Parsing Cato’s Analysis Of Kasich’s Fiscal Record

As a resident of Ohio I was intrigued by Cato’s article on Kasich’s fiscal record. The paragraph that caught my attention was:

Just 18 months after the expansion took effect, the costs have exploded. According to a recent report from the state’s Legislative Service Commission, costs are 63 percent, or $1.4 billion, over budget. The report says the overage is because of “higher than expected caseloads and per person costs.”  The expansion population was 600,000 in June of 2015, compared to estimates of 366,000. Medicaid expenditures are 9.5 percent higher in fiscal year 2015 than they were in fiscal year 2014.

When you are $1.4 billion over budget it is kind of a big deal for states. What had me confused is why the local papers are so quiet about the budget overrun and who is the Legislative Service Commission? The second question was the easiest. The Legislative Service Commission is a nonpartisan agency providing the Ohio General Assembly with drafting, research, budget and fiscal analysis, training, and other services. They are the people who should know about budget overruns. Since Cato referenced their report, Status Of The GRF, I read it looking for references about Medicaid and the $1.4 billion dollar budget overrun. I did not find it. So I downloaded the tables for the report and looked for the budget overrun. I did not find it. So I went back to the original blog post and noticed that two of the three links refer to the LSC report. The other link refers to a post at OhioWatchdog.org called, “Ohio’s Obamacare expansion has cost $4 billion”.  It is that article that says that “Kasich underestimated the cost of the first 18 months of his Obamacare expansion by roughly $1.5 billion” and the expansion population was 600,000 compared to estimates of 366,000. Both Affordable Care Act supporters and I would agree that was not surprising. The only question in my mind was whether the state was running deficits because they expanded Medicaid and who was paying for the overrun. If you look at the first page of the LSC report you will find that the FY2015 revenues for the state($31,473.1 millions) are approximately in balance with the expenditures($31,461.5 millions). Since the “budget overrun” was a federal obligation that was paid for by the federal government, the local papers did not care.

That got me suspicious about the statement that Medicaid expenditures were 9.5% higher in fiscal year 2015 than they were in fiscal year 2014. If we look at LSC table 2 we see that the FY2015 state’s share of Medicaid expenses grew 2.7% over FY2014. This is exactly the same growth as it was for the previous year. In FY2016 the state’s share of Medicaid expenses is expected to grow 4.4%. This number is inline with budget increases for education. When we look at LSC table 3 we see that FY2015 state and federal share of Medicaid expenses grew 9.7% over FY2014. This is worse than the previous year growth of 7.6%. The scariest number I saw was a 22% growth in the FY2016 Medicaid expense. From this data it looks like the state portion of Medicaid is in control and the federal portion is out of control. Since most Affordable Care Act supporters say the bill is working as intended, it is hard to blame Kasich for the out of control federal portion of the Medicaid mess. Is anyone surprised that Ohio has their act together and the federal government does not!

About 300,000 People Who Paid The Individual Mandate Penalty Probably Did Not Have To

One of the reasons I wrote the post, Affordable Health Insurance And The Individual Mandate, was to point out that if the lowest cost health insurance available on the exchange is greater than 8% of your income then you are exempt from the individual mandate penalty. Although the exemption was not applicable to me I was surprised that I would have been exempt from the penalty. That got me wondering how many people paid the penalty without checking first to see if they were exempt. According to this article, IRS: More paid Obamacare fine than expected, about 300,000 people likely made that mistake. Considering how easy it is to be exempt from the penalty and that 7.5 million people paid the penalty, I am surprised that only 300,000 made that mistake.

The Treasury Department said about 300,000 people who paid the penalty likely qualified for an exemption from having to have health coverage. There are a slew of exemptions from the Obamacare mandate based on income status or certain hardships.

“The IRS will be reaching out to these taxpayers to inform them about available exemptions and note that they may benefit from amending their tax return,” said Mark Mazur, assistant Treasury secretary for tax policy, in a blog post Monday. “This outreach will also help educate taxpayers about the options they have for future years.”

The Cost of The Tesla Powerwall Is The Only Specification I Am Watching

As a person who lives on a farm a Powerwall battery I am a likely customer if the battery when teamed up with a solar array is a cost effective replacement for utility company generated electricity. With my current electrical cost of 12¢ per kilowatt hour a 7kWh battery will save me $0.84 a day. If we ignore the investment cost of producing the charging electricity with a solar array, it will take about 9.78 years to break even under perfect weather conditions. If we assume that I would probably be willing to take a chance on the battery if the payback was 5 years or less then, that either the electrical rate has to go up to 24¢ per kilowatt hour or the battery cost has to drop to $1,500 for the battery.

Here are the specifications on the Powerwall.

TeslaPowerwall1

  • Technology – Wall mounted, rechargeable lithium ion battery with liquid thermal control.
  • Models
    • 10 kWh Cost: $3,500
      Purpose: For backup applications
    • 7 kWh Cost: $3,000
      Purpose: For daily cycle applications
  • Warranty Ten year warranty with an optional ten year extension.
  • Efficiency 92% round-trip DC efficiency
  • Power 2.0 kW continuous, 3.3 kW peak
  • Voltage 350 – 450 volts
  • Current 5 amp nominal, 8.5 amp peak output
    • Compatibility Single phase and three phase utility grid compatible.
    • Operating Temperature -4°F to 110°F / -20°C to 43°C
    • Enclosure Rated for indoor and outdoor installation.
    • Installation Requires installation by a trained electrician. AC-DC inverter not included.
    • Weight 220 lbs. / 100 kg
    • Dimensions 52.1" x 33.9" x 7.1" (130 cm x 86 cm x 18 cm)
    • Certifications UL listed

Things that make me go hmm… How Can Planned Parenthood Sell Body Parts From A Nonviable Fetus?

Abortion generally involves a fetus who is unable to survive outside the uterus after birth because its organs are not mature enough and yet these same organs are suitable for organ donation and medical research. It sure looks the difference between aborting a fetus versus aborting a human being just got a whole lot fuzzier. If Planned Parenthood thinks an organ from a fetus is suitable enough for organ transplants and medical research then why isn’t that fetus actually a human being? It has been a long time since Roe vs. Wade and it appears the medical community has a different time frame about fetus viability then they had in 1973.

The Dreaded Debit Card Hold Part II

Last week I followed up on my initial debit card test,
The Dreaded Debit Card Hold. This time I paid for my Sam’s Club gasoline with a Visa debit card and my Sam’s Club groceries with the Discover debit card. Both the Visa and Discover debit card transactions put a hold equal to the transaction on the account. To avoid unreasonable and unnecessary holds this tells me I should not use the Discover debit card to buy gasoline.

Small Business Healthcare Relief Act Is Re-introduced

For those who are still interested in Health Reimbursement Accounts Zane Benefits posted an update on the legislation that has been introduced in Congress.

Two weeks ago, a group of legislators re-introduced the Small Business Healthcare Relief Act (S. 1697 and H.R. 2911). The legislation would allow small employers to once again use an HRA to reimburse employees for health insurance premiums and out-of-pocket medical expenses.

I was hopeful that Mr. Boustany  of Louisiana would re-introduce the legislation and that my Representative, Brad Wenstrup,  and my Senators, Rob Portman and Sherrod Brown, would step forward and co-sponsor the bill. This bill is a pretty simple, non-partisan health care reform. Although my representatives did not co-sponsor the bill I am pleased to see more sponsors and a Senate version of the bill. For more information about this bill you can read it at OpenCongress.org.

Diverging Views On Health Care Reform

Now that the King v. Burwell case is over I was curious whether both sides would find common ground on meaningful health care reforms. I was surprised to hear that Kathleen Sebelius says the law is working as intended and we should use this new opportunity to build on its early success. She is not alone. Sara Rosenbaum provided this list of health care reforms in the article, Post-King: Moving Forward In A New Normal.

  1. Expanding Medicaid To Cover The Poorest People
  2. Making the ACA’s Private Insurance Provisions Work Better For Children, Low- And Moderate-Income Families, And People With Disabilities
  3. Making The ACA A More Potent Force For Cost Containment And Quality Improvement Building Primary Health Care Access For Medically Underserved
  4. Communities And Populations And Addressing The Underlying Social Conditions Of Health

John Goodman thinks there are some serious problems with the Affordable Care Act and lists these problems in the article,

Six Problems With The ACA That Aren’t Going Away.

  1. An Impossible Mandate
  2. Unworkable Subsidies
  3. Perverse Incentives For Insurers
  4. Other Perverse Incentives For Buyers
  5. Lack Of Access To Care
  6. Impossible Burden For The Elderly And The Disabled

It is interesting that neither side talks about the cost of health care for the middle class and the fact that the ACA has made health insurance unaffordable for unsubsidized people. In an ironic twist of fate the Affordable Care Act very existence depends on convincing these healthy, unsubsidized, middle class people to purchase health insurance from the exchange. When you look at the report from Avalere Health, Exchanges Struggle to Enroll Consumers as Income Increases, it is easy to anticipate a death spiral in the exchanges if only 2% of the eligible people with income over 400% over the federal poverty limit are enrolled in the exchanges. The problem for ACA supporters is no longer politics but math. As I wrote in a previous post the cost of health insurance from the exchange versus my grandfathered plan is a very strong incentive for me to keep my existing health insurance. Perversely if my health insurance is not grandfathered for another year, my second best choice is to go without health insurance since I am exempt from the individual mandate because “health insurance from the exchange is not affordable”. Everything is in place for the exchanges to fail and the ACA supporters say the law is working as intended. I guess we have to break it before we can fix it.

 

1427290263_ExchangePlansbyIncome1

Did The Greek People Just Say No To Kicking The Can Down The Road?

Most of the news pundits and central bankers are aghast with yesterday’s referendum vote in Greece. According to the pundits it was common sense for the Greek people to vote yes, take the money, and kick the can down the road again. On the other hand it is a sign of insanity to keep doing the same thing and expect different results. From that perspective it make perfect sense that the Greek people want a different resolution this time.