Exploring the Taxation of New York’s New Paid Family Medical Leave Benefit by Richard Barnes :: SSRN

January 2, 2019

This article examines the taxation of benefits received under New York’s new Paid Family Leave Act. The article argues that New York’s Paid Family Leave Act is unique when compared to similar provisions enacted in other states to date and that benefits paid under the tax are excluded from federal gross income by operation of Internal Revenue Code Sections 104 and 105. Additionally, the article contends that New York’s Department of Taxation and Finance’s Notice N-17-12 errs in concluding that amounts paid under the Act are includible in federal gross income. The article contends that insurance policies issued in compliance with the Act are “health insurance” and that income replacement benefits paid under the Act are paid for “sickness” as described in Code Sections 104 and 105.

via Exploring the Taxation of New York’s New Paid Family Medical Leave Benefit by Richard Barnes :: SSRN


Reliance on Medicare Providers by Veterans after Becoming Age‐Eligible for Medicare is Associated with the Use of More Outpatient Services

December 20, 2018

Objective
To estimate the effect of Medicare use on the receipt of outpatient services from 2001 through 2015 for a cohort of Veterans Administration (VA) users who became age‐eligible for Medicare in 1998–2000.

Data Sources/Study Setting
VA administrative data linked with Medicare claims for veterans who participated in the 1999 Large Health Survey of Enrolled Veterans.

Study Design
We coded each veteran as VA‐reliant or Medicare‐reliant based on the number of visits in each system and compared the health and social risk factors between VA‐reliant and Medicare‐reliant veterans. We used bivariate probit and instrumental variables models to estimate the association between a veteran’s reliance on Medicare and the receipt of outpatient procedures in Medicare and the VA.

Principal Findings
Veterans who chose to rely on the VA (n = 4,317) had substantially worse social and health risk factors than Medicare‐reliant veterans (n = 2,567). Medicare reliance was associated with greater use of outpatient services for 24 of the 28 types of services considered. Instrumental variable estimates found significant effects of Medicare reliance on receipt of advanced imaging and cardiovascular testing.

Conclusions
Expanded access to fee‐for‐service care in the community may be expensive, while the VA will likely continue to care for the most vulnerable veterans.

via Reliance on Medicare Providers by Veterans after Becoming Age‐Eligible for Medicare is Associated with the Use of More Outpatient Services – Hebert – 2018 – Health Services Research – Wiley Online Library


Separating the Wheat from the Chaff: A Disaggregate Analysis of the Effects of Public Spending in the US

June 7, 2018

In this paper, we undertake a systematic disaggregate analysis of the effects of government spending on economic activity in the US. The level of disaggregation we consider is the highest available and is unprecedented in the empirical literature. More specifically, public consumption and public investment are decomposed into various subcategories, which are measured at the levels of the federal (defence and non‐defence), and state and local governments. For each subcategory, we estimate a structural vector autoregression that identifies public spending shocks through the conditional heteroskedasticity of the structural disturbances, thus relaxing the identifying restrictions commonly used in the literature. Our analysis reveals significant heterogeneity in the effects of public spending shocks on output both across subcategories and government levels. Shocks to spending on durables and structures are found to have the largest and most persistent effect on aggregate output, with a peak multiplier that exceeds 1. Our results also suggest that there is little association between the size of a given category of public expenditures and the magnitude of its effect on output.

via Separating the Wheat from the Chaff: A Disaggregate Analysis of the Effects of Public Spending in the US by Hafedh Bouakez, Denis Larocque, Michel Normandin :: SSRN


Wasted Health Spending: Who’s Picking Up The Tab?

June 1, 2018

The Institute of Medicine estimated that waste consumed 30 percent of US health dollars in 2009. Donald M. Berwick and Andrew D. Hackbarth, working from a 2011 baseline, pegged the midpoint of reasonable waste estimates even higher, at 34 percent. A crude extrapolation of these figures, given the steady rise in overall health expenditures, implies that wasted spending now comfortably exceeds $1 trillion annually (see Exhibit 1), a sum that could fund the entire Medicaid program twice over.

via Wasted Health Spending: Who’s Picking Up The Tab?


Perverse Incentives: Why Everyone Prefers High Drug Prices — Except for Those Who Pay the Bills

May 29, 2018

Health care spending rarely follows an ordinary, rational model. Yet even in that context, prescription drug prices are rising at a puzzling rate. What is causing the phenomenon? Quite simply, incentives percolating throughout the prescription drug market push players toward higher prices. At the center, lies the highly secretive and concentrated PBM industry — middle players who negotiate between drug companies and health insurers, arranging for rebates and establishing coverage levels for patients.

Contracts between drug companies and the middle players are closely guarded secrets. The PBM customers, including Medicare, private insurers, and even their auditors, are not permitted access to the terms. And the middle players are not alone; everyone is feeding at the trough.

Markets, like gardens, grow best in the sun; they wither without information. Thus, competitive distortions and suboptimal outcomes are unsurprising.

Despite the extreme secrecy, details have begun to seep out — through case documents (including recent contract disputes among parties), government reports, shareholder disclosures, and industry insider reports. Piecing together these sources, this article presents a picture of incentive structures in which higher-priced drugs receive favorable treatment, and patients are channeled towards more expensive medicines. In exchange for financial incentives structured in different ways to appeal to hospitals, insurers, doctors, and even patient advocacy groups, drug companies ensure that lower-priced substitutes cannot gain a foothold. It is a win-win for everyone, except of course for taxpayers and society. This article also analyzes popular proposals that are unlikely to work and suggests approaches for aligning incentives.

via Perverse Incentives: Why Everyone Prefers High Drug Prices — Except for Those Who Pay the Bills by Robin Feldman :: SSRN


Declining Teen Employment: Minimum Wages, Other Explanations, and Implications for Human Capital Investment

May 29, 2018

We explore the decline in teen employment in the United States since 2000, which was sharpest for those age 16–17. We consider three explanatory factors: a rising minimum wage that could reduce employment opportunities for teens and potentially increase the value of investing in schooling; rising returns to schooling; and increasing competition from immigrants that, like the minimum wage, could reduce employment opportunities and raise the returns to human capital investment. We find that higher minimum wages are the predominant factor explaining changes in the schooling and workforce behavior of those age 16–17 since 2000. We also consider implications for human capital. Higher minimum wages have led both to fewer teens in school and employed at the same time, and to more teens in school but not employed, which is potentially consistent with a greater focus on schooling. We find no evidence that higher minimum wages have led to greater human capital investment. If anything, the evidence points to adverse effects on longer-run earnings for those exposed to these higher minimum wages as teenagers.

via Declining Teen Employment: Minimum Wages, Other Explanations, and Implications for Human Capital Investment by David Neumark, Cortnie Shupe :: SSRN


Fear and the Safety Net: Evidence from Secure Communities

May 17, 2018

We study the impact of deportation fear on the incomplete take-up of federal safety net programs in the United States. We exploit changes in deportation fear due to the roll-out and intensity of Secure Communities (SC), an immigration enforcement program administered by the Immigration and Customs Enforcement Agency (ICE) from 2008 to 2014. The SC program empowers the federal government to check the immigration status of anyone arrested by local law enforcement agencies and has led to the issuance of over two million detainers and the forcible removal of approximately 380,000 immigrants. We estimate the spillover effects of SC on Hispanic citizens, finding significant declines in ACA sign-ups and food stamp take-up, particularly among mixed-status households and areas where deportation fear is highest. In contrast, we find little response to SC among Hispanic households residing in sanctuary cities. Our results are most consistent with network effects that perpetuate fear rather than lack of benefit information or stigma.

via Fear and the Safety Net: Evidence from Secure Communities by Marcella Alsan, Crystal Yang :: SSRN