About that $100 million cut to the health department

Louisiana legislators – reportedly at the insistence of House leaders – sprung a surprise, $100 million cut to the state Department of Health as part of thousands of changes to the budget bills approved in the final minutes of the regular session. The Senate Health and Welfare Committee wants to know how the cut would affect health care providers and patients, and has scheduled a hearing for next Tuesday to discuss the matter. The Louisiana Illuminator’s Julie O’Donoghue reports: 

Committee Chairman Sen. Fred Mills, R-Parks, said he expected health care providers and state officials to testify on what services would be affected by the funding loss. … Most lawmakers didn’t get to see the final budget plan their leadership put together until a few minutes before they were asked to vote to approve it. A health care reduction of that size had not been discussed for several weeks. Gov. John Bel Edwards is also said to be seriously considering a veto of the $100 million health care cut. 

Reality check: The budget instructs the state to save $22 million by speeding up a review of Medicaid eligibility, which was paused during the pandemic. Shrinking this process could cause more eligible people to lose their coverage. The compressed timetable is unlikely to yield the anticipated savings, as the state would face increased costs of uncompensated care payments and poor health outcomes. 

Expanded Child Tax Credit was worth the cost 
The U.S. Senate Finance Committee is hearing testimony on Wednesday about the poverty-reduction power of the federal Child Tax Credit. A temporary expansion of the credit – and a provision that made the full credit available to families with the lowest incomes – helped cut child poverty to a record low in 2021. Unfortunately, Congress failed to extend the credit. The Center on Budget and Policy Priorities’ George Fenton explains why an expanded Child Tax Credit should be included in any future tax package. 

The recent Child Tax Credit expansion under the American Rescue Plan drove down child poverty and appears not to have meaningfully discouraged work among parents, numerous studies of real-world evidence suggest. Employment among both parents and non-parents rose by 1.7 percentage points in 2021, according to Bureau of Labor Statistics data. Researchers at the University of Michigan examined part- and full-time employment and labor force participation and found “no significant employment effects for any outcome” — with several other research teams reaching similar conclusions

Generational spending gap
A peculiar and unusual generational spending gap is emerging, as baby boomers (roughly ages 59 to 77) and traditionalists (ages 78 to 95) rapidly outspend younger Americans. Some of the increased spending reflects an uptick in leisure and travel spending as older people felt safer to venture out after the Covid-19 pandemic, and larger Social Security payments. But as The Washington Post’s Abha Bhattarai explains, other factors, such as housing costs and student loan debt, also factor in. 

(O)lder Americans also tend to have lower housing costs. Many own their homes outright or have locked-in low mortgage rates. Younger adults, by comparison, are more likely to rent. They are also more likely to move, either for work or family reasons, which means they’re constantly having to renegotiate housing costs, Tinsley said. … In California, Emerald Culmer, 29, spends more than one-third of her take-home pay on a one-bedroom apartment she shares with her cat, Franklin. Culmer makes $75,000 a year working for a tech company. But she also has about $92,000 in student loan debt.

Reimagining America’s health care system
America spends more on health care, as a percentage of its economy, than any other country in the world and gets middling results. Dr. Aaron E. Carroll, chief health officer of Indiana University and contributing writer to the New York Times, traveled to five countries to study their health care systems. Here’s what he learned. 

No other country I’ve visited has these debates the way we do. Insurance is really just about moving money around. It’s the least important part of the health care system. Universal coverage matters. What doesn’t is how you provide that coverage, whether it’s a fully socialized National Health Service, modified single-payer schemes, regulated nonprofit insurance or private health savings accounts. All of the countries I visited have some sort of mechanism that provides everyone coverage in an easily explained and uniform way. That allows them to focus on other, more important aspects of health care.

Carroll also explains how reforming our costly system could help reallocate resources to improve other social determinants of health, such as food security, housing and access to education. 

Addressing these issues in the United States would require significant investment, to the tune of hundreds of billions or even trillions of dollars a year. That seems impossible until you remember that we spent more than $4.4 trillion on health care in 2022. We just don’t think of social policies like housing, food and education as health care. Other countries, on the other hand, recognize that these issues are just as important, if not more so, than hospitals, drugs and doctors. Our narrow view too often defines health care as what you get when you’re sick, not what you might need to remain well.

Number of the Day
$1.7 million – Average net worth of a baby boomer household, compared with $214,000 for millennials. (Source: Federal Reserve via the Washington Post)