by Rob Cullen on September 1, 2010 - 3:09 PM
At an economic roundtable last week, President Obama called small businesses the “backbone of our economy and cornerstones of our communities.” It’s true: small business accounts for about half of America’s GDP and more than half of all employment. They create two out of every three new jobs- especially important these days, while unemployment is still high.
Yet for decades our health care system has placed small business at a competitive disadvantage. Not only are the administrative costs of setting up and maintaining a health plan much higher for small businesses, they also have to pay higher premiums than large corporations– 18% higher on average.
Rising health care costs in recent years have been particularly hard on small businesses too. According to the Chicago Tribune:
“To deal with soaring health costs, many small businesses have had to switch insurance carriers, push more of the financial burden on to workers, or reduce, if not eliminate, coverage. About 12 percent of nearly 500 small businesses polled in a dozen states dropped coverage for their workers in 2008 and 2009, according to a report by the Illinois Main Street Alliance. In addition, 35 percent reported switching within the past two years to insurance that covers fewer services.”
Will the new health care law help small business? Right now only 24% of owners think so… but that doesn’t mean they’re right. It’s a complicated law and surprisingly little media coverage has been devoted to how it will affect them. And so we’ve put together a brief primer on what the law means for “the backbone of our economy.” [click to continue reading…]
by Rob Cullen on August 26, 2010 - 2:12 PM
Just wanted to let you know about a couple of changes we have made, or will be making soon, on What If Post.
First, we’ve updated our History of Health Reform timeline. The new version should be easier to use– it looks more like a timeline now and we’ve added some pictures. Even better, it’s interactive: you can zoom in and out for more detail, click on events to get even more info and links, and eventually you’ll be able to sort by topic. (Thanks to the folks at Timeglider for the free software.) And for those of you who prefer your historical information in boxy html charts, there’s still a link to the old version. Check out the new timeline here.
That’s just one of the changes we have planned for the design of What If Post. Coming soon, look for some new art and graphics on the rest of the site.
And finally, if you’re on Twitter, we definitely invite you to follow us. Our Twitter feed will let you know whenever a new post goes up, and you’ll get links to the most interesting health-related articles we find on the web. If you’re not on Twitter, you can still see what links we’ve posted recently in the Twitter Updates sidebar (in the column to the right, under Featured Stories).
Thanks again for reading, and stay Posted!
by Rob Cullen on August 10, 2010 - 10:03 AM
When it was released last summer, it instantly became the big hit of the 2009. Some said it was too controversial, but most Americans said they liked it. For months, you couldn’t turn on a television or a radio without hearing about it. There were times when we were told it was dead, that we should just move on to the next new thing. But it always managed to come back, just as popular as ever. Then, last March, that all changed. It finally fell off the charts, and has barely been heard from since. And so we ask… what ever happened to the public option? [click to continue reading…]
by Rob Cullen on August 6, 2010 - 12:09 PM
Following up on our coverage of state and federal budget issues: we’ve noticed that there seems to be some confusion over the difference between the Stimulus and the bank bailouts.
Part of the American Recovery and Reinvestment Act of 2009– better known as the Stimulus– gave state governments extra funding to help deal with the giant holes in their budgets caused by the financial crisis. With the economy still in rough shape, President Obama has urged Congress to pass additional funding to help states. Politicians and media types have referred to this as a “bail out” for state governments. That might be a fair description, but the words “bail out” have left a lot of people thinking that the Stimulus is connected to TARP and the bank bailouts.
It actually is not. To help clear things up, here’s a short description of each program. [click to continue reading…]
by Rob Cullen on August 2, 2010 - 1:21 PM
There’s not much we like more than a good graph. You might remember a couple months ago we talked about the best health care graph we’ve seen. It shows how the cost of health care per person in the United States is more than double what other industrialized countries pay, yet our life expectancy is lower than average, and we see the doctor less often.
Recently we discovered another great graph- this one from the Center for Economic and Policy Research- that shows what our extremely high health care costs mean for the national deficit. Check it out:
The graph shows our budget deficit as percentage of GDP. (Remember that the deficit is different from the national debt– the deficit is the annual shortfall between what the government collects in taxes and what it spends every year. If it spends more than it takes in, the difference gets added to the national debt, which is the total amount we owe.)
Medicare, Medicaid, and CHIP make up 21% of the federal budget- that’s more than we spend on Social Security or defense. And so, when health care costs are high it has a huge impact on the budget. The yellow line shooting up is the budget projection from the Congressional Budget Office assuming that health care costs continue to rise as fast as they have in recent years. As you can see, by around 2060, the budget deficit would be an enormous 30% of our GDP– that’s trillions of dollars we would owe every year.
The light blue line shows the CBO’s “low cost projection”– that is, if health care costs were to rise only because of the aging of the population (the baby-boomers getting older), but stayed even with inflation. (Lately health care costs have been growing at twice the rate of inflation.) In this scenario, we’d still be looking at a deficit that’s 10% of the GDP- it’s still not great.
Now look at what happens if we plug other countries’ per capita health care spending into our budget picture. In other words this is what the deficit would look like if we spent the same amount on health care per person as Germany, France, Canada, or England:
Our deficit problem would disappear completely! (Anything below zero on the graph is a surplus.)
Unfortunately, as Washington Post blogger Ezra Klein notes, it’s almost impossible to imagine how we get there from here:
The wrenching, agonizing process that got us the Affordable Care Act was attached to a pretty modest bill that was careful not to strike at the core of our system. And anytime anyone suggested arming the bill with more dramatic reforms — converting the employer-tax exclusion to a standard deduction, or adding a strong public option into the market — the politicians recoiled, and quick.
There’s a lot in the Affordable Care Act that should bring down health care costs and help reduce our long term deficit (we pointed out a bunch in an earlier post). But the goal of all these reforms was simply to “bend the cost curve,” i.e. make the budget picture look more like the blue line in the graph above.
If politicians are genuinely concerned about reducing the deficit, a strong public option would be a great place to start-the nonpartisan Congressional Budget Office estimates that a strong public option could save $68 billion between 2014 and 2020. Soon, those in Congress will get a chance to put their money (or I guess in this case, our money) where their mouth is: a coalition of 128 House Democrats is pushing to reconsider the public option. We’ll have more on that in an upcoming post.
by Rob Cullen on July 22, 2010 - 4:10 PM
by Rob Cullen on July 19, 2010 - 2:49 PM
The debate over what to do about the economy tends to get dumbed down into two positions:
Stimulus Spending vs. Reducing the Deficit.
In this simplified version, the Democrats want to spend money like crazy to get the economy going, but aren’t concerned about adding to the national debt. The Republicans, meanwhile, say they want to something about unemployment, but in the name of “fiscal responsibility” aren’t willing to borrow money to do it.
It’s a tidy explanation, but wrong. Stimulus spending isn’t a major source of our debt problem- but the massive growth in health care costs over the past decade is.
[click to continue reading…]
by Rob Cullen on July 6, 2010 - 12:14 PM
The latest employment numbers came out last week, and the numbers weren’t good:
Payrolls dropped by 125,000. In another one of those unwanted lessons in how we calculate unemployment data, the unemployment rate dropped from 9.7 percent to 9.5 percent — but not because people got hired. Instead, 652,000 people gave up and stopped looking for work.
The silver lining was that hiring by private industry was up 83,000 (the 125,000 total loss was mostly from temporary census jobs expiring), but even that figure represents a decline– fewer jobs were created than in previous months. Many economists worry that we’re looking at a double-dip recession (a 2nd recession almost immediately after the previous one).
Now, at this point you might be wondering– what happened to the massive $787 billion stimulus that Congress passed last year? Wasn’t that supposed to create millions of new jobs? Did it fail?
Evidence shows that the stimulus did work, but only partially, thanks to what Washington Post blogger Ezra Klein calls “a massive anti-stimulus that’s ripped through the states.” And at the center of the anti-stimulus… health care, of course. [click to continue reading…]
by Rob Cullen on July 2, 2010 - 12:15 PM
One of the first provisions of the new health care law to take effect said that the Department of Health and Human Services had to build a website for comparing insurance plans by July 1. Well, the deadline is here, and yesterday HSS unveiled a great-looking, easy-to-use site: www.HealthCare.gov
The Washington Post explains how it works:
Maybe you are a 21-year-old woman who has just graduated from college in Ohio and haven’t found a job yet. Or you are a 49-year-old unemployed man with high blood pressure who lives in West Virginia. How would you know what insurance options you have under the new health-care law?
A Web site that the Obama administration unveiled Wednesday aims to give everyone the full range of public and private health insurance plans available to them based on their individual circumstances.
Users of the site — HealthCare.gov — will not need to divulge personal information such as their name, address or income. Instead, the site asks a series of questions including age, Zip code, job status and degree of difficulty affording health insurance, then uses a person’s answers to produce a detailed list of potential coverage options from among 5,500 private plans as well as the full array of federal and state programs such as Medicare and Medicaid.
The woman, for example, would be advised of six options, including a list of nearby clinics offering free or low-cost care. The man would have eight options, including a new state-based insurance program for people unable to get regular coverage because of pre-existing conditions.
For now, you still have to click on each insurer’s website to get pricing information. But starting in October, HealthCare.gov will list prices for each plan and feature user-friendly charts comparing plans according to measures like deductible and co-pay levels.
There’s also helpful information explaining the new law and how your insurance options will change over the coming years, as more provisions take effect. But for now, the immediate goal of the website, according to HSS Secretary Kathleen Sebelius, is to ensure that individuals and small businesses are aware of all the resources that are available to them. For example, an estimated 5 million children are eligible for the Children’s Health Insurance Program (CHIP) but aren’t enrolled, often because their parents don’t know it’s an option.
HSS is still working to improve the site, but it’s already a great resource. We highly recommend checking it out: www.HealthCare.gov
by Rob Cullen on June 23, 2010 - 1:26 PM
Passage of health care reform may have ended the debate in Congress, but the misinformation continues. Here are some of the recent bogus claims examined by the nonpartisan website, Factcheck.org:
- Requires patients to be implanted with microchips. (No, it doesn’t.)
- Cuts benefits for military families and retirees. (No. The TRICARE program isn’t affected.)
- Exempts Muslims from the requirement to obtain coverage. (Not specifically. It does have a religious exemption, but that is intended for Old Order Amish.)
- Allows insurance companies to continue denying coverage to children with preexisting conditions. (Insurance companies have agreed not to exploit a loophole that might have allowed this.)
- Will require 16,500 armed IRS agents to enforce. (No. Criminal penalties are waived.)
- Gives President Obama a Nazi-like “private army.” (No. It provides a reserve corps of doctors and other health workers for emergencies.)
- “Exempts” House and Senate members. (No. Their coverage may not be as good as before, in fact.)
- Covers erectile-dysfunction drugs for sex offenders. (Just as it was before the new law, those no longer in jail can buy any insurance plan they choose.)
- Provides federal funding for abortions. (Not directly. But neither side in the abortion debate is happy with the law.)
- [For more detailed explanations about why these claims are wrong, you can read their full analysis here.]
The latest falsehood making the rounds is an anonymous chain email about supposed hidden taxes in the new law. It begins: [click to continue reading…]
