House votes to repeal ObamaCare medical device tax | TheHill

July 24, 2018

The House on Tuesday voted to repeal ObamaCare’s medical device tax, a provision that members of both parties have criticized as harming innovation.

The House voted 283 to 132 to repeal the 2.3 percent tax on sales of medical devices, with some Democrats joining Republicans to approve the measure. 57 Democrats voted for the measure.

via House votes to repeal ObamaCare medical device tax | TheHill

Making health insurance enrollment as automatic as possible

May 4, 2018

One promising strategy to address these challenges involves the use of automatic, default enrollment into insurance. An automatic enrollment program can improve participation by creating options that require little or no premium payment and that require very little effort from the consumer—apart from providing consent, perhaps through failing to opt out.

We propose an approach aimed at making enrollment into insurance as automatic as possible. This will be a complex undertaking. Nonetheless, once it is up and running, we believe this approach can dramatically improve enrollment into insurance, and thus help to stabilize the market and make it more attractive for all consumers.

via Making health insurance enrollment as automatic as possible – AEI

The Effect of the Risk Corridors Program on Marketplace Premiums and Participation

January 17, 2018

We investigate the effect of the Risk Corridors (RC) program on premiums and insurer participation in the Affordable Care Act (ACA)’s Health Insurance Marketplaces. The RC program, which was defunded ahead of coverage year 2016, and ended in 2017, is a risk sharing mechanism: it makes payments to insurers whose costs are high relative to their revenue, and collects payments from insurers whose costs are relatively low. We show theoretically that the RC program creates strong incentives to lower premiums for some insurers. Empirically, we find that insurers who claimed RC payments in 2015, before defunding, had greater premium increases in 2017, after the program ended. Insurance markets in which more insurers made RC claims experienced larger premium increases after the program ended, reflecting equilibrium effects. We do not find any evidence that insurers with larger RC claims in 2015 were less likely to participate in the ACA Marketplaces in 2016 and 2017. Overall we find that the end of the RC program significantly contributed to premium growth.

via The Effect of the Risk Corridors Program on Marketplace Premiums and Participation by Daniel Sacks, Khoa Vu, Tsan-Yao Huang, Pinar Karaca-Mandic :: SSRN

Trump offers new rule going after ObamaCare

January 4, 2018

Workers would be allowed to band together to buy health insurance under a proposed rule released Thursday by the Department of Labor.

The proposed rule was issued in response to an executive order by President Trump, which would allow associations of workers to purchase cheaper health insurance that’s not subject to the same rules as plans under ObamaCare.

via Trump offers new rule going after ObamaCare | TheHill

JCT | Distributional Effects Of The Conference Agreement For H.R.1, The “Tax Cuts And Jobs Act”

December 21, 2017

This analysis includes the impact of the repeal of the individual mandate penalty.

via JCX-68-17

The Tax Bill And The Individual Mandate: What Happened, And What Does It Mean?

December 21, 2017

As has been widely reported, both houses of Congress have now voted to repeal the Affordable Care Act’s (ACA) individual shared responsibility penalty, effective for 2019, as part of the 2017 tax reconciliation act. This post discusses first what the repeal does and does not do. Second it discusses the repeal’s possible effects.

via The Tax Bill And The Individual Mandate: What Happened, And What Does It Mean?

What The GOP Pols Have Wrought—A Fiscal, Economic And Political Monster, Part 1

December 21, 2017

As we have long insisted, America’s health care system consists of the worst of both worlds. It amounts to socialism for the beneficiaries, which generates uncontainable demand via third-party paid, cost-averaged pricing; and crony capitalism for the providers, where delivery system cartels of doctors, hospitals, nursing homes, pharma suppliers, medical device makers etc. have implanted themselves deep on K-street and have thereby rigged reimbursement systems for maximum private revenue gain (and minimum system efficiency and competitive discipline).

via Contra Corner » What The GOP Pols Have Wrought—A Fiscal, Economic And Political Monster, Part 1

Pharma & Healthcare #BeltwayBrief DEC 13, 2017 @ 08:01 AM 1,011 The Little Black Book of Billionaire Secrets Under New Bill, Medical Device Tax Might Vanish, But Only Temporarily

December 14, 2017

A controversial tax on medical device sales under the Affordable Care Act could be suspended again rather than disappear permanently under new legislation emerging in the Republican-led Congress.

The 2.3% tax on medical device sales that is part of the ACA has already been on a temporary hiatus since the beginning of 2016. That suspension is scheduled to expire at the end of the month.

But new legislation emerging in the U.S. House of Representatives would put the medical device tax on another hiatus. Reps Erik Paulsen (R-Minnesota) and Jackie Walorski (R-Indiana) said the proposed legislation would suspend the medical device tax for another five years under a new bill introduced Tuesday.

via Under New Bill, Medical Device Tax Might Vanish, But Only Temporarily

Regulation Strategies for the Provision of Paternalistic Goods

December 9, 2017

In this study, we analyze the regulation of markets for the provision of services whose costs are subsidized for paternalistic reasons. We model the choice of a benevolent regulator who wants to maximize consumer welfare in a setting where quality cannot be verified and the good provided is fully subsidized. The choice is thus made between two types of providers (profit maximizers and altruistic providers) and two frameworks (monopoly franchise and quality competition). Our analysis shows that in this environment the performance of mixed markets is always dominated by pure forms. Moreover, although making efficient providers compete for the market minimizes cost, the choice of quality competition with altruistic providers may be preferable from a welfare point of view whenever service quality is relevant and the productivity differential is not substantial.

via Regulation Strategies for the Provision of Paternalistic Goods by Laura Levaggi, Rosella Levaggi :: SSRN

Editor’s note: the U.S. health system is a “mixed markets” approach, implying we could maximize welfare by moving towards market competition or quality competition using altruistic providers.

Price Transparency and Incomplete Contracts in Health Care

December 8, 2017

Market-based health reform solutions dominate the post-Affordable Care Act landscape. Under these plans, competition is supposed to bring down ballooning prices, and patients are to act more like consumers, refusing low-value, medically unnecessary care. Whether one embraces these solutions, one thing is clear: they cannot work absent price transparency—which the U.S. system lacks. To the contrary, the law explicitly enforces open price term contracts between patients and providers.

This Article is the first to synthesize theories of incomplete contracts from traditional law and economics and recent work in the behavioral sciences and to apply these theories to the price transparency problem. It argues that doctrine is out of step with theory, and proposes a contract law solution: an information-forcing penalty default rule. Courts should impose an undesirable default to force the parties to contract around the default. When providers fail to include a price, and it would have been reasonable to do so, courts should fill the gap with a price of $0. Rather than risk not being paid, providers will include a price in the patient contract. Legislative action has been both slow and ineffective in fixing the crucial price transparency problem. At no other time in recent memory has the importance of contract theory been put into such sharp relief and, remarkably, in an area of law that is at the very core of the emerging political economy.

via Price Transparency and Incomplete Contracts in Health Care by Wendy Epstein :: SSRN