Wednesday, November 26, 2014

Fwd: qotd: OECD: United States is first in private social spending

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Subject: qotd: OECD: United States is first in private social spending
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OECD
November 2014
Social spending is falling in some countries, but in many others it
remains at historically high levels


In 2014, OECD countries devote more than one-fifth of their economic
resources to public social support.

Countries on average spent more on cash benefits (12.3% of GDP) than on
social and health services (8.6% of GDP).

Cash income support to the working age population accounts for 4.4% GDP
on average across the OECD, of which 1% GDP towards unemployment
benefits, 1.8% on disability/sickness benefits, 1.3% on family cash
benefits and another 0.4% on other social policy cash supports.

Public expenditure on health is another important social policy area. On
average across the OECD, public expenditure on health has increased from
4% in 1980 to 6% of GDP.

In terms of spending, public pension payments constitute the largest
social policy area with spending at just below 8% of GDP.

In the United States public social spending is relatively low, but total
social spending is the second highest in the world

Thus far, the discussion focussed on public social spending on cash
benefits and social and health services, and in the United States and
other non-European OECD countries such spending is lower than in most
European countries. However, a focus on public budgets misses two
important features that affect social spending totals and international
comparisons of social expenditure: 1) private social expenditure and 2)
the impact of tax systems.

Private social expenditure

Private social expenditure concerns social benefits delivered through
the private sector (not transfers between individuals) which involve an
element of compulsion and/or inter-personal redistribution, for example
through the pooling of contributions and risk sharing in terms of health
and longevity. Pensions constitute an important part of both public and
private social expenditure. Private pension payments can derive from
mandatory and voluntary employer-based (sometimes occupational and
industry wide) programmes (e.g. in the Netherlands or the United
Kingdom), or tax-supported individual pension plans (e.g., individual
retirement accounts in the United States).

Individual out-of-pocket spending on health services is not regarded as
social spending, but many private health insurance plans across the OECD
involve pooling of contributions and risk sharing across the insured
population. On average across the OECD, such private social health
expenditure amounted to 0.6% of GDP in 2012. It was 1.5% of GDP in
France and 2.5% of GDP in Chile, but across OECD countries private
health insurance is most important in the United States where it
amounted to 5.7% of GDP. Taken together with public spending on health
amounting to 8% of GDP in the same year, and the value of revenue
foregone on tax breaks on health premiums (just over 0.5% of GDP), total
social health spending in the United States amounted to over 14% of GDP
- 4 percentage points higher than in France which is the second biggest
"health spender" among OECD countries.

Private social spending plays the most important role in the United
States where it amounted to almost 11% of GDP.

Cross-country rankings

The combination of small "net tax effects" and considerable private
social spending ensures that Australia, Canada, Japan and in particular
the United States move up the international social spending ladder. As
private social spending (including health) is so much larger in the
United States compared with other countries, its inclusion moves the
United States from 23rd in the ranking of the gross public social
spending to 2nd place when comparing net total social spending across
countries.

http://www.oecd.org/els/soc/OECD2014-Social-Expenditure-Update-Nov2014-8pages.pdf

****


Comment by Don McCanne

The character of a nation is determined by support of its social
programs. Medicare and Social Security are two social insurance programs
that are revered by U.S. citizens. Yet those programs, combined with
other public social programs, leave us ranked only 23rd amongst OCED
nations. It is our unique private social spending programs that move us
from 23rd to 2nd place.

At almost 11% of our GDP, private social spending was by far the highest
in the United States, as compared to other nations. Contributing to this
are our private pension plans (5% of GDP) and especially spending on
private health insurance (5.7% of GDP). In fact, our total public and
private social spending on health care (private insurance @ 5.7%, public
spending @ 8%, and tax breaks on health premiums @ 0.5%) amount to 14%
of GDP, making us by far the biggest health spender of all nations.

Is it wise for us to rely so heavily on private social spending? First
of all, administration of private retirement accounts is much more
expensive and complex than administration of our Social Security system,
and administration of private health insurance plans is also much more
expensive and complex than is administration of Medicare. We are wasting
private social funds on these inefficient intermediaries.

But more than that, as a percentage of income, contributions to private
retirement accounts and private health insurance are regressive. For
comparable benefits, lower-income individuals pay a higher percentage of
their incomes for private pensions and private health insurance than do
higher-income individuals. The fact that we rely much more heavily on
private social spending demonstrates how inegalitarian the United States
has become, in contrast to other nations.

Imagine folding the benefits of individual retirement accounts into
Social Security and folding the benefits of private health insurance
plans into Medicare, and then fund both programs with equitable
progressive taxes. We would have the finest retirement and health
programs in the world.

Tomorrow - Thanksgiving - we can give thanks for having the wisdom to do
that as a nation (or did I get something wrong here?).

Monday, November 24, 2014

Fwd: qotd: Why we don’t need long-term care insurance

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Bloomberg
November 12, 2014
Maybe You Don't Need Long-Term Care Insurance After All
By Ben Steverman

The biggest threat to a retiree's nest egg isn't a stock market crash.
It's a long illness requiring round-the-clock care.

The statistics behind that scenario -- $81,000 a year for a nursing
home, $184,000 for 24-hour home care -- are what sells long-term care
insurance policies. But while past research suggested that many more
people needed the coverage than bought it, a new study suggests that
most people should just skip it.

The study, by Boston College's Center for Retirement Research, focused
on singles, who now make up the majority of Americans. Long-term care
insurance makes financial sense only for the richest 20 to 30 percent of
unmarried people, it finds. For the rest, it makes more sense to go
without. If they need care, spending down their assets and then letting
Medicaid pick up the tab is the most practical solution.

Long-term insurance can pay off for wealthier singles, even under the
Center's new math. It takes $260,405 in assets, or about $90,000 in
annual income, to put a household in the top 25 percent, the Russell
Sage Foundation and the Congressional Research Service estimate. These
affluent customers can afford the premiums, and insurance can protect
their heirs' inheritance if that's a goal. The same logic works for
couples, but only if they're even wealthier. Webb warns that forthcoming
research will show long-term care insurance makes even less sense for
married couples than it does for singles.

http://www.bloomberg.com/news/2014-11-12/maybe-you-don-t-need-long-term-care-insurance-after-all.html

Report from Center for Retirement Research at Boston College
http://crr.bc.edu/briefs/long-term-care-how-big-a-risk/

Mediciad.gov - Community-Based Long-Term Services & Supports
http://www.medicaid.gov/affordablecareact/provisions/community-based-long-term-services-and-supports.html

****


Comment by Don McCanne

The Affordable Care Act included Senator Ted Kennedy's Community Living
Assistance Services and Supports Act (CLASS Act) which would have
provided long-term care. Unfortunately the specifics of the CLASS Act
proved to be unworkable and thus it has been suspended. But according to
this new study, unless you are wealthy, you do not need long-term care
insurance anyway. Most of us can simply spend down our assets and then
Medicaid will take care of us.

Think about how that could apply to the increasing use of patient
cost-sharing, especially the ever-higher deductibles. We could eliminate
individual health insurance coverage. When individuals are faced with
expensive acute or chronic conditions, they could simply spend down
their assets and then go on Medicaid to cover their future health care
costs.

The obvious flaw in all of this is that it would require near
destitution for us to have our heath care expenses covered. Other
nations automatically cover these expenses for everyone without forcing
them to relinquish their assets. It is a sad commentary that we accept
the policy that a person must go broke before we will provide them with
long-term care. This should not happen in a caring society.

But what are we doing with moderate-income individuals and families
right now? We are requiring cost-sharing, especially deductibles, at a
level that wipes out liquid assets for many of them, if they even have
such assets. Financial hardship has become an expected consequence for
far too many people who have significant medical needs. It is primarily
wealthier individuals and families who have the assurance of being able
to obtain health care without losing their assets.

Long-term care should be covered by our health care financing system,
and significant cost-sharing should be eliminated. A single payer system
would ensure that all of us could get the care we need, including
long-term care, without adverse financial consequences.

If we really do expect that people should use their personal assets to
contribute to the financing of health care, do it through estate taxes,
but make the taxes equitable, that is, progressive. Do not take away
from our seniors what little they have in the final years of their lives.

And do not charge the estate specifically for the amount of health care
that was given. We shouldn't deprive families of their modest
inheritances just because medical bills were high late in life. Estate
tax rates should not apply to smaller estates, but then the rates should
increase with the size of the estate, unrelated to whatever health care
costs the family faced. Yes, the rich would pay more, but that's the way
it should work in a caring society.

Friday, November 21, 2014

Fwd: qotd: Medicaid improving access for the homeless, but…

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From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>
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Subject: qotd: Medicaid improving access for the homeless, but…
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Kaiser Family Foundation
November 13, 2014
Early Impacts of the Medicaid Expansion for the Homeless Population
By Barbara DiPietro, Samantha Artiga and Alexandra Gates

The Affordable Care Act (ACA) Medicaid expansion offers a significant
opportunity to increase coverage and improve access to care for
individuals experiencing homelessness, who historically have had high
uninsured rates and often have multiple, complex physical and mental
health needs.

* The Medicaid expansion has led to significant increases in coverage
that are contributing to improved access to care and broader benefits
for homeless individuals. Providers reported that these coverage gains
have enabled patients to access many services that they could not obtain
while uninsured, including some life-saving or life-changing surgeries
or treatments. Participants also identified other broader benefits for
homeless individuals stemming from Medicaid coverage gains. For example,
providers noted improvements in individuals' ability to work and
maintain stable housing due to better management of health conditions.
In addition, participants said individuals have reduced financial stress
and improved access to other services and programs, including disability
benefits.

* Providers reported having access to a broader array of treatment
options as a result of Medicaid coverage gains among their patients.
With these increased options, providers said they are better able to
provide care based on the best courses of treatment rather than based on
the availability of charity or discounted resources.

* Gains in Medicaid revenue are facilitating strategic and operational
improvements focused on quality, care coordination, and information
technology. In addition, administrators indicated that Medicaid revenue
gains supported staff increases and led to changing staff roles to meet
increased administrative and billing needs. However, participants
emphasized that, even with Medicaid revenue gains, other funding sources
remain vital for supporting the full range of services needed by the
homeless population.

* Participants from the non-expansion site (Florida - did not expand
Medicaid) indicated that their patients remain uninsured and are
continuing to face significant gaps in care that contribute to poor
health outcomes. Participants also said they are facing an increasingly
challenging financial situation because they are missing out on Medicaid
expansion revenue gains and other funding sources are declining.

* As homeless patients gain Medicaid coverage and are enrolled in
managed care, some challenges are emerging. Participants commented that
some patients are being auto-assigned to providers with whom they do not
have an existing relationship and/or they may have difficulty accessing
due to lack of transportation. Additionally, working within provider
networks can be difficult given the complex needs of individuals, lack
of transportation, and the limited experience among other providers in
serving this population. Lastly, participants emphasized that prior
authorization requirements and limited and/or changing drug formularies
are leading to delays in care for individuals and creating substantial
administrative burdens for providers.

http://kff.org/uninsured/issue-brief/early-impacts-of-the-medicaid-expansion-for-the-homeless-population/

****


Comment by Don McCanne

The experience of the homeless population under the Affordable Care Act
(ACA) demonstrates both the benefits of reform under ACA and the flaws
of ACA that call for replacement with a single payer system. ACA was
better than nothing, but we can have so much more through enactment of a
single payer system.

The primary ACA benefit for the homeless is that most of them in
expansion states qualify for Medicaid and thus have improved access to
health care without financial barriers. Some of the homeless who access
health care have been noted to have an increased ability to work and to
maintain stable housing. Financial stress is reduced and some have
gained access to appropriate disability benefits. These benefits to the
homeless are more reasons why calls for simple repeal of ACA are bad
policy, devoid of compassion.

Yet the last paragraph from the excerpts above explains why Medicaid
managed care is often a poor choice for the homeless (and many other
lower-income individuals as well). Homeless patients often are unable to
see the health care professionals who would be most accessible and
appropriate for them. Transportation concerns are more likely. Essential
specialized services may not be available. Managed care intrusions such
as prior authorization requirements, limitations and changes in
formularies, or other perverse managed care innovations may impair
access to important health care services or products. Further, those
states that refuse to expand Medicaid are leaving most of the homeless
without any coverage and therefore reliant on often inadequately funded
safety-net institutions.

There are those who believe that we should merely proceed with
implementation of ACA and try to obtain legislative and administrative
patches along the way. Compared to the deficiencies in our dysfunctional
system, patches have only minimal beneficial impact while increasing the
administrative complexity that already overburdens our system. Patches
fall way too short of what we need.

We should not repeal ACA since it does provide some temporary benefit
until we can implement a single payer system. But we should not let ACA
implementation divert us from instituting what we really need - a single
payer national health program. Not only would that benefit the homeless,
it would benefit all of the rest of us as well.