Barry is a Senior Economist with the National Center for Policy Analysis, one of the most influential think tanks in America today.
The National Center for Policy Analysis (NCPA) is a nonprofit, nonpartisan public policy research organization, established in 1983. The NCPA's goal is to develop and promote private alternatives to government regulation and control, solving problems by relying on the strength of the competitive, entrepreneurial private sector. Topics include reforms in health care, taxes, Social Security, welfare, criminal justice, education and environmental regulation.
NCPA Motto - Making Ideas Change the World - reflects the belief that ideas have enormous power to change the course of human events. The NCPA seeks to unleash the power of ideas for positive change by identifying, encouraging, and aggressively marketing the best scholarly research.
Daily Policy Digest
Provided courtesy of: http://www.ncpa.org/
Daily Policy Digest
- Replace ObamaCare, Stat
- 11 Mar 2014 07:00:58 CDT -
We cannot wait until 2017 to reform ObamaCare, says John Goodman, president and CEO of the National Center for Policy Analysis and a senior fellow with the Independent Institute.
Goodman outlines the elements that form the basis of his proposal to reform the U.S. health care system. More progressive than ObamaCare, Goodman explains why his reforms would provide genuine access to care and protections for those with preexisting conditions.
- Choice: There should be no health insurance mandate, and Americans should be able to choose whatever type of health plan they need.
- Fairness: Goodman suggests offering a tax credit to anyone who purchases insurance that is the same for everyone. Moreover, making income irrelevant would eliminate the link between health insurance and the IRS and other federal agencies. Insurance companies could sign people up for health insurance without asking questions about their income and assets.
- Jobs: The problems that ObamaCare is creating in the labor market would vanish with a uniform tax credit and no mandate. Businesses would not be incentivized to stay small and avoid hiring, and there would be no incentive to shift employees to part-time work. Employment costs would also drop (thereby encouraging hiring), because the tax credit would do away with the perverse incentives that currently exist for employers to purchase wasteful insurance. As it stands now, employers receive greater tax benefits when they purchase more costly insurance.
- Universality: Most of the uninsured will still remain uninsured under ObamaCare. But with a tax credit system, unclaimed tax credits could be sent to safety net institutions in communities with large numbers of uninsured. These funds can be used to pay for uncompensated care when the uninsured cannot pay their health care bills.
- Portability: Today, it is illegal in most states for employers to buy employees insurance that travels with them from job to job. This is also largely responsible for the preexisting condition problem. Instead, employers should be allowed to provide portable insurance, similar to a 401(k).
- Patient Power: 30 million people today have health savings accounts (HSAs) and health reimbursement arrangements, and they control costs and eliminate waste by putting health care decisions into the hands of patients. The RAND Corporation estimates that if these plans see even more widespread use, the United States could see up to 30 percent savings in health care costs.
- Real Insurance: ObamaCare is destroying the individual insurance market, as states, cities and counties dump high-cost patients into the exchanges. Because of community rating and guaranteed issue, insurers cannot charge premiums that actually reflect the cost of enrolling a specific enrollee, and insurance companies are doing all that they can to avoid the sick. Patients are losing access to care because insurers are competing in a market of perverse incentives.
Source: John C. Goodman, "Replace Obamacare, Stat," National Review, March 24, 2014.
For more on Health Issues:
- Cash No Longer a Vehicle for Saving
- 11 Mar 2014 07:00:57 CDT -
There is little incentive for Americans to save today, says R. David Ranson, a senior fellow with the National Center for Policy Analysis and head of research at H. C. Wainwright & Co. Economics.
The United States' financial capital supply comes largely from Americans' savings. But with the Federal Reserve's zero interest rate policy and government incentives that encourage consumer spending, it is not realistic to expect savers to fuel economic growth because there is little reason to put money into savings.
To guard against the Fed's price manipulation through zero interest rates, individuals should use permanent portfolios that contain a mix of stable assets.
- The idea of "permanent portfolios" was developed in the 1980s by financial author Harry S. Browne. He advocated investing in equal weights in assets in four major categories: stocks, bonds, gold and commodities.
- A similar idea was advocated by Ray Dalio, an investment guru, who advocated allocating weights to each investment contribution based on the level of risk.
- Both of these portfolios are incredibly successful compared to returns from cash. By using a constant mix of selected assets, investors can mimic the long-term stability of cash while getting a higher return.
Ranson writes that these types of portfolios -- competing investment funds with highly stable asset mixes -- are likely to become more and more popular, serving as an "irrepressible form of private money."
Source: R. David Ranson, "The Federal Reserve Orchestrates the Death of Cash as a Vehicle for Saving," Forbes, February 21, 2014.
For more on Economic Issues:
- Stop Basing Climate Policy on Invalid Models
- 11 Mar 2014 07:00:56 CDT -
It is time to stop basing national policy on climate models that have proven themselves wrong again and again, says Paul Ballonoff, an independent consultant in international energy development.
Our current climate policy is based on models that produce global warming forecasts. Unfortunately, those forecasts have been wildly incorrect from what we have actually observed. If those forecasts are not accurate, we need to reconsider the policies that were based on them.
- After 25 years of cooling after World War II, temperatures increased at a strong rate in the quarter century ending in 1997.
- That same year, the United Nations issued its Intergovernmental Panel on Climate Change analysis, on which most of our climate policy today is based, despite that it was the last year in which a global average temperature rise occurred.
Ballonoff does not dismiss the impact that climate can have on life, and he specifically says that the global climate "has had a profound effect on human viability." However, he does not see the risk of severe cooling or human-induced warming to be imminent.
If humans can find ways to regulate the global temperature, he says, that would be quite advancement. But those in the climate change community have only created mistrust for the use of science in making policy determinations. Models, forecasts and predictions are only valuable or worthwhile if they actually work. Models alone are not science, and they are wildly deceptive foundations on which to base energy policy.
By failing to compare their forecasts to subsequent actual events, the climate science community has simply produced false predictions and abused "science" for political purposes.
Source: Paul Ballonoff, "A Fresh Look at Climate Change," Cato Institute, Winter 2014.
For more on Environment Issues:
- Students Seek Loans for Cash, Not Degree
- 11 Mar 2014 07:00:55 CDT -
Some student loan recipients are simply interested in getting low-cost cash, says the Wall Street Journal.
Ray Selent, a 30 year old from Fort Lauderdale, Florida, found himself unemployed in 2012. Strapped for cash, he enrolled as a part-time student at a local community college, allowing him to take out thousands of dollars in loans.
- By taking out the loan, Selent was able to suspend his $400 per month payments on some previous student debt, because federal law does not require student borrowers to pay back debt while enrolled in classes.
- Federal student loans can be a lot easier to apply for than bank loans, as the government generally does not conduct credit checks.
- Of the $1.1 trillion in student loan debt, it is not clear how much has gone toward living expenses. But last month, the Department of Education warned that, with the advent of online education more students have begun borrowing excess money for personal expenses.
- Moreover, the Education Department reported that at eight colleges with online programs, more than 42,000 students who received no class credits received an average of $5,285 in loans.
- The amount of student borrowers taking out the maximum amount of loans has risen since the recession. In the 2011-2012 school year, 68 percent of undergraduate borrowers reached the loan ceiling of $12,500 -- an increase from 60 percent in 2008.
Students are allowed to use some of their federal loans to cover living expenses, the idea being that students can then devote more time to studying and are more likely to graduate. However, schools that suspect students are over-borrowing are not allowed under federal law to deny funds.
Selent says that he recognizes that debt puts him into a hole, but he sees it as a preferable alternative to earning minimum wage. He earned a bachelor's degree in communications in his 20s but was unable to find a job in his field upon graduation. Now, he is enrolled in theater classes so that he can become an actor.
Source: Josh Mitchell, "Student Loans Entice Borrowers More for Cash Than a Degree," Wall Street Journal, March 2, 2014.
For more on Education Issues:
- Looming Retirement Crisis
- 11 Mar 2014 07:00:54 CDT -
The United States could be facing a retirement crisis similar to the housing market crisis, says MarketWatch.
Anyone can look at the state of retirement today -- tens of millions of baby boomers retiring combined with increasing longevity, too little savings and a threadbare public safety net -- and see that it is in trouble, yet Americans seem intent on ignoring it and hoping for the best.
Three new reports paint a frightening picture for the future.
- An analysis by Natixis, a money management firm, looked at a broad array of factors (from economic factors to health care) and found that the United States ranked 19th in the world for retirees, behind most other leading developed nations.
- The Boston College Center for Retirement Research updated its "National Retirement Risk Index," which seeks to assess how many people can expect to be financially comfortable in retirement. Half of the United States, according to the index, risks being unable to maintain their current standards of living in retirement.
- The Employee Benefits Research Institute (EBRI) recently found that 43 percent of baby boomers and those in Generation X are at risk of running out of money in retirement. For those in the poorest 25 percent, that figure rises to 83 percent. Moreover, EBRI used the most positive financial scenarios to calculate these figures. And an earlier survey by the institute found that 66 percent of American workers had saved less than $50,000 for retirement, while 28 percent had saved less than $1,000.
Natixis CEO John Hailer said of the issue, "Individuals need to be concerned about their own retirement needs, and not just be dependent on government and corporations." He noted that a full 89 percent of those surveyed told Natixis researchers that they were on track to reach their retirement goals, despite the fact that 54 percent of them did not even have a retirement plan, and 45 percent could not even articulate what those retirement goals might be.
Source: Brett Arends, "Our Next Big Crisis Will Be a Retirement Crisis," MarketWatch, March 3, 2014.
For more on Economic Issues:
- The TRICARE Quagmire
- 10 Mar 2014 07:00:53 CDT -
TRICARE, the military health insurance program operated by the Department of Defense, offers three types of health plans: Health Maintenance Organization (HMO), Preferred Provider Organization (PPO) and fee-for-service plans. The majority of Americans receiving TRICARE are enrolled in TRICARE Prime, a managed care plan, says Jacob Casey, a research associate with the National Center for Policy Analysis.
Active service members, National Guardsmen and reservists, retired servicemen (age 60 and above), survivors and their families are eligible for the health plans. Unfortunately, TRICARE is plagued with problems that impact quality and access to care.
The acceptance rate of new TRICARE patients is lower than for other types of coverage, both public and private.
- Only 58 percent of civilian providers accepted new TRICARE patients between 2008 and 2011, while 72 percent accepted new Medicaid patients and 96 percent accepted new commercially insured patients.
- This problem is rooted in the fact that providers are required to charge below-market prices for services to TRICARE patients. In order to not lose money, providers have to refuse service or lower quality.
From 2001 to 2011, military health care spending grew 6.3 percent annually on average, twice as fast as the rise in the nation's overall health care costs. TRICARE is a major contributor to this, having tripled over the last 10 years.
- By 2030, the Congressional Budget Office estimates that the Defense Department will spend $90 billion per year on health care, matching current spending on all military research and development programs combined.
- This cost explosion is due to increased demand. Because Congress sets TRICARE fees so low, premiums have not risen in the 17 years since TRICARE was created in 1996.
- As the costs of other insurance options have shot up, TRICARE becomes more and more appealing. Enrollment fees for TRICARE Prime are $38 per month, just 12.5 percent of the average cost of comparable private insurance.
- Incredibly, while the TRICARE Prime premium declined 12 percent from 2002 to 2012 in fiscal year 2012 dollars, the average private health insurance premium increased 67 percent.
- Not only do these low costs encourage enrollment in TRICARE, but the low out-of-pocket costs encourage greater consumption of services.
Real, market-based reform is necessary. Casey suggests replacing TRICARE with Health Savings Accounts (HSAs) for each eligible service member or retiree. Deposits could be placed into HSAs, and unused balances could be rolled over into future years. With HSAs, quality of care for our nation's military would increase and costs would fall. Lawmakers need to overcome political challenges to reform and take action to place health care decisions into the hands of those actually receiving care.
Source: Jacob Casey, "Supporting the Troops: The TRICARE Quagmire," National Center for Policy Analysis, March 10, 2014.
For more on Health Issues:
Health Policy Digest
Provided courtesy of: http://www.ncpa.org/
Consumer Driven Health Care
- Health Care Reform Tax Will Hurt Franchisees
- 04 Oct 2011 12:43:58 GMT - When the employer mandates go into effect in 2014, many franchised businesses will be motivated to reduce the number of locations and move workers from full-time to part-time status...
REAL CLEAR MARKETS
- Saving Jobs from Health Reform's Harmful Regulations
- 04 Oct 2011 12:43:58 GMT - If the rate of health care cost growth had not exceeded general inflation, a typical family would have had $545 more per month in spendable income instead of $95 -- a difference of $5,400 per year...
- Does Health Insurance and Seeing the Doctor Keep You Out of the Hospital?
- 04 Oct 2011 12:43:58 GMT - Gaining health insurance and using more primary care services leads to more hospitalizations as a result of physicians' discretionary decisions regarding aggressive and intensive treatment...
AMERICAN ENTERPRISE INSTITUTE
- The Case for Competition in Medicare
- 04 Oct 2011 12:43:58 GMT - A well-functioning marketplace would set in motion the forces needed to transform American medical care into a model of efficient patient-centered care...
- Potential Effect of Health Care Reform on Emergency Department Utilization Not Clear
- 04 Oct 2011 12:43:58 GMT - In 2010, 71 percent of emergency physicians said that they expected emergency department visits to increase due to the implementation of the Affordable Care Act...
NEW ENGLAND JOURNAL OF MEDICINE
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