(Reuters) – Democratic presidential candidate Joe Biden wants to expand the Affordable Care Act, President Barack Obama’s signature healthcare legislation, and then name it after himself.
Republican President Donald Trump wants to end it altogether, and replace it with something that has yet to be defined.
An ongoing debate over which approach is better for the economy is partly about price tags. Bidencare is forecast to increase federal healthcare spending by $2 trillion or more over 10 years. Trump’s approach is to hold federal spending stable or reduce it.
Bidencare supporters emphasize the stimulative effects of government spending, especially in a period of economic distress, and the benefits of insuring more people in the middle of a pandemic. Those who prefer Trump’s approach say it would avoid debt or tax increases they say would drag on future economic growth.
The United States has about 30 million people without health insurance https://tmsnrt.rs/3mzqQxC now, down from about 46.5 million in 2010, when the ACA was passed.
Graphic – Under ACA, a drop in the number of uninsured: https://graphics.reuters.com/USA-ELECTION/ECONOMY-HEALTHCARE/rlgpdxbompo/chart.png
Bidencare would cut that figure by a further 15 million to 20 million, an analysis by the Committee for a Responsible Federal Budget estimates. Trump isn’t expected to try to reduce that.
Healthcare spending is equal to 17% of the U.S. economy, far more than any other industrialized country, so the Trumpcare vs. Bidencare debate is no small economic matter. It’s further complicated by the fact that extra spending doesn’t translate to a healthier populace than other counties.
“Improving healthcare performance is a critical part of strengthening America’s health, economy and fiscal future, and should be top a priority for the next president and Congress,” says Peterson Foundation CEO Michael Peterson.
BIDENCARE FOCUSES ON LOWER-INCOME AMERICANS
Bidencare would cover more Americans by increasing subsidized health insurance purchases through tax credits.
It would also offer a “public option,” allowing anyone who wants it to buy in, even if their job offers private insurance. Lower-income families shut out of ACA’s expanded Medicaid eligibility because of where they live could get it premium-free.
Any boost to health and financial stability is likely to be biggest for millions of low-income households, particularly Latino and Black families who have been particularly hard-hit during the pandemic.
For these groups especially, says the University of Michigan School of Public Health’s Helen Levy, being able to accumulate assets “is really important if you think about supporting economic mobility.”
Minorities get and die from COVID-19 at higher rates than whites, data shows. Some of that is probably because Blacks and Latinos are more likely to work in jobs that put them at higher risk of transmission.
But even without COVID-19, minorities face higher rates of chronic disease and earlier death than whites. They also have lower rates of health insurance despite substantial gains since the advent of the ACA, a study by Kaiser Family Foundation shows.
Biden said he would pay for his plan through higher taxes on the wealthy, and use the clout of expanded public insurance to keep down medical costs.
Increasing the number of insured Americans could have positive economic consequences.
There’s evidence that the uninsured who do get sick get care in expensive settings like the emergency room, says UCLA public health policy professor Gerald Kominski. That takes a toll on their financial health and, when they can’t pay, strains the finances of hospitals that provide their care, with taxpayers footing part of that bill as well.
People in states where uninsured rates fell under Obamacare had fewer past-due debts, were less likely to use payday loans or file for bankruptcy, had better credit and were less likely to be evicted than those in states that did not expand Medicaid eligibility under the ACA.
“The whole reason people should get insurance, from an economist’s perspective, is to protect them against catastrophic losses,” says University of Minnesota professor Sayeh Nikpay.
TRUMPCARE LESS CLEAR, BUT CHEAPER
Trump tried and failed to get Congress to repeal the ACA in his first four-year term, and is likely to continue to it in some form during a second term.
The Supreme Court is scheduled to hear a challenge to the law a week after Tuesday’s presidential election. A ruling to dismantle the ACA would put coverage of 21 million Americans in jeopardy, according to the Urban Institute, though most legal scholars don’t expect the court to do so.
If it does, Trump hasn’t specified a plan to replace it. One blueprint may be the Health Care Choices Proposal, put together by conservative health policy experts at the Galen Institute and the Heritage Foundation.
The plan would turn money now used for the ACA over to states to help people buy private health insurance and to provide coverage for low-income households.
An analysis by the right-leaning nonprofit think tank American Action Forum found the proposal would lower premiums by 18% to 24%. The number of uninsured would remain steady.
“The macroeconomic effects would be better than either current law or proposals to devote more public resources to the ACA,” says author Doug Badger. Reducing premiums, he said, would be the “best form of economic stimulus” because it would put money in the pockets of regular Americans.
That analysis is disputed.
Bidencare’s high price tag does worry Bipartisan Policy Center Senior Vice President William Hoagland, a former staffer to Republican lawmakers. But, he said, it’s worth paying for broader health insurance access, which he said would lead to a stronger economy.
“I’m going to come down on the side that a healthy country, and a reduction in chronic conditions, improves productivity, and improving productivity increases economic growth,” he said.
(Reporting by Ann Saphir; Editing by Heather Timmons and Jonathan Oatis)
TORONTO – Canada’s main stock index was higher in late-morning trading, helped by strength in energy stocks, while U.S. stock markets also moved up.
The S&P/TSX composite index was up 34.91 points at 23,736.98.
In New York, the Dow Jones industrial average was up 178.05 points at 41,800.13. The S&P 500 index was up 28.38 points at 5,661.47, while the Nasdaq composite was up 133.17 points at 17,725.30.
The Canadian dollar traded for 73.56 cents US compared with 73.57 cents US on Monday.
The November crude oil contract was up 68 cents at US$69.70 per barrel and the October natural gas contract was up three cents at US$2.40 per mmBTU.
The December gold contract was down US$7.80 at US$2,601.10 an ounce and the December copper contract was up a penny at US$4.28 a pound.
This report by The Canadian Press was first published Sept. 17, 2024.
OTTAWA – Canada’s inflation rate fell to two per cent last month, finally hitting the Bank of Canada’s target after a tumultuous battle with skyrocketing price growth.
The annual inflation rate fell from 2.5 per cent in July to reach the lowest level since February 2021.
Statistics Canada’s consumer price index report on Tuesday attributed the slowdown in part to lower gasoline prices.
Clothing and footwear prices also decreased on a month-over-month basis, marking the first decline in the month of August since 1971 as retailers offered larger discounts to entice shoppers amid slowing demand.
The Bank of Canada’s preferred core measures of inflation, which strip out volatility in prices, also edged down in August.
The marked slowdown in price growth last month was steeper than the 2.1 per cent annual increase forecasters were expecting ahead of Tuesday’s release and will likely spark speculation of a larger interest rate cut next month from the Bank of Canada.
“Inflation remains unthreatening and the Bank of Canada should now focus on trying to stimulate the economy and halting the upward climb in the unemployment rate,” wrote CIBC senior economist Andrew Grantham.
Benjamin Reitzes, managing director of Canadian rates and macro strategist at BMO, said Tuesday’s figures “tilt the scales” slightly in favour of more aggressive cuts, though he noted the Bank of Canada will have one more inflation reading before its October rate announcement.
“If we get another big downside surprise, calls for a 50 basis-point cut will only grow louder,” wrote Reitzes in a client note.
The central bank began rapidly hiking interest rates in March 2022 in response to runaway inflation, which peaked at a whopping 8.1 per cent that summer.
The central bank increased its key lending rate to five per cent and held it at that level until June 2024, when it delivered its first rate cut in four years.
A combination of recovered global supply chains and high interest rates have helped cool price growth in Canada and around the world.
Bank of Canada governor Tiff Macklem recently signalled that the central bank is ready to increase the size of its interest rate cuts, if inflation or the economy slow by more than expected.
Its key lending rate currently stands at 4.25 per cent.
CIBC is forecasting the central bank will cut its key rate by two percentage points between now and the middle of next year.
The U.S. Federal Reserve is also expected on Wednesday to deliver its first interest rate cut in four years.
This report by The Canadian Press was first published Sept. 17, 2024.
FREDERICTON – New Brunswick‘s finance minister says the province recorded a surplus of $500.8 million for the fiscal year that ended in March.
Ernie Steeves says the amount — more than 10 times higher than the province’s original $40.3-million budget projection for the 2023-24 fiscal year — was largely the result of a strong economy and population growth.
The report of a big surplus comes as the province prepares for an election campaign, which will officially start on Thursday and end with a vote on Oct. 21.
Steeves says growth of the surplus was fed by revenue from the Harmonized Sales Tax and federal money, especially for health-care funding.
Progressive Conservative Premier Blaine Higgs has promised to reduce the HST by two percentage points to 13 per cent if the party is elected to govern next month.
Meanwhile, the province’s net debt, according to the audited consolidated financial statements, has dropped from $12.3 billion in 2022-23 to $11.8 billion in the most recent fiscal year.
Liberal critic René Legacy says having a stronger balance sheet does not eliminate issues in health care, housing and education.
This report by The Canadian Press was first published Sept. 16, 2024.
