Health Jobs Grow Twice as Fast in April as Other Jobs

Of the 223,000 jobs added in April, 45,000 were in health services, according to the latest Employment Situation Summary from the Bureau of Labor Statistics. Health services employment rose by 0.30 percent monthly, while other nonfarm, civilian employment grew only 0.14 percent. This continues the trend seen in March. As shown in Table 1, jobs in ambulatory settings accounted for well over half of health jobs.

20150511 Health Workforce T1[1]

Longer-term jobs in ambulatory settings accounted for just under half of health jobs in the last year, as shown in Table 2. Obamacare seems to be juicing jobs in the health services sector, which continues to challenge repeal efforts. Hospitals, especially, are relentlessly lobbying for its survival and expansion.

20150511 Health Workforces T2[2]

The Individual Mandate

healthcare-lawAs most people know by now, the Individual Mandate is one of the key elements in the Affordable Care Act (ACA). The Supreme Court ruled in 2012 that the Individual Mandate is constitutional. Prior to that ruling, both proponents and opponents of the ACA agreed that it is essential enough that the ACA would not work without it.

Enforcement of the Individual Mandate lies with the Internal Revenue Service (IRS), which is supposed to verify compliance when taxpayers submit their income tax returns.

With all the discussion of the importance of the Individual Mandate, I was surprised–as many taxpayers must have been–to discover that the way the IRS is verifying compliance with the Individual Mandate is through a box taxpayers check on their 1040 form stating they have health insurance.


Shifting from Quantity to Quality in Patent Applications

patent_trolls_180x270VentureBeat has published a good piece on how “innovators are now moving away from creating untargeted, mass-produced innovations that aim only to secure as many patents as possible, and they’re moving toward precise innovation centered around specific product and market needs.” The American patent system has long been suffering the consequences of the issuance of junk patents that are eventually bought for pennies by patent trolls who then use these patents to shake down various companies and innovators. Fewer patents can only help our system and make it more difficult for the trolls to conduct business.

The Ex-Im Bank Redux

indexAdam Smith, the first and still best of all of the world’s economists and moral philosophers, once wrote in opposition to all systems of “preference and restraint”.

That lesson is lost on most politicians and all special pleaders who support re-authorization of the taxpayer-financed Export-Import Bank, whose funding is once again set to expire at the end of June 2015. The Ex-Im Bank is a poster child for crony capitalism. The list of the major beneficiaries of its subsidies and loan guarantees is headed by Boeing, Caterpillar and other large U.S. corporations, none of which need privileged access to the common pool resources of the federal budget to sell their products overseas. The Ex-Im Bank allows foreign airlines and mining companies, among others, to buy capital equipment from U.S. manufacturers on the cheap, thereby gaining advantages over their rivals in the global marketplace, many of which, like American and Delta airlines, are headquartered in the United States. Subsidies to exporters at the expense of ordinary American taxpayers not only distort competitive market forces, but, insofar as they help Boeing and hurt U.S. commercial airlines, also are morally indefensible.

I once told Mercatus’s Veronique de Rugy in person that if fiscally responsible commentators like us cannot kill the Ex-Im Bank, we cannot kill any other profligate federal spending program that delivers special benefits to politically well-organized lobbyists, paid for by you and me.

It is past time for all Americans to stand up against all systems of preference and restraint. Although many other for opportunities for opposing Washington’s expansionism could be put on the table, the pending re authorization of the Ex-Im Bank is a good place to start.

Save the Children. Open the Border

They call it “La Bestia” (“the beast”) or “el tren de los desconocidos” (“the train of the unknown”). Every year, an estimated 400,000 to 500,000 immigrants, as many as 1,500 per day, climb on top of trains and travel from their countries of origin—mostly Guatemala, Honduras, Nicaragua, and El Salvador—and through Mexico in an effort to reach the United States.

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Obamacare’s Risk Corridors Are Back, and Bigger and Badder than Ever!

health_costsLast year, I discussed at length Obamacare’s risk corridors, which comprised an unlimited taxpayer bailout of insurers’ profits in the Obamacare exchanges, by transferring money from insurers with extra profits to those whose profits from Obamacare are less than expected. Fortunately, Congress capped this liability last December.

The CROmnibus, which funded the government for 2015, put a guardrail around the risk corridors by legislating that any payments beyond budget neutrality would have to be appropriated. (That is, if extra profitable insurers earned $100 “too much” and losing insurers lost $200 “too much”, the winners could pay the losers $100, but the U.S. Treasury could not just make up the balance without Congress appropriating the funds.)

Well, Standard & Poor’s has just concluded that payments from extra profitable insurers will fund only 10 percent of risk corridor payments:

Standard & Poor’s Ratings Services expects the ACA risk-corridor pool to be significantly underfunded if the government enforces budget neutrality. Budget neutrality requires the pool to be funded by payments insurers make into the pool. No external funding can be allocated to it. Our study of risk-corridor receivables and payables recorded in U.S. health insurance companies’ 2014 annual financial statements found that receivables insurers booked for the ACA corridor far outweigh the payables. In fact, our study indicates that the risk corridor payables are less than 10% of the receivables insurers reported in 2014.

Taxpayers: We dodged a bullet. U.S. Senator Marco Rubio wants to take it a step further, by simply abolishing the risk corridor payments entirely. Given how quickly the Republican-majority Congress stampeded into paying for an unfunded Medicare “doc fix” just a few weeks ago, it might not be a bad idea.

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For the pivotal alternative to Obamacare, please see the Independent Institute’s new book: A Better Choice: Healthcare Solutions for America, by John C. Goodman.

Florida’s Financial Health Care Follies, and a Problem with a Part-Time Legislature

FloridaSenateThe one constitutional responsibility of Florida’s legislature is to pass a budget—something Florida’s solidly Republican House and Senate could not do by the end of their regular legislative session. The big issue that divided them was how to deal with the Affordable Care Act’s mandates.

Here’s the issue. Florida has been receiving about $1.3 billion a year in a Low Income Pool (LIP) grant from the federal government to help offset the costs hospitals incur from uninsured patients. The Obama administration is replacing LIP funding with Medicaid grants to states that expanded their Medicaid programs under the Affordable Care Act. Florida has not expanded its Medicaid program, so the Obama administration says it will not get the Medicaid money nor the LIP funding.

The state Senate wants to expand Medicaid and get the federal money. The House does not want the Medicaid expansion. There’s the impasse. Meanwhile, Governor Rick Scott is suing the federal government to get the LIP money restored, claiming that the federal government is using the threat of funding cuts in order to try to force the state to expand a program it does not want to expand. The federal government is telling Floridians, who pay federal taxes just like everyone else, that it will send their tax dollars to other states unless they bow to this federal pressure to expand Medicaid.

In 1990 Medicaid made up less than 10% of Florida’s state government budget. Now it makes up more than 30%. It seems reasonable for Florida’s legislature to decide they won’t expand the program further, and it seems unreasonable for the federal government to coerce any state into expanding its expenditures on any program. The federal government passed the Affordable Care Act. They should not be requiring states to administer and pay for it. I’m siding with the Florida House and the governor on this one.

There is another interesting wrinkle in this division between the Florida House and the Florida Senate. Florida has a “part-time” legislature, so most legislators have other jobs. The president of the Florida Senate, Andy Gardiner, is vice president of Orlando Health, a network of hospitals that receives state funding. His annual pay of nearly $200,000 a year includes incentives based partly on the financial performance of the hospitals in his network. Gardiner has a direct personal incentive to push for Medicaid expansion, even as the House and governor oppose it.

Conflicts of interest show up often in every legislature, but this specific example might point toward a problem with “part-time” legislatures, which almost require legislators to have outside financial interests.

Florida’s Constitution requires a budget to be passed by July 1, and with the regular legislative session now over, I expect a special session to be called and a budget passed. Unlike market transactions, where people exchange for their mutual benefit, politics is a game of winners and losers, so however this plays out, one side will win and the other will lose.

This isn’t Republicans against Democrats. Both the House and Senate are solidly Republican. This is just an example of how the political process divides people and creates conflict, even among people who mostly agree with each other.

Obamacare’s State-Based Exchanges Struggle with Surging Costs

Money-Spiral-Image-for-PostObamacare’s health insurance exchanges are a real problem. States that established exchanges as “active purchasers” of health insurance, instead of just clearinghouses, have higher premiums. So, what is the point of them? Further, the federal government threw billions of dollars at states to set up exchanges, with zero accountability.

Things are not improving. From the Washington Post:

Nearly half of the 17 insurance marketplaces set up by the states and the District under President Obama’s health law are struggling financially, presenting state officials with an unexpected and serious challenge five years after the passage of the landmark Affordable Care Act.

Many of the online exchanges are wrestling with surging costs, especially for balky technology and expensive customer call centers—and tepid enrollment numbers. To ease the fiscal distress, officials are considering raising fees on insurers, sharing costs with other states and pressing state lawmakers for cash infusions. Some are weighing turning over part or all of their troubled marketplaces to the federal exchange,, which now works smoothly.

Well, whether the federal exchange “works smoothly” or not is a discussion for another day, although I would beg to differ with the WaPo. A more appropriate description of might be that it works illegally, because it pays tax credits to insurers without any legal basis for doing so.

That is the question in the Supreme Court case King v. Burwell. If the Supreme Court decides for the plaintiff, will effectively wind down (because it won’t have any more access to taxpayers’ money). With state-based exchanges failing, the future of Obamacare is in great doubt.

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For the pivotal alternative to Obamacare, please see the Independent Institute’s new book: A Better Choice: Healthcare Solutions for America, by John C. Goodman.

Galeano vs. Rangel: A Conflict of Visions in Latin America

liberty_for_latin_america_180x270In 2009, President Hugo Chávez caused a stir when he presented President Barack Obama with a literary gift titled Open Veins of Latin America. The author, Uruguayan writer Eduardo Galeano, an icon of the left, died last month. It so happens that 2015 is also the fortieth anniversary one of the best books about the developing world, The Latin Americans—Their Love-Hate Relationship with the United States, written by Venezuela’s Carlos Rangel. Unfortunately, the translation of the title misses the powerful connotations of the Spanish title.

Galeano spent his life mythifying Latin America; Rangel, who committed suicide in 1988, spent his demythifying it. The Uruguayan enjoyed the protection of a vast left-wing apparatus. The Venezuelan was one of the left’s favorite targets in the 1970s and 1980s.


Why Don’t You Own Your Own Health Information?

health_informationDavid Brailer, MD, was the first head of the Office of the National Coordinator of Health Information Technology (ONC), appointed by President George W. Bush. Today, he is a venture capitalist.

Last week in the Wall Street Journal, Dr. Brailer noted that a law passed in 1996 governs our access to health information. Clearly, it needs updating:

This brave new digital world has one huge risk: You don’t own your health information. In 1996 the U.S. passed a law called HIPAA (Health Insurance Portability and Accountability Act) requiring hospitals, physicians, labs, pharmacies and other “covered entities” as well as the health plans and their “business associates” (for example, an information-technology vendor) to protect how your data is stored and released. But not without delays, often for months. You can’t force a covered entity to give your data to someone you choose, and you can’t stop them from giving it to someone they choose. Health apps? Most aren’t covered by HIPAA at all, and can do whatever they want with your information.