1. Health, Environment, and Energy Policymaking
CHAPTER 17

2. Health Care Policy in America
US is one of the world’s wealthiest countries.
Lags behind other countries in life expectancy and infant mortality
Americans spend about $2.8 trillion per year on healthcare
1/5 of gross domestic product (GDP)
Other democracies spend much less and provide universal healthcare
Canada, UK, France, Germany
health care costs- Americans spend more than 2.8 trillion a year on healthcare, making it a large expenditure component in our economy. Other democracies with developed economies like Canada, the Uk, France, Japan spend much less on healthcare while providing universal healthcare for their citizens. Health care is a major obstacle for balancing the national budget, making up about ¼ of all federal expenditures

3. Why So Expensive? American healthcare is inefficient
Overbuilt medical facilities (many empty hospital beds)
Doctors/hospitals have few incentives to be efficient
New technologies provide better but more expensive care
Many procedures and treatments in US may not be widely available in other countries
U.S. CITIZENS DON’T GO TO THE HOSPTIAL ANY MORE THAN SOMEONE IN GERMANY OR CANADA, SO WHY IS OUR HEALTH CARE SO HIGH?
 1/4 of all federal expenditures
2. why so high? b/c of inefficiencies in healthcare system
Too many empty hospital beds, meaning that medical care facilities are overbuilt
Doctors/hospitals have few incentives to more efficient
New technologies/drugs add to the cost
Much of the money Americans spend on healthcare is spent on procedures and treatments that may not be widely available in other countries or may cost a lot.

4. Who Pays for Healthcare?
No one has primary responsibility for healthcare costs.
Paid by a combination of govt. funds, private insurance, and out-of-pocket
Because insurance pays for most health care, patients have no incentive to ask for cheaper care
“Defensive medicine” doctors may order extra tests
Patients do not protest costs because the insurance company will pay it
FIGURE 17.1 RISING COST OF HEALTHCARE
who pays?- part of the reason health care in the US relies exclusively on expensive high tech equipment is that medical bills are paid by a mixture of gov’t funds, private insurance, and individuals out of pocket payments. No one has primary responsibility for paying for health care costs. Other country's gov’ts have focused on containing costs as well as giving equal care to all. In the US, cost containment and equality care have taken a back seat to technological advances.

6. Access to Health Care
2/3 of Americans have private insurance of some kind
Mostly through employers because they bargain for cheaper rates
Traditional insurance plans paid on a fee-for-service
More service a doctor provides, more $$$
Health Maintenance Organizations (HMOs)- networks of health care providers that provide all or most of a person’s healthcare
½ of Americans are enrolled in HMO or network plan
Nearly everyone 65 and older participates in Medicare
Medicaid and CHIP cover nearly 60 million with low incomes
private health insurance plans- most Americans have access to health care through private health insurance, which is most commonly obtained through employers. It is almost always cheaper to get insurance through your employer than on your own because employers bargain for group rates. Most private insurance works on a fee-for-service basis… the more tests and treatments doctors provide, the more money they make.
. Health Maintenance Organizations- Today private insurance often takes the form of health maintenance organizations, which are networks of health care providers that directly provide all or most of a person’s health care for a yearly fee. Members of HMOs must see doctors within their network and must designate a primary care provider

7. Who Is Uninsured? 50 million lack health insurance
Disproportionately young (because of Medicare)
Many part-time employers or small companies do not offer health insurance
Uninsured postpone treatment until it requires a more expensive emergency visit
Hispanics and African-Americans more likely to be uninsured
More likely to be hospitalized for preventable conditions
Life expectancies for whites 5 years longer than A.A.
Uninsured facts
50 million without health insurance
uninsured are young, 7 million children and 10 million 18-25
must pay for health expenses out of pocket
many part time employees or small companies don’t offer insurance bc its too costly
postpone treatments until illness gets worse which requires a more expensive emergency treatment
insurance with some full time employers is bad bc of the share of the cost people have to pay themselves
the bigger the family, the more likely they will be uninsured
higher risk of dying at an earlier age or in the hospital
more Hispanics/ African Americans are uninsured
pregnant women lack care during pregnancy and afterwards- Infant mortality twice as high for African americans than whites

8. Government Role in Healthcare
Government pays more of costs of health care than private insurance
42% state, local, national
Gives tax breaks to companies that provide insurance
National Institute of Health provides grants for research at colleges and universities
Medical care for armed services and veterans
8 gov’ts role: most people think that private insurances pay most of the healthcare costs, but in actuality the government pays the most. The gov’t also subsidizes employer-provided health insurance with tax breaks work over 200 billion per year.

9. Medicare Passed in 1965 Provides health insurance for the elderly
Covers 50 million, 16% of population
Paid for by paycheck deductions
Expanded in 2006 to cover prescription drugs
AARP, 40 million members, largest voluntary association in the world, powerful lobbyists
People who benefit from SS and Medicare actively participate in elections
Medicare- passed in 1965; pay into Medicare through paycheck… receive benefits when you are eligible. It provides hospitalization insurance and short term nursing care, prescription drugs. Costs are outrunning tax contributions. To save money, medicare has frequently cut back on the fees it pays doctors and hospitals and as a result, some hospitals and doctors do not accept Medicare patients, because Medicare payments for services do not cover their costs.
10 Medicare cost growing- Medicare expenditures keep growing bc the elderly are one of the most powerful voting and lobbying forces in American politics. The AARP American Association for Retire people relentlessly advocates increasing Medicare benefits

10. Medicaid Passed in 1965 50 million people
Low-income children and adults, disabled
$300 billion per year cost
Funded by state and federal govts., States set eligibility requirements
1/5 of expenditures for health care in US
CHIP- for children whose household income is too high for Medicaid but cannot afford private coverage- 8 million
Medicaid- health care for the poor. Serves over 50 million people, mostly children and adults in low income families. Remainder are disabled or elderly, many who require long term care. Medicaid is funded by states and the national government and eligibility and services vary state to state. Costs the federal gov’t 300 billion a year and costs to states are 130 billion

11. Health Care Reform Harry Truman called for “National Health Insurance”
American Medical Association opposed it as “socialized medicine”
Truman’s proposal went nowhere.
Every other industrialized country has some form of national healthcare insurance.
national health insurance- Truman called for a national health insurance that would finance all of American’s medical care. It was strongly opposed by the American Medical Association , which is the largest physicians interest group, bc they said it was socialized medicine bc program would be gov’t run. His idea was shot down. Most other developed nations have national health insurance and the US remains the exception.

12. Health Care Reform Bill Clinton proposed the Health Security Act
Wanted to guarantee coverage for all and extend coverage for those with inadequate coverage
Would’ve required tax increase or employers to pay a premium
Concern about big government killed the plan
Harry and Louise Ads
13. Clinton’s attempt- Under his Health Security Act Proposal, Clinton wanted to deal with health care policy and access. His plan would have benefited people without any health insurance and would have extended health insurance for millions who had inadequate insurance. To pay for the plan a requirement would be set that employers provide health insurance for their employees or pay a premium into a public fund. Small businesses strongly opposed this. He then proposed raising taxes on cigarettes, but the tobacco industry strongly fought this. People fetlt his was an attempt at a gov’t takeover and the middle class felt its health care threatened. Plan died in Congress.

13. Reform Under Obama Proposals:
End discrimination against preexisting conditions
Prevent insurance companies from dropping coverage when people need it most
Allow young people to remain on parent’s insurance until 26
Eliminate extra charges for preventative care
Obama- Those with Health Insurance: Obama proposed to change the following things for those who already had health insurance:
end discrimination against people with preexisting conditions
insurance companies cant drop coverage when people become sick
young people can stay on parents insurance until 26 years old
eliminate extra charges for preventative care like flue shots, diabetes tests, mammograms
close gap in Medicares coverage for prescription drugs
Obama- Those without health insurance- He proposed to increase the number of people with health insurance by:
large employers had to provide health insurance for employees
everyone has to have healthcare
create new insurance marketplace called the Exchange to allow people without insurance, as well as small businesses, to compare plans and buy competitively
expand Medicaid eligibility
tax credits provided to help people buy health insurance and help small businesses cover their employers

14. Critics of Obama’s Plan
Businesses complained about cost of covering employees
Requirement of insurance limited freedom of choice
People were afraid they would lose their health care even if they liked it
Worries about decline in quality of health care
Limited ability to choose your doctor
Affordable Care Act 2010
SCOTUS upheld mandate of insurance in 2012
16. Critics of Obama’s plan-
Businesses complained about the costs of covering employees,
others thought the requirement that everyone have health insurance limited individual’s freedom of choice and exceeded power of Congress…
People were afraid they would lose what they liked about their own healthcare.
People worried they would see declines in quality of their own healthcare

15. Some Videos Medicare for All How Obamacare Works
Why is Health Care So Expensive?
Paul Ryan’s PowerPoint
Not a Video

16. Environmental Policy Modern environmental movement began in 1960s
Environmental goals often conflict with economic growth/jobs
Powerful interest groups compete for influence
Sierra Club, Greenpeace, Audubon Society
States compete with each other to attract industry, environmental laws matter
CA has strictest environmental laws
environment have become a big policy-making concern in the last few decades. Environmentalist movement in the 60s and 70s, now environmental interest groups are exploding. Therefore, if a politicial/party is running for office, they try to appeal to environmentalists.
17. environment vs. economic growth- states and cities push to attract large investments, like automobile plants, bc new business can be a boom to their economy. If a state a strong pollution-conrol laws, businesses may be driven away by costs involved. But states with lax pollution laws may leave its citizens unhappy and make other people reluctant to move there. Sometimes state pollution standards work against the state and sometimes they work for the state.

17. Environmental Protection Agency
Created in 1970
LARGEST FEDERAL REGULATORY AGENCY
Deals with land use, air and water quality, wilderness and wildlife preservation
Environmental Protection Agency- passed in 70s, is now the nation’s largest federal regulatory agency. It administers policy dealing with land use, air and water quality, and wilderness and wildlife preservation
19. National Environmental Policy Act- passed in 1969, requires gov’t agencies to file an environmental impact statement with the EPA everytime they propose a policy that could disrupt the environment. The EIS tells possible environmental effects of proposed policy. All projects, big and small, must include an EIS. The EIS alerts environmentalists to prosed projects. NEVA has been an effective tool in preventing environmental destruction.

18. Clean Air and Water
Passed in allows EPA to protect and improve air quality
DOT set standards for automobiles
Led to lower emissions, better gas mileage, smaller cars, unleaded gasoline
Water Pollution Act- clean up lakes and rivers
1/3 were suitable for swimming and fishing
Cuyahoga River Fire
Scott Pruitt
MWPA
Clean Air and Water Act- controls pollution of the nation’s lakes and rivers. This has made water quality improve dramatically. 1972, only 1/3 of US lakes and rivers were safe for fishing and drinking. Today it has increased to 2/3.

19. Endangered Species
1973
Required government to protect species on the list regardless of economic impact
Controversial because of growing demand for land and growing population
P. 596 “You are the Policymaker”
Endangered Species Act of created an endangered species protection program in the U.S. Fish and Wildlife Servcie. The law required the gov’t to protect each of the hundreds of species listed as endangered, regardless of the economic consequences for the areas that were the habitats of the species. As of 2012, endangered species list included 987 animals and close to 650 plant species

20. Toxic Wastes Superfund- 1980 fund to clean up hazardous waste sites
Originally funded by taxing chemical companies
Now funded by general revenue
Thousands of sites all over the country
REMIND THEM OF LOVE CANAL- TOXIC WASTE REMOVAL PROBLEMS
22. Superfund- a fund to clean up toxic waste sites created by taxing chemical products. The law that created the fund said that polluters were responsible for paying for cleanups; the fund was to be used when polluters were nto identified. This has virtually eliminated toxic waste dumping, but has ben less successful in cleaning up existing waste. Cleaning up sites can take many years and cost millions of dollars. The EPA has cleaned more than 1,000 sites and work is going on at 400 more additional sites

21. Nuclear Wastes Wastes from nuclear reactors and nuclear weapons
Must be isolated until they are safe
Yucca Mountain Nevada proposed site
NIMBY- Not In My Back Yard!
Yucca Mountain
Nuclear waste- clean up and removal of nuclear waste is dangerous bc nuclear materials can take 100 years to decay to the point at which they are safe. Right now we have tens of thousands of highly radioactive nuclear waste siting at temporary sites around the nation waiting to be permanently removed. No state wants a storage area for nuclear wastes and the problem is that nuclear waste keeps accumulating.

22. Global Warming
Fossil fuels (coal, oil, natural gas) release carbon dioxide when burned.
Greenhouse effect, global warming, sea level rise, droughts, storms, other bad things
Opponents of cutting emissions argue it will make them less competitive internationally.
US produces 20% of greenhouse gases
Some politicians claim there is not enough evidence.
global warming- one of the most serious environmental concerns. When fossil fuels (coal, natural gas, oil) are burned, they produce carbon dioxide. It collects in the atmosphere, wrapping the earth in a added layer of insulation and heating the climate. Greenhouse effect occurs when energy from the sun in strapped under the atmosphere and warms the eart as a result. Scientists think if this warming trend is not reversed, heat waves and severe droughts could lead to famine and disease.
25. fixing global warming- no technology to control carbon emissions so the only way to reduce greenhouse gases is to burn less fuel or find alternative sources of energy. Industrialized and neighboring countries argue over distributing the burden of cutting greenhouse gasses. Developing nations produce more emissions but some other countries got rich by burning coal and oil and still produce most of the emissions today.
Obama’s plan- his plan includes a “market-based cap-and-trade system” in which gov’t sets a mandatory cap on emissions and then issues other companies credits for a certain amount of emissions. Companies that need to increase their emission allowance must buy credits from those who pollute less. The buyer is paying a charge for polluting, while the seller is being rewarded for reduced emissions. In theory then, those who can reduce emissions will do so. Opponents argue that the cost of emissions controls will be passed on to the consumers in higher energy costs.

23. Energy Policy Fossil fuels provide 82% of nation’s energy.
Coal is most abundant but dirtiest.
Natural gas produces 25% of electricity.
Figure 17.2
Many countries compete for a limited amount of oil which can drive prices up.
coal- America’s most abundant fuel. It accounts for 21% of the energy we use and helps produce half of America’s electricity. Although it is the most plentiful fuel, it is also the dirtiest. It contributes to global warming and smog and is a health hazard to coal miners.
28. petroleum and natural gas- natural gas produces 25% of our electricity and petroleum supplies 36% of our total energy needs and almost all the fuel we put in cars. They both are cleaner than coal but also contribute to global warming. Oil spills can cause major environmental damage and refining oil pollutes the air. We import more than half of the oil we use. Dependency on foreign oil puts us at the mercy of other nations. Most of the world’s oil reserves are in Russian and the Middle East
We have emergency reserve oil in case another country places an embargo on our oil. The oil is stockpiled in an underground cavern along the Gulf of Mexico coastline.

24. Energy Sources

25. Foreign Oil
Middle East and Russia contain much of world’s oil reserves.
Disruption in oil supplies (embargos) can cause shortages and price jumps.
Oil exploration on public lands and offshore can increase US supply but has environmental concerns.
Keystone Pipeline
29. Obama’s plan- 2010, Obama announced offshore drilling off of America’s coastline. 2 months later- BP oil spill off of America’s coastline. Gulf closed for drilling for a short while and reopened in Keystone Pipeline System to transport oil from northeastern Canada to several destinations in the U.S. spearheaded. Many landowners and environmentalists opposed this rote of the pipeline. Many agencies worked to see if this was in the nations best public interest. We know Obama vetoed it.

26. Imported Oil

27. Nuclear Power Most controversial No new power plants since 1978
Environmentalists worry about radiation, regulation, waste disposal.
Leaders of both parties support increasing use of nuclear power.

28. Renewable Energy Water, wind, solar, geothermal, biomass
Hydroelectric 6% of power
Wind 1%
Likely to remain small for immediate future
CRASH COURSE ENVIRONMENTAL ECON
democracy, health care, and the environment- healthcare, the environment, and energy involve human health and welfare, are highly technical areas in which ordinary people are ill equipped to make decisions. Scope of federal gov’t has grown in the area of healthcare and environment.