You Won’t Believe How Much Diabetes is Costing the U.S.
The budget-busting price of Sovaldi, a drug used to treat hepatitis C has generated wave after wave of media attention, but it’s far from the only drug creating cost problems for patients and insurers.
As Michelle Andrews of Kaiser Health News points out, diabetes affects 29 million Americans, or 10 times as many people as hepatitis C, and the costs of treating it have been rising quickly. And because it’s a chronic condition, people require lifetime care.
Related: Diabetes Detection Up in Pro-Obamacare States
In 2011, the average annual health spending for individuals with diabetes was $14,093. Two years later, it had risen to $14,999, according to the Healthcare Cost Institute. In contrast, a person without diabetes spent about $10,000 less in medical costs in 2013. Pharmacy provider Express Scripts said earlier this year that 2014 marked the fourth year in a row that medication used to treat diabetes were the most expensive of any traditional drug class.
In all, diabetes costs totaled an estimated $245 billion in 2012, including both direct medical expenses and indirect costs from disability and lost work productivity.
While some of the most popular diabetes drugs aren’t particularly expensive, the new brand-name drugs that are continually being introduced offer more effective treatment and fewer side effects — but also come with a higher price tag. Less than half of the diabetes prescription treatments filled in 2014 were generic.
Nearly a century after its discovery in 1921, insulin is still a common form of treatment for the millions of people with type 1 diabetes, yet there is still no generic form available. Patent protection has been extended in some cases due to improvements in existing formulations. Once those patents expire, Andrews notes, biologically similar drugs could replace them and reduce the price by up to 40 percent.
Related: This Disease Hikes Health Care Costs By More than $10,000 a Year
The financial ramifications of diabetes don’t just stem from the cost of drugs or medical treatment — it’s also been proven that people with diabetes have a high-school dropout rate that is six percentage points higher than those without the disease, according to a Health Affairs study. In addition, young adults with diabetes are four to six percentage points less likely to attend college than those without the disease.
Diabetes also contributes to lower employment and wages. On average, a person with diabetes earns $160,000 less over the course of their lives than people who don’t develop the disease. By age 30, a person with diabetes is 10 percent less likely to be employed.
So even if it’s not generating as many headlines as hepatitis C at any given point in time, the costs of diabetes can’t be ignored.
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Majority of Tax Cuts Going to Filers Earning More Than $100K: JCT
Ahead of a House Ways and Means Committee hearing scheduled for Wednesday, the Joint Committee on Taxation prepared an analysis of the distributional effects of the 2017 Republican tax bill. The New York Times’ Jim Tankersley highlighted the fact that according to the JCT analysis, about 75 percent of the individual and business benefits of the tax cuts will go to filers earning more than $100,000 in 2019. And nearly half of the benefits will flow to filers earning over $200,000.
The Trump Budget's $1.2 Trillion in 'Phantom Revenues'
President Trump’s 2020 budget includes up to $1.2 trillion in “potentially phantom revenues” — money that comes from taxes the administration opposes or from tax hikes that face strong opposition from businesses, The Wall Street Journal’s Richard Rubin reports, citing data from the Committee for a Responsible Federal Budget. That total, covering 2020 through 2029, includes as much as $390 billion in taxes created under the Affordable Care Act, which the president wants to repeal.
The $1.2 trillion in questionable revenue projections is in addition to the White House budget’s projected deficits of $7.3 trillion for the 10-year period. That total is itself questionable, given that the president’s budget relies on optimistic assumptions about economic growth and some unrealistic spending cuts, meaning that the deficits could be significantly higher than projected.
Republicans Push Ahead on Medicaid Restrictions
The Trump administration on Friday approved Ohio’s request to impose work requirements on Medicaid recipients. Starting in 2021, the state will require most able-bodied adults aged 19 to 49 to either work, go to school, be in job training or volunteer for 80 hours a month in order to receive Medicaid benefits. Those who fail to meet the requirements over 60 days will be removed from the system, although they can reapply immediately.
The new work requirements include exemptions for pregnant women, caretakers and those living in counties with high unemployment rates and will apply only to those covered through the expansion of Medicaid under the Affordable Care Act. There are currently about 540,000 people on Medicaid in Ohio who receive coverage through the expansion, according to Kaitlin Schroeder of The Dayton Daily News, compared to roughly 2.6 million Medicaid recipients in the state overall.
Once implemented, the work requirements are expected to result in 36,000 people losing their Medicaid eligibility, according to state officials, though critics say the reductions could be significantly larger. Similar work requirements in Arkansas pushed 18,000 people off the Medicaid rolls in six months.
A larger GOP project: The creation of new work requirements is part of a larger effort by Republicans to limit the expansion of Medicaid, says The Wall Street Journal’s Stephanie Armour. Since the Affordable Care Act passed in 2010, 36 states have expanded their Medicaid programs under the ACA and the number of people in the program has grown by 50 percent, from roughly 50 million to about 75 million. But many red-state governors have expressed concerns about the cost of Medicaid expansion and worries about a lack of self-sufficiency among the able-bodied poor, and are embracing new limitations on the program for both fiscal and political reasons.
In 2017, the White House in 2017 gave states the green light to explore ways to limit the reach and expense of their Medicaid programs. Governors have proposed a variety of new rules, which require waivers from the federal government to enact. Kentucky, for example, wants to drug-test Medicaid recipients, and Utah wants a partial expansion and a cap on payments. Kaiser Health News summarizes the variety of waivers states have requested, which are governed by Section 1115 of the Social Security Act, in the chart below.
Legal challenges: Efforts to restrict Medicaid have received legal challenges, and U.S. District Judge James Boasberg blocked work requirements in Kentucky last year. The same judge, who has expressed doubts about the administration’s approach to Medicaid, will rule on the legality of work requirements in both Kentucky and Arkansas by April 1.
The bottom line: The Trump administration is seeking fundamental changes in how Medicaid works. Even if Boasberg rules against work requirements, expect the White House and Republican governors to continue to push for new limitations on the program.
Chart of the Day: Trump's Huge Proposed Cuts to Public Investment
Ben Ritz of the Progressive Policy Institute slams President Trump’s new budget:
“It would dismantle public investments that lay the foundation for economic growth, resulting in less innovation. It would shred the social safety net, resulting in more poverty. It would rip away access to affordable health care, resulting in more disease. It would cut taxes for the rich, resulting in more income inequality. It would bloat the defense budget, resulting in more wasteful spending. And all this would add up to a higher national debt than the policies in President Obama’s final budget proposal.”
Here’s Ritz’s breakdown of Trump’s proposed spending cuts to public investment in areas such as infrastructure, education and scientific research:
Chart of the Day: The Decline in Corporate Taxes
Since roughly the end of World War Two, individual income taxes in the U.S. have equaled about 8 percent of GDP. By contrast, the Tax Policy Center says, “corporate income tax revenues declined from 6% of GDP in 1950s to under 2% in the 1980s through the Great Recession, and have averaged 1.4% of GDP since then.”
