Tag Archives: crowd out

Gov. Hickenlooper wrong to veto Colorado SB11-213

The Denver Post published my letter to the editor criticizing Governor Hickenlooper’s veto of Senate Bill 11-213:

Re: “Hick’s reason for veto makes sense,” June 2 editorial.

Gov. John Hickenlooper was wrong to veto Senate Bill 213, which would have increased Child Health Plan Plus premiums for families earning more than twice the federal poverty level. Enrolling one child costs just $25 per year. A Post editorial asked if it was unfair for SB 213 to raise the fee to $20 per month. It’s fair. According to the latest Consumer Expenditure Survey, the poorest U.S. households spend on average more than $150 per month on alcohol, tobacco, sweets and entertainment.

What’s unfair is that Colorado compels taxpayers to fund a program that allows eligible parents to value satisfying bodily appetites more than their children’s health.

This was a very short version of my longer article on the subject, which describes how programs like CHP+ crowds out private insurance. That is, parents stop buying it and sign up for the tax-funded product.  Read more:

Colorado Child Health Plan: Parents should value children’s health more than sweets and booze, Health Policy Solutions, May 17; Denver Daily News, May 20.

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Colorado SB 11-213: Parents should value children’s health more than sweets & booze

Would you donate to a charity that allows parents well over the poverty line to pay just $25 per year for their child’s’ medical insurance? What if many recipients previously paid for such insurance themselves, and spend hundreds of dollars a year on booze, sweets and entertainment?  If you pay Colorado taxes, you’re forced to fund such a charity – the state-run “Child Health Plan Plus” (CHP+).  Senate Bill 11-213, which is awaiting the governor’s signature, would increase CHP+ enrollment fees for the wealthiest of eligible households, and rightly so.

Read the rest of this article at HealthPolicySolutions.org: Parents should value children’s health more than sweets and booze

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Why Cato’s Michael Cannon has boycotted PolitiFact:

Michael Cannon writes:

The Lie of the Year award is easily PolitiFact’s biggest publicity-generator. In 2009, they picked Sarah Palin’s “death panels” claim. In 2010, they picked the claim that the new health care law is a “government takeover” of health care. …

… each of those statements is actually factually true; it is rather that they are true for reasons that PolitiFact failed to consider. …

PolitiFact’s decision to go further by declaring those statements lies highlights a logical flaw in their Lie of the Year award. For a statement to be a lie, the speaker must know or believe it to be false. In neither the case of “death panels” nor “government takeover” has PolitiFact offered any evidence that the speakers knew or believed their statements to be false.

Since January, I have declined maybe four requests for help from PolitiFact reporters …

Read the whole post: Why I’m Boycotting PolitiFact.

via Why I’m Boycotting PolitiFact | Cato @ Liberty.

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Colorado SB 11-213: Parents can afford higher child health plan fees

Colorado parents earning up to 250% of the Federal Poverty Level (FPL) are eligible for the tax-funded Child Health Plan Plus. Enrollment fees are $25 per year for one child, and $35 per year for two or more children. The Denver Post reports that  Senate Bill 11-213 would increase the enrollment fees for households with incomes between 205% & 250% of the FPL: $20/month for one child, $10/more for each additional child with a $50/month limit.

[History of votes on this bill; May 1 Denver Post article on its status]

Can parents in this income range afford this?  Data from the Bureau of Labor Statistics says yes.  As I’ve written before:

The 2009 [Bureau of Labor Statistics] Consumer Expenditure Survey data suggests that some Medicaid recipients and parents with kids in CHP+ can afford more. On average, the lowest income households, less than $5,000, spend almost $1,900 on sweets, alcohol, tobacco, and entertainment. (That’s $156 per month) Oddly, households with incomes between $5,000 and $10,000 spend less on these items – around $1,400 ($113/month).

More details: If you look at the BLS data, the average number of people in a “consumer unit,” i.e., household or family is 2, with on average half a person under 18.  Then look at the CHP+ eligibility rules for a family size of 2. The maximum income such a family can have is $3,065 per month, or about $37,000 per year.

Now look back to the BLS data, which splits households according to $10,000 income increments, and look at the spending habits for households with the bracket below $37,000 per year: $20,000 – $30,000 per year. Note that looking at spending of families in this income range underestimates the spending of higher-income CHP+ eligible families with income betweeen $30,000 and $37,000.

For this group ($20,000 – $30,000 per year.), the total spending on alcohol, tobacco, candy, and entertainment is $2,287 per year, or $191 per month.   Such households have, on average half a person under age 18, which means that about half do not have kids.  For sake of argument, say that the childless households account for, say, 3 times as much spending as those with kids.  Even in this case, the spending by households with kids is $95 per month.

(See my calculations here.)

Moreover, the Congressional Budget Office reports that 77% of children in families with incomes between two and three times the FPL have commercial (non-government) health plans.  For the lower-income bracket, between one times and twice the FPL, the rate is 50%.  The CBO report also concludes that the State Health Insurance Program (S-CHIP) crowds out private insurance:

for every 100 children who enroll as a result of SCHIP, there is a corresponding reduction in private coverage of between 25 and 50 children.

(Colorado’s “Child Health Plan Plus” is Colorado’s version of S-CHIP.)

A study co-authored by MIT economist (& past Obama Administration consultant) Jonathan Gruber estimates that SCHIP’s crowd out level is 60%. Or as Michael Cannon puts it, S-CHIP  covers “four uninsured Americans for the price of ten — a lousy deal even by government standards.”

So when people object to SB 11-213 by saying parents will drop enrollment, do they say what happens next?  Some buy insurance themselves. After all, according to the CBO, between 50% and 77% of people with incomes between 205% and 250% of the FPL already buy commercial health plans for their kids.

The enrollment fees of Senate Bill 11-218 are similar to New Hampshire’s “Healthy Kids” program, which charges monthly fee $32 for households between 185%-250% FPL). As I’ve noted before, the program’s co-pays are also higher, and more reasonable.

See also: The Citizens’ Budget by the Independence Institute, health care policy section (page 75 of pdf for CHP+).

Recent news: Last week the Denver Post reported that “Deal on Colorado children’s health care bill faces last-minute snag.”

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“Cuts Leave Patients With Medicaid Cards, but No Specialist to See” – NYTimes

The New York Times reports:

“Having a Medicaid card in no way assures access to care,” said Dr. James B. Aiken, an emergency physician in New Orleans. …

“My Medicaid card is useless for me right now,” Ms. Dardeau said over lunch. “It’s a useless piece of plastic. I can’t find an orthopedic surgeon or a pain management doctor who will accept Medicaid.” …

With the expansion of Medicaid to cover nearly all people under 65 with incomes up to 133 percent of the official poverty level (up to $29,330 a year for a family of four), Medicaid will soon be the nation’s largest insurer. It accounts for almost half of the increase in coverage expected under Mr. Obama’s health law, but has received less attention than other parts of the law regulating private insurance. …

To hold down costs [spending], it has cut Medicaid payments to doctors, dentists, hospitals and other health care providers several times in the last two years. …

Dr. Kim A. Hardey, an obstetrician-gynecologist in Lafayette, said he received about $1,000 from the Louisiana Medicaid program for providing prenatal care and delivery for a full-term pregnancy, compared with $2,400 from private insurance.

With the expansion of Medicaid eligibility, he said, more of his patients will be on Medicaid, and fewer will have private insurance, which helps offset the financial losses doctors sustain on their Medicaid business.

Already, Dr. Hardey said, many of his patients have jobs with private insurance but switch to Medicaid when they become pregnant, avoiding premiums, deductibles and co-payments.

More: Cuts Leave Patients With Medicaid Cards, but No Specialist to See – NYTimes.com.

If government continues to immorally force taxpayers to fund Medicaid at least its co-payments, premiums, and deductibles should be higher.

(Via FIRM)

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Filed under coverage isn't care, Medicaid/Medicare/SCHIP

ObamaCare forces insurers to withdraw from markets

Grace-Marie Turner of the Galen Institute writes:

The impact of new rules on health insurance is causing people throughout the country to “lose the coverage they have now” and to have many fewer options. We all keep hearing the news in a drip-drip-drip of reports, but it seems particularly stark when you pull together in one paper, as we have done, the number of companies that have withdrawn from various markets in response to new rules. This leaves customers with fewer options of affordable coverage in an increasingly non-competitive market.

Here is our latest paper, out today, entitled “Negative consequences of health law force health insurers to withdraw from markets across the country.

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Filed under insurance, tax code, HSAs

Colo. SB 11-168 admits that authoritarian “co-op” will kill jobs

Colorado SB 11-168 (text), which would create a tax-funded authoritarian health care cooperate that unfairly competes with insurance companies, admits that it will put people out of jobs. Section 10-16-1107 (yeah, really) reads:

The [Board of Directors] shall design the Cooperative for Colorado in collaboration with parties that may be affected by the design and implementation of the Cooperative. In designing the Cooperative, the board … shall at least make recommendations concerning the following elements: …

Develop a transition plan for retraining and job placement that considers extended unemployment benefits for those whose jobs have been impacted by the implementation of the system.

Which jobs? People who work for insurance companies?  Insurance brokers, perhaps?

See my previous post: Government health co-op: public plan in disguise?

Also check out: Colorado SB 11-168: The health care Authority will enforce your “cooperation”

Thanks to the Colorado Chamber of Commerce and Industry for bring this to our attention.

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