Why No One Is Taking Robert Samuelson's Medicaid Deal Seriously

March 20, 2017

20 Marzo 2017

Robert Samuelson put forward what would ordinarily be a very reasonable proposal on Medicaid and Medicare in his column today. He suggested that the federal government take over the portion of Medicaid that deals with low-income elderly and fold it into the Medicare program, while leaving states with full responsibility for dealing with the part of Medicaid that deals with low-income families below retirement age.

While he is right that this sort of consolidation could likely reduce costs and prevent seniors from falling between the cracks in the two systems, there is a basic problem with turning Medicaid over to the states. There are a number of states controlled by Republicans where there is little or no interest in providing health care for low-income families.

This means that if Medicaid were turned completely over to the states, millions of low-income families would lose access to health care. For this reason, people who want to see low-income families get health care, which is the purpose of Medicaid, want to see the program remain partly under the federal government’s control.

Robert Samuelson put forward what would ordinarily be a very reasonable proposal on Medicaid and Medicare in his column today. He suggested that the federal government take over the portion of Medicaid that deals with low-income elderly and fold it into the Medicare program, while leaving states with full responsibility for dealing with the part of Medicaid that deals with low-income families below retirement age.

While he is right that this sort of consolidation could likely reduce costs and prevent seniors from falling between the cracks in the two systems, there is a basic problem with turning Medicaid over to the states. There are a number of states controlled by Republicans where there is little or no interest in providing health care for low-income families.

This means that if Medicaid were turned completely over to the states, millions of low-income families would lose access to health care. For this reason, people who want to see low-income families get health care, which is the purpose of Medicaid, want to see the program remain partly under the federal government’s control.

Washington Post Misinforms Readers, Texas Trump Supporter is Eligible for Health Care Assistance

By CEPRCEPR

March 19, 2017

19 Marzo 2017

A front page Washington Post piece profiled Tamara Estes, a supporter of Donald Trump who is anxious to see undocumented aliens deported, along with a neighboring family, the Corrals. The parents in the Corral family entered the country illegally, while the children were born in the United States and are therefore U.S. citizens.

In describing the situation of Ms. Estes, the piece tells readers that she earns $24,000 a year driving a school bus part-time. It then reports that she does not have health care insurance:

“She earns a bit too much to qualify for most government assistance but too little to buy health insurance, with its high monthly premiums and impossible deductibles.”

Actually, her income would qualify her for substantial assistance in buying health care insurance. According to the Kaiser Family Foundation’s premium calculator, the government would pay a subsidy of $548 a month for a $678 a month silver plan. This would leave her with a monthly payment of $130.

It is possible that Ms. Estes would still decide not to buy the insurance at this price, but it is wrong to say that she does not qualify for government assistance. The subsidy she could get on her insurance is considerably larger than the TANF benefit that a family of three would receive in Texas.

The Post should have provided correct information to readers on this issue. It might also have been useful to question Ms. Estes further on why she opted not to take advantage of the assistance available to her.

Addendum

I should have also mentioned that the Bronze plan would cost Ms. Estes $70 a month according to the Kaiser calculator. This also comes free wellness exams and other preventive care.

A front page Washington Post piece profiled Tamara Estes, a supporter of Donald Trump who is anxious to see undocumented aliens deported, along with a neighboring family, the Corrals. The parents in the Corral family entered the country illegally, while the children were born in the United States and are therefore U.S. citizens.

In describing the situation of Ms. Estes, the piece tells readers that she earns $24,000 a year driving a school bus part-time. It then reports that she does not have health care insurance:

“She earns a bit too much to qualify for most government assistance but too little to buy health insurance, with its high monthly premiums and impossible deductibles.”

Actually, her income would qualify her for substantial assistance in buying health care insurance. According to the Kaiser Family Foundation’s premium calculator, the government would pay a subsidy of $548 a month for a $678 a month silver plan. This would leave her with a monthly payment of $130.

It is possible that Ms. Estes would still decide not to buy the insurance at this price, but it is wrong to say that she does not qualify for government assistance. The subsidy she could get on her insurance is considerably larger than the TANF benefit that a family of three would receive in Texas.

The Post should have provided correct information to readers on this issue. It might also have been useful to question Ms. Estes further on why she opted not to take advantage of the assistance available to her.

Addendum

I should have also mentioned that the Bronze plan would cost Ms. Estes $70 a month according to the Kaiser calculator. This also comes free wellness exams and other preventive care.

The NYT Meant to Say "In Cutting Social Security and Medicare"

By CEPRCEPR

March 17, 2017

17 Marzo 2017

The politicians who are trying to cut Social Security and Medicare know that these programs are incredibly popular across the political spectrum. For this reason they typically use euphemisms when referring to plans to cut the benefits they provide, like calling for “reform,” “modernization,” or “slowing the growth.”

It is understandable that politicians pushing an unpopular agenda would try to mislead people about their actions, but it’s not clear why the NYT is playing the same game, telling readers in an article on the Trump budget:

“But the early reaction from members of his party on Capitol Hill was muted at best, reflecting in part the discomfort among many of the party’s leaders with a budget that makes no progress on tackling the growth of entitlements.”

The reference to “no progress on tackling the growth of entitlements” is the NYT’s way of saying the budget doesn’t cut Social Security and Medicare. This should be an easy one, it’s shorter and more informative to just describe the issue directly.

The politicians who are trying to cut Social Security and Medicare know that these programs are incredibly popular across the political spectrum. For this reason they typically use euphemisms when referring to plans to cut the benefits they provide, like calling for “reform,” “modernization,” or “slowing the growth.”

It is understandable that politicians pushing an unpopular agenda would try to mislead people about their actions, but it’s not clear why the NYT is playing the same game, telling readers in an article on the Trump budget:

“But the early reaction from members of his party on Capitol Hill was muted at best, reflecting in part the discomfort among many of the party’s leaders with a budget that makes no progress on tackling the growth of entitlements.”

The reference to “no progress on tackling the growth of entitlements” is the NYT’s way of saying the budget doesn’t cut Social Security and Medicare. This should be an easy one, it’s shorter and more informative to just describe the issue directly.

The Public is Clueless About the Federal Budget and It's the New York Times' Fault

By CEPRCEPR

March 17, 2017

17 Marzo 2017

Paul Krugman criticized the Trump administration for its budget, which would cut or eliminate many programs that benefit low- and moderate-income people. In his piece, Krugman points out that the public is incredibly ignorant on the budget, with most people having virtually no idea of where most spending goes. In particular, he referenced an analysis that found people on average believed we spend more than 30 percent of the budget on foreign aid. The actual figure is less than one percent. This is the sort of item that inevitably leads people to deplore the ignorance of the masses. While ignorance is deplorable, instead of blaming the masses, we might more appropriately look at the elites. The overwhelming majority of people are never going to look at a budget document. Insofar as they get any information on the budget, it is from reporters who tell them how much we spend in various areas of the budget. (They may get this information indirectly from their friends who read the newspaper or listen to news.) When they hear about spending, they will invariably hear things like we spend $40 billion a year on foreign aid or $17.3 billion on Temporary Assistance for Needy Families (TANF). Most people will think these figures are large sums, since they dwarf the sums that people see in their daily lives. In fact, the former is less than one percent of the $4.1 trillion that we will spend in 2017, while the latter is just over 0.4 percent of total spending. The media could do a much better job of informing the public about spending (i.e. by doing their job) if they made a point of putting these figures in context. As it is, giving people these really huge numbers without context is essentially telling them nothing. As an alternative, they could make a point of always referring to these numbers as a share of the budget and/or expressing them on a per person basis (e.g. the spending on TANF comes to a bit more than $50 per person per year from every person in the country).

Government Granted Patent Monopolies Cause People to Skip Cancer Treatments

By CEPRCEPR

March 16, 2017

16 Marzo 2017

NPR had an interesting segment on the difficulties that many families have paying for cancer treatments. The piece points out that even middle-income families with good insurance may still face co-payments of tens of thousands of dollars a year.

One item not mentioned in this piece is that the reason the prices of new cancer drugs is high is that the government grants companies patent monopolies. This is done as a way to finance research. In almost all cases these drugs would be available for less than a thousand dollars for a year’s treatment if the drugs were sold in a free market.

While it is necessary to pay for research, there are more modern and efficient mechanisms than patent monopolies (see chapter 5 of Rigged).

NPR had an interesting segment on the difficulties that many families have paying for cancer treatments. The piece points out that even middle-income families with good insurance may still face co-payments of tens of thousands of dollars a year.

One item not mentioned in this piece is that the reason the prices of new cancer drugs is high is that the government grants companies patent monopolies. This is done as a way to finance research. In almost all cases these drugs would be available for less than a thousand dollars for a year’s treatment if the drugs were sold in a free market.

While it is necessary to pay for research, there are more modern and efficient mechanisms than patent monopolies (see chapter 5 of Rigged).

I Am Out of Here!

By CEPRCEPR

March 08, 2017

08 Marzo 2017

On vacation until Thursday, March 16th. Remember, don’t believe anything you read in the paper until then.

Washington Post's Mind Readers Tell Us the Real Goal of Republican Appeal of Obamacare

By CEPRCEPR

March 07, 2017

07 Marzo 2017

In an article on the main features of the Republican replacement for Obamacare, the Post told readers:

“At the same time, the shift to take income into account could create a potentially difficult ripple effect for Republicans, who regard a reduction in the federal government’s role in health care as a central reason to abandon the sprawling 2010 health care law (emphasis added).”

This comment is in reference to the decision to phase out the heath care tax credit for couples with incomes over $150,000.

While it is possible that the opposition to this phase out is due to Republicans who somehow see this as excessive federal government involvement in health care, it could also be due to the fact that Republicans just want to give more money to rich people. Fortunately, the Post’s mind reading reporters can tell us the true motive.

In an article on the main features of the Republican replacement for Obamacare, the Post told readers:

“At the same time, the shift to take income into account could create a potentially difficult ripple effect for Republicans, who regard a reduction in the federal government’s role in health care as a central reason to abandon the sprawling 2010 health care law (emphasis added).”

This comment is in reference to the decision to phase out the heath care tax credit for couples with incomes over $150,000.

While it is possible that the opposition to this phase out is due to Republicans who somehow see this as excessive federal government involvement in health care, it could also be due to the fact that Republicans just want to give more money to rich people. Fortunately, the Post’s mind reading reporters can tell us the true motive.

• Affordable Care Act

Republicans Look to Top 50 Million Uninsured

By CEPRCEPR

March 07, 2017

07 Marzo 2017

In the years before the Affordable Care Act (ACA) the uninsured population peaked at just over 50 million people. It fell sharply when the main provisions of the ACA took effect, falling to less than 28 million in recent quarters. However, in its effort to make America great again, the Republicans expect to raise the number of uninsured back above 50 million. Serious analysis of their plan shows that they have a good shot at meeting this goal. While the Republicans are in principle keeping some of the provisions of the ACA that were responsible for lowering the number of uninsured, this effect will be temporary. In most cases, the situation for most people not covered by their employers will be the same or worse than before the ACA took effect. For example, the plan leaves in place the expansion of Medicaid through 2020. This should be long enough so that most currently serving Republican governors will not have to deal with the effect of the elimination of this provision. After 2020 people benefiting from the expansion will be allowed to remain on Medicaid, but new people will not be added. Since people tend to shift on and off Medicaid (something rarely understood by reporters who cover the ACA), after two or three years the vast majority of the people who benefited from the expansion will no longer be getting Medicaid. By 2025, the impact of the expansion on the number of the uninsured will be trivial. The plan also allows insurers to charge people with pre-existing conditions higher rates, if they allow their insurance to lapse. While the provision allowing people to avoid being penalized for pre-existing conditions, if they maintain continuous coverage, may appear to provide protection, in reality this is not likely to be the case. Before the ACA workers were allowed to keep employer based coverage for a substantial period of time after they left their employer under COBRA. The take up rate under this law was always low, primarily because most workers could not afford to keep their coverage once they left their jobs. This is likely to be the case when the Republican plan takes effect as well.

• WorkersSector del trabajo

One Way to Counter Job Killing Robots: Stop the Federal Reserve Board from Raising Interest Rates

By CEPRCEPR

March 07, 2017

07 Marzo 2017

It is amazing that there is not an effort to have a mass deportation of economists. After all, almost the whole profession completely missed the housing bubble and the economic crisis that resulted from its collapse. They failed to see the weakness of the recovery and now they can't decide whether we will have too few workers or too few jobs. (This is known as the "which way is up?" problem in economics.) Claire Cain Miller gave us a "too few jobs" story in her NYT column that asked how we can offset the impact of job killing robots. She discusses various ideas that will create jobs or generate incomes for the people displaced by robots. It is worth noting that if we think the problem really is too few jobs, in effect, that productivity is soaring, then many other commonly discussed economic problems do not really exist. If we have too few jobs then we have no reason to worry about government budget deficits. The problem of government budget deficits (if there is one) is that excessive spending by the government is creating too much demand in an economy that is unable to supply enough goods and services. Similarly, in the too few jobs story there is no reason to worry about the demographics of retiring baby boomers. That is a story of too few workers to care for a growing population of retirees. There is also no reason to worry about the burden of excessive regulations stifling growth. The too few jobs story is telling us that the robots are leading to mass displacement of workers in spite of whatever burden is created by regulations. The implication is that we would have even if fewer jobs if not for the burden of regulations (assuming that regulations actually do slow growth). And of course, if the problem is the robots taking all the jobs there is no reason for the Federal Reserve Board to raise interest rates. The point of higher interest rates is slow the rate of job creation so that the labor market doesn't get too tight and cause inflation. If we are worried that robots are getting rid of all the jobs it doesn't make any sense for the Fed to deliberately make the problem worse by slowing the rate of job creation. It would be nice if economists could either agree than we face a world of soaring productivity so that scarcity is not a problem or (as the data show) we face a world of weak productivity growth, so that we could face some problems of scarcity. Given the high average pay in the profession, it would be reasonable to think there could be some consensus or at least some clear thinking on the implications of each position.

Ross Douthat's Deal for Blacks

By CEPRCEPR

March 06, 2017

06 Marzo 2017

In recognition of the wrongs done by slavery, but not subsequent legal and actual discrimination, NYT columnist Ross Douthat proposes making a one time payment of $10,000 to every person who trace their ancestry to someone who was enslaved. This payment would be in exchange for ending affirmative action in education, employment, or any other area. The idea seems to be that after the descendants of slaves get their check, we’re all good.

For anyone interested on how this measures up in the scheme of things, currently the median income for a white household is $71,300. The median income for an black household is $43,300. Since this is for an adjusted household of three people, Douthat’s $10,000 per person payment will put the median black household slightly above the median income for white households, in the year they get it.

In subsequent years, they will get nothing to offset the discrimination they experience in schools, hiring, getting mortgages, and even selling baseball cards on eBay. Apparently, Douthat thinks that his one time payment of $10K (only to those with direct ancestors who were enslaved) would make things right. My guess is that this deal wouldn’t look too good to people who are better at arithmetic than Mr. Douthat.

In recognition of the wrongs done by slavery, but not subsequent legal and actual discrimination, NYT columnist Ross Douthat proposes making a one time payment of $10,000 to every person who trace their ancestry to someone who was enslaved. This payment would be in exchange for ending affirmative action in education, employment, or any other area. The idea seems to be that after the descendants of slaves get their check, we’re all good.

For anyone interested on how this measures up in the scheme of things, currently the median income for a white household is $71,300. The median income for an black household is $43,300. Since this is for an adjusted household of three people, Douthat’s $10,000 per person payment will put the median black household slightly above the median income for white households, in the year they get it.

In subsequent years, they will get nothing to offset the discrimination they experience in schools, hiring, getting mortgages, and even selling baseball cards on eBay. Apparently, Douthat thinks that his one time payment of $10K (only to those with direct ancestors who were enslaved) would make things right. My guess is that this deal wouldn’t look too good to people who are better at arithmetic than Mr. Douthat.