Sunday, August 9, 2020

Trump Calls for Making Permanent Cuts to Both the Medicare and Social Security Payroll Taxes

President Trump said over the weekend, "If I'm victorious on November 3rd, I plan to forgive these [payroll taxes for Social Security and Medicare] and make permanent cuts to the payroll tax."

Currently, employers and employees split the 12.4% payroll tax on the first $137,700 of 2020 earnings and also split the 2.9% Medicare tax on all earnings. The self-employed pay the entire tax.

Trump not only wants to suspend these taxes during the pandemic crisis, he says he wants to make permanent cuts to these taxes.

First, the only people who pay these taxes are people who still have their jobs and their earnings. With millions unemployed it can be argued that it would make more sense to increase deficit spending by providing help directly to those who don't have any earnings––the unemployed.

But the bigger question revolves around the suspension of funding to Medicare and Social Security––particularly permanent cuts.

Both the Medicare and Social Security trust funds are running out of money––both face an inability to pay full benefits if their problems aren't solved by either increasing funding or cutting benefits. That is projected by the Congressional Budget Office to happen for Medicare in 2025 and Social Security in 2031.

So, with their solvency teetering, why would you cut their taxpayer provided funding sources?

Friday, August 7, 2020

Well, That's a Fine Fiscal Mess They've Gotten Us Into––Fiscal Irresponsibility and Hard Hearted Republicans

The Covid pandemic has led to extraordinary government spending.

I have no doubt that it is necessary in order to avoid not only further economic collapse but massive suffering. Sure, there are some people making more in unemployment benefits than they made working and have spent the summer partying at the beach and ignoring social distancing rules.

Remember, the $600 a week additional unemployment benefit was originally the Trump administration's idea.

But I have no doubt there have been more families that have been able to put food on the table had it not been for this assistance. Emergency action gets really messy.

Republicans seem only to be able to see the partying and have a blind eye to the suffering.

Now that the presidential debate over health care is restarting in the run-up to November, Joe Biden has a plan on the table to continue the Medicaid expansion in the states that have not taken it as well as to fix the very serious Obamacare subsidy problems for the middle class in the individual health insurance market who face extraordinarily high premiums and out-of-pocket expenses. Good for him. That individual market will be more important than ever as people face the loss of their jobs and health insurance.

But Biden's plan would cost a lot of money. He proposes paying for a lot of it by repealing the Republican tax cuts on the highest earners. The problem with that is that the Republicans never paid for those tax cuts––they just added the cost of that $1 trillion tax cut to the deficit. So, Biden isn't really paying for his health care plan, he's just transferring the Republican's deficit spending on a favorite priority––tax cuts––to a Democratic favored priority––health care benefit expansion.

So, here's the fine mess.

When the economy was booming––pre-Covid––the fed held interest rates to near zero and the Republicans cut taxes at a cost of $1 trillion. The type of things usually left for recessions when the government needs a full tool box in order to give the economy a boost and bolster the safety net.

So, here comes the biggest social and economic threat since the Great Depression to not only our economy and society but the world's as well and we've already taken interest rates to near zero and run up the fiscal red ink to record levels.

Now, on top of all of this, if I could outline a Republican plan to deal with health care, I would be pleased to do so.

Some people, including a lot of people who invest in the stock market, think we are headed to a quick "V" shaped recovery even with a widely available vaccine for at least 200 million Americans still at least a year out.

We are about to wake up to a massive debt that will come due and ultimately have to be financed with real interest rates, the big social, fiscal, and health care problems we faced last February, and a main street economy now in tatters. Just how do we ultimately avoid big tax increases above the pre-2017 levels?

And, in their negotiations with Democrats, Republicans are quibbling about paying a few party boys and girls too much in unemployment benefits.

What a mess.

Wednesday, April 22, 2020

Is the Federal Government Prepared to Give 300 Million Coronavirus Vaccine Injections in Early 2021?

Are any of the world's governments and drug companies ready to give a billion or more injections in 2021?

Anyone who believes that our economy will be able to fully open up before a vaccine is not only developed but deployed is dreaming. Will you take a vacation without being vaccinated? Sit at a bar? Attend a business meeting or convention? Go to a movie?

After watching our federal government constantly playing from behind these past few months, I don't see any evidence the White House is thinking about the logistics necessary to vaccinate everyone in America––or the diplomatic issues that are going to occur when the rest of the world wants to get their hands on that vaccine.

A vaccine may be available as soon as early 2021.

But just think about the logistics necessary to actually vaccinate everyone:
  • Billions of doses will have to be manufactured worldwide.
  • Which country will come up with it? What makes us think it will necessarily be an American creation?
  • How will the vaccine be shared by the rest of the world––will other drug suppliers be able to manufacture it and under what terms?
  • If it is injected, where are we, and the rest of the world, going to get billions of needles virtually overnight?
  • What other support materials will we need to deliver the vaccine? 
  • What will the U.S. distribution network have to look like to quickly get people vaccinated? Can you imagine the free-for-all if this isn't methodically thought out?
  • If it is a two part vaccination, what additional logistics will we need to have ready?
What if the first or most effective vaccine is a Swiss vaccine and virtually all of the needles now come from China? 

Will needle shortages become the new N95 mask fiasco? How are we going to divide the vaccine supply with the rest of the world?

Are we going to have to watch another series of White House task force briefings early next year where they tell us no one could have possibly seen this coming?

I see no evidence the White House has thought about any of this.

Maybe it's up to the governors to sort it out fifty different ways.

Friday, April 3, 2020

Best Review of Practical Information on the Coronavirus I Have Seen

Dr. David Price, an ICU physician at Weill Cornell Medical Center on the front lines in New York City, held an informal briefing for his friends and family on his experiences and recommendations for regular people.

It is the most comprehensive and practical primer on the epidemic that I have seen and I highly recommend it to you.

You can access it here.

Sunday, March 29, 2020

A Step By Step Plan to Manage the Pandemic and Reopen the Country

I sense that the discussion on where we go next, among those who truly know what they are talking about, is centering on a phased approach that responsibly balances both medical safety and reopening of our economy.

My last post directed you to David Katz's op-ed which generally outlined such an approach.

The American Enterprise Institute (AEI) now has a more lengthy paper authored by a number of experts, led by former FDA Commissioner Scott Gottlieb.

Their plan has three key phases:
  1. Slow the Spread - This is essentially where we are in the nation's various lock downs. "These measures will need to be in place in each state until transmission has measurably slowed down and health infrastructure can be scaled up to safely manage the outbreak and care for the sick."
  2. State-by-State Reopening - "Individual states can move to Phase II when they are able to safely diagnose, treat, and isolate COVID-19 cases and their contacts."
  3. Eliminating Physical Distancing Restrictions and Other Phase II Measures - "Can be lifted when safe and effective tools for mitigating the risk of COVID-19 are available, including broad surveillance, therapeutics that can rescue patients with significant disease or prevent serious illness in those most at risk, or a safe and effective vaccine."
I will suggest that we are so far behind the curve in making testing readily available and supplying health care providers with their equipment needs, that it will be months, not weeks, before "transmission has measurably slowed down and health infrastructure can be scaled up to safely manage the outbreak and care for the sick."

But, I will also suggest we will not be able to get back to anything resembling normal until we have a vaccine, mass produce it, and have made it available to the general population. Hearing experts tell us that all of this won't likely occur for one to two years makes it necessary to come to an agreement on what Phase Two will look like and when we can move to it.

You can see the full AEI report here.

Monday, March 23, 2020

A Plan to Quickly Confront and Defeat Coronavirus Without Collapsing the Economy?

What America lacks right now is a plan as we veer into one reaction to this pandemic after another.

I am not an epidemiologist so I offer no professional opinion on just what that plan should be.

But, if you haven't yet read the op-ed in the NY Times by David Katz of Yale University, you should.

An excerpt:
The data from South Korea, where tracking the coronavirus has been by far the best to date, indicate that as much as 99 percent of active cases in the general population are “mild” and do not require specific medical treatment. The small percentage of cases that do require such services are highly concentrated among those age 60 and older, and further so the older people are. Other things being equal, those over age 70 appear at three times the mortality risk as those age 60 to 69, and those over age 80 at nearly twice the mortality risk of those age 70 to 79...

The experience of the Diamond Princess cruise ship, which houses a contained, older population, proves the point. The death rate among that insular and uniformly exposed population is roughly 1 percent...

The clustering of complications and death from Covid-19 among the elderly and chronically ill, but not children (there have been only very rare deaths in children), suggests that we could achieve the crucial goals of social distancing — saving lives and not overwhelming our medical system — by preferentially protecting the medically frail and those over age 60, and in particular those over 70 and 80, from exposure...

If we were to focus on the especially vulnerable, there would be resources to keep them at home, provide them with needed services and coronavirus testing, and direct our medical system to their early care. I would favor proactive rather than reactive testing in this group, and early use of the most promising anti-viral drugs. This cannot be done under current policies, as we spread our relatively few test kits across the expanse of a whole population, made all the more anxious because society has shut down.

This focus on a much smaller portion of the population would allow most of society to return to life as usual and perhaps prevent vast segments of the economy from collapsing. Healthy children could return to school and healthy adults go back to their jobs. Theaters and restaurants could reopen, though we might be wise to avoid very large social gatherings like stadium sporting events and concerts...

A pivot right now from trying to protect all people to focusing on the most vulnerable remains entirely plausible. With each passing day, however, it becomes more difficult. The path we are on may well lead to uncontained viral contagion and monumental collateral damage to our society and economy. A more surgical approach is what we need.


Tuesday, March 10, 2020

Will the Trump Administration's Testing Snafus for Coronavirus Be Their Political Version of the Democrats' Catastrophic Launch of Obamacare?

As I have watched the Trump administration fumble the ball on getting mass coronavirus testing available to communities, I am reminded of the way the Obama administration fumbled their own ball during the Obamacare launch in 2013:

  • Repeated statements on how well things were going in the face of facts that did not match their rhetoric.
  • Not having a handle on what could go wrong and what did go wrong from beginning to end.
  • Delays that led to a public lack of confidence in the administration.

The difference this time is that the Obamacare fiasco was ultimately brought under control and, while people not being able to sign up for their health insurance for a few weeks was not a small deal, it wasn't the life and death scenario we are facing today.

Monday, February 24, 2020

Read "The Dispatch"

A few months ago, Steve Hayes and Jonah Goldberg founded a news site.
There are tons of those. This is different and worthy of your time.
In their own words:

Tuesday, February 11, 2020

Why Obamacare Supporters Should Favor the Trump Administration's Medicaid Block Grant Proposal

Readers of this blog know that no one has been more critical of Obamacare's flaws––particularly over the impact the program has had on middle class consumers in the individual health insurance market.

And, readers already know that no one has been more supportive of the Medicaid expansion from the very beginning.

Now, the Trump administration wants to give states the option to abolish the open-ended federal funding of Medicaid via fixed block grants for only a small portion of those eligible, or potentially eligible.

Critics argue that by fixing these funds, particularly at a growth rate lower than paid in the past, will result in less money and if there is less money there will be fewer benefits and fewer people covered given the flexibility states would have to redefine the program.

That is a logical conclusion.

But it's a lot more complicated than that.

Monday, February 10, 2020

Despite All of Its Efforts to Insure Everyone and Control Health Costs Things Are Getting Worse in Massachusetts

Guest Post By: 
Jeffrey Hogan
Northeast Regional Manager 
Rogers Benefit Group

Few states have done as much as Massachusetts (MA) over the last 30 years to lower healthcare costs, improve quality and outcomes and, in general, to innovate.   

Last week the MA Health Policy Commission issued its 2019 Annual Health Care Cost Trends Report documenting wins, losses, and opportunities for change. Romney Care was passed in 2006 and, in 2012, the state passed a sweeping initiative to focus on a healthcare growth target and transparent metrics for evaluating healthcare performance statewide. 

Despite significant initiatives, the state reports slippage in many metrics, including burdensome cost increases for employers and their employees. 

Wednesday, February 5, 2020

Profitability in the Health Care Market Has Never Been Better

For many years I have followed Allan Baumgarten's detailed health care market reports.

His latest covers the state of Florida and provides what I am sure is a representative sample of what is happening across the country.

A few excerpts:

Iowa Caucus Goers Strongly Support Single-Payer Health Care

This from the Washington Post:
About 6 in 10 Democrats at the Iowa caucuses on Monday reported that they support eliminating private health insurance as part of establishing a single-payer health-care system, according to preliminary poll results, suggesting that most of the party’s voters agree with Sen. Bernie Sanders (I-Vt.) on the divisive issue.
 Only these voters can reelect Donald Trump.

Monday, January 27, 2020

Comprehensive Enrollment and Cost Estimates for the Biden Health Plan, the Buttigieg Health Plan, the Warren Health Plan, and the Sanders Health Plan

In this hyper-partisan environment, I can't think of an organization that better fits the definition of bipartisan than the Committee for a Responsible Federal Budget.

Their mission is to keep the federal budget process honest and responsible. 

Its current board members include a veritable who's who of Washington, DC adults; Mitch Daniels, Leon Panetta, Tim Penny, Erskine Bowles, Kent Conrad, Vic Fazio, and Bill Gradison.

The Committee has just released a comprehensive evaluation of the leading Democratic candidates' health care plans.

It is required reading for any serious health policy wonk. Disbelieve their work at your own peril.

Monday, January 13, 2020

Republican Health Care Reform: The Congressional Republicans' Irrational Opposition to Medicaid

Congressional Republicans have consistently, if not unanimously, opposed Obamacare's expansion of Medicaid.

Their opposition is irrational.

It is also unpopular with voters. In dark red states like Nebraska, Idaho and Utah voters recently went over the heads of their Republican legislators and governors by approving referendums to expand the program. And, Kansas is about to become the 37th state to expand Medicaid under Obamacare after a bipartisan agreement between the Democratic governor and Republican leaders in the legislature.

While Obamacare's individual health insurance reforms and subsidies have been a disaster for the middle class (See: Obamacare is "Stable" at an Incredibly Unstable Place), the Medicaid expansion in the states that have approved it has covered millions of people that would never have been covered otherwise––at a cost that could never have been less.

Republican opposition has centered around a number of arguments. Let's take a look at each of them.

Wednesday, January 8, 2020

Biden, Bloomberg, and Buttigieg Have the Health Plans That Can Become Law and Will Work

In an earlier post, I pointed out that there is no better chance of passing a Medicare for all health care plan through Congress in the coming years than there was in 1977, or 1993, or 2009.

Then Elizabeth Warren showed us just how politically unrealistic single-payer health care is when she released her funding plan and then quickly backtracked to the public option approach in the face of rapidly declining polls. See my post: Elizabeth Warren Backs Into the Public Option and Effectively Takes Medicare for All Off the Table for Democrats in 2021

In a separate post, I pointed out that single-payer advocates, like Sanders and Warren, have yet to answer the biggest financial questions surrounding putting the entire country on a single government reimbursement system: How will their paying providers Medicare rates for everything not bankrupt hospitals and doctors? And, if they don't pay providers these lower Medicare rates, how will their proposals save us any money?

Thursday, December 19, 2019

Health Care Special Interests Four Hundred Billion - Consumers Zero

That's the Congressional health care score card for December.

As the year winds down and must pass year-end spending bills are completed––and with that any chance of attaching and approving health care legislation––the special interests have won big and consumers have lost big.

Employers, unions, and insurance companies won big with the repeal of the "Cadillac" tax on high cost benefit plans at a cost of $200 billion over ten years as well as the repeal of the health insurance tax (HIT), and the 2.3% medical device tax sales tax.

The total cost for repealing just these things will add about $400 billion to the deficit over a decade and are part of a mammoth $1.4 trillion spending bill larded up for lots of different interests.

Wednesday, December 18, 2019

Buttigieg and Biden Spend What They Would Gain Repealing the Republican Tax Cuts on Health Care

Shouldn't any gain from repealing the Republican tax cuts on the wealthiest go toward fixing the debt and deficit problems these tax cuts have contributed to?


Democratic presidential candidates Joe Biden and Pete Buttigieg both rely on repealing some of the Trump tax cuts––particularly those for the "rich"––to pay for their very similar and incremental health care plans that rely upon making a government-run public option available to consumers.

On one level that notion can be attractive to Democratic voters turned off by the 2017 Republican tax cuts.

But when those tax cuts were passed, the Congressional Budget Office (CBO) estimated those cuts would add $1.6 trillion over ten years to the deficit. The Democrats were apoplectic over the Republican irresponsibility of it all.

Wednesday, December 11, 2019

Greed Outranks Compromise in Congressional Attempts to Fix Surprise Medical Bills

There are few things in our health care system that are more unfair than surprise medical bills. Consumers think they have good coverage and are getting treatment in their health plan network only to get a huge unexpected bill in the mail because it turned out that something like the anesthesiologist at their recent surgery wasn't covered.

How were they to know that? As you're sitting on the gurney about to be rolled into surgery do you need to do a provider roll call asking each to confirm their network status?

The worst of these examples often has to be with air ambulances sending patients bills for tens of thousands of dollars they had no reason to expect. As the patient lays there with burns over 60% of their body and they need to be transferred to the regional burn center, are they supposed to say, "Before you put me on the helicopter, what is this going to cost?

Now, every politician I know of says that all of this needs to end.

But, they are yet to end it.

Monday, December 9, 2019

The Trump/Republican 2020 Health Care Plan

The Republicans don't yet have a health care plan less than a year before the 2020 elections.

But based upon their 2017 Obamacare repeal and replace efforts, as well as a major document recently issued by the House Republican Study Committee, what might a Republican plan look like?

Monday, December 2, 2019

Elizabeth Warren Backs Into the Public Option and Effectively Takes Medicare for All Off the Table for Democrats in 2021

Medicare for all is dead because Democratic voters aren't buying it.


Fixing Obamacare and adding a public option is the health care policy territory first staked out by Democratic Presidential candidate Joe Biden.

Writing about Biden's plan recently on this blog, I said:
IF the Democrats capture the White House, keep the House, and take over the Senate, no matter who they elect as President, this Biden health care outline, not Medicare for all, will likely be the plan Democrats embrace in 2021.
Not even I thought Elizabeth Warren would act so quickly to move off her only days-old detailed Medicare for all plan and onto about the same place all of the leading Democratic candidates, save Bernie Sanders, sit on health care––just fixing Obamacare and adding a public option.

Avoid having to check back. Subscribe to Health Care Policy and Marketplace Review and receive an email each time we post.

Blog Archive