The CDC today released data on obesity in the US. This is obesity, really really fat people, not just overweight. Obesity is a BMI in excess of 30, you are a tubby, you come down with Type 2 Diabetes, then kidney failure, nephropathy, eye problems, heart problems, you costs hundreds of billions.
The data for the US is shown below by race,
The rates amongst blacks is greatly above whites but Hispanics are also at an elevated rate. No matter all rates are excessive. As it stands Type 2 Diabetes costs almost $300 billion annually in a $2.5 Trillion health care bill. The solution is simple, stop eating, just like stop smoking. The way to achieve it is also simple, tax the heck out of it! Why tax small business to get them to provide health insurance when you can go to the source of the problem, fat people! We all pay for their ailments.
The data for the northeast is shown below:
The data for the south is shown below;
The south shows a greater disproportion of obesity amongst blacks. This results in a proliferation of Type 2 Diabetes diseases. We have analyzed this in one of our White Papers.
The CDC report continues:
"Obesity is associated with increased health-care costs, reduced quality of life, and increased risk for premature death... Common morbidities associated with obesity include coronary heart disease, hypertension and stroke, type 2 diabetes, and certain types of cancer... As of 2007, no state had met the Healthy People 2010 objective to reduce to 15% the prevalence of obesity among U.S. adults... An overarching goal of Healthy People 2010 is to eliminate health disparities among racial/ethnic populations. To assess differences in prevalence of obesity among non-Hispanic blacks, non-Hispanic whites, and Hispanics, CDC analyzed data from Behavioral Risk Factor Surveillance System (BRFSS) surveys conducted during 2006--2008. Overall, for the 3-year period, 25.6% of non-Hispanic blacks, non-Hispanic whites, and Hispanics were obese. Non-Hispanic blacks (35.7%) had 51% greater prevalence of obesity, and Hispanics (28.7%) had 21% greater prevalence, when compared with non-Hispanic whites (23.7%). This pattern was consistent across most U.S. states."
In a CBO letter to Congressman Rangel, a rather rotund Congressman, not an ad for compliance, the CBO states:
" On a preliminary basis, CBO and the JCT staff estimate that the proposal’s provisions affecting health insurance coverage would result in a net increase in federal deficits of $1,042 billion for fiscal years 2010 through 2019. That estimate primarily reflects $438 billion in additional federal outlays for Medicaid and $773 billion in federal subsidies that would be provided to purchase coverage through the new insurance exchanges. Not all enrollees in the exchanges would receive subsidies, but the average subsidy among those who would be subsidized is projected to rise from roughly $4,800 in 2015 to roughly $6,000 in 2019. The other main element of the proposal that would increase federal deficits is the tax credit for small employers who offer health insurance, which is estimated to reduce revenues by $53 billion over 10 years."
The assumptions in this $trillion estimate are:
"The proposal’s major provisions—including the establishment of an individual mandate to obtain insurance, an expansion of eligibility for the Medicaid program, and the creation of new insurance exchanges through which certain people could purchase subsidized coverage—would be implemented beginning in 2013.
The CBO report lists the health care shortfall as follows:
NET IMPACT OF COVERAGE SPECIFICATIONS ($ Billion)
2010 $3
2011 $4
2012 $1
2013 $69
2014 $107
2015 $141
2016 $158
2017 $171
2018 $187
2019 $202
2010-2019 $1,042
BUT. if we solve the obesity problem we save multiples of this cost every year! Why is Congress defaulting on this issue. It is more than a tax on soft drinks, it is a change in lifestyle, it is the Victory Gardens of WW II.
Yet we have also offered the need for individual responsibility by having out of pockets costs paid for non life threatening procedures and insurance on an individual basis. The who problem here has been precipitated by company funded plans, an artifact or Roosevelt, we will most likely be bemoaning this as an artifact of the current President for generations to come.
The data for the US is shown below by race,
The rates amongst blacks is greatly above whites but Hispanics are also at an elevated rate. No matter all rates are excessive. As it stands Type 2 Diabetes costs almost $300 billion annually in a $2.5 Trillion health care bill. The solution is simple, stop eating, just like stop smoking. The way to achieve it is also simple, tax the heck out of it! Why tax small business to get them to provide health insurance when you can go to the source of the problem, fat people! We all pay for their ailments.
The data for the northeast is shown below:
The data for the south is shown below;
The south shows a greater disproportion of obesity amongst blacks. This results in a proliferation of Type 2 Diabetes diseases. We have analyzed this in one of our White Papers.
The CDC report continues:
"Obesity is associated with increased health-care costs, reduced quality of life, and increased risk for premature death... Common morbidities associated with obesity include coronary heart disease, hypertension and stroke, type 2 diabetes, and certain types of cancer... As of 2007, no state had met the Healthy People 2010 objective to reduce to 15% the prevalence of obesity among U.S. adults... An overarching goal of Healthy People 2010 is to eliminate health disparities among racial/ethnic populations. To assess differences in prevalence of obesity among non-Hispanic blacks, non-Hispanic whites, and Hispanics, CDC analyzed data from Behavioral Risk Factor Surveillance System (BRFSS) surveys conducted during 2006--2008. Overall, for the 3-year period, 25.6% of non-Hispanic blacks, non-Hispanic whites, and Hispanics were obese. Non-Hispanic blacks (35.7%) had 51% greater prevalence of obesity, and Hispanics (28.7%) had 21% greater prevalence, when compared with non-Hispanic whites (23.7%). This pattern was consistent across most U.S. states."
In a CBO letter to Congressman Rangel, a rather rotund Congressman, not an ad for compliance, the CBO states:
" On a preliminary basis, CBO and the JCT staff estimate that the proposal’s provisions affecting health insurance coverage would result in a net increase in federal deficits of $1,042 billion for fiscal years 2010 through 2019. That estimate primarily reflects $438 billion in additional federal outlays for Medicaid and $773 billion in federal subsidies that would be provided to purchase coverage through the new insurance exchanges. Not all enrollees in the exchanges would receive subsidies, but the average subsidy among those who would be subsidized is projected to rise from roughly $4,800 in 2015 to roughly $6,000 in 2019. The other main element of the proposal that would increase federal deficits is the tax credit for small employers who offer health insurance, which is estimated to reduce revenues by $53 billion over 10 years."
The assumptions in this $trillion estimate are:
"The proposal’s major provisions—including the establishment of an individual mandate to obtain insurance, an expansion of eligibility for the Medicaid program, and the creation of new insurance exchanges through which certain people could purchase subsidized coverage—would be implemented beginning in 2013.
- All legal residents would be required to enroll in a health insurance plan meeting certain minimum standards or face a tax penalty Individuals not required to file a tax return would be exempt from the penalty; exemptions for hardship and other reasons would be determined by a new and independent federal agency overseeing the health insurance exchanges.
- The penalty assessed on people who would be subject to the mandate but did not obtain insurance would equal 2.5 percent of the difference between their adjusted gross income ... and the tax filing threshold. The amount of the penalty could not exceed the national average premium for plans offered in the exchanges.
- New health insurance policies sold in the individual and group insurance markets would be subject to several requirements regarding their availability and benefits. Insurers would be required to issue policies to all applicants and could not limit coverage for people with preexisting medical conditions. In addition, premiums for a given plan could not vary because of enrollees’ health but could vary because of their age by a factor of two ,,, Individual policies that were purchased before 2013 and maintained continuously thereafter would be “grandfathered,” meaning that they would not have to conform to the new rules but would still fulfill the individual mandate. Existing group policies would have to conform to the new rules by 2017.
- In order to fulfill the individual mandate, policies that were not grandfathered would have to cover a broadly specified minimum benefit package (which was assumed to have the same scope of benefits as seen in a typical employer-sponsored plan) and would have to have a minimum actuarial value of 70 percent and a limit on out-of-pocket costs no greater than $5,000 for individual coverage and $10,000 for family coverage. (A health insurance plan’s actuarial value reflects the share of costs for covered services paid by the plan.) After 2013, the maximum levels of those out-of-pocket caps would be indexed to general inflation.
- The proposal would establish a national exchange through which certain individuals and employers could purchase health insurance; states could also opt to operate their own exchanges ... All insurance plans sold through an exchange would be required to cover the “basic” benefit package described above. “Enhanced” plans would have an actuarial value of 85 percent, and “premium” plans would have an actuarial value of 95 percent.
- Except as specified below, individuals and families who enroll in exchange plans and have income between 133 percent and 400 percent of the federal poverty level (FPL) would be eligible for premium subsidies and cost-sharing subsidies (see table below). Federal premium subsidies in a given area would be tied to the average premium of the three lowest-cost plans providing basic coverage in the exchange in that area. The subsidies would limit an enrollee’s contribution to a percentage of income ranging from 1.5 percent to 11.0 percent (see table); those caps would not be indexed over time. The federal government would fully fund cost-sharing subsidies, which would increase the actuarial value of enrollees’ coverage to specified tiers based on income.
- Eligibility for subsidies would be determined on the basis of adjusted gross income... Participants would have to provide information from their prior-year tax return during a fall open enrollment period for coverage during the next calendar year... Each exchange would be given authority to obtain such information about taxpayers from the Internal Revenue Service as necessary to verify the information provided on income from the prior year. Individuals who did not qualify for a subsidy on the basis of their prior-year income would be allowed to apply for a subsidy on the basis of specified changes in their circumstances. Individuals receiving subsidies would be required to report changes in income and family composition during the year and, if changes occurred, would have their eligibility redetermined.
- People not enrolled in other coverage would be allowed to purchase insurance in an exchange at their own expense. Employers meeting specified size requirements would also be allowed to let their workers choose any of the plans available in the exchange...
- A “public plan,” run by the Department of Health and Human Services, would be offered through the exchanges. That plan would pay Medicare rates plus 5 percent for physicians and other practitioners (and those rates would not be determined by the sustainable growth rate formula used in Medicare but instead were assumed to grow with the Medicare economic index); Medicare rates for hospitals and other services and supplies that are on fee schedules; and negotiated rates for drugs and other items and services that are not on a fee schedule. Medicare providers would not be required to participate in the public plan.
- Eligibility for the Medicaid program would be expanded to all nonelderly individuals and families with income at or below 133 percent of the FPL. The federal government would pay 100 percent of the costs of newly eligible enrollees. States would be required to maintain their current eligibility levels for existing groups indefinitely. The federal government would fully subsidize the cost for some parents and childless adults who are currently covered by Medicaid under existing waivers that expand coverage. People eligible for Medicaid could not receive subsidies via an exchange. Newborns who would otherwise be uninsured would be automatically enrolled in Medicaid for 60 days (with the federal government paying 100 percent of their costs during that period), at which point there would be a determination of their eligibility for Medicaid or for subsidies provided through an exchange.
- Medicaid payment rates for primary care services would be increased to 80 percent of Medicare rates in 2010, 90 percent in 2011, and 100 percent beginning in 2012. The federal government would pay 100 percent of the cost of those increases. There would be a maintenance-of-effort requirement for the Children’s Health Insurance Program through 2013, at which point the program would be terminated. Firms with an annual employee payroll above $250,000 would be subject to a “play-or-pay” requirement. Employers could “play” by offering coverage that meets the minimum benefit standards described above and making a minimum contribution toward the premiums (72.5 percent for individual premiums and 65 percent for family premiums). Firms that do not meet those requirements would be subject to a payroll tax, with the rate depending on their annual payroll, as follows: 2 percent, for firms with a payroll between $250,000 and $300,000; 4 percent, for firms with a payroll between $300,000 and $350,000; 6 percent, for firms with a payroll between $350,000 and $400,000; and 8 percent, for firms with a payroll above $400,000. Employers could choose to “play” for full-time employees and “pay” for part-time employees and could also make separate elections for separate lines of business.
- Employers offering coverage would also be required to automatically enroll workers in single coverage.
- In 2013, full-time employees with an offer of employer-sponsored insurance would not be permitted to receive subsidies via an exchange (under an approach known as a “firewall”). Thereafter, those employees could receive the subsidies only if their contribution for that coverage was deemed unaffordable—which would be defined as exceeding 11 percent of their income. Part-time employees could receive the subsidies with no restrictions. Beginning in 2014, employers offering coverage would be required to pay the exchange a percentage of their average payroll per worker for each employee obtaining coverage with the exchange. ...
- A tax credit for small employers would be available. It would be permanent, not advanceable or refundable, and would phase out as employers’ size and average wages increased. The smallest firms with average wages below $20,000 would receive a credit equal to 50 percent of the employer’s share of premiums. The credit would phase out for employers with between 10 and 25 employees and average wages between $20,000 and $40,000 and would not be available for workers with wages above $80,000; those wage amounts would be indexed to the consumer price index."
The CBO report lists the health care shortfall as follows:
NET IMPACT OF COVERAGE SPECIFICATIONS ($ Billion)
2010 $3
2011 $4
2012 $1
2013 $69
2014 $107
2015 $141
2016 $158
2017 $171
2018 $187
2019 $202
2010-2019 $1,042
BUT. if we solve the obesity problem we save multiples of this cost every year! Why is Congress defaulting on this issue. It is more than a tax on soft drinks, it is a change in lifestyle, it is the Victory Gardens of WW II.
Yet we have also offered the need for individual responsibility by having out of pockets costs paid for non life threatening procedures and insurance on an individual basis. The who problem here has been precipitated by company funded plans, an artifact or Roosevelt, we will most likely be bemoaning this as an artifact of the current President for generations to come.
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