One of the popular objections to the GOP proposals to reform health insurance markets is that the Affordable Care Act (aka “ObamaCare”) saved thousands of lives per year, and hence that tinkering with ObamaCare will literally kill lots of people. For example, Hillary Clinton tweeted out:
Now to be sure, even if the claim were true, it still wouldn’t follow that coercive redistribution of wealth was morally justified. However, as happens so often in political controversies, libertarians don’t have to choose between property rights and tolerating widespread suffering.Believe it or not, the data suggest that if anything, ObamaCare actually caused more Americans to die.
None of what I write in this piece should be construed as an endorsement of the GOP bills. But the claim that they would “kill lots of people” is not valid.
Oren Cass’s Amazing Takedown
The researcher who alerted me to these awkward facts was the Manhattan Institute’s Oren Cass. Cass makes three important points in his recent study:
#1. The various estimates of the alleged lives saved under ObamaCare were not based on actual mortality data. Rather, these pro-ObamaCare studies relied on previous episodes (such as the implementation of “RomneyCare” in Massachusetts) where the expansion of insurance coverage went hand-in-hand with improved health outcomes. Then, taking this correlation as a “fact,” the pro-ObamaCare researchers multiplied by the expansion of insurance under ObamaCare and came up with an estimate of how many Americans’ lives were saved.
Yet as Cass points out, this procedure is flawed. What the literature actually shows is that expansion of private health insurance coverage contributes to improved health outcomes. But under ObamaCare, the amount of private coverage went down relative to what we would have expected in the absence of the legislation. What really drove the increase in insurance coverage under ObamaCare was the expansion of Medicaid. And here, it is much less obvious that this is a boon for health outcomes, as the now infamous Oregon experiment shows.
Looking at the Aggregate Data
#2. Now that we’ve undercut the foundations of the pro-ObamaCare figures, we can turn to the actual mortality data from the U.S. After all, as Cass says, if ObamaCare really has been avoiding tens of thousands of deaths per year, we should see that in the data.
And yet, we see the opposite. Although the ACA passed in 2010, the full expansion of insurance coverage didn’t kick in until 2014. So the relevant metric is to see what happened to (age-adjusted) mortality rates before and after 2014. Lo and behold:
U.S. Age-Adjusted Mortality Rates per 100,000 (Annual, 2002–2015)
As the figure shows, if we control for the aging of the population, the mortality rate tends to fall over time. However, for whatever reason, after falling in 2014, the mortality jumped back up in 2015, erasing all the gains since 2013.
To see that this isn’t some artifact of this data set, we can cross-reference this information with life expectancy. Some readers may have been aware that researchers were alarmed in late 2016 when the latest figures showed U.S. life expectancy falling “for the first time in decades.”
Looking at the State-Level Data
#3. But now we come to the third and most devastating component of the Cass study. He is intellectually honest and concedes that the uptick in mortality in 2015 could be a fluke, or it could be a genuine problem due to something other than ObamaCare. For example, there is a festering opioid epidemic in many parts of the US, so perhaps it was just bad luck (for Obama’s legacy) that this public health crisis happened to hit right when his signature legislature fully kicked in.
Yet Cass points out that we still have a pretty good control group to assess the specific impact of the Affordable Care Act’s boost to coverage. Specifically, only 31 states (plus DC) expanded Medicaid under the ACA, while the other 19 states rejected the offer. So if it’s true that the ACA really did “save lives” relative to what otherwise would have happened, but that the absolute mortality rate in the US went up because of some external problem (like the opioid crisis), then we should still expect see mortality rates jumping more in the “red” states that rejected Medicaid expansion.
And yet, as Cass points out in his study, we see the exact opposite. Namely, the states that took advantage of ObamaCare’s Medicaid expansion saw a worse impact on their mortality rates than the states that rejected the expansion.
Although I personally do not yet have a theory on the specific mechanism that may be responsible, I am confident in saying that the actual data do not support the breathless claims that rolling back ObamaCare will literally kill many thousands of Americans.
Fans of the Austrian school should not be shocked, though, to discover that having the federal government get more heavily involved in the health sector has apparently made things worse.
Could Donny Boo Boo possibly stick his head any farther up his own ass! The clown’s not a checker player playing against chess grandmasters, he’s a fool playing Russian Roulette with a semi-auto instead of a revolver.
Donny just had to watch Morning Joe today, and it got him to Tweeting yet again, like the impulsive child he is. Joe S detailed a story where Joe was informed by senior White House folks that the National Enquirer, the rag run by Donny Boo Boo’s good friend, was going to run a hit piece on Joe and Mika, but if Joe called Trump and apologized for criticizing him, Trump would have the story pulled. Also, Mika’s kids were being harassed by unknown individuals, and as soon as that started is when Joe got the first call from the White House.
Granted this is just alleged, but it will undoubtedly get the attention of Bob Mueller. Mueller can question both parties under oath and find out which one (no doubt Trump) is lying. Mueller has that right to broaden the investigation, just as Ken Starr broadened Whitewater to eventually include a blue dress. Also, though Tweet Boy denied Joe’s allegations, Joe said he has both texts from senior White House officials and phone records.
In addition, Joe detailed a call he got from ‘a long time senior House Republican Rep’ who was at the White House healthcare meeting a few weeks ago. In the meeting, according to this Rep, Trump went into a wild rant about Mika, using his now characteristic ‘blood pouring from everywhere’ meme. The Rep said that in all his time in DC he had never been so scared, as the POTUS was clearly mentally unstable.
The Dems have already introduced a Bill yesterday to invoke Article 4 of the 25th Amendment to remove Trump for reasons of insanity. Some Republicans are quietly joining the debate. Some other Repubs are trying to make a deal with Democrats, saying they will join the Trump removal group if Dems make concessions on the healthcare Bill. Now THAT is dealmaking!
There can be little doubt that Trump is on the edge of a total breakdown. Rats are beginning to desert the sinking ship of fools. Don’t be surprised if some very visible figures walk away over the 4th of July weekend, such as SecState Tillerson. Donny looks like a steaming pile of shit as the pressure is showing on his taut and wan face. If we wake up tomorrow and see Donny had a heart attack, it will not be surprising. It’s not like he’s in any sort of shape. It’s ironic that the bloated asshat is forever criticizing women on their looks, as if his 300 lbs of rancid blubber make him a looker.
Ninety-nine percent, perhaps 100%, of Donny's woes are of his own making. He never grew up, and in his declining years he may well be losing whatever hold on reality he might have had---and that has always been in question on the best of days. The 140 characters are on the wall, when even his own Party is horsetrading behind his back to rid the United States of the disgrace and embarrassment that is Trump.
As the Fed is in the midst of a rate hike cycle, it seems important to remember why this cycle is like no previous rate hike cycle. The mechanics of this hiking cycle are completely unique and experimental...thus the outcome is far more of an unknown than "normal".
Why? In a typical cycle, the Fed would sell a relatively small portion of its assets...er, balance sheet (typically short duration bills and notes) to banks. This would withdraw some of banks liquid funds (replacing them with less liquid assets) and create "tightness". This tightness would push overnight lending rates higher and the daisy chain of rising rates would work its way through from the shortest eventually all the way to the 30yr Treasury bonds.
However, this time, nothing like that is happening. This is because the Fed sold all its short term notes/bills (in Operation Twist) and bought longer duration MBS (mortgage backed securities) and longer duration Treasuries in Quantitative Easing to the tune of $4.5 trillion. Further, since the Fed bought most of these assets from large banks, these banks held much of the proceeds from these sales at the FRB (Federal Reserve Bank). For the Fed to perform typical rate hikes, it would need to remove most of the $2.1 trillion banks are now sitting on in excess reserves @ the FRB...likely creating a crisis in the process. Conversely, if the Fed can't contain the $2.1 trillion at the FRB, and the reserves are leveraged into the market...stand back in awe of the mother of all bubbles.
Thus, the Fed has instead determined to raise rates via paying banks interest on these excess reserves to maintain the reserves at the Federal Reserve. In short, pay banks not to lend money, not to invest the reserves. This is just like Federal programs that paid farmers not to farm...IOER (interest on excess reserves) pays big bankers not to bank.
Since the end of QE in late 2014, the Federal Reserve has continued to buy bonds with the intent of maintaining a consistent quantity of assets on its balance sheet. But interestingly, banks excess reserves have been declining, by as much as $800 billion since late 2014 (chart below). Apparently, during this Fed balance sheet maintenance phase (as the Fed continues to buy assets from the banks to maintain its balance sheet) banks aren't doing their part and have been unwilling to retain these proceeds as excess reserves.
And a close up of the above chart from 2014 to present (chart below). Since the end of QE, $800 billion previously held in excess reserves found its way into loans and/or markets!!! Considering that much or even the majority of the excess reserves are held by foreign banks, it seems more likely the newly liberated cash would find its way into financial assets. Even conservatively leveraged, that's an awful lot of money (not so conservatively leveraged, it's a big deal)!
Excess reserves held at the Fed declined by almost $800 billion from the end of QE until the Fed began it's more recent set of rate hikes (from 0.5% to 1.25%)...but behold, excess reserves have responded by increasing almost $200 billion (chart below) since the recent set of rate hikes.
Excess reserves held at the FRB appear to have responded to the ramping IOER...just as the Fed intended (chart below)!?!