance on the exchange. Yet the ACA brought a whole host of additional costs, such as covering adult children up to the age of 26.

The crowning achievement of the Obama administration, elected with fulsome union support, is Obamacare. Obamacare will be the undoing of a basic foundation of union membership, blue-chip medical coverage. Defined-benefit pensions are almost all gone (see the recent Boeing Machinists' capitulation where they voted to go to a 401(k) plan); now, fully-paid, employer-provided health insurance. Soon belonging to a union will not mean much.

As this reckoning sinks in, the only way Democrats will be able to win elections is solely by tapping plutocrats and playing the big money game. They do this now of course. But they have managed to keep healthy numbers of working people aligned with the party because it is the lesser of two evils. After Obamacare and the death of the unions, this alignment becomes increasingly problematic.

We need new men! We must be inspired by a vision of the future as fecund as Blowup and The Yardbirds of the middle-60s. Right now there is nothing.

The Coming Obamacare Backlash

A story, "On Health Exchanges, Premiums May Be Low but Other Costs Can Be High," appeared yesterday in the New York Times written by Robert Pear, the Gray Lady's longtime health care policy reporter. In it you will find an excellent synopsis of the fundamental failing of the Affordable Care Act: It is not affordable. Once people and the media get past the abominable failure of HealthCare.gov and realize that the $300-$600 per month policies purchased on the new exchanges carry with them deductibles on average of $5,000 for an individual and $10,000 for a couple there will a significant political backlash. Republicans in Congress will benefit.

Here's how Pear explains it:

Until now, it was almost impossible for people using the federal health care website to see the deductible amounts, which consumers pay before coverage kicks in. But federal officials finally relented last week and added a “window shopping” feature that displays data on deductibles. 

For policies offered in the federal exchange, as in many states, the annual deductible often tops $5,000 for an individual and $10,000 for a couple. 

Insurers devised the new policies on the assumption that consumers would pick a plan based mainly on price, as reflected in the premium. But insurance plans with lower premiums generally have higher deductibles. 

In El Paso, Tex., for example, for a husband and wife both age 35, one of the cheapest plans on the federal exchange, offered by Blue Cross and Blue Shield, has a premium less than $300 a month, but the annual deductible is more than $12,000. For a 45-year-old couple seeking insurance on the federal exchange in Saginaw, Mich., a policy with a premium of $515 a month has a deductible of $10,000. 

In Santa Cruz, Calif., where the exchange is run by the state, Robert Aaron, a self-employed 56-year-old engineer, said he was looking for a low-cost plan. The best one he could find had a premium of $488 a month. But the annual deductible was $5,000, and that, he said, “sounds really high.” 

By contrast, according to the Kaiser Family Foundation, the average deductible in employer-sponsored health plans is $1,135. 

“Deductibles for many plans in the insurance exchanges are pretty high,” said Stan Dorn, a health policy expert at the Urban Institute. “These plans are more generous than what’s prevalent in the current individual insurance market, but significantly less generous than most employer-sponsored insurance.”

The Obamacare plans might be more generous than what is currently offered on the individual market (though far less so than the average employer-provided plan), but if you are a young, healthy person you would normally never wade into the individual private insurance market to purchase health coverage. Now you are going to have to. How many young adults working part-time have an extra $300 a month to drop on health insurance or have $5,000 sitting in a savings account to pay off that high deductible? A low percentage I would guess.

Apologists for Obamacare like Paul Krugman will argue that subsidies exist for both premiums and deductibles, but according to Pear only about one of three people are qualifying so far for those subsidies:

Plans in the marketplace are separated into four categories — bronze, silver, gold and platinum — indicating the generosity of coverage, or the share of costs paid by insurance for an average enrollee. 

Many people buying insurance on the federal and state exchanges are expected to qualify for subsidies. But in the first month, for reasons that are not clear, only 30 percent qualified. The others must pay the full premium and will be subject to the full deductible.

Most people don't know what is going on. I talk to my coworkers -- informed Democrats who are politically engaged and who keep up on the news -- and the level of their knowledge about the Affordable Care Act is superficial. I photocopied the Pear article and handed it out. Over the next few months it will become more apparent that the grand achievement of Obamacare is to shunt an enormous number of people into a failed, costly health care system. The insurance companies will see their bottom lines engorged, but the complexity of the coverage and the high deductibles will prevent people from seeking medical attention.

Maybe after a period of time the wrinkles in the Affordable Care Act will be ironed out and more people will qualify for premium support and the federal government will be able to exercise control over rising health care costs. But bear in mind the baseline that we are beginning with -- a $300 premium with a $5,000 deductible for an individual -- is already out of reach for most people. Prices will not decrease. The system won't work. There is not that much disposable income available in the general populous. People will be angry when forced to pay and they will vote Republican, a party that has been nothing if not consistent in its denunciation of Obamacare.

(A good source of information on Obamacare is the Naked Capitalism blog. One of the bloggers regularly featured, Lambert Strether, called attention months ago to the exorbitantly high deductibles of the average Obamacare plan. Ever since, I've been telling people about it. And the response I usually get is a blank stare of incredulity.)

Post-Meltdown Economy Creates Lousy Part-Time Jobs

Catherine Rampell had an excellent story yesterday, "Part-Time Work Becomes Full-Time Wait for Better Job," about the growth of an underemployed underclass in the United States:

In March, 7.6 million Americans who want more hours were stuck in part-time jobs, about the same as a year earlier and three million more than there were when the recession began at the end of 2007. 

These almost invisible underemployed workers do not count toward the standard jobless rate of 7.6 percent. A broader measure, which includes the involuntary part-timers as well as people who want to work but have stopped looking, stands at 13.8 percent.

Rampell's Saturday unemployment stories are becoming a regular feature, and I hope the New York Times keeps running them. I think Rampell has accomplished a couple things in her unemployment reporting. First, she always draws attention to the broader measure of unemployment, what's known as U6, in contradistinction to U3, the standard unemployment rate. Second, she consistently points out that the jobs being created in this post-meltdown economy are bottom-of-the-barrel, low-wage positions:

Even for those who have been able to take advantage of the better job market, the opportunities have not been good. Since the economy began to recover almost four years ago, hiring has been concentrated in relatively low-wage service sectors, like retailing, home health care, and food preparation, and in contingent jobs at temporary-hiring companies. For example, nearly one out of every 13 jobs is at a restaurant, bar or other food-service establishment, a record high. 

Household incomes have been stagnant throughout the recovery, and actually fell in the latest report, according to Sentier Research. As a result, economists and policy makers have been expressing concerns about not only the pace of hiring but the quality of new jobs as well. 

“It’s important to look at the types of jobs that are being created,” Sarah Bloom Raskin, a member of the Federal Reserve Board, said in a recent speech. “Those jobs will directly affect the fortunes and challenges of households and neighborhoods as well as the course of the recovery.”

Obamacare is likely a factor in the growth of part-timers. Next year as part of the Affordable Care Act any employer who has 50 or more full-time workers will have to provide health insurance:

Paul Dales, senior United States economist for Capital Economics, said, “There is another reason to believe that part-time employment will stay higher for longer, namely the incentives to employ part-time workers created by Obama’s health care reforms.” 

Starting in 2014, employers that had an average of at least 50 full-time employees in the previous calendar year will have to provide health insurance or face penalties. Some companies and franchise locations, like Darden Restaurants, which operates brands like Red Lobster and Olive Garden, suggested last year that they might seek to limit full-time staff to avoid activating this mandate.