There are three possible answers to the question of who pays for social expenses. First, governments can pay by taxing their citizens to fund social programs. Second, employers can pay by using corporate revenues to provide employment-related benefits. Third, individuals and families can pay out of pocket, rely on unpaid labor from friends and relatives, or make do without.
For much of the twentieth century, the United States had a workable answer to the “Who pays?” question that drew on a mix of all three sources. Government provided certain social benefits like Social Security, Medicare, and public education. Aided by government tax incentives, many employers offered a wide range of benefits like health insurance and pensions, creating what political scientist Jacob Hacker refers to as a “public-private welfare regime.” And with one-third of the labor force unionized, and even nonunion employers pressured to match union-scale wages and benefits, many workers earned enough to support their families and handle the social expenses not covered by government- and employer-based programs.
For its part, government social spending has been uneven. Large universal programs like Medicare and Social Security have proven resistant to most retrenchment efforts, and Obamacare included a major expansion of Medicaid — though this was blocked in some Republican-dominated states. Meanwhile, more means-tested programstargeting low-income Americans have proven more vulnerable. In a context where employers have sharply cut back their commitment to providing social benefits, and individuals and their families are faced with stagnating wages, government’s response has proven inadequate.
At the same time, late last month, the latest Trustees’ Report for Medicare determined that the Medicare Part A Trust Fund will be exhausted in the year 2026, which, if you do the math, is a mere five years from now. At that point, Medicare would have to cut reimbursement rates for doctors by 9%, increasing to 20% in 2045, or even more if the report’s assumptions don’t pan out.
How will the new dental benefits — assuming they remain in the bill — affect Medicare Part A and its trust fund? Strictly speaking, not at all. The new benefits would be a part of Part B of the program, that is, doctors’ charges, rather than Part A, which covers hospital charges. In one respect, it would be its own benefit structure entirely, since, unlike “regular Part B” Medicare, the proposal would have the federal government pay 100% of the benefit’s costs, rather than requiring participants to pay a 25% cost-share premium. It would, in a way, become Medicare Part E.
The Biden administration’s vaccination requirement is putting a squeeze on nursing homes as they try to balance protecting residents and retaining low-wage staff that have been reluctant to get the shot.
Later this month, the administration will outline a policy that requires all staff working at nursing homes to be vaccinated or risk the facilities losing federal funding.
The specifics of the policy are sparse so far, but it would effectively be a mandate for an industry that relies heavily on Medicare and Medicaid funding.https://aef67baff698e02f95a8ec2b0d53753d.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html
Only about 62 percent of nursing home and long term care facility staff are fully or partially vaccinated nationally, according to federal data compiled by the Centers for Medicare and Medicaid Services (CMS).
“The biggest group of unvaccinated staff are certified nurse aides. They’re making close to minimum wage. They can make that, maybe even more, plus maybe even better benefits out in retail jobs, restaurant jobs. The vast majority of those employers are not imposing mandates,” Grabowski said.
Members of Congress have increasingly demanded large tax hikes on upper-income families to finance large spending increases on top of soaring baseline deficits. But even the most aggressive tax hikes on the rich would make only a small dent in the long-term budget deficits, and they would significantly harm the economy. Before considering any new taxes, lawmakers should first reduce federal spending benefits for high-income families. This bipartisan strategy would achieve both the redistributive goals of the left and the spending restraint goals of the right.
Such upper-income spending cuts have several advantages over new taxes: 1) they will not harm economic growth, 2) they increase future policy flexibility, 3) they are better targeted, and 4) they promote political compromise.
Several programs target spending to wealthy Americans. This report focuses on three of the largest: Social Security, Medicare, and farm subsidies, where basic reforms could save upward of $1 trillion in the first decade, and substantially more in future decades.
When it comes down to it, I’ll suggest to readers that they don’t really believe that it matters. And with the Biden administration’s 2022 budget proposal comes a fairly strong indication that this is their point of view as well, that they expect, when the Trust Fund well comes dry, to simply tap general federal revenues for the necessary funds, in exactly the same manner as is done for Parts B (doctors) and D (drugs).
This single sentence makes it clear that’s not the case: the only premiums paid by Medicare recipients are partial-cost payments for Parts B and D. For Part B, this is 25% of the cost for most retirees; for those with income above $85,000/$170,000 single/married, premiums are higher, reaching as much as 85% of the total cost for the highest earners. For Part D, the premium is set to cover 25.5% of the standard drug benefit, plus any extra costs charged by particular private providers for enhanced benefit levels, and an extra flat charge for higher earners. The remaining cost, 75% of Part B and 74.5% of Part D, is funded by the federal government through its general revenues.
A 30-year-old American is three times more likely to die at that age than his or her European peers. In fact, Americans do worse at just about every age. To make matters more grim, the American disadvantage is growing over time.
In 2017, for example, higher American mortality translated into roughly 401,000 excess deaths – deaths that would not have occurred if the US had Europe’s lower age-specific death rates. Pre-pandemic, that 401,000 is about 12% of all American deaths. The percentage is even higher below age 85, where one in four Americans die simply because they do not live in Europe.
There have been many efforts to account for the US mortality disadvantage. There is no single answer, but three factors stand out. First, death rates from drug overdose are much higher in the US than in Europe and have risen sharply in the 21st century. Second is the rapid rise in the proportion of American adults who are obese. In 2016, 40% of American adults were obese, a larger proportion than in Europe. Higher levels of obesity in the US may account for 55% of its shortfall in life expectancy relative to other rich countries. Third, the US stands out among wealthy countries for not offering universal healthcare insurance. One analysis suggests that the absence of universal healthcare resulted in 45,000 excess deaths at ages 18-64 in 2005. That number represents about a quarter of excess deaths in that age range.
Above age 65, healthcare insurance coverage is nearly universal via Medicare. An international review of medical practice by the National Academy of Sciences suggested that the US does comparatively well in identifying and treating cardiovascular diseases and many cancers. But the prevalence of these diseases, the principal killers in wealthy countries, is unusually high in the US. Heart disease, a type of cardiovascular disease and America’s number one cause of death for decades, is strongly linked to lifestyle factors such as obesity. Although the connection between obesity and health risks is well known, consumer preferences for unhealthy food are strong. Not just because humans are biologically vulnerable to sweets and fats, but because major food producers and distributors are incentivized to turn this weakness into profit.
The Time to Rescue United States Trusts, or TRUST Act, would establish bipartisan, bicameral commissions to address the long-term solvency of major trust funds.
The Congressional Budget Office projects the Highway Trust Fund will be insolvent by 2022, the Medicare Hospital Insurance Trust Fund in 2026, the Social Security retirement fund in 2032, and Social Security Disability Insurance in 2035.
A current example of California’s bipartisan capitulation to public employees is OPEB—formally, “Other Post-Employment Benefits”—chiefly, health insurance for retired employees and their dependents costing the state $10 billion per year. Those benefits are provided even when the retiree or dependent has another job that offers insurance, is covered by Medicare, or is entitled to premium support from the Affordable Care Act.
No other state in America showers such subsidies on retired employees, who are already entitled to the highest pensions in the land. But both parties have been obstacles to OPEB reform because both fear retribution from government employee unions. If you have any doubt about that, check out donations to legislators on both sides of the aisle.
Author(s): David Crane
Publication Date: 12 March 2021
Publication Site: Hoover Institution at Stanford University
Washington State’s Aging and Long-Term Support Administration, which falls under the Department of Social and Health Services, directed nursing homes to accept COVID-positive patients that were no longer needing “acute care” in a hospital. The goal was to “transition” those patients to “alternative settings”
“Our primary strategy to create capacity in acute care hospitals is working with participating patients and families to transition to nursing homes,” a March 20, 2020 memo stated. “Once in the nursing home, Home and Community Services staff will work the eligible individual and their family to transition to a permanent home and community-based setting of their choice.”
In exchange for taking in those patients, nursing home facilities would receive an additional $100 Medicare add-on for up to six months, The Post Millennial. That funding was part of two Medicaid waivers the state filed.
The past two decades have seen a rapid increase in Private Equity (PE) investment in healthcare, a sector in which intensive government subsidy and market frictions could lead high-powered for-profit incentives to be misaligned with the social goal of affordable, quality care. This paper studies the effects of PE ownership on patient welfare at nursing homes. With administrative patient-level data, we use a within-facility differences-in-differences design to address non-random targeting of facilities. We use an instrumental variables strategy to control for the selection of patients into nursing homes. Our estimates show that PE ownership increases the short-term mortality of Medicare patients by 10%, implying 20,150 lives lost due to PE ownership over our twelve-year sample period. This is accompanied by declines in other measures of patient well-being, such as lower mobility, while taxpayer spending per patient episode increases by 11%. We observe operational changes that help to explain these effects, including declines in nursing staff and compliance with standards. Finally, we document a systematic shift in operating costs post-acquisition toward non-patient care items such as monitoring fees, interest, and lease payments.