In Part 1, we learned that real per capita health spending saw a 25-fold increase the 8 decades starting in 1929 even as real per capita GDP grew only 5-fold during the same period.
In Part 2, we learned that annual excess growth in inflation-adjusted health spending above and beyond general economic growth has been a persistent phenomenon: from 1929 to 2015, the average rate of growth in real per capita health spending (4.1%) was slightly more than double the rate experienced in the rest of the economy (2%).
Today we will examine the consequences of this outsized growth in health spending: health spending–which includes both spending on health services (“health care”) as well as health insurance–absorbs an ever-growing fraction of the economy and government spending (in this post, my term “health spending” is equivalent to the official government term used by actuaries at the Centers for Medicare and Medicaid Services: National Health Expenditures or NHE: it includes both spending for medical care services/supplies/medications as well as health insurance and the attendant administrative costs borne by health care providers and health insurers; in short, it includes everything).
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A recent study by Express Scripts Holding found that about a quarter of Medicaid patients were prescribed an opioid in 2015. Wisconsin Sen. Ron Johnson presents intriguing evidence that the Medicaid expansion under ObamaCare may be contributing to the rise in opioid abuse. According to a federal Health and Human Services analysis requested by the Senator, overdose deaths per million residents rose twice as fast in the 29 Medicaid expansion states—those that increased eligibility to 138% from 100% of the poverty line—than in the 21 non-expansion states between 2013 and 2015.
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In Iowa, the state’s sole remaining insurer announced on Thursday that it wants to boost ObamaCare premiums by 57%. This isn’t exactly the vibrant, competitive, low-cost market that Democrats promised. But it is the inevitable outcome of ObamaCare’s government-knows-best approach to health care.
Earlier this year, Aetna and Wellmark Blue Cross & Blue Shield announced that they were pulling out of Iowa’s ObamaCare exchange, leaving only Medica, which was also threatening to leave. Not surprisingly, Medica has used its newfound monopoly status to push for increasingly higher rates, while trying to pin the blame President Trump for the increases.
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A majority of the public (57 percent) want to see Republicans in Congress work with Democrats to make improvements to the 2010 health care law, while smaller shares say they want to see Republicans in Congress continue working on their own plan to repeal and replace the ACA (21 percent) or move on from health care to work on other priorities (21 percent). However, about half of Republicans and Trump supporters would like to see Republicans in Congress keep working on a plan to repeal the ACA.
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The mere existence of ACA insurance policies can’t be the only metric for measuring the success of a major federal program. Another sensible measure of ACA success is the affordability of the policies being sold. For a broad spectrum of middle-aged persons in the middle class, premiums for even the cheapest bronze policy today are, in a majority of rating areas examined, so expensive that people are formally exempt from the individual mandate.
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The government will make this month’s payments to insurers under the Obama-era health care law that President Donald Trump still wants to repeal and replace, a White House official said Wednesday.
Trump has repeatedly threatened to end the payments, which help reduce health insurance copays and deductibles for people with modest incomes, but remain under a legal cloud.
A White House spokesman said “the August payment will be made,” insisting on anonymity to discuss the decision ahead of the official announcement. The so-called “cost-sharing” subsidies total about $7 billion this year and are considered vital to guarantee stability for consumers who buy their own individual health insurance policies.
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The oracles at the Congressional Budget Office this week descended from Delphi to predict 20% premium increases if the Trump Administration ends illegal Obama Care subsidies for insurers, and Democrats are happy to agree. Yet a careful reading of the report reveals some surprising results that are far less ominous and for consumers mostly benign.
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Next time you run into someone who minimizes the problems with Obamacare, I want you to introduce them to Fay. She’s a reasonably healthy 60 year old grandmother living in Fayette County, Illinois and earns about 450% of the federal poverty level ($53,460) working for a small employer that does not provide her with health insurance. Right now, if she wants the second lowest silver plan in her area, she needs to pay 28% of her pre-tax income in order to get it — $1,247 per month. Fay just doesn’t have that kind of money and thus lives in fear of medical bankruptcy should something go wrong.
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The Affordable Care Act (ACA) requires insurers to offer plans with reduced deductibles, copayments, and other means of cost sharing to some of the people who purchase plans through the marketplaces established by that legislation. The size of those reductions depends on those people’s income. In turn, insurers receive federal payments arranged by the Secretary of Health and Human Services to cover the costs they incur because of that requirement. At the request of the House Democratic Leader and the House Democratic Whip, the Congressional Budget Office and the staff of the Joint Committee on Taxation (JCT) have estimated the effects of terminating those payments for cost-sharing reductions (CSRs). In particular, the agencies analyzed what would happen under this policy: By the end of this month, it is known that CSR payments will continue through December 2017 but not thereafter.
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A group of liberal and conservative health policy experts argues that critical matters relating to health reform must be addressed quickly and that bipartisan approaches are possible. They offer five recommendations for near-term action to protect coverage and health care access for people who are relying on them now while providing new flexibility for the states to offer more affordable, attractive policies. Signatories include: Joseph Antos, Stuart Butler, Lanhee Chen, John McDonough, Ron Pollack, Sara Rosenbaum, Grace-Marie Turner, Vikki Wachino, and Gail Wilensky.
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