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Medicaid enrollment soared by 25% during the COVID-19 pandemic – but a big decline could happen soon

Pandemic-related policies made it easier for states to afford to cover more people and made that coverage more stable for millions of Americans who rely…

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Growth outpaced new enrollment from the Affordable Care Act's Medicaid expansion. bymuratdeniz/E+via Getty Images
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Medicaid, the government-funded U.S. health insurer for people with low incomes, grew by about 25% between February 2020 and May 2022 as policies adopted at the outset of the COVID-19 pandemic expanded the program’s reach.

All told, the number of people enrolled in Medicaid and the Children’s Health Insurance Program, or CHIP, which serves kids in families with low to moderate incomes, increased from 71 million to 89 million. That’s roughly 27% of all Americans.

The pandemic-related increase in Medicaid enrollment was slightly larger than the 24.7% increase seen after the Affordable Care Act (ACA) expanded Medicaid for adults, starting in 2014.

But unlike Medicaid expansion under the ACA, these pandemic policies are temporary. They will end once the federal government’s COVID-19 public health emergency expires. Some experts predict Medicaid enrollment could fall by as many as 15 million people when this happens, disrupting health care for many Americans.

In a new article we published in the Journal of the American Medical Association on Sept. 20, 2022, we examine how Medicaid serves Americans, analyze the program’s importance for health equity, and assess how Medicaid grew and changed during the COVID-19 pandemic.

As health policy researchers, we believe that Medicaid’s growth since 2020 highlights the program’s importance during economic and public health crises. It also underscores how painful the unwinding of these pandemic policies is likely to be to those who may end up uninsured.

Federal changes

In March 2020, Congress passed the first of several large spending packages, called the Families First Coronavirus Response Act. To help states shoulder increased Medicaid costs associated with the pandemic, that measure increased the share of Medicaid spending the federal government pays for by 6.2 percentage points in all states.

This aid has made a big difference for states, which split the costs of Medicaid with the federal government. Before the pandemic, the federal government was paying about 65% of Medicaid’s costs overall, with the precise share varying based on a state’s average income. States picked up the other 35% of Medicaid costs. These costs accounted for more than one-fourth of state budgets before the pandemic.

The extra federal money for Medicaid came with an important requirement: states accepting funds could not remove anyone from Medicaid who was enrolled as of March 2020 or gained Medicaid afterwards – as long as the official public health emergency, first declared on Jan. 31, 2020, remained in effect. These policies also applied to CHIP.

All 50 states and the District of Columbia accepted the higher federal payments in exchange for keeping Medicaid enrollment stable during the pandemic.

Greater stability

These changes helped to address longstanding instability in Medicaid coverage for many people. Before the pandemic, nearly 25% of those with Medicaid would enter or exit the program each year as their short-term circumstances changed.

People would lose Medicaid coverage when their income ticked up, their family circumstances changed, they aged out of CHIP, or they failed to complete required paperwork. Losing Medicaid coverage can lead to someone ending up without any health insurance at all, which increases the likelihood they will postpone or never get needed care. Having the same people frequently entering and exiting the program also increases the program’s administrative costs over time.

Changes to Medicaid policy in response to the pandemic made it much easier for everyone enrolled in Medicaid to keep their coverage. To illustrate, just over half of Wisconsin’s Medicaid growth in 2020 came from that state keeping existing enrollees in the program who might otherwise have lost coverage for at least a few months.

Young adults, especially those aged 18 and 19, and Americans who recently gave birth are two groups that benefited from this change in Medicaid policy.

What’s next

Even with many aspects of daily life getting back to normal, and President Joe Biden’s comments to the media about the pandemic being “over,” the official public health emergency that spurred Medicaid enrollment growth still remains in force.

When the government renewed the declaration for the 10th time in July 2022, it set a new expiration date of Oct. 13, 2022. The administration also said it would provide states with 60 days notice before it would end the federal emergency declaration, which suggests the declaration will be renewed at least one more time.

When the emergency ends, states will have to reevaluate eligibility for everyone with Medicaid within 12 months. Extra federal funding for states will also end.

These changes will have profound consequences. Millions of people will have to reestablish their eligibility for Medicaid and are at risk of losing coverage if they do not complete the required paperwork on time.

The administration may ultimately decide to renew the COVID-19 emergency declaration again, as hundreds of Americans are still dying daily from the disease. Keeping it in place would prevent a massive drop in Medicaid enrollment and make it easier to continue other COVID-19 public health policies, such as making free COVID-19 testing and vaccinations widely available.

Beyond extending the public health emergency, we believe that states and the federal government can seek new ways to minimize disruptions in coverage and to make Medicaid more accessible to the millions of Americans who depend on it for health insurance.

Julie Donohue receives funding from the Pennsylvania Department of Human Services.

Eric T. Roberts does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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What Is Helicopter Money? Definition, Examples & Applications

What Is Helicopter Money?What’s a surefire way to encourage spending, and thus, spur growth? How about dropping money from the sky? As far-stretched…

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Former Fed Chair Ben Bernanke describes helicopter money as a “money-financed tax cut.”

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What Is Helicopter Money?

What’s a surefire way to encourage spending, and thus, spur growth? How about dropping money from the sky?

As far-stretched as this idea seems, it actually has credence in schools of economic thought, particularly during times of recession or supply shocks. Helicopter money policies inject large sums into the monetary supply either through increased spending, direct cash stimulus, or a tax cut.

This policy has two goals in mind:

1. Expand the supply of money, which improves liquidity

2. Spur economic growth

Economists consider helicopter money to be an option oflast resort, after other measures, such as lowering interest rates or quantitative easing, have either failed to lift an economy out of recession or because interest rates are already as low as they can get. This conundrum is known as a liquidity trap, when the economy is at a standstill because people are hoarding their savings instead of spending.

Since the practice of helicopter money also tends to foster inflation, it typically works best during periods of deflation, when prices, along with overall monetary supply, contract without a corresponding decrease in economic output. One relevant example is the Great Depression. Bank runs resulted in a reduction in both the monetary supply as well as in the overall prices of goods and services.

It takes a whole lot to lift an economy from such dire straits, and in such cases, helicopter money can be a viable option.

Example of Helicopter Money: The COVID-19 Recession

At the onset of the COVID-19 pandemic, the stock market crashed, and GDP nosedived, thrusting the economy into recession. While the Federal Reserve slashed interest rates and instituted a new round of quantitative easing measures, the U.S. government responded with helicopter money.

  • Under the Coronavirus Aid, Relief, and Economic Security Act (CARES), the Trump administration authorized two rounds of direct-to-taxpayer stimulus payments, of $1200 and $600 per person, in 2020.
  • In addition, as part of the Paycheck Protection Program (PPP), payroll loans were offered to thousands of small businesses—and many were quickly forgiven. The Federal Reserve also provided increased liquidity to banks so that they could offer loans to businesses to help them stay afloat.

Who Coined the Term Helicopter Money?

In a 1969 paper entitled “The Optimum Quantity of Money,” economist Milton Friedman coined the term “helicopter drop” as a method to increase monetary policy during times of economic stress. He wrote:

“Let us suppose now that one day a helicopter flies over [the] community and drops an additional $1,000 in bills from the sky, which is, of course, hastily collected by members of the community. Let us suppose further that everyone is convinced that this is a unique event which will never be repeated.”

The point was that the easiest way to lift an economy out of troubled times would be to give its population a direct injection of money. This would both expand the monetary supply and as well as increase the disposable income of the populace, resulting in greater consumer spending and increased economic output.

Who Made the Concept of Helicopter Money Popular?

In the 1990s, Japan was facing a deflationary crisis. Its central bank had implemented crippling rate hikes to calm its housing bubble—to disastrous economic effects.

In a 2002 speech to the National Economists Club, then-Fed Governor Ben Bernanke proposed that Japan’s central bank could have re-started the country’s economy through fiscal programs:

“A broad-based tax cut, for example, accommodated by a program of open-market purchases to alleviate any tendency for interest rates to increase, would almost certainly be an effective stimulant to consumption and hence to prices. Even if households decided not to increase consumption but instead re-balanced their portfolios by using their extra cash to acquire real and financial assets, the resulting increase in asset values would lower the cost of capital and improve the balance sheet positions of potential borrowers. A money-financed tax cut is essentially equivalent to Milton Friedman's famous "helicopter drop" of money”

However, critics interpreted Bernanke’s words as his way of authorizing indiscriminate money printing, and the moniker “Helicopter Ben” took hold.

Bernanke would go on to chair the Federal Reserve from 2006–2014, and many of his theories were put into practice during the Financial Crisis of 2007–2008 and subsequent Great Recession. In fact, President Barack Obama credited Bernanke’s leadership during the crisis with averting a second Great Depression.

Helicopter Money vs. Quantitative Easing

While helicopter money and quantitative easing are both monetary policy tools, and both increase the monetary supply, they actually have different effects on a central bank’s balance sheet.

Through quantitative easing, a central bank buys trillions of dollars’ worth of long-term securities, such as Treasury securities, corporate bonds, mortgage-backed securities, or even stocks. This increases its reserves and expands its balance sheet. These purchases are also reversible, meaning the central bank can swap out its assets if it chooses.

Helicopter money, on the other hand, involves fiscal stimulus: distributing money to the public. It has no impact on a central bank’s balance sheet. The practice of helicopter money is irreversible, which means it is permanent—and cannot be undone.

In effect, helicopter money is less a long-term economic solution than it is a “one-time” or short-term operation.

Pros of Helicopter Money

In a 2016 blog post written for the think-tank Brookings Institution, Bernanke admitted that his helicopter money reference gave him some bad PR. In fact, he said that their media relations officer, Dave Skidmore, had warned Bernanke against using the term, saying “It’s just not the sort of thing a central banker says.”

But Bernanke insisted, and the moniker stuck.

To this day, Bernanke continues to believe in the practice of helicopter money as a tool the Fed could use in response to a slowdown in the economy. His successor at the Federal Reserve, Janet Yellen, agreed, stating that helicopter money “is something that one might legitimately consider.”

Other central bankers support the concept, particularly in Europe, which suffered from debt crises that mired its economy throughout the 2000s, igniting deflationary pressures like low demand and weak lending, and made recovery exceedingly difficult.

Cons of Helicopter Money

The biggest drawback of helicopter money is the inflation it tends to ignite. And since inflation is notoriously difficult to manage, once the inflationary fires have been stoked, what’s to prevent them from growing out of control—and fostering hyperinflation? That’s what happened in countries like Argentina and Venezuela, when their central banks printed money and gave it to their governments, who in turn gave it to the people. Inflation surged.

Helicopter money also leads to weakened currencies, because as more and more money is printed, its value decreases significantly. It could also deter currency traders from making long-term investments if the practice is prolonged.

Clearly, helicopter money is not a practice a central bank should undertake lightly.

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Arsenal’s $55.9M Loss An Improvement Over Previous Fiscal Year

Arsenal took a heavy loss but saw reasons for optimism.
The post Arsenal’s $55.9M Loss An Improvement Over Previous Fiscal Year appeared first on Front…

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As a team in transition, Arsenal saw some losses in its last`fiscal year — but also saw signs of hope.

The Premier League team took an operating loss of $55.9 million in the fiscal year ending May 2022.

  • That figure was a significant improvement on last year’s $131.9 million loss.
  • The team saved around $39 million in wages compared to the previous year.
  • But broadcasting revenue dropped from $225 million to $178 million.

Arsenal benefitted from the lifting of pandemic restrictions, with matchday revenue rising by around $51.6 million to $453.7 million.

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Streak Snapped

The club failed to qualify for any European competitions in the 2020-21 season for the first time since 1994-95, which led to heavy spending on player contracts. 

“This investment recognises that the Club has not been where it wanted to be in terms of on-field competitiveness and that, as a minimum, qualification for UEFA competition needed to be regained, as a prerequisite to re-establishing a self-sufficient financial base,” the club wrote.

Arsenal credited owners Kroenke Sports & Entertainment for its willingness to invest in the team.

The move has borne fruit this season with Arsenal’s return to the Europa League, the second-tier competition to the UEFA Champions League. The team has already earned $8.4 million for its appearance there, with total potential earnings up to $22.1 million.

The post Arsenal’s $55.9M Loss An Improvement Over Previous Fiscal Year appeared first on Front Office Sports.

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FDA’s drug shortages leader wants companies to start reporting increases in demand

It is no secret that drug shortages have been prevalent in 2022. Several major drug products, such as amoxicillin and Adderall, have been in short supply…

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It is no secret that drug shortages have been prevalent in 2022. Several major drug products, such as amoxicillin and Adderall, have been in short supply for several months and have led to members of Congress applying pressure on the FDA and HHS to resolve the situation.

Valerie Jensen

Speaking at a webinar hosted by the Alliance for a Stronger FDA, Valerie Jensen, the associate director of the FDA’s Drug Shortage Staff, noted both the rise in quality-related issues and increased demand for some products. She called on companies to report such demand increases, even though they are not currently required to do so.

During the Covid-19 pandemic, she said, the agency has seen new challenges mainly related to these increases in demand.

“During the pandemic as well, we had competition on manufacturing lines and that’s still occurring due to vaccine production and other Covid products,” Jensen said. “So, the same products are being made on those lines that are making the vaccines and Covid-related products, and then that creates a competition situation.”

Jensen added that an increase in demand for manufacturing commodities due to large-scale vaccine production is also leading to shortages. Items such as glass, filters and vial hoppers are in short supply. And now the increased demand is centered around the increase in drugs to counter respiratory illnesses.

She said the physical number of drug shortages currently sits at 123, which is “a little above normal,” but there have been around 100 shortages at any given time over the past seven years. Some of those can be chalked up to companies not producing the volumes required to meet market demand. She also added that there were 38 new shortages in 2021, but the FDA is still dealing with them this year.

For some temporary solutions, Jensen said that she has been coordinating with international regulatory authorities more often, to find out what is being marketed and to see if they can import a drug in short supply in the US. She is also coordinating experts to try to mitigate the situation, providing the public with widely available information as well as expediting the review of anything that manufacturers need to boost supplies.

However, Jensen said that the increase in the demand for drugs is not something that will be going away anytime soon.

“One thing that we really see going forward are these demand increases, this is something that is fairly new to us. It’s something that we’re looking at closely,” she said. “We would really want companies to inform us if they’re seeing spikes in demand because that’s currently not required.”

While producers do need to let the FDA know of supply disruption, companies do not need to let the FDA know of spikes in demand, and Jensen would like to see this changed. Also, she would like to apply different uses for supply chain data to look for signals or patterns and ultimately predict shortages.

Jensen added that in some cases it is impossible to prevent a shortage, but she stresses that better notification of when companies are seeing a spike in demand can be a key solution:

In those cases, when we can prevent (a shortage), we are using those same tools to prevent it. So, we’re expediting review, we’re looking at potential ways that we can use flexibility to allow a product to be on the market while the company fixes a problem. All of those tools are really the same for prevention and mitigation. But I think that really the key is early notification. The earlier companies let us know about an issue the earlier we can deal with it.

With the uptick in respiratory illnesses and shortages of drugs such as amoxicillin, Jensen noted that it’s a matter of reaching out and monitoring the market to see what manufacturers are contending with. Also, Jensen will look to work with pharmacy associations and other trade groups to see what is occurring at the pharmacy level and then “put all of those pieces together” to try and help end the shortage.

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