Consumer Power Report #329
New York City Mayor Michael Bloomberg’s ban on large sodas and other sugary drinks is just the most recent, and most ridiculous, act by the self-appointed chief of food police for the nation, I write at the American Thinker:
In the press conference announcing the move, Bloomberg rejected the idea that this would annoy people or store owners.
“Your argument, I guess, could be that it’s a little less convenient to have to carry two 16-ounce drinks to your seat in the movie theater rather than one 32 ounce,” Bloomberg said. “I don’t think you can make the case that we’re taking things away.”
There are a few carve-outs. You can still get a large fruit juice, even though many juices are full of sugar more than sodas are. You can still get large milkshakes, even though they’re more fattening. And you can still order a cappuccino or latte with sugary syrup added, in a win for Big Milk’s lobbyists. But who knows how long Bloomberg will grant access to hazelnut or vanilla? And no, you can’t get a large coffee with that same sweetener, for some reason. Maybe the mayor has a thing for latte-sipping.
Of course, there’s no evidence whatsoever that restricting access to larger sodas and sugary drinks will result in any significant downturn in obesity. Instead, this functions simply as a regressive tax. In his announcement, Bloomberg suggested that store owners could just charge more for smaller drinks if sales dropped, which they almost certainly will. But research has shown time and again that such price hikes don’t reduce obesity.
In fact, few things that the nanny state can do actually reduce obesity. Even severely limiting menu choices doesn’t do it. Individual weight really is about individual responsibility, it turns out, and ideas like taxing fat, while appealing to technocrats and bureaucrats, are also unlikely to make a huge impact. And if there is an impact, it may not be the one they expect: in the New York Times this weekend, we see how government policies end up achieving the opposite of their goal in this story about salt.
While sports nutritionists have since come around to recommend that we should indeed replenish salt when we sweat it out in physical activity, the message that we should avoid salt at all other times remains strong. Salt consumption is said to raise blood pressure, cause hypertension and increase the risk of premature death. This is why the Department of Agriculture’s dietary guidelines still consider salt Public Enemy No. 1, coming before fats, sugars and alcohol. It’s why the director of the Centers for Disease Control and Prevention has suggested that reducing salt consumption is as critical to long-term health as quitting cigarettes. And yet, this eat-less-salt argument has been surprisingly controversial – and difficult to defend. Not because the food industry opposes it, but because the actual evidence to support it has always been so weak.
In fact, as the story notes, more recent research has found that less salt could actually increase your risk of health problems. Consider the equivalent unexpected consequence of Bloomberg’s policy. If larger sized drinks are harder to come by, will children drink less and end up more dehydrated and prone to sunstroke in the hot New York City summer? Stranger things have happened.
That’s the thing about the nanny state. It’s not just that it’s an awful overreach of the state. It’s that the state makes a very bad nanny.
— Benjamin Domenech
IN THIS ISSUE:
CONSERVATIVE ORGANIZATIONS WIN THE EXCHANGE BATTLE
ALEC, Cato, Heartland, and others won the implementation argument.
“Over the last eight to 10 months, we’ve seen a huge change in course,” said Christy Herrera, health task force director of the American Legislative Exchange Council (ALEC). “Before the deadline, states have the time to carefully deliberate. … They shouldn’t be pressured.”
Without state exchanges, the federal government will be unable to implement the 2010 health care law, ALEC, the Cato Institute and other conservatives say. Exchanges are websites where consumers can compare costs and benefits of available insurance plans in the state, as well as buy insurance.
Ten states have delayed acting on exchanges because of the groups’ influence, according to ALEC.
Administration officials and some policy conservatives say the theory by ALEC and the Cato Institute is misguided. The federal government is paying for the start-up exchanges, and the law gives the states the flexibility to run their own programs. The Department of Health and Human Services announced this month that 34 states have accepted grants to pay for exchanges. If states don’t create exchanges, their residents can participate in a federal program.
Delays are shortsighted, said Cheryl Smith of the exchange practice of Leavitt Partners, a health care group run by former HHS secretary Mike Leavitt, a Republican. “States need to set up legislation to protect themselves,” she said. …
Many conservatives say that even if states create an exchange, the federal government will dictate how it is run, not the state.
New Hampshire’s House passed a bill by Republican Rep. Andrew Manuse that would prohibit lawmakers from creating laws to enact exchanges. He said Cato and ALEC helped him draft his proposal. “Not setting up an exchange is the best way we can work toward making the law be amended or repealed,” Manuse said.
Before the health care law was passed, Smith said, she was working with 22 states to create exchanges, which she called a Republican idea.
“I’m a conservative and a Republican, but I still would not be willing to bet the farm on” the idea that the law will fail if states don’t create exchanges, Smith said. “When you work at a think-tank, it’s really easy to come up with these really high-risk plans.”
SOURCE: USA Today
OBAMACARE IS ENDING STUDENT HEALTH INSURANCE
If you like your plan, you can keep it:
Some colleges are dropping student health-insurance plans for the coming academic year and others are telling students to expect sharp premium increases because of a provision in the federal health law requiring plans to beef up coverage.
The demise of low-cost, low-benefit health plans for students is a consequence of the 2010 health-care overhaul. The law is intended to expand coverage to tens of millions of uninsured Americans, but it is also eliminating some insurance options.
Many students already have coverage through their parents and aren’t affected by the changes. Parents who get insurance from an employer have traditionally been able to enroll dependents on their plans up to the age of 22 if they are full-time college students, and about two-thirds of students have that kind of coverage, according a 2008 study by the Government Accountability Office. The health-care law has since increased the age at which children can be on their parents’ coverage to 26.
Around 600,000 students, about 7% of the total number of 18-to-23-year-olds in college, bought their own insurance, generally plans arranged by schools for which students pay all the premiums, the GAO study said.
SOURCE: Wall Street Journal
HIGH-DEDUCTIBLE HEALTH INSURANCE BECOMING MORE POPULAR
Consumer-driven health care is the way to go:
Seventy percent of large companies recently surveyed by Olson’s firm said they’ll offer high-deductible insurance by 2013 combined with accounts that let patients buy medical services with pretax dollars, often funded by the employer. Nearly a fifth of the firms responding to the survey, conducted by Towers and the National Business Group on Health, a nonprofit alliance of large companies, said high-deductible coverage would be the only option in 2013.
Half of all workers at employer-sponsored health plans – including those working for the government – could be on high-deductible insurance within a decade, according to a new paper from Rand Corp.
Supporters say the plans can contain health costs. Patients who have to pay for care up front will take better care of themselves and shop more carefully, the thinking goes, seeking lower-cost providers or asking whether tests are necessary. High-deductible plans, known as “consumer-driven” insurance, may partly account for a recent slowing in the upward spiral of medical spending, analysts say, although reluctance to buy health services in a poor economy is also a factor.
Critics say high-deductible insurance is just a way for corporations to shift costs onto workers, especially those dealing with chronic illness such as diabetes and arthritis. Further, consumers aren’t prepared to shop for treatment because reliable information on price and quality is difficult, if not impossible, to find. High deductibles, they say, boost chances that patients will delay seeking care until ailments become acute. Still, high-deductible plans, long promoted by Republicans as a way to bring market forces to medicine, are here to stay no matter how the Supreme Court rules on the 2010 health-care law, experts say.
“There’s no question that high deductibles are spreading,” said Jonathan Oberlander, a health policy professor at the University of North Carolina. “That’s a pretty significant trend, and I don’t expect it’s going to slow up anytime soon. Employers like it because they’re providing less coverage. If they can relabel it as consumer-driven then it even sounds good.”
SOURCE: Washington Post
OBAMACARE HAS BENT INSURANCE COST CURVE IN WRONG DIRECTION
Insurance executive Edward Fensholt told the House Subcommittee on Health, Employment, Labor, and Pensions the following:
“These mandates have increased our clients’ health plan costs 2 to 3 percent on average to this point,” he said. And he said the costs will escalate further when new rules – such as reductions in waiting periods and the automatic enrollment requirement – take effect in 2014.
Fensholt is a senior vice president of Lockton Companies, LLC, an insurance brokerage and consulting firm that provides employee-benefits expertise to 2,500 mostly middle-market employers.
In addition to the Affordable Care Act’s coverage mandates, Fensholt said a “great frustration” for his clients is the law’s “many additional administrative burdens.”
Under federal law right now, Fensholt said, a simple group health-care plan is required to supply up to 50 separate notices, disclosures and reports to enrollees or to the federal government – often more than once. He noted that the Affordable Care Act added more than a dozen of those notices, disclosures and reports. …
“Our clients are already drowning under the cost of providing robust health insurance to employees,” Fensholt said. “Rather than tossing employers a lifeline, the Affordable Care Act is in many ways an anchor – albeit a well-intentioned one – by piling on additional costs and burdens.”
SOURCE: CNSNews.com
HEALTH CARE PLAN REBATES HAVE HIDDEN COSTS
Why is stopping fraud bad?
Some consumers and businesses might see a little extra cash this summer as a result of the 2010 health care law. The Kaiser Family Foundation recently reported an estimated $1.3 billion in rebates will be delivered from health insurers who spent more than the law allotted on administrative expenses and profits.
What people don’t realize is that there’s a catch to this “free” money. The rebates are required by an obscure regulation in the health care law, called the “minimum loss ratio,” which also contains longer-term incentives for health insurers to increase costs that will be passed along to all of us. Instead of rushing to spend these extra dollars, rebate recipients are better off pocketing it to pay for higher premiums in the future.
The regulation is supposed to benefit policyholders by limiting what insurance companies can spend on administrative costs and marketing expenses – and by limiting profits. It requires insurance companies to pay a specified percentage of their premium income – usually 80 percent or 85 percent – for health care (or initiatives that will improve the quality of health care). So if an insurer spends only 84 cents of each premium dollar on health care benefits instead of 85 cents, it would have to rebate the difference to consumers. With the typical family health insurance premium now exceeding $15,000, that one percent difference could amount to $150.
Unfortunately, the regulation contains several incentives that actually discourage activity that clearly benefits the policyholder.
For example, insurance company expenses to prevent fraud are considered “bad” administrative costs. Suppose an insurance company is right at the maximum allowed spending on administrative costs, but it needs to spend an extra $100 to prevent $1,000 worth of fraud. It won’t, because it will get penalized.
Because fraud accounts for 3 percent to 10 percent of total health care spending, according to the National Health Care Anti-Fraud Association, we ought to be doing everything possible to prevent it rather than creating incentives to catch it only after the fact. Which do you think is more cost-effective? Putting a lock on your door to prevent burglaries or leaving your door open and paying cops to track down your stolen goods?
SOURCE: Roll Call
ANOTHER CASUALTY OF OBAMACARE: TRANSPARENCY
Why it’s about more than the individual mandate:
This month, the Supreme Court will rule on President Obama’s health care law. But contrary to popular belief, it will not be considering whether to overturn the entirety of the president’s health care agenda. Even if the court finds the Affordable Care Act unconstitutional, other troubling aspects of the president’s policies will remain intact unless Congress fixes them.
Consider a program created by the 2009 stimulus bill, known as academic detailing. The program sends government representatives, akin to drug representatives, into doctor’s offices to influence prescribing decisions.
The more information physicians have, the better equipped they are to provide quality care to patients. But under academic detailing, the government may be grossly misinforming doctors about medical choices. Thanks to a total lack of transparency in the program, there is no way for the public to know.
Physician outreach on the part of medical companies is a valuable and legitimate source of information. But because drug companies naturally want to sell more of their branded medicines, this type of communication is heavily regulated to counter possible conflicts of interest, while still allowing the sharing of scientific information that could help improve patient care.
The government’s academic detailing program is similar, but it is curiously exempt from the same patient-protecting transparency standards applied to the drug industry. The Agency for Healthcare Research and Quality, the agency responsible for academic detailing, is spending nearly $12 million in contracts with public relations firms, yet it refuses to disclose exactly what its detailers are telling doctors. Contrast this with onerous burdens on industry representatives, who must get every word approved by the Food and Drug Administration.
Read more here on reconciling the House and Senate PDUFA bills.
SOURCE: Washington Examiner
AAF: THE ECONOMIC IMPACT OF THE MEDICAL DEVICE EXCISE TAX
A study from Michael Ramlet, Robert Book, and Han Zhong, who are, respectively, director of health policy, health care expert, and research assistant at the American Action Forum.
The Medical Device Excise Tax (“device tax”) is a tax on all medical devices sold in the United States and a component of the Affordable Care Act (ACA), President Obama’s signature legislation. The device tax will soon be center stage in the Congressional healthcare debate. A Ways and Means committee markup of repeal legislation this week will be followed by a floor vote in the House of Representatives in June. The device tax debate highlights the economic impact of the ACA.
SOURCE: American Action Forum
PANEL ON OBAMACARE AT CPAC CHICAGO
I’ll be participating on Friday, June 8:
Panel 5: Repeal and Replace: The Ongoing Fight for Health Care Freedom in America Room 2
Christie Herrera, Health & Human Services Task Force Director, American Legislative Exchange Council
Jonathan Ingram, Healthcare Policy Analyst, Illinois Policy Institute
Nina Owcharenko, Director, Center for Health Policy Studies and Preston A. Wells, Jr. Fellow, The Heritage Foundation
Benjamin Domenech, Managing Editor, Health Care News, Heartland Institute
Moderator: The Honorable Steve Rauschenberger, United to Restore Freedom/Right Nation Director and former Illinois State Senator
SOURCE: CPAC Chicago
Benjamin Domenech is the founder and publisher of The Federalist and a senior fellow at The Heartland Institute.
