Child Poverty In Britain Set To Reach New Record High

"Across all regions, relative child poverty is projected to increase markedly," according to new research from the Institute for Fiscal Studies.

The thinktank predicts an increase of more than a million in the number of children living in poverty, more than reversing all the progress made over the past 20 years.

As The Guardian reports, the number of children living in poverty will soar to a record 5.2 million over the next five years as government welfare cuts bite deepest on households with young families.

Weakness in income growth since the recession had been unprecedented in recent times, according to the research, and living standards will continue to be under pressure over the coming years.

“The larger projected rises occur in areas where families with children are more reliant on benefits than earnings for their income, and where more families are likely to be adversely affected by the new two-child limit on means-tested benefits.”

The IFS said the increase in relative poverty over the coming years would be concentrated among families with children.

Poverty rates for working-age adults without children and for pensioners would remain roughly unchanged...

“with real earnings growth boosting the incomes of those at the top of the distribution more, while benefit cuts fall largely on those nearer the bottom."

The report’s findings, which also predict a widening of the gap between rich and poor and four more years of weak income growth, pose a direct challenge to Theresa May, who arrived in Downing Street pledging to help those “just about managing”.

Visualizing How Americans Get Healthcare Coverage

With Obamacare firmly in the crosshairs of Republican lawmakers, the debate around U.S. healthcare is at a fever pitch.

While there is no shortage of opinions on the best route forward, Visual Capitalist"s Jeff Desjardins points out that the timeliness of the debate also gives us an interesting chance to dive into some of the numbers around healthcare – namely how people even get coverage in the first place.

HOW AMERICANS GET HEALTHCARE

The following infographic shows a breakdown of how Americans get healthcare coverage, based on information from Census Bureau’s surveys.

Put together by Axios, it shows the proportion of Americans getting coverage from employers, Medicaid, Medicare, non-group policies, and other public sources. The graphic also includes the 9% of the population that is uninsured, as well.

The following definitions for each category above come from the Kaiser Family Foundation, a non-profit that uses the Census Bureau’s data to put together comprehensive estimates on healthcare in the country:

Employer-Based: Includes those covered by employer-sponsored coverage either through their own job or as a dependent in the same household.

Medicaid: Includes those covered by Medicaid, the Children’s Health Insurance Program (CHIP), and those who have both Medicaid and another type of coverage, such as dual eligibles who are also covered by Medicare.

Medicare: Includes those covered by Medicare, Medicare Advantage, and those who have Medicare and another type of non-Medicaid coverage where Medicare is the primary payer. Excludes those with Medicare Part A coverage only and those covered by Medicare and Medicaid (dual eligibles).

Other Public: Includes those covered under the military or Veterans Administration.

Non-Group: Includes individuals and families that purchased or are covered as a dependent by non-group insurance.

Uninsured: Includes those without health insurance and those who have coverage under the Indian Health Service only.

HEALTHCARE MIX BY STATE

Here’s another look at how Americans get healthcare coverage on a state-by-state basis.

This time the graphic comes from Overflow Data and it simply shows the percent of buyers in each state that receive health coverage from public sources:

Oddly, the state that gets the highest proportion of public health coverage (New Mexico, 46.6%) is kitty-corner to the state with the lowest proportion of public health coverage (Utah, 21.3%).

WHY THE DEBATE IS PARAMOUNT

If you ask some people what is going on with U.S. healthcare, they will tell you that things are going “sideways” – that costs are going up, but care is not improving anywhere near the same pace.

Here’s a graphic we published last year from Max Roser that puts this sentiment in perspective:

It’s fair to say that care has been going sideways in the U.S. for some time, and the stakes couldn’t be higher.

So, what needs to be done to fix the problem?

"From Horrific To Catastrophic": Court Ruling Sends Illinois Into Financial Abyss

First Maine, then Connecticut, and finally late on Friday, confirming the worst case outcome many had expected, Illinois entered its third straight fiscal year without a budget as Republican Governor Bruce Rauner and Democratic lawmakers failed to agree on how to compromise over the government’s chronic deficits, pushing it closer toward becoming the first junk-rated U.S. state.

By the end of Friday - the last day of the fiscal year - Illinois legislators failed to enact a budget, and while negotiations continued amid some glimmers of hope and lawmakers planned to meet over the weekend, the failure marked a continuation of the historic impasse that’s left Illinois without a full-year budget since mid-2015, and which, recall, S&P warned one month ago will likely result in a humiliating and unprecedented downgrade of the 5th most populous US state to junk status.

Then came the begging.

According to Bloomberg, on Friday Illinois House Speaker Michael Madigan, a Democrat who controls much of the legislative agenda, pleaded with rating companies to "temporarily withhold judgment” as lawmakers negotiate. “Much work remains to be done,” the Democrat said on the floor of the House Friday, before the chamber adjourned for the day. “We’ll get the job done.”

Meanwhile, the state remains without a spending plan, its tax receipts and outlays mostly on "autopilot", leaving it with a record $15 billion of unpaid bills as it spent over $6 billion more than it brought in over the past year, and with $800 million in interest on the unpaid bills alone. The impasse has devastated social-service providers, shuttering services for the homeless, disabled and poor. The lack of state aid has wrecked havoc on universities, putting their accreditation at risk.

However, in a "shocking" development, just hours remaining before the midnight deadline to pass the Illinois budget, and Illinois" imminent loss of its investment grade rating, federal judge Joan Lefkow in Chicago ordered Illinois to come up with hundreds of millions of dollars it owes in Medicaid payments that state officials say the government doesn’t have, the Chicago Tribune reported. Judge Lefkow ordered the state to make $586 million in monthly payments (from the current $160 million) as well as another $2 billion toward a $3 billion backlog of payments - a $167 million increase in monthly outlays - the state owes to managed care organizations that process payments to providers.

While it is no secret that as part of its collapse into the financial abyss, Illinois has accumulated $15 billion in unpaid bills, the state"s Medicaid recipients had had enough, and went to court asking a judge to order the state to speed up its payments. On Friday, the court ruled in their favor. The problem, of course, is that Illinois can no more afford to pay the outstanding Medicaid bills, than it can to pay any of its $14,711,351,943.90 in overdue bills as of June 30.

The backlog of unpaid claims the state owes to managed-care companies directly, as well as to the doctors, hospitals, clinics and other organizations “is crippling these providers and thereby dramatically reducing the Medicaid recipients’ access to health care,” Lefkow said in her ruling (attached below).

* * *

Friday’s court ruling, which meant that the near-insolvent state must pay an additional $593 million per month, may have been the straw that finally broke the Illinois camel"s back.

“Friday’s ruling by the U.S. District Court takes the state’s finances from horrific to catastrophic,” Comptroller Susana Mendoza, a Democrat, said in an emailed statement after the ruling.

As a result of the court decision, “payments to the state’s pension funds; state payroll including legislator pay; General State Aid to schools and payments to local governments -- in some combination -- will likely have to be cut.” 

"As if the governor and legislators needed any more reason to compromise and settle on a comprehensive budget plan immediately, Friday"s ruling by the U.S. District Court takes the state"s finances from horrific to catastrophic," Mendoza said in a statement. "A comprehensive budget plan must be passed immediately." Realizing where all this is headed, she said that payments to bond holders won"t be interrupted (more below).

Illinois Comptroller Susana Mendoza

Friday night"s legal decision followed a previously discussed ruling, when on June 7, Judge Lefkow ordered lawyers for the state to negotiate with Medicaid recipients to come up with more money, but she stopped short of dictating how much more the state should pay each month, or when. That decision sent Illinois General Obligation bond soaring.

Earlier this week, the parties again went before the judge to say they were at an impasse, with lawyers for Medicaid recipients asking for more than $1 billion a month to cover past and ongoing costs.

Lawyers for Illinois countered that they could only come up with approximately $75 million more a month, which would translate to $150 million with federal matching dollars. Although the state is way behind, state officials said in court filings that they have been making more than $1 billion in Medicaid related payments each month in 2017, “including payments to safety net hospitals, MCOs, and other providers.”

While the state was livid over the decision, plaintiffs were delighted. Tom Yates, one of the lawyers who represented the Medicaid recipients. said the judge’s ruling is a “fair result” that will help them have access to care. “Medicaid is an incredibly important program for 25 percent of the state’s population,” Yates said. It remains unclear, however, where Illinois would find the required funds.

In her ruling, Lefkow said the state must pay the $2 billion toward its past obligations beginning July 1 and ending June 30, 2018. She ordered the state to file monthly reports showing that it’s making the payments consistent with the ruling. The Judge said she considered submissions by managed care organizations, including The Meridian MCO and Aetna Better Health Inc., in reaching her decision. Meridian is owed $540 million and Aetna is owed $700 million, the judge said. In addition, she considered submissions from doctors and clinics.

Adding insult to crippling financial injury, the judge also ordered the state to file monthly reports showing that they are making the payments consistent with the ruling.

* * *

Meanwhile, despite the recent fireworks, things in Illinois remain on autopilot as the state needs a new budget to change financial direction.

Without a budget, Bloomberg writes, the state has continued to spend more than it brings in. That’s forced it to cover “core priority” payments first, including payroll, debt service and pensions that total about $1.85 billion a month. While those bills include some Medicaid-covered payments like health services for children and adults, the state has said there aren’t enough funds to include general payments to managed-care organizations as a top priority.

Also, without a budget that includes borrowing to pay down the bill backlog, Illinois by August will run out of money for key expenses for the first time since the stalemate began, according to Comptroller Mendoza. That means school funding, state payroll, and pension payments could be affected, she said. There won’t be enough money for these mandated or court-ordered payments.

As noted above, Mendoza said that this won’t jeopardize debt-service payments, however she probably should have added "for now." For now, Illinois hasn’t missed any bond payments and state law requires it to make monthly deposits to its debt-service funds.

For now, despite the Illinois deadline coming and going, the political standoff shows no signs of ending.

And now the market is set to react: investors have already punished Illinois for its fiscal woes. Yields on the state’s 10-year bonds have soared to 4.8%, 2.8% points higher than benchmark debt. That’s the highest yield of all 22 states that Bloomberg tracks.

Summarizing best the chaos in Illinois was John Humphrey, the head of credit research for Gurtin Municipal Bond Management, which oversees about $10.1 billion of state and local debt who said that “recognizing that they’re continuing to work through the weekend, it doesn’t look good to adjourn halfway through your last day.”

* * *

The case is Memisovski v. Wright, 92-cv-01982, U.S. District Court, Northern District of Illinois. Full court ruling below:

"It Was A Pretty Disturbing Briefing”: Why State Governors Suddenly Got Cold Feet About Obamacare Repeal

Several days after Goldman Sachs explained in theory why hopes for a quick "repeal and replace" of Obamacare are now extinguished, and even "repair and rename" is looking bad, overnight state governors meeting in Washington got the bad news in practice, when a presentation from Avalere Health and McKinsey warned that the policies proposed by Republican congressional leaders to repeal and replace Obama"s signature healthcare law would lead millions of people to lose their health coverage, while states lose billions in Federal funding.

Health and Human Services Secretary Tom Price exits a closed-door discussion on
health-care policy at the National Governors Association in Washington on Saturday

The presentation, reproduced below, estimates that the number of people covered by Obamacare through the individual insurance market could be reduced by as much as 51% in states that chose not to expand Medicaid coverage under Obamacare and by 30% in those that did expand the federal-state health program for the poor. The governors’ meeting came at a pivotal moment in the debate over the future of the health law, which Republicans have pledged to overturn.

The Republican party controls the White House, the Senate, the House of Representatives and 33 state governorships; it is also getting cold feet about repealing, replacing or even overhauling Obamacare out of concerns what it would mean for existing coverage, which would lead to millions of Americans losing insurance, and potentially truncating the careers of many politicians. It would also mean the end of millions in Federal government handouts to states coming to an end.

Roughly 12 million people gained Medicaid coverage after Obamacare broadened eligibility for the program. From 2014 through the middle of 2015, states got $79 billion of extra funding from the Medicaid expansion, according to the Kaiser Family Foundation. Under the health law, the federal government paid 100 percent of the cost of the expansion from 2014 to 2016. The government’s share fell to 95 percent this year and was scheduled to fall to 90 percent by 2020.

On the other hand, Obamacare premiums for those paying into the program have soared in the past two years, sucking up a substantial portion of US household disposable income, and leading to widespread displeasure among the US middle-class with the existing format of the healthcare law.

As a result, significant differences remain between GOP officials in the House, the Senate, and the states—most acutely, over the Medicaid insurance program for the poor and disabled, which is administered by the states and jointly funded by the federal and state governments. A summary of the various proposed plans was laid out last week by Goldman.

The debate over the future of Obamacare culminated on Saturday, when governors left a closed-door meeting at the National Governors Association’s winter meeting saying they hadn’t hammered out an answer that day. “We don’t want to create unequal treatment between all the different states,” said Republican Gov. Mary Fallin of Oklahoma. “I don’t think we’ve reached a conclusion on that, other than to say it’s a priority that we find a way that we can cooperate.”

Democrats were more willing than their Republican colleagues to talk to reporters after the closed-door meeting. Virginia Governor Terry McCauliffe called the presentation on what might happen if the ACA is repealed, or if Medicaid funding is limited, “scary.”

“Tens of thousands who would not be able to afford their coverage and would lose their coverage,” Democratic Governor Jay Inslee of Washington said after the closed-door meeting. “It was a pretty disturbing briefing.”

According to the presenation, under the standard repeal and replace plane, the impact would vary by state, but as Axios summarized, in a sample state that expanded Medicaid, it"s estimated that:

The state would lose $635 million in federal funding, a 65 percent decrease.

• 110,000 current enrollees would no longer be able to afford a plan.


• 20,000 currently uninsured people would buy a plan with the new tax credit provided by the GOP plan.


• Additionally, 115,000 low-income people may lose Medicaid coverage, with no affordable alternative on the individual market.


• A per capita cap — which would limit funding for each person in the program — would reduce federal spending by 24 percent over five years, requiring the state to spend $6.2 billion to close the gap.

In a sample non-expansion state, it"s estimated that:

• The state would lose $885 million in federal funding, an 80 percent decrease.


• 130,000 current enrollees would no longer be able to afford a plan.


• 10,000 currently uninsured people would be able to buy coverage with the new tax credit.


• A per capita cap would reduce federal spending by 6 percent over five years, requiring states to spend $1.5 billion to close the gap.

While republicans have campaigned for years on a promise to repeal Obamacare, and Donald Trump’s election victory put that goal within reach, now they’re confronting the task of coming up with a replacement, mindful of the 20 million people who’ve gained health insurance under the law and the billions of dollars it sends each year to states.

Among the anecdotes laid out in the presentation, in one hypothetical example presented, a state that didn’t expand Medicaid and had 235,000 enrollees in Obamacare through the individual market would see the number of participants fall to 115,000. In a hypothetical state that did expand Medicaid coverage and had 300,000 enrollees in the individual market, the number would drop to 210,000, Bloomberg reported. 

The expansion state could see further losses in Medicaid, where another 115,000 would probably lose eligibility, without being able to find an affordable replacement plan. The presentation also revealed that a hypothetical state that expanded Medicaid could lose 24 percent of federal dollars spent on the program over five years, requiring $6.2 billion to make up the gap. The scenario would require Congress to repeal the expansion and implement a per-person funding mechanism. A hypothetical state that didn’t expand the program could lose 6 percent in federal spending.

The presentation is based on a plan by Republican leaders to eliminate income-based subsidies under Obamacare that help people afford insurance and replace them with age-based tax credits.

President Trump hasn’t weighed in publicly in the current fight. Members of the administration have been working to smooth the way for changing former President Barack Obama’s health-care law. Health and Human Services Secretary Tom Price attended the governors’ meeting Saturday afternoon. At issue is whether to maintain significant federal funding for states that have expanded eligibility for Medicaid to include residents with income that is up to a third more than the federal poverty level. GOP-led states split almost evenly in opting to take the funds to expand eligibility for their programs. States that didn’t have cited a concern about the impact on the federal budget and a desire to resist Mr. Obama’s health law.

Republican governors in states that expanded Medicaid have been telling their congressional delegations for months that repealing the health-care law without an adequate replacement would cost their budgets and hurt hospitals. While many say they support repealing Obamacare, they’ve advised a heavy dose of caution. Republican leaders in Washington are considering ending the Medicaid expansion, as well as setting per-person caps on federal funding of the program. “Governors know about 50 times more about Medicaid than anyone in Congress,” said Haley Barbour, the former Republican governor of Mississippi. “The idea that we’re going to repeal, repair, replace, redundant, whatever -- the idea that we’re going to do that in a matter of weeks just ignores the difficulty of doing it,” Barbour said.

As the WSJ adds, republican senators are similarly split. Several of them, including Sen. Lisa Murkowski (R., Alaska) have said they would take cues from their respective states’ preferences. Republican Ohio Gov. John Kasich, who opted to expand Medicaid despite legal challenges from GOP legislators in his state, met with Mr. Trump on Friday and is trying to rally fellow governors behind a compromise in which states agree to pare back eligibility and funding to residents making up to the poverty level. Residents above that threshold would lose Medicaid, he has said, but likely get subsidized private coverage. A handful of states—such as Wisconsin and Arkansas—already have systems in place along those lines.

On Friday, Kasich called House Republicans’ initial plans to replace the health-care law “inadequate.” Kasich, a former Republican presidential candidate, didn’t go into details during brief remarks to reporters after a meeting Friday with President Donald Trump. “To me, it’s not acceptable,” Kasich said. The governor, who opened Ohio’s Medicaid program to more low-income people under Obamacare, has advocated maintaining the Medicaid expansion. He has said the income limit for the program should be lower.

Alabama Gov. Robert Bentley, also a Republican, said he was open to finding a way to help states that expanded the program. But he said it couldn’t be one that came at the expense of states such as his that didn’t do an expansion. “There were 18 governors that fought the ACA and we actually need to be rewarded for that, not punished,” he said. “I have not seen that plan yet.”

Saturday’s meeting is one of several taking place between governors and federal officials.

Governors have been meeting with Trump as well, Bloomberg adds. On Saturday, the president discussed the Affordable Care Act with Florida’s Rick Scott and Wisconsin’s Scott Walker, both Republicans. The topic was “how best to solve the problems of Obamacare, with a special emphasis on the states role in health care,” according to information provided to reporters. Democratic governors are reaching out to Republican colleagues in states that expanded Medicaid and “now have a very sick feeling in their stomachs,” Malloy, who’s chairman of the Democratic Governors Association, told reporters Saturday at an earlier press conference. “I know that there is tremendous pressure on them, but we have to stand tall and make sure our fellow Americans have the coverage that they need.’’

The best summary of the current disarray, however, comes from Bloomberg which writes that former Wyoming Governor Jim Geringer, a Republican, asked why current governors aren’t coming together to develop a plan to repeal and replace Obamacare.

“For members of Congress, it’s primarily a political debate, not a health-care debate,” Geringer said. “Giving Congress cover is probably the best thing you can do right now.”

The full presentation governors were presented yesterday is below: