The Cold, Hard Financial Facts of Social Security

Geoffrey RosenbergerGuest Commentary from Geoff Rosenberger, CGR Trustee

The Social Security Trustees recently released their 2014 Annual Report. The Wall Street Journal carried a story about the report, but didn’t provide much detail (see The Hard Numbers on Social Security -also see How Should the Government Change Social Security? )

The long term projections are of course tenuous and highly susceptible to even subtle changes in assumptions around wage rates, demographics, immigration, GDP growth, inflation and a myriad of other factors. But there is still enough meat here to provoke a lot of thought. Note especially the charts and graphs at the end of this post!

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Where’s John Locke When you Need Him?

Kent GardnerI just watched a pair of fictional Supreme Court nominees debate the implications of repealing the Defense of Marriage Act (DOMA)—just the kind of “ripped from the headlines” thing that appeals to TV script writers. Only this was from a 2003 episode of The West Wing—my 27 year old daughter has discovered the show and is working her way through on Netflix. The case hit the court in 2013 and, as the The West Wing script suggested, was overturned. Now various state bans on same sex marriage appear headed to the high court, with the first—a ruling by the 10th circuit striking down Utah’s law—formally submitted at the beginning of August.

Nearly all Americans are disturbed by stories of atrocities by the Islamic State (ISIS/ISIL, etc). Whether the more appalling reports—the beheading of Christian children, female genital mutilation—are substantiated or not, radical Islam clearly sees fit to harness government to enforce religious conformity. Exile, imprisonment—even death—await those who break the rules or even disagree with accepted dogma. Christians have their own history to live down: The Catholic Church sent many “heretics” to a painful death during the Inquisition. The Protestant Reformation was equally intolerant in its early decades. Martin Luther and John Calvin were quite willing to use the power of government to impose their theology on all citizens.

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Can the decision to refuse vaccination be truly ‘personal’?

Kent Gardner“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?

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Proof that isn’t

Kent GardnerWe 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?”

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A Perspective on the Affordable Care Act: Part 2

Kent Gardner

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.

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A Perspective on the Affordable Care Act

Kent GardnerPart 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.

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Gov to Governments: Keep Cutting

Erika RosenbergThis 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.

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I’m ready for some Global Warming

Kent GardnerThe 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.

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Collateral Damage Revisited: The Minimum Wage

Kent GardnerOnce 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.

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That’s why we call it “work”

Kent GardnerTwo 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.

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