Where are the people who want to get into the US?

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The US population grew by less than 1% last year. The Census estimate is for growth of 0.82%, with most of that increase coming from births in the US – 1.38 million births versus 1.25 million immigrants.

The Census forecast is that population growth rate will decrease, reaching a low of 0.45% in 2048.  Deaths among the Baby Boomers will offset both births and immigration.  In fact, if we had no immigration, the US population would decline.

As we have seen in both Maine and Japan, a population decline is a problem. It means slowing of economic growth and employers take jobs to other regions where labor is available.  It means there are fewer workers to pay for benefits for the elderly and disabled.

This forecast predates the last election and the entire discussion of a wall and restructuring of the H1-B visa program.

What you need to consider:

  • Know the facts before you listen to politicians and TV commentators.  Intentionally or not, a good portion of what they say is wrong.
  • Immigration restrictions won’t help people with the wrong job skills get work. Unless people recognize that old jobs are gone and they need to retool for what’s available, they’ll be stuck. There’s no future in unskilled labor.

Sources:

  1. US Census Bureau. https://www.census.gov/population/projections/data/national/2014/summarytables.html
  2. Ben Fifield, “Many Northeast, Midwest States Face Shrinking Workforce,” Pew Charitable Trust, 27 May 2016. http://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2016/05/27/many-northeast-midwest-states-face-shrinking-workforce

What the CBO Report on the American Health Care Act Actually Says (updated)

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Photo Courtesy of Holden Police Department

By now. most people have seen headlines or soundbytes about the report.  The Congressional Budget Office is a nonpartisan group. The head of the CBO was actually appointed by the GOP. The purpose of the office is to provide Congress with a source of “objective” information about the financial impact of legislation that is independent from information provided by the Executive Branch. In a complex world, this actually makes sense.

 

What the CBO report actually says:

  • Health insurance costs for individuals will under the new act (the AHCA is also known as “Trumpcare”), will increase through the year 2020 and may decrease after that.  The CBO expects increases in health insurance premiums under the new law of between 15% and 20% for 2018 and 2019 under the new law.  However, the CBO argues that by 2026, premiums might be 10% lower than under the ACA.
    • Some professionals refer to these as “hockey stick” forecasts, with a positive result occurring sometime in the remote future.  That could happen, but usually unforeseen events preempt the desired result.
  • Healthcare costs should decline for people in their 20s, but will increase sharply for older Americans.  The proposed tax credits will be insufficient to cover the cost increase.
  • The CBO estimates a $337 decrease in the Federal deficit from the AHCA law, mostly due to the repeal of Medicaid expansion and the end of subsidies for health insurance.  (As noted, the tax credits are smaller than the current subsidies.)  That averages out to about $33.7 billion per year.
    • The current US deficit is $441 billion in the current fiscal year.  Obviously, any reduction is good, but a savings of less than 10% of the deficit isn’t a cause for celebration.
    • The US budget deficit is expected to expand by over $10 trillion over the next decade, after shrinking during the Obama administration.
  • The Medicaid rollback will cost 14 million people their healthcare coverage immediately.  That plus the increase in out of pocket expense will ultimately mean that 24  million people will be forced to do without health insurance.
    • The CBO expects that some states will lose Federal funding for Medicaid in 2020 by their failure to provide the matching funds required under the new law.  That will further reduce Federal spending.
    • The matching funds requirement simply moves part of the tax burden from the Federal government to the states, and may require increases in state taxes.
  • Existing law requires the CBO to provide guidance on the impact of the law on the economy.  However, the CBO claims it has not had sufficient time to do this.
    • My argument is that anything that takes money away from consumers will be a drag on economic recovery.  This law does, by raising health care out-of-pocket expenses for most people.

Sources:

  1. Congressional Budget Office, “Cost Estimate,” 13 March 2017.  https://www.cbo.gov/publication/52486 I’ve downloaded a pdf of the report from the CBO website, and will share it on request.
  2. Emily Stephenson, “U.S. deficit forecast to shrink in 2017 but climb over next decade,” Reuters, 24 January 2017.  http://www.reuters.com/article/us-usa-congress-budget-idUSKBN158217

How Healthcare Reform Will Hurt Medical Professionals and Patients

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The Affordable Care Act is a complex piece of legislation with multiple goals:

  • Universal access to health care regardless of pre-existing conditions17456_1269532813224_1076952025_30803996_7657050_n
  • Reduction of costs of health insurance by averaging costs between healthy and unhealthy individuals
  • Reduction in actual outlays for medical services by
    • Reducing use of expensive emergency room services
    • Screening and earlier identification and treatment or prevention of major illnesses

The “repeal” effort to date addresses none of these goals, and in fact backtracks on them.

In addition, there is a continuing expansion of “cost sharing,” a euphemism for the shifting of costs from employers to employees for those workers who have access to group health insurance.

Physicians saw increased office traffic in 2016, but this is not likely to continue in the future.  Alicia Ault, writing for Medscape, comments,

Use and intensity of services and prices are the two biggest components of American health spending growth, the economists said. Overall use and intensity of healthcare goods and services continued to grow in 2016 as more people gained healthcare coverage through Medicare, Medicaid, or private insurance, and as disposable personal income rose. (1)

As the amount of money consumers have to spend for healthcare increases, their use of health services will decrease.  Economists with the Centers for Medicare and Medicaid Services (CMS, the agency that administers the Federal Marketplace as well as children’s programs) are expecting a reduction in use of physician services just in response to increased cost sharing, even without changes or repeal of the ACA.

Historical data show that greater cost sharing leads to less use of healthcare, Sean Keehan, a CMS economist, told Medscape Medical News. “People think twice about seeing the doctor if it’s going to be much more than it was before,” said Keehan, who is also lead author on the article in Health Affairs.(1)

Other factors will drive down use of health services over the next several years:

  1. Inflation which will reduce what consumers have available to spend
  2. Relatively stagnant wage growth, meaning that wages will not keep up with inflation

The CMS estimates are optimistic, excluding any impacts of ACA repeal.  A sharp increase in the number of people who cannot afford health insurance would be a game changer, and, frankly, could force some primary care physicians to close their practices.  The areas likely to see the greatest impact are poor and rural communities.

What you need to consider:

  • For most people, money is going to be a problem.  Do you need to improve or acquire skills to allow you to get a higher paying job?
  • Relocation to an area with better local public health services? 
  • How will you deal with older relative who may find themselves in trouble?

Sources:

  1. Alicia Ault, Physician Services to Decline With More Cost-Sharing, CMS Says. Medscape. Feb 15, 2017.
  2. https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/NationalHealthAccountsProjected.html

Healthcare Changes — Updates

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There were some ideas floated yesterday by GOP Congressional leadership, but nothing definite.  While Paul Ryan is expressing optimism that there will be a concrete proposal by17456_1269532813224_1076952025_30803996_7657050_n the end of February, others in the GOP are saying that it won’t happen “overnight” or are waiting for cost estimates from the Congressional Budget Office (CBO).

 

The ideas being discussed include:

  • Paying for repeal of the Affordable Care Act by levying a tax on healthcare insurance offered by employers.  Some versions of this proposal would limit the tax to higher end plans (gold, platinum or concierge plans), but that would go against Trump’s stated intention of giving tax breaks to the wealthy.
  • Subsidies for healthcare would be eliminated, and replaced by tax credits for people who don’t have employer provided care.
  • Elimination of some business taxes used to support the Affordable Care Act.
  • Expansion of Medicaid to more of the poor would be withdrawn.  Federal funding for expansion of Medicaid benefits would be eliminated.
  • Penalties for not having insurance will be eliminated.

The withdrawal of subsidies and removal of penalties will drive up the cost of health insurance for individuals who need insurance.  You should expect increases for 2018 that may be in the range of 20% or higher.

Removal of subsidies (for most people, an advance on a tax credit) means that more people will not be able to afford health insurance.  However, some in the GOP would prepay these tax credits — basically keeping much of the current system under a different name.

But Kenneth E. Raske, the president of the Greater New York Hospital Association, expressed alarm, saying the proposals would “put a huge amount of pressure on state budgets and put many Americans at risk of losing health care coverage.”(3)

The Medicaid change might be the most important of all of these provisions.  Many middle class Americans depend on Medicaid now to pay for nursing home care when that time comes.  At a national average of more than $92,000 per year, most people don’t have the savings to cover that.  The proposed revisions would “put Medicaid on a budget” and allow states to eliminate payments to nursing homes.

Of course, if the cost of ACA repeal is too high, none of this may go anywhere.

So the next step is to see what the CBO projections are.  We wait.


Sources:

  1. Alan Fram, “GOP leaders unveil new health law outline, divisions remain,” Associated Press, 17 February 2017.  https://www.yahoo.com/finance/news/house-gop-batting-around-options-080740612.html
  2. Ana Radelat, “GOP gives House members proposal to repeal, replace the ACA,” The Connecticut Mirror, 16 February 2017.  http://ctmirror.org/2017/02/16/gop-gives-house-members-proposal-to-repeal-replace-the-aca/
  3. Robert Pear and Thomas Kaplan, “House G.O.P. Leaders Outline Plan to Replace Obama Health Care Act,” The New York Times, 16 February 2017.

The Cost of Aging

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Most people in the US simply aren’t ready to grow old. I know one person who has told me 17456_1269532813224_1076952025_30803996_7657050_nthat his retirement plan is a gun, but is that really what most of us want?

In fairness, the suicide rate is increasing in every age group except those age 75 and older. Maybe that’s what we do want.

In the US, consumers don’t really start thinking about old age until after they turn 40. Unfortunately, that’s the age in which, if they have kids, they are saving for college and paying rather high housing costs. That makes putting anything aside for retirement a difficult proposition for all but the very rich or very lucky.

The problem is that the financial challenges of retirement are worse than most people think. Let’s break it down:

  • Living expenses after one is unable to work.  That’s food and housing, and Social Security doesn’t pay enough to most people to cover these bills.
  • Home health care, if you have to have someone come to the home to provide service.  That’s over $3,800 per month.
  • Assisted living facilities:  Over $3,600 per month.
  • Nursing home facilities:  The national average for a semi-private room is $6,844 per month, but it is as much as $13,000 per month in places like New Jersey. [Genworth]

On average, people require 2.4 years of assisted living or nursing home care. A rough estimate puts that cost at $126,000 if you don’t live in a high-priced area. Even better, Medicare currently picks up only a small fraction of this expense.

These costs are per person.  If you are part of a couple, you need to double the amount.

One way to cover these long-term care expenses in the US is through insurance — either a stand-alone Long Term Care (LTC) policy, or more cost effectively, an LTC rider on a life insurance policy. The other choices are to move to another country, move in with the kids, or deplete all of your assets and go on Medicaid. However, with the Medicaid option, you can forget about everything you ever dreamt of doing in your old age.

Other countries handle elder care more sensibly.  For example, Germany pushed through a reform package in 2014 improving government funding for home health services.  Foreign nationals living in UK can receive elder care through the National Health Service at no charge.

Why is the US so far behind?


Sources

Cervical Cancer, Race and Poverty

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A re-examination of cancer data shows that cervical cancer is more common than originally thought, and that it is more deadly among minority and poor women.

Sometimes, you just have to reconsider the assumptions made in data analysis.  That’s what happened here.  The originally analysis looked at rates among all adult women.  The revision excludes women who have had a hysterectomy, for whom cervical cancer is no longer a possibility.

  • The adjustment took the rate for white women from 3.2 per 100,000 women to 4.7.
  • The adjustment took the rate for black women from 5.7 to 10.1 per 100,000 women.

Overall, there are about 4,000 new cases of cervical cancer per year.

The kicker is that while cervical cancer is treatable (my wife had an advanced case of it over 30 years ago), there are still people dying from it.  Routine screening is essential:

“A recent study in the journal Gynecologic Oncology that looked at 15,194 patients with advanced cervical cancer found that more than half did not receive treatment considered to be standard of care, and that those patients were more likely to be black and poor.

“According to the analysis published Monday, the hysterectomy-corrected mortality rates put black American women on par with women living in some underdeveloped countries in Latin America, Asia and Africa, particularly in sub-Saharan Africa.” [NY Times, see sources below]

One doctor interviewed for the article recalled recently having to outfit a 25-year-old female with a colostomy bag as a result of late detection.  Most patients with advanced cervical cancer never had a PAP Smear.

Access to healthcare and screening was one of the cardinal elements of the Affordable Care Act.  Current revisions will make this less accessible and more costly.  That means more deaths.


Sources:

 

 

 

 

 

 

 

Women’s Healthcare Under Attack

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The Affordable Care Act is a complex law which addressed a number of serious omissions in American healthcare.

  • While the Act is flawed, calls for simple repeal are at best naive and will hurt a great many people.  Unfortunately, “Congress” seems to be a synonym for “ignorance”.

The Kaiser Family Foundation weighed in on one of these issues today — universal access to contraception.  I’m not going to repeat their entire article here.  You can find it at

http://kff.org/womens-health-policy/issue-brief/the-future-of-contraceptive-coverage/?utm_campaign=KFF-2017-January-Future-of-Contraceptive-Coverage&utm_medium=email&_hsenc=p2ANqtz-8GDcQq7tdmeq63OmhJQp_6O8mXB7t-8g_0PPXr_7xS_Nb6uM4sKhgU560QDQgTEPH20tlmp0Z0_RVIZKs4aN0jL-0136q6GE1-LECbE6U2AE7VM2E&_hsmi=40279577&utm_content=40279577&utm_source=hs_email&hsCtaTracking=3b5a083c-444e-49d7-b9ed-786e93b8471a%7Cb988136a-71ce-466e-9021-3684f879937e

The Act eliminated out of pocket costs for contraception for most women and made access independent of workplace or insurer.  (Remember the lawsuits involving church employees from before the law?)

When coupled with the attack on Planned Parenthood, which provides breast cancer screening for low income women as well as access to contraceptives, it seems like there is an agenda to reduce healthcare for women.

  • One interesting finding in the Kaiser data is that men are less supportive of contraceptive services for women than are women.  Most members of Congress or male.  While only a minority of men feel this way, the reasons for this are unclear. 

One theme to which I keep returning is the promise of “Life, Liberty and the Pursuit of Happiness” made by the Founding Fathers in the Declaration of Independence.  These rights are meaningless without good health.  In modern terms, that means universal access to quality healthcare.