The Impact of the Affordable Care Act on Drug Trafficking

The Impact of the Affordable Care Act on Drug Trafficking

Colin Ross[*]

 

Forget the Tea Party—it’s international drug traffickers who truly fear the successful implementation of the Affordable Care Act. The law of supply and demand makes it clear why. Traffickers service, and help create, the American demand for illegal drugs such as cocaine, heroin, and methamphetamine. In 2010, about 1 million Americans suffered from cocaine dependence or abuse; about 350,000 suffered similarly from heroin.[2] Those customers send a steady stream of cash that keeps traffickers well-armed, equipped, and funded. We see the devastating effects of that cash flow when traffickers fight their rivals in bloody battles on Mexican streets or brazenly assassinate top prosecutors in Honduras.[3]

No one could fault the United States for lacking enthusiasm in combatting the international drug trade. But that enthusiasm is usually directed at drug supply—arrests, interdictions, seizures, Miami Vice. Squeezing supply can keep demand in check by making drugs far more expensive and far less accessible than they would be in a legal market—and it has.[4] But the remaining demand is large enough to keep the traffickers prosperous. But were this persistent customer base to begin to erode, traffickers would be in trouble.

Meanwhile, in the hallowed halls of the United States Congress, the Affordable Care Act (ACA) enters the picture. If you didn’t know that the Act deals directly with the nation’s drug problem, join the club. The relevant parts of the law have garnered hardly a mention in most media outlets; they do not have the drama of a drug bust or a shoot-out.

But deal with our drug problem the law does, by targeting what we have too often neglected: drug demand. The fundamental idea is simple: drug abuse and addiction are deeply unhealthy and often self-destructive afflictions; the more people who have health insurance and can afford regular, and preventative, medical care, the more people who will be able to keep addiction out of their lives.[5] Because healthcare is more than resetting your broken leg or being told to go for a jog. Treatment for mental problems and substance abuse (the two are often closely related) is crucial.[6]

The ACA recognizes this by classifying mental and substance coverage as essential benefits that most new health policies must include.[7] And the substance and mental coverage must be comparable to the more standard medical and surgical coverage—this is referred to as the law’s “parity” provision.[8] Americans with health problems that often stem from or lead to the heavy use of illegal drugs will be better able to get the help they need and cease being customers of the traffickers. As far-reaching as the change may be, it is hardly radical. Parity was first put on the books in a 2008 law,[9] but because substance and mental coverage itself was not mandated, the impact was limited.

As you’ve probably heard, and possibly benefited from, the law also allows young adults to remain on their parents’ insurance plans until they are 26. This gives them healthcare in the critical years when virtually all addicts first turn to drugs. And the ban on excluding people with pre-existing conditions?[10] Being formerly addicted to cocaine is one heckuva pre-existing condition. But if we are to significantly reduce drug demand by treating addiction and preventing relapses, it is people with that type of condition that we most need to bring into the healthcare fold.

The law casts an even wider net in search of preventable and treatable addictions with its screening, intervention, and treatment referral program, known as SBIRT.[11] As with much of the rest of the law, the idea of SBIRT is to invest in a modest amount of preventative care to avoid serious health problems down the line. Screeners at sites such as health clinics and emergency rooms will automatically evaluate patients’ alcohol and drug use. They can then offer advice and information if they detect signs of substance abuse, or grant treatment referrals in severe cases.

Some have criticized the new provisions, especially parity, on the grounds that they will increase costs.[12] In the short-term, these critics are probably right. Better insurance costs more.

But we all are already paying under the status quo, in both economic and moral costs—for the addiction of our fellow citizens, for the wasted potential, for the resulting crime, and for the violence in drug source and transit countries. To not act is to accept those costs.

But the Act is on the ropes now, threatening to collapse under the weight of technical problems and misleading presidential rhetoric. Will it? The traffickers can only hope.


[*] J.D. Candidate, Harvard Law School, 2016.

[2] Substance Abuse and Mental Health Servs. Admin., U.S. Dep’t of Health and Human Servs., Results from the 2010 National Survey on Drug Use and Health: Summary of National Findings 71 (2011).

[3] See Patrick Corcoran, ‘30 Killed’ in Gunfight as Mexico State Heats Up, InSight Crime (Aug. 31, 2012), https://www.insightcrime.org/news/analysis/30-killed-in-gunfight-as-mexico-state-heats-up/ [https://perma.cc/8FSW-4VKQ]; Marguerite Cawley, Honduras’ Top Anti-Money Laundering Prosecutor Murdered, InSight Crime (Apr. 19, 2013), https://www.insightcrime.org/news/brief/honduras-top-anti-money-laundering-prosecutor-murdered/ [https://perma.cc/Z98T-RJVW].

[4] See Peter Cohan, Is it Time to Legalize Illicit Drugs?, Forbes (July 9, 2012), https://www.forbes.com/sites/petercohan/2012/07/09/is-it-time-to-legalize-illicit-drugs [https://perma.cc/8K3X-F7WE].

[5] See generally Keith Humphreys, The Dramatic Arrival of Health-Oriented Drug Policy, The Reality-Based Community (Mar. 11, 2013), http://www.samefacts.com/2013/03/drug-policy/the-dramatic-arrival-of-health-oriented-drug-policy/ [https://perma.cc/5PDU-6HAS].

[6] See Jun Yan, Survey Finds Substantial Overlap of Mental Illness, Substance Abuse, Psychiatric News (Aug. 3, 2012), https://psychnews.psychiatryonline.org/doi/full/10.1176/pn.47.15.psychnews_47_15_8-a [https://perma.cc/Y982-2TQB].

[7] Kirsten Beronio, Rosa Po, Laura Skopec & Sherry Glied, Affordable Care Act Expands Mental Health and Substance Use Disorder Benefits and Federal Parity Protections for 62 Million Americans, U.S. Dep’t of Health and Human Servs. (Feb. 20, 2013), https://aspe.hhs.gov/report/affordable-care-act-expands-mental-health-and-substance-use-disorder-benefits-and-federal-parity-protections-62-million-americans [https://perma.cc/NH6G-X2Q9].

[8] Jeffrey A. Buck, The Looming Expansion And Transformation Of Public Substance Abuse Treatment Under The Affordable Care Act, HealthAffairs (Aug. 2011), https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2011.0480 [https://perma.cc/X5V6-32UE].

[9] Mental Health Parity and Addiction Equity Act of 2008, Pub. L. No. 110-343, 122 Stat. 3765.

[10] See Jesse Singal, Why You Should Care About Obamacare, The Fix (Apr. 3, 2012), https://www.thefix.com/content/obamacare-supreme-court-addiction-treatment-decision8921 [https://perma.cc/3ZXU-32JE] (“Almost everyone who develops an addiction to alcohol or tobacco or to other drugs does so in adolescence or in young adulthood . . . .”).

[11] SBIRT: Screening, Brief Intervention, and Referral to Treatment, SAMHSA-HRSA Center for Integrated Health Solutions, U.S. Dep’t of Health and Human Servs., https://www.integration.samhsa.gov/clinical-practice/sbirt [https://perma.cc/D7JC-25WQ].

[12] See J.D. Tuccille, Mental Health Parity is a Nice Obamacare Gesture, With a Big Price Tag, Reason: Hit & Run (Nov. 13, 2013, 12:16 PM), https://reason.com/blog/2013/11/13/mental-health-parity-is-a-nice-obamacare [https://perma.cc/SZ6N-6SUW]; Merrill Matthews, New Mental Health Mandate Will Make Obamacare More Expensive, Increase Fraud And Canceled Policies, Forbes (Nov. 11, 2013), https://www.forbes.com/sites/merrillmatthews/2013/11/11/new-mental-health-mandate-will-make-obamacare-more-expensive-increase-fraud-and-canceled-policies/ [https://perma.cc/DNG2-DVH8].

Rosie the Riveter Cuts the Cap

Rosie the Riveter Cuts the Cap

Jenna Tynan[*]

 

This year, Harvard Business School celebrates the 50th anniversary of its first coed class.[2] This effort to break gender barriers in education was just one piece of the greater movement (advanced through direct action, judicial decisions, and legislation) to enhance the status of women in the business community. The next legislative advance for female entrepreneurs comes from an unlikely source: The National Defense Authorization Act of 2013 (NDAA).[3]

The specific provision in the 600-plus-page document eliminates caps on contracts set aside for Women-Owned Small Businesses (WOSB) and Economically Disadvantaged Women-Owned Small Businesses (EDWOSB). Previously, contracting officers could only set aside contracts valued less than $6.5 million for manufacturing and $4 million for all other industries. Proponents believe that government agencies will be in a better position to meet the statutory goal of WOSBs representing no less than 5% of federal contracting and subcontracting revenue.[4] But should women business owners celebrate because the NDAA has cut the cap?

The legislation provides an example of how the law of unintended consequences may thwart otherwise favorable efforts. The legislative history itself fails to indicate dubious intentions: Senator Olympia Snowe (R-Me.) proposed the amendment, which was co-sponsored by six senators (Democrats and Republicans, male and female).[5] However, this change may not favor female small business-owners as expected. First, the number of contracts set aside for women-owned small business concerns may dwindle as agencies meet representation goals with a few big-ticket procurements. In essence, the same amount of contracting funds may become concentrated in a few WOSBs. If these businesses remain under revenue thresholds for their procurement category, a WOSB oligopoly could ensue, thereby restricting the competition the amendment sought to enhance. However, considering the practical context of government procurement, this result is highly unlikely to occur: “small business” definitions prevent, perhaps imperfectly, such concentration.

The more interesting result involves an ancillary amendment in the NDAA that changes how subcontracting is calculated for “similarly situated entities.”[6] Small business “set aside” contractors generally cannot subcontract out more than 50% of a contract’s value. However, the amendment now treats activities subcontracted to “similarly situated entities” (i.e. other women-owned businesses) as “prime activities” (i.e. not subcontracted) for purposes of the threshold. What’s the issue? Assume Rosie Rivets (a WOSB) wins a $10 million contract, but that Rosie Rivets subcontracts 70% of the project to Betty Builders (another WOSB). There’s no problem yet, as both contractors are promoting the legislation’s goals. Now assume that Betty Builders subcontracts out 90% of its tasks to Big Boys, a standard company (i.e. not a small business and not women-owned). Because the amount contracted to Betty Builders is treated as “prime” no subcontracting flag is raised.  As a result, Rosie Rivets walks away with $3 million in revenue, Betty Builder with $700,000 and Big Boy’s wins the lion’s share of $6.3 million.

Many protections against this type of gaming do exist. For example, contracting officers are not impelled but merely allowed to set aside higher contracts. Moreover, procurement regulations and/or the fact that economic benefits from the arrangement would be minimal may further restrict gaming on the behalf of larger contractors. Thus, well-intentioned legislation may result in unexpected consequences, but for now, Rosie has indeed cut the cap.


[*] J.D. Candidate, Harvard Law School, 2016.

[2] 50 Years of Women in the MBA Program, Harvard Business School (last updated Apr. 17, 2013), http://www.hbs.edu/women50/ [https://perma.cc/GU4S-3VRT].

[3] National Defense Authorization Act for Fiscal Year 2013 (“NDAA”), Pub. L. 112–239, 126 Stat. 1632.

[4] See Press Release, United States Small Business Administration, SBA Announces Changes to Contracting Program For Women-Owned Small Businesses (Jan. 17, 2013), https://www.sba.gov/about-sba/sba-newsroom/press-releases-media-advisories/sba-announces-changes-contracting-program-women-owned-small-businesses [https://perma.cc/7GVP-CNRA].

[5] See S. Amdt. 3218, 112th Cong. (2012) (agreed to in Senate by voice vote, Dec. 3, 2012).

[6] See NDAA § 1651(e)(2)(C), 126 Stat. at 2081 (2013) (codified as amended at 15 U.S.C. § 657s).