Thoughts on the returns to Medicaid expansion

There is a recent NBER paper making the wonkosphere rounds. It finds that the expansion of Medicaid eligiblity to larger pools of children have produced significant long run positive tax transfers back to the federal government. Those transfers don’t cover the entire cost of providing medical care to poor and near poor kids but they greatly reduce the program price if Medicaid expansion was to be dynamically scored.

With administrative data from the IRS, we calculate longitudinal health insurance eligibility from birth to age 18 for children in cohorts affected by these expansions, and we observe their longitudinal outcomes as adults. Using a simulated instrument that relies on variation in eligibility by cohort and state, we find that children whose eligibility increased paid more in cumulative taxes by age 28. These children collected less in EITC payments, and the women had higher cumulative wages by age 28. Incorporating additional data from the Medicaid Statisticalinformation System (MSIS), we find that the government spent $872 in 2011 dollars for each additional year of Medicaid eligibility induced by the expansions. Putting this together with the estimated increase in tax payments discounted at a 3% rate, assuming that tax impacts are persistent in percentage terms, the government will recoup 56 cents of each dollar spent on childhood Medicaid by the time these children reach age 60.

The study only looks at the net present value of increased federal tax collection.  It neglects from its scope of consideration any benefits captured by the individual.

Thining extemperaneously, I think there are three things that could be driving the higher wages and thus higher taxes over the long run.

1) An income substitution effect.  Medicaid always covered the poorest of the poor children, but since the mid-80s, Medicaid and later CHIP have been moving to cover more kids a little higher up the income scale each time it expanded.  At some point, an additional dollar of Medicaid resources displaces a dollar that the family would have spent on medical care.  That displaced dollar or fraction of a dollar could have been spent on something else that has long run pay-offs (better education, better food, more stability and predictability in formative years to produce “grit” etc)

2)  Better health makes finding and keeping a job a whole lot easier.  Better health makes it easier to do well in school as that pain in the leg has been taken care of instead of festering for another month or two untreated.  Better health means an ability to shift attention and thought to non-health matters.

3)  Better health is a social signal of respectability.  People quickly judge others by their teeth, by their walk, by hundreds of subtle and not so subtle signals of class.  Early childhood Medicaid might remove some negative signals.

 

What say ye?



Fables of the Reconstruction: Tom Petty Edition

It’s been a while I know, and in the meantime real life has been so agonizingly real that the problems of three (or more) little kitchen appliances don’t amount to a hill of beans in this crazy world.

But it’s getting on for evening, and in our house the sun has definitely passed over the yardarm, so perhaps a little renovation schadenfreude might suit y’all just fine.

So here’s the current look:

IMG_1986

 

Those of you familiar with the renovation rhythm will recognize this phase.  We’re really in the end game.  The cabinets are in and … wait for it … almost all the trim has been fitted.  The appliances (all but one)  have been placed — not hooked up, mostly — but placed.  The painters are doing their thing, the electrician is scheduled and … you get the drill.

And yet, inevitably, what I blithely label an ending is not a matter of the number of actual days the different crafts have to do to complete the project.  It is, of course, the number of weeks it will take to get the guys in for the day here and the day there to do all the bits and pieces.

We’ve already been hammered by that.  The key, as everyone who’s done this kind of thing knows deep in the bone, is that first stumble off the neat center line of the project.  Or, to put it into the SNAFU military frame familiar to many here, every renovation reaffirms the eternal truth: no plan survives first contact with the enemy.   This particular enemy is, of course, the effrontery of wood and stone and flooring and all the other bits that don’t miraculously assemble themselves.

As late as November 5th or so, everyone involved thought we had a reasonable shot at a working kitchen by Thanksgiving.  Now, today, we got a sink plumbed, with the dispose-all to be hooked up Friday — maybe.  As for the rest…

It’ll come.  It all will happen.  We’ll likely have ovens on Friday.  The stove will take longer, as we have a little code problem that will take a bit of carpentry to fix (don’t ask).  And….

Never mind.  Everyone who’s entered renovation hell knows this story, and it’s never an interesting one, no matter how often it gets retold.  This job will likely be actually done, no one coming back, everything in and working, by sometime in January.  Could be February — wouldn’t surprise me.  It’s a minimum of a 50% schedule fail on a four month job.  Par for the course.

When it’s all finished, we’ll be able as a family to do what we truly love:   cook and cook and cook and cook for friends and friends and friends and friends.  If in the meantime y’all get a bit of vicarious pleasure at knowing that the eternal verities of construction remain true…so much the better.

Last — and I mean last:  we’ve been pretty good this going-on-for-half-a-year at cooking interesting, enjoyable meals on a hot plate, an electric frying pan, and a gas grill. But we’ve been beaten down.  Tonight was supposed to be spatchcocked chicken roasted on the grill, but it’s pissing down with a steady, penetrating drizzle and it’s cold and it’s late, and f**k it sideways.  We give up:  pizza is on its way.

And I’m not ashamed.

So there.

And really last (no I’m not joking) — the obligatory soundtrack to a post about attending on the arrival of Godot’s scullion:

The thread, it is open.  Talk about whatever, and especially the worst construction traumas you chose to share.


Fables of the Reconstruction, Part Deux

If you’re reading this, you owe it to yourself to check out Richard’s post below on the con in conservative proposals for health care reform.  Shorter:  the “reform” is to make sure the wrong people get less and more expensive care under the guise of a variety of measures claimed to be (but not) free market efficiencies.  Also too, why Avik Roy isn’t an expert, but a marginally policy-literate hack.

With that out of the way, more on the joys of home renovation.

First the good news.  It turns out that this problem — the wire formation inside our kitchen walls that I’ve since dubbed “Cthulu’s Hairball” — isn’t actually live electrical wires.  Instead, its what you get before you texting became the way to call the kid to dinner.  Before the internet, kiddies, it turns out, people networked their houses in other ways — including setting up, in 1920, a house-wide intercom system.  “Come, child!”

So, not the fire hazard general wiring nightmare we expected.  We’ve still got plenty of knob and tube spread round the place — wiring we’re replacing in bits as we work on the house.  But Cthulu sleeps.

However…and as those of you who know, know, there’s always something.

Check out this:photo-2

That’s what you get when you open up the wall, and find a sill that has been so chewed up by termites you can sweep it away.  I mean, with a broom.  (We did chunk up the rotten timber a bit, before getting out the sweepers, but still.)

Which is to say, it seems our house was holding itself up out of habit.

Here’s another view:

photo-1

That’s the post at the end of that run of sill.

Ah, our six-legged friends.

What’s bugging y’all today?



Further To The Be Careful What You Wish For Chronicles

Yup.  I know this is the type specimen of a first-world problem, but oy, the kitchen renovation blues.

Demolition started on Monday.  Those guys are amazing:  a 7 a.m. we had a fully functional, intact (crappy) kitchen.  By eight?  Bam!

8:15 and the water line to the second floor exploded.  Around 8:45 we had the flood mostly under control, without too high a tide in the basement. And so it goes.

We’re going to be down a kitchen and the master bathroom upstairs for ~three months.  We’re treating the time as a camping trip.  That’s close to right, but what I forgot was what it was really like on those family car-camping trips way back when.

Let us simply say that lack of all mod cons did not reliably bring out the best in the four-kids-two-dogs-parents collective.  We’ll see.

But there are definitely rewards to the process (as we hope there will be at the end of the road…).  You get to play a grown-up version of the old Art Linkletter game:  pre-historic contractors did the darndest things.  Our house dates from 1920, which puts it right smack in the middle of the “what the hell should we do with this stuff called electricity” era.  As we found when we got the kitchen wall open:

Wire spaghetti

 

I guess all this adds up to a lunchtime open thread.

Update:  Here’s a link to the story of the bees that friend and commentor Aimai mentioned.  This is a house with its own particular take on the world, is all I’m saying.

And to the range of comments below: Yes, we are doing at least some rewiring.  No, we had no idea that this was lurking.  We have done some prior electrical work, and though we knew we had some knob-and-tube stuff in the house (and replaced some of it) we were not looking for this.

My favorite house repair story on this place (besides the bees)?   Our emergency disconnection of the live gas lines that had served the gas lighting system the house had in parallel to its electric lighting network.

The lights themselves were long gone, and usual practice when you take something like that out is to turn of the gas at the main, cut feed at the valve where it enters your house, and cap it properly with a big honker screw-mounted metal cap.  It’s a plumber’s job, not a big one, but definitely not something for the average home owner to mess around with.  What did some previous owner do?  Remove the gas light fixtures and stuff some plumber’s caulk in the pipe ends.

Think on that for a second.

We found this out as our electrician was wiring the kitchen ceiling for a track, and opened up the little circular plate in the ceiling where some fixture had previously lived.  He found two live naked wires and a gas line — out of which a plug of caulk promptly fell.  The gas spewed out, and our guy never moved so fast, throwing himself off the ladder and getting out of there, sounding the warning to everyone else.

There were, by the way, about five or six workers in the house, using power tools, sawing, hammering, plumbing. No chance of a stray spark there, oh no.  None at all.

Alls well that ends…everyone cleared out of the house. The fire dept. and the gas company came by. The line got cut and capped as it should have been, all done before nightfall.  But I still shudder sometimes, thinking about how this house could have literally blown up — likely taking much of the block with it — at more or less anytime over the last who knows how many decades.

Ah…adventures in home ownership.



Being broke is not being poor

Paul Krugman is reraising a common and key insight into poverty which is not well captured by federal poverty guidelines:

By security, I mean that you have enough resources and backup that the ordinary emergencies of life won’t plunge you into the abyss. This means having decent health insurance, reasonably stable employment, and enough financial assets that having to replace your car or your boiler isn’t a crisis.

There is a clear distinction between being broke and being poor from this insight.  Being broke means having no cash available, but having access to sufficient resources that the every day minor oh-shit moments are not a crisises as resources were available to manage the problem.  Being poor means the minor oh-shit moments can easily become a crisis because there are no resources available.

When I was in college, I was consistently broke.  I lived in a flophouse one summer with anywhere from seven to sixteen other people paying some share of the monthly rent.  The most I paid was $86.75 for August.   I sold myself to science as the pay and food was good, and I knew where there was free food offered by every department.  As a student I was broke and under federal poverty guidelines, I was poor.

However, I had resources.  I had good health insurance through my parents.  When I woke up and my knee was swollen to the size of a grapefruit while the patella had dislocated itself, I swore in pain but not in concern about how to get through the day without seeing a doctor.  I went to student health services after calculas, and then hopped a bus to see an orthopedic surgeon.  She  drained 38 CC of fluid.  I owed $20 in co-pays and had to buy a cane. I would have rather spent the $20 on beer, but oh well, I could walk well enough in three days.   When I was scrambling to come up with a security deposit for the first apartment that I would share with my girlfriend and now wife, I could go to my parents and ask that the security deposit and a good dinner with family be my graduation present. 

This is a crucial distinction between being poor where there are few good choices over the long run as people operate from scarcity thinking  and being broke.  I was able to access resources and behave almost a Friedmanesque lifetime income hypothesis individual.  (As a side note, this is why I discount the experiences of the 1% who claim they were poor in college — they might have been broke, but mommy and daddy could take care of anything)  This is a weakness of the poverty guidelines as they are income based and not resources based.  Some people may have rather low incomes but have the ability to call on resources in an oh-shit scenario, and others may have slightly above poverty level incomes but have no resources that turns an oh-shit scenario into a crisis. 

Health insurance is one of the most important resource that is an on-call and hopefully not needed resource, so two individuals with the same income but where one has decent health insurnace and the other does not have two very different abilities to absorb bad news from a doctor.



Moral Mondays and now Truth and Justice Tuesdays

A reader sent me this:

The Moral Monday movement to protest changes in North Carolina public policy that organizers believe are extreme and hurt the state won’t abate in 2014 and will spread to other states, its leader said. Activists from a dozen states attended a meeting in Raleigh earlier this month to learn how to hold similar protests in their states.

“There is no stopping this deep, moral, constitutional critique of public policy,” said the Rev. William Barber, president of the state chapter of the NAACP, which began the protests. “It is a must.”

Among those attending the meeting in Raleigh was Democratic state Sen. Hank Sanders of Alabama, where groups were already holding Truth and Justice Tuesdays based on Moral Mondays. Georgia also plans to demonstrate against laws there.

More than 930 people, including Barber, were arrested during the 2013 legislative session as part of the protests as they moved weekly from the outdoors into the Legislative Building. After the session ended, the NAACP held events across the state, including Asheville, where an estimated 10,000 people showed up. Barber, who was convicted of two counts related to the protest earlier this month, is appealing the District Court judge’s decision.

The protests will continue next year starting with a planned march in downtown Raleigh on Feb. 8 and continuing when the North Carolina General Assembly goes back into session next May 14, Barber said.

The Moral Mondays protests will spread to Atlanta when the legislative session opens in Georgia on Jan. 13, said Tim Franzen, Atlanta economic justice program director for the American Friends Service Committee. “A lot of us are looking at it as a Southern strategy, the kind of Southern strategy that hasn’t existed in many decades,” said Franzen, who also attended the December session in North Carolina.

Art Pope is a conservative activist and wealthy donor who was appointed to a state position in North Carolina. Here’s a great piece from 2011 by Jane Mayer titled “State For Sale”. The state that was sold in 2012 is North Carolina. Art Pope bought it.

Since so many of the Moral Monday citizens were arrested there were public records of the arrests and (one of) Pope’s conservative lobbying groups used those records to create a site to smear the protesters. You can look through that site here. Mr. Pope’s employees had a lot of fun posting the mugshots of their fellow citizens on the smear site.

I’m grateful to the protestors but I’m also grateful to Art Pope for creating and funding such a handy site where these brave folks are all listed in one place.



Never, Ever Learn

Reading is for Snobs has the story of an editor at RedState, who had a serious illness, was uninsured (since it is a tradition for Erick and all his sons not to provide insurance for their employees), and had his medical bills paid by a charity campaign funded in part by Daily Kos readers. Let’s just say the story has irony to burn.

Of course, now that he’s better, the question is whether he’s changed his mind on Obamacare. You guess the answer.