Thursday, April 15, 2021

Pandemic Brain Fog: How Life's Repetition, Uncertainty and Isolation Impact Our Minds and Memory

This is a fascinating read on the poor cognitive function or the "brain fog" people may feel during the pandemic.  From the Guardian

One powerful factor [leading to our poor cognitive function or "brain fog" during the pandemic] could be the fact that everything is so samey. [Catherine Loveday, professor of cognitive neuroscience at the University of Westminster] explains that the brain is stimulated by the new, the different, and this is known as the orienting response: “From the minute we’re born – in fact, from before we’re born – when there is a new stimulus, a baby will turn its head towards it. And if as adults we are watching a boring lecture and someone walks into the room, it will stir our brain back into action.”

Most of us are likely to feel that nobody new has walked into our room for quite some time, which might help to explain this sluggish feeling neurologically: “We have effectively evolved to stop paying attention when nothing changes, but to pay particular attention when things do change,” she says. Loveday suggests that if we can attend a work meeting by phone while walking in a park, we might find we are more awake and better able to concentrate, thanks to the changing scenery and the exercise; she is recording some lectures as podcasts, rather than videos, so students can walk while listening. She also suggests spending time in different rooms at home – or if you only have one room, try “changing what the room looks like. I’m not saying redecorate – but you could change the pictures on the walls or move things around for variety, even in the smallest space.”

The blending of one day into the next with no commute, no change of scene, no change of cast, could also have an important impact on the way the brain processes memories, [Jon Simons, professor of cognitive neuroscience at the University of Cambridge] explains. Experiences under lockdown lack “distinctiveness” – a crucial factor in “pattern separation”. This process, which takes place in the hippocampus, at the centre of the brain, allows individual memories to be successfully encoded, ensuring there are few overlapping features, so we can distinguish one memory from another and retrieve them efficiently. The fuggy, confused sensation that many of us will recognise, of not being able to remember whether something happened last week or last month, may well be with us for a while, Simons says: “Our memories are going to be so difficult to differentiate. It’s highly likely that in a year or two, we’re still going to look back on some particular event from this last year and say, when on earth did that happen?”

Full story here.  

Wednesday, April 14, 2021

Stupid Budget Tricks - Government Healthcare Edition

If you think the federal budget situation in the United States is bad, and it is, you needn’t look any further than the remarkably inefficient and miserably managed systems of Medicare and Medicaid in order to get an idea of just how bad.  As of today, our national debt is over $28 Trillion or $225,000 per taxpayer.  But of course, that doesn’t take into account America’s unfunded liabilities.  You know, how big that debt is when you factor in what we owe and have not set aside for Medicare, Medicaid and Social Security.  After factoring that in, the real U.S. debt is $162 Trillion and each citizen owes $492,000.   


This trick has actually been going on since the 1990s.  Yup ... the 90s.     


What is the problem?  One-third of all government healthcare payments are wasted on fraud and abuse.  


See CATO: In 2005, the New York Times reported that New York’s Medicaid program “has become so huge, so complex and so lightly policed that it is easily exploited,” and that “a chief state investigator of Medicaid fraud and abuse in New York City said he and his colleagues believed that at least 10 percent of state Medicaid dollars were spent on fraudulent claims, while 20 or 30 percent more were siphoned off by what they termed abuse, meaning unnecessary spending that might not be criminal.“


Nevertheless, Medicare pays less than half of what employer-based plans pay in the U.S.  So, increasingly providers decline to take new Medicare patients.  More providers decline to take Medicaid (for low income folks) which pays, on average, 28% less than Medicare.  


Medicare is now set to run out of money by 2023 or 2024. 


See Kaiser Health News: "The Committee for a Responsible Federal Budget, a nonpartisan group of budget experts focused on fiscal policy, estimates that the pandemic will cause the Part A Trust Fund to be unable to pay all of its bills starting in late 2023 or early 2024. “But we’re still very close,” said Marc Goldwein, the group’s senior vice president." 


Even more problematic, healthcare expenditures continue to grow at 6% annually.  Federal legislators look at this quandary and don't know what to do.  Obviously the fraud can't be removed or it would have been over the last 30+ years.  Yet, House and Senate members must still "bring home the bacon" to cement reelection.  So how do they pass new legislation, particularly as it relates to healthcare, without totally blowing up the Congressional Budget Office's (CBO's) financial projections?  Two tricks:  

  1. They write a provision into their favorite federal spending laws, like Obamacare, that provide that part of the way they will "fund" the new entitlements will be to cut the Medicare reimbursements to doctors by 2% per year.  That way the "law" is in the books and the CBO must score the law assuming the cuts will happen.  

  2. Then, as those cuts come due, congress delays or suspends them.  Every.  Single. Time.  Below is the latest story on this topic.  

To reiterate the whole-scale financial negligence of the situation: one-third of U.S. government healthcare is waste, fraud and abuse.  That same system compensates doctors less than half of what private plans do.  But when congress is faced with how to make it more efficient or to save money, its answer is to bluntly cut the reimbursement to doctors even further because they know that the federal bureaucracies simply cannot get a handle on waste, fraud and abuse.  


Of course when Medicare is paying less than half of what employer-based plans pay and Medicaid pays 28% less than Medicare, nobody who wants to be re-elected will actually further reduce those reimbursements.  Doing so would be political suicide.  


This is from The HIll:  

The House on Tuesday approved a bill that would put off automatic cuts to Medicare provider payments until the end of the year.

The bill passed with a strong bipartisan majority of 384-38. 

Technically, the House vote comes nearly two weeks after the cuts were set to take effect, but the delay came with knowledge that action could be postponed until Congress returned from recess and passed the legislation.

The automatic cuts were originally put into place by the 2011 Budget Control Act, which set up an annual 2 percent reduction in Medicare payments as one of its mechanisms for reducing the debt. Congress has never allowed the cuts to take place, however, voting to overturn them regularly over the past decade.

When Congress passed the CARES Act, its $2.2 trillion emergency COVID-19 bill, last March, it pushed the cuts off until April 1 as a way of countering some of the bill's costs, at least on paper. ...

Saturday, April 3, 2021

The Final 12 States That Refused to Expand Medicaid Now Face Additional Federal Enticements

This hardly comes as a surprise. Medicaid was originally passed to cover the lowest 2% of American earners. It now covers 23%; and 1 in 3 babies is born into the program.  Over the last ten years the federal government is slinging money at states as fast as it can print and borrow it in order to further the addiction to taxpayer funded healthcare.   The fact that there are still 12 holdout states is the real story here.  From the Wall Street Journal:  

Some GOP-led states that previously declined to expand Medicaid are reconsidering that decision now that the $1.9 trillion pandemic-relief package has made billions of dollars available to enlarge the program.

The legislation passed by Congress last month boosts federal funding for two years to states that expand Medicaid, more than covering a state’s cost for increasing eligibility for the program, which is currently used by almost 79 million low-income and disabled people.

The availability of more federal funds is putting pressure on Republican leaders in some of the 12 states that haven’t expanded the program.


Friday, April 2, 2021

Who Will Really Pay for the Proposed Corporate Income Tax Hike?

 From Dr. John Goodman writing at Forbes:   

If there is one thing that virtually all economists are united about, it is this: corporations don’t pay the corporate income tax.  

Why is that? A corporation is not a person. It is a relationship ­– a relationship between workers, managers, stockholders, consumers and others. You can tax relationships. But relationships don’t pay taxes. 

The sales tax, for example, taxes a relationship between buyer and seller. But sales don’t pay taxes. People do. The burden of the sales tax must fall on the buyer, the seller or both. In competitive markets, economists think the full burden falls on the buyer. This conclusion makes sense to most people because they see the tax nominally added to the prices of the goods they buy at the cash register.

But what we see with our own eyes isn’t necessarily good economics. Take the payroll tax. This is a tax on wages. But wages don’t pay taxes. The burden must fall on the buyer (the employer) or the seller (the worker) or both. In practice (and by law), half the tax is deducted from the worker’s wages and the employer sends a check for the whole amount to the government. So, it looks like the worker is paying half and the employer is paying half.

However, careful studies by economists over many years show this is not the case. The burden of the tax is not determined by who writes the check to the government. It is determined by how the market adjusts to the tax. In this case the evidence is quite convincing: the full burden falls on the workers. That means that for every dollar of payroll tax the government collects, workers’ pay will be a dollar lower than it otherwise would be.

Full post here.  

The One Itty-Bitty, Teeny-Weeny Problem with the Plan to Expand Medicare

From Merrill Matthews writing at The Hill:  

It will be very expensive.

All workers have deducted from their paychecks a 2.9 percent Medicare payroll tax - split equally between the employer and employee. But those funds only pay for Medicare Part A, which covers hospital expenses. 

Retirees must pay out of their own pockets Part B and Part D premiums - which cover physicians' fees and prescription drug costs, respectively. But those premiums cover only about 25 percent of the cost of the programs. Taxpayers foot the other 75 percent.

And those costs add up quickly. 

Eugene Steuerle and Erald Kolasi of the Urban Institute track the average amount of money workers at various income levels pay into Social Security and Medicare and how much they can expect on average to receive in benefits. 

A male worker who made the median income his entire working career and retired at age 65 in 2020 can expect to receive from Social Security just about what he paid in. However, while he paid $81,000 in Medicare (Part A) payroll taxes, he is likely to receive $240,000 (net of premiums) in lifetime Medicare benefits. 

Lowering the enrollment age to 60 adds perhaps another $25,000 to $30,000 to that deficit.

And that's just for a single person. Consider a married couple with only one low-wage earner. That worker retiring at age 65 in 2020 paid about $36,000 in Medicare taxes, which qualifies both of them to participate in Medicare. But the couple can expect to receive about $522,000 in Medicare benefits. 

Thursday, April 1, 2021

In the Name of COVID Relief: People Making $350,000 a Year Can Now Claim $20,000 from Taxpayers to Buy a PPACA Exchange Plan (with Armstrong & Getty)

People who make $350k can now get $20k from taxpayers so they can afford a $51k exchange plan. That looks like this:
  • $51,059 is the cost of the benchmark PPACA Premium in Prescott, AZ for a family of 5 with a 60-year-old household head; 
  • $37,874 is the amount of subsidy they qualify for if they make $150,000 a year; 
  • $20,294 is the amount of subsidy of subsidy they qualify for if they make $350,000; 
  • $8,559 is the amount of subsidy they qualify for if they make $500,000; and 
  • $580,876 is the annual income at which this family no longer qualifies for a subsidy. 
Thank you to Brian Blase and Michael Cannon for doing the heavy lifting on most of the above numbers and pointing me to them, respectively.   

This is because, as Shepard Mullen explains
The [American Rescue Plan Act of 2021] provides for premium subsidies for the 2021 and 2022 calendar years. It completely subsidizes health insurance premiums for individuals who earn up to 150% of the federal poverty level for the second cheapest silver plan by area – a change from before where individuals up to 150% were only partially subsidized.... Premium tax credits also apply to, and provide considerable changes in premium contributions by higher earners. For example, individuals making 400% of the federal poverty level previously paid up to $5,017.  Under the Act, such individuals will max out at $4,338 for premiums. Individuals who earn more than 400% above the federal poverty levels will also receive premium subsidies, such that they will pay no more than 8.5% of their annual incomes for their marketplace health insurance premiums in total. These subsidies are retroactive, and thus may be claimed by individuals who have already enrolled....

Lastly, while typically individuals must repay any excess premium tax credits if their annual income exceeds 400% of the federal poverty level, the Act waives this repayment requirement for 2020.
And yes, these newly added subsidies are supposed to phase out after two years, but, as our President might say, "c'mon man."  We all know that will never happen.  These will become permanent as eloquently explained by healthcare expert Bob Laszewski in "The Democrats Are About to Set a Whopper of an Obamacare Political Time Bomb for Republicans."   

Keep in mind that back in 2016 before these latest changes happened, 70% of all healthcare in California (and about 64% nationally) was paid for by taxpayers.

Also keep in mind that folks paying for healthcare privately, such as on an employer plan, pay 240% more than those on government plans for hospital services.

And now, Hospitals Using Computer Coding Tricks to Evade Transparency Rules: WSJ Investigation. Hospitals and insurers are horrified at the thought of people starting to see the true prices are for procedures.  

What this means:
  1. As more are funneled into taxpayer funded plans, fewer care what healthcare actually costs.
  2. As hospitals are further squeezed by taxpayer-funded plans, they will require increasingly higher reimbursement rates from private/employer plans. 
  3. Reference Based Pricing (RBP) will become more popular for large employers wishing to keep health insurance.  Yes, this is a contentious route for employers as hospitals detest RBP, it confuses employees and can result in costly and time-consuming litigation.  Nevertheless, once RBP is in place, employers will only see 1.7% trend numbers as their plans can only inflate at the same pace as Medicare.  In RBP, large, self-funded employer plans eliminate their hospital networks entirely and agree to reimburse for hospital procedures at a fixed percentage above Medicare; for example, 140% of what Medicare pays.  This represents huge savings under the 240% employers pay now.  Often the first year in RBP saves an employer plan 20% to 30% overall.  I've written on this extensively here in "America Will Dramatically Change the Way It Provides Health Care by 2030"  
  4. The practical solution for many employers, especially those with less than 250 to 500 employees, will be to join into that 70%, drop health insurance and push employees to the exchanges. In fact, it will not surprise me if we see members of both political parties craft legislation that will eliminate PPACA's employer mandate paving the way for this to occur.  Democrats could support the concept as it would work to acclimate more people to government subsidies to buy healthcare.  Republicans could support it because they see the writing on the wall and realize that more government spending and greater deficits are a federal inevitability.  Hence, the GOP could see this as a way to, at least, launder those taxpayer funds through the enormous insurance lobby before doling it out to enrollees.