Tuesday, December 31, 2013

Government Health Programs Save Everyone Money

Government Health Programs Save Everyone Money: Study
More and more it seems that, when the government subsidizes health insurance, patients' share of health care costs go down. 
The latest evidence: In the years immediately following the implementation of Medicare and Medicaid -- two programs that dramatically expanded government-sponsored health coverage -- patients’ share of out-of-pocket costs dropped by 40 percent, according to a December paper from Jeffrey Clemens, an economist at the University of California at San Diego. Out-of-pocket costs are what patients are responsible for paying on their own. In the case of insured patients, those costs can include copays and deductibles. Uninsured patients typically have to pay for all of their medical services “out-of-pocket.”
In the charts above, the dotted lines represent the share of various health-care costs paid out-of-pocket by patients, and the solid red lines represent the percent change in the share of out-of-pocket health care costs since 1960. 
The explanation for the precipitous drop in patient costs is somewhat obvious, said Clemens. 
"The period right around 1965 had such a large drop because a pretty substantial fraction of seniors basically didn’t have insurance against hospital episodes and office visits at that time," he said. "Covering that population just kind of mechanically meant that people were paying way less out of pocket when they had the need to go to hospital." 
As Medicaid became more comprehensive, patients' out-of-pocket costs continued to drop, Clements said, ultimately falling 90 percent from their 1960 levels by 1980
The study adds to a growing body of evidence that these government entitlement programs helped cut health-care cost burdens for struggling consumers. Just 16 percent of funding for personal health care came from out-of-pocket payments in 2003, down from 55 percent in 1960, according to a 2005 study from the Department of Health and Human Services. 
And Medicaid alone kept at least 2.6 million people out of poverty in 2010, according to a recent paper in the Journal of Health Economics. 
If the pattern holds, the Affordable Care Act, also known as Obamacare, could lead to even more cost savings. Out-of-pocket health-care costs will drop from $1,463 to just $34 per year in 2016 for the 11.6 million low-income Americans who are expected get health coverage as a result of the law’s expansion of Medicaid, according to an October RAND study.

Income Inequality


According to the best estimates, the income share of America’s top 10% probably crossed 50% in 2012 for the first time ever, and the 22% income share that went to the top 1% was exceeded only in 2007, 2006, and 1928. The incomes of America’s top 10% are two-thirds higher than those of their counterparts 20 years ago, while the incomes of the top 1% have more than doubled...
But, for everyone else – roughly 90% of the US population – there has been no jump in income share relative to ten or 20 years ago to offset what now looks to be a permanent lost decade. On the contrary, the bottom 90% has continued to lose ground.

Sunday, December 29, 2013

$18.30 Minimum Wage

Real value of the federal minimum wage, 1968–2013 and 2013–2016 under proposed increase to $10.10 by 2016, compared with its value had it grown at the rate of productivity or average worker wages (2013 dollars)
* Productivity and average wage projections from 2013 to 2016 do not include the Harkin-Miller proposal. [source]

"If the minimum wage had grown at the same rate as productivity, it would be $18.30 today," reports David Cooper of the Economic Policy Institute.

Thursday, December 5, 2013

The Minimum Wage

President Barack Obama, Pope Francis and the fight against income inequality
A small way to attack the chronic problem of wealth concentration is to modestly boost the federal minimum wage.
As Maura Stephens, of Alternet, reported, "If the minimum hourly wage had advanced with the cost of living and productivity from its high-water mark of 1968, it would have been $21.72 in 2012, according to a March 2012 study by John Schmitt for the Center for Economic Policy and Research." Over the past few decades, our economy has experienced an increasing rate of GDP per capita - a growing economy. Yet, this bounty hasn't found its way into the wages of most workers. Workers haven't shared in this growing prosperity. Here's a series of graphs that speaks volumes about the disparity between wages and general economic growth over the past few decades.

For Further Reading:
Why Does the Minimum Wage Have No Discernible Effect on Employment?