Tag: Health

Berniecare Would Increase Federal Expenditure by $32 Trillion Over Next Decade, Twice as Much as Campaign Claimed

Fresh off his resounding victory in the West Virginia primary, Senator Bernie Sanders has intimated that he has no intent of dropping out of the race any time soon, even though he trails his rival Hillary Clinton significantly in pledged delegates. One of the cornerstones of the Sanders campaign has been his health care plan, which would replace the entirety of the current health care system with a more generous version of Medicare. His campaign has claimed the plan would cost a little more than $13.8 trillion over the next decade, and he has proposed to fund these new expenditures with a clutch of tax increases, many of them levied on higher-income households. At the time, analysts at Cato and elsewhere expressed skepticism that the cost estimates touted by the campaign accurately accounted for all the increases in federal health expenditures the plan would require, and incorporated costs savings estimates that were overly optimistic. Now, a new study from the left-leaning Urban Institute corroborates many of these concerns, finding that Berniecare would cost twice as much as the $13.8 trillion price tag touted by the Sanders campaign.

The authors from the Urban Institute estimate that Berniecare would increase federal expenditures by $32 trillion, 233 percent, over the next decade. The $15 trillion in additional taxes proposed by Sanders would fail to even cover half of the health care proposal’s price tag, leaving a funding gap of $16.6 trillion. In the first year, federal spending would increase by $2.34 trillion. To give some context, total national health expenditures in the United States were $3 trillion in 2014.

Sanders was initially able to restrict most of the tax increases needed to higher-income households through income-based premiums, significantly increasing taxes on capital gains and dividends, and hiking marginal tax rates on high earners. Sanders cannot squeeze blood from the same stone twice, and there’s likely not much more he could do to propose higher taxes on these households, which means if he were to actually have to find ways to finance Berniecare, he’d have to turn to large tax increases on the middle class.

There are different reasons Berniecare would increase federal health spending so significantly. The most straightforward is that it would replace all other forms of health care, from employer sponsored insurance to state and local programs, with one federal program. The second factor is that the actual program would be significantly more generous than Medicare (and the European health systems Sanders so often praises), while also removing even cursory cost-sharing requirements. In addition, this proposal would add new benefits, like a comprehensive long-term services and support (LTSS) component that the Urban Institute estimates would cost $308 billion in its first year and $4.14 trillion over the next decade. These estimates focus on annual cash flows over a relatively short time period, so the study doesn’t delve into the longer-term sustainability issues that might develop from this new component, although they do note that “after this 10-year window, we would anticipate that costs would grow faster than in previous years as baby boomers reach age 80 and older, when rates of severe disability and LTSS use are much higher. Revenues would correspondingly need to grow rapidly over the ensuing 20 years.”

Even at twice the initial price tag claimed by the Sanders campaign, these cost estimates from the Urban Institute might actually underestimate the total costs. As they point out, the authors do not incorporate estimates for the higher utilization of health care services that would almost certainly occur when people move from the current system to the generous, first-dollar coverage in the more generous version of Medicare they would have under this proposal. They also chose not to incorporate higher provider payment rates for acute care services that might be necessary, and include “assumptions about reductions in drug prices [that] are particularly aggressive and may fall well short of political feasibility.”

Berniecare would increase federal government spending by $32 trillion over the next decade, more than twice as much as the revenue from the trillions in taxes Sanders has proposed. And this might not be underselling the actual price tag, and only considers the cash flow issues in the short-term. There could be even greater sustainability problems over a longer time horizon. One thing is for certain the plan would require even more trillions in additional tax hikes.

Poverty’s Decline and Its Causes

It is always refreshing to see journalists draw attention to the incredible decline in world poverty. An article that did just that appeared yesterday in the Christian Science Monitor. The piece shines a spotlight on three heartening facts in particular. 

First, poverty is decreasing. Not only have poverty rates fallen, but the total number of people in poverty has decreased. This is incredible when one considers population growth—there are more people alive today who aren’t in poverty than ever before. The Brookings Institution projects poverty will be practically eliminated by 2030. 

Second, average incomes are rising. World per capita GDP, adjusted for inflation and differences in the cost of living, has never been higher. And average income growth is not limited to developing countries: the average American has more disposable income left after basic expenses

Finally, humanity is healthier. Globally, average life expectancy is at an all-time high, largely due to plummeting infant mortality rates. More people have enough to eat and enjoy access to clean drinking water and improved sanitation facilities. The developed world has also seen health gains, with cancer death rates falling for both men and women in the OECD countries. 

The article attributes improvements in well-being to three main factors: the fall of communism, the rise of trade and globalization, and the courage of those who stood up against tyranny. 

While the CSM article gives some credit to international aid programs, it is important to recognize that aid is not a good driver of economic development. Even vocal aid-proponent Bono acknowledges that international aid and charity pale in comparison to the prosperity-creating power of people engaging in market exchange. 

When given the freedom to do so, it is truly remarkable what ordinary people can achieve. Consider the utter transformation of Singapore from poverty to riches – that is the power of economic freedom!

Are We Entering The Age of Exponential Growth?

In his 1999 book The Age of Spiritual Machines, the famed futurist Ray Kurzweil proposed “The Law of Accelerating Returns.” According to Kurzweil’s law, “the rate of change in a wide variety of evolutionary systems (including but not limited to the growth of technologies) tends to increase exponentially.” I mention Kurzweil’s observation, because it is sure beginning to feel like we are entering an age of colossal and rapid change. Consider the following:

According to The Telegraph, “Genes which make people intelligent have been discovered [by researchers at the Imperial College London] and scientists believe they could be manipulated to boost brain power.” This could usher in an era of super-smart humans and accelerate the already fast process of scientific discovery.

Elon Musk’s SpaceX Falcon 9 rocket has successfully “blasted off from Cape Canaveral, delivered communications satellites to orbit before its main-stage booster returned to a landing pad.” Put differently, space flight has just become much cheaper since main-stage booster rockets, which were previously non-reusable, are also very expensive.

Human Ingenuity and the Future of Food

A recent article in Business Insider showing what the ancestors of modern fruits and vegetables looked like painted a bleak picture. A carrot was indistinguishable from any skinny brown root yanked up from the earth at random. Corn looked nearly as thin and insubstantial as a blade of grass. Peaches were once tiny berries with more pit than flesh. Bananas were the least recognizable of all, lacking the best features associated with their modern counterparts: the convenient peel and the seedless interior. How did these barely edible plants transform into the appetizing fruits and vegetables we know today? The answer is human ingenuity and millennia of genetic modification.

(Photo Credit: Genetic Literacy Project and Shutterstock via Business Insider).

Fatal Flaw in the USGCRP Climate and Health Assessment

Global Science Report is a feature from the Center for the Study of Science, where we highlight one or two important new items in the scientific literature or the popular media. For broader and more technical perspectives, consult our monthly “Current Wisdom.”

 

Yesterday, we posted some excerpts from the Background section of our submitted Comment on the draft report on climate and health from the U.S. Global Change Research Program (USGCRP). In that section, we argued that the USGCRP was overlooking (ignoring?) a vital factor that shapes the influence of climate change on the health and well-being of Americans—that is, that the adaptive process is actually spurred by climate change itself. Without recognition of this fact, projections are often alarmist and pessimistic.

Today, we wanted to highlight what we found to be the fatal flaw in the entire USGCRP report—that the USGCRP fails to describe the net impact of climate change on public health, instead, presenting only a narrow and selective look at what they determine to be negative impacts (and even those examples tend to be miscast).

Here’s what we had to say about this:

White House Announces Initiative to Focus on Health Concerns of Global Warming: We’ve Already Done It For Them!

Global Science Report is a weekly feature from the Center for the Study of Science, where we highlight one or two important new items in the scientific literature or the popular media. For broader and more technical perspectives, consult our monthly “Current Wisdom.”

It seems like the Obama Administration is a bit behind the times when it comes to today’s announcement that it will start a new initiative to focus on the health effects of climate change.

There is no need for the White House to outlay federal resources for the time and effort that will be involved—we have already done it for them (and, undoubtedly, for a minuscule fraction of the price)!

Two and a half years ago, we released a publication titled “ADDENDUM: Global Climate Change Impacts in the United States” that basically was a non-government-influenced look at how climate change would likely impact the United States in the future, based a lot on current trends in climate and society. We titled it an “ADDENDUM” because the U.S. Global Change Research Program, back in 2009, released a similarly titled report that was so incomplete that, well, it needed an addendum. We knew the government wasn’t going to supply one, so we produced one ourselves.

In our report (available here), we included a chapter on human health. Here are the key messages from that chapter:

  • The health effects of climate change on the United States are negligible today, and likely to remain so in the future, unless the United States goes into precipitous economic and technological decline.
  • Death certificate data indicate that 46 percent of all deaths from extreme weather events in the United States from 1993-2006 were from excessive cold, 28 percent were from excessive heat, 10 percent were from hurricanes, 7 percent were from floods, and 4 percent were from tornadoes.
  • Over the long term, deaths from extreme weather events have declined in the United States.
  • Deaths in the United States peak in the colder months and are at a minimum in the warmer months.
  • In U.S. cities, heat-related mortality declines as heat waves become stronger and/or more frequent.
  • Census data indicate that the migration of Americans from the cold northern areas to the warmer southwest saves about 4,600 lives per year and is responsible for three to seven per cent of the gains in life expectancy from 1970-2000.
  • While the U.S. Global Change Research Program states that “Some diseases transmitted by food, water, and insects are likely to increase,” incidence of these diseases have been reduced by orders of magnitude in the United States over the past century, and show no sign of resurgence.

We effectively show that if you want to focus on the health of Americans, there is no need to bring climate change into the equation—especially if you are hoping to find negative impacts (which appears to be the goal of the Administration).

Scads of new science–on everything from heat-related mortality, to asthma, to extreme weather–continues to support that general conclusion.

Of note is that accompanying today’s White House announcement is an announcement from the USGCRP that it has produced its own reportThe Impacts of Climate Change on Human Health in the United States: A Scientific Assessment.”

Based on loads of past experience with the USGCRP, we can only imagine the worst.

Public comments on this draft of the USGCRP report are due on June 8, 2015. It’s on our calendar.

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