Category: Health Alerts

Shrinking Health Construction Spending: Consolidation to Blame?

This morning’s release of construction spending from the U.S. Census Bureau indicates spending on health facilities actually shrank a little in May, a significant downturn from the previous release (see Table I, below the fold). Total construction spending amounted to about $1 trillion, of which $39 billion was health care. Health construction spending shrank 0.6 percent from April and grew only 3.1 percent year on year. Total construction spending, less health, grew 0.9 percent on the month, and 8.4 percent year on year.

We look at this because other economic data indicate that health spending is consuming more of our prosperity. Low, even shrinking, spending on construction of health facilities may represent the consolidation of hospitals that many fear will lead to increasing prices.

Over-the-Counter Contraceptives Better than a Mandate

“The Pill” turned 50 in May of 2010.  With the advent of oral contraceptives, couples had far better contraceptive options.  Democratic supporters of Obamacare wanted to make contraceptives more affordable by mandating contraceptive coverage.  Many supporters view the mandate as a feminist issue and assume anyone who opposes it is waging a war on women. The problem is that mandated benefits are not free; they come with costs that would be more efficiently borne by individuals.

Republican Senators Kelly Ayotte (R-NH) and Cory Gardner (R-CO) also want to make birth control pills easier to afford — and more accessible.  They sponsored Senate Bill 1438, Allowing Greater Access to Safe and Effective Contraception Act. S.1438 would encourage the sale of hormonal contraceptives over the counter (OTC) without a prescription.

Obamacare and Employer-Based Benefits

(A version of this Health Alert was published by American Thinker.)

Now that we have over one full year of ObamaCare under our belts, a mystery is unfolding: What is happening to employer-based benefits? Data from different sources convey widely different messages, but until we solve this mystery, it is difficult to predict the political future of President Obama’s troubled health reform law.

The puzzle is obscured by the media’s focus on topline figures, which indicate significant increases in the number of insured people, including millions added to Medicaid, the joint state-federal program for low-income households. In truth, it is inappropriate to categorize Medicaid dependents as “insured” — for the same reason it is inappropriate to consider jobless people who receive cash welfare benefits as “employed.” The fiscal difference between people who depend on government benefits and those who do not is one of kind, not of degree.

But how should we classify consumers covered through the ObamaCare exchanges? Are they government dependents or not? The issue is tricky.

King v. Burwell: Fix Obamacare’s Job Killing Tax Credits

(A versio30-ways-to-cut-your-health-care-costsn of this Health Alert was published by Forbes.)

You read that headline right: It is not only those who pay Obamacare taxes who suffer, but those who receive them. That’s because the tax credits are calculated so perversely that people who receive them actually get punished for working more hours. In the wake of the Supreme Court’s forthcoming decision on King v. Burwell, which will determine whether tax credits paid in at least 34 states are legal, fixing this should be a priority for Congress and President Obama.

For the first time since 2012, the Congressional Budget Office has done a comprehensive estimate of the costs and benefits of Obamacare. The new estimate concludes that repealing Obamacare would increase Gross Domestic Product by 0.7 percent over the next ten years. The primary reason is the disincentive to work contained in the design of the tax credits.

Of course, President Obama is not going to repeal Obamacare. Nevertheless, in the wake of King v. Burwell, much of this problem can be alleviated without doing violence to the president’s goal of increasing coverage, as I describe in a new study from the National Center for Policy Analysis (NCPA).

Shrink Obamacare’s Costs by Removing Rule Driving up Young People’s Premiums

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

The Supreme Court will soon decide King v. Burwell, the case that will determine whether tax credits being paid in at least 34 states without their own exchanges are legal. If the Supreme Court makes the administration follow the letter of the law, billions of dollars of federal tax credits will continue to flow to 16 states, but not the rest. This will result in a political crisis giving Congress and President Obama the opportunity to fix the worst aspects of Obamacare.

Here is one suggestion: Remove Obamacare’s rule forbidding accurate premiums by age. The difference in rates between young adults and older ones can be no greater than three to one. The actuarial consensus is that average health spending for 63-year-olds is five times that of 22-year-olds. However, instead of reducing premiums for older applicants, the rule dramatically increases premiums for younger ones.

Medicare’s Sustainable Growth Rate Was Not Entirely Bad

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

Supported by health-care interests, Medicare beneficiaries, and an overwhelming bipartisan consensus in Congress, President Obama has signed a law that will change how Medicare pays doctors — for the worse. Critics note the law will dramatically increase federal control of medicine and add $141 billion in deficits through 2025, a violation of Republican and Democratic pledges made since 2010.

The old system, called the Sustainable Growth Rate, was hardly perfect. In fact, in over a decade of working in health policy, I have never heard one person say anything good about it. Now that it is dead, it is time to give the SGR a fitting eulogy — to bury it, but also, for once, to praise it. Whatever its flaws, the SGR was this nation’s only attempt to connect the cost of an entitlement to our ability to afford it.

Responding to King v. Burwell: Give Benefits to People, Not Health Insurers

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

The Supreme Court is expected announce its decision on King v. Burwell soon. The case hinges on whether Obamacare tax credits can be paid in states that did not establish their own exchanges. If the plaintiffs win, health insurers will lose tax credits that allow them to offer artificially low premiums to Obamacare beneficiaries. About seven million people will suddenly be asked to pay full premiums for their plans. To be blunt, they will freak out, and many will drop out of Obamacare, putting the president’s signature achievement in jeopardy.

This gives Congress the opportunity to present the president with reforms that, while falling well short of the promise to “repeal and replace Obamacare,” can address some of its worst shortcomings. Here is one suggestion: Every single penny of Obamacare’s federal spending on health benefits goes to insurers. Not one penny goes to beneficiaries themselves. How about giving that money to beneficiaries directly, and allowing them to decide how much to spend on medical care directly, instead of premiums to health insurers?

King v. Burwell: How Important Is Obamacare’s Individual Mandate?

HEALTHCARE LAW PROTESTS AT SUPREME COURT(A version of this Health Alert was published at Forbes.)

Later this month, the Supreme Court will likely announce its decision on King v. Burwell, the lawsuit which asserts tax credits currently being paid to health insurers in 34 to 37 states that use the federal health insurance exchange are illegal. If the Supreme Court stops these tax credits, over six million people will be required to pay the full premiums for their Obamacare policies. This will cause a crisis, which will demand a response by Congress and the president.

President Obama recently stated that, “Congress could fix this whole thing with a one-sentence provision.” True: Repealing Obamacare in its entirety would only take one sentence. However, that is not likely what he meant. Congress would have the opportunity to propose changes to Obamacare, but they would have to be signed by a reluctant president who will never again face the voters.

Now that both chambers of Congress have Republican majorities, any legislative response will surely include eliminating the individual mandate, the most unpopular feature of the law. Victory for King would make Obamacare policies in most of the country “unaffordable” and thereby relieve 11.1 million people of the individual mandate. Any “fix” that re-imposes the mandate would be political kryptonite for this Congress.

Many Congressional Republicans Opposing Obamacare Have A Conflict of Interest

(A version of this Health Alert was published in The Hill on June 3, 2015.)

One day in June or July, Congress may well have the opportunity to re-open the Affordable Care Act. Congress will not be able to repeal it, but it may be able to induce President Obama to sign amendments that significantly reduce the harm Obamacare has caused.

The grounds would be a Supreme Court decision in King v. Burwell, a case which seeks to make the Obama Administration enforce the Affordable Care Act as written, instead of according to the President’s shifting political priorities. The instances in which the Administration has changed the law without Congressional amendment are numerous.

The one at question in King v. Burwell is the Administration’s paying tax credits to health insurers offering Obamacare plans in 34 states with federally facilitated exchanges. As a result of these tax credits, people who buy health insurance on exchanges pay premiums much lower than the otherwise would. If the plaintiffs prevail, these tax credits will stop and premiums will go up. Many people will decide to drop coverage. On the other hand, tax credits will continue to be paid in the 16 states (plus the District of Columbia) which have state-based exchanges.

This is not a politically tenable situation, and both Congress and the President have an incentive to fix it as quickly as possible. Congressional Republicans have promised an offer which will be acceptable to the President while mitigating the worst effects of Obamacare. However, they have not rallied around unified response.

One reason may be that many Representatives and Senators are benefitting from another illegal payment of public monies the Administration is using to prop up Obamacare. When the Affordable Care Act was being debated, one sticking point was that politicians were proposing to impose an unpopular health insurance “reform” on vulnerable citizens while leaving their own generous health benefits untouched. Members of Congress and their staff have long been covered by the same health plan that unionized federal public servants enjoy.

Net Neutrality Versus Your Health

Laptop and Stethoscope(A version of this Health Alert, which is co-authored by Roslyn Layton, was published by iHealthBeatRoslyn Layton is a PhD fellow at Aalborg University’s Center for Communication, Media & Information Studies and vice president of Strand Consult.)

The Federal Communications Commission’s recent decision to regulate the Internet with the same law that was created for “Ma Bell” before World War II has plenty of implications for the health innovation economy. The era of “permission-less innovation” may be coming to an end as the FCC will scrutinize telemedicine applications and other broadband-enabled health care services because they involve connectivity. If Congress can act quickly to rein in the FCC, a disaster can be averted.