Tag: "Health Care Costs"

Propping Up Obamacare: Playing the (Bad) Hand You’re Dealt…

Caduceus with First-aid Kit --- Image by © Royalty-Free/Corbis

Caduceus with First-aid Kit — Image by © Royalty-Free/Corbis

Obamacare is enrolling too many sick people and too few healthy ones to prevent a death spiral. The Centers for Medicare & Medicaid Services (CMS), a unit of the U.S. Department of Health & Human Services (HHS), has proposed a new rule to stabilize the Obamacare markets for individual health insurance. This was the first rule issued since Dr. Tom Price was appointed HHS secretary. The proposed Market Stabilization rule includes a number of measures to prevent people from entering the market when sick and exiting when healthy.

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Apr 03, 2017 | 26 comments | by

House Obamacare Repeal Bill Limits HSAs for Millions of Americans

Hand Holding Cash ca. 1998

Hand Holding Cash ca. 1998

The House Republican American Health Care Act Managers Amendment would not allow Americans to use their tax credits to fund an HSA. Instead of using their tax credit/HSA to pay for doctor visits, prescriptions and OTC drugs, Americans will only be allowed to use their credit for insurance. This is a big mistake – and a giveaway to insurers. Millions more Americans would have an HSA if the proposed $2,000 to $4,000 tax credits were automatically deposited into individuals’ HSAs for use on health insurance premiums, copays, cost-sharing and paying for direct care.

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Mar 21, 2017 | 27 comments | by

CPI: Medical Price Hikes Match Inflation

BLSBoth the Consumer Price Index and the price index for medical care rose just 0.1 percent in February. This is the sixth month in a row we have enjoyed medical price relief in the CPI. Even prices of prescription drugs dropped by 0.2 percent. Some components – medical equipment and supplies, outpatient hospital services, and health insurance jumped a bit, but not enough to drive overall medical prices higher. Medical price inflation contributed nine percent of CPI for all items.

Over the last 12 months, however, medical prices have increased much more than non-medical prices: 3.5 percent versus 2.7 percent. Price changes for medical care contributed 11 percent of the overall increase in CPI.

More than six years after the Affordable Care Act was passed, consumers have not seen relief from high medical prices, which have increased over twice as much as the CPI less medical care since Obamacare took effect.

See Figures I, II, and Table I Below the fold:

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Mar 15, 2017 | 1 comment | by

PPI: Health Prices Mixed, Inflation Low

BLSFebruary’s Producer Price Index rose 0.3 percent. However, prices for many health goods and services grew slowly, if at all. Nine of the 16 price indices for health goods and services grew slower than their benchmarks.* Prices for medical lab and diagnostic imaging actually deflated in absolute terms.

Even  pharmaceutical preparations for final demand, for which prices increased most relative to their benchmark, increased by just 0.4 percent. Although 0.3 percentage points higher than the price change for final demand goods less food and energy (0.1 percent), this is still tame relative to the trend of pharmaceutical prices. Among services for final demand, only price for health insurance and nursing homes rose higher than their benchmark.

With respect to diagnosing whether health prices are under control, the February PPI is about as mixed as January’s was.

See Table I below the fold:

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Mar 14, 2017 | 1 comment | by

Medical Drug Tourism: An Odd Byproduct of High Drug Prices

Capture14On numerous occasions President Trump has lambasted drug companies for their high drug prices. He has suggested on more than one occasion Americans should be allowed to import medications from abroad where they are cheaper. Allowing private citizens to import their own drugs is a form of arbitrage. Arbitrage is when people are able to take advantage of discrepancies in prices in two different markets and bypass the higher prices by purchasing the lower-priced product in a cheaper market. For instance, you could argue that buying from Amazon is a form of arbitrage to avoid paying higher prices at your local brick & mortar store.

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Mar 03, 2017 | 11 comments | by

GDP: Strong Health Spending In Weak Report

BEAFor those (like me) concerned about how much health spending continues to increase after Obamacare, today’s second report of fourth quarter Gross Domestic Product shows concern is still warranted. Because of revisions to the advance estimate, health spending accounted for a greater share of GDP than we had thought.

Overall, real GPD increased 1.8 percent on the quarter, while health services spending increased 5.6 percent, and contributed 36 percent of real GDP growth. Growth in health services spending was much higher than growth in non-health services spending (0.3 percent) and non-health personal consumption expenditures (2.4 percent). However, the implied annualized change in the health services price index increased by just 1.6 percent, lower than the price increase of 2.4 percent for non-health services, 2.0 percent for non-health PCE, and 2.1 percent for non-health GDP.

(See Table I below the fold.)

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Feb 28, 2017 | 1 comment | by

Health Spending & Prices to Rise Through 2025

Actuaries at the Centers for Medicare & Medicaid Services, a government agency, have just updated their estimate of future health spending:

For 2018 and beyond, both Medicare and Medicaid expenditures are projected to grow faster than in the 2016–17 period, and more rapidly than private health insurance spending, for several reasons. First, growth in the use of Medicare services is expected to increase from its recent historical lows (though still remain below longer-term averages). Second, the Medicaid population mix is projected to trend more toward somewhat older, sicker, and therefore costlier beneficiaries. Third, baby boomers will continue to age into Medicare, with some of them dropping private health insurance as a result. And finally, growth in the demand for health care for those with private coverage is projected to slow as the relative price of health care—the difference between medical prices and economywide prices—is expected to begin gradually increasing in 2018 and as income growth slows in the later years of the projection period.

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Feb 21, 2017 | 62 comments | by

Health Prices Up Two Thirds Less Than CPI

blsThe Consumer Price Index rose 0.6 percent in December, while medical prices rose only 0.2 percent. This is the fifth month in a row we have enjoyed medical price relief in the CPI. Even prices of prescription drugs rose by only 0.3 percent. Prices of three components – medical equipment and supplies, dental services, and care of invalids and elderly at home even dropped. No category rose more than 0.1 percentage point more than all item CPI. Medical price inflation contributed only three percent of CPI for all items.

Over the last 12 months, however, medical prices have increased much more than non-medical prices: 3.9 percent versus 2.4 percent. Price changes for medical care contributed 13 percent of the overall increase in CPI.

See Figure I and Table I below the fold:

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Feb 15, 2017 | 6 comments | by

PPI: Health Prices Mixed Amidst Inflation

blsJanuary’s Producer Price Index rose 0.6 percent. However, prices for many health goods and services grew slowly, if at all. Nine of the 16 price indices for health goods and services grew slower than their benchmarks.* Prices for six of the categories of health goods and services deflated in absolute terms.

The outlier was pharmaceutical preparations for final demand, which increased by 1.1 percent (0.7 percentage points more than final demand services (less trade, transportation, and warehousing.) The largest decline (relative to its benchmark) was for prices of health and medical insurance for intermediate demand, which declined by 0.8 percentage points versus services for intermediate demand (less trade, transportation, and warehousing).

With respect to diagnosing whether health prices are under control, the January PPI is more mixed than December’s was. Nevertheless, although pharmaceutical prices stand out, most excess inflation is in health services, not goods.

See Table I below the fold:

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Feb 14, 2017 | 4 comments | by

High Drug Prices? Don’t Fall for ‘Fake News’ Blaming the Middleman

The tab for Americans’ prescription drugs is rising. High drug prices have not escaped notice by politicians, from Bernie Sanders to Senator Ted Cruz — including President Trump. Not all drug prices are outrageous, it’s really just a handful of over-priced drugs that have given the rest a bad name. Most of the drugs Americans take are affordable, but prices for a few drugs exceed the average mortgage payment.

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Feb 08, 2017 | 8 comments | by
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