Largely to recommend to others, I’m looking for free or cheap, but good, resources on economics, ones people might use for self-education. I’ve listed some about which I’m aware below, though I haven’t looked in detail at all of them, so the extent to which they—or that to which they link—are “good” is not fully known to me. I’m specifically not looking for health economics, and my interest is a bit tilted toward micro vs. macro, but not strongly. Nevertheless, if you’re aware of good stuff in the econ realm of any flavor, or have used any of the following, let me know what you think.
- Marginal Revolution University
- EconLib/EconTalk (My, now pretty old, review of EconTalk is here. I’ve also been a guest on the program.)
- Economics For Dummies (Don’t laugh. Every Dummies book I’ve read, including this one, is good.)
- Microeconoics Principles, by Rittenberg and Tregarthen (free, online text, which I have not examined closely)
- Jon Gruber’s Principles of Economics (MIT Open Courseware)
- WikiEducator’s list of free, online economics texts
- A list of microeconomics e-books
- Mark Thoma’s course videos
- Quick Notes Economics
- Economics: A Very Short Introduction, by Partha Dasgupta
- The Little Book of Economics, by Greg Ip
- Advanced material: Advanced Macroeconoics, by David Romer; Asset Pricing (Coursera); Intermediate Microeconomics, by Hal Varian (painfully slow download for me on this last one)
- Much more in the comments
Though they can be high-cost if bought new, feel free to mention textbooks you like. Sometimes one can find them used or older editions for prices that someone intending to self-educate might pay. For what it’s worth, the texts I’ve read most closely are by Cowen and Tabarrok. I was impressed by their micro book and also enjoyed their macro one, some of my thoughts on which are here. Also, I’ve read and contributed to Health Economics, by Santerre and Neun. With that bias in mind, I recommend it.
Comments are open for the topic of this post only (time limited).
All right, enough. I’ve read enough—left, right, and center—about what CBO said about the labor market effects of Obamacare. You know what the best thing I read was? The CBO report itself. The details are in an appendix. It might be longer than you care to read in full, but even reading just the first three pages and skimming the rest, I think you’ll learn a lot more about the truth than you’ll find almost anywhere else. This is the source document, after all.
(You could skip the rest of this post and read the report, but keep reading for my summary, for what it’s worth.)
What I see, reading the document, is a discussion of myriad ways Obamacare will affect the labor market. Some are reasonably construed as the removal of a distortion. For instance, people who are near retirement or would like to make an attempt at starting their own business really have been “locked” into jobs for health insurance. Maybe they have a pre-existing condition and have not been able to find affordable coverage on the individual market. Under Obamacare they can. With health insurance taken care of, they are free to do what they prefer, which is to retire or to take a risk on a new venture.
Some other effects can be reasonably construed as the addition of distortions. There really are higher taxes for some high-income people in Obamacare. That’s a work disincentive. There really is an exchange subsidy cliff at 400% of the poverty line, which could disincentivize some people from working more, making more, and losing the subsidy. Medicaid will expand (in some states), and some people won’t want to take a job and lose that coverage. All true.
Then there’s the mixed bag of the Cadillac tax—the excise tax on high-premium, employer-sponsored plans. It’s a tax, for sure. It will alter the cost and nature of employer-sponsored health insurance. That could change whether people want to work and retain such coverage or not. On the other hand, it will cause wages to go up, which is a work incentive and will stimulate non-health sectors of the economy somewhat. And there’s the employer mandate, which is a tax on employers, though delayed until 2015 (and probably should be repealed). It has incentives for employers to cut full time work.
There are a few other factors, but you get the idea. It’s a mixed bag of anti- and pro-distortionary features. Unfortunately, CBO only signed but did not quantitatively weight the impact of each of the relevant factors. We only have the bottom line prediction of a one percent drop in aggregate wages earned over 2017–2024. You can cherry pick the anti- or pro-distortionary features to hang this number on, to make the law look awesome or terrible. That’s what you’re seeing in the debate. But, skip it and read the appendix for the full story.
Several more points and some emphasis:
- Some of CBO’s predictions are for people to (voluntarily choose to) leave the labor force. That’s more than leaving a job. That’s leaving the ambition to have a job. When that happens, it removes that individual from both the numerator (number unemployed) and denominator (number seeking work) of the unemployment rate. Therefore, it has less of an effect on the unemployment rate than if they just left their job but wanted to find another one.
- Some of CBO’s predictions are for people to cut their work hours. This is not “job loss” but a cutback in work.
- Some of CBO’s predictions remove constraints (job lock), giving people freedom to do what they really want to do with respect to working.
- Some of CBO’s predictions add constraints (incentives) for people not to work as much as previously.
- Some of the work disincentives of Obamacare could be tweaked (ditch the employer mandate, design a smoother glide path off subsidies, etc.) but at some taxpayer cost. Taxes also impose an economic drag. Choose your poison.
- No other health reform plan that expands coverage would do so without affecting the labor market in good and bad ways. Ultimately, this is not really a debate about Obamacare but about the effects of almost any coverage-expanding reform.
Finally, tune out the noise and read the damn report.
A few readers wrote me in response to a post last week. At issue, it seems, is my assertion that
The best bet for health policy compromise, in my view, is if the GOP sweeps in 2016. It is hard for me to believe they would actually repeal the law [in 2017] in that case without implementing a substantially similar replacement.
Tom Bokuneiwicz begs to differ,
[Republicans] do not want people to have health care unless they can afford it. To them less people buying health care drives prices down—no demand is no supply. They do not see health care as a moral issue (despite their alleged allegiance for the most part to the teachings of Christ). Hence, they will do all they can to limit health care. Forcing the poor to pay more, as they do, is just one clear point. Reducing the Medicaid threshold is another. Health care is a moral issue and until they assert that you should not give them a pass.
Charlene K offered something similar,
Respectfully, I disagree with you that Republicans would replace Obamacare if they won a clean sweep in 2016. All you have to do is look at places like North Carolina, where you can see the effects of Republican rule.
These Republicans are so brazen, they will promise and spin but they will never get around to actually implementing a plan. And I don’t think that the insurance companies would mind – they would have people enrolled and then would be free to kick people off who cost too much money. Sure, they might keep some piecemeal things, like allowing 26 year old people on their parents’ plan, but not much more than that. If they haven’t come up with a viable alternative to Obamacare in 5 years, they won’t get it done. Once you abolish the mandate, the whole thing falls apart. Whatever they put in place, without a mandate, is a joke and will never pass once the CBO ratings come in. We will get the status quo ante.
It’s easy for me to understand why people feel this way, especially when examining states like North Carolina, with Republican-controlled governments that have opted not to expand Medicaid.
But I also understand that a few years is long enough to make a huge difference in what Republicans (and Democrats) may be willing to do. For every North Carolina there’s a Massachusetts, for every Texas there’s a California. To make national law that might satisfy the Red states would enrage the Blue ones. Last I checked, there are Senators and Representatives from all the states; there are very invested and influential stakeholders everywhere; and taking away people’s health insurance makes for very easy and powerful attack ads.
In a few years, Medicaid and exchange-based coverage expansion will be the entrenched status quo in at least half the states, if not more. That’s going to matter. A lot. Unless the Affordable Care Act is a clear disaster almost everywhere, I don’t expect repeal to ever be more than campaign rhetoric or the spin put on a law that also does some significant, similar replacing. And, if the ACA is actually a disaster, not just Republicans should favor repeal.
The best precedent for repeal in health policy is the Medicare Catastrophic Coverage Act, passed in 1988 and repealed in 1989. That repeal was swift and bipartisan. The “new status quo” had no time to entrench. The ACA is clearly different. There’s no chance at swift repeal, and certainly not with bipartisan support. So long as the ACA doesn’t destroy itself, repeal (without similar replacement) in 2017 that upsets health insurance in half or more states seems politically impossible. The law will rise or fall largely on its merits, with a strong status quo tail wind.
In my experience, it’s a rare health economist or health services researcher who doesn’t want his or her work to be relevant to policymakers. The problem, however, is that few of us have access to policymakers to ask them what, specifically, they want to know.
Fortunately, as part of its Translation and Dissemination Institute,* AcademyHealth has undertaken the “Listening Project” that fills this gap. They released their first report—on Medicare—earlier this week. It’s based on interviews with 24 policymakers and non-governmental experts about research needs, data gaps, research process improvements, political context, and improved dissemination.
Here are just some of the things policymakers want to know more about:
- How ACOs are internally structured, coordinate care, compensate participating providers, and about any unintended consequences of the model
- The “inner workings” of Medicare Advantage plans, how they coordinate care and realize efficiency
- How greater employment of physicians by hospitals affects access, costs, and quality
- The impact of technology on costs
- How to manage high-cost beneficiaries
- The causes and implications of the recent slowdown in Medicare spending
- More about how Medicare’s hospice benefit is used and its impact on cost and quality of care and life
I hope that proposals to funding organizations that demonstrate responsiveness to Listening Project themes are given a little extra consideration. Making research relevant to policy is important, and knowing what policymakers want to know is a first step. There is more and more detail in the report. Go read it.
* Disclosure: I serve on the Translation and Dissemination Institute’s advisory committee.
Lonely Libertarian wrote,
I would be interested in hearing your thoughts on how you might have changed the ACA—or if you would have—had you known “then” what we “know” now.
I’ll play this hindsight game, so long as we all understand that it is, by definition, unfair to presume that what we know and would do now could have been known and done then. With that in mind, here are two things, among many, we now know (or know better):
- The Medicaid expansion is optional and resisted in about half the states
- The individual mandate remains unpopular and divisive
(In contrast, we don’t yet know that the exchanges are, broadly, a failure or that enrollment will be lower than expected or too highly skewed unhealthy/old. It’s too early to draw any conclusions about these. But I already have ideas—which I’ll save for another time—to offer in case these come to pass.)
In light of these, if I had the power to go back in time and change the ACA, I’d have made exchange subsidies available down to 0% FPL, with the state option of allowing individuals with incomes below 133% FPL to enroll in Medicaid as another choice, alongside exchange plans. That is, publicly administered Medicaid would be a state-discretionary “public option” for poor individuals. They could use their exchange subsidy to enroll in Medicaid or any participating private plan.
Clearly, subsidies would have to be at least generous enough to make Medicaid, if not private options, affordable for very low income individuals. The upside here is that all poor Americans, even in states that didn’t want to offer a Medicaid expansion/public option, would have access to subsidized coverage.
I’m leaving out some details about how to set subsidy rates down to 0% FPL. (I see several approaches.) Any way you slice it, I think it’s likely that a reasonable approach would cost more than the ACA’s original design, because subsidies for poor Americans in states that refused the Medicaid option (if not also in states that accepted it) would likely have to be higher than the cost of Medicaid.
How would we pay for that extra cost? One way is to cap the employer-sponsored insurance (ESI) tax subsidy to an extent that would generate more revenue than the Cadillac tax. Another way is to move Medicare/Medicare Advantage to a competitive bidding (premium support) regime. These are not mutually exclusive and both are appealing policy options to conservatives. Finally, one could extend the Medicaid public option up to higher incomes and or the Medicare FFS public option to younger ages. These might appeal to progressives. All of the above would save money or generate revenue, and some versions of them have been scored by the CBO, I believe. (With apologies, I’m not link hunting right now.)
As for the individual mandate, I’d have dumped it for a late enrollment penalty of a size that compensates insurers for any additional cost they might incur under such a scheme (e.g., if late enrollees are disproportionately sicker than the insured pool at time of sign-up). Obviously the precise penalty level would have to be either set in the market (risk rating for late enrollees?) or revisited over time for calibration. Many options here.
This leaves open the problem of the uninsured imposing costs on the system (uncompensated care). To the extent that would remain an issue, it might require slightly higher taxes to deal with it.
I could entertain other ways in which the past me (were he king) would change the ACA if he knew what the current me knows (some are here), but this is enough for now. I’ll conclude with a major caveat: the utility of policy proposals, with or without hindsight bias, is attenuated to the extent they are politically infeasible. I’m not at all confident what I suggested above would have passed Congress in 2009-2010 or any particular Congress in the future.
Edwin Wong and colleagues examined the association between unemployment rates and use of outpatient services in the Veterans Health Administration (VA) between 2004 and 2012.
Prior studies have identified a negative relationship between unemployment rates and utilization of both inpatient and outpatient health services among individuals under age 65. Specifically, higher unemployment rates were associated with decreases in discretionary health services including preventative medical services and routine nonemergency medical care. In contrast, 2 notable studies examining Medicare-eligible seniors found rates of hospitalization increased as unemployment rates rose. McInerney and Mellor attribute this finding, in part, to increased supply resulting from a greater willingness of providers to accept Medicare-eligible patients.
Wong et al.’s findings are somewhat different. Their results, after adjusting for season, a time trend, time-invariant clinic fixed effects, as well as VA clinic-level demographic, provider, and patient characteristics, are shown in the figure below. The bars show the percent change in average clinic-level visits associated with a one percentage point change in local area unemployment rate.
Among veterans exempt from copayments, unemployment rates are positively and statistically significantly correlated with VA primary, specialty, and mental health care, for both those under 65 and 65+. It’s reasonable to presume non-elderly veterans lose jobs and insurance coverage as the unemployment rate rises. Their greater utilization underscores the VA’s role as a safety net.
It’s a bit harder to explain why utilization of the 65+, copay exempt population also rose in association with unemployment rates. I didn’t catch an explanation in the paper, and, though I could speculate, I don’t have an evidence-based explanation.
Patterns of use for veterans subject to copayments were different, as shown. (Find VA copayment details here.) With the exception of primary care use for those under 65, utilization is either negatively associated with unemployment rates or not statistically significant. The large difference in utilization patterns between the copayment exempt and non-exempt groups underscores the role copayments play in access to care.
Earlier this week, I compared the ACA risk corridor program to Medicare Part D’s. (Go see the charts.) What I didn’t do was convey the extent to which the risk corridor program “kicked in.” TIE research assistant Daniel Liebman found the relevant data for 2006-2007 and put together the following charts that tell the story.
As you can see from the first chart below, the vast majority of Part D risk corridor payments flowed from insurers to Medicare, in both years. That is, insurers’ actual costs were lower than expected, and by a wide margin. However, this is not universally true, so some payment did flow the other way, helping to protect some insurers from unexpected losses.
Data Source: Office of the Inspector General, Department of Health and Human Services: “Medicare Part D Sponsors: Estimated Reconciliation Amounts for 2006”
The next chart below shows the percentage breakdown of plans according to whether they gave/received no risk corridor payment, paid money to Medicare, or received money from Medicare. Here we see a bit more of the value of the program. In 2007, for example, 24% of plans received a payment, buffering their losses. Even if the aggregate dollar amount was low, relative to the amount flowing the other way (per the chart above), these payments probably mattered a great deal to the plans receiving them.
Data Source: Office of the Inspector General, Department of Health and Human Services: “Medicare Part D Reconciliation Payments for 2006 and 2007”
One thing to keep in mind about all this is that insurers were (and are) well aware of the risk corridor program (Part D’s and the ACA’s). Therefore, they are likely building in the protection it provides to their premiums and plan designs. In some sense, the losses/gains they experience aren’t “unexpected.” They know that there is some chance they’ll lose money and the feds will help them out.
One need not interpret this as corporate welfare, however. It benefits consumers too, as Galen Benshoof articulated.
One final point I’ll make is that there is a clear bias evident in the charts above. A lot more money from a lot more plans flows to Medicare than from it. This suggests the possibility that plans might be able to price their products a bit lower. It’s not a complete analysis, so I don’t want to overplay this idea. It’s also reasonable to speculate that plans are pricing close to optimally, given the level and nature of competition in Part D.
After a month-long experiment, we’re happier with comments turned off by default. So, we’ll keep it that way. (Keith Humphreys, doing the same thing, has a few thoughtful things to say about why.) But, as you may have noticed, we do open them up for a week-long period on selected posts. That’s the case for this one. It’s an open thread. Subject to the comments policy, speak your mind on any topic of relevance to this blog except …
UPDATE: I’m tired of comments about the comments policy. So, I’m not going to approve any more of them. Feel free to chime in on issues pertaining to health policy and related research. If there’s something about a prior post you wanted to comment on, do it here.