Bubbles Expand; Real Economy Contracts


This week’s health policy news roundup curated by Jane Orient, M.D.

One of the most important and damaging ObamaCare provisions has largely gone unnoticed by the general public, but the Medicaid expansion bubble threatens to cause state budgetary meltdowns as federal support declines. Enrollment increases have been dramatic and unexpected. More than 21 percent of all Coloradoans, for example, are now enrolled in Medicaid or CHIP, double the percentage of the population enrolled in 2009. As Justin Haskins points out, “many states have happily signed on to expand Medicaid, not because they believed it would be in the best interests of their citizens in the long-term, but rather because political opportunists in state capitals are using Obamacare to further their own ambitions.” Taxpayers, Medicaid recipients, and those who care for them will pay the price. http://humanevents.com/2015/09/04/the-growing-medicaid-expansion-bubble/

The central bank has kept the stock market bubble from popping, but the Fed may be running out of price-rigging tricks, writes David Stockman. http://davidstockmanscontracorner.com/why-hedge-fund-hot-shots-finally-got-hammered/

One sign of a bubble is inflation. The federal government needs inflation to erode the value of its debt, but needs to conceal it to limit the cost-of-living-adjustment (COLA) to entitlement recipients. The U.S. federal government has changed the way it calculates inflation at least 20 times since the mid 1980s. A bill known as HR 3074, written “for the purpose of establishing an accurate Social Security COLA, admits that the government is fudging the numbers.” It is said to have a 0% chance of being passed. http://www.sovereignman.com/trends/no-inflation-friday-the-government-admits-its-own-statistics-are-phony-17417/

The Affordable Care Act (ACA) has an unacknowledged way to burst the bubble of healthcare spending: the Cadillac tax. It will work by effectively reducing access to care. http://www.forbes.com/sites/theapothecary/2015/08/31/decrypting-the-cadillac-tax-part-1/ (Also see Dr. Dana Beezley-Smith’s exposé of Jonathan Gruber in the fall issue of the Journal of American Physicians and Surgeons, http://www.jpands.org/vol20no3/beezley-smith.pdf.)

The U.S. continues to lose productive jobs by the millions. Government employees now outnumber manufacturing employee 1.8 to 1. http://www.cnsnews.com/news/article/terence-p-jeffrey/21955000-12329000-government-employees-outnumber-manufacturing

It is also losing insurance companies through still more mergers. http://www.bloomberg.com/news/articles/2015-09-08/anthem-aetna-deals-threaten-competition-across-u-s-ama-says

And people are losing their insurance. Nearly 1 in 4 of the Americans who picked a health plan this year through the Affordable Care Act’s insurance marketplaces have dropped or lost their coverage.

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