Category Archives: Investing

The shutdown was a $31 billion gift to the health-care industry

By Carolyn Y. Johnson

The Capitol after the U.S. Senate reached a deal to reopen the federal government. (Mandel Ngan/AFP/Getty Images)

Government shutdowns aren’t typically a productive time, but health-care industry players notched a few big wins out of three days of uncertainty — with the suspension and delay of key health-care taxes.

The popular Children’s Health Insurance Program became the well-publicized football in the political blame game over the shutdown. The continuing resolution provides federal funding for another six years. But the deal to end the shutdown also delivered a win to the health-care industry, to the tune of $31 billion as it suspends or delays three taxes imposed by the Affordable Care Act: a tax on medical devices, the “Cadillac tax” on generous employer-sponsored health plans and a tax on health insurance companies.

Medical devices

The medical device tax is a 2.3 percent excise tax that has long been fought by the industry, which has argued that the tax hinders medical innovation and stifles job growth. The tax has been temporarily suspended for the past two years, but that reprieve was set to expire starting Jan. 1. The spending bill provides another two-year moratorium, but the industry is preparing to push for longer delays and a full repeal.

“Congress’ action — just days before medical technology innovators were set to start cutting checks to the IRS — means funds will not be diverted from current investments in jobs, capital improvements and research into new treatments and cures,” Scott Whitaker, president of the Advanced Medical Technology Association, said in a statement. “We look forward to continuing to work with the Hill on a bipartisan basis to drive towards permanent relief.”

[Working Americans are using less health care, but spending more]

Cadillac tax

The spending deal also includes …read more


Working Americans are using less health care, but spending more

By Carolyn Y. Johnson

(Washington Post illustration; iStock)

Americans who get health insurance through their jobs are not using more medical care than they were five years ago, but they are spending more due to soaring medical prices, according to a new report.

Health spending for the more than 150 million people who receive insurance through their employers was $5,407 per person in 2016. That is a 4.6 percent increase over 2015, even though people’s use of almost every broad category of care dropped or stayed the same over a five-year period, according to a new analysis from the Health Care Cost Institute, a nonprofit funded by the insurance industry.

The report, built on claims data from 39 million people who receive insurance through their employers, found especially sharp increases in the prices of emergency room visits, surgeries and drugs administered in doctors’ offices.

The number of emergency room visits increased modestly between 2012 and 2016, by 2 percent. Meanwhile, the average price of those visits soared 31 percent, to $1,917. Admissions to the hospital for surgery dropped 16 percent over that period, but the average price increased to $41,702, or a 30 percent jump. The price of physician-administered drugs, such as infusions for chemotherapy, increased by 42 percent.

Utilization of brand name prescription drugs dropped, but overall spending increased due to price increases, according to the data — which does not take into account rebates and coupons. For example, utilization of brand name drugs for skin diseases dropped by 42 percent, but prices increased by 165 percent.

[The uninsured are overusing emergency rooms — and other health-care myths]

“The health-care cost curve, at least for the employer-sponsored insurance population, seems to be trending in the wrong direction again,” said Niall Brennan, president of the Health Care Cost …read more


What destroyed Venezuela’s economy could destroy ours too

By Matt O’Brien

Anti-government protesters clash with police in Caracas, Venezuela. (Miguel Gutierrez/EPA)

Venezuela’s government has managed to turn the country with the world’s largest oil reserves into a pauper state where food is scarce, violence is abundant and money is worthless.

Despite that, however, its grip on power still seems strong. It has packed the courts, bullied the press and replaced the opposition-led legislature with a much more pliant one filled solely with regime apparatchiks. Not even mass protests have been able to stop this slide into authoritarianism. Why not? Because Nicolás Maduro’s Venezuela has learned what Robert Mugabe’s Zimbabwe did a decade ago: that you can get people to stick with you no matter what if they think your opponents are their enemies.

It turns out, then, that revolutions do not live by bread alone. They need polarization, too.

That’s the only way to explain the otherwise inexplicable fact that the two of the most economically destructive governments in recent memory have also been two of the longest-lasting. Indeed, Venezuela has the world’s worst inflation rate, second-worst unemployment rate, third-worst murder rate and 10th-worst corruption score. To give you an idea of how dire things are, the International Monetary Fund estimates that inflation is more than 1,100 percent right now and will get up to more than 2,000 percent by year’s end. (The government, of course, doesn’t bother publishing its own figures anymore). This has meant death for the nation’s currency. It lost 99.7 percent of its value, going by black market prices, from the start of 2012 to the end of 2016, and then another 98.3 percent since. Altogether that’s a 99.99 percent drop over the past six years. Which, as my colleague Anthony Faiola reports, is how something as simple as a Transformers toy could end up being worth 10 months of …read more


In a first, only women will lead Davos — an elite meeting of mostly men

By Danielle Paquette


Nearly every year for the past three decades, heads of state, chief executives, top economists and other celebrities have swarmed Davos-Klosters, Switzerland, for the World Economic Forum’s annual meeting, which kicks off again Monday.

The Alpine gathering is billed as a place where the sharpest minds debate Earth’s loftiest problems, including war and environmental decline. The themes have changed over time, but one trait has persisted: Davos is dominated by men. So much so that the political scientist Samuel P. Huntington’s nickname for the global elite, coined in 2004 and still widely used, is the Davos Man.

The 2018 cast of seven co-chairs comes as a twist. For the first time in the forum’s history, all the top Davos Men are women. There’s a union boss, a nuclear physicist, two company heads, a financial organization leader, an economist and the prime minister of Norway.

The all-women leadership team presides over the conference after a weekend of women’s rallies in the U.S. and around the world against the gender pay gap and other issues — and a year of fierce public debate about sexual harassment.

The gender transformation at the top of the conference does little to improve its overall ratio. Just 21 percent of the roughly 3,000 participants this year are women, the forum said. That’s a slight uptick from 20 percent in 2017, 18 percent in 2016 and 17 percent in 2015. It’s way up from 9 percent in 2002.

The imbalance is not specific to Davos.

“That is a mirror of how this community looks like in the world at large,” said Peter Vanham, a forum spokesman.

Although female representation in the upper ranks of business and politics has grown in recent years — Iceland just made it illegal for companies to pay men more than women in …read more


This shutdown crisis was (at least) 17 years in the making. Here’s how we got here.

By Jeff Stein

The sun rises over the Capitol in Washington on Nov. 1, 2011. (Andrew Harrer/Bloomberg)

The federal government is set to shut down at the end of Friday unless congressional negotiators can strike a last-minute deal to fund the government. But it’s not really the fight over government funding that has driven Congress to impasse: It is, at least in large part, a disagreement over immigration.

Specifically, it’s a fight over about 700,000 undocumented immigrants who were brought to the United States as children. Democrats want the spending bill to contain a guarantee that those immigrants — known as “dreamers” — won’t be deported, and they’re not willing to extend funding for the government, even for a short time, unless they get it.

It’s a rare moment of leverage for Democrats, as Republicans need help from at least nine Senate Democrats to pass a spending bill. And Democrats are trying to use that leverage to resolve an immigration struggle that has been simmering for nearly two decades.

Here are some of the key developments that brought us here.

August 2001: Sens. Richard J. Durbin (D-Ill.) and Orrin G. Hatch (R-Utah) introduce the Dream Act, which creates a pathway for young undocumented immigrants to become permanent legal residents.

December 2010: The Dream Act dies in the Senate in a narrow 55-41 vote after passing the House.

June 2012: Under intense pressure from immigration activists, President Obama announces hundreds of thousands of young immigrants can, if they meet certain conditions, receive a temporary reprieve from deportation and have the chance to apply for a work permit. Over the next several years, hundreds of thousands of the dreamers turn over their personal information to the federal government and receive protection under the Deferred Action for Childhood Arrival program.

November 2016: Donald Trump is elected president and Republicans secure control of the …read more


Union membership remained steady in 2017. The trend may not hold.

By Christopher Ingraham

Union membership held steady in 2017 at 10.7 percent of the workforce, according to figures released Friday by the Bureau of Labor Statistics.

An additional 1.2 percent of workers reported no union affiliation but had jobs covered by a union contract, bringing the total union representation up to 11.9 percent of the American workforce.

In 2017, union workers reported higher median weekly earnings ($1,041) than workers not covered by unions ($829). Percentage-wise, the union wage premium is essentially unchanged since the year 2000.

Union membership remains dramatically diminished from its peak in the middle of the 20th century, when roughly one-third of American workers were union members.

There are a number of forces driving the long-term decline in union membership. American manufacturing jobs historically had high union membership, but those jobs now make up a far smaller portion of the economy — down from about one-quarter of the American workforce in 1971 to about 10 percent in 2012.

Outsourcing of blue-collar jobs has been another factor in union decline, as has a less favorable political environment for union organizing starting in the 1980s.

This year the Supreme Court will hear a case that could weaken public sector unions by prohibiting them from collecting mandatory fees from workers who are covered by union contracts but are not dues-paying union members. According to BLS statistics, 38 percent of public sector employees are represented by unions.

Regardless of the causes, research has shown that declining union membership is one key factor in stagnating wages for middle-class workers. A 2011 study by researchers at Harvard and the University of Washington found that robust union membership helps set norms for pay across the economy, and that the decline of unions explained up to one-third of the growth in wage inequality since the 1970s.

The Economic Policy …read more


Let’s remember: 9 million kids’ health insurance is at stake in this budget fight

By Heather Long

Marbell Castillo, center, holds her granddaughter, Maia Powell, while being seen by nurse practitioner Molly Lalonde during a checkup appointment at Burke Pediatrics on Oct. 31 in Burke, Va. Maia is insured through the Children’s Health Insurance Program. (Matt McClain/The Washington Post)

If Congress fails to reach a deal to avert a government shutdown at 12:01 a.m. Saturday, federal workers won’t be the only ones worrying. Parents of the 9 million children insured through the Children’s Health Insurance Program, known as CHIP, are panicking because funding for the program has nearly run out.

Republicans in Congress thought they had a grand solution: They pitched Democrats a deal to do a one-month extension of overall government funding and a six-year extension of CHIP money. But President Trump tweeted Thursday morning that was a bad idea. House Speaker Paul D. Ryan (R-Wis.) says he spoke with Trump and the president is now on board, but confusion abounds in the Capitol.

There is a real chance that CHIP funding won’t get renewed this week, a scenario with potentially dire consequences for kids. Colorado, Virginia and Connecticut have already sent letters to parents warning them their kids’ insurance might end as early as February because of Congress’s inaction. More states are expected to issue notices to parents soon.

“In Washington it may seem like just a political game, but at the state level the stakes are very real: Kids will lose health-insurance coverage and lives are on the line now,” says Heather Howard, a lecturer at Princeton University’s Woodrow Wilson School who’s keeping track of which states are about to run out of funds. Both red and blue states are in trouble.

How did we get here?

CHIP funding expired in September. Congress passed a short-term Band-Aid just before Christmas to keep the program limping along …read more


Eric Trump’s 401(k) is up by 35 percent, but half of American families don’t even have one

By Christopher Ingraham

Eric Trump, a son of Donald Trump, waits for an elevator in the lobby of Trump Tower in New York in December 2016. (Evan Vucci/Associated Press)

Appearing on Sean Hannity’s show on Fox News Channel this week, Eric Trump pointed to the stellar performance of his 401(k) as evidence that his father’s economic policies were helping average Americans.

“I just opened up my 401(k), I haven’t looked at it in a year. It’s up by 35 percent. I didn’t think retirement was possible, and now it is,” Trump said.

Set aside the fact that for Trump, heir to a multibillion-dollar fortune and an already-wealthy businessman in his own right, the returns on a measly $18,500 in annual 401(k) contributions have little bearing on his ability to stop working. What does the stock market’s performance mean for the average worker, one for whom maxing out his 401(k) each year is but a distant dream?

Let’s begin with some numbers. In 2016, according to the federal Survey of Consumer Finances, just more than half of Americans had some sort of retirement account — a 401(k), IRA, etc. That means nearly half of American households have no dedicated retirement savings.

The share of households with retirement accounts is up considerably since 1989, but there has been little change since about 2001: For the past 15 years, the share with retirement accounts has hovered between 49 and 53 percent.

That’s particularly troubling because of what the chart above doesn’t include: Social Security payments or old-style defined benefit pension plans. Measures of wealth and net worth don’t typically count those assets because they’re not owned by people the same way a savings account or 401(k) is. If you hit a rough …read more


A popular school fundraiser is just ‘junk-food marketing to kids,’ experts say

By Caitlin Dewey

Boxes of General Mills breakfast cereals, sporting the Box Tops for Education logo. (Daniel Acker/Bloomberg News)

For 43 years, schoolkids and their parents have clipped the labels from cookie bags and cracker boxes as part of a popular rewards program called Labels for Education.

Through this and similar programs — think Tyson’s Project A+ or General Mills’ Box Tops for Education — schools get cash and supplies in exchange for clipped labels from participating food items.

But these programs, most of which are wildly popular at U.S. schools, may have major downsides for students. Critics say they are designed to sell junk food to children too young to make good health decisions.

Just this month, as Labels for Education wound down — a result of declining participation, said its parent company, Campbell’s — public health advocates cheered the end of a program widely beloved by teachers, schools and parents. The program included snack foods, such as cookies and crackers, that many health advocates say should be discouraged.

“It’s just another form of junk-food marketing to kids,” said Colin Schwartz, a senior nutrition policy associate at the Center for Science in the Public Interest, one of several groups that has celebrated the demise of Labels for Education. “We’re glad to see Campbell’s ending its program, and we’re calling on other companies to take the same step.”

Besides Campbell’s, two other companies dominate school rewards: General Mills and, to a far lesser extent, Tyson. Each company awards schools a set amount of money — roughly 5 to 38 cents — for each product purchase code or label collected from participating products.

Those products carry a distinctive logo on the front of the box or bag. Schools publicize that logo to parents via conferences and meetings, as well as through materials sent home with their kids.

Many schools also promote rewards …read more


There were over 12,000 poison control calls for people eating laundry pods last year

By Christopher Ingraham

Detergent pod poisonings are actually trending downward, according to the American Association of Poison Control Centers. (Mike Mozart/Flickr)

Tide Pods are the Internet’s breakout meme of early 2018. For those of you not in the know, the joke is that brightly colored laundry detergent pods look like delicious fruity candy so maybe we should, you know, eat them.

To be clear, you should not eat them.

“You’re really taking a chance — and to what end?” Alfred Aleguas of the Florida Poison Information Center told The Washington Post earlier this month. “It’s pretty foolish behavior.” The Consumer Product Safety Commission warned that “a meme should not become a family tragedy.” Tide partnered with New England Patriots tight end Rob Gronkowski to issue a PSA.

But Tide Pods are not exactly a breaking public health emergency. In fact, data from the American Association of Poison Control Centers (AAPCC), which compiles up-to-the-minute numbers on poison control calls, shows that detergent pod poisonings are actually trending downward.

In 2017, there were 12,299 calls to U.S. poison control centers due to exposure to laundry pods, according to AAPCC’s latest data. That number is actually down by about 14 percent since 2015, when there were over 14,000 calls. The organization didn’t start tracking pod poisoning separately until 2012, when Tide Pods first came out.

A couple things to keep in mind. First, while 12,000 poison control calls sounds like a lot, it’s well within the range of calls for a lot of other common household products. In 2016, for instance, there were over 20,000 calls related to hand sanitizers, 17,000 for toothpaste exposure, 16,000 for deodorants and 13,000 for mouthwash.

As is the case for laundry pods, the overwhelming majority of …read more