House Budget Committee report on poverty released Monday by Rep. Paul Ryan (R-Wis.) focuses on welfare reform and recommends a sweeping overhaul of social programs, including Head Start and Medicaid (see pp. 103-123).
Regardless of whether policymakers want to see the ACA improved or replaced, both sides can benefit from learning about the health policy experiments of the past. They reveal two valuable lessons:
First, the federal government’s spending on health care programs usually outpaces economic growth.*
This fact presents a significant challenge to policy-makers—as the growth in these programs crowds out other budgetary priorities. It also presents an increasing threat to taxpayers and consumers, who will, as a result, either face higher tax burdens, larger debt, or reduced focus on other important federal priorities.
Second, compared with initial government estimates and outlays, most programs have experienced exponential growth in real terms when compared to initial estimates. Certainly, a variety of modifications to eligibility and benefits have been made in these programs by Congress since their inception. And it is also true over the longer-term, demographic and market changes (like innovations in medical technology and longer life-expectancy) have significantly impacted the growth in spending within these programs. But the historical trend is clear: federal spending on health care programs will increase vastly and outpace economic growth. Moreover, the original estimates of program outlays are relatively poor indicators of actual spending over a longer period of time.
Based on a review of the facts, readers have solid ground for concluding the federal government has a poor track record of constraining health care spending over time. Accordingly, in light of the reality of past trends, concern about the trajectory of the future health care spending – whether in the ACA, Medicare, Medicaid, or other programs—is well placed.
The interactive tools on this page allow you to examine the use of recommended clinical preventive services by, and the prevalence of risk factors among, adults aged 50–64 across racial/ethnic groups, income levels, educational attainment, and health insurance coverage status.
Midlife adults who receive recommended preventive services and engage in healthy behaviors are more likely to remain healthy and function independently in old age. Yet the majority of midlife adults are not up-to-date with a core set of clinical preventive services and many experience risk factors for poor health, such as high blood pressure.
Medicaid once again rose as a percentage of total state spending (all state and federal funds combined) in fiscal 2013, after remaining unchanged in fiscal 2012. In both fiscal 2011 and fiscal 2012 Medicaid represented 23.9 percent of total state expenditures, while in fiscal 2013 it is estimated to represent 24.5 percent. Meanwhile, elementary and secondary education has gone from representing 20.4 percent of total state expenditures in fiscal 2011, to 20.1 percent in fiscal 2012, to an estimated 20.0 percent in fiscal 2013.
Link to full report.
Preserving the military health care benefit: Needed steps for reform – Foreign and Defense Policy – AEIOctober 18, 2013
These cost increases are not going unnoticed. A consensus has begun to emerge that the rising cost of military health care is unsustainable and poses a challenge as spiraling costs undermine the military’s ability to train, equip, and supply America’s men and women in uniform. As retired Marine Corps General Arnold Punaro has said, “I am very concerned that as current trends continue, this country will not have the strong military it needs 20 years from now, because all of the money is going to go to pay people that are no longer serving.”
Victoria Harden makes a strong defence for the public funding of health research, yet the improvements in health we have seen in the industrialized world have been occurring for nearly 200 years now, and when a person charts those improvements against the initiation of significant government funding of health research (which in the UK, for example, was launched in 1913 with the creation of the Medical Research Council) one simply does not see any deflection in the long-term trends in morbidity and mortality. So much health research continues to be supported by independent foundations (Wellcome Trust, Bill and Melinda Gates etc) to say nothing of that funded by private companies (the drug companies have huge budgets for R&D) that a person is forced to conclude that in aggregate there simply is no evidence that public research money has made any impact. After all, it is interesting how little benefit the former Soviet bloc’s generously funded research programs yielded in terms of health care. I don’t think that the sort of anecdotal approach that a historian like Victoria Harden may be forced to take can show anything short of crowding out (but see below.)
by Irena Dushi and Kalman Rupp
Using Health and Retirement Study data, the authors examine three groups of adults aged 51–56 in 1992 with different disability experiences over the following 8 years. Our analysis reveals three major findings. First, people who started and stayed nondisabled experienced stable financial security, with substantial improvement in household wealth despite substantial labor force withdrawal. Second, people who started as nondisabled but suffered a disability shock experienced a substantial increase in poverty rates and a sharp decline in median incomes. Average earnings loss was the greatest for that group, with public and private benefits replacing less than half of the loss, whereas the reduction in private health insurance coverage was more than alleviated by the increase in public health insurance coverage. Third, people who started and stayed disabled were behind at the baseline and have fallen further behind on most measures. An important exception is substantial improvement in health insurance coverage because of public safety nets.
“As of fiscal year 2009, the cities in this report had promised at least $118 billion more than they had in hand to cover health care benefits for current and future retirees. Cities had set aside enough money to cover 6 percent of their promises, compared with slightly more than 5 percent in states.”
President Obama on Tuesday will announce a broad new research initiative, starting with $100 million in 2014, to invent and refine new technologies to understand the human brain, senior administration officials said Monday.
This paper introduces a model of optimal health insurance. This model provides theoretical guidance of the relationship between household preferences, cost-sharing, and premiums. It applies this model to understand how the income tax subsidy distorts optimal cost-sharing in health insurance. Typically, insurance protects individuals from financial risk. Health insurance plans, however, are frequently designed to provide coverage at non-catastrophic levels of financial loss. The presence of a health insurance subsidy in the United States tax code, which enables individuals to pay premiums in pre-tax dollars, encourages the purchase of more generous health insurance plans. Little is known about how the tax subsidy affects preferences for the structure of cost-sharing in private plans. This model illustrates how the tax subsidy can distort the optimal cost-sharing schedule. The model is tested empirically using claims data in the Medical Expenditure Panel Survey and a regression discontinuity strategy that uses discrete changes in the marginal tax rate at the Social Security taxable maximum for identification.