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What you need to read about Obamacare to start the week

Ezra Klein's Wonkbook

Nov. 4, 2013

Welcome to Wonkbook, Ezra Klein and Evan Soltas's morning policy news primer. (Well, usually Ezra and Evan's. But Ezra is on vacation, so it's just Evan.) Send comments, criticism, or ideas to Wonkbook at Gmail dot com. To read more by Ezra and his team, go to Wonkblog.

Wonkbook's Number of the Day: 7 million. That's the number of uninsured people who may be eligible for "bronze" health insurance plans that are free after the subsidy.

Wonkbook's Graph of the Day: The TV ratings of the World Series keep falling.

Wonkbook's Top 5 Stories: 1) Obamacare's continuing struggles; 2) a beginning and an ENDA; 3) the hot rental market; 4) legitimizing the NSA; and 5) wood and coal.

1) Top story: What you need to read about Obamacare to start the week

HealthCare.gov: How political fear was pitted against technical needs. "In May 2010, two months after the Affordable Care Act squeaked through Congress, President Obama's top economic aides were getting worried. Larry Summers, director of the White House's National Economic Council, and Peter Orszag, head of the Office of Management and Budget, had just received a pointed four-page memo from a trusted outside health adviser [Harvard professor David Cutler]. It warned that no one in the administration was "up to the task" of overseeing the construction of an insurance exchange and other intricacies of translating the 2,000-page statute into reality." Amy Goldstein and Juliet Eilperin in The Washington Post.

Read: The Cutler memo.

@ByronYork: This May '10 memo warning of possible disaster in Obamacare implementation was written before those bad Republicans had power to do anything

U.S. healthcare delays would 'destabilize' insurance market. ""Delaying the individual mandate and/or extending the open enrolment period past March 31 could have a destabilising effect on insurance markets, resulting in higher premiums and coverage disruptions for individuals and families," said the lobby group called America's Health Insurance Plans, or Ahip. It added that if enrolment "incentives" were changed - a reference to the tax penalty Americans will face if they are not insured for nine consecutive months, beginning next year, as stated by the law - monthly premiums would have to increase to account for fewer young and healthy participants in the healthcare exchanges." Stephanie Kirchgaessner in The Financial Times.

@jimgeraghty: President Obama's message, in the face of continuing, worsening problems with the Obamacare rollout: Stay the course.

Administrative decision boosts pharma. "Drug makers scored a significant win last week in their effort to increase sales from the rollout of the health-care overhaul, when the Obama administration cleared a path for the companies to help pay patients' out-of-pocket costs of prescriptions. At issue was whether drug makers could help cover the cost of copayments on brand-name drugs for patients who get insurance through the overhaul's new insurance exchanges. The pharmaceutical industry spent about $4 billion on copayment assistance to patients in private health plans in 2011, according to an estimate by Amundsen Group, a consulting firm. But the subsidies have drawn the ire of health plans and pharmacy-benefit managers, who say the aid undermines the use of copayments to steer patients toward lower-price generic drugs...Federal law bars drug makers from giving copayment assistance to patients insured by federal programs such as Medicare and Medicaid. The law considers the aid an illegal kickback that encourages unnecessary spending. Until last week it had been unclear whether that prohibition applied to insurance sold through the new online marketplaces, where people can get federal subsidies to help pay for coverage." Jonathan D. Rockoff and Peter Loftus in The Wall Street Journal.

@markknoller: WH adds ObamaCare enrollment event to Pres Obama's Dem fundraisers visit to Dallas on Wednesday.

You might get your health insurance for free. "Millions of people could qualify for federal subsidies that will pay the entire monthly cost of some health care plans being offered in the online marketplaces set up under President Obama's health care law, a surprising figure that has not garnered much attention, in part because the zero-premium plans come with serious trade-offs. Three independent estimates by Wall Street analysts and a consulting firm say up to seven million people could qualify for the plans, but federal officials and insurers are reluctant to push them too hard because they are concerned about encouraging people to sign up for something that might ultimately not fit their needs." Reed Abelson and Katie Thomas in The New York Times.

Explainers: Five myths about the Affordable Care Act. A timeline of President Obama's health law. Sarah Kliff in The Washington Post, and The Washington Post.

For consumers whose health premiums will go up under new law, sticker shock leads to anger. "If the poor, sick and uninsured are the winners under the Affordable Care Act, the losers appear to include some relatively healthy middle-income small-business owners, consultants, lawyers and other self-employed workers who buy their own insurance. Many make too much to qualify for new federal subsidies provided by the law but not enough to absorb the rising costs without hardship. Some are too old to go without insurance because they have children or have minor health issues, but they are too young for Medicare." Ariana Eunjung Cha and Lena H. Sun in The Washington Post.

Romney accuses Obama of 'fundamental dishonesty' on health-care law. ""The president failed to learn the lesson that came from the experience of Massachusetts," Romney said on NBC's "Meet the Press." His state's efforts showed the merits of avoiding a "one-size-fits-all plan," Romney said. "States should be able to craft their own plans."..."He told people they could keep their insurance, and that was not the truth," Romney said." Holly Yeager in The Washington Post.

@jpodhoretz: Obamacare is the ultimate case for single payer.

POLLACK: Want to keep people out of the hospital? Make sure they have a place to live. "In Illinois' Medicaid program last year, 3.2 percent of patients accounted for half of all spending. The top 0.15 percent - 4,500 people in a program covering 3.2 million people - required annual expenditures upward of $285,000 each. In the health-policy world, these heavy spenders are known as "frequent fliers:" patients with severe conditions, disabilities and life problems whose complex care accounts for such a disproportionate share of the medical economy...A striking proportion of the patients with the most costly and complex conditions are either homeless or one step away from that in precarious or temporary housing. It stands to reason that providing secure housing to people with chronic illnesses might help." Harold Pollack in The Washington Post.

KRISTOF: Why we need Obamacare. "[H]ow about showing empathy also for a far larger and more desperate group: The nearly 50 million Americans without insurance who play health care Russian roulette as a result. FamiliesUSA, a health care advocacy group that supports Obamacare, estimated last year that an American dies every 20 minutes for lack of insurance." Nicholas D. Kristof in The New York Times.

DIONNE: The noise around Obamacare. "There's a lesson here that liberals apparently need to learn over and over: Good intentions without proper administration can undermine even the most noble of goals. And a White House that has sometimes played fast and loose with the loyalties of its congressional supporters can ill-afford to put the more politically vulnerable among them in an exposed position." E.J. Dionne in The Washington Post.

Music recommendations interlude: Robot dances to dubstep.

Top opinion

OBAMA: Pass ENDA. "Americans can't be fired from their jobs just because of the color of their skin or for being Christian or Jewish or a woman or an individual with a disability. That kind of discrimination has no place in our nation. And yet, right now, in 2013, in many states a person can be fired simply for being lesbian, gay, bisexual, or transgender...It's offensive. It's wrong. And it needs to stop, because in the United States of America, who you are and who you love should never be a fireable offense. That's why Congress needs to pass the Employment Non-Discrimination Act, also known as ENDA, which would provide strong federal protections against discrimination, making it explicitly illegal to fire someone because of their sexual orientation or gender identity." Barack Obama in The Huffington Post.

SULLIVAN: The case against ENDA. "[T]wo successful prosecutions in four years does not suggest a problem so vast that the federal government must be involved...88 percent of Fortune 500 companies have non-discrimination policies with respect to homosexuality, and 57 percent also include gender identity in their policies...I would not vote against ENDA if I, God help us, were a Senator. But I would vote for it with my eyes open. I don't think it will make much difference in reality just as I don't believe hate crime laws make much difference in reality." Andrew Sullivan in The Daily Dish.

COOK: Why workplace equality is good for business. "Those who have suffered discrimination have paid the greatest price for this lack of legal protection. But ultimately we all pay a price. If our coworkers cannot be themselves in the workplace, they certainly cannot be their best selves. When that happens, we undermine people's potential and deny ourselves and our society the full benefits of those individuals' talents." Tim Cook in The Wall Street Journal.

HARFORD: Why can't banking be more like baking? "The first difference is competition. This is partly about pluralism: there are lots of places to buy bread, but not so many to get a mortgage, or for that matter to underwrite an initial public offering...More fundamentally, many consumers of financial services cannot tell a good product from a bad one...Then there is the fact that banking has a tendency to blow up, causing tremendous collateral damage. The last time a baker laid waste to the City was 1666, when one accidentally triggered the Great Fire of London; bankers seem to be able to perform the trick more frequently." Tim Harford in The Financial Times.

FREELAND: Populists are beating the plutocrats. "Here's the puzzle of America today: the plutocrats have never been richer, and their economic power continues to grow, but the populists, the wilder the better, are taking over...Most plutocrats are translating their vast economic power into political influence in two principle ways. The first is political lobbying strictly focused on the defense or expansion of their economic interests." Chrystia Freeland in The New York Times.

KRUGMAN: Germany makes Europe's troubles worse. "Since southern Europe has been forced to end its deficits while Germany hasn't reduced its surplus, Europe as a whole is running large trade surpluses, helping to keep the world economy depressed...Germany isn't blameless. It shares a currency with its neighbors, greatly benefiting German exporters, who get to price their goods in a weak euro instead of what would surely have been a soaring Deutsche mark. Yet Germany has failed to deliver on its side of the bargain: To avoid a European depression, it needed to spend more as its neighbors were forced to spend less, and it hasn't done that." Paul Krugman in The New York Times.

LUCE: Thank you, Snowden. "Mr Snowden has also forced us to confront the larger question of US power in a changing world. For all America's military weight, hard power gets fewer bangs for its buck nowadays. The fate of a US-led world in the coming decades will probably not be decided by a military clash with another large power. It is more likely to be settled by the quality of America's economy and democracy...The damage to US soft power - and the weight it lends to those who want to nationalise data storage and balkanise the internet - should not be overlooked." Edward Luce in The Financial Times.

DOUTHAT: Pot and jackpots. "Both have been made possible by the same trend in American attitudes: the rise of a live-and-let-live social libertarianism, the weakening influence of both religious conservatism and liberal communitarianism, the growing suspicion of moralism in public policy. And both, in different ways, illustrate the potential problems facing a culture pervaded by what the late sociologist Robert Bellah called "expressive individualism" and allergic to any restrictions on what individuals choose to do." Ross Douthat in The New York Times.

KONCZAL: The tea party's assault on workers. "There's been excellent coverage of efforts by individual state legislatures, particularly efforts to roll back unionization for public-sector workers in Wisconsin and Michigan. But there hasn't been a solid overview of how all these efforts hang together and how extensive and coordinated they are. That has changed with a remarkable paper by the University of Oregon's Gordon Lafer for the Economic Policy Institute, titled "The Legislative Attack on American Wages and Labor Standards, 2011-2012."" Mike Konczal in The Washington Post.

Things you've always wondered about interlude: What makes a continental breakfast continental?

2) A beginning and an ENDA

Senators get ready for a vote on employment discrimination. "A major test of how carefully Republicans can navigate the intraparty politics of sexuality will come on Monday, when the Senate holds a crucial vote on a bill to outlaw workplace discrimination against gay men, lesbians and transgender people." Jeremy W. Peters in The New York Times.

Manchin is a yes. "Senator Joe Manchin III, Democrat of West Virginia, said Wednesday that he would vote for a nondiscrimination bill that protects gay men, lesbians and transgender people, putting the measure within one vote of gaining the support it needs to overcome a filibuster. Mr. Manchin was the only Democrat who had not signaled how he would vote. His support means that all 55 members of the Democratic majority are expected to get behind the bill." Jeremy W. Peters in The New York Times.

And you thought you had seen it all interlude: Making custom-sized boxes in Korea.

3) The rental market is hot, hot, hot

Tales of the recovery, or the bubble?: Blackstone is introducing a new security backed by homes. "Investors will this week be offered the chance to buy a novel security backed by thousands of foreclosed homes across the US purchased by the private equity giant Blackstone and converted into rental properties. The sale will be closely watched by bankers, hedge funds and private equity firms, with a belief that strong demand for the bonds could give birth to a new asset class and provide a fresh source of capital to finance their purchases of foreclosed houses in the US...The bonds are known as a "Reo-to-rental", or "single-family rental" securitisations." Tracy Alloway and Anjli Raval in The Financial Times.

Demand for homes is rising as more get put onto the rental market. "Until recently, real-estate investors had focused primarily on scooping up tens of thousands of foreclosed homes, at a sharp discount, and converting them into rental properties. Now that the pool of these properties has declined and prices have risen, these investors are snapping up newly finished single-family homes to be used as rentals, or even developing vacant lots from the ground up." Conor Dougherty in The Wall Street Journal.

More recovery-or-bubble watch: IPOs! IPOs! IPOs! "Investors are stampeding into initial public offerings at the fastest clip since the financial crisis, fueling a frenzy in the shares of newly listed companies that echoes the technology-stock craze of the late 1990s. October was the busiest month for U.S.-listed IPOs since 2007, with 33 companies raising more than $12 billion. The coming week is slated to bring a dozen more initial offerings." Matt Jarzemsky and Telis Demos in The Wall Street Journal.

The economic outlook. "The health of the US economy will be in the spotlight this week, with the release of the first estimate of gross domestic product for the third quarter of 2013 on Thursday. Early predictions suggest that growth slowed as the US went into political crisis over the federal government shutdown at the end of the three-month period. Daily consumer sentiment polls have indicated that the public mood took a significant hit." Kate Allen in The Financial Times.

Interview: Delaware's governor on bringing jobs home. Lydia DePillis in The Washington Post.

Yellen to meet Republican lawmakers ahead of confirmation votes. "Janet Yellen, US Federal Reserve chair nominee, this week meets key Republican party lawmakers who will probably oppose her nomination, in an effort to allay their concerns about her economic policies ahead of her Senate confirmation hearings. Senators Mike Crapo, David Vitter and Bob Corker were among six Republicans on the Senate banking committee who opposed Ms Yellen's vice-chair nomination in 2010...Her initial meetings with lawmakers indicate she is being careful in her answers." Gina Chon in The Financial Times.

Food stamp cuts will hurt families still trying to recover from recession, advocates say. "About 47 million Americans who rely on food stamps for their meals will have to get by on less after their benefits were cut Friday...The cut was triggered by the expiration of the stimulus spending Congress approved in the depths of the Great Recession. But it is unlikely to be the last; in Washington, the House and the Senate are trying to reconcile bills approved in each chamber that would reduce food stamp spending by billions more dollars." Evan Halper and Cindy Chang in The Washington Post.

Just a lot of cool things on the Internet interlude: Like Wolfram Alpha's social-networking map tool. By the way, this is what the NSA is doing to everybody anyway.

4) The price of legality for the security state is legitimacy

Senate bill would validate NSA's harvesting of phone, e-mail records, privacy advocates say. "The bill to amend the Foreign Intelligence Surveillance Act (FISA), which advanced out of the Senate Intelligence Committee, would codify limits that a special court has placed on the NSA's use of the records. But if the FISA Improvements Act became law, Congress would be validating expansive powers that have been claimed by the NSA and upheld by a court -- but never explicitly written into statute -- to harvest the phone and e-mail records of millions of Americans, the advocates say." Ellen Nakashima in The Washington Post.

No morsel too small for hungry-hungry-hippo NSA. "From thousands of classified documents, the National Security Agency emerges as an electronic omnivore of staggering capabilities, eavesdropping and hacking its way around the world to strip governments and other targets of their secrets, all the while enforcing the utmost secrecy about its own operations. It spies routinely on friends as well as foes, as has become obvious in recent weeks; the agency's official mission list includes using its surveillance powers to achieve "diplomatic advantage" over such allies as France and Germany and "economic advantage" over Japan and Brazil, among other countries." Scott Shane in The New York Times.

House, Senate intelligence chairs voice fresh concerns about NSA eavesdropping. "The leaders of the Senate and the House intelligence committees voiced fresh concerns Sunday about recently revealed National Security Agency surveillance efforts and what the White House says it knew about them...Both intelligence committee chairmen rejected the recent suggestion that Edward Snowden, the former NSA contractor who leaked agency documents, might receive clemency in the United States. Snowden, now living in Russia, has been charged with theft and two violations of the 1917 Espionage Act." Holly Yeager in The Washington Post.

No-shave November interlude: To grow a beard or not?

5) How much wood would a...coal plant need to become renewable?

Here's a big leak from the IPCC report on climate change. "Climate change will pose sharp risks to the world's food supply in coming decades, potentially undermining crop production and driving up prices at a time when the demand for food is expected to soar, scientists have found. In a departure from an earlier assessment, the scientists concluded that rising temperatures will have some beneficial effects on crops in some places, but that globally they will make it harder for crops to thrive -- perhaps reducing production over all by as much as 2 percent each decade for the rest of this century, compared with what it would be without climate change. The warnings come in a leaked draft of a report under development by a United Nations panel, the Intergovernmental Panel on Climate Change. The document is not final and could change before it is released in March." Justin Gillis in The New York Times.

Power plants turn to wood to reduce coal's carbon emissions. "Even as the Environmental Protection Agency considers requiring existing coal-fired power plants to cut their carbon dioxide output, some utilities have started to use a decidedly low-tech additive that accomplishes that goal: wood...Using modest amounts of wood at a large number of coal plants could be a relatively quick way to phase in renewable energy. And unlike wind or solar power electricity from a boiler, burning wood is easy to schedule and integrate into the grid...Using modest amounts of wood at a large number of coal plants could be a relatively quick way to phase in renewable energy. And unlike wind or solar power electricity from a boiler, burning wood is easy to schedule and integrate into the grid." Matthew L. Wald in The New York Times.

Reading material interlude: The best sentences Wonkblog read today.

Wonkblog Roundup

Low wages "aren't what it's about anymore": Delaware's governor on bringing jobs home. Lydia DePillis.

Want to keep people out of the hospital? Make sure they have a place to live. Harold Pollack.

Five myths about the Affordable Care Act. Sarah Kliff.

The tea party's assault on workers. Mike Konczal.

Et Cetera

The important policy story you'd have otherwise missed this morning: Indiana is paying kids who might not otherwise go to college to get an associate's degree on an accelerated track, and it's working. Caroline Porter in The Wall Street Journal.

Colorado may ask its voters for a billion-dollar tax increase to pay for education spending. Jack Healy in The New York Times.

Agencies can't always tell who's dead and who's not, so benefit checks keep coming. David A. Fahrenthold in The Washington Post.

Republican moderates say they'll speak louder in the House. Seung Min Kim in Politico.

Is the slowdown in emerging markets cyclical or secular? We'll find out in the next year. Tom Wright in The Wall Street Journal.