Thursday, September 11, 2014

Thursday, September 11, 2014

Health costs continue to slow; Where will money come for roads and bridges?; Payday lending debate delayed by Metro Council; and Report on TANF responsiveness to the recession found faulty

Health costs continue to slow
More evidence that the Affordable Care Act may be working better than its critics are willing to admit: The cost of employer-sponsored health insurance grew only 3 percent last year, according to the Kaiser Family Foundation. That continues a trend of modest premium hikes increases after several years where health-care costs grew much faster than the overall economy.

The New York Times’ “Upshot” blog sees this as a positive trend: “Health economists disagree about the precise mix of factors underlying the slowdown, but most think it has been caused by some combination of a weak economy and shifts in medical practice away from expensive hospitalizations and drugs.”

While it’s hard to say whether Obamacare has anything to do with this welcome news, it does mean that critics who insisted that health-care reform would cause companies to jack up premiums have some explaining to do.

Where will money come for roads and bridges?
When faced with a big problem, with no political consensus on how it should be solved, state government’s typical response is to form a commission. Hence the Louisiana Transportation Funding Task Force, which is tasked with figuring out how to finance nearly $12 billion needed for roads and bridges. The task force held its first meeting Wednesday, where debate centered on $400 million in new financing that may or may not materialize by 2019.

The $400 million is vehicle sales-tax revenue that now goes to the state general fund. Under a 2008 law, those dollars will be dedicated to transportation needs. The kicker is that the law won’t take effect until state revenues rebound to pre-recession levels, which could take several years. Sen. Robert Adley of Benton says the state can’t wait that long. “In six years’ time, the problems would multiply dramatically,” Adley said after the 90-minute meeting. “Waiting until then is next to impossible.”

There is another potential solution, of course, if officials really want to build better roads: Raise the state’s gasoline tax, currently at 38.8 cents per gallon. But that would require political courage.

Payday lending debate delayed by Metro Council
The Baton Rouge Metro Council has delayed a debate on zoning regulations that could restrict the locations and hours of payday lending operations in the Capital City. The proposed ordinance would restrict new payday lending shops from opening up within 1,000 feet of residential zones, existing payday lenders, pawn shops, churches, public libraries, schools, daycare centers, public parks, playgrounds, businesses that have liquor licenses, and casinos. It would also limit their hours of operation to 7am through 7pm. Efforts to regulate the extremely high interest rate short term lenders failed last legislative session.

“Representatives of payday lending companies, however, said this debate should be taking place at the state level. The industry is highly regulated, they said, pointing out that no one restricts the number of fast food restaurants even though fast food is unhealthy.”

Payday lenders in Louisiana outnumber McDonald’s Restaurants by 4 to 1.

Learn more about Payday Lending in Louisiana.

Report on TANF responsiveness to the recession found faulty
When the economy goes into a deep recession, federal safety-net programs like Temporary Assistance for Needy Families (TANF) are supposed to pick up the slack and help families stay on their feet. A recent study from the Brooking Institute says the program did a good job responding to increased need during the Great Recession. The Center on Budget and Policy Priorities disagrees, citing problems with the analysis.

In contrast to their claim that TANF responded reasonably to the large increase in need in the recent recession, we find that it fell well short of how we would expect such a basic safety net program to respond during tough economic times. 

Number of the Day: $502 – Average monthly premium for single coverage in an employer-sponsored health plan. (Source: Kaiser Family Foundation)