In 2015, the United States spent a staggering $3.2 trillion on health care, or nearly $10,000 per capita–amounting to 17.8 percent of U.S. gross domestic product. Health care is one of the most expensive components of the federal budget, and health spending comes in a variety of different forms, including major public programs, direct subsidies, and a number of different provisions in the tax code.

While big insurance programs like Medicare and Medicaid tend to be the focus of most health care discussions, and account for most of the spending, the government provides and subsidizes health care in ways that many might not realize. Given the rising prominence of the health care industry in our budget and in our economy, it’s important to look at the current role played by the federal government. Read on to see how the government provides and incentivizes health insurance coverage and how much these efforts cost.

Government Health Care Programs

Two government programs account for a large portion of health care spending, and federal spending in general. Medicare and Medicaid are two entitlement programs that together account for roughly 25 percent of the federal budget. In 2016, the U.S. government spent a net total of $588 billion on Medicare, the health insurance program covering all Americans over the age of 65. Federal spending on Medicaid, which provides health insurance to people with disabilities, the elderly, children, and people with low incomes, totaled $368 billion last year. Because Medicaid is a federal-state partnership, states also account for a notable portion of health care spending. In 2016, federal funding covered about 63 percent of all Medicaid spending, excluding administrative costs. The remaining 37 percent, or about $204.5 billion, was held by the states.

It’s worth noting that along with Social Security, Medicare and Medicaid are the largest mandatory spending programs–spending that is built into existing laws and is not subject to annual appropriation bills. Forecasts predict that these programs will grow as a share of the federal budget in the coming years as the Baby Boomer generation retires. In its most recent forecast, the Congressional Budget Office (CBO) predicts, “outlays for mandatory programs increase as a share of GDP by 2.4 percentage points from 2017 to 2027–mainly because of the aging of the population and rising per capita health care costs. Social Security and Medicare account for nearly all of that increase.” Last year, Social Security amounted to 4.9 percent of U.S. GDP and spending on major health programs amounted to 5.4 percent of GDP.

In addition to Medicaid and Medicare, the government provides subsidies for people with incomes between 100 and 400 percent of the federal poverty level and who do not get health insurance through their employer. According to the CBO, the government spent $42 billion in 2016 on subsidies and other costs related to the individual insurance market.

The video below from the Brookings Institution gives an overview of health care spending trends over the past several decades:

The Tax Code

While the various provisions of the tax code that encourage individuals and companies to buy health insurance might not sound all that interesting, tax policy is a crucial part of the current health care system, and accounts for a significant amount of spending, or more precisely, foregone revenue.

Employer-provided Insurance

The government uses the tax code to encourage and discourage a wide range of behaviors. To encourage individuals and businesses to do certain things, the government uses tax expenditures, more commonly known as tax breaks. These provisions in the tax code forego tax revenue when people or businesses engage in certain activities. The largest of the existing tax expenditures deals with health care spending by employers. Specifically, the tax code excludes all spending toward employees’ health care premiums from taxation. This exclusion encourages employers to provide certain benefits to their employees because they can use pre-tax dollars to do so–if the same amount of money was given to employees in the form of traditional wages, it would be taxed. The exclusion is projected to cost about $260 billion in 2017, based on what the government would otherwise receive in payroll and income taxes. That annual cost makes the health care exclusion the third largest health care program, following Medicaid and Medicare.

The tax exclusion of employer provided health care dates back to World War II and emerged almost accidentally. In an effort to control inflation, the federal government froze wages, which prevented companies from paying their employees more. Instead, employers took advantage of an exception that applied to certain benefits–they started providing health insurance plans. Then in 1954, the IRS determined that payments toward employee health insurance are exempt from taxation. Over time, employer-subsidized health care became quite common, and today, most Americans get health care from their employer or a close family member’s employer.

While the tax exempt status of employer-provided health care has become particularly popular and politically durable–efforts to eliminate or even cap the tax benefits have not gotten very far–many economists believe that it has a distortionary effect on the health care system as a whole. The most frequent criticism of employer-subsidized health care is that it can spur growth in medical costs. Because premium payments are excluded from taxation, employers are incentivized to offer very generous health insurance plans instead of simply paying their employees higher wages. Economists argue that if more of the cost burden was placed on consumers when they use medical services, they would try to reduce those costs by searching for lower prices and avoiding unnecessary care. But when most of the cost of health care is masked by generous insurance plans, there is little incentive for individuals to cut costs.

Other criticisms of employer-subsidized health care focus on concerns about equity and progressivity. People with high incomes are more likely than those with lower incomes to benefit from health-related tax expenditures, of which employer-subsidized health care is by far the largest in value. Moreover, the nature of the tax exclusion makes it more valuable to people with high-incomes than those lower on the income scale. Because income tax is progressive–those with higher incomes pay higher tax rates–pre-tax money spent on health care is worth more to those with higher incomes because it would otherwise be taxed at a high rate. In 2015, about 45 percent of all benefits from health tax expenditures went to individuals with incomes in the top 20 percent, while just 0.5 percent of all benefits went to those in the bottom 20 percent.

Efforts to eliminate or curtail the tax preference for employer-sponsored health care date back to Reagan’s presidency, but few have made any notable progress. One notable exception is what’s known as the “Cadillac tax,” which was a part of the 2010 Affordable Care Act. The Cadillac tax, formally known as the high-cost plan tax, sought to rein in health care cost growth by discouraging employers from providing extremely generous health insurance plans. Health insurance premiums payments in excess of $10,200 for an individual or $27,500 for families will face a 40 percent excise tax. The tax was originally scheduled to take effect in  2018 but was pushed back to 2020 after widespread opposition in 2015. Both businesses and unions strongly protested the tax, which may be one issue that both Republicans and Democrats can agree on. While it is still scheduled to go into effect in a couple years, questions about its fate loom as recent health care legislation would push its implementation back even further.

Conclusion

Peter Fisher, a former under secretary at the Treasury Department, once famously advised, “Think of the federal government as a gigantic insurance company […] with a sideline business in national defense and homeland security.” When you look at the federal budget, you can see that Fisher’s comments are rooted in an important truth–health insurance is one of the most expensive aspects of the federal budget.

The government plays a large, if sometimes unnoticed, role in the American health care system. From major programs like Medicare and Medicaid, which together add up to roughly one-quarter of the entire budget, to tax provisions that encourage employers to provide insurance to their workers, the government has a hand in nearly everyone’s insurance. Rising health care costs have led to notable budgetary issues in the long term, particularly as the American population ages, which have led some to argue that entire programs need to be revamped to keep spending sustainable. While many agree that health care spending has gotten unusually high in recent years, actually controlling costs has proven challenging.

Kevin Rizzo

Kevin Rizzo is the Crime in America Editor at Law Street Media. An Ohio Native, the George Washington University graduate is a founding member of the company. Contact Kevin at krizzo@LawStreetMedia.com.

The post How Much Does the Government Spend on Health Care? appeared first on Law Street.

While on the campaign trail, President Donald Trump repeatedly vowed to “repeal and replace” the Affordable Care Act (commonly known as “Obamacare”). However, his first attempt at dismantling the federal statute crashed and burned before a single vote was even cast due to divisions among conservative and moderate Republicans on Capitol Hill. If passed, Trump’s health care bill would have slashed federal funding to Medicaid.

Now, in the wake of the embarrassing defeat, Trump’s fledgling administration is still looking to give the American people a better option for health care. Some experts believe this could still come in the form of reforms to Medicaid and Medicare, which have historically been mired in controversy.

So, lets take a look at how these health care programs, both enacted in 1965, have evolved over the years. How has the Affordable Care Act affected them? And what is the fate of these programs if a new health care bill is finally passed?

What is Medicaid?

Medicaid is a social health care program for certain individuals and families in the U.S. with limited income and resources. It was created through the Social Security Amendments of 1965–signed into law by President Lyndon B. Johnson–under Title XIX of the Social Security Act. It essentially acts as government insurance for those who are unable to pay for traditional health care costs.

The federal government matches state spending on Medicaid to enable states to provide medical assistance to residents who meet their individual eligibility requirements. While the program is jointly funded by state and federal governments, it is managed at the state level. Thus, every state has an immense amount of autonomy in determining who is eligible for the program. Since 1982, all 50 states have participated in the program–despite not being required to do so.

The Affordable Care Act (ACA) significantly expanded Medicaid eligibility, extending coverage to adults under 65 years of age who have incomes up to 133 percent of the poverty line, as well as making it available for low-income adults without dependent children. However, the Supreme Court’s ruling in National Federation of Independent Business v. Sebelius determined that states did not have to agree to the expansion. Thus, many states have continued to stay at pre-ACA funding and eligibility levels.

As a whole, Medicaid provides a variety of services for some of America’s most vulnerable populations. According to the National Council for Behavioral Health, Medicaid is the single largest payer of mental health services, paying for 25 percent of all mental health care and 20 percent of all addiction care. Four out of 10 children are treated under Medicaid, and a study published in Women’s Health Issues found that almost half of the 4 million births each year in the U.S. are covered by the program. Medicaid also often covers the costs of nursing homes and other long-term care options for elderly patients.

Medicaid Structure Explained

While poverty is a primary requirement for Medicaid eligibility, it alone does not qualify citizens for the program. Other categories, such as pregnancy, age, and disability, may also qualify a citizen for Medicaid eligibility. Interestingly, Medicaid also provided the largest portion of federal money for people with HIV/AIDS until Part D of Medicare was implemented (but more on that later). In most states, adults who receive Supplemental Security Income benefits (a federal income supplement program) are automatically enrolled in Medicaid. While state Medicaid programs are required by federal rules to cover comprehensive dental services for children, coverage for adult dental services is optional and oftentimes limited.

Some states choose to utilize the Health Insurance Premium Payment Program (HIPP). Under HIPP, a person under Medicaid is eligible to have private health insurance paid for by the Medicaid program. Essentially, the state pays the private insurance premiums for beneficiaries. States may also combine administration of Medicaid with other programs, such as the Children’s Health Insurance Programs (CHIP), for ease.

What is Medicare?

Medicare, in contrast, is a single-payer social health insurance program specifically for those aged 65 and older that has been administered by the federal government since 1966. With President Lyndon B. Johnson at the helm, Congress enacted Medicare in 1965 under Title XVIII of the Social Security Act. Medicare provides health insurance to some individuals under the age of 65 with disabilities as determined by the Social Security Administration. For example, any individuals with end stage renal disease or amyotrophic lateral sclerosis (ALS) are eligible for Medicare.

Those who have worked and paid into the system through payroll tax are eligible once they reach age 65, regardless of income or medical history. Currently, there are a number of private insurance companies across the U.S. under contract for administration of Medicare. It is funded primarily through payroll taxes, general revenues, and premiums paid by Medicare beneficiaries.

In 1966, Medicare spurred racial integration, by making desegregation of waiting rooms and hospital floors a condition of receiving Medicare funds. According to David Barton Smith, a professor emeritus in health-care management at Temple University, nearly 2,000 hospitals had integrated by July 1966 in order to remain connected to federal money for the program. Although some hospitals resisted integration, and those who complied found ways to restrict multi-bed rooms, Medicare still played an important role in integrating the nation’s hospitals.

Medicare Structure Explained

Structurally, Medicare is complicated. There are four parts: Part A, hospital and hospice insurance; Part B, medical insurance; Part C, Medicare Advantage plans; and Part D, prescription drug plans. Hospital and hospice insurance covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care. Medical insurance under Part B is optional, and helps insured members pay for services and products that are not covered under Part A–usually outpatient care. Patients who miss their initial enrollment period for Part B incur a lifetime penalty of 10 percent per year on the premium.

Medicare Advantage plans under Part C are Medicare plans sold through private insurance companies. These plans are required to offer coverage that meets or even exceeds standards set by Original Medicare. However, they do not have to be identical in covering every benefit. These are considered “capitated” health insurance plans, which is a payment arrangement that pays a physician or group of physicians a set amount for each enrolled person assigned to them for a particular period of time, whether that person seeks care or not. The difference between Part C plans and Original Medicare is likened to the standard HMO versus non-HMO plan decisions other citizens make.

Finally, Part D covers prescription drug plans. It was created in 2003 under the Medicare Prescription Drug, Improvement, and Modernization Act and went into effect in 2006. Anyone with Part A or Part B is eligible for Part D, though the coverage is not standardized. Plans choose which drugs to cover, though they must cover at least two drugs in 148 categories and cover substantially all drugs in six protected classes (including antidepressants, antipsychotics, anti-convulsants, immuno-suppressants, as well as cancer, AIDS, and HIV drugs).

Medicaid and Medicare under the ACA

Medicaid was expanded extensively under the ACA. Currently, 73 million people are enrolled in Medicaid, and roughly 11 million are covered under the program because of the ACA expansion. States who chose to reject the Medicaid expansion are slowly facing the consequences of that decision. Reports issued by the Urban Institute, Lewin Group, and Rand Corp. have stated that these states are slated to lose billions of dollars–money that their own residents have paid in federal taxes.

The ACA expansion also made a number of changes to Medicare; many provisions were specifically designed to reduce the cost of Medicare. It was designed to help Medicare patients afford their prescription drugs by closing the Part D coverage gap, often referred to as the “donut hole,” by year 2020.

Furthermore, premiums under Part B and Part D were restructured; as a result, the wealthiest people with Medicare had their contributions increased. More oversight, stronger standards, and provider screenings were also enacted to prevent Medicare fraud and abuse.

What’s Next?

According to a recent Pew Research Center survey, 60 percent of Americans feel that the government should be responsible for ensuring everyone has health insurance. This number increased from 51 percent last year and has now reached its highest point in roughly a decade. Those on the other side of the argument–individuals who believe the government has no responsibility to provide health insurance for all–do, however, believe that the government should continue Medicaid and Medicare.

Following the death of Trump’s heath care bill that would have repealed and replaced the ACA, some states are looking to see if participating in the federally-funded Medicaid expansion is a lucrative path to take. As of last count, 19 states have opted out. Some contend that an expansion of Medicare may be a way to improve upon the ACA. Potentially lowering the age of eligibility of Medicare to 50 may also make private individual health more affordable. Moreover, offering Medicare as an option on health insurance exchanges could bring in younger people, reducing Medicare’s overall average costs by not just insuring those who cost the most to insure.

In contrast, there is also the option of implementing a full single-payer healthcare program, considered “Medicare for All”–a system that Senator Bernie Sanders has advocated for immensely. Under a single-payer system, any links between employment and health insurance would cease, as well as expanding the net for people over 65 to all Americans. Thus, the entire spectrum of care for every American citizen would be covered: primary, vision, oral, mental health, and more. Instead of paying a premium to for-profit insurance companies, Americans would merely pay a tax and employers would also pay taxes through payroll. Senator Sanders is poised to reintroduce the single-payer plan in the Senate, on the heels of the failed Republican ACA repeal attempt.

Conclusion

Despite the problems with the current health care system, such as rising premiums and fewer choices for citizens, Medicaid and Medicare have arguably been success stories in their more than 50-year history. Providing insurance and health care to the country’s most at-risk populations–the poor, the disabled, and elderly–is something to be lauded. What lies ahead for the programs, however, is up in the air until a new health care reform bill is passed.

Nicole Zub

Nicole is a third-year law student at the University of Kentucky College of Law. She graduated in 2011 from Northeastern University with Bachelor’s in Environmental Science. When she isn’t imbibing copious amounts of caffeine, you can find her with her nose in a book or experimenting in the kitchen. Contact Nicole at Staff@LawStreetMedia.com.

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On February 17, Maine’s Department of Health and Human Services (DHHS) asked the federal government to approve a statewide ban on the use of food stamps to purchase sugary drinks and candy. In its press release, DHHS representatives argued that banning such purchases would benefit public health and ease the burden on taxpayers. While many welcomed the move, it embodies the way in which conditional government welfare programs patronize and stigmatize low-income people.

The Supplemental Nutrition Assistance Program (SNAP), also known as the Food Stamp program, is a state-administered and federally-funded program designed to help low-income families. Maine’s move to ban candy and soda aside, SNAP is already an example of conditional welfare in that benefits can only be used to buy foodstuffs from approved vendors. Rather than providing unconditional benefits for low-income families to spend at their discretion, conditional welfare programs like SNAP undermine the autonomy of low-income people by imposing parameters on how they are allowed to use their benefits. Governments rationalize the conditions imposed on welfare recipients, but these rationalizations are often unjustified. Ultimately, conditional welfare is motivated by a cultural and institutional mistrust of low-income people.

The press release from Maine’s DHHS justified the prospective ban on the grounds that soda and candy lack nutritional value and that eliminating the option to buy soda would reduce obesity amongst SNAP recipients. However, the assumption that simply improving nutritional content of the food one eats will improve one’s weight is not that well supported by evidence. While poor nutrition can affect certain health outcomes, the American Medical Association and the National Institute of Diabetes and Digestive and Kidney Diseases agree that caloric content, not nutritional content, of food overwhelmingly determines one’s weight.

In 2010, a professor of human nutrition at the University of Kansas made headlines when he lost 27 pounds in two months by cutting his calorie intake and restricting his diet to Twinkies, Doritos, and Oreos. Of course, being thin is not equivalent to being healthy and there are many positive health outcomes associated with improving nutritional intake. Nonetheless, simply banning the purchase of some items will do little to reduce obesity, nor ensure those on food stamps will diversify their nutritional intake.

Misguided Calculations

After drawing a tenuous prediction that the prohibition of sugary foods will cause a reduction in obesity rates, the press release notes “Over $700 million is spent in Maine on obesity related medical expenditures and more than a third of that paid for by taxpayers in the Medicare and Medicaid programs.” This, of course, implies that low-income individuals are disproportionately responsible for Maine’s obesity problem and that they disproportionately contribute to the healthcare costs associated with obesity.

However, according to data from the Kaiser Family Foundation (KFF), the average low-income Mainer generates an effectively equal amount of “obesity related medical expenditure” as the average Mainer who is not reliant on Medicare or Medicaid. Over 269,000 of 1.33 million Mainers rely on Medicaid and over 306,400 on Medicare. When factoring in the 104,000 dual eligibilities, KFF’s data shows that nearly 35 percent of Maine’s population relies on these health aid programs.

Therefore, just under two-thirds of the Maine population that is not low-income makes up about two-thirds of Maine’s “obesity related medical expenditure.” The assertion made in this press release is likely grounded in the misguided and simplistic belief that poorer Americans are more likely to be obese. In reality, obesity is a relatively constant cause for concern across all income brackets.

Unconditional Help

Obesity is no doubt an issue in Maine and throughout the country. While the state’s move to eliminate sugary products from its food stamp program may have been well intentioned, it is but one example of how conditional welfare disproportionately blames low-income people for public problems that are largely unrelated to economic status. Such misguided rationalizations are often used to justify patronizing conditional welfare programs.

While limiting the autonomy of beneficiaries is seen as a way of ensuring government funds are spent properly, doing so not only unjustly stigmatizes welfare recipients, it often undermines the efficacy of each dollar spent on welfare. Conditional welfare assumes that because one is in need of welfare, they are unfit to have discretion over how they spend money.

Research has shown that unconditional cash transfer and welfare programs are far more effective means of improving recipients’ conditions. In 2003, Brazil introduced a program known as Bolsa Familia under which poor families were eligible to receive direct cash transfers. While Bolsa Familia did impose some conditions on families (requiring children of recipient families be vaccinated and attend school), each family was free to spend their cash transfer as they saw fit. The program was considered a huge success, helping to reduce poverty and inequality nationwide.

Maine’s effort to ban the purchase of candy and soft drink with food stamps awaits approval from the United States Department of Agriculture (USDA), which is the federal agency in charge of overseeing SNAP.

Callum Cleary

Callum is an editorial intern at Law Street. He is from Portland OR by way of the United Kingdom. He is a senior at American University double majoring in International Studies and Philosophy with a focus on social justice in Latin America. Contact Callum at Staff@LawStreetMedia.com.

The post No Food Stamps for Sweets: Unjust Welfare Conditionality appeared first on Law Street.

The U.S. Department of Justice announced Wednesday it is charging hundreds of individuals across the country with committing health care fraud worth hundreds of millions of dollars, in what is being hailed the largest health care fraud bust in U.S. history. Here are the five fast facts you need to know.

1. 301 People Charged in Health Care Fraud Bust

The bust resulted in the takedown of 301 individuals, including 61 licensed medical professionals, 28 of whom were doctors. The charges include various health care fraud-related crimes, including conspiracy to commit health care fraud, violations of the anti-kickback statutes, money laundering, aggravated identity theft, and Medicare Part D pharmacy fraud.

Attorney General Lynch called out the alleged perpetrators in the release saying,

They target real people – many of them in need of significant medical care.  They promise effective cures and therapies, but they provide none.  Above all, they abuse basic bonds of trust – between doctor and patient; between pharmacist and doctor; between taxpayer and government – and pervert them to their own ends.

2. $900 Million in False Billings

The DOJ found the defendants to be responsible for a total of $900 million in false billings. The largest portion of fraudulent billings was traced to Florida, where a total of 100 defendants were charged for their involvement in approximately $220 million in false billings for home health care, mental health services and pharmacy fraud. According to the release,

In one case, nine defendants have been charged with operating six different Miami-area home health companies for the purpose of submitting false and fraudulent claims to Medicare, including for services that were not medically necessary and that were based on bribes and kickbacks.  In total, Medicare paid the six companies over $24 million as a result of the scheme.

Defendants in California, Texas, and Michigan are charged with committing more than $100 million worth of fraud in each state.

3. This Was a Joint Effort

Medicaid Fraud Control Units in 23 states and the Medicare Fraud Strike Force in 36 federal districts coordinated with the Justice Department and the Department of Health and Human Services in  the “unprecedented nationwide sweep.”

National Health Care Fraud Takedown Results https://t.co/LQk9OJpzKN pic.twitter.com/HMVFxvFrgd

— Justice Department (@TheJusticeDept) June 22, 2016

The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the DOJ and HHS to help prevent waste, fraud, and abuse in the Medicare and Medicaid programs.

4. New Study Identifies 27 Home Health Care Fraud “Hotspots”

The U.S. Health & Human Services Office of Inspector General released a new study in conjunction with the DOJ’s arrests citing 27 geographical “hotspots” in 12 states where health care fraud is committed most often.

Eye on Oversight: OIG identified 27 hotspots for probable home health fraud. Watch the VIDEO. https://t.co/1KPY9RQe6D

— OIG at HHS (@OIGatHHS) June 21, 2016

The states include Arizona, California, Florida, Illinois, Louisiana, Michigan, Nevada, New York, Oklahoma, Pennsylvania, Texas, and Utah.

5. This Recent Bust Helped Pad Federal Authorities’ Record

Since its launch in March 2007, the Medicare Fraud Strike Force has charged over 2,900 defendants who collectively have falsely billed the Medicare program for over $8.9 billion. Wednesday’s announcement marks the second time that districts outside of Strike Force locations participated in a national health care fraud bust, and they accounted for 82 defendants charged in this takedown.

Alexis Evans

Alexis Evans is an Assistant Editor at Law Street and a Buckeye State native. She has a Bachelor’s Degree in Journalism and a minor in Business from Ohio University. Contact Alexis at aevans@LawStreetMedia.com.

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A study published yesterday by the Center for Immigration Studies, or CIS, claims immigrant households collect $1,803 more in welfare benefits than native households–families headed by a U.S. born person–based on data collected in 2012.

Based on a sample size of 22,077 native households and 2,980 immigrant households, the study found that a large portion of the discrepancy in welfare benefits stems from Medicaid dollars, though immigrant households benefited from welfare by slim margins in nearly every other category–cash ($686 to $517) and food ($1,083 to $689). Native households received one dollar more in housing benefits, ($395 to $394.)

Conducted by the conservative, independent public policy analyst Jason Richwine, the study explains the findings as being attributable to the average education level of immigrant families, which is lower than those born in the U.S.

“It is easy to understand why people with fewer skills are more likely to participate in welfare programs, since eligibility for those programs requires a low income,” writes Richwine, whose 2013 study with the Heritage Foundation on IQ differences between immigrants and natives caused quite a stir.

Richwine concluded the study by saying, “the American welfare system has become increasingly focused on buttressing low-wage workers rather than supporting non-workers. Put more simply, welfare and low-wage work go together.”

While this study seems to provide evidence for those who want the U.S. to scale back immigration, claiming that immigration hurts the economy, a separate study by the American Immigration Council highlights the positive effects immigration has on the economy.

Among the findings:

• Based on 2013 figures, immigration increases GDP (by $31.4 billion) and tax revenue (“The average immigrant contributes nearly $120,000 more in taxes than he or she consumes in public benefits”).
• Immigrants are nearly twice as likely to start a business than natives–at a rate of 0.52 immigrant entrepreneurs and 0.27 for natives.
• Between 1996 and 2011, immigrants contributed $62 more per person than natives to Medicare.

As Congress and the next president will surely take a close look at U.S. immigration policy, possibly overhauling it completely or banning those of a certain faith, these studies will surely be used as fodder for both sides in the conversations to come.

Alec Siegel

Alec Siegel is a staff writer at Law Street Media. When he’s not working at Law Street he’s either cooking a mediocre tofu dish or enjoying a run in the woods. His passions include: gooey chocolate chips, black coffee, mountains, the Animal Kingdom in general, and John Lennon. Baklava is his achilles heel. Contact Alec at ASiegel@LawStreetMedia.com.

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Last Thursday marked the 50th anniversary of Medicare, a program instituted under the Social Security Act in 1965 by President Lyndon B. Johnson. To honor the anniversary of Medicare, the National Nurses United held a rally at which Presidential hopeful Bernie Sanders spoke. His comments shed further light on his positions on Medicare and American healthcare as a whole.

The rally brought together many different groups of people who all supported expanding Medicare. Many speakers from the National Nurses United spoke before Sanders and shared personal stories of why Medicare should be available for everyone.

Sanders, a big advocate of Medicare, stated, “healthcare is a right, not a privilege of all Americans.”

Sanders appears to strongly believe that everyone deserves health care and has worked hard during his time as a senator to make that happen. Sanders strongly supports Medicare for all, by transforming it into a single payer system. Under this system, a single or quasi-public agency would organize health care financing, but the delivery of care would stay privatized. Sanders’ home state of Vermont is one of the states that has moved forward with this arrangement.

For Sanders, Medicare expansion fits into his overall platform of equality for all. He strongly believes that all Americans should have equal rights and equal opportunities, and affordable healthcare for all is a necessary aspect of that equality. He’s attracting supporters with those kinds of goals, given that 48 percent of Americans polled in 2013 said the healthcare system needs fundamental changes, and 27 percent said the healthcare system should be completely rebuilt.

Medicare, and what to do about the current healthcare system in America, will be hot topics in the 2016 election particularly because this issue will continue to affect Millennials in the upcoming years. Most Millennials are children of baby boomers who are now becoming older, and need to have affordable healthcare in some capacity. The way the healthcare system is set up in America, the older generation depends on the younger generation to take care of them because young people are the ones who pay the most into Social Security, Medicare, and Medicaid. However, if Sanders’ plan to create a single-payer system reaches fruition, the younger generation will not be entirely held responsible for taking care of the older generation, as the government would play a larger role in organizing health care financing.

Overall, the rally was successful and discussed why Medicare should be reformed and expanded. It’s essential that the future president realizes the need for affordable healthcare for all Americans, and takes action to make it happen.

Jennie Burger

Jennie Burger is a member of the University of Oklahoma Class of 2016 and a Law Street Media Fellow for the Summer of 2015. Contact Jennie at staff@LawStreetMedia.com.

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Long-term healthcare institutions for the elderly are now more common than ever in America. There are thousands of nursing homes and residential-care facilities dispersed across the country. As a society, we rely on and trust these establishments to medically treat and handle with care our aging loved ones. Even though these places are instrumental to our healthcare system, nursing home regulations haven’t been widely updated in more than 30 years. That is until this month. The Obama Administration has set out to reform the rules required of nursing homes to qualify for Medicare and Medicaid. As they stand today, the rules aren’t up to speed with the innovative scientific advances and administration of health care. There are also alarming reports of abuse and neglect inside the system. But with promising new laws on the horizon, nursing home healthcare may be getting a makeover.

History of Nursing Homes in the United States

The normalization of nursing homes is a relatively recent development. Demographic and political shifts have created a standard use of these facilities. For many years, elderly citizens turned to almshouses, charitable housing for the sick, impoverished, inebriated, mentally ill, and homeless. The elderly lived in almshouses for a variety of reasons including poverty, disability, sickness, and/or separation from families. The Industrial Revolution started to bring more people into the cities and spread families apart. Many singles no longer had extended families to rely on for support.

At the turn of the nineteenth century, women’s and religious groups started to create specific housing for the elderly. Boston’s Home for Aged Women was created in 1850. Institutions like this generally required substantial entrance fees and certificates of good character. They were a marked upgrade and alternative to the almshouses. Many of these women were widowed or single, and had lived their lived as upstanding citizens. These requirements limited shelter to a small population; the impoverished still mostly resided in almshouses.

As time continued, almshouses started to exclusively aid the elderly. Younger people were removed and sent to specific-needs organizations like orphanages, hospitals, or insane asylums. In 1880, 33 percent of almshouse residents were elderly. By 1923, that number soared to 67 percent.

The almshouses were not places of luxury, but rather were found in extremely poor conditions. In 1992, Abraham Epstein, advocating for pensions, wrote that the almshouse “stands as a threatening symbol of the deepest humiliation and degradation before all wage-earners after the prime of life.” The enactment of the 1935 Social Security Act was in large a movement to remove almshouses altogether; however, elderly residents weren’t solely there due to poverty. Others required daily nursing and medical attention. The money received through pensions was often used to gain access to independent facilities that could provide medical care; however, conditions were not necessarily improved.

In 1955, the Medical Facilities Survey and Construction Act allowed federal support to those in public facilities. Both private and public nursing home residents received federal support. In 1965, Medicare and Medicaid was established, furthering the growth of nursing home facilities. Between 1960 and 1976, nursing homes grew by 140 percent, with 79 percent still private institutions. Through investigations conducted through the 1970s, it was concluded that the conditions were still subpar and not far enough removed from the stigma of historic almshouses.

The 1970s saw the first real regulations for nursing homes. The Office of Nursing Homes Affairs was established in 1971 and authorized to administer nursing home standards. Social Security reforms in 1972 “established a single set of requirements for facilities supported by Medicare and for skilled-nursing homes that received Medicaid.” A plethora of amendments to older acts were enacted as well.

By 2000, nursing home care became a $100 billion industry. Although the standard of care has dramatically increased since the days of the almshouse, it is time for a new round of regulations. The video below, created by the Common Wealth Fund, joins in the effort to improve nursing home quality care.

Nursing Home Care Today

Statistics

There are five, main long-term healthcare services: home health agencies, nursing homes, hospices, residential care communities, and adult day service centers. Approximately 8,357,100 people receive support from these services annually. Nursing homes alone account for 1,383, 700  people in the group, and 63 percent of those are age 65 and older. In 2000, 15 million people required long-term care. Due to Baby Boomers, that number is projected to rise to 27 million in 2050.

For those that reach the age of 65, 69 percent will acquire a disability before they die. And 35 percent will enter a nursing home at some point. One in every eight people over the age of 85 resides in an institution.

Financial Stats

A 2013 report estimates that between $210 and $306 billion is spent on long-term care per year. Most pay a majority out of pocket for assisted living, while Medicaid pays a majority for long-term nursing care and Medicaid pays for a majority of hospice care and short-term skilled nursing facilities. Almost one-fifth of the elderly community will pay more than $25,000 in out-of-pocket costs before they die. And in 2012, 14.8 percent of those over 65 were reported below the poverty line. This is even more significant as the private-pay prices for a private or semiprivate room in a nursing home grew by four percent in 2002. It grew another 4.5 percent in 2012. Lastly, Medicaid spent $83.8 billion on long-term care services in 2003, amounting to approximately one third of all Medicaid expenditures.

Proposed Regulation

There are a host of reasons why the Obama Administration has decided to tackle nursing home care regulations. First and foremost, current regulations don’t consider the advances in science and health care for the elderly. As previously stated, long-term care regulations haven’t been updated in nearly 30 years–consolidated Medicare and Medicaid requirements for long-term care facilities were set in 1989, and haven’t been updated since 1991. Science has seen invaluable progress since then. New proposals are also significant in light of reports over the last decade finding varying degrees of neglect and abuse among nursing care facilities. At the core of it all, current regulations aren’t up to par.

Highlights

The proposal bans facilities from hiring any personnel with a record of abuse and/or neglect, and develops policies that target abuse and/or neglect. Nurses would be trained in preventing elder abuse. Although there isn’t an assigned patient-to-nurse ratio, facilities will have to report staffing levels to Medicare officials for review. Low staffing is a common reason stated by those in the field why patients with dementia are given inappropriate and potentially dangerous antipsychotic drugs. The regulations would also limit the amount of antibiotic and antipsychotic drugs administered, toughen infection control, and reduce hospital readmissions.

It also suggests a baseline care program: a comprehensive plan for each resident created within 48 hours of a patient’s arrival. In addition, a nurse aide, a member of the food and nutrition services staff, and a social worker would be added to those involved in the development of the care plan. The proposal also covers “electronic health records and measures to better ensure that patients or their families are involved in care planning and in the discharge process.”

There are a number of revisions directed toward the personal happiness of the residents. The proposal includes open visitation (similar to hospital regulations) and the ability for residents to choose roommates as these facilities often double as homes. It also mandates the availability of “suitable and nourishing alternative meals and snacks” for residents who would like to eat outside the scheduled meal times. These types of policies create a more comfortable and home-like atmosphere.

A major concern in the long-term care community is enforcement. Toby Edelman, a senior policy attorney at the Center for Medicare Advocacy, states that “the biggest problem is that the rules we have now are not enforced. We have a very weak and timid enforcement system that does everything it can to cajole facilities into compliance instead of imposing penalties for noncompliance.” The proposed rules should allow violations to be more easily detected.

Conclusion

As the proposal states, “many of the revisions are aimed at aligning requirements with current clinical practice standards to improve resident safety along with the quality and effectiveness of care and services delivered to residents.” This is a way to ensure that every facility across the nation is legally required to provide equal quality of care to every patient. It is alarming that a comprehensive update to modernize the nursing home care system hasn’t been done in so many years. Residents want to feel safe and happy in their environment, and their families want to feel that their aging elders are healthy and receiving the best care possible.

Resources

Primary

Federal Register: Medicare and Medicaid Programs

Additional

CDC: Long-Term Care Services in the United States

Family Caregiver Alliance: Selected Long-Term Care Statistics

Kaiser Health News: New Regulations Would Require Modernizing Nursing Home Care

Net Industries: Nursing Homes

U.S. Legal: The History of Nursing Homes

White House: Administration Announces New Executive Actions to Improve Quality of Care for Medicare Beneficiaries

Jessica McLaughlin

Jessica McLaughlin is a graduate of the University of Maryland with a degree in English Literature and Spanish. She works in the publishing industry and recently moved back to the DC area after living in NYC. Contact Jessica at staff@LawStreetMedia.com.

The post Obama Proposes New Nursing Home Regulations appeared first on Law Street.

The blanket ban on Medicare coverage of sexual reassignment surgery, which had been in place since 1989, was lifted in May 2014. With this move, Medicare officially recognized sexual reassignment surgeries as non-experimental and medically necessary for some suffering from gender dysphoria. Many consider the lifted ban a major victory for transgender rights; however, the move also sparked controversy as many people felt Medicare needs to prioritize the coverage of other medical concerns. Read on to learn how and why Medicare made the decision to lift its ban on sexual reassignment surgery.

What does it mean to be transgender?

According to GLAAD, transgender is “an umbrella term for people whose gender identity and/or gender expression differs from what is typically associated with the sex they were assigned at birth.” “Transsexual” is an older term “preferred by some people who have permanently changed–or seek to change–their bodies through medical intervention.” Gender identity is a person’s innate sense of being female, male, or other. Gender expression is how “a person communicates gender identity to others through behavior, clothing, hairstyles, voice, or body characteristics.”

It’s important to note that being transgender is not considered a mental disorder as it does not cause significant distress or disability; however, those who identify as trans* have difficulty finding “affordable resources, such as counseling, hormone therapy, medical procedures and the social support necessary to freely express their gender identity and minimize discrimination.” The culmination of these experiences can lead to higher levels of anxiety and/or depression than among the cisgender population.

What is Gender Dysphoria?

Gender Dysphoria It is a diagnosis given to people who “experience intense, persistent gender incongruence.” They do not identify with the physical sex they were assigned at birth. For an official diagnosis, the incongruence must last for at least six months. For children, the wish to be a different gender must be apparent and verbalized. People with gender dysphoria exhibit an overwhelming desire to be rid of his or her biological gender characteristics or “strong conviction that one has feelings and reactions typical of the other gender.” In order to cure gender dysphoria, some opt to undergo hormone therapies and or/medical surgeries.

The World Professional Association for Transgender Health (WPATH) recommends a “real-life experience” and hormone therapy before surgery. A real-life experience is a specific duration of time that a transgender person must completely live as their desired gender while maintaining a mentally healthy and active lifestyle. People transitioning from male to female take testosterone-blocking agents along with female hormones like estrogen and progesterone in order to develop characteristics such as breasts, softer skin, and less body hair. Female to male candidates take testosterone in order to deepen the voice, shrink the breasts, and increase physical strength.

After hormone therapy, there are a plethora of surgical options. People transitioning from male to female may choose to undergo a breast augmentation, orchiectomy (removal of the testicles), penectomy (removal of the penis), vaginoplasty (creation of the vagina), clitoroplasty (creation of the clitoris), and/or labiaplasty (creation of labia). The new constructions are generally built from penile tissue. There is also voice modification surgery to deepen the voice. Transitioning from male to female generally costs $40,000 to $50,000. Female to male transition surgeries are less medically successful. Trans males can undergo a mastectomy (removal of the breast tissue), hysterectomy (removal of the uterus), and salpingo-oophorectomy (removal of the fallopian tubes and ovaries). Patients can have a metoidioplasty (enlargement of the clitoris), but the construction of a penis has yet to be medically perfected. Collectively, transitioning from female to male costs about $75,000. Both trans females and trans males can receive cosmetic surgeries as well.

Medicare’s Prior Policy

Since 1989, Medicare specifically denied coverage for sex reassignment surgery under the National Coverage Determination 140.3. The decision was based on a 1981 National Center of Health Care Technology report, which stated:

Because of the lack of well controlled, long term studies of the safety and effectiveness of the surgical procedures and attendant therapies for transsexuals, the treatment is considered experimental. Moreover, there is a high rate of serious complications for these surgical procedures. For these reasons, transsexual surgery is not covered.

Basically, the surgeries were considered too risky and dangerous.

Since then, the American Medical Association, the American Psychological Association, and the American Psychiatric Association began advocating sex reassignment surgery as a productive, effective relief for victims of Gender Dysphoria. The U.S. Department of Health and Human Services Departmental Appeals Board overturned the decision in May 2014. The board stated that the policy was “based on outdated, incomplete, and biased science, and did not reflect contemporary medical science or standards of care.” This doesn’t mean candidates will automatically be approved for sex reassignment surgery, but approval or denial will be given based on individual cases, not a blanket policy.

Case Study: Denee Mallon

Medicare’s reevaluation of the ban started when 74-year-old army veteran Denee Mallon was denied her request for gender reassignment surgery by Medicare. In turn, she challenged the government insurance ban against sex reassignment surgeries.

After receiving the surgery, Mallon happily stated, “I feel congruent, like I’m finally one complete human being where my body matches my innermost feelings, my psyche. I feel complete.”

Mallon initially realized her gender identity when she was a 12 year old child in the 1940s. She continued to live as a man, having five kids and entering three marriages. When she could afford sex reassignment surgery in the late 70s and early 80s, her doctors refused to approve it because she was participating in consensual sex with women. When she finally received approval in the late 80s, she could no long afford it. She lived her life as a woman aided by hormonal therapy starting at age 40. She hid the fact that she was born male until 2012 when she became open about it and came out of what she calls “stealth mode.”

In response to critics calling being transgender a “lifestyle” choice, Mallon stated, “It’s far deeper than that. It’s so a part of my basic psyche, there’s no escaping it. I’ve tried to be the kind of man that society wanted and my feminine self just kept creeping up.”

Mallon decided to challenge Medicare after she was refused sex reassignment coverage by both her secondary private insurer and Medicare. She could not afford the expensive surgery living on $650 a month in Social Security income. The challenge and review process took about 18 months, before Medicare decided to lift the ban.

Pros of Lifting the Ban

Health Benefits

According to a British study, 88 percent of patients whounderwent male to female sexual reassignment surgery were content with the results. Those with Gender Dysphoria that undergo the transition process have substantial mental health improvement and a decrease in substance abuse and depression. According to a 2010 U.S. study, 41 percent of transgender people have attempted suicide. Sex reassignment surgery is a critical step in creating mental stability for some.

Marci Bowers, a transgender obstetrician and gynecologist in Burlingame, California, reported only two out of 1,300 people on whom she has performed sex reassignment surgery wanted to reverse the procedure. This is a 99.85 percent success rate.

Starting a Trend

The lifted ban is not only a significant win for transgender rights, but perhaps a catalyst for more change to come. Many public and private insurers take cues from the government. This could be the start of a long line of insurers securing coverage for these types of surgeries. In 2002, zero Fortune 500 companies offered transgender benefits. Ten years later, 19 percent did, and by 2014 it was 28 percent.

As of today, California, Colorado, Connecticut, Oregon, Massachusetts, Washington, Illinois, New York, Vermont, and Washington D.C. have banned anti-transgender discrimination in health insurance, and they legally require insurers to provide transgender health insurance.

Backlash

The first attempt to lift the ban came in 2013, but there were protests from conservative and religious groups. Defenders of the ban don’t believe these types of surgeries should be paid for by tax payer money.

Leanna Baumer, a senior legislative assistant with the Family Research Council, stated:

Real compassion for those struggling with a gender identity disorder is to offer mental health treatments that help men and women become comfortable with their actual biological sex — not to advocate for costly and controversial surgeries subsidized by taxpayers.

Frank Schubert, national political director for the National Organization for Marriage, doesn’t believe condoning the surgery sends the right message to America’s youth “to respect who they are, how they were born.”

Conclusion

There’s plenty of evidence to suggest that an overwhelming majority of those who undergo sex reassignment surgery for Gender Dysphoria find a substantial increase in their quality of life. In a demographic that experiences high rates of depression and suicide, the importance of these procedures is clear. The high expense of these surgeries essentially eliminates the option if they aren’t covered by insurance. Most people don’t have an extra $50,000 to spend on treatment for any medical condition. The lifted ban holds important symbolic value for the future and what’s to come.

Resources

Primary

American Psychological Association: What Does Transgender Mean?

Additional

Advocate: HHS to Reevaluate Ban on Gender-Confirming Surgeries

How Stuff Works: Stages of Gender Reassignment

NBC News: Sex Reassignment Surgery at 74

GLAAD: GLAAD Media Reference Guide

National Center for Transgender Equality: Know Your Rights

Trans Health Care: List of U.S. States That Have Banned Anti-Transgender Discrimination in Health Insurance

USA Today: Medicare ban on sex reassignment surgery lifted

Washington Post: Ban Lifted on Medicare Coverage For Sex Change Surgery

Washington Post: Here’s How Sex Reassignment Surgery Works

Jessica McLaughlin

Jessica McLaughlin is a graduate of the University of Maryland with a degree in English Literature and Spanish. She works in the publishing industry and recently moved back to the DC area after living in NYC. Contact Jessica at staff@LawStreetMedia.com.

The post Sexual Reassignment Surgery: The Path to Medicare Coverage appeared first on Law Street.

Senators Chuck Grassley (R-Iowa) and Ron Wyden (D- Ore.) have co-authored a bill that would make the Medicare claims database available to the public, allowing for unprecedented transparency in medical costs.  If this bipartisan bill becomes law, the media, advocacy groups and consumers will be able to see how much the federal government pays for healthcare procedures for those on Medicare.  Doing so would give the American public the ability to compare the costs of different treatments, procedures and even the varying prices between hospitals.

Americans spent $2.7 trillion on healthcare last year, nearly $600 billion of which was paid for by Medicare alone.  Insight into the largest purchaser of health services in America would provide the public with an unprecedented amount of information about the healthcare market, and could potentially create a check on medical costs.  However, opponents of the proposed legislation claim that releasing this data to the public would reveal too much about the practicing patterns of individual doctors, hospitals and providers.  There is certainly a trade-off, but providing new information to consumers may be in the public’s best interest.

[Politico]

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Featured image courtesy of [Sharyn Morrow via Flickr]

Kevin Rizzo

Kevin Rizzo is the Crime in America Editor at Law Street Media. An Ohio Native, the George Washington University graduate is a founding member of the company. Contact Kevin at krizzo@LawStreetMedia.com.

The post Bipartisan Bill to Change Healthcare Market appeared first on Law Street.