Posts Tagged ‘healthcare’

bhopal-verdict-cartoon

Special mention

14R0DA.AuSt.79 Clay Bennett editorial cartoon

11414332504_dce6ef5442_b

After more than thirty years of rising inequality, and in the midst of the Second Great Depression, the financial situation of many U.S. households is dire.

That’s my interpretation of the results of the Federal Reserve’s latest report on the economic well-being of American households.

Here are some of the facts contained in the report:

Overall, only 30 percent of the respondents considered themselves to be better off financially than they were in 2008.

In terms of credit-card debt, only 57 percent of respondents reported that they pay off their balances in full each month. (Among the remaining 43 percent who revolve their credit card balances, 82 percent had been charged interest on their balance at some time in the prior 12 months.)

The median percentage of 2102 income reported saved was only 2 percent (the mean was much higher, 9 percent), while 45 percent of respondents reported that they were not able to save any portion of their income in 2012.

Respondents were asked how they would pay for an emergency expense that came along and cost $400. The majority responded that covering such an expense would be a challenge: 19 percent indicated that they simply could not cover the expense; 9 percent would have to sell something; or would have to rely on one or more means of borrowing to pay for at least part of the expense, including paying with a credit card that they pay off over time (17 percent), borrowing from friends or family (12 percent), or using a payday loan (4 percent).

student debt

24 percent of respondents have education debt for themselves, someone else (spouse, child, or grandchild), or a combination of the two. Among those with each type of education debt, the average amount people reported owing for their own education was $25,750, with a median value of $13,000. Overall, 37 percent of respondents said that the financial costs of education outweighed the benefits. Those who did not complete their program of study were far more likely (56.5 percent) than others (38 percent for those who completed programs, 17 percent for those still enrolled) to say that the financial benefits of their education were much smaller than the cost.

When asked if they could afford to cover the cost of a major out-of-pocket medical expense, 43 percent of all respondents said that it was not likely that they could afford to pay. Only 21 percent of respondents indicated that it was very likely they could afford to pay for a major out-of-pocket medical expense. In fact, almost a quarter of respondents experienced what they described as a major unexpected medical expense that they had to pay out of pocket in the prior 12 months. The result? One quarter of respondents went without dental care in the prior 12 months because they could not afford it, 18 percent went without a doctor visit, 15 percent went without prescription medicine, 11 percent went without a visit to a specialist, and 10 percent went without follow-up care. Overall, 34 percent of respondents reported going without at least one of these types of care because they could not afford it.

retirement

Finally, 23 percent of Americans who are near retirement age (ages 45 to 59) have zero money saved. So, what are they planning to do? Basically, rely on Social Security benefits (58 percent), continue working (25 percent), and/or expect their spouse/partner to keep working (11 percent). Not surprisingly, people’s expectations depend on their level of income:

Responses to the question about the path to retirement also vary consistently by income, indicating that expectations around retirement are closely linked to financial circumstances. While 35 percent of those earning six figures reported that they intend to work full time until a retirement date and then stop working, only 15 percent of those earning less than $25,000 intend to do so. Similarly, 28 percent of those earning less than $25,000 indicated that they expect to “keep working as long as possible,” while only 13 percent of those earning $100,000 or more said the same.

The bottom line: a very large group of Americans are financially on the edge. They’re broke and getting broker.

718-1cGEFi.AuSt.91

Special mention

151471_600 151484_600

151122_600

Special mention

151149_600 obamacare-and-the-courts-cartoon-heller-495x344

www.usnews

Special mention

BsC0Uv0CMAA7EMK 140716_The_Rescue_t618

Trickle-Down-Economy

Special mention

The-Obsession 150740_600

TMW-07-07

Special mention

150642_600 150664_600

Davis_Mirror_2014_ES1_for_web

The U.S. healthcare system ranks dead last out of 11 countries studied by the Commonwealth Fund [ht: ja].

The United States health care system is the most expensive in the world, but this report and prior editions consistently show the U.S. underperforms relative to other countries on most dimensions of performance. Among the 11 nations studied in this report—Australia, Canada, France, Germany, the Netherlands, New Zealand, Norway, Sweden, Switzerland, the United Kingdom, and the United States—the U.S. ranks last, as it did in the 2010, 2007, 2006, and 2004 editions of Mirror, Mirror. Most troubling, the U.S. fails to achieve better health outcomes than the other countries, and as shown in the earlier editions, the U.S. is last or near last on dimensions of access, efficiency, and equity. In this edition of Mirror, Mirror, the United Kingdom ranks first, followed closely by Switzerland. . .

The most notable way the U.S. differs from other industrialized countries is the absence of universal health insurance coverage. Other nations ensure the accessibility of care through universal health systems and through better ties between patients and the physician practices that serve as their medical homes. The Affordable Care Act is increasing the number of Americans with coverage and improving access to care, though the data in this report are from years prior to the full implementation of the law. Thus, it is not surprising that the U.S. underperforms on measures of access and equity between populations with above- average and below-average incomes.

The U.S. also ranks behind most countries on many measures of health outcomes, quality, and efficiency. U.S. physicians face particular difficulties receiving timely information, coordinating care, and dealing with administrative hassles. Other countries have led in the adoption of modern health information systems, but U.S. physicians and hospitals are catching up as they respond to significant financial incentives to adopt and make meaningful use of health information technology systems. Additional provisions in the Affordable Care Act will further encourage the efficient organization and delivery of health care, as well as investment in important preventive and population health measures.

1979-2010

A second front has opened up in the attempt to deny the significance of inequality in the United States.

The first was to focus on earnings inequality within the bottom 99 percent, instead of the growing gap between the top 1 percent and everyone else.  We’ve seen the insignificance of that one, when we consider earnings at the top are themselves distributions of the surplus appropriated by capital.

Now, in a second attempt to criticize the idea of growing inequality, it’s the role of nonmarket income (basically healthcare premia paid by employers plus government transfers). That’s what Robert Samuelson invokes, in sending us to Gary Burtless, who in turn sends us to the Congressional Budget Office.

Let’s grant the point: the distribution of income today is not directly comparable to that of the 1920s (if, that is, we include nonmarket income). It’s the same point I made when I argued we can’t compare Gini coefficients across countries—precisely because economic structures, including nonmarket incomes (plus, of course, in-kind services), are different.

Still, if we limit ourselves to the period since 1979 (as in the chart above), we can see that there was a growing gap between the tiny group at the top and everyone else: by 2007, the real incomes of the top 1 percent had grown by over 300 percent, while the incomes of everyone else by much else.

CBO-incomes

The result (as we can see in this table above) is that, by 2010, the percentage of income (both market and nonmarket) of the top 1 percent was much higher than that of any other group: 14.9 percent of before-tax incomes, 12.8 after-tax.

It may not be the symmetric 20-plus percent (of the Piketty and Saez estimates for market incomes) of 1928 and 2007. But these numbers do demonstrate that, even if we expand the sources of income, those at the very top—today just as at the end of the 1920s—are still pulling away from everyone else.

2013-ehbs-sof-a

 

I always said health care reform would come to the United States, after decades of debating the issue, when private employers decided they could no longer afford the existing health-insurance system. And finally they did, and in 2010 we got the Affordable Care Act.

The question is, for whom is it affordable?

On one hand, the act does provide affordable health insurance for millions of Americans who before were either too poor to purchase any health insurance (and, at least in some states, they’re now eligible for Medicaid) or were forced to purchase private health insurance that was either too expensive and/or covered too little (and they can now purchase better and more affordable health insurance through the government-sponsored exchanges).

On the other hand, Obamacare is going to make it more affordable to drop workers from employer-provided health insurance programs, thus shifting the burden of paying for health insurance from employers to workers. In this, and as Neil Irwin reminds us, it’s not dissimilar from what employers managed to do by eliminating defined-benefits pension plans in favor or defined-contribution plans, and thus shifting the bulk of both the risk and the payments to workers themselves.

One way of looking at this is to examine what employers (at least large corporations) had to do to get access to the workers’ ability to labor. They had to pay a wage (so that workers could purchase the commodities they needed to consume in order to perform labor). On top of that, they had to distribute a portion of their profits to health-insurance companies, so that their workers could have access to health care. In recent years, employers have managed to shift more of the cost of that health insurance to workers (who have faced rising copayments and insurance premia, thus increasing the amount workers pay by 89 percent) but also, with the rising cost of health care, have had to pay out more from their profits to purchase health insurance from their workers (to the tune of an 77-percent increase).

If workers are shifted out of employer-sponsored plans to the health exchanges, employers’ profits are going to increase by a tremendous amount. According to the S&P Capital IQ study Irwin cites, we’re talking about

$700 billion between 2016 and 2025, or about 4 percent of the total value of those companies. The total could reach $3.25 trillion for all companies with more than 50 employees.

Workers, on the other hand, are going to have to pay for health insurance out of their wages, on top of everything else they currently purchase in order to support themselves and their families. Something is going to have to give.

Corporate profits will certainly rise. But how will their employees get by? As workers are forced to pay more and more of their health care, what are they going to have to give up—buying a home, saving for retirement, saving for their children’s college education?

In this sense, the reform that was implemented in 2010 may have made healthcare more affordable for the tiny minority of employers—but less affordable for everyone else.