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
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Daily Policy Digest
- Repeal the Medicine Cabinet Tax on OTC Drugs
- 21 Nov 2014 07:00:58 CDT -
When Americans think about medical care, they generally think about hospitals, doctors and prescription drugs. But in a new report from the National Center for Policy Analysis, Senior Fellow Devon Herrick says that many overlook the importance of inexpensive, over-the-counter (OTC) drug therapy; just 1 percent of health spending goes toward OTC drugs, despite that Americans first reach for a nonprescription drug 80 percent of the time when they have a health ailment.
How much cheaper are OTC drugs than their prescription drug counterparts?
- The average price for a name-brand prescription was $268 in 2011, compared to only $33 for a prescription filled with a generic drug.
- OTC drug products are available in numerous package sizes; many OTC drugs are $10 or less and will last for months.
- Americans save themselves (and the health care system) $6 to $7 for every $1 spent on a nonprescription drug.
Still, they could be cheaper, says Herrick. When Congress passed the Affordable Care Act, it included what was essentially a tax on OTC drugs, because it made OTC medicines ineligible for reimbursement through health reimbursement arrangements (HRAs), flexible spending accounts (FSAs) and health savings accounts (HSAs). These accounts allow the Americans who have them to deposit pretax dollars into their accounts, which can then be used for medical expenses. Prior to the ACA, account holders could use those pretax dollars to purchase OTC drugs, resulting in a significant savings on medication. For example:
- A middle-income family may face a marginal tax rate of 25 percent, a payroll tax of 15.3 percent, and possibly a state and local tax of 5 percent.
- Thus, if an individual can use his pretax income to purchase OTC medication, he escapes that 45.3 percent tax.
- This so-called Medicine Cabinet Tax is equal to a price hike of more than 40 percent for many consumers buying drugs over the counter.
OTC drugs can still be purchased through a tax-preferred account if they are prescribed by a physician. However, Herrick says the effort of obtaining a prescription for an OTC drug would negate any savings from choosing the OTC drug. Herrick encourages the new Congress to repeal the Medicine Cabinet Tax. Over-the-counter drugs reduce doctors' office visits and cost less than prescriptions, saving Americans, and the health system, money.
Source: Devon Herrick, "Patient, Heal Thyself: Why Congress Should Repeal the Medicine Cabinet Tax on Over-the-Counter Drugs," National Center for Policy Analysis, November 21, 2014.
For more on Health Issues:
- Obama's Amnesty and the Impact on Jobs
- 21 Nov 2014 07:00:57 CDT -
The Obama administration's amnesty plan will give 5 million illegal immigrants work permits. According to Neil Munro at the Daily Caller, 4 million illegals who have been in the country for five years are eligible to apply for the permits, and another 1 million will be exempted from deportation in other ways.
If one adds those permits, reports Munro, to the other 1 million permits that the administration has previously given out, it will equal 6 million -- the same number as the number of jobs that the economy has added since the president took office in 2009.
What does this mean for jobs and the economy? Munro notes that American wages have stagnated since 2000 due to a surplus of people seeking jobs. How many people are entering the job market every year?
- The United States accepts 1 million new, legal immigrants every year. Over the last 5 years, 3.5 million have been of working-age.
- Companies tend to hire 450,000 blue-collar guest workers and 200,000 white-collar guest workers each year.
- 4.3 million Americans enter the workforce every year.
- Currently, 9 million Americans are unemployed, while 7 million have given up looking for employment.
- The number of native-born Americans with jobs has flat-lined since 2000.
According to Munro, some of the 5 million who will receive work permits are already working cash jobs or under false identities, but he says the newly permitted will compete with blue-collar workers and job seekers who were legally in the job market.
The Heritage Foundation recently released a report outlining steps to revive the American immigration system. The report, by Research Associate David Inserra, outlined many of the financial costs of illegal immigration, noting that illegal immigrants who are granted amnesty will tend to be tax consumers, not contributors. Inserra noted that were the United States to grant amnesty to 11.5 million illegals, they would pay just $3.1 trillion over the course of a lifetime in taxes while receiving $9.4 trillion in government benefits.
Source: Neil Munro, "Obama's Amnesty Will Add As Many Foreign Workers As New Jobs Since 2009," Daily Caller, November 20, 2014.
For more on Economic Issues:
- How to Inject Choice and Valuable Skills into Education
- 21 Nov 2014 07:00:56 CDT -
What should real education reform look like? Jim Geraghty of National Review says the education system needs a total overhaul, and he has some suggestions:
- Real school choice: Why are parents limited in their choices of schools? All parents, says Geraghty, should be able to send their child to any school -- anywhere -- if the school will accept him. With parents and students as consumers, the best-performing schools would thrive, while poor schools would have to clean up their act, or fail.
- Trade schools: Does everyone need a college degree? No, says Geraghty. Trade schools -- where students can learn needed skills -- prepare students for the workplace and teach them how to master a trade, without the college price tag.
- Let businesses create schools: Geraghty suggests that allowing corporations to start their own schools would solve a problem that many businesses claim to face -- a lack of prepared workers. He suggests that a "Ford Academy of Automotive Engineering," for example, could offer standard core subjects while allowing students specialized training in a specific area.
Beyond these reforms, Geraghty stresses that parents and families play a vital role in a child's ultimate success, writing that a safe and supportive home life is critical to a child's achievement.
Source: Jim Geraghty, "An Uber for Education," National Review, November 19, 2014.
For more on Education Issues:
- Flawed Model Hides Costs and Exaggerates Benefits of Climate Legislation
- 21 Nov 2014 07:00:55 CDT -
A new report from Kevin Dayaratna, Nicolas Loris and David Kreutzer of the Heritage Foundation contends the Obama administration has ignored costs while exaggerating the benefits of climate change-related regulation. According to their calculations, the EPA's proposed regulation of greenhouse gases could reduce employment and lower GDP by more than $2.5 trillion over the next two decades.
Dayaratna, Loris and Kreutzer report that White House has misrepresented climate science and the need for expensive carbon regulations. When the U.S. Global Change Research Program issued its National Climate Assessment in May 2014, it claimed that human-caused (anthropogenic) global warming was already having negative effects in the United States, and it warned of increases in sea levels, extreme weather events and temperature. But Dayaratna, Loris and Kreutzer say the report was faulty:
- The report claimed that there was a 97 percent consensus on anthropogenic global warming. However, that figure says nothing about the amount of warming that scientists believe should be attributed to humans, nor the degree of temperature acceleration or whether temperature increases would be catastrophic.
- The report's concerns about sea level rise ignore that sea level rise has been slowing. In fact, sea levels have been rising since the end of the ice age but are rising at a much slower rate today.
- The report's claims of more extreme weather events is at odds even with the U.N.'s Intergovernmental Panel on Climate Change, which concluded that the globe was unlikely to see an increase in extreme weather events.
- Much has been said about melting ice caps, but the amount of global sea ice is actually above average, and Antarctica has record amounts of sea ice.
- The report ignores more recent studies on how sensitive the climate is to carbon dioxide increases, thereby overstating climate predictions.
The authors cite research from Paul Knappenberger and Pat Michaels demonstrating that EPA climate regulations will only lower warming by 0.02 degrees Celsius by 2100.
Source: Kevin D. Dayaratna, Nicolas D. Loris and David W. Kreutzer, "The Obama Administration's Climate Agenda: Underestimated Costs and Exaggerated Benefits," Heritage Foundation, November 13, 2014.
For more on Environment Issues:
- The Costs of Free Tuition in Germany
- 21 Nov 2014 07:00:54 CDT -
College education in Germany is now tuition-free, but what does that mean? According to Natasha Bertrand of Business Insider, it has increased student access to school -- but at a cost.
With free tuition, demand for college education in Germany has risen dramatically, not only for domestic students but for foreign students, who enrolled in German schools in record numbers in the 2013-2014 school year. But without tuition fees, schools are struggling to meet the increased demand. Says Bertrand:
- Schools have had difficulty building additional classrooms and training new teachers.
- There is a housing shortage among German universities, which receive 400,000 new students annually but have only 230,000 places for them.
Why did Germany turn to the tuition-free model? Its lawmakers believed the fees were "socially unjust," explains Christopher Denhart, administrative director for The Center for College Affordability and Productivity. Denhart says that the "free" German education will not be free for taxpayers, who will likely face higher tax rates as a result of the new policy. He notes that Germany already has a problem with students who remain in college longer than they should, a problem that could increase with the free college model. In the United States, 50 percent of college students graduating from public schools do so within four years, compared to an 80 percent four-year graduation rate in private schools.
Source: Natasha Bertrand, "Why Germany's Free College Education Is Actually Not That Great," Business Insider, November 19, 2014; Christopher Denhart, "There Is No Such Thing As A Free College Education," Forbes.com, October 3, 2014.
For more on Education Issues:
- How Obamacare Is Ruining Access to Doctors
- 20 Nov 2014 07:00:53 CDT -
Dependence on government health care, both Medicare and Medicaid, is only growing. Over the last 10 years, the number of Americans over the age of 65 has risen by 6 million. Of the 8.5 million who enrolled in the exchanges during 2014, over 6 million enrolled in Medicaid. Scott Atlas, senior fellow at the Hoover Institution, says that 140 million Americans will have government health insurance by 2020.
What does the rise in the number of Americans on Medicare and Medicaid mean for health care? Reduced access to care. Already, a majority of American doctors refuse to treat Medicaid patients, and more than 20 percent of primary care doctors refuse to accept new Medicare patients -- five times larger than those who refuse to accept new patients with private insurance. And the number of those refusing to accept Medicare is growing: 10,000 doctors chose not to participate in Medicare in 2012, three times larger than those who opted out in 2009.
America is also facing a doctor shortage of 124,000 physicians by 2025, two-thirds of which will be in specialist care. This is significant, because seniors (who are on Medicare) rely heavily on specialists. Unfortunately, writes Atlas, fewer doctors are going to want to enter the profession due to cuts, noting that the Medicare Payment Advisory Commission has recommended cuts to specialists that, after adjusting for inflation, will amount to a 50 percent drop in payments after a decade.
Not only will there be fewer doctors to choose from, but insurance plans are limiting access to those doctors who are available in order to keep premium costs down, offering insurance plans that offer relatively few health care providers. According to a report from McKinsey, the vast majority (68 percent) of Obamacare insurance plans provide enrollees with access to narrow or "very narrow" networks, and most of America's best cancer care hospitals are not included in state exchange plans.
As Atlas explains, government policy is reducing the attractiveness of becoming a doctor and limiting patients' ability to access specialists and seek care at the nation's best hospitals.
Source: Scott Atlas, "If you like choice in health care, look to Republicans," CNN.com, November 18, 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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