Tax Bill’s Individual Mandate Repeal Could Lead to ACA “Death Spiral”
November 16, 2017
Senate passes battlefield medical approvals bill; Individual mandate repeal attached to tax bill, sparking fears of rising premiums; US to be a big driver of oil production growth over the next decade; Jobless claims tick up on Puerto Rico backlog, underlying data strong.
- Senate passes battlefield medical approvals bill. A compromise bill between the FDA and the Pentagon regarding expedited approval of experimental medical treatments for soldiers wounded on the battlefield was hammered out over the weekend, and passed the Senate unanimously on Thursday. The bill is designed to expedite access to experimental treatment for soldiers wounded in battle, by circumnavigating the traditional FDA approval process. Critics were worried the bill’s original language could expose soldiers to dangerous and untested treatments, with the new compromise bill addressing many of these concerns while enabling the FDA to offer the military expedited permission on certain treatments, like freeze-dried plasma for rapid blood loss. [The Hill]
- Individual mandate repeal attached to tax bill, sparking fears of rising premiums. Senate Republicans have added a repeal of the Obamacare individual mandate, that imposes a fine on those that elect to go without insurance, to the tax reform bill, in an effort to make corporate tax reductions permanent. The move worried insurance market efforts, as the mandates makes sure more healthy people join insurance plans. The sicker risk pools resulting from its repeal might increase premiums or give insurers the incentive to leave the market altogether. Experts disagree on the severity of the repeals impacts: some believe it will really collapse insurance markets, while others note the mandate, which is poorly enforced, likely had little impact on insurance incentives. [The Hill]
Economic Indicators & News
- US to be a big driver of oil production growth over the next decade. New data from the International Energy Agency said Thursday that 80% of growth in oil production over the next 10 years will come from the US. The head of the energy agency, Fatih Birol, said at a conference in Bonn, Germany, that the US “will be the undisputed leader of oil and gas worldwide,” largely due to advances in fracking technology and domestically produced natural gas, the availability of which has depressed global oil prices. OPEC countries are expected to continue to attempt to curb oil oversupply, with cuts designed to bring down global oil reserves and support higher prices. [Reuters]
- Jobless claims tick up on Puerto Rico backlog, underlying data strong. Jobless claims in Puerto Rico are finally being processed this week, pushing up the number of Americans filing claims unexpectedly. The underlying data, however, paints a rosy picture of a strong labor market experiencing its 141st straight week below the 300,000-claim threshold. Unemployment is currently at 4.1%, considered close to “full employment.” Import prices were up 0.2% as well last month, where lower food prices and higher petroleum and capital prices largely canceled each other out. The weak US dollar is helping to prop up import prices and boosting exports, accounting for some of the 2.5% increase in import prices year over year. [Reuters]