Obamacare’s Bureaucracy: The Amazing Rise in Health Insurance Jobs

 

health-insuranceAs Congress and President Trump debate how to repeal and replace Obamacare, the obsession with health insurance, rather than actual access to health care, has dominated the debate. It invites the question: How have jobs in health insurance fared before and after Obamacare?

They have boomed, growing over one quarter since the pre-recession January 2008 employment high-water mark.

Obamacare’s Individual Mandate Very Inefficient

 

Healthcaredotgov(A version of this Health Alert was published by Forbes.)

Next Tuesday afternoon, I am scheduled to testify before the U.S. House of Representatives’ Ways and Means Oversight Subcommittee on Obamacare’s individual mandate that almost all Americans maintain health insurance.

This is Obamacare’s least popular feature. It was the subject of the 2012 lawsuit asserting Obamacare was unconstitutional: Never before had the federal government forced any resident to buy a good or service from a private business. The people lost that argument. Nevertheless, Republicans have pledged to eliminate the individual mandate. This commitment remains good politics. However, it is also good economics.

Feel The Bern! No Right To Health Care In Canada

 

220px-Tom_PriceOn Wednesday, I watched the Senate’s Health, Education, Labor, & Pensions (HELP) Committee’s courtesy hearing for Dr. Tom Price, MD, whom President-elect Trump has nominated to be the next United States Secretary of Health & Human Services. As a game of “gotcha,” the hearing played out predictably.

However, Senator Bernie Sanders (I-VT) stood out for asking a pointless “question” (actually a statement), which was because it was based on an error. As he has many times, Senator Sanders made the false claim that health care is a right in Canada and other countries outside the United States. According to Mr. Sanders, this is a unique stain on the United States. With respect to Canada, it is simply and plainly not true that health care is a “right.”

CPI: Moderate Health Price Increases

 

blsThe Consumer Price Index rose 0.3 percent in December. Medical prices rose only 0.2 percent. This is the fourth month in a row we have enjoyed medical price relief. Even prices of prescription drugs rose by only 0.2 percent. Prices of health insurance even dropped a smidgeon!

Prices for medical care commodities rose the most, by 0.6 percent, followed closely hospital services (0.3) percent).

Over the last 12 months, however, medical prices have increased over twice as fast as non-medical prices: 1.9 percent versus 4.1 percent. Price changes for medical care contributed 16 percent of the overall increase in CPI.

Many observers of medical prices decline to differentiate between nominal and real inflation. Because CPI is has been low until recently, even relatively moderate nominal price hikes for medical care are actually substantial real price hikes. More than six years after the Affordable Care Act was passed, consumers have not seen relief from high medical prices, which have increased over twice as much as the CPI less medical care since March 2010, the month President Obama signed the law.

(See Figure I and Table I below the fold.)

Advice to Trump: Leave Medicare Drug Prices to the Free Market

 

President-elect Donald Trump has bashed drug prices on numerous occasions. During his campaign, he championed the idea of having the government directly negotiate the price of Medicare drugs for Part D drug plans. Trump seemingly dropped the idea later in his campaign only to resurrect it again mid-January. Many Democrats also believe the government could secure a lower price for the drugs Medicare reimburses on seniors’ behalf. However, Republicans have long opposed the idea of government meddling in private markets and codified a non-interference clause in the Medicare Modernization Act of 2003.

Graham to Testify at House Ways & Means Oversight Subcommittee January 24

 

NCPA Senior Fellow John R. Graham has been invited to testify in person to the U.S. House of Representatives Ways & Means Oversight Subcommittee on January 24 at 2 p.m. The topic is Obamacare’s individual mandate to buy health insurance, which Graham concludes is a burden without benefit.

Learn more at this link. Come in person, or watch online.

Council of Economic Advisers’ Bad Obamacare Economics

 

CEAPresident Obama’s Council of Economic Advisers (CEA) has issued its valedictory report on the state of Obamacare. The gist of the argument is that Obamacare is doing fine, on the verge of overcoming its growing pains since 2014.

The CEA claims critics who suspect the 25 percent increase in premiums for 2017 are a problem are off-base. In a normal insurance market, this would indicate a “death spiral”: The sick enroll and the healthy stay away, causing next year’s premiums to increase. The cycle repeats itself until only the sickest enroll. The CEA asserts this cannot be occurring because 11.3 million people enrolled in Obamacare last December, which was 300,000 more than in December 2015. Further, insurers underpriced their policies in 2014 because the market was new. However, they have learned since then and are pricing policies more realistically.

While it is true enrollment in Obamacare’s market is a little higher than last year, it is still well below the Congressional Budget Office’s estimate of 21 million enrollees in 2016, which it made as recently as March 2015. Even in January 2016, it estimated 13 million would enroll last year, which was almost one fifth too high.

PPI: Pharma Prices Are Dropping!

 

BLSDecember’s Producer Price Index rose 0.3 percent. However, prices for most health goods and services grew slowly, if at all. Fifteen of the 16 price indices for health goods and services grew slower than their benchmarks.*

The outlier was health and medical insurance for final demand, which increased by 0.2 percent, the same rate as final demand services (less trade, transportation, and warehousing.) The largest decline (relative to its benchmark) was for prices of new health care building construction, which declined twice as fast as prices of overall building construction did.

Prices of hospital outpatient care and nursing home care declined versus their final demand services (less trade, transportation, and warehousing) and also absolutely. Pharmaceutical prices decreased 0.1 percent, a 0.4 percent drop versus the price increase for final demand goods less food and energy.

See Table I below the fold:

Veterans Deserve Better Health Care

 

man-in-wheelchair(A version of this Health Alert was syndicated by the Tribune News Service.)

President-elect Trump has nominated David Shulkin, MD, to be the next Secretary of Veterans Affairs. In 2015, Doctor Shulkin was nominated by President Obama to be Under Secretary of Health in the VA (the position he currently holds). It is an interesting choice, not only because Mr. Trump is calling on an Obama appointee to take the top job in the VA, but also because it recognizes veterans’ health care is the major pain point in the department.

Congress Should Take Steps to Make Drugs More Affordable

 

gencompAs Republicans squabble about how to repeal & replace Obamacare, lost in the debate is the way most Americans actually access our health care system. In any given year, most people don’t ride in the back of an ambulance heading to the ER. Nor do they convalesce in a hospital bed. Most of the medical care Americans receive is not even provided in doctors’ offices. The most common way Americans access our health care system is by taking a pill.