HealthLawProf Blog

Oral Arguments in King v. Burwell, and thoughts about additional implications for the case

Oral arguments ran over an hour in King v. Burwell today (transcript available here). As many are aware, the question in this case involves whether the IRS appropriately interpreted the ACA to authorize tax credits for insurance policies purchased on both state-based and federally-based health insurance exchanges.  The plaintiffs claimed that the IRS has acted illegally in providing tax credits through federally-run exchanges, and if they are successful, the IRS will immediately cease offering subsidies to individuals who have purchased health insurance in federally-run exchanges.  

Reading oral arguments is always less satisfying than hearing or witnessing them, but reading the tea leaves is still irresistible when justices appear to reveal their positions.  For example,  Justices Kagan, Sotomayor, Ginsburg, and Breyer appeared to agree with the arguments put forth by the United States. Justices Scalia and Alito appeared to agree with Mr. Carvin and the plaintiffs, though Justice Alito appeared open to some of statutory answers being provided by Solicitor General Verrilli toward the end of his argument.  The Chief Justice was almost silent during the oral arguments, and Justice Kennedy raised his favorite topic, federalism, and whether Carvin's interpretation of the ACA can lead to unprecedented coercion of the states, raising a fatal constitutional consequence for what should otherwise be an exercise in legislative interpretation.

This line of questioning is worth considering for a moment.  Readers are probably aware that the doctrine of coercion was merely a theory until the Court breathed life into it in NFIB v. Sebelius.  In that decision, the Court held that the ACA's Medicaid expansion was unconstitutionally coercive because states, in the plurality's view, had to choose between expanding Medicaid to childless, non-elderly adults or losing all of their Medicaid funding.  But, the structure of Medicaid is quite different from the structure of the exchanges.  If a state rejects Medicaid funding, then that state has no Medicaid program within its borders - this form of cooperative federalism facilitated the coercion analysis in NFIB, because the states successfully argued that they could not realistically leave the program.  The exchanges, on the other hand, epitomize 'backstop federalism' - if a state rejected funding to create a state-based exchange, then the federal government would step in (and it did).  

Initially, it was unclear what Justice Kennedy was pursuing in his federalism questioning, because he seemed to indicate that he perceived the Medicaid-style federalism at work in the exchanges.  He later clarified, however, that he was concerned about the ramifications of the challengers' theory, that Congress intended to deny subsidies in states that refused to establish exchanges, thereby obliquely and opaquely threatening states by refusing to offer tax credits to their citizens.  Not only is this interpretation of the ACA plainly wrong, but it would also create a bizarre conditional spending situation where the states did not know they were being threatened until long after they decided to reject federal policy.  Justice Kennedy indicated that this reading of the statute would result in a "serious constitutional problem" that should be avoided, and he is right.  But, he was also skeptical about the actual language of the statute, so the U.S. cannot yet breathe easy.

 One additional observation for now - the impact on health insurance access will be even greater than the parties discussed.  If the IRS ends subsidies for insurance policies purchased through the federal exchange, the current tally indicates that approximately 8 million people will lose the subsidies that make insurance affordable for them.  While they will not be subject to a tax penalty for failure to carry health insurance, they also will not be able to afford health insurance.  That is immediately clear.  But, the ripples will be greater than the 8 million, because some states that have obtained waivers to expand Medicaid are placing their newly eligible Medicaid populations into the exchanges.  If the exchanges experience a death spiral due to increased premiums and loss of covered lives in the risk pool, then the exchanges become a very unstable way to provide Medicaid coverage and likely become unaffordable for states.  Demonstration waivers are supposed to be budget neutral, which would become impossible in plans like Arkansas' if the plaintiffs win this case.  Further, low-income individuals tend to churn between Medicaid and private insurance coverage - but if the insurance offered through federal exchanges is not subsidized, then they will churn into uninsured status, thereby increasing dramatically the number of lives affected by this decision.  

Of course, if the Court upholds the IRS interpretation of the ACA, then we can all go back to waiting for the next challenge to come along.

Hot off the press!

In this article, published today at the Illinois Law Review online, Jessica Roberts and I argue why the Medicaid expansion is a matter of social justice that must be taken seriously in the upcoming gubernatorial elections.  Here's the blurb from the journal:

On the doorstep of its fiftieth anniversary, Medicaid at last could achieve the ambitious goals President Lyndon B. Johnson enunciated for the Great Society upon signing Medicare and Medicaid into law in 1965. Although the spotlight shone on Medicare at the time, Medicaid was the “sleeper program” that caught America’s neediest in its safety net—but only some of them. Medicaid’s exclusion of childless adults and other “undeserving poor” loaned an air of “otherness” to enrollees, contributing to its stigma and seeming political fragility. Now, Medicaid touches every American life. One in five Americans benefits from Medicaid’s healthcare coverage, and that number soon will increase to one in four due to the Patient Protection and Affordable Care Act. Medicaid’s universalization reveals that the program can now be best understood as a vehicle for civil rights. ...

The Problematic Jurisprudence of Halbig v. Burwell

Like the recent Supreme Court decision in Hobby Lobby, the D.C. Circuit’s ruling earlier this week in Halbig v. Burwell is being hailed by conservatives and bemoaned by liberals as a death knell for Obamacare.  Unlike the decision in Hobby Lobby, however the D.C. Circuit’s ruling is not the end of the matter, and many liberals are finding hope in the ruling of the 4^th Circuit the same day, the probability of an en banc hearing in the D.C. Circuit, and the ultimate possibility of a favorable Supreme Court decision.  In an earlier post in HealthLawProf, I decided to take seriously the possibility of damage control from a limited reading of Hobby Lobby.  It is pretty much universally agreed—and I believe correctly—that it is not possible to do similar damage control by giving a limited reading to Halbig v. Burwell.  If the ruling stands, that tax subsidies are not available to people purchasing coverage through the exchanges in the states that are letting the federal government do the work, many important other provisions of the ACA will be untenable, including the penalties for large employers not offering insurance whose employees receive subsidies and likely the individual mandate itself.  But I think it is possible to undermine Halbig in a way not generally recognized by the liberal critics who argue (correctly) that the statutory provision at issue is ambiguous:  argue that the jurisprudence of the majority opinion in Halbig is internally inconsistent.  Here’s how.

Under D.C. Circuit precedent, the court must “uphold an agency action unless we find it to be ‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.’”  So, the question for the court was whether the IRS rule permitting individuals purchasing insurance through federally-run exchanges was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.  In concluding that it was, Judge Griffith’s opinion for the court reasoned that it was not in accordance with law. That is, Judge Griffith found that there was no ambiguity in the relevant provision of ACA that permitted the IRS to interpret the statute as it did.   Here's where much of the criticism takes him on.  But there’s more to say.

In reaching the conclusion that the statutory language is not ambiguous, Judge Griffith purported to rely on a literalist approach to statutory interpretation.  But he did not in fact rely consistently on such an approach—nor could he have done so.  The problem is that in order to formulate the literalist question to answer, Judge Griffith had to resolve several issues in a manner that was not literalist at all.

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Reading Hobby Lobby narrowly

I write this post with more than a little trepidation; I’m as unhappy as anyone about what the Court made of the Religious Freedom Restoration Act last week.  Nonetheless, given the current state of play, I’ve tried to see whether there are any ways to try to limit the damage. 

This Supreme Court term has featured a striking number of unanimous decisions.  What has drawn unanimity in these cases has been the narrow basis on which they were decided.  Commentators have praised Justice Roberts for his political skills in bringing the Court together—demonstrating that at least one branch of government remains functional and shoring up claims to judicial legitimacy.  Other observers note, however, that the unanimity is only skin deep—and point to the cases in which the Court divided 5-4 as symptomatic.  So suppose we perform a thought experiment on one of the most divisive decisions of this term, Hobby Lobby.  How could the decision have been narrowed?  How should it have been narrowed?  Such an examination is invited by Justice Alito’s statement that the Court’s holding is “very specific.”  It is also invited by Justice Kennedy’s concurrence, which opens with the assertion that the Court’s opinion “does not have the breadth and sweep ascribed to it by the respectful and powerful dissent.  Finally and disturbingly, it is also invited by the observation that the Court has quite quickly, in the case involving Wheaton College, opened wide one of the apparently narrow doors. 

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PCAST, Big Data, and Privacy

The President’s Council of Advisors on Science and Technology (PCAST) has issued a report intended to be a technological complement to the recent White House report on big data. This PCAST report, however, is far more than a technological analysis—although as a description of technological developments it is wonderfully accessible, clear and informative.  It also contains policy recommendations of sweeping significance about how technology should be used and developed.  PCAST’s recommendations carry the imprimatur of scientific expertise—and lawyers interested in health policy should be alert to the normative approach of PCAST to big data. 

Here, in PCAST’s own words, is the basic approach: “In light of the continuing proliferation of ways to collect and use information about people, PCAST recommends that policy focus primarily on whether specific uses of information about people affect privacy adversely. It also recommends that policy focus on outcomes, on the “what” rather than the “how,” to avoid becoming obsolete as technology advances. The policy framework should accelerate the development and commercialization of technologies that can help to contain adverse impacts on privacy, including research into new technological options. By using technology more effectively, the Nation can lead internationally in making the most of big data’s benefits while limiting the concerns it poses for privacy. Finally, PCAST calls for efforts to assure that there is enough talent available with the expertise needed to develop and use big data in a privacy-sensitive way.”  In other words:  assume the importance of continuing to collect and analyze big data, identify potential harms and fixes on a case-by-case basis possibly after the fact, and enlist the help of the commercial sector to develop profitable privacy technologies. 

The report begins with an extremely useful (and particularly frightening if you aren’t familiar with the internet of things) description of big data possibilities, now and in the near-term future.  The description emphasizes the distinction between data “born digital”—that is, created in digital form—and data “born analog”—arising from the characteristics of the physical world and then becoming accessible in digital form.  Data born analog are highly likely to contain more information than just that of particular digital interest; for example, surveillance cameras record everything that is occurring in a particular location, not just acts that are the target of surveillance.  But with analytics that allow data fusion, the combination of data sources may reveal new meanings, for example profiling individuals. Big data are high volume, high velocity, and high variety, an intersection that presents serious privacy challenges.

PCAST then attempts to anticipate the privacy harms that might be associated with big data collection and analysis.  The harms are in the main presented as byproducts of the benefits of developments of particular types of technologies.  The list is impressive, but may miss additional harms associated with the development of a big data world.  Here’s a table listing developments, benefits, and harms; I’ve marked with an asterisk benefits that I’ve reconstructed from what PCAST says but that PCAST does not state explicitly. 

Technological development	Benefit	Associated Harm
Digital communication	Social networking across geographical boundaries; social and political participation on a far larger scale	Shared pipelines and the possibility of interception
Virtual home	Ability to store, organize, and share personal records, e.g. cloud storage of photographs.	“Home as one’s castle” should extent to “castle in the cloud,” not currently protected
Inferred facts about individuals	Delivery of desired or needed services, e.g. targeted marketing	Inferences may be drawn about highly sensitive facts about the individual (e.g. sexual orientation)—facts of which the individual may not even be aware (e.g. early dementia)
Locational identification	Services such as navigation or routes, finding people or services nearby, avoiding hazards	Stalking and tracking
Personal profiles	Benefits of use of statistically valid algorithms	False conclusions about individuals may be drawn
Discovery of special cases that apply to individuals within a population	May allow tailoring of services to special cases—e.g. personalized medicine, instruction linked to learning styles*	Foreclosure of autonomy—individuals may not want to take the predicted path
Identification of individuals	May allow individuals to be warned or protected or otherwise benefited*	Loss of desired anonymity

PCAST intentionally omitted from this list desires that information be used fairly and that individuals know what others know about them or are doing with their information.  In the view of PCAST, neither of these “harms” can be sufficiently defined to enable policy recommendations.  Also omitted from this list are more overarching concerns such as effects on identity, security, stigmatization of groups, freedom of expression, or political liberty.

PCAST’s discussion of the current technologies of privacy protection is highly informative and readers with interests in this area would do well to read the report—I won’t summarize it here.  The report also debunks several standard methods for privacy protection:  notice and choice (a “fantasy”), de-identification (ineffective in light of the development of analytics enabling re-identification), and non-retention or deletion (hopeless given potential for copying including the creation of multiple copies at the point analog data become digital).

Instead, the report suggests several different approaches for protection against data misuse.  As a successor to notice/consent, PCAST recommends the development of “privacy preference profiles,” perhaps by third parties such as the ACLU or Consumer Reports; apps or other internet entities could then indicate whether their privacy policies comport with a profile specified by the consumer. Or, the profile developers might offer the service of vetting apps.  Ideally, technologies could be developed to perform the vetting automatically.  PCAST also recommends developing use controls associated with data collection, use, and subsequent transmission of data or uses.  Metadata might serve this purpose but there is clearly need for further development.  Another suggested strategy is audit capability as a deterrent to misuse.  Finally, PCAST suggests implementing the Consumer Privacy Bill of Rights through recognition of potential harmful uses of data.  Emphasis should be placed on development of best practices to prevent inappropriate data use throughout the data life cycle. 

Five major policy approaches (they are called recommendations, but they are far better characterized as general directions rather than specific recommendations) conclude the report.   They are:

            --attention should focus on uses of big data rather than collection and analysis

            --policies should not be stated in terms of technical solutions but in terms of intended outcomes  

            --the US should strengthen privacy-related research, including relevant social science informing successful application of technologies

            --the US Office of Science and Technology Policy should increase education and training efforts

            --the US should take international leadership by adopting policies that stimulate the development of privacy protective technologies.

These recommendations seem remarkably anodyne after the detailed discussion of technologies that preceded them.  Moreover, they are also preceded by some other, less anodyne policy observations (I found these quite troubling—for reasons I just begin to suggest parenthetically below):

            --basing policy on data collection is unlikely to succeed, except in very limited contexts (such as health information) where there may be possibilities for meaningful notice and consent.  (Why, I ask, is notice/consent the only way to approach collection practices?  What about other sorts of restrictions on collection? Or, is the thought that getting the data is both inevitable and desirable, no matter what the context?)

            --regulating at the moment individuals are particularized by analytics might be technically possible—but even so, it’s preferable to focus on harms downstream (Doesn’t this expose people to risks of harm, correctable only after the fact? Shouldn’t we consider building ways to detect and deter re-identification that could intervene before the harm occurs?)

            --drafting savvy model legislation on cyber-torts might help improve the current patch-work of liability rules for privacy violations (Why not a public law approach to violations rather than placing the onus on individual litigation?)

            --forbidding the government from certain classes of uses might be desirable, even if these uses remain available in the private sector (So is the government the only or even primary problem with big data use???)

Leslie Francis

           

 

 

 

 

 

 

 

FDA Regulation of E-Cigarettes—A Gateway to Teaching Administrative Law

 

It’s likely that most readers of this blog already know that the FDA just announced its intent to extend its regulatory powers to E-Cigarettes.   E-Cigarettes have proven to be a "high interest" topic in both my "Constitutional Issues in Health Law" and "Legal Issues in Human Subject Research Classes."  The struggle between the FDA and those it wishes to regulate raise questions about the powers of all three branches of Government.  It can serve as a proxy for all administrative agencies in an Admin Class or as a direct source of study in a public health, environmental or (of course) food & drug law class.

The FDA's current struggles include energy drinks, body building supplements and truth in calorie reporting (no more hiding calories by assuming unrealistic serving sizes).

But back to E-Cigarettes.  

Here is the text of the proposed rule.  And here is the Campaign for Tobacco-Free Kids’ list of reasons why the FDA is justified—and should—be able to do this.

The FDA’s relationship with regulating tobacco products has been a complicated one.  This book review by Margaret Gilhooley can bring you up to date on the history of FDA’s failed attempts to obtain jurisdiction.  It was not until June 22, 2009 that the FDA finally did get regulatory power when President Obama signed the Family Smoking Prevention and Tobacco Control Act (FSPTCA) that the FDA got any authority to regulate tobacco products—and that only through the filter (sorry) of protecting children.   And that still remains the outer limit—protecting children. 

So any regulation of E-Cigarettes has to be along the lines of making them less available to minors.  That’s why what sounds like a relatively weak reason—“even if they are harmless, they are a gateway for children to real cigarettes” is important because that is the statutory basis of the FDA’s power.  It’s not surprising that the FDA’s announcement has been met with immediate protest from Vapers.  New York’s ban (and remember, all the FDA’s done is to announce it intends to assert its authority to look into the product’s safety) has sparked considerable push-back based on issues of “personal liberty.” Apparently this anti-regulation movement is not restricted to the U.S.

   Vapers have had little success persuading cities to exempt e-cigarettes from public spaces, but they have been able to prevent outright bans and to allow the creation of “vaping lounges” –-the English majors among you know these better as modern day equivalent of a legal opium den—perhaps inhabited by today’s Keats, Shelleys and Coleridges.  We even have them in Lubbock.  

The FDA’s goal is to build on the actions of the cities that are equating e-cigarettes with “old style” tobacco to keep e-cigarettes as an “adults only” product.

 

IRS Rule Providing Tax Credits In Federal Exchanges Upheld

On Wednesday, Judge Friedman (U.S. District Court, District of Columbia) granted summary judgment to Secretary Sebelius in Halbig v. Sebelius (2014 WL 129023).  Individual plaintiffs and small businesses, supported by the Cato Institute, Competetive Enterprise Institute, and others, challenged the availability of tax credits in federally-run Health Insurance Exchanges as exceeding the IRS's administrative authority.  The court found that the statute, Congress's intent, and the legislative history of the Affordable Care Act supported the IRS's regulations.  Thus, tax credits will be available in Exchanges whether the insurance is purchased on an exchange created by a state or an exchange created by the federal government standing in the state's shoes. The opinion engaged in careful statutory analysis and found the first part of the Chevron test answered the legal questions the plaintiffs presented (though a footnote provided a quick second step analysis anyway).  Professor Gluck called this decision a big win for the ACA given that Chevron deference was not necessary in the court's analysis, and the court's methodical statutory analysis is certainly persuasive. (Professor Bagley posted a similarly sanguine analysis here.) By all accounts, this decision is a win for the Obama Administration.

This solid decision ought to end this frivolous litigation, but the plaintiffs have already stated that they will file an appeal.  As I discussed here and here, even though these challenges have no statutory traction, the plaintiffs are financially well supported, and they have the means to continue pressing their theories up the federal court ladder.  And, the political climate inspires unhappy policy losers to pursue their desired outcome through the judicial branch when they have lost in the legislative and executive branches.  Although the decision in NFIB v. Sebelius allowed the ACA to move forward, it opened the courthouse doors to litigation such as this, which pushes legal reasoning in directions that would not have been considered serious before the successes of the NFIB litigation.  While I do not believe that Halbig et al. have a real case for preventing tax credits in federally-run exchanges, that will not necessarily prevent another federal court from finding a differently.

Dynamic Medicaid Expansion

Yesterday's reports on the annual meeting of the Republican Governors Association indicated disarray over the Medicaid expansion, and an opinion piece in the NYT highlighted the common story that only half of states are expanding their Medicaid programs.  If CMS is counting, then this tally is correct, as the federal agency can only account for those states that have submitted the proper documentation for expansion.  But this is not the only way to consider the states' decisionmaking regarding the expansion.  I have just posted a short essay preliminarily detailing research I have performed over the last several months, which reveals that many states currently counted as "not participating" are acting to expand their Medicaid programs.  Here is the abstract:

In the run up to the ACA’s effective date of January 1, 2014, the sleeper issue has been the Medicaid expansion, even though Medicaid stands to cover nearly a quarter of the United States citizenry. While the national press has portrayed a bleak picture that only half of the states will participate, the Medicaid expansion is progressing apace. Though this thesis may sound wildly optimistic, it is more than predictive; it is empirically based. I have gathered data on the implementation of the Medicaid expansion during the crucial months leading up to the operation of the insurance provisions of the ACA, and it is clear that most states are moving toward expansion, even if they are currently classified by the media as “not participating” or “leaning toward not participating.” The data thus far reveals counterintuitive trends, for example that many Republican governors are leading their states toward implementation, even in the face of reticent legislatures and a national party’s hostility toward the law. Further, the data demonstrates dynamic negotiations occurring within states and between the federal and state governments, which indicates that the vision of state sovereignty projected by the Court in NFIB v. Sebelius was incorrect and unnecessary.

 

Solving Two Federal Problems at Once: Lets Mail Information to Those Losing Their Inadequate Health Insurance

The efforts by both Congress and the President  to ensure that people can keep individual health care policies which  do not meet the Obamacare minimum coverage standards are so misguided that if it weren't for the fact that vulnerable people are being caused needless suffering  it would be comical.

so far, there is no evidence that anyone is going to be worse off with the coverage now available to them on the exchange than they were with the policies being cancelled.   In fact,  information available to us  from sources like the Kaiser Family Foundation, Business Insider, and Families USA about the characteristics of the policies being cancelled is that whatever peace of mind they provided to those paying for them was illusory.

 The fact that this insurance did not meet Obamacare criteria means that it is highly likely that the coverage they had:

•  Excluded the conditon for which they were most likely to need care
• Had a far higher deductible than the policies now available on the exchange
• And if it covered mental illness at all, did not do so at the same level as other covered illness.

Moreover,  these policies were subject to cancellation as soon as they were needed (for example after a diagnosis of cancer or after a debilitating accident).

Yet these facts are of no help to people without access to information about their alternatives.

Here's one thought--instead of requiring insurance companies to continue making these inadequate plans available, why couldn't they be required to send individualized information about alternatives on the exchange at the same time they send the cancellation letters?

The fact that they already have the relevant information about their policy owners means that those individuals don't need the web site to find out about their options.

In retrospect, depending on any web site to provide all the information to everyone who needed it was a bad idea from the beginning.   But letting people continue to pay good money for bad coverage is not the right solution.

Here's a win/win idea--why don't we activate an already existing but underused government resource to get individualized information out quickly to those who need it---the U.S. Postal System.

Federal-State Tensions in Fulfilling the ACA's Promises

[Cross posted today at Constitution Daily:]

The Affordable Care Act expresses many goals, but its heart is the desire to create a health insurance home for all Americans.  The American healthcare system historically exists at the pleasure of a number of stakeholders and is not a coherent whole. This lack of system is reflected in the consistent tensions that underlie American healthcare, most notably federal power versus state power; the collective versus the individual; and the individual versus the state.  In creating near-universal health insurance, the ACA has resolved one of those tensions, individual versus the collective, in favor of the collective.  To that end, the ACA eliminated many of the practices health insurers used to cherry pick policyholders, which excluded people who need medical care from their risk pools.  In so doing, the ACA represented a federal choice to make all people insurable, whatever their wealth, age, medical history, sex, race, or other distinguishing factor. 

Despite the redirection this leveling of the health insurance playing field represents, the ACA did not craft a coherent whole out of the American healthcare system.  Instead, the ACA remodels the preexisting, unstable healthcare system.  In building on the old foundation rather than starting anew, the law retained the historic role of the states in regulating medical matters.  To that end, the ACA urged the states to implement two key aspects of its insurance modifications: Health Insurance Exchanges and the expansion of the Medicaid program.  The federal government has the power under the Spending Clause to create a federally-run insurance mechanism, but it chose instead to employ cooperative federalism to keep states engaged in healthcare policymaking.  The trouble is that some states have not been cooperating with these central legislative goals.

 The Exchanges, or Marketplaces, are an instrument through which qualified private health insurance plans can be purchased by individuals or small businesses.  The states were offered federal funding to create their own state-run Exchanges, which were operative as of October 1, 2013 (Tuesday last week).  Many states created Exchanges, but many rejected them as an expression of their distaste for the ACA.  Predictably, many of the states that have refused to create their own Exchanges were the same states that challenged the constitutionality of the ACA.  While there is value in dissent, the states that refused to create Exchanges invited more federal power into the state, because rejecting the federal offer for funding to create a state-run Exchange did not halt Exchanges from coming into existence. Instead, the ACA tasked the federal government with operating Exchanges in states that did not create their own.  While expressing a desire to protect their state sovereignty, these states have invited federal authority into their borders.  Though the Exchanges at both the state and federal levels have experienced some technical glitches this week, it appears that many people are eager to purchase insurance through them and that they have been successful at doing so.  The states that rejected Exchanges have not stopped implementation of the law, but their actions have other notable ramifications.

The Medicaid expansion was designed to catch childless adults under age 65 and below 133% of the federal poverty level in Medicaid’s safety net.  As with other modifications to the Medicaid program over the years, the expansion added a new element to the Medicaid Act that states could reject, but they could lose all of their funding if they made that choice.  The day the ACA was signed into law, states challenged the expansion of the Medicaid program as unconstitutionally coercive.  They succeeded on this claim in NFIB v. Sebelius, and the Court rendered the expansion optional for states. Immediately pundits began to question whether the states would participate in the Medicaid expansion. 

Though national media tallies make it appear that just over half of the states are participating in the Medicaid expansion, in reality the number is and will be much higher.  In almost every state reported as “leaning toward not participating,” and in many states reported as “not participating,” some significant act has occurred to explore implementation of the Medicaid expansion.  Some states have special commissions or task forces researching expansion; some state governors have indicated a desire to participate and have included the expansion in the budget; some legislatures have held debate or scheduled it for the next session; and so on.  Though some states will not have their Medicaid expansions running by January 1, 2014, it seems very likely that most if not all states will participate in the expansion in the relatively near future.

 In the meantime, state non-cooperation will have a direct effect on some of the nation’s poorest citizens.  People from 100% to 400% of the federal poverty level are eligible to receive tax credits for purchasing insurance in the Exchanges.  In states with no expansion, people above 100% of the federal poverty level who would have qualified for Medicaid will still be able to obtain insurance through federal subsidies in the Exchanges.  But, people who are below 100% of the federal poverty level will be too poor for tax-credits and living in states that have not yet expanded their Medicaid programs, therefore they will not be able to enroll in Medicaid either.  These very low income people will not be penalized for failing to carry health insurance, but they will not have health insurance either.  These individuals will get caught in a health insurance black hole that exists in part because the Court allowed states to refuse Medicaid expansion and in part because of state resistance to partnering in the implementation of the ACA.   

State cooperation in the Medicaid expansion is even more important than state participation in the Exchanges, because many thousands of people may not get the access to health insurance that is the promise of the ACA.  The debate over the meaning of federalism that swirls around political and academic circles will have a direct and important effect on the people who can least afford it.  The good news for them is that Medicaid’s history indicates that all states eventually participate in the program and its amendments, but this week’s implementation of the Exchanges keeps access to medical care through health insurance tantalizingly out of reach.

Of Data Challenges

Challenges designed to spur innovative uses of data are springing up frequently.  These are contests, sponsored by a mix of government agencies, industry, foundations, a variety of not-for-profit groups, or even individuals.  They offer prize money or other incentives for people or teams to come up with solutions to a wide range of problems.  In addition to grand prizes, they often offer many smaller prizes or networking opportunities.  The latest such challenge to come to my attention was announced August 19 by the Knight Foundation:  $2 million for answers to the question "how can we harnass data and information for the health of communities?"  Companion prizes, of up to $200,000, are also being offered by  the Robert Wood Johnson Foundation and the California Healthcare Foundation. 

Such challenges are also a favorite of the Obama administration.  From promoting Obamacare among younger Americans (over 100 prizes of up to $30,000)--now entered by Karl Rove's Crossroads group--to arms control and identification of sewer overflows, the federal government has gone in for challenges big time.  Check out challenge.gov to see the impressive list.  Use of information and technological innovation feature prominently in the challenges, but there is also a challenge for "innovative communications strategies to target individuals who experience high levels of involuntary breaks ("churn") in health insurance coverage" (from SAMHSA), a challenge to design posters to educate kids about concussions (from CDC), a challenge to develop a robot that can retrieve samples (from NASA), and a challenge to use technology for atrocity prevention (from USAID and Humanity United).  All in all, some 285 challenges sponsored by the federal government are currently active, although for some the submission period has closed.

These challenges are entertaining, call on crowdsourcing for knowledge production, find new sources of expertise way beyond the Beltway or even US borders, encourage private sector groups rather than government to bear costs and risks of development (or failure), and may bring novel and highly useful ideas to light.  So what's not to like?  I may be just grumpy today, but I have some serious worries about the rush to challenges as a way to solve persistent or apparently intractable problems. 

Challenges may be more hype than achievement, more heat than ultimate light.  They may emphasize the quick and clever--the nifty over the difficult or profound.  They may substitute the excitement of awarding and winning a prize for making real progress on a problem. Most troubling to me, however, is the challenge strategy's potential to skew what government finds interesting and what it is willing to do.  Many challenges have private partners in industry, appear likely to result in for-profit products, or set aside values that may be more difficult to quantify or instantiate.

Take the HHS Datapalooza, for example.  Now entering its fifth year, the Datapalooza is an annual celebration of innovations designed to make use of health data available from a wide variety of sources, including government health data.  "Data liberation" is the watchword, with periodic but limited references to data protection, security and privacy.  A look at the 2013 agenda reveals a planning committee representing start-ups and venture capital.  It also reveals a $500,000 prize awarded by Heritage Provider Network, a managed care organization originally located in Southern California but now expanding in markets in Arizona and New York and serving many Medicare Advantage patients.  The prize was for a model to predict hospitalizations accurately and in advance--so that they could be avoided.   The winning team, powerdot, didn't reach the benchmark needed to win the full $3m prize.  So . . . Heritage is continuing the competition, making more (and apparently no longer deidentified) data available to a select set of leading competitors in the original competition in order to improve the accuracy of the modeling.  (A description of deidentification methods for the data made available to all entrants in the original competition is available here.)  There are of course real advantages in developing a good predictive model--for patients in avoiding hospitalizations, and for Heritage in saving money in patient care.  This is potentially a "win win"--as Mark Wagar, the executive awarding the prize stated, "it's not just about the money; it's personal."  But "it's not just about the money" is telling: the risk of these challenges is that they are about the money, and that the money will come to dominate personal or other values unless we are careful.

Solutions, if my concerns are well-founded?  Trying to turn back the disruptive clock and fight the appeal of challenges is probably futile--although perhaps some of the initial enthusiasm may wane. One solution is to join in--after all, challenges are infectious and potentially innovative--encouraging more challenges aimed at different problems--say, challenges for privacy or security protection alongside challenges for data liberation and use.  Or, challenges for improving patient understanding of their health conditions and informed consent to strategies for managing them--as some of the challenges aimed at patients with diabetes illustrate.  Another solution is to watch very carefully what challenges are offered, who funds them, who wins them, and what is ultimately achieved by them.

[LPF]