Amid all the talk about changing health insurance and health care in the USA, changing employer-paid (employer-based, employer-provided) health insurance rarely gets attention. One article -- eight years old -- does.
Changing the tax treatment of employer-paid health insurance would be a big improvement in my opinion. Make the cost taxable income to the employee (retirees included). If the employee buys his/her own insurance -- not employer-provided and include family coverage -- make the premium tax-deductible or allow a partial credit, perhaps scaled by income. This would enlarge the individual insurance market (below age 65), make it more competitive, and make consumers more cost-conscious. According to the Kaiser Family Foundation about 49% of the US population has insurance coverage that is wholly or mostly paid for by an employer. As a result most of them have little or no concern about the cost.
Friday, March 31, 2017
Tuesday, March 28, 2017
Financialization #2
Orhangazi's book gives three approaches of explaining financialization.
1. The long-waves approach is a historicist one. According to it, each long cycle of capitalism consists of two segments: an increase in material production followed by a crisis due to over-accumulation and a financial expansion cycle.
2. The neoliberal approach stresses how the neoliberal philosophy -- strong private property rights, free markets, and free trade -- structures governmental institutions and regulation, which in turn help shape the business environment. It encourages shorter time horizons with greater attention to the interests of investors and creditors. Palley, the author of Financialization and very critical of neoliberalism, is not mentioned.
3. The governance approach focuses on the changing relationship between financial markets and non-financial corporations. It has this in common with #2, but focuses more on the particular interests of investors, creditors, and managers.
I find the the third the most convincing, but even it doesn't include any of the empirical factors I gave in my Amazon review of Palley's book.
The first two approaches are favored by Marxists and /or Post-Keynesians.
The second approach used a new term to me -- coupon pool capitalism, described as follows. Capital is often seen as merely an intermediary between savings of household and production firms. Coupon pool capitalism says capital is not limited to an intermediary role. It also regulates the behavior of firms and households.
1. The long-waves approach is a historicist one. According to it, each long cycle of capitalism consists of two segments: an increase in material production followed by a crisis due to over-accumulation and a financial expansion cycle.
2. The neoliberal approach stresses how the neoliberal philosophy -- strong private property rights, free markets, and free trade -- structures governmental institutions and regulation, which in turn help shape the business environment. It encourages shorter time horizons with greater attention to the interests of investors and creditors. Palley, the author of Financialization and very critical of neoliberalism, is not mentioned.
3. The governance approach focuses on the changing relationship between financial markets and non-financial corporations. It has this in common with #2, but focuses more on the particular interests of investors, creditors, and managers.
I find the the third the most convincing, but even it doesn't include any of the empirical factors I gave in my Amazon review of Palley's book.
The first two approaches are favored by Marxists and /or Post-Keynesians.
The second approach used a new term to me -- coupon pool capitalism, described as follows. Capital is often seen as merely an intermediary between savings of household and production firms. Coupon pool capitalism says capital is not limited to an intermediary role. It also regulates the behavior of firms and households.
Saturday, March 25, 2017
House Reveals Proposed Health Care Revision #4
The Republicans led by Speaker Paul Ryan planned to bring the proposed American Health Care Act to a vote in the House of Representatives yesterday. Before the day was over, it was obvious that there would not be enough yes votes to pass it, so Ryan withdrew it from consideration.
President Trump had endorsed it, and threatened repercussions to Republicans who would vote against it. Every Democrat was expected to vote no. There were several reasons for the expected no votes. A big one was less federal money to the states for Medicaid (block grants rather a percent of Medicaid spending to the states*). Health care providers do not like their revenues reduced, nor do many people want to see less money available to give health care to poorer folk.
This was a big setback for both the Congress and Trump. The President's alleged deal-making skills failed.
* The federal government paid for 62.8% of Medicaid spending in 2015. Obamacare enabled a higher percent (100% initially) of spending for newly-enrolled people to states that expanded Medicaid. Here is a short quiz about Medicaid from the Kaiser Foundation.
President Trump had endorsed it, and threatened repercussions to Republicans who would vote against it. Every Democrat was expected to vote no. There were several reasons for the expected no votes. A big one was less federal money to the states for Medicaid (block grants rather a percent of Medicaid spending to the states*). Health care providers do not like their revenues reduced, nor do many people want to see less money available to give health care to poorer folk.
This was a big setback for both the Congress and Trump. The President's alleged deal-making skills failed.
* The federal government paid for 62.8% of Medicaid spending in 2015. Obamacare enabled a higher percent (100% initially) of spending for newly-enrolled people to states that expanded Medicaid. Here is a short quiz about Medicaid from the Kaiser Foundation.
Tuesday, March 21, 2017
Financialization #1
A point I made in my review of Financialization (Mar 11) was as follows: "In the latest 40 years or so, transaction costs for trading stocks and other securities fell dramatically. That plus the number of individuals doing transactions rising due to 401(k) plans and IRAs has raised the volume of trading. The rise in the volume of trading has raised the number of people employed in the infrastructure for trading, which is part of the financial sector."
I'm reading another book -- Financialization and the US Economy by Orhangazi. Unlike Financialization, the author isn't so biased and presents some data. The average daily volume of shares traded on the New York Stock Exchange rose from about 19 million in 1975 to 1,602 million in 2005. That's about 84 times.
I'm reading another book -- Financialization and the US Economy by Orhangazi. Unlike Financialization, the author isn't so biased and presents some data. The average daily volume of shares traded on the New York Stock Exchange rose from about 19 million in 1975 to 1,602 million in 2005. That's about 84 times.
Financial sector employment as a percent of total employment rose from around 3% in the 1950's to more than 5% in the mid-1980's, but fell to about 4.7% by 2006. It was even lower around 2000-01 while the stock market dropped sharply and many brokers were laid off.
Saturday, March 18, 2017
House Reveals Proposed Health Care Revision #3
Agreeing to add more Medicaid curbs to the House Republican healthcare bill to bolster support from some conservative lawmakers, President Trump spoke in favor of the Republican proposed healthcare bill. "I just want to let the world know I am 100 percent in favor" of the measure, Trump said at the White House after meeting around a dozen House lawmakers and shaking hands on revisions. "We're going to have a health care plan that's going to be second to none."
President Trump again shows his chronic habit of hyperbole and a boasting facade of having a Midas touch. The prospects of success in the House (and the Senate later) remain iffy.
In January Trump vowed, "We're going to have insurance for everybody" (link). The proposed bill doesn't do that. He also vowed to not touch Medicare. Promises, promises, not often kept.
Yet some Trump supporters have faith in his health-care plan. How
deluded some people can be continues to amaze me.
Tuesday, March 14, 2017
House Reveals Proposed Health Care Revision #2
There is more to the Republican proposal to replace Obamacare than eliminating the mandate for individuals to buy health insurance and tax credits for doing so. Another big issue is Medicaid funding, which affects state governments that administer Medicaid and providers such as hospitals and doctors. The Republican proposal calls for a fundamental change to Medicaid. No longer will the federal government commit states to cover a certain set of benefits; rather, it will be a fixed block grant from the federal government to the states based on current costs, adjusted annually to reflect inflation. Long-run this likely means less money for Medicaid. Providers, especially hospitals, have criticized the proposal.
“When Colorado expanded Medicaid coverage under former President Barack Obama’s health care law, the largest provider in the Denver region hired more than 250 employees and built a $27 million primary care clinic and two new school-based clinics.
"Emergency rooms visits stayed flat as Denver Health Medical Center directed many of the nearly 80,000 newly insured patients into one of its 10 community health centers, where newly hired social workers and mental health therapists provided services for some of the county’s poorest residents. Demand for services at the new primary care clinic was almost immediate.
"The hospital system, like others around the country, now is facing enormous uncertainty under the health care overhaul proposed by congressional Republicans.
"The GOP plan would scale back the Medicaid expansion and take away direct federal subsidies to help consumers pay their health insurance premiums, replacing them with age-adjusted tax credits.
"Denver Health could see revenue losses between $50 million and $85 million by 2020, which is between 5 and 9 percent of their annual revenue, according to the hospital’s chief financial officer. Adding to the financial anxiety is that Denver Health and many other hospital systems and medical providers across the country still would be required to care for many of the same patients, even if they lost their health coverage. That would leave hospitals, state and local governments, or privately insured patients to foot the bill" (link).
“The Congressional Budget Office on Monday projected that the House leadership’s American Health Care Act would result in 24 million Americans losing their health insurance while raising premiums for those covered on the individual market. Their bill would lower federal deficits by $337 billion over 10 years, largely as a result of cuts to Medicaid that would reduce its enrollment by 14 million, according to the estimate.
“Democrats had criticized Republicans for advancing their legislation through two key committees without a cost projection from CBO [and] anticipating … that the CBO would validate their claim that the GOP bill would strip coverage from millions. Republicans, meanwhile, have been downplaying the CBO for days in an effort to take the sting out of its projection and prevent wavering members from withdrawing their support" (link).
“When Colorado expanded Medicaid coverage under former President Barack Obama’s health care law, the largest provider in the Denver region hired more than 250 employees and built a $27 million primary care clinic and two new school-based clinics.
"Emergency rooms visits stayed flat as Denver Health Medical Center directed many of the nearly 80,000 newly insured patients into one of its 10 community health centers, where newly hired social workers and mental health therapists provided services for some of the county’s poorest residents. Demand for services at the new primary care clinic was almost immediate.
"The hospital system, like others around the country, now is facing enormous uncertainty under the health care overhaul proposed by congressional Republicans.
"The GOP plan would scale back the Medicaid expansion and take away direct federal subsidies to help consumers pay their health insurance premiums, replacing them with age-adjusted tax credits.
"Denver Health could see revenue losses between $50 million and $85 million by 2020, which is between 5 and 9 percent of their annual revenue, according to the hospital’s chief financial officer. Adding to the financial anxiety is that Denver Health and many other hospital systems and medical providers across the country still would be required to care for many of the same patients, even if they lost their health coverage. That would leave hospitals, state and local governments, or privately insured patients to foot the bill" (link).
“The Congressional Budget Office on Monday projected that the House leadership’s American Health Care Act would result in 24 million Americans losing their health insurance while raising premiums for those covered on the individual market. Their bill would lower federal deficits by $337 billion over 10 years, largely as a result of cuts to Medicaid that would reduce its enrollment by 14 million, according to the estimate.
“Democrats had criticized Republicans for advancing their legislation through two key committees without a cost projection from CBO [and] anticipating … that the CBO would validate their claim that the GOP bill would strip coverage from millions. Republicans, meanwhile, have been downplaying the CBO for days in an effort to take the sting out of its projection and prevent wavering members from withdrawing their support" (link).
Saturday, March 11, 2017
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