“So, so tired of seeing children dying of measles. Our measles ward has overflowed and using an additional 15 beds. One to 2 kids dying every day from measles. Another one just started seizing as measles attacks his brain. It’s a truly terrible disease. I had forgotten since it has been uncommon in the US since my childhood.”
This poignant Facebook post came from my wife’s cousin, a physician volunteering in Papua New Guinea, which is suffering from a measles epidemic. It reminds me of a recent conversation with a friend. She mentioned that she and her husband have chosen not to vaccinate their daughter, and that “this was a very personal decision for us.”
This goes to the heart of how we think about evidence and about risk in an uncertain world. And is it possible for such a decision to be truly personal?
We are routinely bombarded by claims that have been “proven” with statistics. Today’s column offers tips in judging these claims.
- Surprising results get headlines. “Did you hear that hurricanes with female names are more deadly? Who knew?!!” An Internet search of this report from last week yields thousands of citations.
- “That’s why autism is on the rise!! It’s the vaccines!” The 1998 study making this claim got a lot more ink than The Lancet’s retraction, after the study’s publisher learned that the results were fraudulent.
Pure fabrication may be rare, but many studies are published with claims that should be served with many grains of salt. The first question to ask: “Is there enough data?”
Will more be insured? Will we have the health professionals to meet their needs?
Last month’s column looked at how health insurance eligibility changed under ACA and explored the “coverage gap” in states choosing not to expand Medicaid. This week we’ll explore other implications of this revolutionary change in how health insurance is secured and paid for.
On balance, will the share uninsured go down?
Cutting the ranks of the uninsured is a key objective of ACA. Not all of the 8 million who signed up for new plans were previously uninsured: According to early surveys, two thirds to three quarters of these enrollees were changing plans. No surprise here. ACA offers subsidies that are significant for many, making the Marketplace plans very attractive for those who qualify. Others who didn’t qualify for subsidies still found the Marketplace plans a good deal. Competition spurred by the Marketplace drove down prices for nonemployer plans in some states, including New York.
Yet some will choose to pay the penalty for being uninsured instead of the premiums. Insurers are now required to cover a fixed set of preventative services at no extra cost to the consumer. The law also limits what consumers can be charged for care within a single year. Initially, ACA required that a 2014 policy must cover all costs above $6,350 for singles or $12,700 for families. That’s the “out-of-pocket maximum,” now delayed until 2015. (These deductibles are subsidized for individuals and families below 250% of the poverty line.) This shifts the financial burden of major illness from the insured to the insurer. Both changes make for better insurance—but they cost insurers more and premiums will rise.
Part 1: Health Insurance Coverage for the Poor
The Affordable Care Act’s initial enrollment period is over and Health & Human Services Secretary Kathleen Sibelius has resigned, having earned a jacket full of Purple Hearts from countless Congressional hearings. What have we wrought?
Make no mistake—this will revolutionize health care delivery in the United States. As the Arab Spring suggests, revolutions can be good or bad. Or both, as in this case.
In the first of a two-part column on the Patient Protection and Affordable Care Act (ACA), let’s focus on how coverage for the poor has changed.
This piece first appeared in Mid-Hudson Valley Community Profiles Viewpoints section.
New York State’s local governments were shielded from the fallout of the Great Recession but did not escape unscathed: Though federal stimulus funds postponed the pain, county government spending across the state and in the Mid-Hudson Valley has now been flat or declining for at least two years. Yet governments are under continuing pressure to find efficiencies.
The Polar Vortex has me thinking about global warming. No, not the reflexive, “How could the world be warming and still post the coldest temps in recent memory?” I’m on board with the scientific consensus on climate change and I’ve a healthy appreciation for the randomness of complex systems. Most economist & weather forecaster jokes are interchangeable, after all.
Once again, the Congressional Budget Office is weighing in on a current policy debate—in a just-released report, they have sided with the consensus view among economists that an increase in the minimum wage will eliminate jobs: “Most [low wage workers] would receive higher pay that would increase their family’s income, and some of those families would see their income rise above the federal poverty threshold. But some jobs for low-wage workers would probably be eliminated, the income of most workers who became jobless would fall substantially, and the share of low-wage workers who were employed would probably fall slightly.” If the minimum wage goes to $9/hour, CBO estimates job loss of about 100,000 in the second half of 2016, relative to what might otherwise have occurred. If the minimum wage rises to $10.10, they estimate the loss at about 500,000 jobs.
Every policy change has good and bad effects. If the goal is to maximize the number of jobs, we should eliminate the minimum wage entirely. But that would open up some workers to a level of exploitation most of us would find unacceptable, so we put up with some degree of job loss in exchange for this protection. And we counter the effects of the minimum wage on labor demand by putting more money into improving the employability of low wage workers, thus boosting the supply of workers who are more productive.
Two weeks ago, the Congressional Budget Office stirred up a hornet’s nest with its estimate of the impact of the Affordable Care Act (ACA) on jobs. Here’s the key sentence: “CBO estimates that the ACA will reduce the total number of hours worked, on net, by about 1.5 percent to 2.0 percent during the period from 2017 to 2024, almost entirely because workers will choose to supply less labor—given the new taxes and other incentives they will face and the financial benefits some will receive.” The annual reduction is estimated to be a headline-grabbing 2.5 million jobs. Download the report here.
Critics of Obamacare greeted the news with barely disguised glee: “The CBO says that Obamacare is a job killer,” they crowed. That’s not what it said: “The estimated reduction stems almost entirely from a net decline in the amount of labor that workers choose to supply, rather than from a net drop in businesses’ demand for labor.” The jobs aren’t eliminated—workers choose not to fill them.
Few of us make decisions based on a purely rational assessment of our own self-interest. And thank goodness for that! Life with homo economicus, “economic man,” would be dreary indeed. There is a deep tradition in economics that considers the role that “institutions”—defined here as traditions, cultural mores and social organizations—play in society. A cultural value of honesty, for example, contributes to a more efficient economy. Traditions and cultural norms, even without any claim to morality, also bring societal benefit. Laws and explicit rules cannot create a good society unless they are built upon a strong cultural foundation. I illustrate this below in three spheres: the macroeconomy, government, and the firm.
The Tampa Bay Times Politifact has awarded its coveted “lie of the year” rating to President Obama’s oft-repeated “If you like your health plan, you can keep it” promise. I’m happy to chalk this one up to naiveté and the heat of the political moment(s).
As President Obama has noted, the reason that existing health insurance policies have been cancelled willy-nilly is because the plans don’t measure up to ACA’s standard for coverage. Supermarkets can’t sell unpasteurized milk. Health insurers can’t sell these plans.
It is not immoral to sell or buy noncompliant plans. Many consumers chose noncompliant plans on purpose because they were cheaper. Let’s look at one provision of ACA that has received little coverage—the out-of-pocket maximum (OOPM). ACA initially required that a 2014 individual policy must cover all costs above $6,350 for singles or double this, $12,700, for families (of any size) within the year. That’s the OOPM (now delayed to 2015).