Category: reason

Will Trump’s New Travel Restrictions Help Combat Coronavirus?

Even advocates of open borders can support reasonable temporary travel restrictions to protect the public from extreme health threats. And the coronavirus pandemic certainly fits the bill. But how effective will President Donald Trump’s new travel “ban” be?

The answer isn’t clear yet. At this stage, experts are deeply divided.

Here’s the background. Trump restricted travel from China and Iran, the first countries to be hit with the virus, on January 31. This week he extended the restrictions to the 26 countries in the European Union’s Schengen region, where citizens can travel freely across national borders without visas or passports. People in these countries—or all those who have visited them in the last 14 days—will be banned from the United States for the next 30 days, starting tonight. Americans and U.S. permanent residents who clear a screening are exempted from the ban. (The ban does not cover the United Kingdom, which is not part of the Schengen region, though the U.K. has roughly 500 confirmed cases of the virus. That’s the same as Sweden, which is among the banned countries. Moreover, U.K. is on an upward trajectory.)

Trump’s former homeland security adviser, Thom Bossert, thinks the ban will be of “little value.” He noted in a series of tweets that America already has 1,323 confirmed cases of the disease, a number that is comparable to the rate in some of the countries—Germany, France, Spain—in Trump’s ban. So it’s not like this change will prevent the virus from reaching our shores. Meanwhile, enforcing a ban entails both direct costs and opportunity costs, diverting resources from where they could have been deployed more effectively. In a few weeks, Bossert insists, America will regret “wasting time and energy on travel restrictions.” It would be far better, he maintains, to focus on hospital preparation and large-scale community mitigation.

Private companies, meanwhile, have been way ahead of the government on this. When Trump was minimizing the severity of the problem, many had already done their own risk analysis and started radically restricting all non-essential employee travel, in many cases stopping it altogether. Many airlines suspended flights from all the three affected provinces in China around January 28, several days before Trump did. They have likewise significantly scaled back flights from Europe.

On the other hand: Large companies may be beating the government to the punch in restricting employee travel, but that does not mean that smaller players and individual travelers are doing so. Slapping restrictions on them won’t keep the country corona-free. But the the game now is “flattening the curve“—slowing the exponential spread of the disease and minimizing the number of people who contract it, so hospitals aren’t overwhelmed by a crush of patients all at once. A slower disease trajectory will also buy the country more time to scale up screening capacity and develop treatments and cures, ultimately lowering the fatality rate.

To accomplish this, reducing the total number of disease vectors in the country may not be a bad idea. Dr. Anthony Fauci, the widely respected director of the National Institute of Allergy and Infectious Diseases, told the House Oversight Committee that 70 percent of the new cases are linked to Europe, making it the new China. So he thinks restricting travel from their to limit the number of new vectors is worth doing.

But there are dangers to this strategy. In the past, draconian travel bans have driven desperate people to try to enter the country illegally—and therefore without any screening whatsoever. That would increase, not diminish, the spread of the disease. At the same time, it will lead to calls to militarize the border even further.

Moreover, bans also prevent international experts and aid workers from going to the affected countries because they fear that they might not be able to return home. This makes the situation worse in those countries, increasing the global risk.

There are no perfect solutions here. With the ban in place, we’ll soon see whether it makes the situation better or worse.

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Will Trump’s New Travel Restrictions Help Combat Coronavirus?

Even advocates of open borders can support reasonable temporary travel restrictions to protect the public from extreme health threats. And the coronavirus pandemic certainly fits the bill. But how effective will President Donald Trump’s new travel “ban” be?

The answer isn’t clear yet. At this stage, experts are deeply divided.

Here’s the background. Trump restricted travel from China and Iran, the first countries to be hit with the virus, on January 31. This week he extended the restrictions to the 26 countries in the European Union’s Schengen region, where citizens can travel freely across national borders without visas or passports. People in these countries—or all those who have visited them in the last 14 days—will be banned from the United States for the next 30 days, starting tonight. Americans and U.S. permanent residents who clear a screening are exempted from the ban. (The ban does not cover the United Kingdom, which is not part of the Schengen region, though the U.K. has roughly 500 confirmed cases of the virus. That’s the same as Sweden, which is among the banned countries. Moreover, U.K. is on an upward trajectory.)

Trump’s former homeland security adviser, Thom Bossert, thinks the ban will be of “little value.” He noted in a series of tweets that America already has 1,323 confirmed cases of the disease, a number that is comparable to the rate in some of the countries—Germany, France, Spain—in Trump’s ban. So it’s not like this change will prevent the virus from reaching our shores. Meanwhile, enforcing a ban entails both direct costs and opportunity costs, diverting resources from where they could have been deployed more effectively. In a few weeks, Bossert insists, America will regret “wasting time and energy on travel restrictions.” It would be far better, he maintains, to focus on hospital preparation and large-scale community mitigation.

Private companies, meanwhile, have been way ahead of the government on this. When Trump was minimizing the severity of the problem, many had already done their own risk analysis and started radically restricting all non-essential employee travel, in many cases stopping it altogether. Many airlines suspended flights from all the three affected provinces in China around January 28, several days before Trump did. They have likewise significantly scaled back flights from Europe.

On the other hand: Large companies may be beating the government to the punch in restricting employee travel, but that does not mean that smaller players and individual travelers are doing so. Slapping restrictions on them won’t keep the country corona-free. But the the game now is “flattening the curve“—slowing the exponential spread of the disease and minimizing the number of people who contract it, so hospitals aren’t overwhelmed by a crush of patients all at once. A slower disease trajectory will also buy the country more time to scale up screening capacity and develop treatments and cures, ultimately lowering the fatality rate.

To accomplish this, reducing the total number of disease vectors in the country may not be a bad idea. Dr. Anthony Fauci, the widely respected director of the National Institute of Allergy and Infectious Diseases, told the House Oversight Committee that 70 percent of the new cases are linked to Europe, making it the new China. So he thinks restricting travel from their to limit the number of new vectors is worth doing.

But there are dangers to this strategy. In the past, draconian travel bans have driven desperate people to try to enter the country illegally—and therefore without any screening whatsoever. That would increase, not diminish, the spread of the disease. At the same time, it will lead to calls to militarize the border even further.

Moreover, bans also prevent international experts and aid workers from going to the affected countries because they fear that they might not be able to return home. This makes the situation worse in those countries, increasing the global risk.

There are no perfect solutions here. With the ban in place, we’ll soon see whether it makes the situation better or worse.

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COVID-19: A National Problem With Local Solutions

Social solidarity saves the day? The government has found ways to fail at every step of the response to the new coronavirus outbreak, but the American people are exhibiting commendable levels of calm, careful, and community-oriented action.

Businesses, nonprofit groups, churches, community leaders, and individuals have been voluntarily canceling plans, creating workplace workarounds, soliciting ways to help their neighbors, and practicing “social distancing” in the face of vast uncertainty about the true threat level faced or whether widespread testing for the virus (let alone a vaccine) will be ready anytime soon.

The now-constant churn of coronavirus updates—another new city with cases, another school system sending kids home, another state seeking federal help by declaring an emergency—can make even those who aren’t prone to panic start stocking up on canned goods and wine. Even Disney parks are shutting their gates through the end of the month.

But a lot of what we’re seeing and hearing about constitutes acts of social solidarity, as Matt Pearce of the Los Angeles Times suggested yesterday.

The events put on hold, personal and business travel cancellations, employees and students sent to work and learn from home, museum and theater closings, action taken by sports leagues, and countless self quarantines… The people passing along practical tips to help neighbors who might be hit especially hard when public life slows down… Scientists from all spheres stepping in to help develop tests (and groups like the Gates Foundation to help make them more widely available)…. Even everyone stocking up on groceries and household items in order to stay home if they start coughing…

Individuals, civic groups, businesses, and loose social networks are working in the spirit of charity, personal responsibility, and helping one another.

People are attempting to mitigate their own risk, sure, but it also goes beyond that. Even in populations not likely to be seriously affected by the illness, and even with warnings that most people will be exposed eventually and a majority infected, we’re seeing people pretty cheerfully do what all the health experts have been saying: to slow, if we cannot stop, the spread of the contagion in order not to overwhelm health care and emergency services.

We’re also witnessing state and city governments grapple with this in ways that rely on relaxing their regular rules and letting everyone pitch in.

Unfortunately, some officials are taking advantage of the crisis to push essentially unrelated policies they’ve long desired. Others are operating under the idea that government can do whatever it wants in unusual times. In California, for instance, Gov. Gavin Newsom “released a sweeping executive order on Thursday that allows the state to commandeer hotels and medical facilities to treat coronavirus patients and permits government officials to hold teleconferences in private without violating open meeting laws,” reports the Los Angeles Times.

And while the U.S. Food and Drug Administration has been correcting course on COVID-19 testing, we’re still woefully behind.

Nothing will get back the time we’ve lost. But even if we can’t count on officials to get things right, civil society has been lessening the impact of those follies.

This phenomenon is backed up by other research on times of disaster. A recent piece in The New York Times shows that “the Great Alaska Earthquake of 1964 surprised everyone by showing that natural disasters can bring out more kindness than selfishness”—and that this turned to be a typical social response.

“It turns out that unselfish behavior during a disaster is the rule rather than the exception,” Boing Boing points out.

FREE MINDS

Chelsea Manning finally freed.

FREE MARKETS

Congressional Democrats have released a coronavirus appropriations bill that contains some sensible measures—and a whole lot of extras. As Reason‘s Robby Soave noted yesterday, the measure would “establish free coronavirus testing; mandate private businesses provide additional paid sick leave; expand unemployment insurance eligibility; strengthen food security initiatives for senior citizens, children, pregnant women, and food banks; increase funding for Medicaid; and bolster unemployment benefits, among other provisions,” to the tune of tens of billions of dollars. It would also make the mandated sick leave program permanent.

Rep. Justin Amash (I–Mich.) weighs in:

FOLLOWUP

U.S. airstrikes in Iraq. While viruses and elections have dominated the news, battles between U.S. and Iranian-backed forces in Iraq have been quietly escalating. The Pentagon says Kataib Hezbollah-linked facilities “across Iraq” were hit by U.S. airstrikes this morning, in retaliation for the Iran-linked group’s killing of two U.S. and one British military member. “The aerial bombardment took place around 1:30 a.m., according to the Iraqi military. It was unclear whether any militia members were killed,” reports The Washington Post.

QUICK HITS

  • In New York City, a new pop-up exhibit tells sex workers stories through a range of different media. More information here.

  • Sex work in a time of pandemic:

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COVID-19: A National Problem With Local Solutions

Social solidarity saves the day? The government has found ways to fail at every step of the response to the new coronavirus outbreak, but the American people are exhibiting commendable levels of calm, careful, and community-oriented action.

Businesses, nonprofit groups, churches, community leaders, and individuals have been voluntarily canceling plans, creating workplace workarounds, soliciting ways to help their neighbors, and practicing “social distancing” in the face of vast uncertainty about the true threat level faced or whether widespread testing for the virus (let alone a vaccine) will be ready anytime soon.

The now-constant churn of coronavirus updates—another new city with cases, another school system sending kids home, another state seeking federal help by declaring an emergency—can make even those who aren’t prone to panic start stocking up on canned goods and wine. Even Disney parks are shutting their gates through the end of the month.

But a lot of what we’re seeing and hearing about constitutes acts of social solidarity, as Matt Pearce of the Los Angeles Times suggested yesterday.

The events put on hold, personal and business travel cancellations, employees and students sent to work and learn from home, museum and theater closings, action taken by sports leagues, and countless self quarantines… The people passing along practical tips to help neighbors who might be hit especially hard when public life slows down… Scientists from all spheres stepping in to help develop tests (and groups like the Gates Foundation to help make them more widely available)…. Even everyone stocking up on groceries and household items in order to stay home if they start coughing…

Individuals, civic groups, businesses, and loose social networks are working in the spirit of charity, personal responsibility, and helping one another.

People are attempting to mitigate their own risk, sure, but it also goes beyond that. Even in populations not likely to be seriously affected by the illness, and even with warnings that most people will be exposed eventually and a majority infected, we’re seeing people pretty cheerfully do what all the health experts have been saying: to slow, if we cannot stop, the spread of the contagion in order not to overwhelm health care and emergency services.

We’re also witnessing state and city governments grapple with this in ways that rely on relaxing their regular rules and letting everyone pitch in.

Unfortunately, some officials are taking advantage of the crisis to push essentially unrelated policies they’ve long desired. Others are operating under the idea that government can do whatever it wants in unusual times. In California, for instance, Gov. Gavin Newsom “released a sweeping executive order on Thursday that allows the state to commandeer hotels and medical facilities to treat coronavirus patients and permits government officials to hold teleconferences in private without violating open meeting laws,” reports the Los Angeles Times.

And while the U.S. Food and Drug Administration has been correcting course on COVID-19 testing, we’re still woefully behind.

Nothing will get back the time we’ve lost. But even if we can’t count on officials to get things right, civil society has been lessening the impact of those follies.

This phenomenon is backed up by other research on times of disaster. A recent piece in The New York Times shows that “the Great Alaska Earthquake of 1964 surprised everyone by showing that natural disasters can bring out more kindness than selfishness”—and that this turned to be a typical social response.

“It turns out that unselfish behavior during a disaster is the rule rather than the exception,” Boing Boing points out.

FREE MINDS

Chelsea Manning finally freed.

FREE MARKETS

Congressional Democrats have released a coronavirus appropriations bill that contains some sensible measures—and a whole lot of extras. As Reason‘s Robby Soave noted yesterday, the measure would “establish free coronavirus testing; mandate private businesses provide additional paid sick leave; expand unemployment insurance eligibility; strengthen food security initiatives for senior citizens, children, pregnant women, and food banks; increase funding for Medicaid; and bolster unemployment benefits, among other provisions,” to the tune of tens of billions of dollars. It would also make the mandated sick leave program permanent.

Rep. Justin Amash (I–Mich.) weighs in:

FOLLOWUP

U.S. airstrikes in Iraq. While viruses and elections have dominated the news, battles between U.S. and Iranian-backed forces in Iraq have been quietly escalating. The Pentagon says Kataib Hezbollah-linked facilities “across Iraq” were hit by U.S. airstrikes this morning, in retaliation for the Iran-linked group’s killing of two U.S. and one British military member. “The aerial bombardment took place around 1:30 a.m., according to the Iraqi military. It was unclear whether any militia members were killed,” reports The Washington Post.

QUICK HITS

  • In New York City, a new pop-up exhibit tells sex workers stories through a range of different media. More information here.

  • Sex work in a time of pandemic:

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Prizes for Progress Against Coronavirus

I am a big fan of technology-inducement prizes. The prospect of substantial rewards is a major driver for innovation and invention. Indeed, this is how the patent system works: Successful inventors are rewarded with a temporary monopoly (which allows them to obtain monopoly rents, i.e. economic returns greater than they would get in a competitive market). Prizes can provide a similar incentive structure and thus can be particularly valuable in contexts (such as with the atmospheric commons) where patents are insufficient to generate the super-competitive returns.

Prizes can also help spur innovation when it is needed due to exigent circumstances such as with, say, a pandemic.

At Marginal Revolution, Tyler Cowen has announced that the Emergent Ventures Project of the Mercatus Center has raised money to fund over $1 million in prizes for coronovirus-related accomplishments. From his post:

I believe that we should be using prizes to help innovate and combat the coronavirus. When are prizes better than grants? The case for prizes is stronger when you don’t know who is likely to make the breakthrough, you value the final output more than the process, there is an urgency to solutions (talent development is too slow), success is relatively easy to define, and efforts and investments are likely to be undercompensated. All of these apply to the threat from the coronavirus. . . .

Anyone in the world could make a contribution to the anti-virus effort and it won’t work to just give a chunk of money to say Harvard or MIT. . . .

I therefore am grateful that I have been able to raise a new chunk of money for Emergent Ventures — a project of the Mercatus Center — for ex post prizes (not grants) for those who make progress in coronavirus problems.

Here are the newly established prizes on offer:

1. Best investigative journalism on coronavirus — 50k

2. Best blog or social media tracking/analysis of the virus — 100k

3. Best (justified) coronavirus policy writing — 50k

4. Best effort to find a good treatment rapidly — 500k, second prize 200k

5. Best innovation in social distancing — 100k

6. Most important innovation or improvement for India — 100k

What might be an example of a winning project?  What if this attempt to build scalable respirators succeeded?  That would be a natural winner.  Or a social distancing innovation might be the roll out of more meals on wheels, little libraries, online worship, easier ways to work from home, and so on. . . .

Cowen has also noted that, if funding is available, he would like to be able to offer additional prizes in this area.

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Prizes for Progress Against Coronavirus

I am a big fan of technology-inducement prizes. The prospect of substantial rewards is a major driver for innovation and invention. Indeed, this is how the patent system works: Successful inventors are rewarded with a temporary monopoly (which allows them to obtain monopoly rents, i.e. economic returns greater than they would get in a competitive market). Prizes can provide a similar incentive structure and thus can be particularly valuable in contexts (such as with the atmospheric commons) where patents are insufficient to generate the super-competitive returns.

Prizes can also help spur innovation when it is needed due to exigent circumstances such as with, say, a pandemic.

At Marginal Revolution, Tyler Cowen has announced that the Emergent Ventures Project of the Mercatus Center has raised money to fund over $1 million in prizes for coronovirus-related accomplishments. From his post:

I believe that we should be using prizes to help innovate and combat the coronavirus. When are prizes better than grants? The case for prizes is stronger when you don’t know who is likely to make the breakthrough, you value the final output more than the process, there is an urgency to solutions (talent development is too slow), success is relatively easy to define, and efforts and investments are likely to be undercompensated. All of these apply to the threat from the coronavirus. . . .

Anyone in the world could make a contribution to the anti-virus effort and it won’t work to just give a chunk of money to say Harvard or MIT. . . .

I therefore am grateful that I have been able to raise a new chunk of money for Emergent Ventures — a project of the Mercatus Center — for ex post prizes (not grants) for those who make progress in coronavirus problems.

Here are the newly established prizes on offer:

1. Best investigative journalism on coronavirus — 50k

2. Best blog or social media tracking/analysis of the virus — 100k

3. Best (justified) coronavirus policy writing — 50k

4. Best effort to find a good treatment rapidly — 500k, second prize 200k

5. Best innovation in social distancing — 100k

6. Most important innovation or improvement for India — 100k

What might be an example of a winning project?  What if this attempt to build scalable respirators succeeded?  That would be a natural winner.  Or a social distancing innovation might be the roll out of more meals on wheels, little libraries, online worship, easier ways to work from home, and so on. . . .

Cowen has also noted that, if funding is available, he would like to be able to offer additional prizes in this area.

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The Most Important Coronavirus-and-the-Law Issues

Many businesses are doubtless already scrambling to figure out if their insurance policies cover business interruptions of various sorts stemming from the coronavirus. For some, it could be the difference between staying in business and going bankrupt; I expect it will likewise sharply affect the economy as a whole, as well as unemployment. It’s not the sort of thing most of us think about (I regret to say that I didn’t start thinking about such matters until I married an insurance lawyer) but it’s hugely important.

I was reminded of this because my colleagues at Mayer Brown LLP (the firm with which I consult on a part-part-part-time basis) circulated this item, which they kindly allowed me to pass along:

NYDFS Instructs Insurers to Provide COVID-19 “Explanation of Benefits” for All Business Interruption Coverage and Report to NYDFS on Operational and Financial Preparedness

by David W. Alberts, Kara Baysinger, Stephanie Duchene, Matthew J. Gaul, Philip A. Goldstein, Lawrence R. Hamilton, David Heales, Francis R. Monaco & Sanjiv J. Tata

The New York Department of Financial Services (NYDFS) issued two broad communications to the insurance industry on March 10.

“Explanation of Benefits” for Business Interruption Coverage

Citing the “potential impact of COVID-19 on business losses,” NYDFS issued a letter instructing all property and casualty insurers that provide business interruption and related coverage in New York to send a “clear and concise explanation of benefits” to all commercial policyholders. The explanation must include the following information:

  • A description of the policyholder’s commercial property insurance or related coverage.
  • Whether the policy covers “business interruption” and a list of the covered perils under the policy.
  • Whether the policy includes “civil authority” coverage, the type of damage or loss required for coverage and, specifically, whether impairment of the policyholder’s access to property in connection with COVID-19 is sufficient for coverage.
  • Whether the policy includes “contingent business interruption” coverage and a list of the covered perils under the policy.
  • Whether the policy includes “supply chain” coverage and whether such coverage is limited to named products or services from a named supplier.
  • Whether business interruption, contingent business interruption or supply chain coverage requires “physical damage or loss” and whether contamination related to a pandemic may constitute “physical damage or loss.”
  • The required waiting periods under the policy.

The letter also instructs insurers to provide copies of each explanation of benefits to NYDFS along with certain statistical information about the volume of business written with the described coverage, both in terms of number of policies and premium, by March 18. If an insurer does not write any business interruption coverages, then an officer or other authorized representative of the insurer is required to provide a signed certification to NYDFS that the insurer writes none of the business described in the letter.

The NYDFS letter is titled “CALL FOR SPECIAL REPORT PURSUANT TO SECTION 308, NEW YORK INSURANCE LAW,” but, in directing insurers to proactively provide explanations of benefits to policyholders, the letter goes beyond the authority to demand information from insurers found in Section 308….

Operational and Financial Preparedness

The Department also issued a Circular Letter to all “regulated insurance entities” demanding extensive information on their operational and financial preparedness for the effects of COVID-19. Responses are due by April 9, 2020.

I’m positive we’ll be hearing a lot more about this.

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Judges Thapar and Kethledge Call for SCOTUS to Reconsider TWA v. Hardison (1977)

Last month, the Supreme Court denied cert in Patterson v. Walgreen. The petitioner in that case called on the Court to reconsider TWA v. Hardison (1977). Justice Alito dissented from the denial of cert, joined by Justices Thomas and Gorusch. He wrote:

I agree with the most important point made in that brief,namely, that we should reconsider the proposition, endorsed by the opinion in Trans World Airlines, Inc. v. Hardison, 432 U. S. 63, 84 (1977), that Title VII does not require an employer to make any accommodation for an employee’s practice of religion if doing so would impose more than a de minimis burden. . . .

As the Solicitor General observes, Hardison’s reading does not represent the most likely interpretation of the statutory term “undue hardship”; the parties’ briefs in Hardison did not focus on the meaning of that term; no party in that case advanced the de minimis position; and the Courtdid not explain the basis for this interpretation. See Brief for United States as Amicus Curiae 19–21. I thus agreewith the Solicitor General that we should grant review inan appropriate case to consider whether Hardison’s interpretation should be overruled.*

Yesterday, the Sixth Circuit decided Small v. Memphis Light, Gas, and Water. The per curiam opinion followed Hardison. But Judge Thapar, joined by Judge Kethledge, wrote a concurrence that called on the Court to reconsider Hardison. Judge Thapar sketches how Hardison made up the “de minimis” test. He also rejects any implicit argument that Hardison‘s holding was needed to avoid an Establishment Clause violation. Here is his argument, which relies on scholarship from Professors Michael McConnell and Mark Storslee:

As for the implicit reason—acknowledged only by the Hardison dissent—the majority may have construed Title VII so narrowly because it feared that a broader reading might run afoul of the Establishment Clause. See Hardison, 432 U.S. at 89–90 (Marshall, J., dissenting). Yet whatever doctrinal merit that concern once may have had, I seriously doubt that it remains valid. Even properly read, Title VII doesn’t require employers to provide any and all accommodations; it requires them to provide only those accommodations that won’t impose an “undue hardship” on the company—meaning significant costs. That seems more than fine under the Establishment Clause. See, e.g., Cutter v. Wilkinson, 544 U.S. 709, 722–24 (2005); Estate of Thornton v. Caldor, Inc., 472 U.S. 703, 711–12 (1985) (O’Connor, J., concurring); Michael W. McConnell, Accommodation of Religion: An Update and a Response to the Critics, 60 Geo. Wash. L. Rev. 685, 704 (1992); see generally Mark Storslee, Religious Accommodation, the Establishment Clause, and Third-Party Harm, 86 U. Chi. L. Rev. 871 (2019) (challenging the theory that religious accommodations violate the Establishment Clause whenever they impose more than de minimis costs).

In any event, the doctrine of constitutional avoidance doesn’t give courts license to rewrite a statute. See, e.g., Jennings v. Rodriguez, 138 S. Ct. 830, 836 (2018). But the Hardison majority appears to have done exactly that. The only other explanation is that the majority stumbled through the looking glass and into “an Alice-in-Wonderland world where words have no meaning[.]” Welsh v. United States, 398 U.S. 333, 354 (1970) (Harlan, J., concurring in the judgment).

Of course, all this does not mean that employers must always accommodate their employees’ religious beliefs and practices. The term “undue hardship” makes clear “that this is a field of degrees, not a matter for extremes” or “absolutes.” E.E.O.C. v. Firestone Fibers & Textiles Co., 515 F.3d 307, 313 (4th Cir. 2008); cf. Barnett, 535 U.S. at 402. But Hardison itself adopted an “absolute” when it “effectively nullifi[ed]” the accommodation requirement. Hardison, 432 U.S. at 89 (Marshall, J., dissenting). And without any real reason.

The irony (and tragedy) of decisions like Hardison is that they most often harm religious minorities—people who seek to worship their own God, in their own way, and on their own time. See McConnell, supra, at 693, 721–22; Storslee, supra, at 873–74, 877. The American story is one of religious pluralism. The Founders wrote that story into our Constitution in its very first amendment. And almost two-hundred years later, a new generation of leaders sought to continue that legacy in Title VII. But the Supreme Court soon thwarted their best efforts. Even at the time, this “ultimate tragedy” was clear. Hardison, 432 U.S. at 97 (Marshall, J., dissenting) (“[O]ne of this Nation’s pillars of strength our hospitality to religious diversity has been seriously eroded.”).

This argument may soon garner four votes for cert, and give votes for reversal of Hardison.

 

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Walmart’s New Clinics Are a Free Market Experiment in Health Care Reform

When I needed new glasses, I went to an optometrist for an exam, picked out some dorky black frames, paid my portion and my insurance picked up the rest. Then, by chance, I walked into one of those ubiquitous Walmart optometry centers and realized I could have had the exam and the glasses for little more than the price of the copay. That speaks volumes about our current health system.

When a third party—insurance or government, for instance—pays for something, the prices escalate. What’s the first thing an auto body shop asks when you take in your car to repair the fender? “Is this an insurance job?” If it is, the price will be higher than if you’re paying for it yourself. I never asked the price of my appendix surgery last year, nor did I care. Blue Cross paid the tab.

It’s far worse when government is the default payer, given there are no serious controls on costs. There only are two ways to divvy up resources: pricing or rationing. As economist Thomas Sowell explains, “What everyone wants adds up to more than there is. Market economies deal with this problem by confronting individuals with the costs of producing what they want, and letting those individuals make their own trade-offs.”

Healthcare is tough because everyone needs access to life-saving surgeries and drugs. Unfortunately, our policymakers look at the problem through the wrong lens. Many seek to upend an insurance-based system that works remarkably well (despite the high prices) and replace it with government-run systems that will spend the nation into penury and lead to long waits for common services (rationing).

Instead of starting from scratch, policymakers ought to fill in the gaps—meet the needs of those people who are falling through the cracks of the current system. One idea goes back to that example in the first paragraph. No one will ever head to Walmart for a kidney transplant, but retail companies and profit-based clinics certainly can offer high-quality, lower-level services—and impose market discipline in a sector that sorely needs it.

Walmart announced last year that it intends to provide clinics that offer low-cost X-rays, lab work, checkups and dentistry, according to a recent CNBC article. “We’re going to have a consumer revolution,” former Apple CEO John Sculley told the news network. “Why? Because if the Walmart tests are successful, and I suspect they will be, people will be able to go in and get these kinds of health services at a lower cost than if they had health insurance.”

One of the biggest flaws of Obamacare is that it imposed myriad healthcare mandates, requiring health policies to cover every manner of treatment and service that politicians deemed necessary. For instance, it’s silly for an insurance company to be forced to provide my wife and me, who are in our late 50s, with birth-control coverage.

In other areas, we choose insurance based on our specific needs. I use insurance to protect against financially catastrophic events, not to cover minor services that I can pay for myself. Other people have different needs and priorities.

Scully explained that the big tech firms “realize that this is the largest remaining industry that has not been revolutionized by modern technologies that has transformed every other big industry in the United States.” That’s because health care, and health insurance, is dominated by government regulation and subsidy. Private companies can’t revolutionize industries that are encrusted with Byzantine rules—and where price signals can’t work their magic.

In particular, occupational licensing rules, which are enforced by entrenched industries that want to keep out the competition, make it difficult to innovate. That’s true, especially in healthcare industries. One reason the gig economy has been so successful is these emergent companies have created newfangled ways to circumvent competition-stifling policies that lock inefficient systems into place. Thank goodness for clever work-arounds.

If you look at prices over time, you’ll find that consumer buying power has improved dramatically in industries that have the fewest government regulations. I remember when my parents bought our first color television in 1973 for $470. I still recall the price because it was such a major purchase, the equivalent of around $2,700 in today’s dollars. I recently bought a fancy smart TV for 300 bucks—and chose among dozens of options.

When products or services largely are immune to market pressure (because government provides, subsidizes or heavily regulates them), inflation levels are daunting. California public schools never have enough money even though per-pupil spending has soared. That’s true for every public service. College tuition has soared. A day doesn’t go by without some politician complaining about skyrocketing healthcare prices. Don’t you think there’s a connection?

Sculley predicts Walmart-style health clinics can lead to a “consumer revolution.” That’s no doubt true—provided government gets out of the way and allows it to happen.

This column was first published in the Orange County Register.

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The Most Important Coronavirus-and-the-Law Issues

Many businesses are doubtless already scrambling to figure out if their insurance policies cover business interruptions of various sorts stemming from the coronavirus. For some, it could be the difference between staying in business and going bankrupt; I expect it will likewise sharply affect the economy as a whole, as well as unemployment. It’s not the sort of thing most of us think about (I regret to say that I didn’t start thinking about such matters until I married an insurance lawyer) but it’s hugely important.

I was reminded of this because my colleagues at Mayer Brown LLP (the firm with which I consult on a part-part-part-time basis) circulated this item, which they kindly allowed me to pass along:

NYDFS Instructs Insurers to Provide COVID-19 “Explanation of Benefits” for All Business Interruption Coverage and Report to NYDFS on Operational and Financial Preparedness

by David W. Alberts, Kara Baysinger, Stephanie Duchene, Matthew J. Gaul, Philip A. Goldstein, Lawrence R. Hamilton, David Heales, Francis R. Monaco & Sanjiv J. Tata

The New York Department of Financial Services (NYDFS) issued two broad communications to the insurance industry on March 10.

“Explanation of Benefits” for Business Interruption Coverage

Citing the “potential impact of COVID-19 on business losses,” NYDFS issued a letter instructing all property and casualty insurers that provide business interruption and related coverage in New York to send a “clear and concise explanation of benefits” to all commercial policyholders. The explanation must include the following information:

  • A description of the policyholder’s commercial property insurance or related coverage.
  • Whether the policy covers “business interruption” and a list of the covered perils under the policy.
  • Whether the policy includes “civil authority” coverage, the type of damage or loss required for coverage and, specifically, whether impairment of the policyholder’s access to property in connection with COVID-19 is sufficient for coverage.
  • Whether the policy includes “contingent business interruption” coverage and a list of the covered perils under the policy.
  • Whether the policy includes “supply chain” coverage and whether such coverage is limited to named products or services from a named supplier.
  • Whether business interruption, contingent business interruption or supply chain coverage requires “physical damage or loss” and whether contamination related to a pandemic may constitute “physical damage or loss.”
  • The required waiting periods under the policy.

The letter also instructs insurers to provide copies of each explanation of benefits to NYDFS along with certain statistical information about the volume of business written with the described coverage, both in terms of number of policies and premium, by March 18. If an insurer does not write any business interruption coverages, then an officer or other authorized representative of the insurer is required to provide a signed certification to NYDFS that the insurer writes none of the business described in the letter.

The NYDFS letter is titled “CALL FOR SPECIAL REPORT PURSUANT TO SECTION 308, NEW YORK INSURANCE LAW,” but, in directing insurers to proactively provide explanations of benefits to policyholders, the letter goes beyond the authority to demand information from insurers found in Section 308….

Operational and Financial Preparedness

The Department also issued a Circular Letter to all “regulated insurance entities” demanding extensive information on their operational and financial preparedness for the effects of COVID-19. Responses are due by April 9, 2020.

I’m positive we’ll be hearing a lot more about this.

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