“Given the choice, a lot of people are going to purchase coverage rather than pay the penalty — they simply want the security of having health insurance,” said Jennifer Tolbert, principal policy analyst at the Kaiser Commission on Medicaid and the Uninsured, an initiative of the Kaiser Family Foundation (not associated with Kaiser Permanente, the health insurance company). She said that had been the experience in Massachusetts under a similar initiative. But she added, “The key is to make coverage affordable.”
According to the Congressional Budget Office, some 32 million more Americans will have insurance by 2019 under the new law, about half of whom will be buying health insurance on the individual market for the first time (the other half will be covered for the first time under Medicaid, which is being expanded to include more of the poor).
But Edmund F. Haislmaier, senior research fellow of health policy studies at the Heritage Foundation, a conservative research group, said he was skeptical that so many uninsured people would actually start buying insurance. “We’re premising all this on the idea that we’ll cross-subsidize older, sicker people with a lot of young healthy people, whom we assume will buy the coverage,” he said. “But what if they don’t?”
Many of the uninsured in America are in the same economic boat as Mr. Mann. Some 60 percent of the uninsured earn less than 200 percent of the federal poverty level ($21,660 for a single person and $44,100 for a family of four), according to Sara R. Collins, of the Commonwealth Fund, a health care research group. As earnings increase, people are more likely to be insured, experts say.
A recent study by the fund said that about one-third of people who tried to buy health insurance on their own were turned down or charged more because of a medical condition. But three-quarters walked away for other reasons, and most cited price; 60 percent said it was either “difficult” or “impossible” to find an affordable plan, said Ms. Collins, vice president for the fund’s Affordable Health Insurance Program.
Jacqui Brownstein, 63, a freelance copy editor and proofreader, said she moved to Lancaster, Pa., from New Jersey in 2004 primarily because health insurance was more affordable there. But she can’t afford it anymore; the last time she bought insurance, she paid $4,300 a year, but the rate quoted last year was $5,700. “There was no way I could afford it, so I dropped it,” said Ms. Brownstein, a smoker who has Type 2 diabetes and a family history of ovarian cancer.
Premium subsidies, which will be available to people who buy insurance through the exchanges being established, are supposed to address that problem, experts say. A 40-year-old in a medium-cost geographic area who earns $21,660 (200 percent of the federal poverty level) and whose annual premium is $3,500, for example, would receive a subsidy of $2,135 that goes directly to the insurer, while he or she pays $1,365. A family of four with an income of $44,100 would pay $2,778 while the government subsidizes the plan to the tune of $6,656.
The proportion of income people at this level have to pay for insurance is capped at no more than 6.3 percent of their earnings.
As income increases, the subsidy drops; families earning 300 to 400 percent of the federal poverty level are expected to pay up to 9.5 percent of their income, an amount that ranges from $6,284 to $8,379 per year; the federal subsidy is from $3,150 to $1,056. At the same time, however, a provision states that anyone who cannot find a premium that costs less than 8 percent of their income is exempted from the penalty.
It’s hard to predict whether the carrots and sticks of subsidies and penalties will suffice to bring people into the system, when there are so many are unemployed or underemployed people, many earning less in today’s economy than before and worried about job security and prospects.
From a pure dollars-and-cents point of view, it is cheaper for people just to pay the penalty. Even when fully implemented in 2016, the penalty is limited to no more than 2.5 percent of taxable income, and it starts out even lower, with a penalty of $95 or 1 percent of income in 2014.
“It’s hard to analyze because people are making health decisions based on their wallets,” said Sara Horowitz, who founded the Freelancers Union, a nonprofit organization that offers health insurance to freelancers.
Friday, April 23, 2010
Benefit for Uninsured May Still Pose Hurdle
Thursday, April 22, 2010
We should've passed a bigger stimulus package...
Back in February, some observers were characterizing the Administration's forecast as too rosy. Now, the Administration forecast is looking positively pessimistic by comparison to private sector forecasters, at least over 2010.
First, consider the February 2010 forecasts from the Administration (teal squares) against the April 2010 mean forecast from the Wall Street Journal survey (red line).
Figure 1: Real GDP (09Q4 3rd release) (blue), and WSJ mean forecast (red), and trimmed hi/low (gray), and Administration (teal squares) and CBO forecasts (scarlet triangles) (February 2010). Source: BEA, WSJ April survey, CEA and CBO.Not only have expectations regarding the path (in levels) of GDP risen, the Administration's forecast is now at the low end of the range of forecasts (I've trimmed the top 10% and bottom 10% of forecasts off).
Of course, just because conditions are exceeding expectations back in February (actually, December, since the Administration forecasts were locked down way in advance of the budget's release) doesn't mean all is well. One wants to know how much slack there is in the economy. This is shown in Figure 2:
Figure 2: Log output gap; and forecast output gap using WSJ April mean forecast, and trimmed high. Source: BEA, CBO, WSJ April survey.What this demonstrates is that, taking the CBO's estimate as given, even now the output gap is on the order of 6 ppts of GDP (in log terms), and will be only slightly under 5 ppts by year-end (4 ppts, using the trimmed high forecast).
We should've passed a bigger stimulus package...
GM Repays Treasury Loan in Full, TARP Repayments Reach $186 Billion
The U.S. Department of the Treasury today announced that General Motors (GM) has fully repaid its debt under the Troubled Asset Relief Program (TARP). GM paid the remaining $4.7 billion of the total $6.7 billion in debt owed to Treasury. The repayment comes five years ahead of the loan maturity date and ahead of the accelerated repayment schedule the company announced last year.Total TARP repayments now stand at $186 billion – well ahead of last fall's repayment projections for 2010. With this repayment, less than $200 billion in TARP disbursements remain outstanding.
"We are encouraged that GM has repaid its debt well ahead of schedule and confident that the company is on a strong path to viability," said Treasury Secretary Tim Geithner. "This continued progress is a positive sign for our auto investment – not only more funds recovered for the taxpayer but also countless jobs saved and the successful stabilization of a vital industry for our country."
After this repayment, the remaining Treasury stake in GM consists of $2.1 billion in preferred stock and 60.8 percent of the common equity.
Why It's Hard To Take Tax Complainers Seriously
Is NOT Providing An Earmark An Ethics Violation?
If you read the headline above quickly you may not get the extraordinary irony of this story from yesterday's Roll Call: Someone who did not get the earmark he requested says that's a violation of the House ethics rules.
It's usually the other way around; it's sometimes considered an ethics issue when a representative or senator requests and gets an earmark for someone, especially if they have contributed to his or her campaign, provided other support, or has some other connection. In this case, however, House Defense Appropriations Subcommittee Chairman Norm Dicks (D-WA) refused the request and the person who was turned down didn't like it.
Wednesday, April 21, 2010
Economic costs vs. Budget costs
There is, of course, an odd asymmetry, in the treatment of costs. The additional economic costs for the Iraq category do seem like costs to me (transfers to Rest-of-World via higher oil costs, cost-of-life calculations due to American casualties), while the "costs" that Mr. Lawler attributes to PPACA do have some offseting benefits: if one reads the RAND report, for instance, length of life is extended for some of the formerly uninsured, which adds to the "costs".
Tuesday, April 20, 2010
Financial Reform
Normally, nothing is likely to put voters to sleep faster than talking about financial reform. "Nothing to do with me...zzzzz." (Wrong, of course, as the Great Recession proved.)But the Republican leadership is expert at finding a way to lie about (and thereby seek political advantage in) even so seemingly abstract an issue, by calling anything to do with such reform a "Big Business Bailout" -- a lie, but that's never been an obstruction to Republicans seeking power:"Sen. Corker Refutes Right-Wing Talking Point: The Resolution Fund Is ‘Anything But A Bailout.’" 4/19/2010
http://thinkprogress.org/2010/04/19/corker-mcconnell-bailout/"Mitch McConnell Gets it Wrong." By Robert Reich, 4/19/2010
http://www.huffingtonpost.com/robert-reich/mitch-mcconnell-gets-it-w_b_543474.html"Dems Dig For GOP Votes Ahead Of Key Financial Reform Vote." April 19, 2010
http://tpmdc.talkingpointsmemo.com/2010/04/dems-dig-for-gop-votes-ahead-of-key-financial-reform-vote.php"Democrats stand by $50B fund." 4/19/2010
http://www.politico.com/news/stories/0410/36060.htmlAnd here's a bit about the suit against Goldman Sachs:"Would Financial Reform Have Stopped Goldman's Scheme?" 4/19/2010
http://www.prospect.org/csnc/blogs/tapped_archive?month=04&year=2010&base_name=would_financial_reform_have_stRepublicans on the S.E.C. voted against filing suit against Goldman Sachs:
"Party lines." By Mark Kleiman, April 19th, 2010
http://www.samefacts.com/2010/04/financial-crises/party-lines/
P.S. In case you missed it in the "Sen. Corker..." article above, here's the link to the memo from Frank Luntz, the Republicans' adviser on the manipulation of voters through language: http://timeswampland.files.wordpress.com/2010/04/languageoffinancialreform.pdf. The name of Luntz's outfit, The Word Doctors, is instructive in a literal sense (he does advise the use of particular words and phrases), but the motto makes the real point: "It's not what you say, it's what people hear." What's interesting is that, although anyone who pays attention to political news knows about the Luntz memos and hears the Republicans constantly using these manipulative words, the words still are just as effective with the general public, who are unaware that they're being manipulated (for reasons I've discussed before -- and will again).
Former government employee Dana Perino doesn’t trust the government.
A recent Pew poll found that nearly 80 percent of Americans don’t trust the federal government and have little faith that it can solve the country’s problems, thus marking public confidence in the government at one of the lowest points in half a century.Last night on Fox News, host Greta Van Susteren asked former Bush administration White House Press Secretary Dana Perino about the poll. Perino, herself a former federal government employee, wondered what the other 20 percent of Americans polled in the Pew survey know that “the rest of us” do not:PERINO: Well, I think it’s interesting that the 80 percent of the American people said they didn’t trust the government, and it sort of made me think, what do the other 20 percent know that the rest of us don’t know? Not a good number.Perino later speculated that the massive discontent could be because of the rising deficits, which she said “this year alone higher than the last four years of the Bush administration combined.” She neglected to mention that her former boss is responsible for most of it.
Even Mark Halperin Won't Defend the Republicans Anymore
I confess I did not think this day would ever come. I thought nothing would ever be too much for Mark Halperin:
Steve Beneen:White House economic adviser Austan Goolsbee... explained why GOP talking points about "bailouts" aren't just wrong, but are in fact the opposite of reality. Goolsbee also did a nice job highlighting the GOP's motivations for repeating obvious nonsense: "Everybody knows a consultant just handed them that line and they're just reading it. It doesn't matter what's in the bill. It could be a bill about breakfast cereal and they're going to say this is a bailout bill."But what was especially interesting this morning was the moment when host Joe Scarborough turned to Time's Mark Halperin, and urged him to "defend the Republican position" on the legislation. Halperin... couldn't.... "I cannot defend what they're doing," Halperin said. "They are willfully misreading the bill or they are engaged in a cynical attempt to keep the president from achieving something."...Mark Halperin is calling [Republicans] out for lying...When even Mark Halperin is calling Republicas out for lying, it is long past time to shut the Republican Party down.
There is no "bailout fund"
Section 210 of Chris Dodd's financial regulation bill (pdf) isn't what you'd call a gripping read. In fact, there's really no part of Dodd's bill that you'd call a gripping read. But Section 210, subsection (n), matters because it explains the workings of the "orderly liquidation fund," that $50 billion pot o' cash that Mitch McConnell and the Republicans have decided to call a "bailout fund."
Here's how the liquidation fund works: A year after the bill is signed, the secretary of the Treasury begins taxing banks based on the risk they pose to the financial system. This tax must raise $50 billion and last for at least five years but no more than 10 years. So first, that's where the fund comes from: a tax on too-big-to-fail banks, which has the added bonus of giving a slight advantage to smaller banks that won't be laboring under this tax.
When it comes to saving failing banks, $50 billion isn't a lot of money. Think of the $700 billion TARP fund. Or even look at the House bill, which has a $150 billion resolution fund. But then, the $50 billion isn't there to save banks. It's there to liquidate them.
Here's the chain of events: A bank is judged failing. The FDIC submits a plan for the bank's liquidation -- which includes firing management, wiping out shareholders, handing losses to creditors, and selling off the firm -- and gets it approved by the Treasury secretary. Then the FDIC takes over the banks. The $50 billion fund is used to keep the lights on while all this happens. It's there to prevent taxpayers from having to foot the bill for the chaos that will occur between when we recognize a bank is failing and when we shut it down.
Whatever you want to call this, it isn't a bailout. It's the death of the company. And the fund is way of forcing too-big-to-fail banks to pay for the execution. But stung by Republican criticisms, the administration is telling Democrats to let the fund go. And they're not all that unhappy to see it die. "The fund isn’t a priority for the Obama administration," reported Business Week, "which instead proposed having the financial industry repay the government for the cost of disassembling a failed firm, an approach preferred by the industry."
So let's just be clear: The alternative to the liquidation fund is Wall Street's preference. That should tell you pretty much all you need to know about whether the industry really views this as a bailout.
On the Senate floor yesterday, Bob Corker, who's been unfailingly respectful of his colleagues' criticisms of the bill, had enough. "This fund that’s been set up is anything but a bailout," he said. "It’s been set up to provide upfront funding by the industry so that when these companies are seized, there’s money available to make payroll and to wind it down while the pieces are being sold off." The only question, Corker said, was whether you pre-fund by taxing the banks, which is what the Republican head of the FDIC wants and the bill does, or whether you post-fund by recouping taxpayer losses after the fact, which the Treasury Department and the industry prefer.
That -- and not bailouts -- is the debate. And by demonizing it, Republicans will force Democrats to retreat to the post-funding structure that was the original preference of both the Obama administration and the financial industry. That's not really a strike against future bailouts, though it might be something you promised a roomful of bankers you'd do on their behalf.