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dkf's Journal
dkf's Journal
July 1, 2012

Reluctance in Some States Over Medicaid Expansion

While upholding the most hotly debated part of the health care overhaul law — a requirement that most Americans have health insurance or pay a penalty — the Supreme Court said in its ruling on Thursday that states did not have to expand Medicaid as Congress had intended — leaving a huge question mark over the law’s mechanism for providing coverage to 17 million of the poorest people.

In writing the law, Congress assumed that the poorest uninsured people would gain coverage through Medicaid, while many people with higher incomes would receive federal subsidies to buy private insurance. Now, poor people who live in a state that refuses to expand its Medicaid program will find themselves in a predicament, unable to obtain either Medicaid or subsidies.

That potential gap will probably lead to ferocious statehouse battles in the coming year, as states weigh whether to accept billions of dollars in federal aid to pay for expanded coverage. The health care industry, sensing the skepticism in some states, is preparing a campaign to persuade state officials to accept the money for coverage of the uninsured.

But already, governors in Kansas, Nebraska and South Carolina, among other states, have said they would have difficulty affording even the comparatively small share of costs that states would eventually have to pay.


June 30, 2012

The Supreme Courtís decision will make it much harder to extend health insurance to Americaís poor.

Just what problems have we solved now that the Affordable Care Act has been upheld? We should rightly celebrate that no American will be denied the ability to get health care because of a pre-existing condition, and that many children will remain on parents’ health plans for more time.

But at its heart, the bill was designed to extend private insurance to the largest (politically) possible number of the now 60 million uninsured Americans, and then expand the public safety net for the remainder. To do this, the ACA comprises a “three-legged stool” of policies: a mandate for employers and individuals to buy health insurance if they can afford it, a prohibition on insurers from barring any buyers, and, finally, a massive expansion of free health care for the poor.

According to optimistic projections from the Congressional Budget Office, the ACA as written would only halve the number of uninsured—from 60 million down to 30 million—by 2022. Thus, even with the ACA safe, one-half of all currently uninsured Americans are still projected to lack coverage.

This is why it was difficult for me to care greatly about the presence or absence of the individual mandate, which was at the heart of the Supreme Court case. In all of Massachusetts, the laboratory from which the ACA sprung, only about 20,000 people—which is less than 0.3 percent of the population—were assessed penalties for not buying insurance, penalties that totalled less than $20 million. Forcing people to buy insurance did precious little; those without private insurance are mostly those who couldn’t afford it anyway.

So what does the ACA really do to expand coverage? Again, it’s worth examining Massachusetts. As I wrote back in 2010, the state reforms correlated with a drop in the percentage of the uninsured from 6.4 percent to 2.4 percent, or a gain in coverage for 233,000 citizens. Over this time, state Medicaid rolls ballooned by 276,000 people, indicating that the real driver for expanding coverage was almost exclusively a free giveaway of health care—that is, the third part of the three-legged stool. (Enrollment in private plans grew by only a paltry 2 percent.)


June 30, 2012

Supreme Court Ruling: Uncertain Future for Medicaid Expansion

One portion of the Supreme Court’s 5-4 decision to effectively uphold the Affordable Care Act (ACA) could have profound implications for the law’s goal of universal health coverage: it appears states could opt out of raising their Medicaid eligibility standards to 133 percent of the federal poverty level in 2014 without losing their existing federal Medicaid funding as a result.

The ACA’s Medicaid provision is expected to extend coverage to up to 17 million people within the next decade. But the teeth of the provision, as originally conceived, was that the law gave the U.S. Department of Health and Human Services (HHS) the authority to withhold some or all of a state’s federal Medicaid match (between 50 and 75 percent of each state’s spending for the program) if the state did not adopt the new eligibility standards.

Chief Justice John Roberts, writing for the majority, declared that the Medicaid eligibility expansion is constitutional, but that it is unconstitutional for HHS to withhold existing federal Medicaid funding for states that don’t comply. That could neuter the Obama administration's ability to enforce the expansion.

"Nothing in our opinion precludes Congress from offering funds under the ACA to expand the availability of health care and requiring that states accepting such funds comply with the conditions on their use,” Roberts wrote. “What Congress is not free to do is to penalize states that choose not to participate in that new program by taking away their existing Medicaid funding."


June 29, 2012

Stanley Ann Dunham didn't have a problem with her health insurance coverage but with her co-pays

And out of pocket expenses.

The insurance company she was fighting with was her disability carrier which as claiming she had a preexisting condition in order to keep from paying disability benefits that she needed to pay her out of pocket expenses.

Per the WP via a biography;

But Obama’s mother had full coverage for the disease — her battle was to get disability insurance payments for her out-of-pocket expenses — according to “A Singular Woman,” a biography of Dunham by Janny Scott, who covered the campaign as a reporter for the New York Times.

The White House did not dispute the book’s account, and a spokesman said Scott’s reporting makes clear the president’s mother incurred several hundred dollars of unreimbursed health-care costs each month. “She first could not get a response from the insurance company, then was refused coverage,” spokesman Nicholas Papas said. “This personal history of the president’s speaks powerfully to the impact of preexisting condition limits on insurance protection from health-care costs.”

Scott based her account on correspondence between Dunham and Cigna, the disability insurance carrier, that Dunham’s friends shared with her.


June 24, 2012

Central Banks Face Power Limit As Debt Persists, BIS Says


Central banks in developed nations are confronting the limits of their ability to aid economic recovery as government efforts to strengthen their finances fall short, the Bank for International Settlements said.

“Central banks are being cornered into prolonging monetary stimulus as governments drag their feet and adjustment is delayed,” the Basel, Switzerland-based BIS said in its annual report, published today. “Both conventionally and unconventionally accommodative monetary policies are palliatives and have their limits.”

European Central Bank President Mario Draghi has indicated that the ECB is close to exhausting its tools after cutting its benchmark rate to a record low and flooding the banking system with cash. Photographer: Hannelore Foerster/Bloomberg
While central banks’ actions were key to limiting damage from the collapse of Lehman Brothers Holdings Inc., interest rates are now “as low as they can go” and debt purchases have swollen central bank balance sheets, the BIS said. European Central Bank President Mario Draghi has indicated that the ECB is close to exhausting its tools after cutting its benchmark rate to a record low and flooding the banking system with cash.

“In the middle of all this we find the overburdened central banks, pushed to use what power they have to contain the damage,” Stephen Cecchetti, BIS economic adviser, said on a conference call. “There are very clear limits to what central banks can do. It’s critical for the health of the global economy to break the vicious cycles and reduce the pressure on central banks.”
June 24, 2012

D.C. Leads Nation as U.S. Per Pupil Tops $10,600, Census Bureau Reports


The nation's elementary-secondary public school systems spent an average of $10,615 per pupil in fiscal year 2010, up 1.1 percent from the previous year, according to statistics released today by the U.S. Census Bureau. District of Columbia public schools spent $18,667 per student in 2010, which is the most of any state or state equivalent. States that spent the most per pupil were New York ($18,618), New Jersey ($16,841), Alaska ($15,783), Vermont ($15,274) and Wyoming ($15,169). (See table 11. Excel | PDF).

Public school systems received $593.7 billion in funding in 2010, up 0.5 percent from the prior year. Of that amount, local governments contributed $261.4 billion (44.0 percent), followed by revenue raised from state sources, which contributed $258.2 billion (43.5 percent), and federal sources, which provided the remaining $74.0 billion (12.5 percent).

Revenue from state sources decreased by $18.0 billion, a 6.5 percent decrease from 2009. This is the largest decrease in state funding from the prior year since the Census Bureau began publishing school system finance statistics on an annual basis in 1977 and only the second year since 1977 in which state funding decreased from the prior year (revenue from state sources also decreased 1.7 percent between 2008 and 2009).

Revenue from federal sources increased by $18.1 billion, a 32.5 percent increase from 2009 and the largest increase in federal funding for public school systems since 1977.
June 24, 2012

China changes patent law in fight for cheaper drugs By Tan Ee Lyn


By Tan Ee Lyn

HONG KONG (Reuters) - China has overhauled parts of its intellectual property laws to allow its drug makers to make cheap copies of medicines still under patent protection in an initiative likely to unnerve foreign pharmaceutical companies.

The Chinese move, outlined in documents posted on its patent law office website, comes within months of a similar move by India to effectively end the monopoly on an expensive cancer drug made by Bayer AG by issuing its first so-called "compulsory license".

The action by China will ring alarm bells in Big Pharma, since the country is a vital growth market at a time when sales in Western countries are flagging.

The amended Chinese patent law allows Beijing to issue compulsory licenses to eligible companies to produce generic versions of patented drugs during state emergencies, or unusual circumstances, or in the interests of the public.

For "reasons of public health", eligible drug makers can also ask to export these medicines to other countries, including members of the World Trade organization.

June 24, 2012

Consumer Spending Probably Stalled in May: U.S. Economy Preview

Consumer spending stalled in May, a sign the biggest part of the U.S. economy may struggle as employment and wages cool, economists said before reports this week.

Purchases were unchanged last month after a 0.3 percent gain in April, according to the median of 75 estimates in a Bloomberg News survey before Commerce Department figures due on June 29. Manufacturing is weakening, while housing shows further signs of stabilization, other reports may show.

A slowdown in payrolls and unemployment above 8 percent have damped consumer confidence, which may keep restraining sales at companies from Darden Restaurants Inc. (DRI) to CarMax Inc. (KMX) Waning demand, together with concern about Europe’s debt crisis and U.S. fiscal policy, helps explain why the Federal Reserve last week extended a program to keep borrowing costs low.

“Consumers are staying cautious,” said Michael Hanson, a senior U.S. economist at Bank of America Corp. in New York. “Job growth is sluggish and overall compensation hasn’t been great. The economy is decelerating.”


June 22, 2012

Spain rallies as ECB collateral move provides relief

LONDON (Reuters) - Spanish bonds rallied for a fourth consecutive day on Friday after the ECB relaxed its collateral rules, bolstering investors' conviction that policymakers were taking steps to alleviate pressure on the euro zone's fourth largest economy.

The European Central Bank said it would allow financial institutions to pledge a wider range of assets, including collateral of a lower quality, in exchange for cash at its regular monetary operations.

The move was designed to help ease pressure on Spanish banks whose deteriorating assets have restricted access to much-needed ECB cash. Because Spain's banks are the main buyers of Spanish government debt, the move helped push down bond yields.

"The ECB had to do it help the Spanish banks, to give them some kind of relief so they would still have a sufficient collateral base," said Niels From, chief analyst at Nordea.


June 21, 2012

The funding gap for U.S. state public employees: $1.38 trillion.

By Lisa Lambert and Hilary Russ


(Reuters) - The funding gap for U.S. state public employee retirement benefits climbed by $120 billion to $1.38 trillion in fiscal 2010, according to a report released on Monday.

The report comes at a time when many voters and politicians already claim that compensation for public employees is bloated.

The Pew Center on the States said that public pension systems in 34 states were funded at less than the 80 percent level that is considered the threshold for a healthy pension. That's in stark contrast to 2000, when more than half of the states' pension plans were 100 percent funded.

"The larger (the shortfalls) are, the higher the cost for taxpayers today and for many years to come," said David Draine, a Pew senior researcher, who compared many states to credit card holders who hadn't paid their bills in full but kept racking up charges.

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