Reflex: November 4, 2011

The CDC reports on the percentage of adults age 18-64 who did not get needed prescription drugs because of cost. More families with low incomes had to forego prescription drugs than those with high incomes. “In 2010, 21.5% of those below the poverty level did not obtain needed prescription drugs compared with 3.9% among those at or exceeding 400% of the poverty level.” Aaron’s comment: For those below the poverty line, this problem has been steadily getting worse for years. We may not explicitly ration by availability, but we do ration by ability to pay.

Medicare beneficiaries sue the government for barriers to hospital admissions, reports David Morgan (Reuters). “A group of Medicare patients and their families sued the Obama administration on Thursday, saying they were deprived of coverage by the government health plan because of a policy that allows hospitals to avoid admitting elderly people with chronic ailments as inpatients.” Austin’s comment: I would like to learn more about this issue. From Morgan’s reporting, it seems like the policy is intended to reduce “unnecessary” hospitalizations, hence program expenditures. However, it leads to higher spending by beneficiaries. Is this what rationing backlash looks like? 

Higher premiums for smokers are more acceptable than for those who are obese, reports Scott Hensley. The story reports on a survey showing that 59% support higher health insurance premiums for smokers, while only 31% support the same for persons who are obese. Don’s comment: The costs of smoking are large, around $40 per pack in $2000 dollars, but most of these costs are born by smokers through shortened lifespan, while the external costs of smoking (those shifted to others, such as via higher health care costs) are relatively small, around $1.50 per pack. However, it appears that the motivation of such premium increases or reductions are not only to recoup costs, but to encourage and facilitate behavior change in the case of smoking. This seems particularly appropriate since cigarettes are an addictive substance that are typically began before persons become an adult. The culture is simply more comfortable with such efforts for smoking than for obesity at this point.

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