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Understanding the Competitive Effects of a Public Option

Brendan S. Maher, The Private Option, 2020 Mich. St. L. Rev. 1043 (2021).

Proposals to allow individuals to buy into a public health insurance program such as Medicare have been circulating for over a decade and have been the subject of much academic work. In The Private Option, Professor Brendan Maher offers an important addition to that literature by exploring how the competition between public and private payors that is inherent in public option proposals is likely to play out with respect to three key functions of health insurance: risk bearing, cost control, and ensuring quality care. It is a careful, highly readable, and non-ideological piece of scholarship that should be helpful to a range of stakeholders – from students trying to understand how health insurance markets function to policymakers trying to weigh the benefits of current health reform proposals. While not Pollyanna-ish, the article is ultimately hopeful, making an underappreciated case for the public option by explaining how competitive pressure from a public payor might result in better private health insurance options.

The article begins by explaining the various roles that health insurers play in the United States, focusing on three primary functions: risk-bearing, cost control, and encouraging quality care. The remainder of the article is devoted to evaluating how private payors might behave in a world in which they must compete against a public option. This evaluation is accomplished by assessing the comparative advantages of public and private payors with respect to the three primary functions of insurers previously identified. With respect to risk-bearing, the article unsurprisingly concludes that public payors have an enormous advantage over private payors. Indeed, Maher admits, if insurers were solely serving a risk-bearing function, no private payor could effectively compete with the government. As a result, it is unlikely that a public option would create genuine competition with respect to the risk-bearing function of insurance.

The next two functions, controlling cost and ensuring quality, are more likely to respond to competitive pressures in the face of a public option. The article explores a wide variety of tools that can be used to control cost and improve quality, and concludes that some of these tools favor public payors, while others favor private payors. For example, the government has a distinct advantage in the ability to control cost through rate setting. However, that advantage is somewhat bounded, in that providers will exit the system if reimbursement rates are set too low.

When it comes to ensuring quality care, however, Maher does not believe public payors hold an advantage. Indeed, he thinks it more likely that competitive pressures will result in private payors innovating in this space, and will perhaps result in private payors offering higher-quality products for higher prices when faced with a public option competitor. For example, if provider reimbursement rates in the public option are low, superior providers might elect not to participate in the public option. If so, private insurers might be able to capture such providers and sell a higher priced product tied to superior provider quality. An added benefit of this type of competition is that having multiple payors using different incentive and payment structures should continue to encourage a wide variety of providers to enter and remain in the market.

The article also explores the critical intersection of cost and quality – what is commonly referred to as high-value health insurance. As Maher explains, most health insurance policies, whether public or private, generally cover medical treatments that are clinically beneficial, but avoid differentiating between treatments based on their relative effectiveness or cost-effectiveness. As the article acknowledges, this has been a long-standing and difficult issue to solve, despite the repeated urging of health policy scholars. Americans are unenthusiastic about payors overruling the judgment of treating physicians, and have rejected rationing efforts along these lines. In my view, one of the most important arguments this article makes is that public/private competition in health insurance markets may create the dynamic that finally results in acceptance of health insurance coverage terms that are premised on cost-effectiveness of treatments and services. Maher’s argument is multi-faceted, but is based in part on the likelihood of private insurers being nimble enough and having enough relevant data to offer a product distinct from what a public payor is likely to offer. For example, although the public option is likely to enjoy lower reimbursement rates than private payors, private payors may be able to offer a competitive product by offering some combination of evidence-based coverage terms (or perhaps even coverage terms that embrace personalized medicine), coverage terms based on minimum levels of cost-effectiveness, and high-quality providers. Maher is careful not to suggest that a public payor couldn’t accomplish the same result, but realistically explains that it may be politically more difficult to enact such distinctions in a public program.

In the end, The Private Option argues that government has an overwhelming advantage on risk bearing, a meaningful advantage on cost, no advantage on quality, and a seeming disadvantage on cost-effectiveness – a dynamic that is likely to lead to real competition among insurers. Private payors, Maher argues, may take bold steps in response to a competitive public option. The resulting experimentation could be immensely valuable, and would be lost if health reform eliminates private payors. While I might be more skeptical of the likely behavior of private insurers when faced with competitive pressure, Maher makes a compelling case that a competitive health insurance market with both public and private payors is well worth pursuing.

Cite as: Amy Monahan, Understanding the Competitive Effects of a Public Option, JOTWELL (June 1, 2021) (reviewing Brendan S. Maher, The Private Option, 2020 Mich. St. L. Rev. 1043 (2021)),

Using Public Health Law to Minimize the Racially Disparate Impact of COVID-19

Govind Persad, Allocating Medicine Fairly in an Unfair Pandemic, __ Illinois L. Rev. __ (forthcoming 2021), available at SSRN.

Since the start of the COVID-19 pandemic, there has been significant public debate about how to fairly allocate scarce medical resources. Questions about resource allocation have become even more pressing now that vaccines are finally being distributed. This has resulted in important body of scholarly work arguing that the allocation of scarce resources for the prevention and treatment of COVID-19 should prioritize groups that have been hardest-hit by the pandemic as a result of structural disadvantages like systemic racism.

Govind Persad’s article, Allocating Medicine Fairly in an Unfair Pandemic (forthcoming in the University of Illinois Law Review) is a welcome addition to these conversations. Persad’s article focuses on issues of racial justice in resource allocation, and applies a much-needed legal lens to the practicalities of distribution systems that are often addressed from a more theoretical perspective. Many commentators in the fields of medicine, medical ethics, and public health have proposed that racial disparities be taken into account in the criteria for resource distribution, but not all have the legal background to understand whether and how such criteria could actually be implemented. Persad’s work offers valuable suggestions for how allocation priorities that minimize the disproportionate effects of COVID-19 on racial minorities might be implemented without being struck down on constitutional grounds.

This article echoes the recommendations of a September 2020 JAMA article in which Persad and colleagues Monica Peek and Ezekiel Emanuel argued that because distribution policies not only have a direct impact in preventing death and disability, but also “indirectly alleviate socioeconomic harms like unemployment, poverty and educational deprivation,” these policies should be guided by ethical values. In his new article, Persad directly tackles the legal implications of these ethical recommendations.

Persad presents evidence of COVID-19’s dramatically disproportionate impact on Black, Hispanic, and Native American populations, as well as the unequal distribution of scarce resources like testing, equipment, and personnel. Challenging what he calls an “imagined trade-off between preventing deaths and reducing disparities,” Persad makes a compelling argument that random allocation of scarce resources is likely to exacerbate race-based disparities, resulting in more deaths overall as compared to alternative distribution models. Persad recognizes, however, that explicitly race-based allocation policies (except in the narrow context of Native American tribes) are not a viable solution to this problem given current Supreme Court jurisprudence on the Equal Protection clause and Title VI of the Civil Rights Act.

Instead, Persad proposes alternative mechanisms for crafting resource distribution policies that might serve to alleviate the racially disproportionate impact of COVID-19. He describes his approach as using “facially race-neutral criteria or aggregate neighborhood-level racial data” that have the goal of addressing racial disparities and, in turn, are likely to result in significant public health benefits. While recognizing that any sort of race-conscious classification would be subject to criticism, he argues that facially neutral policies are more likely to survive legal challenges under the current composition of the Supreme Court. Persad suggests that “policies could be designed with the explicit goal of prioritizing locations or occupations that have been hard-hit by COVID-19, not as a proxy for race but as a form of justice that matters in itself.” Such policies, according to Persad, “would be effectively insulated from equal protection concerns, even if they confer disparate benefits on racial minorities[.]”

Persad identifies two policies that might achieve these goals. First, what he calls “disparity-sensitive policies” similar to those used by school districts to address educational disparities. This approach would “prioritize individuals who live in disadvantaged geographic areas or work in occupations hard-hit by COVID-19, potentially alongside explicitly race-sensitive aggregate metrics like neighborhood segregation.” Persad cites Castillo v. Whitmer, a recent Sixth Circuit case, to support his claim that race-neutral public health policies aimed at reducing disparities are likely to be upheld if challenged on Equal Protection grounds. In Castillo, the Sixth Circuit denied a motion for preliminary injunction against a state order that imposed testing protocols in some agricultural settings, which would have had a disparate impact on Latinos. The plaintiffs, agricultural workers and employees, argued that the order was motivated by discriminatory intent because the state had referenced the “the disproportionate impact COVID-19 has had on communities of color and the desire to improve racial equity in healthcare.” The court rejected this argument, however, concluding that “considering the effects of government action on various racial groups is not evidence of improper purpose.” Persad further supports the constitutionality of race-neutral but disparity-sensitive public health policies by citing several federal agencies and policies focused on addressing racial health disparities, including the Office of Minority Health and the United Network for Organ Sharing Minority Affairs Committee.

Persad’s second suggestion is that resource distribution policies focus on the “distinctive and disparately suffered harm of death early in life from COVID-19.” Persad presents dramatic evidence that those who die young as a result of COVID-19 are disproportionately more likely to be Black, Hispanic, Native American, and Asian/Pacific Islander. For example, he cites research demonstrating that the mortality rates of Black patients ages 25-54 are up to seven times higher than those of white patients. This evidence leads Persad to conclude that prioritizing vaccines for elderly patients based on “one-size-fits-all age cutoffs,” as recommended by the WHO and CDC, “would inequitably assign higher-risk minority patients less priority than lower-risk non-minority patients,” worsening racial disparities. Instead, Persad proposes that age be used as one of multiple factors to be taken into consideration – for example, by prioritizing elderly people living in multi-generational households, or those in geographic regions hardest hit by COVID-19.

Persad recognizes that his approach may meet resistance from critics who believe it doesn’t go far enough. He rightfully acknowledges that the policies he proposes are less likely to be effective at reducing racial disparities as compared to explicitly race-based policies; but, he argues, the legal vulnerability of race-based alternatives is simply too great. Scholars across all disciplines who believe that public health law has a role to play in reducing racial disparities ought to consider Persad’s argument.

Cite as: Nadia Sawicki, Using Public Health Law to Minimize the Racially Disparate Impact of COVID-19, JOTWELL (March 29, 2021) (reviewing Govind Persad, Allocating Medicine Fairly in an Unfair Pandemic, __ Illinois L. Rev. __ (forthcoming 2021), available at SSRN),

Democratizing, Protecting, and Supporting Communities: Improving the Government’s Pandemic Response

Lindsay F. Wiley, Democratizing the Law of Social Distancing, 20 Yale J. of Health Policy, L. & Ethics __ (2020), available at SSRN.

Prior to the COVID-19 pandemic, U.S. emergency preparedness laws and plans to prevent, detect, manage, and contain the spread of communicable disease targeted individual actions, rather than community mitigation efforts. For example, the Model State Emergency Health Powers Act and state emergency preparedness laws concentrated on detecting, managing, and containing the spread of an infectious disease, in part, through the medical examination, testing, isolation, and quarantine of individuals. This began to change when Congress amended the Public Health Service Act in 2002 to provide states with financial support and strategies to prepare for and respond to public health emergencies. By 2004, the Centers for Disease Control and Prevention began to use the term social distancing as a way to describe a strategy to stop the community spread of disease.

Yet, as Professor Lindsay Wiley discusses in Democratizing the Law of Social Distancing, social distancing was not widely implemented as a community containment strategy until the COVID-19 pandemic. Many states have begun to incorporate community mitigation efforts, such as stay-at-home/lockdown, mask, and social distancing orders, into emergency preparedness laws and plans to contain the community spread of COVID-19. These efforts have resulted in slowing the spread of COVID-19 in most communities. However, not only have the laws met with resistance from the public and the courts, but also these community mitigation efforts have not been effective in slowing the spread of COIVD-19 in racial and ethnic minority communities.

Because these efforts were adopted during the pandemic, Professor Wiley argues that many of the measures lacked transparency and democratic accountability. Additionally, the efforts have also exacerbated health inequities. State government officials have broad powers to address public health emergencies with community mitigation strategies, especially during a crisis. Nevertheless, to be effective in controlling the spread of disease while balancing the democratic ideals of individual freedoms, there is a need for accountability and support. Wiley’s article is significant because it provides a thorough review of the history of public health laws addressing emergencies, from Jacobson v. Massachusetts through the COVID-19 pandemic; discusses the legal support for public health powers; integrates some of the principles from the health justice framework; and provides solutions and a model for a range of community mitigation efforts.

Professor Wiley provides five key principles that should be used when adopting community mitigation laws, such as stay-at-home orders, to provide transparency, accountability, and supports. First, orders implementing community mitigation measures must provide clear and transparent reasoning for the measures. This can increase the public’s trust in government action, and help ensure that orders are conditioned on a demonstrated threat of significant risk and a suitable fit between the means and clearly stated ends. Many of the current stay at home orders do not include an end date or information regarding evaluative measures for ending the orders. Thus, citizens challenging the orders have argued that the government’s powers have no limit. To address this problem, Professor Wiley proposes that the orders include statements of the strategic purpose they are intended to serve, the scientific understanding on which they are based, and the criteria for when they can be lifted.

Second, statutes should provide officials with a graded range of alternatives to ensure a sustainable emergency response that can be tailored to evolving conditions and understanding. Professor Wiley provides a figure that links the three levels of community transmission (minimal, moderate, and substantial) to the type of intervention (surveillance, altered operation of public facilities, restrictions on business, and restrictions on individuals). Linking the response to the level of transmission allows for a balance between prevention and individual rights, which allows for transparency. Third, statutes should provide substantive standards to ensure orders are neutral laws of general applicability that do not discriminate on the basis of religion. This builds on decisions by many courts, including the Supreme Court, that orders specifically focused on religious activities violate the First Amendment.

Fourth, to enable widespread voluntary compliance and minimize unjust distribution of the benefits and burdens of public health interventions, statutes should mandate that restrictions must be accompanied by financial and other material supports, legal protections, and accommodations for safer alternatives to restricted activities to the greatest extent possible within available resources. One of the most significant failures of current community mitigation efforts is the lack of long-term supports for individuals who are required to stay at home during lockdown orders. The need for supports is one of the key principles in the health justice framework, which provides a mechanism for systems-level transformation of governmental responses to health disparities to achieve health equity, in which “everyone has the opportunity to attain full health potential and no one is disadvantaged from achieving this potential because of social position or any other socially defined circumstance.”

Finally, statutes should authorize criminal enforcement against individuals who violate social distancing orders only if executive-branch officials establish that it is the least restrictive alternative available to achieve the government’s purpose. This will address the current problem where in some cities police officers have handed out free masks and advised, but not required, people gathering outdoors in predominately White affluent neighborhoods to wear the masks, but have arrested and cracked down on Black and Latino people for gathering and not wearing masks.

With these five principles, Professor Wiley offers readers a new framework for implementing community mitigation orders to address public health emergencies that provides accountability, financial supports, and community involvement. Most valuably, this article proposes a more democratic way to stop the spread of disease so that the entire population of the United States can achieve health and well-being.

Cite as: Ruqaiijah Yearby, Democratizing, Protecting, and Supporting Communities: Improving the Government’s Pandemic Response, JOTWELL (March 1, 2021) (reviewing Lindsay F. Wiley, Democratizing the Law of Social Distancing, 20 Yale J. of Health Policy, L. & Ethics __ (2020), available at SSRN),

In Search of Health Law Coherence

Gabriel Scheffler, The Dynamism of Health Law: Expanded Insurance Coverage As the Engine of Regulatory Reform, 10 UC Irvine L. Rev. 729 (2020).

Health law is complicated, unruly, and maybe even incoherent. It lacks a simple universally understood narrative of what, exactly, it is. On top of this complicated foundation, legal and policy reforms have taken effect over recent years with dizzying speed, only to be challenged, carved back, or reversed in later years. Annually, it seems that the whole field of health law hinges on some major case or dramatic legislative effort. The previous year’s class syllabus is never reusable. And it has even humbled our president, as he recently told us what we all already knew: it is unbelievably complex. Seemingly in vain, health law scholars and legal academics search for a unifying theme. But maybe this so-called bug is truly a feature, and its disjointedness may present us with many open lines of scholarly inquiry, giving us all lots of room to run.

That’s why articles that are able to tell a story about the development of health law and about reasoned cause-and-effect of legal and policy development, are so helpful to the field and those of us who work within it. Drawing on historical analysis, interacting with a breadth of previous scholars’ work, and pulling together a simple but edifying story about the development of health law is The Dynamism of Health Law: Expanded Insurance Coverage As the Engine of Regulatory Reform, by Gabriel Scheffler.

Instead of telling of doctrinal development within a field that is haphazard and disconnected, Professor Scheffler argues that modern health law can best be understood through health care financing laws (that expand access) and health care delivery laws (that reform health care delivery). These two types of laws, according to Scheffler, are in a dynamic iterative process, where expansions in coverage lead to reforms in delivery. Scheffler focuses on the creation of the Medicare and Medicaid programs and the passage of the Affordable Care Act as his seminal “expansion” moves. He identifies scope of practice restrictions, the corporate practice of medicine doctrine, and certificate of need laws as key delivery reforms following those efforts, supporting the argument that government intervention to expand health care access reliably leads to a concomitant effort to make health care delivery work better.

Telling this cause-and-effect story allows him to make the argument that future expansions of health insurance may lead to increased pressure on legislators to make delivery more efficient, and that expanding health insurance coverage is often a positive catalyst for regulatory improvements. Scheffler says that this may be because during insurance access expansions, policymakers have been concerned about securing those finance gains as real access gains in doctors’ offices and hospitals, with a specific worry that new demand will swamp the system and lead to quality retrenchment. It could also be that health insurance expansions are often publicly visible, he argues, putting more pressure on legislators to change outmoded delivery mechanisms. In this way, he presents a picture that health care regulation adapts in a reasonable, and perhaps even somewhat orderly, way.

Professor Scheffler’s work builds on Kenneth Arrow’s feedback loop, in which Arrow argues that non-market governmental and regulatory actions follow market failures and information asymmetries in health care. “The market’s failure to provide health insurance to the public has necessitated government-provided health insurance, which has increased the demand for health care, which in turn has created pressure for the government to change delivery system regulations,” Scheffler says. Consequently, governmental involvement and delivery regulation in health care operates as a sort of creeping force, acquiring more legitimacy and necessity as more Americans secure access to health care.

Scheffler’s argument is clear and straightforward, providing a compelling thesis in a foggy time. His work is helpful, much in the way a narrative accounting of the development of the field can be, even at the risk of sanding down some important rough edges. Because I appreciated the precision of his analysis, I would have enjoyed hearing how more recent health care delivery and regulatory changes like physician reimbursement changes, insurance regulations, and dramatic recently enacted surprise billing regulation would fit into his telling. Including more examples, however, may have risked losing the piece’s crisp and straightforward packaging.

In the end, the piece is an ode to health law and its rich history, tying together strands and scholarship from vast reaches of the field. And, although the piece’s thrust may leave the implication that delivery reform must wait for financing reform (which, as we know, is a rare and sacred thing within American law), it provides something that a new and scattered field like health law too often lacks: a clear story, a deep grounding, and a hopeful roadmap for future reform efforts.

Cite as: Zack Buck, In Search of Health Law Coherence, JOTWELL (January 28, 2021) (reviewing Gabriel Scheffler, The Dynamism of Health Law: Expanded Insurance Coverage As the Engine of Regulatory Reform, 10 UC Irvine L. Rev. 729 (2020)),

Reconciling a Public Health Approach to Gun Violence and Second Amendment Rights

Michael R. Ulrich, A Public Health Law Path for Second Amendment Jurisprudence, 71 Hastings L.J. 1053 (2020).

Gun violence in the United States has become a public health crisis, with an average of 100 Americans killed by firearms every day. If any other product caused this many deaths, it would almost certainly be subject to extensive regulation. However, efforts to regulate firearms are often stymied by claims that they violate individuals’ Second Amendment rights. In A Public Health Law Path for Second Amendment Jurisprudence, Michael Ulrich explains why this absolutist interpretation of the Second Amendment is inconsistent with longstanding constitutional principles. In so doing, he demonstrates that it is possible to respect the Second Amendment as an important constitutional value without stripping governments of the authority to regulate firearms in the interest of public health.

Ulrich begins with an overview of the Supreme Court’s two primary Second Amendment cases, District of Columbia v. Heller and McDonald v. City of Chicago. He concludes that those cases definitively resolved only three specific issues: First, that the Second Amendment protects an individual’s right to keep and bear arms; second, that the right is not unlimited; and third, that the right does not extend to “dangerous and unusual weapons.” Beyond those general conclusions, the decisions provide little clarity as to how courts should analyze regulations that implicate Second Amendment rights.

Justice Scalia’s opinion in Heller – and, to an even greater extent, now-Justice Kavanaugh’s dissent in the D.C. Circuit opinion in Heller v. District of Columbia (“Heller II”) – suggest that the scope of Second Amendment rights should be determined by historical investigation. While Ulrich rightly disputes the clarity of the historical record on gun laws, he recognizes that a persuasive case for gun regulation must take the role of history seriously. However, he challenges the assumption that history is relevant only to identifying the type of conduct protected by the Second Amendment. Instead, he argues that a historical analysis should also guide judgments about the circumstances in which states can enact laws limiting Second Amendment rights.

In particular, Ulrich emphasizes that a historically grounded interpretation of the scope of Second Amendment protection must recognize the longstanding judicial acceptance of laws that limit individual rights in pursuit of public health and safety. In Jacobson v. Massachusetts, for example, “the Court treats the notion of infringing on individuals for the public good as well-settled in common law and constitutional analysis.” (P. 1078.) In light of this fact, a historical approach to the Second Amendment does not mean that any infringements on the right to keep and bear arms are necessarily unconstitutional.

Ulrich provides numerous examples of situations in which courts have accepted limitations on fundamental rights for public health and safety purposes. His strongest example is the quarantine power: “The right to move freely is perhaps the most important liberty interest, and yet, the authority to quarantine has been upheld by courts since the founding due to the recognition that the police power authorizes the state to take preventive measures to reduce the risk of harm.” (P. 1083.) If freedom of movement, as well as other fundamental rights, can be limited for public health and safety, “infringing on Second Amendment rights for public health and safety places it on the same level of protection as any other constitutionally protected right.” (P. 1084.)

Ulrich further shows that states’ authority to restrict fundamental rights for public health purposes is not limited to crisis situations. For example, in Zucht v. King, the Supreme Court upheld a law requiring children to be vaccinated for smallpox even in the absence of evidence that smallpox existed in the area. Zucht and other cases support states’ authority to take preventive actions to prevent public health harms before those harms have occurred.

After establishing that states’ public health powers can justify limitations on individual rights, even those that are characterized as fundamental, Ulrich next explains why efforts to reduce gun violence fall within states’ public health authority. He explains that gun violence is not simply a question of individual bad actors engaging in criminal activity, but a “far-reaching public health problem” that “can be alleviated through preventive legal measures.” (Pp. 1085-86.) Like other public health problems, he argues, gun violence has a broad impact on a variety of population health measures, with a disproportionate share of those burdens experienced by members of vulnerable groups. Moreover, the mechanisms by which gun violence operates share many characteristics with other public health threats. For example, like contagious diseases, gun violence spreads through social networks and becomes concentrated in particular populations. Finally, “there is growing evidence that the law can have a significant impact on subduing or increasing gun violence,” which “suggests government action may be warranted and constitutional in certain circumstances depending on the specifics of the regulation.” (P. 1092.)

Ulrich argues that the devastation of gun violence “likely enables a wide range of firearm regulations.” (P. 1096.) Even if the probability that a gun will cause harm is low in any individual situation, the magnitude of the potential harm is substantial. Moreover, the probability of harm increases when it is aggregated across the population. Because the magnitude and probability of harm make the states’ interest in controlling gun violence compelling, “even the application of strict scrutiny does not cripple the ability of the state to act under its police power authority.” (P. 1096.)

In order to determine whether any particular intervention is constitutionally permissible, Ulrich argues, courts must consider not only the extent to which it burdens individual’s Second Amendment liberties but also the potential public health benefits. For example, in evaluating a restriction on carrying firearms in public, “a public health law evaluation would balance the need for self-defense against the risks generated to the public by large numbers of people regularly carrying firearms in public. It may also include an inquiry into what, if anything, data suggests about the success rate of self-defense to determine whether this claim properly override the increased risk to the public.” (P. 1098.)

Ulrich’s analysis provides a persuasive rebuttal to Second Amendment absolutists. It shows that a historically grounded approach to the Second Amendment does not require striking down firearms regulations solely because they did not exist at the time the Second Amendment was ratified. The article is well worth reading by anyone concerned that the Court’s emerging Second Amendment jurisprudence leaves insufficient room for public health.

Cite as: Carl Coleman, Reconciling a Public Health Approach to Gun Violence and Second Amendment Rights, JOTWELL (December 14, 2020) (reviewing Michael R. Ulrich, A Public Health Law Path for Second Amendment Jurisprudence, 71 Hastings L.J. 1053 (2020)),

Federalism and Health Care: Lessons from State Policies on Immigrants’ Eligibility for Medicaid

Medha D. Makhlouf, Laboratories of Exclusion: Medicaid, Federalism & Immigrants, 95 N.Y.U. L. Rev. __ (2020), available at SSRN.

The allocation of public health authority in the United States across more than 2,000 federal, state and local government departments has produced a decentralized, disjointed response to the novel coronavirus disease 2019 (COVID-19). The COVID-19 pandemic also lays bare the vast inequalities in health based on race, ethnicity, and income, and how limited access to health care for some can adversely impact the many. This has brought increased attention to our federalist form of government and the merits of dividing power in the health care arena between a national government and states. Broader health care reform debates about the Affordable Care Act, a public health insurance option, and single payor raise similar questions about federalism’s role in health policy.

Medha Makhlouf’s forthcoming article, Laboratories of Exclusion: Medicaid, Federalism & Immigrants, adds an important and timely contribution to this discussion by providing an in-depth study of federalism’s role in shaping state policies on immigrant eligibility for Medicaid. The article shows how Medicaid’s cooperative federalism structure has not only failed to produce one of the cited benefits of federalism ─ better policy outcomes from state experimentation and innovation ─ but has encouraged the opposite ─ policies that favor the exclusion of immigrants from Medicaid and weaken national health policy goals. Moreover, the article shows how federalism can frustrate national policies that seek greater health equity and even exacerbate existing health inequalities.

The Article begins with a history of immigrant eligibility for Medicaid and explains its evolution to a federal framework that gives states considerable discretion to create policies on noncitizen eligibility for Medicaid. It then documents states’ wide-ranging responses under this framework. The availability of federal matching funds has enticed most states to expand coverage to lawfully present noncitizens with long-term residence (at least 5 years) and who therefore have secure pathways to citizenship. The picture is more mixed with respect to state responses to federal matching funds for other noncitizens. Some states have used available federal funds to expand Medicaid eligibility to some noncitizens, suggesting that federal funding can nudge states toward more expansive policies. Yet ideology and fiscal constraints have caused many states to forego using federal matching funds to expand coverage to other noncitizens, including children and pregnant women. Moreover, perhaps not surprisingly, very few states have elected to use state-only funds to expand coverage to undocumented immigrants, and those that have done so often adopt narrow eligibility criteria and coverage limits due to limited state budgets.

In Part II, Professor Makhlouf highlights the problems of an existing patchwork of state policies on immigrant eligibility for Medicaid that favor exclusion. After explaining how these policies reinforce health disparities among citizens and noncitizens, she discusses the public health risks and inefficiencies these policies produce. The rapid spread of COVID-19 presents an all too timely example of the spillover effects of denying noncitizens access to health care, but Professor Maklouf also notes the potential for higher rates of property and violent crimes when noncitizens’ behavioral health needs go unmet, the strain on U.S. citizens with noncitizen family members in poor health, and lower productivity among noncitizens in the workforce. In addition, states’ exclusionary Medicaid policies create inefficiencies in health care financing, as noncitizens’ poorer health from delayed and foregone care leads to unpaid emergency room and hospital care, increased Medicaid emergency funding, higher Medicaid and Medicare disproportionate hospital (DSH) payments, and cost-shifting. The Article also argues that these state policies frustrate health equity goals and illustrates the link between growing racial and ethnic diversity among noncitizens and the decreasing generosity of state social policies.

Parts III and IV situate the Article’s case study in the larger literature on federalism, and in particular legal commentators’ arguments over the strength and weaknesses of federalism in the health policy arena. Professor Makhlouf shows that rather than enable better policy outcomes through laboratories of democracy, the federalism framework for noncitizen Medicaid eligibility has produced a race to the bottom. This results in part from racial and ethnic dynamics operating at the state level that lead to exclusionary policies and greater health inequities. Fiscal constraints also prevent states from embracing federal options, either because of poor baseline economic conditions or concerns that a future downturn would make it difficult to continue state support for expansive Medicaid policies. Moreover, as the Article explains, various structural features of federalism reinforce these challenges. First, federal law requires affirmative legislative action at the state level that authorizes the expansion of Medicaid to certain groups of noncitizens. Second, siloed state-level advocacy makes it harder for organizations to advance greater health equity across states. These are important lessons for those calling for heath reforms that promote universal access and reduce health disparities.

Cite as: Jessica Lind Mantel, Federalism and Health Care: Lessons from State Policies on Immigrants’ Eligibility for Medicaid, JOTWELL (November 18, 2020) (reviewing Medha D. Makhlouf, Laboratories of Exclusion: Medicaid, Federalism & Immigrants, 95 N.Y.U. L. Rev. __ (2020), available at SSRN),

Protecting the Health of the Elderly

Like other regions in the world, Europe is being confronted with major demographic changes through decreasing birth rates and an ageing population. Although one cannot deny the advantages of the increased life expectancy, the elderly are struggling with stereotypes and facing discrimination based on age. For instance, elderly people use healthcare services disproportionally compared to younger generations, and an ageing population will further increase healthcare costs. Also, in times of public health emergencies like the Covid-19 pandemic, there is an ongoing discussion on whether the elderly should be deprioritised for admission at intensive care units due to scarcity of ventilators.

Facing such challenges, Ageing, Ageism and the Law includes the outcomes of a research project on the consequences of ageism and the role of law (enacting, enforcing and changing laws) in fighting ageism in contemporary societies.

This book is in two parts. Part one covers theories and concepts, explaining the core notions of equality and older people, ageing, vulnerability and ageism and how they can be related to law. The leading concept here is ageism. Although there are several definitions of ageism, here the authors describe ageism as: ‘negative or positive stereotypes, prejudice and/or discrimination against (or to the advantage of) elderly people on the basis of their chronological age or on the basis of a perception of them as being “old” or elderly. Ageism can be implicit or explicit and can be expressed on a micro-, meso-, or macro-level’ (P. 4.) Based on this definition, the authors start a journey to ‘explain the reasons and foundations for ageism’.

Part two addresses the legal experiences to protect the rights of elderly and the manifestations of ageism, from a European–both European Union and Council of Europe level–and international human rights perspective. EU law places age in anti-discrimination clauses both in primary law (Treaty and Charter) and secondary law (directives), although the focus is on labour relations. A more ‘horizontal’ directive, implementing the principle of equal treatment in other parts of sectors in society, has been proposed by the European Council. In addition, a range of other measures and strategies have been adopted to “combat social exclusion and discrimination” and “promote … solidarity between generations …” (Article 3(3) EU Treaty). Thus, at EU level the notion of solidarity encompasses the value of intergenerational solidarity to mutually support generations, including the elderly, by various social protection and social inclusion policies (P. 78.)

The Council of Europe operates in a different manner, fighting all forms of prohibited discrimination, including age-based discrimination and stereotyping, as covered by the European Convention on Human Rights (Article 14) and protected by the European Human Rights Court. Article 14 violations must be read together with other rights under the Convention, such as the right to respect for family and private life. An illustrative case is that of Carvalho Pinto de Sousa v. Portugal, claiming compensation in a medical malpractice case where the plaintiff’s primary injury was a loss of sensation in the vagina area. At a national level, the Portuguese Supreme Court reduced the amount of compensation for non-pecuniary damages since the plaintiff was already 50 years old and had two children, that is, ‘an age when sex is not as important as in younger years, its significance diminishing with age’. It is no surprise that the European Human Rights Court did not accept such a reasoning, based on age and gender discrimination, particularly since the national court upheld similar compensation claims of two male victims in their fifties in which the medical operation left them impotent and incontinent. In its ruling, the European Court criticised the Portuguese judiciary (all men at that time) for its sexist prejudice.

Different from the Convention, the European Social Charter (ESC) includes a specific provision protecting the rights of the elderly to social protection (Article 23), obliging state parties ‘to take measures to enable elderly persons to remain full members of society and live independently, by means of … the health care and the services necessitated by their state’. Article 23 overlaps with other social rights covered by the charter (work, education, occupation, health, social security and welfare), whereas the European Committee on Social Rights consistently held that the rights embodied in the two treaties (the Convention and the Charter) are inextricably linked, since human dignity is the core value of European human rights law. At the same time, the Committee confirmed in International Federation of Human Rights Leagues (FIDH) v. France that ‘health care is a prerequisite for the preservation of human dignity’. Examining the Committee’s Article 23 decisions and conclusions, it shows that ‘the conclusions regarding the rights of the elderly are increasing, and certain patterns can be seen, i.e. only a minority of conclusions authorise the state’s conformity with the requirement of the Charter’ (Pp. 152-3.) More specifically, the Committee emphasises the need for healthcare programmes and services (in particular primary healthcare services) specifically addressed for elderly people, and adequate palliative care services. But so far the Committee has made no explicit references to ageism, although the ESC provides a strong and powerful tool to develop the social rights of the elderly (P. 171.)

In the concluding chapter, the authors call for a more global approach to human rights violations faced by older people, as ageism is not unique to Europe. So far, ageism has only been marginally addressed by international human rights law. Prior to a new international binding treaty that focuses on older people, the authors emphasise the need for a substantive discussion on the implications of ageism on the content of such a new convention in that regard. A mere prohibition of age discrimination alongside the confirmation of other human rights will not be sufficient to tackle systemic and structural ageism (P. 189.)

Although there are strong arguments for such a new convention, at a European level the ‘elderly rights provision’ in combination with other social rights has the potential to fight ageism in various settings. What is important is that the Committee will be triggered to assess potentially discriminatory actions by state parties. A likely test case could be the Dutch Covid-19 critical care triage guideline that has age cut-offs that deprioritise or exclude the elderly. Since the Committee will focus its 2021 examination of state reports on the right to protection of health–specifically on the immediate response to the current Covid-19 pandemic–the arguably discriminatory triage guideline will be reviewed by the Committee.

To conclude, Ageing, Ageism and the Law addresses and examines a highly relevant issue in contemporary health care systems, which became even more prominent during the Covid-19 pandemic.

Cite as: André den Exter, Protecting the Health of the Elderly, JOTWELL (October 15, 2020) (reviewing Israel Doron & Nena Georgantzi (eds.), Ageing, Ageism and the Law. European Perspectives on the Rights of Older Persons (2018)),

The Profit-Maximizing Wellness Plan? Results from the First Comprehensive Randomized Controlled Trial of an Employer Wellness Program

Damon Jones, David, Molitor, and Julian Reif, What do Workplace Wellness Programs do? Evidence from the Illinois Workplace Wellness Study, 134 Q. J. Econ. 1747 (2019).

Workplace wellness programs have received significant attention in the legal literature. These programs are premised on the idea that, rather than simply covering the cost of medical care, health plans should encourage enrollees to take affirmative steps to improve their health so that less medical care is needed. Such encouragement generally takes the form of financial incentives that are provided either for taking certain actions (like filling out a health risk assessment or undergoing a biometric health screening) or for achieving specific health outcomes (such as quitting tobacco or lowering cholesterol). An explicit motivation for such plans is that they can be a piece of the cost-containment puzzle, all while encouraging an otherwise laudable goal–improved health and less sickness. Yet these programs have been strongly criticized for potentially shifting health plan costs onto those least able to afford them. Many suspect that these programs do little more than reward those already engaged in health-enhancing behaviors and may in fact shift costs onto individuals who are sick, disabled, or low-income.

To date, most empirical studies of wellness programs have been observational–simply measuring differences in outcomes between those who voluntarily choose to participate in programs and those who do not, while attempting to control for various differences between groups. But such studies are of limited use in trying to establish whether it is wellness program participation that drives such outcomes. After all, it is highly plausible that only health-motivated individuals who have the capacity to participate in a wellness program opt to do so. In What do Workplace Wellness Programs do? Jones et al. present the results of the first-ever comprehensive randomized controlled trial of a workplace wellness program. Their findings suggest that wellness programs neither lower medical costs nor improve health outcomes or worker productivity. Instead, the study suggests that wellness programs may save an employer money by helping to recruit and retain healthier workers.

The results presented in What do Workplace Wellness Programs do? are the first in a series to be published based on a randomized controlled trial that took place at the University of Illinois, where approximately 4,800 employees were randomly assigned to either the treatment group that was offered participation in a workplace wellness program, or a controlled group that was not allowed to participate. Those in the treatment group were assigned to various incentive design structures to test how differing financial incentives affected participation. A wide range of data were included in the study, including online surveys, university employment records, health insurance claims, campus gym records, and even participation records from a large community running event.

In this first article, the researchers address three key questions. The first is how financial incentives affect the level of participation in wellness programs. This factor was studied using differential financial incentives within the treatment group. The results show that increasing the financial incentive for participating in a health screening from zero to $100 raised participation significantly. Further increasing the incentive to $200 also increased participation, but at a much lower rate. In other words, financial incentives have a significant but diminishing effect on health screening participation.

The study also examined what types of employees select into wellness programs, and the findings confirm what many wellness program skeptics assumed. The study found significant advantageous selection into the wellness program. Individuals assigned to the treatment group who chose to participate in the wellness program had, in the year prior to enrolling in the wellness program, almost $1,400 less in medical spending, were more likely to have visited the campus gym, and more likely to have participated in the large community running event.

Finally, and in my view most significantly, the study evaluated the causal effects of workplace wellness programs on medical spending, employee productivity, health behaviors, and wellbeing after one year. This research question really gets to the heart of wellness programs. Do they do what they claim to do? Yet again, the results here are damning. The study found no statistically significant effects for 37 of the 39 outcomes measured, which addressed various aspects of medical spending, employee productivity, health behaviors, and self-reported health. The two significant treatment effects were both based on follow-up survey results. The first was that employees in the treatment group were more likely to report that they had ever received a health screening, while the second was that the treatment group was more likely to report that management places a high priority on worker health and safety.

While this study examined effects at one employer after only a single year of wellness program participation, I nevertheless believe its findings are hugely important. Most large employers offer a wellness program and do so at a significant cost. Yet the results of this study suggest that relatively healthy and high income employees participate in such programs at a higher rate than relatively sick or low income employees, and that among such voluntary participants, the only significant outcomes are increased participation in health screening and a greater belief that the employer cares about worker health and safety. If these findings are generalizable, why would employers continue to offer such programs? The study authors posit one possible rationale for so doing: to recruit and retain a healthier employee population. A wellness program can be profit-maximizing even in the absence of any direct effects on health, productivity, or medical spending if the employer can shift even a relatively small percentage of its employee population to this healthier, wellness plan-valuing group that comes in with average medical expenses almost $1,400 less than employees who do not participate in such plans. The implications here are weighty, and present a rich area for further study.

Cite as: Amy Monahan, The Profit-Maximizing Wellness Plan? Results from the First Comprehensive Randomized Controlled Trial of an Employer Wellness Program, JOTWELL (September 15, 2020) (reviewing Damon Jones, David, Molitor, and Julian Reif, What do Workplace Wellness Programs do? Evidence from the Illinois Workplace Wellness Study, 134 Q. J. Econ. 1747 (2019)),

Addressing the Tension between Discrimination Law and Pandemic Clinical Triage Protocols

  • Samuel R. Bagenstos, May Hospitals Withhold Ventilators from COVID-19 Patients with Pre-Existing Disabilities? Notes on the Law and Ethics of Disability-Based Medical Rationing, 130 Yale L. J. Forum __ (forthcoming, 2020), available at SSRN.
  • Deborah Hellman & Kate Nicholson, Rationing and Disability in a State of Crisis (Apr. 16, 2020), available at SSRN.

With the COVID-19 pandemic wreaking havoc in health care systems around the world, many jurisdictions have recently drafted or dusted off old clinical care triage protocols to facilitate decision-making when surges in infection rates overwhelm hospitals’ Intensive Care Units (ICUs). Not surprisingly, most of these policies reflect a utilitarian approach. Law and ethics policies generally endorse the notion that a pandemic or other large-scale threat to society requires efficient action by governments, which may involve a curtailing of individual rights. A growing chorus of academic commentators and human rights organizations have voiced concern that the focus on ‘saving the most lives’ embedded in triage policies, and particularly how these policies hope to achieve this, clashes with discrimination law, and particularly the rights of people with disabilities. Of a near-tsunami of blogs, op-eds, and commentaries in the legal, bioethics, and medical literature, forthcoming law articles by Samuel R. Bagenstos, and Deborah Hellman and Kate Nicholson stand out for how they discuss what the demands of equity imposed by discrimination law require, and how they each give us some idea of what accommodation in clinical triage protocol policies could look like.

Triage protocols are intended to solve the clash of commitments among physicians, when they are no longer able to give all patients the care they would normally feel duty-bound to provide. They introduce selection criteria for access to care (particularly ventilators, which I will focus on later), explicitly based on concepts of utility, fairness, proportionality, and reciprocity; and also decision-making procedures built around triage committees. Triage protocols deal with life and death decisions, or a least with who will receive an albeit limited chance of survival, since survival rates of those put on a ventilator for COVID19 appear troublingly low. The disability community has raised particular concerns about those protocols that mention specific disabilities as disqualifying conditions. These concerns flow from a historical experience with deprioritization and broad problems of equitable access to health care; concerns that have been heightened by the disproportionate impact of the pandemic. But even protocols claiming to be purely based on clinical prognoses and prediction of mortality have come under scrutiny because of their disproportionate impact on people with disabilities and other disadvantaged groups.

One of the key questions addressed in the emerging literature is whether, and to what extent, system and public interest-focused triage planning can be reconciled with the equal rights of people with disabilities. Most prominent has been a debate for the Yale Law Journal Forum between Samuel R. Bagenstos and Govind Persad. Both agree on some points: they reject quality of life assessments for triaging, and are concerned about biases and unsupported assumptions about people with disablities. But Persad supports broad triaging and accepts that some people with disabilties should be deprioritized based on ‘evidence-based’ assessments of likelihood of benefit. He argues that triage policies are the most efficient way to save more people, including more people with disabilities, as well as more overall “life years”; and that disability advocates should instead focus on reducing the scarcity of ventilators. Bagenstos supports only a limited form of triaging, namely exclusion of people who are unlikely to survive treatment, with other selection criteria such as random selection to prioritize all others.

Bagenstos’ discussion focuses on why the use of disabilities as a category for exclusion constitutes discrimination based on disability under the Americans with Disabilities Act and the Affordable Care Act. He starts with an analysis of the key legal requirements for a finding of discrimination: in order to be protected under the law, a person must fulfill the essential eligibility criteria for life-saving ventilation support (i.e. must be ‘qualified’ for this form of medical care). Bagenstos highlights the danger of deeming a “comparative ability to benefit” to be a proper qualification standard in triage policies if it excludes people with disabilities from accessing ventilators [based on calculations that their lives are ‘worth less’].

In this discussion, he points out how the restrictions imposed by disability law help counter the well-documented influence, in the provision of health care, of ‘outside’ (read ‘ableist’) views of the quality of life of people with disabilities. For Bagenstos, objective, well-documented medical evidence that a person with a disability will not benefit at all from receiving ventilator support can be the basis for a legally valid disqualification. He warns, however, that we should remain vigilant even when exclusions are based on medical facts, because distorted estimates of survival chances may insert bias into these ‘objective’ assessments. He therefore not only calls for a categorical rejection of specific disabilities as a sufficient basis for exclusion, but also pushes for procedural safeguards that protect against biased assessments. As a component of the duty to accommodate under discrimination law, he also suggests that “medical systems [should] take steps to ensure that those who are not qualified for life-saving treatments can become qualified.” Of further interest, Bagenstos situates the legitimacy of triage exclusions in the context of the broader goal of discrimination law: compensation for the challenges caused by underrepresentation of people with disabilities among health professionals who control the decision-making process, and for the barriers they face for full participation in democratic processes that shape our health care system.

In a paper focusing on policies that appear neutral (i.e: without any explicit disability-based exclusions), Deborah Hellman and Kate Nicholson go even further than Bagenstos. In Rationing and Disability in a State of Crisis, they conclude, albeit “cautiously,” that any policy that results in excluding people with disabilities from accessing life-saving care fails to satisfy the equity requirement embedded in anti-discrimination law. Like Bagenstos, they rightly situate the debate in the context of the broad purpose of anti-discrimination law, namely rectifying the structural inequities that are built into our society, including in the health care system. The paper stands out for its detailed comparison of the degree of incompatibility between four common rationing principles and the demands of equity that undergrid anti-discrimination law.

Hellman and Nicholson’s discussion of the historical use of ‘quality of life’ is interesting, but less important in this context. Few (if any) current pandemic triage policies put forward post-ventilation quality of life as a criterion for access, and rightly so, since the use of stereotypical ableist quality of life presumptions clearly runs counter to the core goal of anti-discrimination law. The three other key principles they consider (efficiency, probability of success, and life expectancy) are of greater relevance in the present context.

With respect to using life expectancy as a triage criterion, they acknowledge that there are ethical arguments in support of favoring young people over old (providing an opportunity for a full life; and giving the young a fair share of resources). But they rightly point out that policies allowing calculations based on life expectancy (so those that do not just favor young over old) will have a particular and disparate impact on people with disabilities, many of who have shorter life expectancy. A life-expectancy criterion is thus inherently suspect under anti-discrimination law.

Further to this, the authors argue that even efficiency and probability of success, the criteria with the most neutral associations to the core purpose of triaging (saving the most lives), are in tension with discrimination law. Of the two, probability of success of ventilation treatment in individual patients, which is expressed in percentages of survival chances, is most problematic for them because it involves a comparison of two persons who need to be treated as equals. Under anti-discrimination law, treating them as equals requires ensuring a disabled person (who, for example, might only have a 30% chance of survival, compared to another person with a 50% chance) an equal chance of access to a service that may save their life.

For Hellman and Nicholson, triaging based on efficiency is morally preferable because it does not amount to explicitly weighing the life of one person in need of care against another’s. For instance, efficiency aims to provide ventilator support to more people, by favoring those who are more likely to benefit quickly. Although both ultimately save more lives and are somewhat similar in outcome (and in my view overlap significantly—I still have difficulty disentangling the two in some practical examples, and I think they will most often be jointly used), efficiency is based on statistical numbers: how many will benefit, not which of the two people before us will most likely benefit. It thus constitutes a less direct disadvantage for people with disabilities. However, Hellman and Nicholson conclude that even efficiency-focused protocols risk running counter to the duty to accommodate that is embedded in discrimination law, for instance when they fail to take into consideration that people with a disability may require more time on a ventilator than a neutral efficiency-based time limit would allow.

Both the Hellman and Nicholson and Bagenstos papers recognize that discrimination law leaves room for some level of efficiency and practicality, though they seem to slightly disagree on how to balance these with the duty to accommodate. Both also discuss anti-discrimination law’s discomfort with broad categorizations, and its emphasis on the need for individualized assessments, which are needed to allow individuals to escape the statistics that would otherwise categorically exclude them from access to care. One particularly compelling aspect of their analysis lies in their emphasis that the approach of ‘saving more lives,’ embedded in triage policies, is fundamentally in tension with the ameliorative purpose of discrimination law. This is an implicit rebuttal to those who suggest that since more people with disabilities will benefit from efficient triage policies than be harmed, triaging focused on saving most lives is fundamentally compatible with anti-discrimination law. Indeed, the concept of equity embedded in discrimination law requires us to look beyond a mere utilitarian calculation of degree of benefit and numbers of people benefiting. They impose a duty to consider how to compensate for structural inequities in the first place.

But how far we can and should go with accommodation in relation to access to ventilators remains to be further explored. Are there other ways than the example Hellman and Nicholson give of permitting a person with disabilities more time on a ventilator if that will provide the person a fair chance of survival? When does accommodation become so unpractical that it really undermines the ability of the health care system to reasonably cope with a shortage? For instance, a recent paper in the medical literature makes an interesting suggestion to compensate for the broader background inequity in health care by “weighing triage scores with an area deprivation index that accounts for social determinants of health.” That would accommodate many people living in communities (particularly in large urban centers) that have been disproportionately affected by the pandemic, and seems to align with the demand for equity. Could there be a similar scale that accounts for the broader inequities that many people with disability face? Such a score could be part of an ameliorative scheme for people with disabilities that may compensate for the lower priority score on triage policies that they would otherwise receive. But do these suggestions not risk becoming so unpractical that they exceed what accommodation can require? Will they even be concretely implemented? In conversations I had with emergency physicians on the topic of pandemic triage protocols, the message was that if protocols become too complicated, physicians will find a way around them, particularly when the rubber hits the road. The authors of the papers discussed here appropriately emphasize that we have to accommodate people with disabilities, even within a context of pandemic triaging. But more work can and needs to be done in thinking about the concrete implementation of accommodation measures.

The papers discussed here will undoubtedly inspire those with a particular interest in disability rights and pandemic health care policies. But they should also be of interest to all those thinking about the relation between individual health rights and broader health systems planning.

Trudo Lemmens, Addressing the Tension between Discrimination Law and Pandemic Clinical Triage Protocols, JOTWELL (July 8, 2020) (reviewing Samuel R. Bagenstos, May Hospitals Withhold Ventilators from COVID-19 Patients with Pre-Existing Disabilities? Notes on the Law and Ethics of Disability-Based Medical Rationing, 130 Yale L. J. Forum __  (2020); Deborah Hellman & Kate Nicholson, Rationing and Disability in a State of Crisis, available at SSRN),

Our Reinsurance Moment

Govind Persad, Expensive Patients, Reinsurance and the Future of Health Reform, 69 Emory L.J. __ (forthcoming, 2020), available on SSRN.

We are in the midst of a health reinsurance “moment” right now. The idea of reinsurance, and in particular, government-sponsored reinsurance, rises to the fore in cycles, and our current rash of state-based reinsurance proposals signals that we’re in the ascendant phase. Reinsurance is at once a clever technocratic device but also a powerful conceptual frame. In the health context, government-sponsored reinsurance can take the form of a policy where the reinsurer, in this case the government, assumes the obligation to pay claims incurred by a given beneficiary once those claims exceed an annual attachment point. CMS has, for example, built in a de facto reinsurance policy for ACA plans, kicking in 60% of medical costs for any ACA plan enrollee who has incurred over a million dollars in claims. As you can see from this example, the primary insurers with this reinsurance protection are partially shielded from the risks of large catastrophic claims requiring excessive capitalization.

But government reinsurance also represents the distinctive structure of public-private power in our era.  How is risk backstopped today, and under what conditions? When does an outcome count as catastrophic such that our existing risk management institutions cannot be expected to absorb it or hold reserves to meet it? Who gets a bail-out, and who must take the consequences of their bad bets? The question of who enjoys government reinsurance is a lens that helps us penetrate many of the mysteries of our current political situation.

Part of my engagement with the reinsurance moment is the pleasure I take in discovering interesting writing, past and present, on the subject of reinsurance. A new and enjoyable entrant in this category is Govind Persad’s new article, Expensive Patients, Reinsurance, and the Future of Health Care Reform, forthcoming in Emory Law Journal.

Persad’s article starts with what I think of as his signature concern, that of expensive medical care that threatens to burst the limits of our health care resources. He then threads his way through to reinsurance as the corresponding tool for both mustering funds for this expensive care while spreading costs in such a way as to keep us within the resource horizon.

What to do about those expenses is, Persad rightly argues, a normative question, rather than a matter of expedient technical design. Others have analyzed the technical virtues of reinsurance. Persad provides a tripartite framework for the normative analysis. He identifies three interlinked considerations for fairly addressing the costs of expensive patients: 1) the breadth of cost-spreading, across a larger or smaller risk pool 2) the bounded scope of the treatment whose costs are shared in this way, and 3) progressivity of the incidence of those shared costs. Persad contends that broad sharing is justified to counteract brute bad luck, but the scope of what is shared must be closely bounded under Dworkin’s “hypothetical prudent insurance” ideal to avoid unfair economic burdens especially upon those who suffer the brute bad luck of poverty. But he then observes that if the economic load of expensive care in this highly inequitable world could be arranged progressively, strict boundedness can be somewhat relaxed, since the wealthier can be justly asked to absorb much of the burden.

And a policy of progressively financed, government-sponsored reinsurance to backstop our various fragmented insurance pools is precisely the device that can achieve these three conditions at once:  breadth of sharing and progressivity of economic contribution, thereby allowing a looser boundedness that frees us from painful decisions about withholding expensive care.

There is much I agree with and much I disagree with throughout the piece, which itself is teeming with fact and argument. Indeed, the density of ideas is what I most enjoyed about the piece—and reading it was like running my own thinking through a clarifying sieve.

Here are some things I agree with. Plaudits to Persad for pushing back on the tendency of reinsurance proponents to dismiss, or even invisibilize the burdens and trade-offs. Reinsurance lends itself to this kind of avoidance. It can seem like the proverbial free lunch where everyone eats and no one pays.  Hence the focus on its technical virtues: reinsurance certainly benefits the high-cost patients to whom it is targeted, but it also makes insurance more affordable for low-cost, low-risk, and financially straitened patients in at least four ways. First, insofar as primary insurers cede certain catastrophic claims to the government, the state is injecting a public subsidy. Second, even if reinsurance were financed purely through insurer fees, reinsurance reduces the primary insurers’ risk, and thereby reduces their need to load on a risk premium. Third, primary insurers with reinsurance need not incur or pass-on the administrative costs associated with aggressive risk selection designed to avoid high-risk individuals.  And, finally, to the extent that risk stabilization helps to, as John Jacobi describes it, “induce private plans to participate in precarious individual and small group markets,” this may foster price competition that exerts downward pressure on premiums.

But the headroom to be gained from reinsurance is not infinitely elastic and it is indisputable what Persad points out: “The imposition of small burdens on many in order to help a few greatly is contested in ethical theory, and its endorsement may rest on cognitive limitations in visualizing the magnitude of the population who experience the small burden.” Moreover, the spiraling expense of these treatments is not a given but a function of political will. As Persad says, “The number of patients with yearly claims over a million dollars rose by 87% from 2014 to 2017.”He pegs many of the expensive treatments as “halfway technologies,” incentivized by policies and exclusivities that misprioritize the targets of pharmaceutical development. How can extortionate pricing for this marginally valuable care justify financial burdens on every single enrollee or taxpayer? Yet the government, having created this covariate cost risk through its regulatory abdication, may through reinsurance simply pass-on the cost. I think of Colombia in the late 1990’s and early aughts, when pharmaceutical companies opportunistically sponsored patients with dire health needs, typically of higher socioeconomic status, to sue successfully for state coverage of treatments like the newest brand-name cancer drugs of marginal efficacy, while the public benefit package was strained to the point of excluding key preventive vaccines. Reinsurance is not immune to that dynamic, and we need vigilance on that front.

Assuming the greater upstream regulation that Persad proposes to curb misdirected technological development, I take a somewhat broader view of who benefits from reinsurance. The trade-offs to me are not so crisp, insofar as the “many” who bear small burdens also benefit from advantages of mutuality. These advantages are ones that prevailing methodological individualism sweeps behind its own cognitive limitations, behind the temptation to fetishize individual choices, despite Dworkin’s heroic attempts to correct for their inevitable short-termism and other biases. The “many” who bear the burden now can easily become the catastrophic “few,” as the Health Care Cost Institute clearly showed in the 2018 study Persad cites in the article’s first paragraph. But even supposing any one of us manages to run the entire gauntlet without brushing up against a medical cost catastrophe, all of us, in the meantime, benefit from the knowledge that those in our community do not suffer from avoidable pain or fear, as that pain or fear could just as well be ours.

Christina Ho, Our Reinsurance Moment, JOTWELL (September 9, 2020) (reviewing Govind Persad, Expensive Patients, Reinsurance and the Future of Health Reform, 69 Emory L.J. __ (forthcoming, 2020)),