December 8, 2013
Avastin costs about $50 per injection.
Lucentis costs about $2,000 per injection.
Doctors choose the more expensive drug more than half a million times every year, a choice that costs the Medicare program, the largest single customer, an extra $1 billion or more annually.
Spending that much may make little sense for a country burdened by ever-
rising health bills, but as is often the case in American health care, there is a certain economic logic: Doctors and drugmakers profit when more-costly treatments are adopted.
via An effective eye drug is available for $50. But many doctors choose a $2,000 alternative. – The Washington Post.
December 8, 2013
The good news, if you want to call it that, is that roughly 1.6 million Americans have enrolled in ObamaCare so far.
The not-so-good news is that 1.46 million of them actually signed up for Medicaid. If that trend continues, it could bankrupt both federal and state governments.
via The Medicaid time bomb | New York Post.
December 3, 2013
If you agree with the dependency narrative, your hypothesis would go something like this: The states that make Medicaid available to more people should see, on average, a reduction in their employment-to-population ratios compared with states that don\’t expand, as some residents in expansion states become able to obtain health coverage for free.
Conversely, the liberal hypothesis should be that there will be no difference between expansion and nonexpansion states in the share of the population that\’s employed. There might even be a slight increase in the expansion states as more people get a handle on chronic health conditions and are able to work as a result.
Previous policy changes, including the adoption of Medicaid starting in the 1960s and the expansion of Medicaid in Oregon in 2008, have offered the opportunity for similar observations. But what makes next year such a good test is that it affects every state simultaneously, and those states have been split in exactly equal numbers.
That means the sample size couldn\’t be bigger, and whatever effects are measured won\’t be the result of different time periods. And while the test and control groups aren\’t quite randomly selected, the decision over whether to take part was made by lawmakers and governors, not those whose behavior stands to be affected.
via Does Medicaid Breed Dependency? – Bloomberg.
November 29, 2013
Switzerland is considering a radical reimagining of its welfare state. Instead of mish-mash of individual programs meant to help people manage different parts of their lives, they\’re thinking of simply guaranteeing every resident a basic income that they can spend how they like. Join Ezra Klein and top experts as they discuss whether this is a good idea or a nutty European fantasy.
via Guaranteed Income for All: Fantasy or Possibility?.
November 20, 2013
December 8 marks the 10th anniversary of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), which established the Part D program and made available coverage for modern pharmaceutical therapies for all Medicare beneficiaries for the first time. The success of Part D over the past decade makes it a model for future entitlement reforms.
At the center of the Part D policy design is a reliance on market forces and competition. This approach raised three key questions: Would insurers and beneficiaries participate at high enough rates to create plan choice for beneficiaries? Would there be sufficient competition among insurers to result in affordability for beneficiaries? What would the long-term fiscal impact be on the federal budget?
Insurer participation proved to not be a concern. Indeed, the MMA provided for federally run “fallback” drug plans to be implemented if private sector plan sponsors did not materialize. No fallback plan has ever been needed.
Beneficiaries display great satisfaction with Part D and in 2013 have at least 23 different plans to choose from in every region. Moreover, the system in which plans bid against each other for beneficiaries and negotiate directly with drug manufacturers to achieve lower pricing has generated affordable premiums.
A second reflection of competitive pressures has been the downward trajectory of federal budget costs, in which actual costs for 2012 fell below every projection of those costs over the past decade.
The Medicare Prescription Drug Benefit has been an unmitigated success. A market-based approach to further federal entitlement program offers additional opportunities for controlling taxpayer costs and generating high levels of beneficiary satisfaction.
via Competition and the Medicare Part D Program | Research | American Action Forum.
November 1, 2013
Over the long term, netting out the bubbles, Americans have achieved impressive increases in their ongoing wealth.The rate of increase may seem modest, but in fact represents a miracle of the market economy. The trend is for inflation-adjusted, per capita wealth in the US to increase by about 2% per year.
via “Wealth” and illusion | AEIdeas.
November 1, 2013
Policymakers can boost income and payroll tax revenue by taking steps to facilitate longer working lives – for example, by changing the structure of Social Security and Medicare so that they stop punishing work at older ages.
Some have objected to such recommendations, arguing that older workers who stay on the job longer make it harder for younger workers to find employment. They see the labor market as a competition between grandma, who\’s had years to secure her financial future, and junior, who\’s just starting out and is facing bleak job prospects.
But there\’s no evidence that older workers threaten the jobs of younger ones. In fact, reducing work disincentives in Social Security and Medicare is likely to boost economic output, reducing the size of the tax increases and entitlement cuts that younger workers will need to face.
via Baby Boomers Aren’t Taking Jobs From Millennials – Economic Intelligence (usnews.com).
October 31, 2013
The latest version of a bill to repeal Medicare\’s sustainable growth rate formula freezes payment levels through 2023 but creates a performance-based incentive program in 2017, according to a discussion draft obtained by MedPage Today.
That program — dubbed the \”value-based performance (VBP) payment program\” — would replace the myriad of current incentive programs for physicians and create a \”single budget-neutral incentive payment program,\” according to the draft from the Senate Finance and House Ways and Means Committees.
via SGR Repeal Bill: 10-Year Pay Freeze, but P4P Incentives.
October 24, 2013
Our tax system is unfair, distortionary, wasteful, and a user’s nightmare. Most important, it’s limiting our country’s economic potential. But can we have a far simpler tax system that generates at least as much revenue and is more progressive?
Yes, it’s called the Common Sense Tax (CST). It’s designed to be revenue neutral and kick start our ailing economy. It features just two taxes. One is a payroll tax that taxes all labor earnings at a flat 13 percent rate. The other is a personal income tax with a 25 percent tax on household income above $100,000, in the case of married households, and $50,000, in the case of singles.
The CST has no explicit corporate income tax and no explicit estate and gift tax. But the CST income tax base includes imputed corporate profits and gifts and inheritances received.
via A Tax Reform Plan that Both Parties Can Like | The Fiscal Times.
October 24, 2013
Medicare, one of the federal government’s largest programs, provides health care benefits primarily to elderly people. The usual age of eligibility for those benefits is 65, although certain people qualify for the program earlier. Medicare is available to people under age 65 who have been eligible for Social Security disability benefits for at least 24 months or who have end-stage renal disease. Outlays for Medicare are projected to increase rapidly in coming decades because of the retirement of the baby-boom generation and because growth in per capita spending for health care is expected to continue to exceed growth in per capita gross domestic product over the long term. Moreover, increases in life expectancy mean that the average length of time that people are covered by Medicare has risen significantly since the program began in 1965. That trend, which increases the program’s costs, will almost certainly continue.In the course of preparing its forthcoming report on options for reducing the budget deficit, the Congressional Budget Office CBO updated its analysis of an option to raise the eligibility age for Medicare from 65 to 67. The agency’s new estimate of the net budgetary savings from that option is much lower than its earlier estimates for proposals to raise Medicare’s eligibility age. This report describes CBO’s new estimate and the reasons for the change.
via CBO | Raising the Age of Eligibility for Medicare to 67: An Updated Estimate of the Budgetary Effects.