ACA Repeal — the Backdoor Method

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Apparently, the bill to keep the government operating excludes payments to insurance companies that subsidize healthcare for those buying insurance through the Marketplace. The tactic is to force insurers out of the market, thus closing the door on the Affordable Care Act.

In theory, that would cost anyone with a subsidy their healthcare.

We’ll see what happens next.

Equality of Education; Inequality of Teacher Pay

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In theory, the quality of teacher impacts the quality of education students receive. In the Brown v. Board of Education of Topeka decision in 1954, the USSC rejected the argument that students in unequal schools could receive equal education. However, if teachers are important, then how do we reconcile the Court’s decision with these findings:

  • There’s a huge disparity in teacher pay between school systems. Affluent districts pay much higher salaries than others.
  • Charter schools, which are supposed to be the road to improve education, pay much lower salaries than most public school districts.

New Jersey treats teachers as public employees, and their salaries are public information. Without going into detail on all 650 public school districts and charter schools in the state (available at reference 1 below), here’s the outlines of the situation:

  • The median salary in 2016 for a school teacher in NJ was $66,117 per year.
  • Northern Valley Regional district in affluent Bergen County paid the most, with a median salary of $105,650.
  • Teachers in the Edison Township school district in Middlesex County had a median salary of $95,432.
  • At the other end, Milford Township in Hunterdon County had a median salary of $48,007.

New Jersey just isn’t that large geographically. The cost of living is relatively uniform across the state.

Many/most of the charter schools are worse: for example the Jersey City Global and Red Bank charter schools both have median salaries of $42,000. Of course, the charter schools haven’t been around as long. We could expect salaries to increase with teacher seniority. However, the need to generate profits at many of these schools may restrict what goes into the classroom.

If you were a capable teacher, where would you want to teach? Where would you expect the best teachers to go? How does this reconcile with equality of educational opportunity?

By comparison, NJ is one of the best-paying states for teachers in the US. The only states that pay as much or more are Alaska, California, Connecticut, District of Columbia, Massachusetts and New York. Maryland pay is lower than NJ, but close. (2) Conversely, South Dakota and Mississippi are at the low end of teacher pay, paying less than 65% of what New Jersey pays.

Again, where would the best go?


Sources:

  1. Tom Davis, “NJ Median Teacher Salaries, Highest To Lowest: How Much Does Your District Pay?” NJ Patch, 24 April 2017. https://patch.com/new-jersey/princeton/s/g3o6z/n-j-median-teacher-salaries-highest-to-lowest-how-much-does-your-district-pay?utm_source=alert-breakingnews&utm_medium=email&utm_term=weather&utm_campaign=alert
  2. National Center for Education Statistics, 2013. https://nces.ed.gov/programs/digest/d13/tables/dt13_211.60.asp

No room for historical revisionism

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I’ve been a history buff for years. Growing up in Kentucky, I dealt with people intent on glossing over the evils of slavery. I was born less than 90 years after the Civil War ended, and there are people still intent on re-fighting that war today.

This bit from History.com leaves little room for gloss. Written about a skirmish in Arkansas in 1864,

The Rebels’ treatment of black troops was harsh. No black troops were captured, and those left wounded on the battlefield were brutally killed, scalped, and stripped. The Washington Telegraph, the major Confederate newspaper in Arkansas, justified the atrocity by declaring “We cannot treat Negroes taken in arms as prisoners of war without a destruction of social system for which we contend.”
http://www.history.com/this-day-in-history/confederates-inflict-pain-at-battle-of-poison-spring

The men ultimately responsible for this atrocity were Confederate General John Marmaduke, later governor of Missouri, and Confederate General Samuel Maxey, who later represented Texas in the US Senate.

I rather suspect that in the current era, both would have been imprisoned or shot for war crimes. However, in Missouri and Texas, they get elected.

I was in Charleston a few years ago when a tour guide tried to claim that the Civil War wasn’t about slavery. That’s a difficult case to make if you look at the newspaper and diary accounts from that time. We’re better off being honest with ourselves about our past and our future.

 

ACA Rule Changes

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If you were waiting for changes that would actually help consumers, don’t hold your breath.

Absent the actual repeal the administration sought, it announced rule changes late yesterday affecting consumer access to healthcare and the percent of costs health insurance will cover under marketplace plans. The point of the changes is to incent insurers to continue offering health insurance on the ACA marketplaces. The technical term for this is “market stabilization.”

A cynic might wonder why these changes come out on the even of holidays when most people will be distracted and might not notice.

The rule changes focus on what the insurance industry calls “adverse selection.” Insurers are concerned about people buying coverage only when they expect they will use it, and then dropping it immediately — which forces the insurer to take a loss on the policy.  The rule changes are designed to prevent that.

Here’s the basics:

  • Silver level plans will cover 66% of consumer medical costs, down from the original 70% requirement.
  • The new rules increase also increase subsidies to consumers buying these plans — provided the administration actually commits to making these payments.

At issue are cost-sharing payments that low-income people enrolled under the healthcare law receive to help cover out-of-pocket expenses. Trump has threatened to withhold the payments as a means to force Democrats to negotiate on healthcare legislation.(2)

[Actually, these subsidies can help people making up to $60,000 per year, which is more than “low income.” Half of US households earn less than that.]

  • As previously noted, the enrollment period is being shortened from three months to six weeks, starting November 1st.  Given the problem that CMS has had in handling the volume of people applying for coverage in the longer period in the past, it’s essential for consumers to apply as early as possible.
  • The administration is making it harder for consumers to qualify for special enrollment periods (SEPs). More people will be required to submit supporting documentation than in the past, which will extend the time required for enrollment. If approval is delayed by three months, the consumer will be required to pay for coverage for two of those months.
  • Consumers are being restricted in terms of their ability to change levels of coverage using a SEP.
  • Insurers can refuse to cover people who have failed to pay premiums for this insurance in the past. If you’ve had coverage and dropped it, you may have to wait a year or more before being able to get coverage again.
  • The determination of whether an insurer has an adequate network of doctors and hospitals in a state will be turned over to the state. Some states are much more rigorous than others.

The new rules don’t address some of the key issues challenging insurers:

  • Will the government continue to pay subsidies to help people afford insurance?
  • Will the government use financial penalties to force consumers to carry insurance?

Trump has said that he would eliminate the penalties and the subsidy, but his bill didn’t pass and no one knows about  his current thinking. A negative on the first question will drive insurers out of the market. A negative on the second will raise costs for everyone who needs insurance.

There’s speculation that the reduction in benefits for the silver policy might allow insurers to reduce the cost of these policies. However, any reduction will be subject to higher out-of-pocket costs for consumers who do incur expenses. The net impact isn’t clear.

Are these rule changes even needed? The Congressional Budget Office has stated that it expected the insurance markets to be stable in 2017 without these changes.  So, what is the point?


Sources:

  1. Virgil Dickson, “White House finalizes ACA rule to strengthen individual market,” Modern Healthcare, 13 April 2017. http://www.modernhealthcare.com/article/20170413/NEWS/170419936?utm_source=modernhealthcare&utm_medium=email&utm_content=20170413-NEWS-170419936&utm_campaign=am
  2. Associated Press, “Democrats seek to resolve health payments on spending bill,” 14 April 2017.
  3. Timothy Jost, “Examining The Final Market Stabilization Rule: What’s There, What’s Not, And How Might It Work?” Health Affairs Blog, 14 April 2017. http://healthaffairs.org/blog/2017/04/14/examining-the-final-market-stabilization-rule-whats-there-whats-not-and-how-might-it-work/

ACA Repeal: Here we go again

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According to one report, VP Pence has offered three changes to the repeal bill to win Freedom Caucus support for the Trumpcare bill:

  • Elimination of requirements for what insurers must cover
  • Eliminating coverage for pre-existing medical conditions
  • Eliminating limits on what insurers can charge people with medical conditions

Whether the bill can retain any support among moderates in the GOP with these changes is questionable. These provisions will cause problems for hospitals and healthcare providers, and result in more people having no health insurance coverage, and may allow a sharp increase in insurance prices for consumers, as the Congressional Budget Office has predicted.

This simply makes a terrible bill worse.


Sources:

  1. Marlene Satter, “Freedom Caucus would support health care bill that kills 3 ACA provisions,” BenefitsPro, 10 April, 2017. http://www.benefitspro.com/2017/04/10/freedom-caucus-would-support-health-care-bill-that?kw=Freedom%20Caucus%20would%20support%20health%20care%20bill%20that%20kills%203%20ACA%20provisions&et=editorial&bu=BenefitsPRO&cn=20170413&src=EMC-Email_editorial&pt=Consumer%20Driven%20PRO

Free College Tuition: a new reality in USA

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Free college tuition — it’s back!martin-luther-king-anger-quote1

There has been a continuing debate as to whether college education is a privilege or a right of citizenship. In an age in which demand for unskilled labor is fading, will people without college be employable in 10 or 20 years?

The US has taken one position on this; Europe and the Commonwealth countries, the opposite. Today, it’s possible for a US family to put four children through college in Europe at the price of sending one to college in the US. For Europeans in several countries, college is free.

In the “golden age” of the US economy after World War II, college was either free or very inexpensive in the US. When I was in high school, City College of New York and the University of California still were free to residents.  Ronald Reagan eliminated free tuition in California.  New York was earlier.

On February 7th, San Francisco because the first city in the current era to offer free community college education.

San Francisco Mayor Ed Lee announced at a press conference yesterday that, starting next fall, community college will be tuition-free for all San Francisco residents through the City College of San Francisco.

As first reported by the San Francisco Chronicle, San Francisco would become the first city in the nation to make community college free to all city residents. Any student who has lived in San Francisco for at least one year – regardless of income – is eligible.

“To California residents who are living in San Francisco, your community college is now free,” Lee said at the press conference. (1)

New York Governor Andrew Cuomo announced a plan in January to make all state, city and community colleges free to residents. There is now a bi-partisan budget deal to make that a reality.

Budget negotiators struck a deal late Friday that could make New York the largest state to offer tuition-free public higher education.

The $163 billion state budget agreement includes the Excelsior Scholarship, which covers tuition for any New Yorker accepted to one of the state’s community colleges or four-year universities, provided their family earns less than $125,000 a year. (2)

Interesting question: Why would you want to live in an expensive state like New Jersey when your kids can attend college for free next door? Or leave San Francisco for anywhere?

 


Sources:

  1. Zack Friedman, “Free College: San Francisco Joins New York With Tuition-Free Plan,” Forbes, 7 Feb. 2017. https://www.forbes.com/sites/zackfriedman/2017/02/07/free-college-san-francisco/#590c8b482bb6
  2. Danielle Douglas-Gabrielle, “New York set to become first state to offer free tuition at public four-year colleges,” The Washington Post, 8 April 2017. https://www.washingtonpost.com/local/education/new-york-to-become-the-largest-state-to-offer-tuition-free-public-higher-education/2017/04/08/3fe0563a-1c8b-11e7-9887-1a5314b56a08_story.html?tid=sm_tw&utm_term=.e16eea88beb6