America is choking on COVID-19
Administrative roadblocks created by Republicans hinder pandemic response
Today, we speak of pigs and pythons: Specifically, we discuss the mechanics of what moves a whole pig through the intestinal tract of a python.
It’s all a metaphor for governmental capacity, not serpentine digestion.
Like most pithy phrases, this one was stolen from another author. Michael Grunwald memorably used it in his book The New New Deal, about the American Recovery and Reinvestment Act (ARRA) of 2009 — more commonly known as the Obama stimulus.
The idea is passing legislation is only the first part of policymaking. In order to execute it, governmental capacity has to be available to implement the policy. The policy is the pig — the administrative agencies that have to process it into something useful are the python. The bigger the pig, the bigger the python you need to digest it.
Grunwald argues convincingly that the ARRA anchored Obama’s policy legacy by delivering on a large set of his campaign promises. For example, it incorporated a massive set of changes that supercharged the clean-energy revolution in the U.S. — just at the point it looked like the 2008 financial collapse would snuff it out.
But one of the underplayed keys to the ARRA’s success Grunwald discusses extensively was the Obama team effectively using the administrative capacity of the U.S. government to quickly get stimulus money out the door to the entities that needed it. For example, Grunwald analyzes in great detail how the Obama team brought in a new chief to energize a sleepy neglected section in the U.S. Department of Energy. That section was then able to work with states to efficiently award hundreds of millions of dollars in weatherization grants to individuals who needed them. That result employed thousands of workers to install energy-efficiency improvements, which in turn that would help poor renters and homeowners save on their power bills and cut greenhouse emissions.
Multiply that across dozens of successful efforts spanning the breadth of the federal government: shoring up state Medicaid programs, expanding and improving unemployment insurance, food stamps and homelessness programs, creating a massive alternative energy R&D program (APRA-E), shoveling money into needed infrastructure repair projects, and a new competitive funding program (TIGER) to concentrate on innovative transport projects that had been falling through the cracks. Oh, and add a highly effective oversight mechanism that balanced between allowing money to get out relatively quickly while still creating transparency and combatting fraud. That oversight effort was coordinated by this guy; maybe you’ve seen him in the news recently on occasion.
During the COVID-19 crisis, we face a similar need to quickly distribute aid to effectively combat twin challenges: the rapidly spreading virus, and economic collapse that is accompanying it. The problem is that actions that have been taken by governors (primarily Republican) and the Trump administration over the last several years have been designed to limit administrative capacity. Why? Simple: A large, professional, efficient bureaucracy focused on serving people in need is every effective at maximizing the people enrolled in a program. A program that is understaffed, hampered by low levels of technical resources or focused on enforcing barriers to entry will minimize enrollment.
Take Medicaid, the federal-state health program that covers the poor. One of the major changes that the Affordable Care Act quietly mandated was that states massively simplify the application and enrollment process. States had to allow people to apply in person, through the mail, online and by telephone. Additionally, they had to implement a “no-wrong-door” policy, by which individuals who maybe called the food-stamps office to apply for Medicaid had to be forwarded over to Medicaid and helped to apply. Other paperwork was cut as well: states were supposed to eliminate asset-tests that forced people to prove. The result led to a much more cost-efficient process that helped more people get Medicaid who needed it.
The Trump administration has attempted to reverse these gains through rulemaking. The Centers for Medicare and Medicaid Services (CMS) have encouraged states to apply for waivers that would force some recipients to prove they were engaged in employment-related activities. As a result, many applicants now again have to provide more paperwork, more often, to balky technical systems. The administrative friction keeps many people from enrolling in the program even if they are eligible. Work requirements in multiple states have been ruled illegal thus far in federal court, and the final state attempting to enforce them, Utah, has finally suspended them for the duration of the COVID-18 emergency. But damage has been done.
The business closures, stay-at-home orders and social-distancing requirements mandated as a public health response to COVID-19 have caused a sudden, sharp economic recession in the United States, which has led to millions of layoffs every week since the middle of March. As a result, millions of workers are filing for unemployment insurance every week, which is an order of magnitude more than rates under previous economic downturns dating back to the beginning of data series at the U.S. Department of Labor.
This unemployment spike creates several problems. Most directly for health care, job losses in the United States often lead to individuals losing their health insurance. That in turn, drastically decreases their ability to access health care, which is often rather useful to have in a pandemic.
The good news is that under the ACA, individuals that lose their jobs automatically have a grace period to enroll in heavily subsidized individual coverage plans sold on the state insurance exchanges. although the general open enrollment isn’t until the fall.
But there’s a catch.
Most states have let the federal government run their exchange through healthcare.gov. Originally, individuals applying simply had to state that they had just left their job as a life change and proceed with the application, subject to a potential future check. However, in 2017, the Trump administration implemented a new rule that required applicants to submit proof of a job loss, which then needed to be certified by staffers.
Before COVID, Healthcare.gov staffers processed 60,000 a week.
During the last two weeks of March, 10 million people applied for insurance on healthcare.gov due to job losses.
This is slightly less than ideal, and quickly overwhelmed everyone.
The needless 2017 regulation threw an unnecessary roadblock in front of people trying to maintain health insurance coverage in a pandemic. Like work requirements, it also wasted the time of valuable administrators with checking documentation instead of having them improve access.
On April 21, The federal government finally relaxed the requirement to provide written proof of a job loss or other life event that would allow for a special enrollment period, but only after several weeks of spiraling unemployment. Nor has the federal government offered a general special enrollment period so anyone can apply, as every state that runs their own state health insurance exchange has done, save one (Idaho).
But many state unemployment insurance portals simply can’t keep up with the demand. Few were designed to process the massive number of applicants, which is understandable. Less understandable is that some states have intentionally designed their unemployment systems to make it extraordinarily difficult to apply for unemployment benefits, to keep taxes lower and make governors look good by keeping the unemployment rate artificially low. The poster child for this sort of “success” is Florida, which drastically cut the capacity of its unemployment system to process claims in a timely manner while also chopping the maximum benefit in 2011, under Republican then-governor and current Senator Rick Scott. (We also should note that some states have done better than others, like Pennsylvania and the administration of its Democratic governor Tom Wolf )
As the United States attempts to swallow the COVID-19 pandemic and its accompanying economic crisis, both the federal and states governments need to prioritize maximizing administrative capacity to most quickly react to the crisis. Whether it be from misguided ideology, pervasive incompetence or both, The Trump administration and many Republican governors’ failures to manage administrative state will inflict staggering amounts of economic and human damage.
