NCPA - National Center for Policy Analysis
NCPA - National Center for Policy Analysis
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

Provided courtesy of: NCPA

Daily Policy Digest

Exchange Plans a Bad Deal for Doctors
30 Oct 2014 07:00:58 CDT -

A number of doctors are choosing not to participate in Obamacare exchange health plans in the upcoming year. According to the medical practice trade group Medical Group Management Association, 214,524 physicians will not be participating in any Affordable Care Act Exchange.

Why are doctors unwilling to participate? According to Brittany La Couture of the American Action Forum, many doctors are worried that patients may stop paying premiums, which is problematic for providers:

  • According to HHS regulations, individuals who stop paying their premiums are granted a 90-day grace period (unlike in the private insurance market, where an individual would lose his coverage altogether in the event of nonpayment).
  • Insurers must continue coverage for the first 30 days of that period.
  • For the next 60 days, insurers will cover any services that are provided to nonpaying patients only if the patient actually pays his overdue premium by the end of the three-month grace period.
  • If he does not, the health care provider is stuck with the losses and must try to recover payment from the patient directly.

La Couture writes that this is the main reason doctors are not participating in the exchange plans. Data indicates that 1 million Americans enrolled in exchange plans but did not pay their premiums. If those individuals obtained care during the grace period, their doctors may go uncompensated.

Additionally, the exchanges have narrow networks and low reimbursement rates which are unattractive to doctors:

  • To make their health plans cheap and thus attractive to potential enrollees, insurance companies created narrow networks which featured relatively few health care providers per insurance plan. Insurers offered doctors low reimbursement rates, with the idea that health care providers could make up the difference due to the high patient volume that would come from the narrow networks.
  • However, the reimbursement rates are so low -- and doctors are already burdened with patients -- that the increased patient volume does nothing to make it more profitable. Insurers are offering incredibly low reimbursement rates; what the private sector would pay $1.00 for, Medicare pays $0.80 for and exchange plans pay around $0.60 for.
  • Many doctors are worried that those on exchange plans are sicker than the average patient, because many on exchange plans were uninsured prior to the Affordable Care Act.                                     

According to La Couture, 70 percent of California doctors were not participating in the state's exchange in January 2014.

Source: Brittany La Couture, "Health Care Providers are Opting-Out of Obamacare Exchange Plans," American Action Forum, October 27, 2014.


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California Ballot Proposition Would Increase Health Costs by $9.9 Billion
30 Oct 2014 07:00:57 CDT -

Next week, California voters will have to make up their minds on Proposition 46, a ballot measure that could increase medical care costs and which threatens medical record privacy, writes Zachary David Skaggs for Real Clear Policy.

In the 1970s, California doctors were fed up with having to pay skyrocketing medical malpractice premiums. At the time, medical malpractice lawsuits in the state were running rampant, and plaintiffs were winning pain and suffering awards worth tens of millions of dollars. In response, lawmakers passed the Medical Injury Compensation Reform Act (MICRA), capping pain and suffering awards at $250,000.

Proposition 46 aims to increase that cap to $1.1 million by adjusting it for inflation. Skaggs points out that all California voters have a stake in the outcome, as the costs will be borne by more than just doctors; doctors will pass on higher costs to patients, and employers will see higher costs for their health plans. According to the California Medical Association, health care costs will increase by a whopping $9.9 billion annually if the proposition passes. That's a more than $1,000 increase for a family of four.

The cap on pain and suffering awards is just one aspect of the three-part ballot measure. The proposition would also require doctors to undergo drug screenings and require all doctors and pharmacists to access a database, run by the state, before prescribing certain drugs to new patients. Skaggs writes that no additional money is available for cybersecurity for the new website, meaning that patients' medical information could be vulnerable to hackers.

Source: Zachary David Skaggs, "How California Could Lose a Generation of Doctors," Real Clear Policy, October 27, 2014.

For more on Health Issues:

Married, Intact Families Yield Higher Incomes
30 Oct 2014 07:00:56 CDT -

In a new report for the American Enterprise Institute, W. Bradford Wilcox and Robert I. Lerman look at the link between today's economy and family structure.

America's family structure -- and corresponding economic situation -- has changed since 1950. From 1950 to 1979, families saw an 80 percent increase in income and almost 90 percent of working-age men were employed. Since that time, things have changed, with family incomes stagnating and male employment falling. At the same time, the marriage rate has fallen.

Wilcox and Lerman describe the link between marriage and incomes:

  • The drop in the marriage rate is having a significant impact on incomes. If the United States had a married parenthood rate at the same level that it had in 1980, the median income of families with children would increase by 44 percent.
  • Since 1979, 37 percent of the decline in the male employment rate is due to the drop in the number of intact families.
  • Children who grow up with both parents in the home tend to be higher educated and have higher incomes. Both men and women earn an income premium of $6,500 and $4,700, respectively, simply for growing up in an intact household.
  • Married men have an income "marriage premium" of $15,900 annually, compared to their single counterparts, making family incomes higher.
  • Married couples who themselves were raised by intact families have a family income premium of $42,000 compared to their unmarried counterparts raised in non-intact families.

The researchers hope that policymakers will recognize the vital role that family and marriage play in economic security. They encourage government policies that strengthen marriage, remove penalties on marriage and improve economic opportunities for families, including by expanding the earned income tax credit and expanding vocational programs that improve job prospects for young adults.

Source: W. Bradford Wilcox and Robert I. Lerman, "For richer, for poorer: How family structures economic success in America," American Enterprise Institute, October 28, 2014.

For more on Economic Issues:

What's Causing Wage Stagnation?
30 Oct 2014 07:00:55 CDT -

Unemployment is falling, and the last year has seen a 2.6 million job gain, yet most polls indicate that most Americans believe the economy is only getting worse. Why? James Sherk, senior policy analyst at the Heritage Foundation, says the answer is due to the many economic realities that are not touted in the official numbers: the declining labor force participation rate and weak wage growth.


Adjusting for inflation, wages between July 2009 -- when America's post-recession recovery began -- and August 2014 have barely changed, rising just 1.4 percent over the entire time period. Why the stagnation? Sherk offers a few theories:

  • The poor economy provides little incentive for business, and a drop in the demand for labor also creates a drop in price, which, in the case of labor, is wages. Sherk notes, however, that labor demand has improved in recent years with 2014 job openings at levels not seen since before the Great Recession. Even so, wages have remained low.
  • When long-term unemployment benefits expired at the end of 2013, America's labor supply increased, and an increase in supply usually leads to a drop in price. However, Sherk says that if supply is the reason, it can only be responsible for more recent changes, as benefits only expired at the end of 2013.
  • Obamacare made hiring new workers more expensive. To offset those costs, employers reduce wages.

Sherk writes that it will take more time and data before it is clear which of these three reasons is the primary culprit behind wage stagnation.

Source: James Sherk, "Why Has Wage Growth Stagnated?" Heritage Foundation, October 28, 2014. 

For more on Economic Issues:

What Does the Drop in Gas Prices Mean for the Economy?
30 Oct 2014 07:00:54 CDT -

Drivers have been seeing lower prices at the pump over the last few weeks, with gas prices having fallen by 30 cents over the last month. Today, the average price sits above $3.00 per gallon. Writing for the Washington Examiner, Joseph Lawler says the drop will have benefits for the American economy overall.

When gas prices fall, consumers benefit:

  • Just a one-cent drop in the price of gas saves consumers $1.4 billion during a year.
  • Businesses that rely on transportation (and, therefore, gas) also benefit from the price drop, and prices of their goods fall.
  • The average household will have an extra $700 this year, thanks to the drop in oil prices over the last month.

Lawler notes that gas prices are not the only thing dropping, as commodities across the globe have seen a fall in prices recently. According to economists, the price drop is due to fears of slow growth in Europe. While that is bad news, Lawler says falling gas prices will likely produce a net benefit for American consumers.

Source: Joseph Lawler, "Falling gas prices to provide mini-stimulus," Washington Examiner, October 29, 2014. 

For more on Environment Issues:

Medicare Drug Plans Need the Tools to Fight Fraud
29 Oct 2014 07:00:53 CDT -

More than 16,000 people die every year from abusing pain relievers, according to research from the Centers for Disease Control. And for every one prescription drug death, 10 people are admitted for prescription drug substance abuse treatment and there are 32 related emergency room visits. Indeed, prescription drug abuse is not a small problem: for every death, there are 130 other people chronically abusing opioid pain relievers and 825 nonmedical users of opioids.

As NCPA Senior Fellow Devon Herrick explains in a new report, prescription drug abuse is made possible through fraud; individuals may visit multiple doctors for pain prescriptions and fill the prescriptions at different pharmacies, evading detection, in order to feed their own addictions or sell drugs to others. But while individual doctors and pharmacies may not recognize that a patient is abusing drugs, drug plans can easily identify questionable drug utilization and detect potential fraud. The problem, explains Herrick, is that Medicare Part D drug plans are not allowed to take action on such fraud; while state Medicaid programs allow drug plans to restrict enrollees with questionable drug utilization to using just one doctor or one pharmacy, Medicare Part D plans have no such authority.

As a result, there is little that Part D drug plans can do to combat prescription drug abuse, which, in addition to being unsafe, is expensive: drug diversion costs insurers $75 billion annually by one estimate. It requires countless unnecessary office visits and 1.2 million emergency room visits each year. An individual who is "doctor shopping" in order to obtain numerous prescriptions might visit a dozen doctors each month, undergoing unnecessary and redundant tests at each visit.

Herrick argues that Medicare Part D should institute a "Lock In" program, which would allow drug plans to restrict an individual who has demonstrated questionable drug-seeking behavior to using just one doctor or one pharmacy -- or both -- for that particular drug. State Medicaid programs which have these plans (and 46 states have plans that lock certain Medicaid enrollees into specific providers) have been able to generate cost savings and reduce narcotic drug use.

Source: Devon M. Herrick, "Medicare Drug Plans Need the Tools to Fight Prescription Drug Fraud," National Center for Policy Analysis, October 29, 2014.  

For more on Health Issues:

Health Policy Digest

Provided courtesy of: NCPA

Consumer Driven Health Care

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Does Health Insurance and Seeing the Doctor Keep You Out of the Hospital?
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The Case for Competition in Medicare
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