1AC

1
Advantage 1 is the economy

Two Internal links---first is coverage:

US is locked into slow growth crisis now -- upward trends are short-
term
John Ross 17, Senior Fellow at Chongyang Institute for Financial Studies, Renmin University
of China, former Professor at Shanghai Jiao Tong University, 6/12/2017, “Why the US economy
remains locked in slow growth,”
http://ablog.typepad.com/keytrendsinglobalisation/2017/06/why-the-us-economy-remains-
locked-in-slow-growth.html
The latest US economic data confirms the US remains locked in a prolonged period of slow
growth with major consequences for geopolitics and destabilising consequences for US domestic politics. ¶
The latest US economic growth data¶ Almost no international issue is more crucial for economic and
geopolitical strategy than economic trends within the US. It is therefore crucial to have an accurate analysis of
these. Regarding such a serious issue and such powerful forces there is no merit in ‘pessimism’, underestimating US growth, and no
merit in ‘optimism’, overestimating US growth – there is only a virtue in realism.¶ This article therefore analyses the latest US GDP
data. The conclusion is clear. The data
confirms the US fundamentally remains in a period of
medium/long term slow growth which will last for at least a minimum of several years.¶ Strikingly, taking a period
of 15 years after the beginning of the international financial crisis, average US growth will be
slower than after the beginning of the Great Depression in 1929. Analyses which appear in parts of
the media claiming the US is entering a significant new period of rapid growth are fundamentally in
error – for reasons analysed in detail blow.¶ Such slow US growth necessarily has major geopolitical
consequences and provides a backdrop for continuing instability and turns in US politics. The
recent period within US politics has already seen:¶ Trump selected as Republican Party Presidential candidate against the wishes of
that Party’s establishment, and elected President against the opposition of the overwhelming major of the US mass media.¶ Since
Trump’s election sharp clashes have continued within the US political establishment with leaks against the President by the US
security services, the President’s sacking of the FBI head, investigations by the US Congress and US police of close aides to the
President, and open campaigns to force the President to change policies or to remove him from office by major US media such as the
New York Times and CNN.¶ Within the Democratic Party a serious challenge mounted to the Party establishment’s candidate
Clinton by the first figure declaring themselves to be a socialist to receive major US public support for almost a century – Sanders.¶
As US medium/long term slow economic growth will continue sharp turns and tensions in US politics will not disappear but are
likely to continue.¶ The consequences for US relations with China flowing from this situation, and geopolitical tensions between the
US and its traditional allies such as Germany shown for example at the recent G7 summit, are analysed at the end of this article. The
conclusion is that China’s constructive approach to the Trump administration is clearly correct but that the risk of sharp turns in the
situation must be taken into account due to the tensions within the US created by its historically low growth.¶ This prolonged period
of slow growth in the US, and in the advanced economies in general, combines with China’s own transition to ‘moderate prosperity’,
and then to a ‘high income’ economy by World Bank international standards, to create under Xi Jinping a qualitatively new period in
China’s development.¶ The Great Stagnation¶ Starting with the global background to the latest US economic data, a
defining
feature of the present overall international situation is extremely slow growth in the advanced
Western economies.¶ In nine years since the 2008 international financial crisis average growth in the advanced Western
economies is already almost as slow as during the ‘Great Depression’ of the 1930s and by the end of 2017 it will be
significantly slower. By 2016, total GDP growth in the advanced economies in the years since 2007 was only 10.1% and by the
end of 2017, on IMF projections, the growth in the advanced economies after 2007 will be lower than in the same period after 1929 –
total growth of 12.3% in the 10 years after 2007 compared to 15.1% in the 10 years after 1929.¶ Even more strikingly IMF
data
projects that future growth in the advanced Western economies, following the international
financial crisis, will be far slower than in the same period after 1929. IMF projections are that by 2021,
fourteen years after 2007, total growth in the advanced economies will be less than half that in the 14 years after 1929 – average
annual growth of only 1.3% compared to 2.9%, and total growth of 20.6% compared to 49.8%.¶ This data is shown in Figure 1. An
aim of this article is instead to carry out the necessary factual checks that the latest US data does not represent a break with long-
term trends.¶ US GDP growth¶ In the 1st quarter of 2017 US GDP was 2.0% higher than in the first quarter of 2016.[1] To evaluate
this 2.0% growth, given that a market economy inherently displays business cycles, it is necessary to separate purely cyclical trends
from medium/long term ones. Failure to do so leads to false analysis/statistical trickery – comparing a peak of the business cycle
with the trough will exaggerate growth, while comparing the trough of the business cycle with the peak will understate growth. Such
cyclical effects may be removed by using a sufficiently long term moving average that cyclical fluctuations become averaged out and
the long term structural growth rate is shown. Figure 2 therefore shows annual average US GDP growth using a 20-year moving
average – a comparison to shorter term periods is given below.¶ Figure 2 clearly shows that the fundamental trend of the US
economy is long-term slowdown. Annual average US growth fell from 4.4% in 1969, to 4.1% in 1978, to 3.2% in 2002, to 2.2% by 1st
quarter 2017. That is, the most fundamental long term growth trend in the US economy is that it has been slowing for half a century.
The latest US GDP growth of 2.0% clearly does not represent a break with this long term US economic slowdown but is in line with
it.¶ Per capita¶ US per capita GDP growth follows the same falling trend. Figure 3 shows a 20-year moving average for US per capita
GDP growth. Annual average US per capita GDP growth fell from 2.8% in 1969, to 2.7% in 1977, to 2.4% in 2002, to 1.2% by the first
quarter of 2017. The latest US data shows no break with this trend of long term slowdown - it is in line with it and continues these
long term trends.¶ This data
shows clearly claims the US economy is currently ‘dynamic’ driven by a
‘wave of innovation’ are therefore factually false – a pure propaganda myth repeated by US media such as
Bloomberg with no connection with factual trends. US per capita growth has in fact fallen to a low
level.¶ This fall of US per capita GDP growth to a low level clearly has major political implications within the US and underlies recent
domestic political events. Very low US per capital growth, accompanied by increasing economic inequality, has resulted in US
median wages remaining below their 1999 level – this prolonged stagnation of US incomes explaining recent intense political
disturbances in the US around the sweeping aside of the Republican Party establishment by Trump, the strong support given to a
candidate for president declaring himself to be a socialist Sanders, current sharp clashes among the US political establishment etc.¶
Cycle and trend¶ Turning from long term trends to analysis of the current US business cycle it may be noted that a 5-year moving
average of annual US GDP growth is 2.0%, a 7-year moving average 2.1% and the 20-year moving average 2.2%. Leaving aside a 10-
year moving average, which is greatly statistically affected by the severe recession of 2009 and therefore yields a result out of line
with other measures of average annual growth of only 1.4%, US average annual GDP growth may therefore be taken as around 2% or
slightly above. That is, fundamental structural factors in the US economy create a medium/long term growth rate of 2.0% or slightly
above. Business cycle fluctuations then take purely short term growth above or below this average. To analyse accurately the present
situation of the US business cycle therefore recent growth must be compared with this long-term trend.¶ Figure 4 therefore shows
the 20-year moving average for US GDP growth together with the year on year US growth rate. This shows that in 2016 US GDP
growth was severely depressed – GDP growth in the whole year 2016 was only 1.6% and year on year growth fell to 1.3% in the
second quarter. By the 1st quarter of 2017 US year on year GDP growth had only risen to 2.0% - in line with a 5-year moving average
but still below the 20-year moving average.¶ As
US economic growth in 2016 was substantially below
average a process of ‘reversion to the mean’, that is a tendency to correct exceptionally slow or
exceptionally rapid growth in one period by upward or downward adjustments to growth in
succeeding periods, would be expected to lead to a short-term increase in US growth compared to
low points in 2016. This would be purely for statistical reasons and not represent any increase in underlying or medium/long US
term growth. This normal statistical process is confirmed by the acceleration in US GDP growth
since the low point of 1.3% in the 2nd quarter 2016 – growth accelerating to 1.7% in 3rd quarter
2016 and 2.0% in 4th quarter 2016 and 1st quarter 2017.¶ President Trump’s administration may of course
claim ‘credit’ for the likely short term acceleration in US growth in 2017 but any such short-term shift is merely a
normal statistical process and would not represent any acceleration in underlying US growth. Only if growth
continued sufficiently strongly and for a sufficiently long period to raise the medium/long term rate
average could it be considered that any substantial increase in US economic growth was
occurring. The latest US growth data, 2.0% year on year, however does not represent any acceleration in US growth compared to
longer term averages and is therefore in line with the pattern of US slow growth and does not represent a break with it.

Increasing coverage is key to faster growth –it solves workforce

productivity, job lock, and bankruptcies
Liam Malloy 16, Ph.D. in Economics from the University of Maryland, Assistant Professor in
the Economics Department at the University of Rhode Island, et al., 2016, “State Sponsored
Health Insurance and State Economic and Employment Growth,”
http://digitalcommons.uri.edu/cgi/viewcontent.cgi?article=1004&context=ecn_facpubs

We find that in both panels increased health insurance coverage is associated with faster economic
growth . In the United States, we find evidence that Medicaid coverage increases both macroeconomic growth and employment
growth. However, our results also suggest that in their efforts to capitalize on the economic benefits of expanding health insurance,
legislators would be wise to implement policies that control per-enrollee costs. To the extent that the economic implications of
increased state-supported health care coverage are a key aspect of the ongoing debate in the health insurance policy arena, our
findings could inform future reforms.¶ Social Policy and Economic Growth¶ Previous
studies of the relationship
between social policies and state economic growth find inconsistent effects (see e.g., Blair and Premus
1987; Crain and Lee 1999; Dye 1980; Erickson 1987; Fisher 1997; Helms 1985; Jiwattanakulpaisarn et al. 2009; Jones 1990; Jones
and Vedlitz 1988; Newman 1983; Schneider 1987). Some find positive relationships between spending and economic growth, others
a negative relationship, and still others find no relationship at all.2 Work on the specific relationship between health spending and
economic growth is very limited. For example, a report issued by the Department of Health and Human Services (2008, 47)
reviewing the literature on government health spending and economic growth concluded that “[g]iven that most
of the
literature in this area is based on anecdotal reports or descriptive evidence, there is significant
scope for improving the current methods by using longitudinal data and more rigorous
empirical analysis.” Their own empirical tests using a panel dataset including 13 years of state spending data suggested
a positive relationship between government expenditures on health and state economic growth, a result contrary to that found in
Jones (1990).¶ Because health problems worsen when unaddressed, cities paying for emergency care of uninsured populations may
pay significantly more for the health problems that result from putting off care than places that pay upfront for preventative care
(Baicker and Chandra 2006 Baker, Fisher, and Wennberg 2008; Bamezai and Melnick 2006). In fact, Baicker and Chandra (2004,
184) find that spending and health outcomes are inversely related perhaps because “the use of intensive, costly care…crowds out the
use of more effective care.” Scholarship on the relationship between health care spending in health outcomes suggests a complex
relationship. Fisher and others (2007) find that additional spending on Medicare patients tends to be associated with higher
numbers of procedures rather than improved health outcomes. Other research suggests that health care spending does produce
improved outcomes but only in particular populations (i.e., infants due to a decrease in infant mortality) (Gallet and Doucouliagos
2015). While the relationship between health care spending and health outcomes is complex, the relationship between spending on
health insurance and health care outcomes may be more straightforward. Health insurance may lead to more desirable health care
outcomes directly (through care which addresses extant diseases/infirmities) and indirectly (through preventative care), and
healthcare spending is not a simple proxy for the prevalence of health care insurance (see Anderson and Frogner 2008; Anderson
and Poullier 1999).¶ Over the last decade, there has been an increase in attention to assessing social programs to see if they “work.”
In the health care policy arena, these assessments tend to focus on one of two primary criteria: (1) health outcomes, or (2) fiscal
efficiency. If health insurance is supposed to make people healthier, we can evaluate Medicaid (for example) based on the health
related outcomes of program participants (e.g., Baiker et al. 2013). But states (and politicians) also have to weigh if a program is
“worth the cost” given that there are other calls on the public purse. These assessments focus more on if a program saves more
money than it spends over time or leads to economic growth that helps the state recoup its costs (in terms of making up lost or
increasing tax revenue for example) or an increase in employment growth that makes the state economy stronger. If providing public
health insurance strengthens the economy and reduces the net cost of the program, it should enjoy broader support. Policy experts
disagree about the net costs of existing state-sponsored health insurance programs, the focal point of this article. Below, we review
these arguments. ¶ Pro: Expanding State Sponsored Health Insurance is Worth the Cost¶ First, increasing
access to health
insurance could positively affect labor supply and demand . Access to health insurance
increases the ability of people to remain in the workforce because it keeps them healthier and
increases the likelihood that they will be available for work. While this can increase overall lifetime
earnings and decrease employee turnover, it also could reduce the number of people reliant on
other government social programs such as social security, food stamps, housing assistance, etc.
Moreover, access to health insurance, particularly through the government may eliminate
“job lock ” and encourage entrepreneurial activities such as starting a new business or investing
in research that could create more jobs for others (see e.g., Sterret, Bender, and Palmer 2014). ¶ Likewise, larger
government sponsored programs could alleviate some inequalities in the system (Sterret, Bender, and Palmer 2014). For example,
under an employee-sponsored health insurance regime, firms with more elderly or disabled employees, pregnant women, and so on,
pay more for health care than firms who have employees that are cheaper to cover. The financial incentives generated by this
insurance regime may encourage firms to either discriminate against certain workers (American Civil Liberties Union 2002),
decrease wages (Gruber 1994) and investments, or decrease hiring additional workers (especially new full time workers) (Baicker
and Chandra 2006) as health care costs become a larger percentage of labor costs. For these reasons, increasing government
sponsored health insurance could increase employment and economic growth by increasing the labor supply and eliminating market
inefficiencies. ¶ Looking specifically at Medicaid, some evidence suggests that expanding Medicaid coverage could increase economic
and employment growth. Baiker and others (2013) harnessed he unique “experimental” expansion of Medicaid in Oregon to test how
Medicaid coverage affected individual health outcome and economic security. While Medicaid access did not improve all health
outcomes, “Medicaid coverage decreased the probability of a positive screening for depression, increased the use of many preventive
services, and nearly eliminated catastrophic out-of-pocket medical expenditures” (Baiker et al. 2013). A related study demonstrated
that those participating in the Medicaid expansion had “lower out-of-pocket medical expenditures and medical debt (including fewer
bills sent to collection), and better self-reported physical and mental health than the control group” (Finkelstein et al. 2012).3¶
State-sponsored health insurance may boost economic growth through other means as well.
Providing lower income individuals with state health insurance can increase tax revenues by
keeping families and individuals out of debt that would otherwise keep them from paying their
taxes. For example, as the cost of health care has increased in the United States, lack of health insurance has
become the largest driver of bankruptcy (Himmelstein et al. 2009). Expenses associated with
significant health issues also decrease the ability of families to invest in activities that would increase
their economic position and thus increase taxable income. For example, a study by Collins and others (2012)
found that 36 percent of young adults had medical debt, and of those 31 percent had put off education and career plans, 28 percent
were unable to meet their basic financial obligations because of medical bills, and 32 percent could not make their student loan or
tuition payments. ¶ Athird mechanism through which state sponsored health insurance could bolster economic growth is as
a direct economic stimulus (see e.g., Pauly 2003): expenditures on health care increase both
wages and the number of jobs in the health care sector. To the extent that expenditures on health care lead to
new treatments and cures that decrease morbidity and infirmity, spending can result in a large financial gain for
the country. (Aaron 2003; Murphy and Topel 2006).z

Coverage gaps threaten economic decline – stabilizing insurance

markets is key
Sara Rosenbaum 10, JD from Boston University, Jonathan Gruber, Buying Health Care,
the Individual Mandate, and the Constitution, The New England Journal of Medicine,
http://www.nejm.org/doi/pdf/10.1056/NEJMp1005897
From an economics standpoint, pose of the ACA is to regulate how Americans buy health care, which is clearly economic conduct.
Above all, the ACA’s fundamental goal is to stabilize the vast U.S. market for health care services — which accounts for 17.5% of the
gross domestic product, according to Congress — along with the health insurance system on which nonelderly Americans rely as a
principal means for financing their health care. The law’s goal is revealed through extensive legislative findings that are set forth in
the ACA. Thegoal also can be seen in the act’s provisions that collectively are aimed at making the
insurance market work for millions of Americans who, because of their income, health status, or
both, have been locked out of affordable, accessible, and stable coverage and must therefore try
to pay for care at the point of service.¶ The existing system has broad economic
implications for both the insured and the uninsured. Far from being passive and noneconomic, the
uninsured consume more than $50 billion in uncompensated care, the costs of which are passed
through health care institutions to insured Americans. Moreover, medical expenses not covered by
insurance are one of the leading causes of bankruptcy in the United States, and the costs of
resolving those bankruptcies are borne throughout the U.S. economy. In addition, the lack of
health insurance leads to poorer health, which can, in turn, reduce workplace productivity. Even
the possibility of losing health insurance makes many workers afraid to leave their jobs for more
productive positions elsewhere, so the current system reduces the over all productivity of the
U.S. labor force.¶ The changes made by the ACA to stabilize the insurance market are fundamentally economic. The
legislation’s core is its mandate to end pervasive discriminatory insurance practices while making care affordable. But such
change is not possible without an individual mandate. If people who are in better health can opt
out of the market and effectively gamble that they can pay for whatever health care they need at
the point of service, prices rise for those who are in poorer health, leading to an “adverse
selection” spiral that raises insurance prices for all. This is not an idle conjecture . Five states
have tried to undertake reforms of the nongroup insurance market like those in the ACA without enacting an individual mandate;
those five states are now among the eight states with the most expensive nongroup health insurance.¶ In the end, the
ACA is all
about altering individual economic conduct, and its importance lies in the way it changes the
when and how of health care purchasing. By ensuring access to affordable coverage for most
Americans, the law seeks to rationalize our economic behavior while providing the regulatory
and subsidization tools to make this rationalization possible. To characterize the ACA as a law aimed at
anything other than individual economic conduct is to fundamentally miss the point of the legislation.
Second is small businesses:
Uncertainty and poor ACA implementation threatens job lock and
crush small businesses – they’re key to the economy
Jeanne Shaheen 17, MA in Political Science from the University of Mississippi, 6/29/2017,
Small businesses are collateral damage in healthcare chaos, http://www.nhbr.com/July-7-
2017/Small-businesses-are-collateral-damage-in-healthcare-chaos/
The Republican plan to overhaul our healthcare system is causing anxiety for millions of Americans
and uncertainty for small businesses and entrepreneurs who are the backbone of our
economy.¶ The Senate bill was drafted in secret by Republican senators with no input from the public, no testimony from doctors
or hospitals and no public hearings. This backroom maneuvering follows passage of the House Republican healthcare plan, which
even President Trump has called “mean.”¶ These bills roll back protections for people with pre-existing conditions, raise out-of-
pocket costs and strip coverage from millions of people. They also slash Medicaid — our nation’s program for insuring children,
people with disabilities, seniors in nursing homes, and people with substance use disorders — by nearly half.¶ I recognize that the
A ffordable C are A ct needs changes. I believe we should focus on improving the law, keeping what
works and fixing what’s not working, while helping to level the playing field for small businesses.¶ But
instead of fixing it, the Trump administration is systematically undermining the ACA by cutting
outreach and enrollment efforts, suggesting it won’t enforce the law and refusing to commit to
making cost sharing reduction payments essential to the ACA-created health insurance
marketplaces for more than a month at a time. President Trump has made clear his desire to see the system fail,
saying: “The best thing we can do politically speaking is let Obamacare explode.”¶ That’s irresponsible, and treats small businesses
as collateral damage.¶ While some small businesses buy health insurance in the small group market, many entrepreneurs, sole
proprietors and people working for small firms purchase their insurance on the individual market through an ACA marketplace.¶
According to the nonpartisan Congressional Budget Office, the
chaotic, incoherent and secretive process in
Washington is creating “substantial uncertainty about how the new law would be implemented
[and] could lead insurers to withdraw from or not enter the non-group [individual] market” for
insurance purchased individually on ACA marketplaces.¶ In 2014, one in five individuals who purchased
healthcare on an ACA marketplace was a small business owner, self-employed, or both. Before passage of the ACA, small businesses
paid an average 18 percent more for coverage than large businesses.¶ Data from the Centers for Medicare and Medicaid Services says
the average yearly premium increase in the small group market was 10.4 percent between 2008 and 2010 (pre-ACA), but dropped by
half between 2011 and 2015. The number of uninsured small business employees (those working at firms with fewer than 50
workers) dropped by more than four million between 2013 and 2015.¶ The
ACA also enabled many Americans to
consider entrepreneurship by ending the disincentive known as “job lock,” which kept many
Americans in jobs they didn’t want because they feared losing their health insurance.¶ David Lucier,
owner of Claremont Spice & Dry Goods in Claremont, said: “Before the ACA, insurance costs were more than a third of my business
expenses. Now, they’re less than an eighth. The ACA made it possible for me to go out on my own and realize my dream of starting a
small business.Ӧ Citing
the uncertainty and the general unpredictability of the legislative process in
Washington, insurers are departing the exchanges. This is especially damaging for sole
proprietors and small businesses that rely on the ACA and its affordable insurance options.¶
Without the ACA, millions of Americans will lose their insurance, and small businesses will face
the prospect of closing or shifting health costs to employees.¶ New Hampshire is a small business state.
Small businesses employ more than half our private workforce and are a job creating
engine . They need certainty so they can make prudent decisions about payroll, budgets and
product development.¶ Running a small business is hard enough. The current chaos in Washington makes it
that much more difficult.¶ Instead of tearing down the ACA and taking health coverage away from
people and small businesses, we should be building on the gains and achievements of healthcare
reform and work together on a bipartisan basis to fix what’s not working.¶ The ACA has had a positive
impact all across America, but it needs commonsense repairs and strengthening . My message to Republican
leaders in Congress and President Trump is: stop undermining the ACA, and let’s work together to improve America’s healthcare
system.
Small businesses are key to reverse economic stagnation – solves
weak job growth and labor outflows
Boyd Nash-Stacey 16, Economist at BBVA Compas, MA in Economics from the University
of Houston, 6/22/2016, Running on fumes: remaining gap in Beveridge Curve a matter of
structural forces, https://www.bbvaresearch.com/wp-
content/uploads/2016/06/160622_US_EW_RunningOnFumes.pdf
As the U.S. economy enters its 28th consecutive quarter of expansion (4th longest since the
great depression), there is ongoing debate as to whether labor markets, and for that matter, the
broader economy is nearing the end of the expansion cycle. While there is evidence that expansions do not die
of old age, there are signs that the labor market recovery is nearing retirement, similar to a growing
share of the labor force. 1 For example, a recent report from the BLS suggested that job growth
was the lowest in six and half years. Moreover, the auspicious signs of strong flows back into the
labor force reversed course dramatically. While these measures can be volatile, there are many signs that
cyclical recovery is nearing its peak at a moment when conditions remain below the economy’s
pre-crisis potential.¶ That being said, a broad view of the labor market suggests that conditions could not be better. The
economy has added an average of 226K jobs per month since 2014, and the unemployment rate now stands at 4.7%—the lowest rate
in nine years. In addition, the number of people choosing to re-enter the labor force and begin work was at an all-time high in April,
pushing up the labor force participation rate, a trend that had coincided with wage gains and tighter labor market conditions. ¶ To
assess if there is remaining slack in the labor market or if the remaining headwinds are structural in nature, we exploit the empirical
relationship between the unemployment rate and jobs vacancies, known as the Beveridge Curve (BC), and a time-series derivation of
the gap in the BC referred to as the “curve shifter.” Theory suggests that higher levels of unemployment (larger pool of job seekers) is
associated with a lower number of vacancies given that a higher supply of job seekers and greater demand for employees will
increase the likelihood of employers finding a match for their vacant positions. As a result, traditional business cycles produce
movements along the curve. However, during
the recession and recovery, there has been a persistent
outward shift in the curve, which is unlikely to be explained by normal cyclical forces.¶ To put
this into perspective relative to the pre-crisis, for any given job vacancy rate, there was a 2pp
higher unemployment rate (UR). For sectors most acutely impacted by the crisis, such as
construction and transportation and utility, the gaps were 5.1pp and 2.3pp larger, respectively.
Although there have been some indications of improvements, based on a derivation of this gap
or shift in the BC, there appear to be remaining frictions.¶ Using this reduced form representation of the
curve shifter, we confirm previously established relationships between productivity (Lubik 2012), uncertainty (Liu & Leduc 2015),
and secular shifts in labor force activity a la Bova et al (2016). However, we find that access to credit, in addition to significant fiscal
policy tightening, are the key elements in the breakdown of labor market matching. Moreover, we find heterogeneous impacts across
firm size and age, and industries. In fact, the reduced form representation of the factors that can “shift the curve” a la Pissarides
(2000) and Liu & Leduc (2015) shows that despite a handful of cyclical indicators suggesting vast improvements in the labor market,
there remain significant structural forces at play.¶ Usual suspects explain remaining gap in labor market¶ After controlling for
changes in unemployment benefits (extension of unemployment insurance claims) due to the financial crisis, we found that there
were three key factors that explain the significant and persistent outward shift in the BC: labor force outflows of those 55 and older,
cyclical fiscal policy tightening and credit availability. In fact, over a four year cycle, increased willingness of banks to lend in the
commercial and industrial (C&I) and commercial real estate loans (CRE) spaces explains 35% of the shift, while cyclical fiscal policy
shocks explain 31% of the movement, productivity explains 15%, and retiree outflows from the labor force explain an additional 13%.
Unlike Liu & Leduc (2015), we find that policy uncertainty explains only a small portion of the shift (3.0%). On a short time horizon
(four quarters), however, productivity plays a more important role in matching, explaining nearly 50% of the shift, with labor force
outflows explaining an additional 17%.¶ These results
imply that factors that are cyclical by nature can have
lasting effects on broader labor market activity. A process sometimes referred to as hysteresis. For example, fiscal
policy shocks and credit availability tend to ebb and flow with the business cycles, leading to predictable movements along the BC.
However, without offsetting shocks to other determining factors, e.g. lower uncertainty or higher productivity, the impact can persist
for years, and in some cases never fully recover. In addition, to the extent that credit and fiscal policy have experienced a permanent
shift, and the fact that monetary policy is becoming a less effective tool, it will be hard to envisage any significant reduction in the
gap in the medium-term. ¶ In addition, we tested the impact hiring rates have on BC across firm age, size and industry. In the short
run, large and incumbent firms have the largest impact on the BC. However, after six quarters, the
impact that startups
and small firms have on the BC is more significant and persistent. In fact, at 16 quarters, the impact that
startup hiring has on BC compared to old firms is 10 times greater; for small firms, in a
similar vein, the impact is 250% greater at 16 quarters versus four quarters from the initial
shock. With this in mind, creating an environment that encourages small business formation and risk
taking could counteract headwinds plaguing the labor market. ¶ Firms at all levels are susceptible to credit
cycles and cash flow volatility. However, these factors are amplified for new entrants or small firms, imparting a larger influence on
the broader labor market, particularly in keystone sectors such as retail, real estate and construction. In other words, hiring
slowdowns in these sectors have the largest and most persistent effect on the BC shifter. For instance, a one standard deviation drop
in the hiring rates in these sectors would shift the BC outwards by approximately 10%. To put this into perspective, in the aftermath
of the crisis, the BC shifter increased by 30% from peak-trough. Moreover, unlike other industries that are more apt at weathering
cycles and have greater access to credit such as manufacturing, these industries are generally slow to respond and as a result,
accumulate losses over a longer time period, and in some cases, never recover.¶ This
finding has substantial
implication for the health of the broader economy given the fact that small and new firms are
the dominant force in net job creation in the U.S.; whereas, larger (500+ employees) and older (11+ years)
firms are historically net job destroyers. Moreover, startups and small businesses hire at a rate between 1 to
2.5 times higher than older and larger firms. Labor-intensive service sectors such as retail also have persistently
higher levels of hiring, in some cases 50-75bp higher than other sectors. More specifically, startup hiring rates in industries such as
finance and insurance, manufacturing and information are 380%, 330% and 270% higher, respectively, than their industry peers.
Small and young firms in arts and entertainment, agriculture and accommodation hire at rates 200%-400% higher than the national
average. Research
has also shown that only 3% of businesses can be classified as “high growth
businesses,” but they are responsible for a disproportionate share of growth. Moreover, small
businesses are essential parts of U.S. supply chains given that can lower logistical costs, are
nimble problem solvers and are better equipped to partner on joint innovations. ¶ There is
additional upside to targeting small businesses and startups given that as outflows from the
labor market intensify, there could be adverse effects for aggregate productivity as new entrants
take time to develop skills. As a result, focusing on new business hires could help to accelerate the
demographic transition.

Small businesses solves competitiveness – reverses offshoring

Karen Mills 13, MBA from Harvard Business School, SBA’s Karen Mills: U.S. competitiveness
hinges on the strength of small business suppliers, The Washington Post,
https://www.washingtonpost.com/business/on-small-business/sbas-karen-mills-us-
competitiveness-hinges-on-the-strength-of-small-business-suppliers/2013/05/06/03f517b8-
b412-11e2-9a98-4be1688d7d84_story.html?utm_term=.86664a9b8ab1
¶However, according to Gary Pisano and Willy Shih of Harvard Business School, for decades, companies operating in
the United States were steadily outsourcing development and manufacturing work to specialists
abroad and cutting their spending here at home. Over time, this outsourcing moved up from low
value tasks to more sophisticated engineering and manufacturing.¶ ¶ This has hurt America’s
competitiveness and our ability to innovate .¶ ¶ Economy & Business Alerts¶ Breaking news about economic
and business issues.¶ Sign up¶ But the trend is shifting, and across the Obama administration, we have put in place
programs that attract more production, more investment and more jobs back to our shores.¶ ¶ Caterpillar, GE and Ford, for example,
are among those that have recently announced they are shifting some manufacturing operations back to the United States. ¶ ¶ The
reasons are clear. In an article about onshoring GE’s appliance manufacturing to Kentucky, CEO Jeff Immelt wrote that
“engineering and manufacturing are hands-on and iterative, and our most innovative appliance-
design work is done in the United States. At a time when speed to market is everything,
separating design and development from manufacturing didn’t make sense.”¶ ¶ This trend is
likely to continue as companies recognize higher U.S. worker productivity, rising labor and
energy costs abroad and logistical advantages here at home. Couple that with global demand for high quality
American-made products, and it is hard not to be bullish about America’s long-term opportunities.¶ ¶ The key now is
building capacity and investing in our country’s small business supplier base so that these firms
can better support global manufacturers and help bring more jobs back to the United States —
and both the government and the private sector have a role to play in making this possible.¶ The
United States has some of the world’s most innovative small suppliers and entrepreneurs. We
have the types of small businesses that, with the right support, can go toe-to-toe with China
(particularly on the higher end of the value chain) or with Germany’s famed Middlestand companies.¶
Businesses around the world are taking notice. Foreign companies like Lenovo, Ikea, Nissan,
Airbus, Siemens are starting or growing U.S. operations, and they are looking for networks of
U.S.-based suppliers to support them.¶ So how do we build on this momentum?¶ Related: How to land contracts with
corporate clients¶ Today, U.S.-based, forward-thinking companies are looking at their supply chains
very differently. They are working together to co-innovate, they are helping supply the capital
and skills their small suppliers need, and they are operating as partners.¶ At the U.S. Small Business
Administration, we are leading a government-wide effort called the American Supplier Initiative to support small suppliers.¶
Between 250,000 and 750,000 U.S. businesses are part of commercial and government supply chains. We are using our experience
and the best practices we have developed overseeing the federal government’s $100 billion small business contracting program to
help more small firms be successful commercial suppliers. Here’s how:¶ Making connections: We are connecting small and large
businesses together through matchmaking activities and through public private partnerships like IBM’s Supplier Connection, a
portal that makes it easier for small businesses to connect to supply chain opportunities.¶ Access and opportunity: The Washington
Post highlighted a recent Massachusetts Institute of Technology (MIT) report that concluded that the “future of manufacturing will
consist of smaller firms that may not always have enough money to train workers, commercialize new products and procure
financing on their own.Ӧ Our agency has a $100 billion loan portfolio to help get capital to these businesses. We also train and
counsel more than a million business owners each year. And, as I highlighted in the second blog in this series, the president’s budget
proposes $40 million for intensive entrepreneurial training to support established firms that are well positioned for growth. The
training is tailored to ensure that entrepreneurs get the skills, resources, counseling and long-term business planning advice they
need to be part of corporate supply chains.¶ Creating ecosystems: A key component of a thriving manufacturing base is a network of
nimble suppliers. At the SBA, we launched the first official federal government cluster initiative in 2010; today, the federal
government is invested in more than 50 clusters across the country.¶ The goal of these clusters is to leverage, integrate and better
align all of a region’s assets (local industries, skill base of local workforce, economic development agencies, universities and
community colleges). These ecosystems are a proven tool for attracting and strengthening regional manufacturing and for boosting
exports.¶ In addition, as part of the American Supplier Initiative, the SBA is supporting efforts to fund supply chain mapping
techniques.¶ This is only the beginning. All across the country there
are small suppliers ready, able and willing to
make America’s corporations more productive, more innovative and more globally competitive.
As those supplier networks grow and connect, they will serve as a magnet to bring more
manufacturing and more jobs back to our shores.¶ That’s how we can accelerate economic
growth, strengthen the middle class and make America more globally competitive.

Strengthening US growth key to US leadership---solves global war

Richard N. Haass 13, President of the Council on Foreign Relations, 4/30/13, “The World
Without America,” http://www.project-syndicate.org/commentary/repairing-the-roots-of-
american-power-by-richard-n--haass
Let me posit a radical idea: The most critical threat facing the United States now and for the foreseeable future is not a rising China, a reckless North
the biggest
Korea, a nuclear Iran, modern terrorism, or climate change. Although all of these constitute potential or actual threats,
challenges facing the US are its burgeoning debt, crumbling infrastructure, second-rate primary and secondary schools, outdated
immigration system, and slow economic growth – in short, the domestic foundations of American power.
Readers in other countries may be tempted to react to this judgment with a dose of schadenfreude, finding more than a little satisfaction in America’s
difficulties. Such a response should not be surprising. The US and those representing it have been guilty of hubris (the US may often be the
indispensable nation, but it would be better if others pointed this out), and examples of inconsistency between America’s practices and its principles
understandably provoke charges of hypocrisy. When America does not adhere to the principles that it preaches to others, it breeds resentment. But, like
most temptations, the urge to gloat at America’s imperfections and struggles ought to be resisted. People around the globe should be careful what they
wish for. America’s failure to deal with its internal challenges would come at a steep price. Indeed, the
rest of the world’s stake in American success is nearly as large as that of the US itself. Part of the reason
is economic. The US economy still accounts for about one-quarter of global output. If US growth
accelerates, America’s capacity to consume other countries’ goods and services will increase,
thereby boosting growth around the world. At a time when Europe is drifting and Asia is slowing,
only the US (or, more broadly, North America) has the potential to drive global economic recovery.
The US remains a unique source of innovation. Most of the world’s citizens communicate with mobile devices based on
technology developed in Silicon Valley; likewise, the Internet was made in America. More recently, new technologies developed in the US greatly
increase the ability to extract oil and natural gas from underground formations. This technology is now making its way around the globe, allowing other
societies to increase their energy production and decrease both their reliance on costly imports and their carbon emissions. The US is also an invaluable
source of ideas. Its world-class universities educate a significant percentage of future world leaders. More fundamentally, the US has long been a
leading example of what market economies anddemocratic politics can accomplish. People and governments around the world
are far more likely to become more open if the American model is perceived to be succeeding.
Finally, the world faces many serious challenges, ranging from the need to halt the spread of

weapons of mass destruction, fight climate change, and maintain a functioning world economic order
that promotes trade and investment to regulating practices incyberspace, improving global health, and preventing armed
conflicts. These problems will not simply go away or sort themselves out. While Adam Smith’s “invisible
hand” may ensure the success of free markets, it ispowerless in the world of geopolitics. Order requires the visible hand of
leadership to formulate and realize global responses to global challenges. Don’t get me wrong: None of this is
meant to suggest that the US can deal effectively with the world’s problems on its own. Unilateralism rarely works. It is not just that the US lacks the
means; the very nature of contemporary global problems suggests that only collective responses stand a good chance of succeeding. But
multilateralism is much easier to advocate than to design and implement. Right now there is
only one candidate for this role: the US. No other country has the necessary combination of
capability and outlook. This brings me back to the argument that the US must put its house in order –
economically, physically, socially, and politically – if it is to have the resources needed to promote order in the
world. Everyone should hope that it does: The alternative to a world led by the US is not a world led by China, Europe,
Russia, Japan, India, or any other country, but rather a world that is not led at all. Such a world would almost
certainly be characterized by chronic crisis and conflict. That would be bad not just for Americans, but for
the vast majority of the planet’s inhabitants.
The US-led liberal order is key to solve global conflict – economic
foundations are key
Robert Kagan 17, Senior Fellow in Foreign Policy, Project on International Order and
Strategy, Brookings Institution, “The twilight of the liberal world order,” 1/24/17,
https://www.brookings.edu/research/the-twilight-of-the-liberal-world-order/
However, it is the two great powers, China
and Russia, that pose the greatest challenge to the relatively
peaceful and prosperous international order created and sustained by the United States.
If they were to accomplish their aims of establishing hegemony in their desired spheres of influence, the
world would return to the condition it was in at the end of the 19th century , with
competing great powers clashing over inevitably intersecting and overlapping spheres of
interest. These were the unsettled, disordered conditions that produced the fertile ground for the two
destructive world wars of the first half of the 20th century. The collapse of the British-dominated world
order on the oceans, the disruption of the uneasy balance of power on the European continent due to the rise of a powerful unified
Germany, combined with the rise of Japanese power in East Asia all contributed to a highly competitive international environment
in which dissatisfied
great powers took the opportunity to pursue their ambitions in the absence of
any power or group of powers to unite in checking them. The result was an unprecedented global
calamity. It has been the great accomplishment of the U.S.-led world order in the 70 years since the end of the Second World
War that this kind of competition has been held in check and great power conflicts have been avoided.

The role of the United States, however, has been critical. Until recently, the dissatisfied great and medium-size powers
have faced considerable and indeed almost insuperable obstacles to achieving their objectives. The chief obstacle has been the power
and coherence of the order itself and of its principal promoter and defender. The
American-led system of political
and military alliances, especially in the two critical regions of Europe and East Asia, has presented China and
Russia with what Dean Acheson once referred to as “situations of strength” in their regions that have
required them to pursue their ambitions cautiously and in most respects to defer serious efforts
to disrupt the international system. The system has served as a check on their ambitions in both positive and negative
ways. They have been participants in and for the most part beneficiaries of the open international economic system the United States
created and helped sustain and, so long as that system was functioning, have had more to gain by playing in it than by challenging
and overturning it. The same cannot be said of the political and strategic aspects of the order, both of which have worked to their
detriment. The growth and vibrancy of democratic government in the two decades following the collapse of Soviet communism have
posed a continual threat to the ability of rulers in Beijing and Moscow to maintain control, and since the end of the Cold War they
have regarded every advance of democratic institutions, including especially the geographical advance close to their borders, as an
existential threat—and with reason. The continual threat to the basis of their rule posed by the U.S.-supported order has made them
hostile both to the order and to the United States. However, it has also been a source of weakness and vulnerability. Chinese rulers in
particular have had to worry about what an unsuccessful confrontation with the United States might do to their sources of legitimacy
at home. And although Vladimir Putin has to some extent used a calculated foreign adventurism to maintain his hold on domestic
power, he has taken a more cautious approach when met with determined U.S. and European opposition, as in the case of Ukraine,
and pushed forward, as in Syria, only when invited to do so by U.S. and Western passivity. Autocratic rulers in a liberal democratic
world have had to be careful.

The greatest check on Chinese and Russian ambitions, however, has come from the combined military power of the United States
and its allies in Europe and Asia. China, although increasingly powerful itself, has had to contemplate facing the combined military
strength of the world’s superpower and some very formidable regional powers linked by alliance or common strategic interest,
including Japan, India, and South Korea, as well as smaller but still potent nations like Vietnam and Australia. Russia has had to
face the United States and its NATO allies. When united, these military powers present a daunting challenge to a revisionist power
that can call on no allies of its own for assistance. Even were the Chinese to score an early victory in a conflict, they would have to
contend over time with the combined industrial productive capacities of some of the world’s richest and most technologically
advanced nations. A weaker Russia would face an even greater challenge.

Faced with these obstacles, the

two great powers, as well as the lesser dissatisfied powers, have had to hope for or if
possible engineer a
weakening of the U.S.-supported world order from within. This could come about
either by separating the United States from its allies, raising doubts about the U.S.
commitment to defend its allies militarily in the event of a conflict, or by various means wooing American allies out from
within the liberal world order’s strategic structure. For most of the past decade, the reaction of American allies to greater
aggressiveness on the part of China and Russia in their respective regions, and to Iran in the Middle East, has been to seek more
reassurance from the United States. Russian actions in Georgia, Ukraine, and Syria; Chinese actions in the East and South China
seas; Iranian actions in Syria, Iraq, and along the littoral of the Persian Gulf—all have led to calls by American allies and partners for
a greater commitment. In this respect, the system has worked as it was supposed to. What the political scientist William Wohlforth
once described as the inherent stability of the unipolar order reflected this dynamic—as
dissatisfied regional powers
sought to challenge the status quo, their alarmed neighbors turned to the distant American
superpower to contain their ambitions.

The system has depended, however, on will, capacity, and coherence at the heart of the
liberal world order. The United States had to be willing and able to play its part as the principal
guarantor of the order, especially in the military and strategic realm. The order’s ideological and economic
core —the democracies of Europe and East Asia and the Pacific—had to remain relatively healthy and
relatively confident. In such circumstances, the combined political, economic, and military power of the liberal world
would be too great to be seriously challenged by the great powers, much less by the smaller dissatisfied powers.

Continued slow growth causes diversionary conflict with China

John Ross 17, Senior Fellow at Chongyang Institute for Financial Studies, Renmin University
of China, former Professor at Shanghai Jiao Tong University, 7/10/2017, “Trump's economy -
cyclical upturn and long term slow growth”,
http://ablog.typepad.com/keytrendsinglobalisation/2017/07/trumps-economy-cyclical-upturn-
and-long-term-slow-growth.html

It is crucial for both economic and geopolitical perspectives to have an accurate analysis of trends
in the US economy. The publication of the latest revised US GDP figures is therefore important as it provides the latest
opportunity to verify these developments. This data confirms the fundamental trends in the US economy under Trump: ¶ The US
remains locked in very slow medium and long-term growth – particularly in terms of per capita GDP growth.¶
Due to extremely weak growth of the US economy in 2016 a
purely short-term cyclical upturn is likely in 2017 -
but any such short-term cyclical upturn will be far too weak to break out of this fundamental
medium and long-term trend of US slow growth.¶ This article analyses these economic trends in detail, considers
some of their geopolitical consequences, and their impact on domestic US politics.¶ US GDP and per capita GDP growth¶ In the 1st
quarter of 2017 US GDP was 2.1% higher than in the first quarter of 2016. Making an international comparison to other major
economic centres:¶ US total GDP growth of 2.1% was the same as the EU’s 2.1%.¶ Making a comparison to the largest developing
economies, US 2.1% growth was far lower than China’s 6.9% or India’s 6.2%.¶ This data is shown in Figure 1¶ However, in terms of
per capita GDP growth the US was the worst performing of the major international economic centres, because the US has faster
population growth than any of these except India. US annual population growth is 0.7%, compared to 0.6% in China and 0.4% in the
EU – India’s is 1.3%. The result therefore, as Figure 2 shows, is that US per capita GDP growth in the year to the 1st quarter of 2017
was only 1.3% compared to the EU’s 1.7%, India’s 4.9% and China’s 6.3%.¶ In summary US per capita GDP growth is very weak –
only slightly above 1%.¶ Figure 1¶ image¶ Figure 2¶ image¶ ¶ Business cycle¶ In order to accurately evaluate the significance of this
latest US data it is necessary to separate purely business cycle trends from medium/long term ones – as market economies are
cyclical in nature failure to separate cyclical trends from long term ones may result in seriously distorted assessments. Purely cyclical
effects may be removed by using a sufficiently long term moving average that cyclical fluctuations become averaged out and the long
term structural growth rate is shown. Figure 3 therefore shows annual average US GDP growth using a 20-year moving average – a
comparison to shorter term periods is given below.¶ Figure 3 clearly shows that the fundamental trend of the US economy is long-
term slowdown. Annual average US growth fell from 4.4% in 1969, to 4.1% in 1978, to 3.2% in 2002, to 2.2% by 1st quarter 2017. The
latest US GDP growth of 2.1% clearly does not represent a break with this long-term US economic slowdown but is in line with it.¶
Figure 3¶ image¶ ¶ Cycle and trend¶ Turning from long term trends to analysis of the current US business cycle, it may be noted that
a 5-year moving average of annual US GDP growth is 2.0%, a 7-year moving average 2.1% and the 20-year moving average 2.2%.
Leaving aside a 10-year moving average, which is greatly statistically affected by the severe recession of 2009 and therefore yields a
result out of line with other measures of average annual growth of only 1.4%, US average annual GDP growth may therefore be taken
as around 2% or slightly above. That is, fundamental structural factors in the US economy create a medium/long term growth rate of
2.0% or slightly above. Business cycle fluctuations then take purely short-term growth above or below this average. To analyse
accurately the present situation of the US business cycle therefore recent growth must be compared with this long-term trend.¶
Figure 4 therefore shows the 20-year moving average for US GDP growth together with the year on year US growth rate. This shows
that in 2016 US GDP growth was severely depressed – GDP growth in the whole year 2016 was only 1.6% and year on year growth
fell to 1.3% in the second quarter. By the 1st quarter of 2017 US year on year GDP growth had only risen to 2.1% - still below the 20-
year moving average.¶ As
US economic growth in 2016 was substantially below average a process of
‘reversion to the mean’, that is a tendency to correct exceptionally slow or exceptionally rapid
growth in one period by upward or downward adjustments to growth in succeeding periods,
would be expected to lead to a short-term increase in US growth compared to low points in
2016. This would be purely for statistical reasons and not represent any increase in underlying
or medium/long US term growth. This normal statistical process is confirmed by the acceleration in US GDP growth
since the low point of 1.3% in the 2nd quarter 2016 – growth accelerating to 1.7% in 3rd quarter 2016, 2.0% in 4th quarter 2016 and
2.1% in 1st quarter 2017.¶ Given the very depressed situation of the US economy in 2016 therefore some increase in speed of growth
may be expected in 2017 for purely statistical reasons connected to the business cycle.¶ Figure 4¶ The economic and domestic US
political conclusions of the trends shown in the latest US data are therefore clear¶ US
economic growth in 2016 at 1.6%
was so depressed below even its long term average that some moderate upturn in 2017 is likely.
President Trump’s administration may of course claim ‘credit’ for the likely short-term acceleration in US growth in 2017 but any
such short-term shift is merely a normal statistical process and would not represent any acceleration in underlying US growth.
Only if growth continued sufficiently strongly and for a sufficiently long period to raise the
medium/long term rate average could it be considered that any substantial increase in
underlying US economic growth was occurring.¶ This fall of US per capita GDP growth to a low
level clearly has major political implications within the US and underlies recent domestic political events. Very
low US per capita growth, accompanied by increasing economic inequality, has resulted in US median wages remaining below their
1999 level – this prolonged stagnation of US incomes explaining recent intense political disturbances in the US around the sweeping
aside of the Republican Party establishment by Trump, the strong support given to a candidate for president declaring himself to be
a socialist Sanders, current sharp clashes among the US political establishment etc.¶ Even a short-term cyclical upturn in the US
economy, however, is likely to be translated into increased economic confidence by US voters. This may give some protection to
Trump despite current sharp political clashes in the US with numerous Congressional investigations of President related issues and
virtually open campaigns by mass media such as the New York Times and CNN to remove the President. The latest opinion poll for
the Wall Street Journal showed that men believed the economy had improved since the Presidential election by 74% to 25%, while
women believed by 49% to 48% that the economic situation had not improved.¶ In terms of geopolitical consequences affecting
China:¶ The short term moderate cyclical upturn in the US economy which is likely in 2017 will aid China’s short term economic
growth – particularly as it is likely to by synchronised with a moderate cyclical upturn in the EU. Both trends aid China’s exports ¶
Nevertheless, due to the very low medium and long-term US growth rate the US will not be able to
play the role of economic locomotive of the G20. In addition to economic fundamentals IMF projections are
that in the next five years China’s contribution to world growth will be substantially higher than the US. It is therefore crucial China
continues to push for economic progress via the G20 and China has the objective possibility to play a leading role in this.¶ Very
slow growth in the US in the medium and longer term creates a permanent temptation to the US
political establishment to attempt to divert attention from this by reckless military action or
‘China bashing’ . China’s foreign policy initiatives to seek the best possible relations with the US are extremely correct but
the risks from such negative trends in the US situation, and therefore of sharp turns in US foreign
policy, must also be assessed.

US-China tensions rising now – aggressive actions escalate to nuke

war
Polina Tikhonova 17, Reporter, MA from Oxford University, citing Bruce G. Blair, the
National Bureau of Asian Research, and Union of Concerned Scientists, 7/27/2017, “If Trump
Orders A Nuclear Strike On China, Here’s What Happens”,
https://www.valuewalk.com/2017/07/trump-orders-nuclear-strike-china/
The fact that Trump now has the obedience of the U.S. Pacific Fleet chief in the hypothetical, yet
possible, decision to launch nuclear strikes against Beijing makes the whole let’s-nuke-China
scenario even faster and easier to execute.¶ Less than five minutes. This is the approximate
time that would elapse from President Trump’s decision to launch a nuclear strike against China
to shooting intercontinental ballistic missiles out of their silos, according to Bloomberg
estimations. The publication, citing former Minuteman missile-launch officer Bruce G. Blair, also estimates that it
would take about 15 minutes to fire submarine missiles from their tubes.¶ While the expert predicts that there might be
some minor hiccups in the let’s-nuke-China scenario – like some of the top brass trying to talk Trump out of launching a nuclear
strike – it appears that it
would be easier for the President to nuke an enemy than expected now that
he has the public support from the commander of the U.S. Navy’s Pacific Fleet.¶ US vs China Tensions
Rising, But Is Nuclear War Imminent?¶ The mere thought of a nuclear war between the U.S. and China – the world’s two biggest
militaries – sounds intimidating. Amid
strained relations between Washington and Beijing, and with
Trump recently giving U.S. Navy more freedom in South China Sea, the territory that China
considers vital to its national and security interests, the possibility of the two nations going to a
nuclear war cannot be ruled out anymore.¶ With Trump pledging to rein in China’s aggressive
territorial expansion in the South China Sea during his presidential campaign, the Trump administration has
made quite a few moves that could be pushing the two nations to the point of no return . In
May, Trump ordered the U.S. Navy to conduct a freedom-of-navigation operation in the
disputed area, which Beijing claims in its entirety despite the Philippines, Malaysia, Brunei,
Vietnam and Taiwan also claiming parts of the disputed region.¶ Earlier this month, the Trump
administration sent an even scarier war message to Beijing to challenge its military buildup on
the artificial islands in the South China Sea. A U.S. destroyer passed through the international flashpoint in the
South China Sea, a move that prompted a furious response from Chinese President Xi Jinping, who warned his American
counterpart of “negative factors” in U.S.-China relations. The Chinese Foreign Ministry lambasted the incident as a “serious political
and military provocation.”¶ US vs China War Would Be ‘Disastrous For Both’¶ Just last week, Trump approved the Pentagon’s plan
to challenge Chinese claims in the South China Sea, where Beijing has been actively building reefs into artificial islands capable of
hosting military planes. Breitbart News’s Kristina Wong exclusively reported that the President approved the plan to check China
over its ongoing militarization of and actions in the South China Sea, a move that will most likely further stain U.S.-China relations.¶
The latest heated exchange of hostile gestures between Beijing and Washington cannot but make
experts wonder: what would happen if the U.S. and China went to war? That would be
“disastrous for both sides – politically, economically, and militarily,” according to VICE citing
senior vice president for political and security affairs at the National Bureau of Asian Research,
Abraham Denmark.¶ While the two nations continue working together to prevent a potential
nuclear threat from China’s neighbor – North Korea – it seems like an even bigger nuclear
conflict is brewing between Washington and Beijing .¶ ‘Increased’ Possibility of Nuclear War¶ In
ValueWalk’s recent comparison of the U.S., Chinese and Russian militaries, it was concluded that the outcome of any war involving
the U.S. and China is quite impossible to predict, as there’s no telling what would be the scope and duration of the military
confrontation and if nuclear weapons would be used.¶ It’s also unclear if Russia would join forces with its arguably one of the biggest
allies – China. If it did, China’s chances of winning a war against Washington would considerably soar. After all, there are plenty of
potential flashpoints in the relations between Washington and Beijing, notably Taiwan and the South China Sea. The U.S. has in its
possession about 6,800 nuclear warheads – the world’s second largest nuclear arsenal after Russia – while China has only 270
nukes, according to recent estimations by the Arms Control Association.¶ According to a report by the Union of
Concerned Scientists, published last year, the U.S. going to “nuclear war with China is not
inevitable – but the possibility that it could occur has increased.” However, with Washington and Beijing not
being able to find common ground on such a vital issue for China’s national and security interests as the South China Sea, and with
Trump ordering more actions that further strain U.S.-China relations, the risk of nuclear war
between the world’s two biggest militaries could skyrocket.

Cost and certainty on the individual exchanges is key to solve job lock
– studies
Bradley T. Heim 17, Professor in the School of Public and Environmental Affairs at Indiana
University, PhD in Economics from Northwestern University, Lang Kate Yang, 4/272017, The
impact of the Affordable Care Act on self-employment, Health Economics, accessed via Wiley
Online Library
It is well known that the cost and availability (or lack thereof) of health insurance has the potential to
impact self-employment decisions, since leaving a wage and salary job often entails the loss of
employer sponsored health insurance. Further, surveys performed by the National Federation of
Independent Business find that the rising cost of health insurance is perennially a top
concern among small business owners. 1 As a result, laws that reform the health insurance market,
particularly for those who are self-employed, may impact the level of self-employment in the
United States. In this paper, we use data from the Current Population Survey to provide evidence on whether the most recent of such reforms, the Affordable Care Act (ACA), has impacted the
level of self-employment in the United States.¶ ¶ Self-employed individuals who do not receive an offer of employer-sponsored or government insurance 2 (either directly or through a spouse) and who wish to
purchase insurance generally must do so in the nongroup health insurance market. Prior to the ACA, even healthy insurance seekers on the private nongroup market often faced high premiums due to adverse
selection in the market, and those with poor health or preexisting conditions generally faced even higher risk-rated premiums or were unable to purchase a policy altogether.¶ ¶ The ACA makes several federal-
level changes to regulations in the private nongroup health insurance market. 3 For health insurance policies that begin in January 2014, it implements modified community rating regulations, which limit the
extent to which insurance companies may charge different premiums based on health status, and guaranteed issue regulations, which prevent insurance companies from excluding anyone based on preexisting
conditions. In addition, it contains subsidies for low-income taxpayers with family income up to 400% of the federal poverty level (FPL) to purchase health insurance and for small firms to provide health
insurance for their employees. Beginning on October 1, 2013, these insurance policies were offered on health insurance exchanges, some of which were operated by individual states and some of which were
operated by the federal government.¶ ¶ The first year of exchange operation was marred by numerous well-publicized difficulties in the function of the federal exchange and many state exchanges, but the second
year of exchange operation went more smoothly. 4 However, numerous state and federal lawmakers have called for repeal of the ACA. In addition, a number of markets have recently experienced decreased
participation by insurers as some large insurers have pulled out of participating in the exchanges, 5 and a number of state cooperative insurers have become insolvent, 6 which may call into question the long-term

Thus, for an individual contemplating self-employment and securing coverage

viability of the exchanges.¶ ¶

through an exchange policy, the availability of guaranteed issue and community rated insurance
in the nongroup market would be expected to make health insurance coverage more accessible
and affordable, increasing the attractiveness of self-employment. However, the poor
functioning of the exchanges in the first year of operation, combined with uncertainty surrounding whether the law will remain in
effect and whether the exchanges will continue to be viable over the long term, would tend to temper such effects. Further, it may take time for individuals to switch from wage and salary

employment to self-employment, which may delay any effect.¶ ¶ In this study, we analyze data from the 2010 to 2015 Current

Population Survey (CPS) to provide evidence on the impact of the ACA on the level of self-
employment. The CPS is a nationally representative survey of U.S. households and is
administered every month. Its timeliness and inclusion of labor force participation information
make CPS an appropriate data source for analyzing changes in self-employment upon the
implementation of the ACA.¶ ¶ We pursue two identification strategies. In the first, we utilize the fact that the pre-ACA individual health insurance environment differed across
states regarding community rating and guaranteed issue regulations. To identify the impact of the ACA on self-employment, we compare the change in self-employment rates pre- and post-ACA implementation in
states that had no such regulations (or had a subset of these regulations) and for which the ACA is a substantial change in policy, to states that had regulations similar to the ACA regulations and for which the ACA
is a smaller change in policy. The former group constitutes the treatment states, while the latter the comparison states. ¶ ¶ In the second identification strategy, we utilize differences across individuals in whether
they had employer-sponsored health insurance (ESI) prior to 2014, and examine, among those who had such insurance, whether having a characteristic (spousal coverage, older age, or a large family) that would
make them more (less) likely to be insurable if they left their job is associated with higher (lower) levels of transitions to self-employment. Such a relationship has previously been interpreted as evidence of
entrepreneurship lock. 7 We test this difference-in-differences analysis in the pre-ACA period (from November 2010 to December 2013) and the results confirm the expected impact of the aforementioned
individual characteristics on entrepreneurship lock. We then adopt a triple-differences strategy with pre- and post-ACA implementation as the third level of difference to investigate whether the estimated
prevalence of entrepreneurship lock has declined following the implementation of the ACA.¶ ¶ Our results suggest that the implementation of the nongroup market reforms and establishment of health insurance
exchanges due to the ACA in 2014 did not lead to an overall increase in self-employment in states that lacked similar provisions in their individual health insurance markets prior to 2014. We also do not find that
the ACA differentially increased self-employment among individuals who may have been likely to face entrepreneurship-lock in the pre-ACA period. We do, however, find statistically significant positive impacts in
states that lacked the ACA nongroup market provisions in the second year of implementation (when exchanges functioned properly and people had sufficient time to adjust their employment status) among

results suggest that the ACA led to increased self-employment

individuals eligible for insurance subsidies. Taken together, these

only in cases in which the uncertainty surrounding the exchanges was sufficiently reduced (due to the
exchanges functioning properly), the cost of insurance was sufficiently low (among low- and moderate-income individuals who qualified for subsidies), and
individuals had time to adjust.

Strengthening the mandate is key to make insurance markets

financially viable
Paul Demko 16, Healthcare Reporter for Political, former Washington Bureau Chief for
Modern Healthcare, 7/13/2016, Obamacare’s sinking safety net,
http://www.politico.com/agenda/story/2016/07/obamacare-exchanges-states-north-carolina-
000162
Even so, many of those insurers
lost tens of millions of dollars on their Obamacare policies last year —
and now they're seeking big rate hikes.¶ The ACA’s strength and its weakness is that it was built
atop America's private insurance system: rather than creating new government health plans, it depends on
competition among companies to offer affordable insurance to people who need it. In a nation dominated by private-sector health
care players, this made it politically possible–but it
also means the system works only if insurers find
Obamacare to be a desirable business. What has happened instead in North Carolina and many other states is that
insurers are finding the Obamacare business to be a swamp.¶ Nationwide, an analysis by
McKinsey found that insurers lost $2.7 billion on individual customers in 2014, the only year since
Obamacare coverage expansion for which full numbers are available–with 70 percent of carriers sustaining losses.
Those losses are after government payments intended to help plans with high-cost customers.
Preliminary data from 2015 suggest the rate of losses likely doubled, according to McKinsey.¶ The red ink
has led to the collapse of two-thirds of 23 new nonprofit health plans that were
established with federal loan dollars to increase competition in the state exchanges where
customers shop for policies. And UnitedHealth Group is largely getting out of the Obamacare
business because of anticipated losses of $650 million this year. “ The individual market is a
mess ,” Brian Webb, health policy manager for the National Association of Insurance
Commissioners, told a recent briefing on Capitol Hill.¶ As Obamacare approaches its fourth season of
enrollment, and prepares to enter the post-Obama era, it's hitting an inflection point—and, in states like North Carolina,
that point could become a crisis. Millions are now being covered through the law, but
they're older, sicker and more expensive to insure than anyone anticipated. To compensate,
health plans are raising premiums, in some cases by a lot—the largest insurer in Texas wants to jack up rates
for individual plans by an eye-popping 60 percent next year.¶ A close look at what's really keeping the exchanges underwater
suggests that some of the problems are self-inflicted wounds by Obama and his administration; others are the handiwork of
Republican saboteurs, who undercut the safeguards intended to help companies weather the uncertainty of the new law. And overall,
the system has been weighed down by one big miscalculation: Health
insurance amounts to a guess about how
much customers’ health care is going to cost in the long run, and in many states Obamacare
health insurers guessed wrong.¶ None of the problems are insurmountable, but if they aren’t fixed, the
law could find itself in a mounting crisis—what observers call a “death spiral”— in
which competition vanishes, costs skyrocket, and a dwindling pool of insurers offer policies so expensive that health insurance is as
out of reach as it ever was.¶ Politically, the repair job isn’t trivial: It requires a bipartisan decision to stabilize the Obamacare
markets, a consensus that has been unattainable in the politically toxic atmosphere on Capitol Hill since the law was passed six years
ago without a single Republican vote. With this year’s enrollment season set to open just one week before Election Day, the
turbulence in the exchanges could be a wildcard in the presidential contest–and threaten Obama’s signature domestic achievement.¶
The gulf between Obamacare's success covering citizens and its failures on the insurance front
isn't just an accidental side effect: It's a direct result of the key selling point of the law, that
coverage is now accessible to all Americans. Health care finance experts point to a handful of policy changes that
could bolster the exchanges and ensure that people in states like North Carolina can still buy health insurance five and 10 years from
now. That would require an honest reckoning with what’s gone wrong–and the legislative resolve to enact fixes. “There’s plenty
to be worried about,” said Don Taylor, a health policy expert at Duke University who has tracked Obamacare in his home
state of North Carolina and across the country. “The answer is more policy—not doing nothing.” ¶ So
just what is that new policy supposed to look like?¶ ANY LAW AS ambitious and complex as the ACA is going to be a work in
progress. Almost from the moment Medicare passed in 1965, Congress has been revising it, and even now it undergoes changes
every year. Most insurance companies say they remain committed to offering Obamacare plans, and as long as they stay in the
business, the exchanges are unlikely to implode.¶ In some states, such as California and Washington, the system is working fine.
More than 9 in 10 health plans made money selling Obamacare policies to individuals during the first year of enrollments, according
to McKinsey’s analysis. But in states like North Carolina, it's becoming increasingly clear that the assumptions the law was built on
just haven't held up. “The pool is far less healthy than we forecast,” said Brad Wilson, CEO of Blue Cross Blue Shield of North
Carolina, in an interview with POLITICO. “We need more healthy people.”¶ North Carolina’s Obamacare story started out just as the
administration hoped it would: More than 350,000 people signed up for insurance the first year it was offered. Just two insurance
companies were offering polices through the state's "insurance exchange"—the marketplace that lets individuals without workplace
coverage buy their own coverage–but in 2015 they were joined by a third carrier, UnitedHealth Group. Sign-ups that year surged
above 550,000. This year, the state saw another 10 percent bump, topping 600,000.¶ But as those customers demanded health care,
costs started to mount. In 2014, medical claims in the individual market for both Blue Cross Blue Shield of North Carolina and Aetna
exceeded 90 percent of premiums paid, according to financial filings. Last year, those costs soared above 100 percent of premiums
for all three carriers competing in North Carolina. Altogether,
medical claims hit $3.2 billion–nearly $100
million more than premiums the insurers collected. Throw in administrative costs on top of that,
and it becomes clear that the insurers lost tens of millions of dollars on their individual market
business, most of it coming through the exchange. This year, all three insurers stopped paying
commissions to brokers for selling individual plans, hoping to suppress enrollments and limit
their losses.¶ The companies are still analyzing how and why their initial estimates for setting their rates and writing policies
were so off the mark. The largest insurer, the nonprofit Blue Cross Blue Shield of North Carolina, has repeatedly stated it can’t
continue to sustain the losses it endured during the first two years of Obamacare enrollment, and it is currently weighing whether it
will continue competing on the exchange at all for 2017. Though the insurer has submitted plans to do business again in every
county in the state, it plans to hike rates nearly 20 percent on average. A final decision on 2017 participation won’t be made until
August.¶ “All options are on the table,” Wilson said—even getting out of the Obamacare business.¶ If Blue Cross Blue Shield does
decide to abandon the North Carolina exchange— which most observers believe is unlikely this year—it would potentially leave just
two companies, Aetna and Cigna, offering Obamacare policies in the state. And neither of those companies intend to compete
statewide in 2017, instead offering policies in select counties. The worst-case scenario is that residents of some North Carolina
counties would be left with just one–or even zero–insurers. Nobody knows precisely what that would mean for consumers at this
point, but at the very least exchange shoppers would have fewer choices and higher prices.¶ “That would be very scary for lots of
people,” said Ciara Zachary, health policy analyst at the North Carolina Justice Center, a liberal advocacy group. ¶ The troubles in
North Carolina’s exchanges are not unique. POLITICO’S analysis of financial filings for exchange carriers in a dozen states shows
continued struggles in 2015. Health plans competing on the exchanges in Colorado and Oregon, for
example, collectively paid out at least 20 percent more in medical costs on their individual
customers than they received in premiums, leaving insurers tens of millions of dollars in the
red.¶ In New York, most plans are losing money, including the much ballyhooed startup insurer Oscar, which has attracted
hundreds of millions in venture capital funding by promising to shake up the insurance market with tech-savvy innovations. But
Oscar sustained medical claims of $180 million on its roughly 50,000 New York customers last year. That’s nearly $1.50 paid out in
medical claims for every $1 collected in premiums–a burn rate that is clearly unsustainable.¶ Not all exchange markets have proven
to be financial quagmires. The exchange market in Florida, for example, appears to be on a path toward financial stability. Fewer
than half of competing carriers operated in the black in 2014, according to McKinsey’s analysis. But of the nine competing plans for
which 2015 data were available, just one–UnitedHealth–had medical claims that exceeded premiums on its individual market
business. Among the remaining plans, medical claims accounted for 86 percent of premiums. That’s right where insurers need to be
to at least break even.¶ There are no simple explanations for the huge difference in financial performance for Obamacare insurers
competing in different states. Though it's a national law, health insurance varies widely from state to state: the populations are
different, the medical cultures are different, and each state has its own business landscape. The local political responses have been
different, too, but that's not always the main story: both Florida and North Carolina enrolled a lot of people despite having a state
government that strongly opposed the health law.¶ One likely factor is the amount of competition among hospitals, doctors and
other health care providers, which determines their ability to dictate reimbursement rates. In southeastern Minnesota, for example,
where the Mayo Clinic is the dominant provider, the cheapest midlevel plan available to a 40-year-old through the state’s exchange
this year was $329 per month. That’s roughly 20 percent higher than in the rest of the state.¶ “The more competition you have, the
better the pricing,” said Mario Molina, CEO of Molina Healthcare, which is selling exchange plans in nine states. “In some markets
where there’s very little competition it’s difficult to get the prices that health plans need.”¶ But looming over the whole conversation
is the blunt question of just who signs up for Obamacare in each state, and how sick they are. In the dry language of insurance
companies, customers are called their “risk pool”—and when it comes to Obamacare, the pool is way riskier than they wanted.¶ SO
WHAT WENT wrong? Like all insurance, Obamacare is built on the idea of shared risk: A small number of customers with big
medical bills needs to be offset by a much wider group who pay monthly premiums but rarely access care. Theoretically, they balance
The biggest problem plaguing the exchanges is that for many
out, and insurers collect their profits off the top.¶
states, the
balance has turned out to be way off. Fewer individuals signed up for coverage than
projected, and they’ve proven sicker and more expensive than insurers had expected.¶ Before the
ACA, there were a handful of ways insurers could balance their risk pool. One big tactic was just to avoid covering sick people,
filtering out individual customers who appear likely to need lots of expensive medical care. But Obamacare made that type of
discrimination illegal: One big selling point of the law was that everyone would be eligible to sign up.¶ In
the new insurance
landscape, where carriers must take all comers, no matter how sick and costly, the simplest way
to ensure a viable risk pool is to make it as large and diverse as possible.¶ For Obamacare, that has turned
out to be a bigger problem than anyone anticipated. Three years ago, the Congressional Budget Office projected that 24 million
Americans would be enrolled in exchange plans in 2016. The reality: barely half that number signed up this year–and that number is
certain to erode as people stop paying their insurance bills or find jobs that include coverage. The Obama administration’s stated
goal is now just 10 million enrollments by the end of 2016.¶ Why so low? In part, it's because fewer people got kicked off their work
plans than expected. Initially, the architects of the plan thought many employers would stop offering insurance and let people buy
their own on the Obamacare market. That didn't happen. “Employers have not ‘dumped’ employees to the extent that some people
feared and predicted,” said Ceci Connolly, CEO of the Alliance of Community Health Plans. It was good news for those workers, but
not so good for the exchanges’ actuarial health.¶ And in part the small size of the Obamacare pool is because of a self-inflicted wound
by Obama himself. For years, in selling the ACA, Obama had been repeating a talking point: "If you like your health care plan, you
can keep it." But in late 2013, as the first open-enrollment season loomed, millions of Americans received notices that their plans
were being canceled because they didn’t meet the coverage requirements of the health care law. Republicans relentlessly mocked the
president’s failure to keep his pledge. PolitiFact called it the 2013 “Lie of the Year.”¶ In response to the blowback, the administration
decided that those old plans didn’t have to be canceled after all–people could keep them through 2017, even if they didn’t comply
with the new rules. That move may have quelled the political uproar, but it also cut off a potential flow of millions of customers who
may otherwise have signed up for new plans in the fledgling Obamacare exchange markets.¶ Not all states extended those plans, and
some insurers phased them out on their own. But McKinsey estimates that heading into the 2016 enrollment season, 3.7 million
Americans were still in those old individual plans. And it’s likely that an awful lot of them are quite healthy, given that they were able
to obtain coverage even when health plans were free to discriminate against people with pre-existing conditions.¶ A viable risk pool
also needs healthy customers. The most desirable customers are young, from 18 to 34—the so-called young invincibles—who might
not want to sign up at all, because they don't think they'll need health care.¶ To
encourage all Americans to sign up,
Obamacare includes a cudgel: You have to pay a tax penalty if you aren't covered in a qualified
health plan. In reality, there are numerous exemptions–and the penalty has proven too low to
induce younger Americans to buy insurance. The fine maxed out this year at $695, or 2.5
percent of income, whichever is higher. Healthy, younger people (some of whom may be eligible
for subsidies but not realize it) often figure it’s cheaper to pay the fine than shell out money on
health insurance that they don’t think they’ll need. That may or may not make financial sense for them as
individuals, but it's hurting the broader system. For markets to be sustainable financially, experts estimate
that 35 percent of customers should be between the ages of 18 and 34. In reality, right now, just
28 percent of customers fall in that group.¶ Obamacare also includes a restriction on timing: Exchange customers are
supposed to sign up only during the annual open-enrollment period. That’s designed to prevent people from gaming the system and
getting insurance only when they need medical care. But there are exceptions to the timing rule--you can sign up for Obamacare
when you've switched jobs and lose your work coverage, for instance. And insurers complain that these exceptions are far too
numerous and easy to game. Most troubling to insurers, there’s been no rigorous verification process to corroborate that Obamacare
customers are truly eligible for special enrollment periods—that they really did change jobs, that they weren’t just claiming to have
done so because they had just gotten a scary diagnosis or banged up their knee and now wanted health care. Many health plans have
found that customers who come in through special enrollments run up bigger medical bills than other people. Pennsylvania’s
Independence Blue Cross, for example, says people who enroll outside the standard window have 30 percent more medical
expenses.
 2
Adv 2 is Medical Tourism

Weak ACA implementation is driving growth in medical tourism –

strengthening the mandate key
Renee-Marie Stephano 12, JD in Health Law, Villanova University School of Law, 7/9/2012,
US HealthCare Reform’s Effect on the US Medical Tourism Marketplace,
http://medicaltourismassociation.com/en/us-healthcare-reform-s-affect-on-the-us-medical-
tourism-marketplace-white-paper.html
The United States has been in a healthcare crisis for years. It is estimated that more than 50
million Americans and growing are without health insurance and over 120 million are without dental
insurance. A common misperception is that the average American without health insurance does not have the financial means to
purchase health insurance, but it is estimated the average American without health insurance makes approximately $50,000 dollars
per year. Those Americans who do not have the financial means to purchase health insurance are typically provided coverage, called
Medicaid, by the state and federal government. The definition of an uninsured American varies and has become a political debate as
different political parties argue different definitions and numbers.¶ At
the end of March 2010, the Patient
Protection and Affordable Care Act (PPACA) and the reconciliation bill were passed into law. US
Healthcare Reform should have a very positive impact on the growth of outbound medical tourism leaving the United States while
having no impact on the continued growth of both foreign patients coming into the US for healthcare treatment (inbound medical
tourism), or on American healthcare consumers who travel regionally throughout the US for healthcare treatment (Domestic
medical tourism).¶ Healthcare Reform will most likely drive up the costs of health insurance in the US to
an unsustainable level. It is estimated that in 2020, health insurance costs for a family could range from $30,000 to
$40,000 per year. Under Healthcare Reform, these health insurance costs should be higher. While Healthcare Reform’s
intention is to insure more Americans, it may have the opposite effect of creating more
uninsured due to high health insurance costs. Healthcare Reform is pushing more employers,
insurers and health insurance agents to examine implementing medical tourism. With health
insurance and healthcare costs in the US rising at a much faster pace under Healthcare Reform,
the medical tourism industry is expected to see growth in 2013 and very strong growth
occurring in 2014, as the major parts and mandates of Healthcare Reform are implemented and
health insurance cost increases are felt more clearly.¶ The passage of Healthcare Reform has made sweeping
changes and has changed healthcare as we know it in America. Very few people in the US, including government officials, employers
and insurance companies, understand its true impact or have even read the entire Healthcare Reform legislation. Unfortunately,
even after reading the Healthcare Reform bill, there are many unanswered questions because the bill creates new governmental
entities whose duties will be to create new regulations, rules and guidelines of how Healthcare Reform will work and what the actual
defined benefit levels will be. It will take several years for industry participants to fully understand the full effect Healthcare Reform
will have on their business.¶ To complicate the matter of the lack of understanding of Healthcare Reform’s true effect, one must
understand the law, and the cost of understanding and complying with the law and the layers of government involvement within it.
The Healthcare Reform Law is almost 3,000 pages, and there are almost 13,000 pages of regulations. In drafting regulations and
interpretations the IRS, Health and Human Services, and many other agencies have not really even gotten started yet on creating
those regulations, rules and interpretations. There are approximately 180 government committees, bureaus, commissions, boards,
within the different agencies involved in providing the rules, regulations, interpretations and enforcement of the law. One can only
imagine how many years and the amount of analysis and education it will take for employers, insurance companies and individual
healthcare consumers to fully understand the law and its impact.¶ Healthcare Reform did not create a public option or a government
plan, so the insurance marketplace will still be run by private industry, specifically the fully insured and self-funded health plans.
Some of the major changes in Healthcare Reform will be the waiving of pre-existing conditions, the elimination of annual and
lifetime limits, the expanding of dependant coverage to age 26 (Caterpillar Inc, when the law was first passed in 2010, estimated that
expanding the dependant age to 26 will cost the company $20 million per year more), providing level or equal premiums for those
who are sick or healthy, the creation of “essential benefits,” the creation of health insurance exchanges (where Americans can
purchase health insurance) and mandating the purchase of health insurance by Americans or a penalty must be paid. Healthcare
Reform also lowers the insurance premiums for elderly Americans artificially and raises it for younger Americans, specifically at a
three to one ratio, where elderly Americans cannot be charged more than 3 times that of a younger American even though actuarially
they should be charged five to six times the price of a younger American.¶ Preventative Services¶ Healthcare Reform required that
preventative services be included for newly enrolled insured plans by the fall of 2010 or within six months of enactment of the bill
for existing health insurance plans. Specifically, the following benefits must be included:¶ ¶ Evidence-based items or services with a
rating of ‘A’ or ‘B’ in the current recommendations of the United States Preventive Services Task Force;¶ Immunizations
recommended by the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention with respect
to the individual involved;¶ For infants, children and adolescents, evidence-informed preventive care and screenings provided for in
the comprehensive guidelines supported by the Health Resources and Services Administration;¶ For women, additional preventive
care and screenings provided for in comprehensive guidelines supported by the Health Resources and Services Administration; ¶ For
women, the recommendations issued by the United States Preventive Service Task Force regarding breast cancer screening,
mammography and prevention shall be considered the most current other than those issued in or around November 2009.¶ For
those qualified health plans that will be required to provide this preventative coverage without cost-sharing for preventive services
that are rated ‘A’ or ‘B’ by the U.S. Preventive Services Task Force, these services could be recommended immunizations, preventive
care for infants, children and adolescents and additional preventive care and screenings for women.¶ Pre-Existing Conditions¶ The
waiving of pre-existing conditions will have both positive and negative effects on the health insurance industry. The waiving of pre-
existing conditions clauses, which started in 2010 for children and will begin in 2014 for adults, will drive up the costs of health
insurance in the US. For those who are sick and have health conditions this can be a positive step forward, because there are many
Americans who were previously denied health insurance because of a pre-existing condition or who could not afford to purchase
health insurance because of the high premiums. For many of these Americans that health insurance and health care were
inaccessible for, they could not afford to receive the proper medical care, which resulted in the worsening of their health conditions
and, later in life, much higher medical expenses. Also, many of these Americans did not have access to preventative services to catch
serious health conditions at an early stage, due to lack of access to proper or affordable health care. For
these Americans,
the waiving of the pre-existing conditions clauses and the lowering of health insurance
premiums, which will be subsidized by healthy Americans that will have their insurance rates
increased, will provide them access to more affordable healthcare for the first time.¶
Unfortunately there are also some negative side effects to this. Even though pre-existing
conditions clauses will be waived starting in 2014, with the costs of a family health insurance
plan rising to $30,000 to $40,000 a year by 2020 or earlier, many of these sick Americans with
pre-existing conditions may not be able to afford to pay the health insurance premiums. Also,
insurance premiums for individuals who are healthy will increase in order to subsidize sicker Americans who have pre-existing
conditions. This is because the law requires healthy and sick people to pay the same health insurance premiums. The only variations
Healthcare
allowed in the charging of health insurance premiums are for age, tobacco use and geographic location.¶
Reform does not properly incentivize Americans to purchase health insurance. The
fines for not purchasing health insurance in 2014 start at $95, and increase each year. Compared to rising health
insurance costs in the next 10 years, the fines, which were originally meant to force the majority
of Americans to buy health insurance, are small and will fall short of their intended goal. This
would mean many Americans can make the decision to not purchase health insurance, not
engage in healthy lifestyles or behaviors or focus on preventative medicine and instead wait until
they are sick and then purchase guaranteed-issue health insurance with no pre-existing
conditions clauses at a “fair price subsidized by the healthy.” This penalizes Americans who have engaged in
healthy behavior and lifestyles and who have planned and paid for health insurance every month in anticipation of one day possibly
becoming ill or sick. People who have always paid for health insurance and maintained a healthy lifestyle are in actuality being
penalized in the form of their health insurance premiums increasing. An example of this is as follows:¶ In 2014, Joe, who is 45 and
whose health insurance costs $1,200 a month makes a decision to not pay for health insurance and instead to pay the $95 fine for
the year. He chooses not to buy health insurance because he knows when he does get sick with a major health condition he can
purchase health insurance at any time and immediately be covered. Joe smokes a pack of cigarettes per day, drinks alcohol each day,
eats fast food for meals and does not exercise.¶ Jane is 45, healthy and her health insurance costs in 2014 would be $1,200 a month.
She pays her premiums each month. She exercises five times per week, eats healthy food and does not drink or smoke. Under
Healthcare Reform, Jane and Joe’s health insurance premiums must cost the same. Joe will eventually develop serious health
conditions because of his lifestyle and when he buys health insurance later in life it will automatically cover everything at the same
price as Jane. Starting in 2014, Jane’s insurance premiums will have to increase significantly for the eventuality and potential of
people like Joe waiting until they are very sick and need health insurance to purchase it.¶ The
rise of health insurance
premiums will have a very positive effect on the medical tourism industry. Because of the
potential for skyrocketing health insurance costs, many employers and insurance companies will start to implement medical tourism
as one of the only means to lower healthcare costs.
The waiving of pre-existing conditions and requiring sick
and healthy Americans to pay the same price for health insurance destroys the underwriting
process and can put an employer or insurance company in a difficult position of potentially
losing a significant amount of money, meaning medical claims incurred by the insurance carrier
or employer exceed insurance premiums collected. Medical tourism provides a
“hedge”/protection against this because if an insured utilizes the medical tourism benefit it will
lower medical claims costs.

Medical tourism threatens international medical apartheid –

exporting care undermines public health systems in South East Asia
specifically
Glenn Cohen 11, Assistance Professor and Co-Director of the Center for Health Law Policy,
Biotechnology and Bioethics, Harvard Law School, JD from Harvard Law, Medical Tourism,
Access to Health Care, and Global Justice, Virgina Journal of International Law, Vol 52(1),
http://www.vjil.org/assets/pdfs/vol52/issue1/Cohen_Final.pdf
Medical tourism — the travel of patients who are residents of one country (the “home country”)
to another country for medical treatment (the “destination country”) — represents a growing and
important business. For example, by one estimate, in 2004, more than 150,000 foreigners sought medical
treatment in India, a number that is projected to increase by fifteen percent annually for the
next several years.1 Malaysia saw 130,000 foreign patients in the same year.2 In 2005,
Bumrungrad International Hospital in Bangkok, Thailand, alone saw 400,000 foreign patients, 55,000 of
whom were American (although these numbers are contested).3 By offering surgeries such as hip and heart valve
replacements at savings of more than eighty percent from that which one would pay out of
pocket in the United States, medical tourism has enabled underinsured and uninsured
Americans to secure otherwise unaffordable health care.4 The title of a recent Senate hearing — “The
Globalization of Health Care: Can Medical Tourism Reduce Health Care Costs?” — captures the promise of medical tourism.5 U.S.
insurers and self-insured businesses have also made attempts to build medical tourism into
health insurance plans offered in the United States, and states like West Virginia have
considered incentivizing their public employees to use medical tourism.6 There have even been calls for
Medicaid and Medicare to incentivize medical tourism for their covered populations.7¶ Although hardly new, in recent years, the
dramatic increase in the scope of the industry and the increasing involvement of U.S. citizens as
medical tourists to developing countries have made pressing a number of legal and ethical issues.8
While the growth of medical tourism has represented a boon (although not an unqualified one9) for U.S. patients, what about
the interests of those in the destination countries ? From their perspective,
medical tourism presents a host of cruel ironies . Vast medico-industrial complexes
replete with the newest expensive technologies to provide comparatively wealthy medical
tourists hip replacements and facelifts coexist with large swaths of the population dying from
malaria, AIDS, and lack of basic sanitation and clean water. A recent New York Times article entitled “Royal
Care for Some of India’s Patients, Neglect for Others,” for example, begins by describing the care given at Wockhardt Hospital in
India to “Mr. Steeles, 60, a car dealer from Daphne, Ala., [who] had flown halfway around the world last month to save his heart
[through a mitral valve repair] at a price he could pay.”10 The article describes in great detail the dietician who selects Mr. Steele’s
meals, the dermatologist who comes as soon as he mentions an itch, and Mr. Steeles’s “Royal Suite” with “cable TV, a computer,
[and] a mini-refrigerator, where an attendant that afternoon stashed some ice cream, for when he felt hungry later.”11 This
treatment contrasts with the care given to a group of “day laborers who laid bricks and mixed cement for Bangalore’s construction
boom,” many of whom “fell ill after drinking illegally brewed whisky; 150 died that day.”12 “Not for them [was] the care of India’s
best private hospitals,” writes the article’s author; “[t]hey had been wheeled in by wives and brothers to the overstretched
government-run Bowring Hospital, on the other side of town,” a hospital with “no intensive care unit, no ventilators, no dialysis
machine,” where “[d]inner was a stack of white bread, on which a healthy cockroach crawled.”13¶ These kinds of stark
disparities have prompted intuitive discomfort and critiques in the academic and policy
literatures. For example, David Benavides, a Senior Economic Affairs Officer working on trade for
the United Nations, has noted that developed and developing countries’ attempts at exporting
health services sometimes come “at the expense of the national health system , and the
local population has suffered instead of benefiting from those exports.”14 Rupa Chanda, an
Indian professor of business, writes in the World Health Organization Bulletin that medical tourism
threatens to “result in a dual market structure, by creating a higher-quality, expensive
segment that caters to wealthy nationals and foreigners, and a much lower-quality, resource-
constrained segment catering to the poor.”15 While the “[a]vailability of services, including
physicians and other trained personnel, as well as the availability of beds may rise in the higher-
standard centres,” it may come “at the expense of the public sector, resulting in a
crowding out of the local population.” 16 FOOTNOTE 16 BEGINS… 16. Id.; see also MILICA Z. BOOKMAN &
KARLA K. BOOKMAN, MEDICAL TOURISM IN DEVELOPING COUNTRIES 176 (2007) (“Medical Tourism can thus create a dual
market structure in which one segment is of higher quality and caters to the wealthy foreigners (and
local high-income patients) while a lower quality segment caters to the poor . . . [such that]
health for the local population is crowded out as the best doctors, machines, beds, and hospitals
are lured away from the local poor.”). FOOTNOTE 16 ENDS… Similarly, Professor Leigh Turner suggests that “ the
greatest risk for inhabitants of destination countries is that increased volume of
international patients will have adverse effects upon local patients, health care
facilities and economies.” 17 He explains that the kinds of investments destination-country
governments must make to compete are in “specialized medical centres and advanced
biotechnologies” unlikely to be accessed by “most citizens of a country [who] lack access to basic
health care and social services.”18 Furthermore, higher wages for health care professionals resulting
from medical tourism may crowd out access by the domestic poor.19 Thus, “[i]nstead of contributing to
broad social and economic development, the provision of care to patients from other countries might
exacerbate existing inequalities and further polarize the richest and poorest members” of the destination country.20¶
The same point has also been made in several regional discussions: Janjaroen and Supakankuti argue that
in Thailand, medical tourism threatens to both disrupt the ratio of health personnel to the
domestic population and “create a two-tier system with the better quality services reserved for
foreign clients with a higher ability to pay.”21 Similarly, the Bookmans’ claim that in Cuba, “only one-fourth
of the beds in CIREN (the international Center for Neurological Restoration in Havana) are
filled by Cubans, and . . . so-called dollar pharmacies provide a broader range of medicines to
Westerners who pay in foreign currency.”22 They describe a medical system so distorted by the
effects of medical tourism as “medical apartheid, because it makes health care available
to foreigners that is not available to locals.” 23 Numerous authors have made similar
claims about medical tourism in India.24 Similar concerns have even been raised as to medical tourism in developed
countries. For example, an investigation by the Israeli newspaper Haaretz concluded, “medical tourists enjoy conditions Israelis can
only dream of, including very short waiting times for procedures, the right to choose their own doctor and private rooms . . . [a]nd
these benefits may well be coming at the expense of Israeli patients’ care,” and suggested that allowing medical tourists to move to
the front of the line on waiting lists for services meant that “waiting times for ordinary Israelis will inevitably lengthen — especially
in the departments most frequented by medical tourists, which include the cancer, cardiac and in vitro fertilization units.”25

Market is nascent – further growth key – especially in Asia --

underinsurance drives demand
GMT 16, Globla Medical Tourism, magazine known as the “voice” of the medical tourism
industry, 10/6/2016, http://global-mtm.com/global-medical-tourism-market-to-witness-
increasing-influx-of-medical-tourists-in-asian-countries/
The increasing number of people travelling abroad to seek medical treatment comprises a rising
global trend. The exponentially rising healthcare cost in developed regions, coupled with the availability of
advanced yet cost-effective medical services in developing countries, is
encouraging people to travel abroad for
treatment purposes that may also incorporate an extended holiday. This trend is called medical tourism and has been
showcasing definitive growth around the world over the past few years .¶ Demand for Advanced
and Cost-effective Medical Services Boosts Global Medical Tourism Market¶ Medical tourism may include sophisticated treatments
such as neurosurgery, cardiac surgery, orthopedics, elective treatments such as cosmetic surgeries and dental care, or routine health
check-ups. The
visibly rising cost of healthcare services in developed countries is the prime
factor bolstering the market for medical tourism. According to a report published by Transparency Market
Research, approximately 50 million people in the U.S. alone are uninsured , while 139 million
Americans do not have dental insurance.¶ An estimated 1.6 million Americans opted for medical tourism in 2012, since the
treatment for the same disease in developing nations costs 20% to 30% less than that in developed countries. This helps patients and
their families save a substantial share of the cost even after accounting for the travel expenses.¶ The
global medical
tourism market, therefore, sees lucrative opportunities in the forthcoming years with an
increasing number of people making it their preferred choice. Transparency Market Research, in its
latest report, pegs the overall value of the global medical tourism market at US$10.5 bn in 2012, and it is expected to reach US$32.5
bn by the end of 2019. If the figures hold true, the global medical tourism market will exhibit an impressive CAGR of 17.9% between
2013 and 2018.¶ Asian
Countries Witness Highest Influx of Medical Tourists¶ With high-quality
infrastructure and low costs, Asian countries have emerged as the most prominent players
in the market for medical tourism over the past few years. Asia attracted over 5.6 million foreign patients in
2012, generating a revenue of a whopping US$6.4 bn from medical tourism. The presence of popular tourist destinations in this
region has also contributed to attracting an increasing number of people from abroad.¶ India,
Thailand, Malaysia,
Singapore, South Korea, and Taiwan are among the Asian countries that witness the highest
number of people travelling from abroad to seek medical services. For instance, Thailand has emerged as
the most popular destination for medical tourists from Western Europe for cosmetic surgeries. In 2012, Thailand received over 2.5
million foreign patients that accounts for almost 45% of the total number of foreign arrivals in Asia. Likewise, India and Singapore
specialize in complex procedures such as cardiac surgeries. In the meantime, Malaysia also has been attracting a large number of
medical tourists due to the presence of a modern healthcare infrastructure.¶ Favorable Government Policies May Boost Global
Medical Tourism Market¶ The medical tourism market is still in a nascent stage and requires substantial
coordination among healthcare providers, insurers, and governments to enjoy sustainable growth in the near future. With favorable
government policies, the organizations operating in the market can enjoy a competitive advantage. Some of the most prominent
names operating in this industry include Bumrungrad Hospital, Apollo Enterprise Ltd, Bangkok Medical Center, Prince Court
Medical Center, Raffles Medical Group, and others.

Public health inequality causes East Asian instability

James R Campbell 12, Professor at the College of Security Studies, Asia-Pacific Center for
Security Studies, 2012, Human Health Threats and Implications for Regional Security in
Southeast Asia*, in Human Security: Securing East Asia's Future,
https://link.springer.com/content/pdf/10.1007%2F978-94-007-1799-2_9.pdf
According to the World Health Organization (WHO), health is not only the absence of infi rmity and disease but also a state of
physical, mental and social well-being (WHO 1946 : 100). As
disease incidence (the number of new cases of a
particular disease within a population over time) increases, the burden on individuals, local
health care systems and other government agencies increases. New or re-emerging infectious
diseases, particularly diseases contracted from exposure to infected animals (zoonotic disease)
such as SARS, Nipah virus and avian infl uenza spread quickly within a region, creating new,
unpredictable crises for national public health systems. For biological and epidemiological reasons not fully
understood, most of the new influenza viruses that spread globally each year originate in the
Southeast Asian region. Yet treatments may not be equitably shared between countries, and international relations can
quickly deteriorate. When Indonesia sought guarantees from the WHO that any vaccine against H5N1 infl uenza that was based on
Indonesian strains of the virus would subsequently be made available to Indonesia at an affordable price, the WHO was unable or
unwilling to convince the large pharmaceutical companies to provide such a guarantee (Current Concerns 2009 ) . As a result
Indonesia withheld critical virus strains from vaccine research and development, putting itself and the region at risk, for which it
was rebuked by much of the international health community. ¶ In 2005 the WHO updated and re-issued its International Health
Regulations (IHR), which specifi es mandatory infectious disease outbreak reporting requirements for the 194 state parties to the
agreement. However the fi nancial and technological burdens of increased disease surveillance inhibited compliance with the
regulations among many of the low and middle income nations in the region. Infuture outbreaks, under authority of
the IHR, the WHO may enter a country with regionally-placed teams of experts and supplement
that nation’s resources in order to protect global public health (WHO 2005 ) . While the benefi ts of such a
policy for regional and global public health are obvious, potential disputes involving state sovereignty create
emerging threats to regional security. Diseases with pandemic potential are especially
problematic to health security, with the additional potential to cause political unrest and civil
disorder, deplete military forces, destabilize nations and contribute to state failure. These
diseases also affect regional health security indirectly, through strategic impacts on important Asian
neighbors like China. The most populous nation on Earth, China earned the enmity of the entire international health
community for its dilatory response to the global outbreak of Severe Acute Respiratory Syndrome (SARS) in 2003 (Maclean 2008 :
475). Because of the tremendous disparity between countries in planning and response capabilities for dealing with pandemics, in
any global pandemic such as the H5N1 avian infl uenza outbreak developing
countries in Southeast Asia will likely
experience proportionately more morbidity and mortality than developed nations, due to limited
access to any vaccines and anti-viral medications like oseltamivir (Tamifl u). Ill-will generated by such
health inequity and perceived injustice could potentially damage international relations and
impact regional stability . ¶ In 2004 the Global Fund offered $100 million in grants to fi ght tuberculosis, malaria and
HIV/AIDS in Myanmar. However in 2005, because of serious concerns about governance in that country and the unwillingness of
the ruling military junta to respect the project’s safeguards and performance-based grant implementation the funds were rescinded
(Global Fund 2005 ) . As a result these highly infectious diseases rampant in Myanmar have returned as imminent health security
threats to neighboring countries. Border regions within Myanmar populated by ethnic minorities and marked by ongoing civil confl
ict suffer the highest national incidences of malaria. The ramifi cations for transnational health security are obvious, because regions
within India, Bangladesh, Laos, Thailand and China that border Myanmar all have signifi cantly higher incidences of malaria,
tuberculosis and HIV/AIDS than other regions of those countries (Beyrer and Lee 2008 : 2). Myanmar has one of the largest AIDS
epidemics in Asia, and this can be as destabilizing as war. The age demographic affected most directly by AIDS includes the most
productive segments of society, such as military and civil servants, business owners, teachers and parents. Higher
mortality
in these sub-populations results in an increased proportion of the young and the old, creating a
less stable and more fragile social situation. By framing infectious diseases as a matter of national security with
regional implications, governments and their people will be better prepared to handle sudden outbreaks that endanger
human lives and threaten the existence and survival of nation-states (Caballero-Anthony 2005
) . ¶ Another factor that destabilizes regional human security is the large number of the world’s poorest people
residing in Southeast Asia who lack access to essential medicines to treat these diseases, which argues
strongly for health programs that emphasize prevention of disease. Besides the expense factor, this lack of access is also due to poor
infrastructure, lack of technical assistance and uncertain quality of pharmaceuticals (International Dispensary Association 2009 ) .
The production, distribution and use of counterfeit medicines represent a thriving transnational crime in Southeast Asia. These fake
drugs, either less than full strength or containing no drug at all, also are an increasing public health problem for the region, often
with tragic results (Fernandez et al. 2008 : 585, Newton et al. 2008 : e32). Under-strength drugs are particularly insidious because
they contain enough of the active compound to foil screening tests yet not enough to treat the disease, while at the same time the
reduced potency accelerates the evolution of drug resistant strains of dangerous human pathogens.

Instability escalates – domestic pressures are a key determinant of

conflict
Michael Auslin 17, PhD in History from the University of Illinois at Urbana-Champaign,
former associate professor of History at Yale The End of the Asian Century: War, Stagnation,
and the Risks to the World’s Most Dynamic Region, January 2017, accessed via Kindle for
Windows - no page numbers available
The regional demographics that we explored in chapter 3 spill over directly into domestic politics. Next to the failure of economic
reform, the political challenges facing Indo-Pacific nations are perhaps the largest risk area the region faces. How
well its
leaders deal with the demands of their populaces, be they modernized or developing, may be the
most important factor determining the future of the Indo-Pacific. ¶ The real risk from
domestic politics in Asia can be boiled down to one idea: ever since the final Qing ruler
abandoned his ivory-inlaid throne, Asia’s political history has been one of unfinished revolution.
From armed uprisings in Japan in 1867 and in China in 1911 and 1949, through decolonization
in India in 1947 and in Southeast Asia in the 1950s, to peaceful popular revolutions in the
Philippines in 1986 and in South Korea 1987, Asian politics has been one of constant struggle.¶ It
sounds odd to claim that Asia’s future is still threatened by political revolution. After all, Japan
seems an entirely stable mature democracy, and the Vietnamese and Chinese Communist
Parties maintain an iron grip on power. But economic and social pressures inside all of Asia’s
countries threaten domestic political consequences. ¶ Equally, to turn a popular advertising slogan on its head,
what happens inside a country does not always stay there. An Asia whose political systems fail to provide
stability, legitimacy, and growth is an Asia that will become increasingly troubled. The region’s history
is full of examples of domestic failure leading to wider dislocation. 2 At the same time, embattled
regimes have regularly sought to defuse tensions at home by exporting instability abroad,
even to the point of invading neighboring countries.¶ In looking at the trends in domestic politics
throughout the Indo-Pacific region, this chapter will chart the challenges to democracy and authoritarianism alike. Few
Westerners pay more than passing attention to Asia’s politics. It sometimes may get a minute or
two on the network newscasts, as when Thailand’s military launched a coup in May 2014 or after
the victory of Nobel Peace Prize winner Aung San Suu Kyi’s democratic opposition party in Burma’s
November 2015 election. Yet precisely because so many are not paying sufficient attention, we should be far
more sensitive to the hidden risks that roil domestic politics in the Indo-Pacific. ¶ The question of domestic
political stability leads to the larger issue of the future of politics throughout the region. Americans, whose nation originated in a war
of independence from a European colonial empire, see the spread of democracy as a natural condition. They believe that, given the
choice of self-determination or servitude, any people would prefer to choose their destiny. 3 Economic freedom and opportunity are
believed to follow naturally from and be guaranteed by political freedom. The collapse of the Soviet Union and the rapid
democratization of eastern Europe in the 1990s only reinforced the American belief in the ultimate victory of democracy. 4 While
most Americans understand that political development is not that simple, the moral superiority of democratic governance remains
an article of faith. Even in the face of frequent domestic political gridlock and economic crises, Americans still assume democracy is
a universal good toward which most peoples on earth aspire. To acknowledge this ideological predisposition is not automatically to
deny its validity.¶ Yet the Indo-Pacific continues to confound American understanding of the natural path of political development.
From totalitarian North Korea to authoritarian China on one side of the spectrum and from India’s dizzying democracy to Japan’s
often sclerotic politics on the other, Asia incorporates nearly every type of government known to humanity. Freedom and despotism
continue to battle for Asia’s political soul in another facet of unfinished revolution. ¶ It
is on this battleground that the
future of the Asia-Pacific will take shape. If democracy proves successful at dealing with its
domestic troubles, it will save its legitimacy, gain adherents, and more likely ensure that it
becomes the norm throughout the region. But if smaller states waver in their commitment to
democracy, the triumph of illiberal political regimes may be assured, and the influence of
power politics correspondingly will grow.

Nuke war
Michael Auslin 17, PhD in History from the University of Illinois at Urbana-Champaign,
former associate professor of History at Yale The End of the Asian Century: War, Stagnation,
and the Risks to the World’s Most Dynamic Region, January 2017, accessed via Kindle for
Windows - no page numbers available
How close is Asia to seeing conflict erupt, and where? Not every dispute threatens peace, but today, the
Indo-Pacific region
is regressing to a nineteenth-century style of power politics in which might makes right. With
the world’s largest and most advanced militaries other than the United States, and including
four nuclear powers, a conflict in Asia could truly destabilize the global economy and spark a
conflagration that might spiral out of control.¶ If you are lucky, you might be near Pearl Harbor in Hawaii
when one of America’s aircraft carriers is in port. One afternoon not long ago, I watched the USS Ronald Reagan slowly steam out of
Pearl Harbor into the vastness of the Pacific Ocean. The Ronald Reagan is an apt symbol of how security risk has been managed in
Asia: the United States has underwritten regional stability since 1945. Today,
however, the post– World War II
order instituted by the United States is increasingly stressed, at the very time when Washington
is finding it difficult to respond to crises in Europe and the Middle East. The economic and political risks discussed
here are not isolated from these security trends.¶ The immediate cause of rising insecurity is simple: as China has grown stronger, it
has become more assertive, even coercive. Beijing has embraced the role of a revisionist power, seeking to define new regional rules
of behavior and confronting those neighbors with which it has disagreements. Japan and Taiwan, along with many countries in
Southeast Asia, fear a risingChina, as does India, though to a lesser degree. That fear, fueled by numerous unresolved
territorial disputes in the East and South China Seas and by growing concern over maintaining
vital trade routes and control of natural resources, is causing an arms race in Asia. The region’s
waters have become the scene of regular paramilitary confrontations. ¶ These fears and responses are
triggering more assertive policies on the part of all states in the region, which only raises tensions further. At the same time,
governments feel pressured at home to demonize neighbors, encroach on territory, and refuse to
negotiate on security disputes. This is clearly what has happened in recent years in the Sino-Japanese relationship. We
have already gone through two turns of a “risk cycle”: uncertainty and insecurity, driven over the past
decade by China’s growing power and increasingly assertive and coercive behavior, and by the emergence of a de facto nuclear North
Korea. A third turn, to instability , could cause conflict and even war .¶ The “Asian Century”
thus may not turn out to be an era when Asia imposes a peaceful order on the world, when
freedom continues to expand, or when the region remains the engine of global economic growth. What it imposes may
instead be conflict and instability. The nations of the Indo-Pacific and the world must prepare for the
possibility of economic stagnation, social and political unrest, and even armed conflict . The
emergence of those would mark the end of the Asian Century.
 3
The United States federal government should:
- significantly increase penalties for the requirement to maintain
minimum essential health coverage
- appropriate out-of-pocket financial assistance for the Health
Insurance Marketplace
- expand premium financial assistance on the Health Insurance
Marketplace
- commit enforcement and outreach resources to these actions.
 4
The plan solves – strengthening the mandate, funding cost-sharing
and increasing subsidies is key to a balanced risk pool, higher
enrollment, competition, and lower premiums– working through the
ACA framework is key to stability
Cori Uccello 17, Senior Health Fellow at the American Academy of Actuaries, MA in Public
Policy from Georgetown University, Deep Banerjee, Director at Standard & Poor, 5/5/2017, The
Individual Market at a Crossroads Transcript, http://www.allhealthpolicy.org/the-individual-
market-at-a-crossroads-5/
Let’s talk about the future a little bit. So, I’m
going to talk about two kinds of forecasts. One is business as usual.
What we mean by that is, everything stays with obviously some changes, but no big overhaul to the rules
of the marketplace. If that is the case, what do we expect? Well, we expect 2017 to be a year when more
insurance companies get to break even margin. So, break even, zero percent, so no loss, break even
margin. And then continued improvement in 2018 where they get to small, single digit margins in this
line of business. It is still a very fragile market and it needs time to stabilize.

Probably the
more important discussion is business unusual or business interrupted forecast. So,
there is obviously a lot of pricing and insurer participation issues in the marketplace today,
going into 2018. One of the biggest things that we look at, is the CSR, which there is some
uncertainty about the future funding of that. The reason the CSR is important — it’s not because just
the dollar amount that goes towards it, but more importantly it is paid to the insurance
companies after the fact. So, the insurance company on day one, accepts members who are CSR
eligible and stop paying out claims based on the fact that they will receive a CSR. The only
receive the federal government funding for the CSR later on. So, insurance companies don’t want
to be in the situation where they find out six months into the year, hey, guess what, you don’t get
that money anymore. What we expect to happen are two options available to insurance companies. One, they would price with what we are
calling an uncertainty buffer. So, let’s say they were expecting to price high single digit premium increases for next year. They will probably tack on a
little bit of this uncertainty buffer, because they don’t know what is going to happen. They can load the silver plan with the CSR that they are not going
to get. So, you will see the silver plan premiums go up. The second option, which is probably a little more drastic, is they get more selective about
participating. If
there is greater amount of uncertainty, they could decide to pull out of certain
counties or certain states. And the third one, which is probably important to mention too, that the marketplace has a set of rules. If the
rules are changed after you are already playing the game, it becomes harder to adjust. So, rules
like the individual mandate or the special enrollment periods, enforcement of that will also be critical for the
future stabilization of the marketplace. Perhaps we will talk about (indiscernible) later on, when questions come up.
SARAH DASH: Thank you so much, Deep, and let me turn it over to Cori Uccello. Thanks.

CORI UCCELLO: First I would like to thank Sarah and the Alliance for inviting me to participate today.

As others have already pointed out, we are in a different situation today then maybe we were a couple days ago, but I am going to still focus my remarks
at a fairly general level and discuss the kinds of actions that are needed to improve the stability and sustainability of the individual market. Before
getting to those potential improvements, I think it’s important for us to know what the goals are.

So first, I will talk about what

is necessary in order to have a stable and sustainable market. First, we
need enrollment levels that are high enough to reduce random fluctuations and a balanced risk
pool. In other words, we need enough healthy people so we can spread the cost of the high cost people
over a broader pool. Second, we need a stable regulatory environment that facilitates fair
competition. And that includes not only a level playing field, but also consistent rules that are
known in advance. Third, we need enough insurers participating to have insurer competition and
consumer choice. And as Karen mentioned this, the correct – -the optimal number of insurers probably varies by area. Last, but no least,
because most premiums go toward paying medical claims, it’s important not to overlook the need for continuing to control healthcare spending and
improve quality of care.

So, how is the market doing compared to these criteria? Well, the ACA dramatically reduced uninsured rates and
participation in enrollment in the individual market increased. Nevertheless, in general, enrollment in the individual market was
lower than initially expected, and the risk pool was less healthy than expected. Now, in the market,
competing rules do generally face the same rules. There is pretty much a level playing field. But, the uncertain and changing
legislative and regulatory environment have contributed to adverse experience among insurers.
This has led to a decrease in the number of participating insurers both in 2016 and 2017 and
there is an indication there will be a further reduction of insurers in 2018. Continued uncertainty
could lead to more insurer withdrawals, leaving consumers with fewer plan choices or
potentially none at all. And as Deep has alluded to, insurer experience has stabilized, but the market itself is still
fragile .

This leads me to the actions that should be taken to improve the market. I feel like I’m piling on here, but
first and foremost is the need to fund the cautionary reductions. Not paying for these reductions or even
uncertainty about whether they will be funded, could lead to higher premiums. As Karen said,
the Kaiser Family Foundation has estimated that on average, not paying for those CSRs could result in premium increases of nearly 20%. That’s on top
of the premium increases that will already occur due to medical inflation and other factors.

Second, the individual mandate needs to be enforced. The mandate is intended to increase
enrollment and encourage even healthy people to enroll. That’s what’s needed for a balanced risk pool. As Karen
mentioned, the mandate itself is already fairly weak, because the financial penalty is low, many people are exempt
from the penalty and enforcement itself is weak. But further weakening it, would make it less effective and would lead to higher premiums.
Strengthening it could improve the risk profile and put downward pressure on premiums. But
enforcement itself isn’t enough. I think there are a lot of people out there who don’t even realize the mandate is still in play. And so, it also needs to be
publicized in order to be effective. Alternatives
to the mandate are being explored, such as the continuous
coverage requirements that were in the house passed bill. But it’s difficult to structure those
kinds of mechanisms, so that they encourage healthy people to enroll sooner rather than later, while
still providing protections to people with preexisting conditions.
So, if the mandate is the stick to encourage enrollment, premium subsidies are the carrots. More external funding in the form of
higher premium subsidies, or funding that will offset the cost of high cost enrollees, such a
through high risk pools or these invisible high risk pools, or reinsurance, could help improve the
pool. It’s important to note that there are many — we use the word “high risk pools” a lot, but there are actually several different ways that high risk
pools can be structured. In your packets, there is a paper from the academy that talks about the different ways that that could be done. Like I said, they
could be done in terms of the traditional high risk pools that were in place prior to the ACA, they could be invisible risk pools so that the person
enrolling in the private market stays in that plan, but their claims are paid through this external funding, and that could be their eligibility for those risk
pools, could be based on either having certain conditions or having spending that exceeds a particular threshold.

Finally, it’s
important to not only take actions to improve the market, but also avoid actions that
could make things worse. So, for instance, allowing the sales of insurance across state lines, or
expanding the availability of association health plans, could actually lead to market
fragmentation and higher premiums. So, with that, I will turn things over to Brian.

A stronger mandate is key – induces millions to enroll in individual

exchanges
Oliver Wyman 9, international management consulting firm , 10/14/2009, Insurance
Reforms Must Include a Strong Individual Mandate and Other Key Provisions to Ensure
Affordability, http://www.oliverwyman.de/content/dam/oliver-
wyman/global/en/files/archive/2011/Importance_of_Strong_Individual_Mandates_-
_Public_Memo.pdf
2. Without a strong mandate, premiums for purchasers in the new marketplace will increase
significantly: ¶ We estimate that without strong individual mandates, average annual medical claims in the
reformed individual market five years after reform are expected to be 50 percent higher
compared to today, not including the impact of medical inflation.¶ This would translate into premium
increases of approximately $1,500 for single coverage for a year and $3,300 for family coverage in today’s dollars for people
purchasing new policies. Subsidies will entirely or partially offset these premium increases for some individuals. Eight million
current individual market members and 25 million uninsured earn between 100 and 400 percent of the federal poverty level and will
have access to subsidies through the exchange.¶ ƒ Adequate
subsidies help participation, but are
insufficient to drive effective coverage levels—both a strong personal responsibility
requirement and subsidies are needed. Over 18 million people, including both currently uninsured and existing
individual market members, are ineligible for subsidies based on the Senate Finance Committee proposed subsidy schedules. For the
very low income, below 200% of the federal poverty level (FPL), we believe a
large percentage of the uninsured will
purchase insurance because of the generous subsidies. However, take up rates will be much
lower for those above 200% FPL without a meaningful penalty, since subsidies decline at higher income
levels.¶ ƒ Weak mandates result in more uninsured. Requiring insurers to guarantee issue coverage
regardless of preexisting conditions—without an effective mandate—means that people can wait
to purchase coverage until they need it, causing premiums to increase for most new purchasers.
We estimate that 12.6 million people will forego coverage, relative to an effective mandate. ¶ 3. The impact of reform on the
individual market will vary significantly by geography. The vast majority of States have not enacted the reforms proposed in Federal
bills. The states where twothirds of the United States population reside will experience the highest premium increases. In these
states, the reformed individual market claims are estimated to be up to 60-73%1 higher than today with a weak individual mandate.¶
4. People with existing individual coverage may not see significant impact from rating and benefit changes. The bills “grandfather”
existing coverage, so that people can keep their current coverage. These “grandfathered” policies will not be impacted by the rating
changes described above. However, individuals with “grandfathered” policies will not be eligible for the new subsidies. We estimate
that as many as 4.6 million people will stay in the “grandfathered” blocks after 5 years. However, these individuals would still be
subject to premium increases as a result of insurer fees included in the Senate Finance Committee bill.¶ Key Findings: Small Group
Market¶ Under reform, small group employers (2-50 employees) will experience rating changes similar to those proposed for the
individual market. Key findings include:¶ 1. Average premiums for small employers will increase: Under reform, small employers
will experience premium increases as a result of rating rule changes and minimum benefit requirements. We estimate that small
employers purchasing new policies in the reformed market, with an ineffective mandate, will experience premiums that are up to 19
percent higher in Year 5 of reform, not including the impact of medical inflation. About 9.5 million small group employees who have
coverage today will stay covered under the “grandfathered” block in the initial post-reform years, but will face premium increases
when the grandfathering phases-out.¶ 2. Overall, the number of small employers offering coverage will decline: Under reform and
after accounting for small employer tax credits, premium increases will lead to fewer small employers offering coverage. We estimate
2.5 million fewer members will be insured through small employer policies. ¶ Overview of Modeling Approach and Methodology¶
Oliver Wyman has developed a comprehensive model to study the impact of different health insurance reform proposals on the
individual and small employer health insurance markets.¶ The
model is based on a database of actual claims,
premium and underwriting information from over 375,000 small groups, representing 4.2 million covered lives, and
1.24 million individual policies, representing 1.6 million covered lives. The database includes blinded information on approximately
1-in-10 purchasers in the individual and small employer markets today. These data are representative of states across the country
and reflect the varying rating rules that are used today. This allows the model to provide insight into the impact of reform at the state
level.¶ The
model differs from other models currently in use because it allows for the analysis of
how insurance reforms will impact actual insurance policies. This is critical because most of the
rating reform impact is felt at the “ends of the distributions.” For example, the medical claims for the
healthiest 10 percent of members are typically less than a quarter of the average claims, and the
sickest 10 percent are often four to seven times more than the average. With actual insurance policy data,
we can see how much premiums will shift, and therefore how enrollment is likely to shift, across the full distribution of policies.¶
Other analyses generally use synthetic health insurance units developed from survey data to
evaluate the impact of reform. Because of this, other models may underestimate the real-world
impact of rating changes, in particular, because they do not evaluate the impact on a distribution of actual
policies.¶ Actuarial analysis is used to determine the premium impact of changes in rating regulations and the differential impact
across geographic regions. The model estimates premium changes and migration among coverage categories over a five year period
after reform is implemented. This multi-year view allows us to capture the impact of adverse selection, which can drive up average
prices in an environment with no or weak mandates. Adverse
selection theory holds that healthier individuals
are more likely to drop or switch coverage when faced with cost increases, leaving the remaining
pool more expensive to insure.¶ Our model estimates the costs of different coverage choices available in the market under
a given reform scenario, determines market reaction, and shifts between different potential sources of coverage (e.g., the individual
market, small employer market, large group market, government programs) and the uninsured. To evaluate the market reaction to
different reform scenarios, we
apply elasticities of demand for employers, employees, and consumers
that are consistent with the academic literature and ranges used by the Congressional Budget Office and other
models.¶ The elasticities, combined with the estimated cost changes to the employer or individual, allow us to determine how many
members will enter or exit the market. We are able to track the membership inflow and outflow based on the health status and
income levels of individuals. In addition to the rating changes, we also account for the savings individuals realize from subsidies and
the cost of declining coverage if an individual mandate penalty is in place. Stated more simply, we are able to estimate the number of
people that will be insured and their expected medical costs for any given reform scenario. ¶ Results Consistent with Actual Market
Experience¶ The results we see in the output of the model are consistent with the experience
observed in the market. Among the trends that are readily validated by actual market experience are:¶ ƒ Less healthy
individuals are more likely to take up coverage and less likely to drop coverage when costs
change.¶ ƒ Healthy individuals are more cost sensitive. They are more likely to exit the market
if costs increase and require stronger inducements to take up coverage if they are uninsured.¶ ƒ
Premiums will increase at a rate higher than average medical inflation if the pool enters a risk
spiral , which occurs when the percentage of healthy members in the pool declines.¶ Key Model Variables¶ Our analysis includes
the major elements of the Senate Finance Committee’s proposal, the “America’s Healthy Future Act of 2009” or AHFA, that will
impact the cost of insurance in the individual and small employer health insurance market. These key elements include the
following: ¶ [Table Omitted] ¶ The AHFA also includes changes to the insurance market that were not explicitly evaluated in our
model. These include optional risk corridors, which could protect certain plans from losses in the early years of reform, and the
inclusion of a “young invincibles” product that could have higher cost-sharing than permitted for other products. We do not expect
these policy provisions to have a substantial impact on average prices for new purchasers of health insurance coverage. ¶ The AHFA
also includes a number of fees and taxes on the health industry to help finance the proposal. These include a $6.7 billion annual
assessment on insurers, assessments on drug and medical device manufacturers, and other assessments that are likely to impact
premiums in the individual and small group health insurance market. The AHFA also imposed an excise tax on high cost benefit
plans offered in the employer marketplace. The analysis for this report does not include the impact of these fees and taxes on cost
and coverage in the individual and small employer markets. The excise tax on high cost benefit plans does not apply to the individual
market and we estimate the impact on small group policies to be negligible.¶ We have not explicitly modeled the impact of health
insurance exchanges. However, Oliver Wyman issued a report in 2008 on this subject that found that exchanges were unlikely to
reduce health insurance premiums for individuals and small employers2 . The Congressional Budget Office's analysis of the Senate
Finance Committee proposal indicates that exchanges could reduce premiums by 4-5 percent in the individual health insurance
market3.¶ We evaluated the impact of health insurance reforms with and without including underlying medical cost inflation. The
results of this report are presented in the absence of medical trend to isolate the cost impact of specific reforms. While the Senate
Finance Proposal includes provisions that are intended to bend the cost curve over the long-term, the inclusion of medical trend
would have increased our projected cost increases over the five-year period we examined.¶ Additional Methodology Detail—
Estimated Medical Costs for the Uninsured Once They Become Insured¶ It is important to have an estimate of the expected
utilization of healthcare services of the uninsured after they become insured. There are a handful of academic studies that have
examined this issue, and the Congressional Budget Office has also estimated the potential cost of the uninsured.¶ Our analysis is
generally consistent with the approach used by CBO. We estimate that the morbidity of the uninsured will be about 85 percent of the
level of the current insured market - meaning the uninsured are generally healthier than the current insured market. However, the
insured market is comprised mostly of members from the employer market. It is well known that the current individual market is
generally healthier than the employer market in the majority of the U.S.¶ We estimate that the average uninsured will have average
medical utilization about 20 percent higher than the current individual market. Given that many of the uninsured are likely to seek
coverage in the reformed individual market, we expect that the average claims in the risk pool of the reformed market will increase
as a result. ¶ The uninsured are expected to have higher medical costs than the current Individual market Expected Claims Cost
(Indexed relative to current Individual Market) 100 120 Current Individual Market Current Uninsured On average, uninsured are
estimated to have 20% more medical claims than current Individual market once they become covered Based on our review of
available information, we estimate that the morbidity of the uninsured if given access to insurance would be essentially 85% of the
currently insured. We note that this assumption is roughly consistent with assumptions that the CBO used in its evaluation of the
available data4 . Using premium, claims, and other available information we estimate that the morbidity of those insured through
the individual market is roughly 70% of the morbidity of the entire universe of people insured through the individual, small group,
and large group markets (including self-insured). This 70% factor is the result of the fact that people insured through the individual
market, in most states, are medically underwritten5 . Combining these two estimates, the uninsured will have morbidity that is
roughly 20% greater than those currently covered in the Individual market. ¶ We also used the distribution of claims expenses in the
individual market to estimate the distribution of expected costs for the uninsured. We assume that the sickest 10 percent of the
uninsured are estimated to have claims that are four to six times higher than the average in the current individual market, which
translates to annual claims of $9,000 to $10,000. This amount is similar to the typical range observed in states’ high risk insurance
pools. ¶ Impact of Insurance Reform on Today’s Market ¶ In most parts of the country today, insurers in the individual market are
permitted to underwrite and design benefit plans with a variety of price points. This flexibility enables a stable, competitive
insurance market. Perhaps most importantly, it offers the greatest affordability to attract younger and healthier members and helps
encourage wider enrollment in health insurance. ¶ The proposed insurance
reforms will increase claims costs
significantly in the individual insurance market. We estimate the average medical claims for the uninsured are 20
percent higher than claims in the current individual market. This is because some have not been receiving regular medical care and
some have been unable to obtain coverage at an affordable price as a result of having chronic conditions. ¶ In addition, certain
segments with high medical utilization who are now insured through other arrangements will
enter the individual market as a result of guaranteed issue and modified community rating
requirements. This includes people enrolled in state high risk pools, people on COBRA through their former employers’
coverage and other group conversion policies.¶ Our model assumes that people will generally act in their economic self-interest.
Although individuals and families cannot predict their health care needs precisely, they often
have a relatively good idea of their short term needs. Insurance reforms will tend to lower
barriers and create stronger financial incentives for unhealthy people to become insured. As
individuals work to optimize the costs and benefits of different coverage options, the market will become more prone
to adverse selection that will increase costs over successive years, especially if insurance reforms
are not coupled with an effective individual mandate.¶ Collectively, these factors will lead to a less
healthy “risk pool” in the individual market which ultimately leads to higher average premiums.
The rating reforms significantly alter the cost-to-value ratio that consumers will experience, and younger members will bear a
greater burden of subsidizing premiums for older members. The high degree of cross-subsidization in the
reformed market makes it imperative to have high levels of participation among young people to
subsidize the older population.¶ Impact of Age Bands¶ Eliminating medical underwriting, requiring guaranteed issue and
requiring minimum benefit packages with 65 percent actuarial value will increase premiums significantly for the youngest,
healthiest 30 percent of members in the market today. Based on our analysis of actual polices, the premium increases will be greater
than 50 percent for this cohort in most of the country in the first year of reform.¶ Forty-two states permit health plans to vary
premiums based on age by 5:1 or more, with most of these allowing rates to be based on actuarial justification. The Senate Finance
Committee proposal to limit variations based on age of 4:1 is more restrictive than all but 8 states today. This would create a strong
disincentive for the young and healthy to participate even under the 4:1 age band in the AHFA.¶ In a previous analysis, Oliver
Wyman, Inc. estimated that in most states, premiums for the youngest one-third of the population would increase by 69 percent
under a 2:1 age band called for in the House and Senate HELP Committee bills, and by 35 percent under a 3:1 age band (being
discussed as a compromise) relative to 5:1 age band. While these tighter age bands will reduce premiums for older purchasers, at
least initially, most people under the age of 50 will see their rates increase significantly under tighter age bands.¶ The effect of tighter
age bands on premiums compounds over time, and it becomes increasingly difficult to attract younger members into the insurance
market. Without an effective mandate with meaningful penalties, people with higher expected
utilization of medical services will be much more likely to purchase coverage, driving up
premiums and reducing the number of people who would be covered. On the other hand, the
young and healthy will have little incentive to maintain coverage as they know they can get
insurance when they anticipate a need6 . As a result, the risk pool will deteriorate and premiums
will rise without adequate cross-subsidies. This situation is not conducive to a viable
insurance market.¶ Impact of Benefit Changes¶ The bills before Congress would also require that new purchasers buy
health insurance products that meet certain minimum benefit requirements. The Senate Finance Committee proposal requires
insurers in the individual and small group markets to offer “Gold” and “Silver” policies, which have an actuarial value (AV) of 80
percent and 70 percent respectively. The lowest actuarial value product that insurers could offer in this market would be the
“Bronze” package, with an AV of 65 percent.7¶ In addition to the minimum actuarial value of benefit, the bill also includes a range of
other changes that will impact the cost of benefit packages, including requirements to cover certain services (maternity, mental
health services, etc.), unlimited annual and lifetime maximums, and other limitations that will increase costs. These changes do not
directly affect the actuarial value of the plan, as described in the legislation, but will add to the actual cost of the products.¶ Oliver
Wyman, Inc. reviewed current benefit offerings in the individual and small group markets to understand how the requirements
proposed by the Senate Finance Committee legislation compare to benefit offerings today, and to assess the likely impact of the bill’s
requirements on premiums. The average actuarial value of coverage purchased in the individual health insurance market today is
close to 65 percent, similar to what the Congressional Budget Office has estimated, however, onehalf of individual market policies
are significantly below the proposed requirement. For the small group market, we estimate that the actuarial value of products
currently purchased is 75 percent, with about 20 percent of small groups having products with actuarial values below the Senate
Finance Committee minimum of 65 percent.¶ We estimate that compliance with the benefit requirements in the Senate Finance
Package would cause premiums for new purchasers to increase by approximately 10 percent in the individual market and 3 percent
in the small employer market nationwide.¶ Reform Scenario Results—Impact of Strong Individual Mandates¶ Each
of the
major bills before Congress require individuals to purchase insurance coverage or face potential
penalties. The bills generally also include requirements for large employers to purchase insurance or face a financial penalty. In
general, the bills exempt the smallest employers from this requirement. In the case of the Senate Finance Committee bill, firms with
fewer than 50 employees would be exempt from the requirement to provide coverage.¶ An amendment accepted during mark-up of
the Chairman’s Mark in the Finance Committee substantially weakened the bill’s individual mandate. This amendment eliminated
Modest
penalties for not maintaining insurance entirely in the first year insurance reforms become effective (2013).
penalties are phased in , reaching a maximum of $750 per adult in 2017. This maximum
penalty is likely to be only about 15 percent of an average premium in 2017, assuming current rates
of medical cost inflation. The amendment also exempted individuals whose premiums exceed 8 percent of their adjusted gross
income. In 33 states, the average cost of health insurance exceeds eight percent of median state income.8¶ Mandates
with
meaningful penalites are highly effective in encouraging a broad cross-section of the uninsured
to purchase coverage when combined with subsidies. For example, the RAND Corporation’s COMPARE model
found that an individual mandate would have the greatest impact on increasing insurance
coverage.9 By itself, an individual mandate with a penalty of 80 percent of premiums could
increase the number of people with insurance by up to 34 million, a 75 percent reduction in the
uninsured. However, RAND estimates the net newly insured would increase by only 8.7 million if there were no penalties and
subsidies up to 200 percent of the federal poverty level.10¶ A recent survey designed by Professor Joel C. Huber of Duke University,
conducted by Knowledge Networks, and funded by the Blue Cross and Blue Shield Association found that fewer
than one
third of the uninsured seeking individual coverage and making between 200 percent and 300
percent of the federal poverty level are likely to purchase coverage given the maximum penalty
of $750 per year in 2017 under the Senate Finance Committee proposal, even after subsidies are provided .
Approximately one in five uninsured making over 300 percent of poverty are likely to purchase
unsubsidized individual coverage with a penalty of $750 per year, according to the survey.¶ To further
evaluate the need for a strong individual mandate, we modeled two reform scenarios with different levels of
penalties for the mandate. The “High Mandate” and “Low Mandate” scenarios illustrate the effect
of individual mandates on affordability and total number of uninsured. The number of uninsured is
estimated to be approximately 12.6 million people higher with the weakened mandate.¶ Further, with weak mandates, the
risk pool of the individual market will be less healthy, have much lower participation among
younger members, and experience much higher premium increases. The average medical claims
of members in the reformed individual market will be 50 percent higher than the average in the market
today (not including medical inflation). This would translate into premium increases of approximately $1,500 for single coverage
and $3,300for family coverage in today’s dollars.11¶ Younger, healthier members are particularly vulnerable to rating reform. They
will experience premium increases greater than 50 percent relative to the current market in most of the U.S.
With weak
mandate penalties coupled with guaranteed issue, it will be less expensive for many people to choose to
buy insurance only when needed. Strong mandates will draw nearly 3 million more young
and healthy members into the reformed individual market. The healthier insurance pool will result in
premiums lower than reform with weak mandates.¶ Mandates serve to complement subsidies. Subsidies will be most
effective for individuals with low income levels. For the uninsured earning 100-200 percent FPL, we estimate that
more than 60 percent of them will purchase insurance because of subsidies. However, more than 60 percent of the current
individual market and about 20 percent of the uninsured have incomes above 300 percent FPL and will realize limited or no subsidy
support. Over 18 million uninsured and existing individual market members are ineligible for subsidies based on the proposed
structures. Higher
income uninsured individuals are not likely to take up coverage without a
meaningful penalty .

Millions are paying the penalty now – strengthening the mandate

changes the incentive structure
Steve Walker 16, JD from George Washington University, former Vice President of the
Healthcare Investment Banking Division of Merril Lynch, 10/28/2016, Millions choose to pay
Obamacare fines rather than enroll; Simple solution–higher fines or…, Monday Morning,
http://mondaymorning.com/2016/10/28/millions-choose-to-pay-obamacare-fines-rather-
than-enroll-simple-solution-higher-fines-or/

The architects of the Affordable Care Act thought they had a blunt instrument to force people–
even the young and invincible–to buy insurance through the law’s online marketplaces: a tax
penalty for those who remain uninsured. It hasn’t worked all that well, according to The New York Times,
and that is at least partly to blame for soaring premiums next year on some of the health law’s
insurance exchanges. The full weight of the penalty will not be felt until next April, says The Times,
when those who have avoided buying insurance will face penalties in the neighborhood of $700 a person. But even that
might be insufficient: For the young and healthy who are desperately needed to make the
exchanges work, it sometimes makes more sense for them to pay the Internal Revenue Service
than an insurance company charging large premiums, with huge deductibles. “In my experience, the
penalty has not been large enough to motivate people to sign up for insurance ,” said
Christine Speidel, a tax lawyer at Vermont Legal Aid. Some do sign up, especially those with low incomes who receive the most
generous subsidies, Ms. Speidel said. But others, she said, find that they cannot afford insurance, even with subsidies, so “they
grudgingly take the penalty.” The IRS says
that 8.1 million returns included penalty payments for people
who went without insurance in 2014, the first year in which most people were required to have coverage. A preliminary
report on the latest tax-filing season, tabulating data through April, said that 5.6 million returns included penalties averaging $442 a
return for people uninsured in 2015. With the health law’s fourth open-enrollment season beginning next Tuesday, Nov. 1,
consumers are fretfully weighing their options, says The Times. When Congress was drafting the Affordable Care Act in 2009 and
2010, lawmakers tried to adopt a carrot or stick approach: subsidies to induce people to buy insurance and tax penalties “to ensure
compliance,” in the words of the Senate Finance Committee. But the requirement for people to carry insurance is one of the most
unpopular provisions of the health law, and the Obama administration has been cautious about enforcing it. The IRS portrays the
decision to go without insurance as a permissible option, not as a violation of federal law. The law “requires you and each member of
your family to have qualifying healthcare coverage (called minimum essential coverage), qualify for a coverage exemption, or make
an individual shared responsibility payment when you file your federal income tax return,” the IRS says at its website. Some
consumers who buy insurance on the exchanges still feel vulnerable. Deductibles are so high, they say, that the insurance seems
useless. So some think that whether they send hundreds of dollars to the IRS or thousands to an insurance company, they are
essentially paying something for nothing, The Times points out. Obama administration officials say that perception is wrong. Even
people with high deductibles have protection against catastrophic costs, they say, and many insurance plans cover common health
care services before consumers meet their deductibles. In addition, even when consumers pay most or all of a hospital bill, they often
get the benefit of discounts negotiated by their insurers. The health law authorized certain exemptions from the coverage
requirement, and the Obama administration has expanded that list through rules and policy directives. More than 12 million
taxpayers claimed one or more coverage exemptions last year because, for instance, they were homeless, had received a shut-off
notice from a utility company or were experiencing other hardships. “Thepenalty for violating the individual
mandate has not been very effective,” said Joseph J. Thorndike, the director of the tax history project at Tax Analysts, a
nonprofit publisher of tax information. “If it were effective, we would have higher enrollment, and the
population buying policies in the insurance exchange would be healthier and younger.” “If you
make the penalties tougher, you need to make financial assistance broader and
deeper ,” said Michael Miller, the policy director of Community Catalyst, a consumer group seeking health care for all. Steve’s
Take: With the exception of the “repeal and replace” camp, practically everyone agrees that insurance companies
are a necessary ingredient in the exchanges for the ACA to function the way it was intended. And,
for insurance companies to remain in the exchange, they need more healthy people, fewer sick
people or a combination of the two. Both sides of the aisle agree that insurance companies
should not be able to reject people with pre-existing conditions, which means sick people in
need of care will remain, according to Forbes. That means a stronger mandate is required
to get healthy people into the insurance pools . Unfortunately, neither party seems to be discussing this
possibility.
The plan is key--- insurers just commited to exchanges and jacked up
premiums – addressing the mandates and CSRs solves
Benjy Sarlin 9-27, NBC News, "Obamacare Repeal Failed, but the Damage Is Already Done",
2017, https://www.nbcnews.com/politics/congress/obamacare-repeal-failed-some-damage-
already-done-n804956

the damage to the

WASHINGTON — Graham-Cassidy is officially over for now after Senate leaders announced they would not bring it up for a vote. But

health insurance market from the lengthy repeal debate is done — with higher
premiums and fewer choices already baked into Obamacare’s 2018 exchanges .¶ Now
Republican leaders and President Donald Trump have to decide what to do about it.¶ Do they keep trying repeal over and over and hope something eventually sticks? Or do they
talk to Democrats about securing a shaky truce? Could they try to make Obamacare work for the most people possible in the meantime? Perhaps they try to sabotage it?¶ Why

insurers are spooked ¶ Any conversation needs to reckon with the current state of Obamacare’s health insurance
exchanges, which are still struggling to attract insurers even as their profits improved last year. While no
counties are slated to go without coverage in 2018, almost half will have just one option next
year.¶ The problem has a lot to do with the last eight months of repeal efforts.¶ For months, insurers warned that the ongoing
turmoil in Congress and threats from the White House to undermine Obamacare would force them to charge
customers more — or not offer plans at all — in 2018.¶ "They say insurers don’t like uncertainty and
things could not be any more uncertain," said Sabrina Corlette, a Research Professor at
the Center on Health Insurance Reforms at Georgetown University.¶ In a report this month, the Congressional Budget
Office estimated this confusion would be responsible for a 15 percent increase in premiums

next year .¶ Looking to calm the waters, Senate HELP Committee Chairman Sen. Lamar Alexander, R-Tenn., led bipartisan
talks this month on a bill to stabilize the insurance market. The emerging plan was to guarantee cost-sharing reduction payments — which
Trump has threatened to cut off over legal concerns — in exchange for concessions from Democrats on loosening Obamacare regulations.¶ But those talks were

frozen once Graham-Cassidy put the GOP back in repeal mode and now it’s too late to pass anything
that will affect 2018. Insurers will finalize their plans this week, after which they will not be able to change

rates for the year.¶ "At this point the clock has basically run out," said Larry Levitt, senior vice president at the Kaiser Family
Foundation.¶ Premium hikes on the horizon¶ Already, state insurance regulators are approving big rate

increases based on the assumption that Trump will discontinue CSR payments and Congress
will not appropriate them.¶ In Connecticut, insurers and state officials agreed to premium hikes of 27.7 percent with
one insurer and 31.7 percent with another, with both sides citing volatility around CSRs. In
Michigan, officials assumed no CSR payments while approving an average 27.6 percent increase.
And in Mississippi, state Insurance Commissioner Mike Chaney approved a whopping 47.4 percent boost in
premiums for the state’s lone Obamacare insurer, according to the Wall Street Journal. He said it would have been 17.9 percent if the
CSR payments were not in question.¶ It’s not just the CSR’s raising rates. Industry analysts say companies are also
pricing in doubts about whether the White House will enforce the Obamacare individual
mandate , which requires people to maintain coverage.¶ The Department of Health and Human Services recently announced it would slash its advertising budget by
90 percent for the 45-day enrollment period, which begins November 1. The lack of outreach is stoking fears that Trump, who has talked about allowing Obamacare "implode" to

The uncertainty in the markets

force Democrats to come to the table, may be on a broader mission to sabotage the law.¶ "

continued throughout this process and will continue in the future if there are no
resolutions around CSR and the individual mandate ," S&P analyst Deep Banerjee told NBC News.
Back to Medical tourism

Continued medical tourism creates massive nosocomial disease risk--

-it’s unique, under-reported and global
C. Michael Hall 11, Professor in the Department of Management, University of Canterbury,
Christchurch, New Zealand, and Michael James, independent researcher and consultant with
interests in peripheral areas and regional development, “Medical tourism: Emerging biosecurity
and nosocomial issues”, Google
Findings – The note finds that there
are substantial risks associated with nosomial infections and
complications as a result of international tourism. Although these are clearly significant at an individual level
they also represent significant biosecurity risks to the home country of medical tourists and
particularly to medical facilities which they may visit if they have an infection. Medical tourists
are therefore identified by the medical community as posing significant risks for the spread of
pandemics as well as further contributing to increased antibiotic resistance . Further
systematic research is required to assess risk management strategies including the appropriateness of international and national
regulations which currently shows considerable variability.¶ Social implications – The development of international medical
tourism is demonstrated to have potentially significant negative implications for global public
health.¶ Originality/value – The relevance of the paper lies in its identification of considerable risks associated with international
medical tourism which may have considerable economic and personal costs associated with them. Such risks are not
usually incorporated into assessments of the economic benefits of medical tourism.¶ Key words
biological invasion, international health regulations, mobility, global public health ¶ Paper type Research paper¶ 1. Introduction¶
Concerns over biological invasion and health can have substantial effects on cross-border human mobility and international tourism
(Hall, 2011). This is particularly because a standard means of reducing the risk of biological invasion is to restrict or slow access or,
at the most extreme, to quarantine or deny access altogether. Such measures also have a substantial impact on the tourism industry
(Hall, 2010; Sharpley and Craven, 2001; Stanbury et al., 2005). For
example, the SARS (Severe Acute Respiratory Syndrome)
pandemic of 2003 was estimated to have led to a loss to GDP by tourism of 15% in Vietnam, 25% in
the People’s Republic of China, 41% in Hong Kong and 43% in Singapore (Teo et al., 2008, p. 95).
While the overall cost of SARS to the Asian region was estimated at nearly US$15 billion, or
0.5% of GDP, while a ‘less readily measurable, but arguably more serious, impact was caused by
faltering business confidence’ (Bell and Lewis, 2005, p. 21).¶ However, tourism is not only affected by
pandemics and epidemics but also contributes to their spread (Hall, 2005a, 2006; Tatem, 2009; Tatem et al.,
2006). As Raptopoulou-Gigi commented, ‘The rapid worldwide spread of the coronavirus that causes SARS and the fact that by May
25th 2003, 28 countries reported cases of this infectious disease, suggested that as for other infectious diseases, evolution and
spread is facilitated by the mobility of the society either through air travel or the densely populated urban areas especially in Asia’
(2003, p. 81). In order to combat the spread of disease and viruses many countries and regions have introduced biosecurity
strategies in order to enhance their economic and resource security (Hall et al., 2003). Biosecurity refers to the protection of a
country, region or location’s economic, environmental and/or human health from harmful organisms, including pests and disease
(Hall, 2005b; Hall et al., 2010). As Hooker (2010, p. 127) notes, ‘Amid an effectively global, interconnected, and highly networked
economy, health scares reassert the validity of borders: prosperity is equated with security, which decodes to border control for
health’. For example, in a foresight study on biosecurity needs in China, a survey of expert opinion found that all of the 18
participants believed that the movement of people, animals and micro-organisms was a driver of infectious diseases that needed
surveillance, with 16 (88.9%) also believing tourism to be a driver and with 17 of the 18 stating that there was a need for surveillance
(Feng et al., 2008).¶ 2. Regulation of infectious human pathogens and their vectors¶ Infectious human pathogens and their vectors
are the subject of substantial national and international regulation. The
leading international legal instrument with
respect to health is the International Health Regulations (IHR) (2005) that is binding on 194 member
countries, including all Member States of the World Health Organization (WHO). The scope of the IHR (2005) is not limited to any
specific disease or manner of transmission, but instead disease is defined as an ‘illness or medical condition, irrespective of origin or
source, that presents or could present significant harm to humans’ (WHO, 2008, p. 7). The IHR were first adopted by the WHO
Health Assembly in 1969 and covered six ‘quarantinable diseases’. These were amended in 1973 and 1981, primarily to reduce the
number of covered diseases from six to three (yellow fever, plague and cholera) and to mark the global eradication of smallpox
(WHO, 2008). The most recent version of the IHR was developed ‘In consideration of the growth in international travel and trade,
and the emergence or re-emergence of international disease threats and other public health risks’ (WHO, 2008, p. 1), and represents
a ‘paradigm shift’ in considering global public health in that there is a move from control at borders to containment of health threats
at source; from a specific list of diseases to all public health threats; and from preset measures to adapted response (WHO, 2007, p.
11). Nevertheless,there may be significant differences in national response to international
disease threat (Coker and Mounier-Jack 2006; Hanvoravongchai et al., 2010; Mensua et al., 2009; Ortu et al., 2008; Oshitani
et al., 2008). For example, in the European context Martin et al. (2010) found substantial differences across Europe in the extent to
which national pandemic policy and plans have been integrated with public health legislation and regulation. They found that
European countries differ in the range and the nature of intervention measures authorized by law, the extent to which borders could
be closed to movement of persons and goods during a pandemic, and the degree of access to healthcare of non-resident persons
(Martin et al., 2010).¶ The development of the most recent version of the International Health Regulations ‘to prevent, protect
against, control and provide a public health response to the international spread of disease in ways that are commensurate with and
restricted to public health risks, and which avoid unnecessary interference with international traffic and trade’ (Article 2 of the IHR
(2005) in WHO, 2008, p. 10), provides an extremely interesting counterpoint to the growth of international medical tourism (Hall,
2011).¶ 3. Mobility and biosecurity risk¶ When humans travel they carry with them not only their cultural preferences, customs,
behavioural patterns, technology and their genetic make up but also potential biosecurity risks including (Wilson, 1995; Hall,
2005a): ¶ • Luggage that may also contain food, soil, fauna, flora, and organic material that may act as vectors for disease¶ •
Pathogens in or on body, clothes and/or luggage¶ • Microbiologic fauna and flora on body, clothes and/or luggage¶ • Vectors on
body, clothes and/or luggage¶ • Immunologic sequelae of past infections¶ • Vulnerability to infections¶ Obviously
all tourism
is subject to such risks as they are inherent to human mobility (Hall, 2006). However, medical
tourism is intrinsically different with respect to increasing biosecurity risk
because individuals who engage in medical tourism are travelling to a medical
environment and engaging in medical practices that must expose them to
pathogens and microbiologic fauna and flora that are qualitatively different from
those found in their home environment . Indeed, one of the lessons of SARS and the ‘bird flu’
pandemics is that health care institutions have emerged as a major potential source of
infection (Balaban and Marano, 2010; Fahey, 2007; Waterer, 2011). Medical tourism therefore
increases the risk of nosocomial infections , also referred to as ‘hospital’ or ‘healthcare
acquired infections’ (Leahy, 2008; Reed, 2008). In 2002 the WHO reported that a prevalence survey conducted under the
auspices of the WHO in 55 hospitals of 14 countries in Europe, the Eastern Mediterranean, South-East Asia and the Western Pacific
demonstrated an average of 8.7% of hospital patients had nosocomial infections. In a meta-analysis of articles on health care
associated infection in developing countries from 1995-2008 Allegranzi et al. (2011) reported that the prevalence of health-care-
associated infection (pooled prevalence in high-quality studies), was 15·5 per 100 patients (95% CI 12·6–18·9) which was much
higher than proportions reported from Europe and the USA. Pooled overall health-care-associated infection density in adult
intensive-care units was 47·9 per 1000 patient-days (95% CI 36·7–59·1), which was at least three times as high as densities reported
from the USA (Allegranzi et al., 2011). Surgical-site infection was the leading infection in hospitals (pooled cumulative incidence 5·6
per 100 surgical procedures), also much higher than proportions recorded in developed countries (Allegranzi et al., 2011). At any
time, over 1.4 million people worldwide suffer from infectious complications acquired in hospital (WHO, 2002) with the elderly
Also of significance is that it is generally
(>65) being particularly vulnerable (Strausbaugh, 2001).
recognised that nosocomial infections and other complications are under-
reported (Dettenkofer et al., 2003; Greig and Lee, 2009; Reid et al., 2002; Uçkay et al., 2008; Vandenbroucke-Grauls and
Schultsz, 2002).¶ Examples from the literature of tourism related nosocomial infections include the role of travel in the spread of
noroviruses (gastric flu) (Koopmans, 2009); multi-resistant infections in repatriated tourists after a natural disaster (Uçkaya et al.,
2008); mycobacterial infections following cosmetic surgery (Centers for Disease Control, 1998, 2004); complications following
arthroplasty (joint replacement) (Cheung and Wilson, 2007) and aesthetic surgery (Jeevan et al., 2011); Hepatitis B as a result of
unhygienic hospital conditions (Löscher et al., 1999), and hepatitis C virus infections as a result of holiday haemodialysis
(Bhattacharya et al., 2009; Patel et al., 2010). Balaban and Marano (2010) review of studies of commercial organ transplanation,
primarily in China and India, suggest an apparent increase in ‘transplant tourism’ from 1990-2009 and a higher incidence of post-
operative tissue rejection and severe infectious complications among transplant tourists compared to other transplant patients.
Although they also note that data is limited. Similarly, substantial concerns have been raised about the risks associated with
xenotransplantation and ‘stem cell tourism’ (Kimball and Hodges, 2010; Nelson, 2008).¶ 4. The NDM-1 case¶ Muir and Weinbren
(2010) report the case of a dialysis patient who had last visited and dialysed in India 18 months previously and who had acquired a
highly resistant Escherichia coli (E. coli) organism. The organism was found to be a New Delhi metallo-β-lactamase (NDM-1)
producer, acquisition of which is strongly associated with medical contact with Pakistan or India. This enzyme confers resistance to
all known antibiotics except polymyxins and, sometimes, tigecycline. Spread of resistance is thought to occur by plasmid-mediated
transfer. As Muir and Weinbren (2010: 240) state “This case raises a number of important issues, particularly concerning renal
dialysis patients. Many dialyse in countries where carbapenemase-producing bacteria are common (India, Pakistan, USA, Israel,
Greece, Turkey) while on holiday or during return visits to family… these patients may use, or be admitted to, a number of
healthcare facilities within a short period of time. All these factors could facilitate rapid spread of NDM-1 with
potentially serious consequences”. In addition to concerns over the spread of antibiotic resistant bacteria such cases also
incur substantial costs with respect to the need for deep-cleaning of potentially affected areas as well as patient screening and room
controls. As Kumarasamy et al. (2010, p. 6) observed, ‘It is disturbing, in context, to read calls in the popular press for UK patients to
opt for corrective surgery in India with the aim of saving the NHS money. As our data show, such a proposal might ultimately cost
the NHS substantially more than the short-term saving and we would strongly advise against such proposals. The potential for wider
international spread of producers and for NDM-1-encoding plasmids to become endemic worldwide, are clear and frightening’.¶
However, the NDM-1 case created considerable controversy. Even though the review of NDM-1 by Kumarasamy et al. (2010)
concluded ‘Several of the UK source patients had undergone elective, including cosmetic, surgery while visiting India or Pakistan.
India also provides cosmetic surgery for other Europeans and Americans, and blaNDM-1 will likely spread worldwide,’ the
association of NDM-1 with New Delhi (because the Swedish patient of Indian origin who had travelled to New Delhi and picked up
the infection in which the drug-resistant strain was first identified (Yong et al., 2009) was widely criticised in India (Pandey, 2010).
The Lancet study (Kumarasamy et al., 2010) was described by the officials of the Indian health industry as ‘malicious propaganda’,
and as a conspiracy by members of the Indian parliament who also associated it with the activities of multi-national pharmaceutical
companies (Pandey, 2010). The irony perhaps being that the lead author of the study was based in India while a number of papers
on the topic have also had authors based in India (e.g. Krishna, 2010; Nataraj, 2010). Nevertheless, Indian Ministry of Health
officials were reported as saying, ‘We strongly refute the naming of this enzyme as New Delhi metallo beta lactamase… We also
refute that hospitals in India are not safe for treatment, including medical tourism,’ while MP SS Ahluwalia of the opposition
Bharatiya Janata Party stated ‘When India is emerging as a medical tourism destination, this type of news is unfortunate and may be
a sinister design of multi-national companies’ and the Congress Party's Jayanthi Natarajan said the report of the superbug was
‘wrong propaganda against the country’ (Pandey, 2010).¶ 5. Conclusion¶ Despite
enthusiasm in some quarters for
the promotion in international medical and health tourism (Economic and Social Commission for Asia and the Pacific,
2009) this paper has indicated that there are substantial concerns with respect to the potential personal
and public health costs of medical tourism. In many ways much of the focus of the medical tourism literature within
tourism and business literature on the destination reflects the general failure of tourism impact research to assess the system wide
effects of tourism (Hall and Lew, 2009). This is particularly the case with the contribution of medical tourism to the dispersal of
biosecurity risks such as disease and drug resistant bacteria, as Koh (2008, p. 852) notes, ‘there is circumstantial evidence to
support the theory that resistant bacteria are constantly being imported (and exported). Medical tourism, travel in general and the
increase in the local expatriate population may all contribute to this’.¶ Undoubtedly
the risks attached to medical
tourism both for individuals as well as the spread of disease and resistant bacteria are a
significant area for future research (Balaban and Marano, 2010; Cantn and Lumb 2011; Crooks et al., 2010; Fernando et al.,
2010; Moellering, 2010; Noël, 2007; Sydnor and Peri, 2011; Talbot et al., 2010). Such research will include not only medical studies
but also assessments of travel behaviour, motivation, level of consumer information, and the appropriateness of the regulatory
framework for regulatory related travel. For example, a participant in a project on the management of a disease pandemic in Europe
even commented ‘it would be good to have uniform guidelines to avoid medical tourism’ (in Martin et al. 2010: 7).¶ Medical tourists
currently represent only a small percentage of post-travel patients (0.1% of Field et al’s (2010) population of 6957 ill returned
travellers who presented in 2008 to EuroTravNet centres with a presumed travel associated condition). However, if that percentage
were to be extrapolated as a percentage of the global international travel market, the resulting figure would be double the estimated
four million people who travel internationally each year for medical treatment (Wilson, 2010). ¶ The growth of medical tourism is
grounded in a neoliberal vision of international trade in health services and the failure of some governments to respond to
increasing demands for public health services from their own population. Like many areas of international trade in services there are
areas of self-regulation, most notably organizations such as Accreditation Canada International, the Joint Commission
International, QHA Trent Accreditation and the Australian Council on Healthcare Standards. However, no clinical governance
methodology is perfect and mistakes and accidents are part of hospital and medical care. In
seeking to assess the costs
and benefits of medical tourism it is therefore imperative that they are assessed not only at the
level of the individual traveller and the business imperatives of the destination medical facility
but also in terms of global public health and the potential costs incurred by medical facilities in the country of origin
of the medical tourist.

Rapid transmission’s uniquely likely due to medical tourism

Tamara L. Hill 11, JD Candidate 2012, The University of Chicago Law School, Chicago Journal
of International Law, "The Spread of Antibiotic-Resistant Bacteria through Medical Tourism
and Transmission Prevention Under the International Health Regulations", 6/1/2011,
chicagounbound.uchicago.edu/cgi/viewcontent.cgi?article=1622&context=cjil
There is heightened concern regarding international transmission in light of the fact that recent medical care
appeared to be a significant factor, not just medical care in another country at any prior point in time. "Most patients with recent travel had been
hospitalized in a foreign country during the 30 days prior to the detection of NDM-1."" Transmission
of antibiotic-resistant
bacteria through patient travel between healthcare settings is a new development, driven by the
increase in global travel and trade. NDM-1 exemplifies the potential dangers of international spread.¶ B. Attributes of Antibiotic-Resistant
Bacteria Compared to Attributes of Other Pandemic Infectious Diseases¶ Antibiotic-resistant bacteria have not historically been considered pandemic
infectious diseases, since they are not communicable via airborne transmission like influenzas and other highly contagious infectious diseases.¶
Additionally, the methods of preventing transmission and containing infections for antibiotic-resistant bacteria differ from the methods used for
pandemic-type diseases.¶ 1. Risk factors for infection and transmission of antibiotic-resistant bacteria compared to other infectious diseases.¶ Most
antibiotic-resistant bacteria , like MRSA, primarily exist in healthcare settings . "The most
common health care risk factors among cases with [healthcare associated] infections [are] a history of hospitalization, history of surgery, long-term care
residence, and MRSA infection or colonization." 7 Community-associated cases, which are not as common as healthcare-associated infections, typically
have risk factors common with institutional settings such as schools, athletic facilities, and jails. These risk factors include: "close skin-to-skin contact,
openings in the skin such as cuts or abrasions, contaminated items and surfaces, crowded living conditions, and poor hygiene."68 Notably,
transmission requires direct skin-to-skin contact or surface contamination, but antibioticresistant bacteria do not tend to survive for more than a few
minutes on contaminated surfaces. Without long periods of transmission through surface contamination or airborne transmission, antibiotic-resistant
bacteria do not tend to spread rapidly outside healthcare or institutional settings. Casual contact, such as hugging, is usually acceptable for visitors of
an infected patient, as long as contact with the wound site is avoided. ¶ Pandemic outbreaks, on the other hand, are more often associated with
infectious diseases with transmission methods that are more difficult to monitor and control. The 2009 H1N1 influenza, which was declared a
pandemic by the WHO, "transmitted through: [d]roplet exposure of mucosal surfaces by respiratory secretions from coughing or sneezing; [c]ontact,
usually of hands, with an infectious patient or [contaminated surface] followed by self-inoculation ... ; and [s]mall particle aerosols in the vicinity of the
infectious individual."o In addition to rapid transmission contact factors, other attributes make the influenza virus particularly susceptible to rapid
Medical tourism
population spread. "Influenza viruses are notorious for their rapid mutation and unpredictable behaviour.,71¶

provides a tool of rapid transmission across international borders for antibiotic-

resistant bacteria that did not exist before this century . Although pandemic outbreaks have many factors
that make them prone to rapid transmission, the introduction of a cross-border transmission factor for diseases

that are particularly resistant to treatment may be especially dangerous.

Extinction---globalization overwhelms burnout

Yaneer Bar-Yam 16, Professor and President, New England Complex System Institute; PhD
in Physics, MIT, “Transition to extinction: Pandemics in a connected world”, July 3,
http://necsi.edu/research/social/pandemics/transition.
Watch as one of the more aggressive—brighter red — strains rapidly expands. After a time it goes extinct leaving a black region. Why
does it go extinct? The answer is that it spreads so rapidly that it kills the hosts around it. Without new hosts to infect it then dies out
itself. That the rapidly spreading pathogens die out has important implications for evolutionary research which we have talked about
elsewhere [1–7].¶ In the research I want to discuss here, what
we were interested in is the effect of adding long
range transportation [8]. This includes natural means of dispersal as well as unintentional
dispersal by humans , like adding airplane routes, which is being done by real world airlines (Figure 2).¶
When we introduce long range transportation into the model, the success of more aggressive
strains changes. They can use the long range transportation to find new hosts and escape
local extinction . Figure 3 shows that the more transportation routes introduced into the model, the
more higher aggressive pathogens are able to survive and spread.¶ As we add more
long range transportation, there is a critical point at which pathogens become so aggressive that
the entire host population dies . The pathogens die at the same time, but that is not exactly
a consolation to the hosts. We call this the phase transition to extinction (Figure 4). With increasing
levels of global transportation, human civilization may be approaching such a critical
threshold.¶ In the paper we wrote in 2006 about the dangers of global transportation for pathogen evolution and pandemics
[8], we mentioned the risk from Ebola. Ebola is a horrendous disease that was present only in isolated villages in Africa. It was far
away from the rest of the world only because of that isolation. Since Africa was developing, it was only a matter of time before it
reached population centers and airports. While the model is about evolution, it is really about which pathogens will be found in a
system that is highly connected, and Ebola can spread in a highly connected world.¶ The traditional approach to public health uses
historical evidence analyzed statistically to assess the potential impacts of a disease. As a result, many were surprised by the spread
of Ebola through West Africa in 2014. As
the connectivity of the world increases, past experience is not a
good guide to future events.¶ A key point about the phase transition to extinction is its
suddenness . Even a system that seems stable, can be destabilized by a few more long-range
connections, and connectivity is continuing to increase.¶ So how close are we to the tipping point? We don’t
know but it would be good to find out before it happens.¶ While Ebola ravaged three countries in West Africa, it only resulted in a
handful of cases outside that region. One possible reason is that many of the airlines that fly to west Africa stopped or reduced flights
during the epidemic [9]. In the absence of a clear connection, public health authorities who downplayed the dangers of the epidemic
spreading to the West might seem to be vindicated.¶ As with the choice of airlines to stop flying to west Africa, our analysis didn’t
take into consideration how people respond to epidemics. It does tell us what the outcome will be unless we respond fast enough and
well enough to stop the spread of future diseases, which may not be the same as the ones we saw in the past. As
the world
becomes more connected, the dangers increase.¶ Are people in western countries safe because of higher quality
health systems? Countries like the U.S. have highly skewed networks of social interactions with
some very highly connected individuals that can be “superspreaders.” The chances of such an
individual becoming infected may be low but events like a mass outbreak pose a much greater risk if they do
happen. If a sick food service worker in an airport infects 100 passengers, or a contagion event
happens in mass transportation, an outbreak could very well prove unstoppable.
2AC
Economy
 AT: Inflation Turn

Fed rate hikes inevitable---even under low inflation

Jeff Cox 6/14, finance editor for CNBC.com where he manages coverage of the financial
markets and Wall Street, 6/14/17, "Fed hikes interest rates despite declining inflation, sets plan
for balance sheet reduction," https://www.cnbc.com/2017/06/14/interest-rates-addressed-at-
fed-meeting-with-janet-yellen.html

The Federal Reserve approved its second rate hike of 2017 even amid expectations that
inflation is running well below the central bank's target .
In addition, the Fed provided more detail on how it will unwind its $4.5 trillion balance sheet, or portfolio of bonds that includes Treasurys, mortgage-
backed securities and government agency debt.

As financial markets had anticipated, the

policymaking Federal Open Market Committee increased its
benchmark target a quarter point . The new range will be 1 percent to 1.25 percent for a
rate that currently is 0.91 percent.
The level impacts most adjustable-rate and revolving debt like credit cards and home equity loans. The prime rate that banks use as a baseline for
interest rates usually rises immediately after the Fed makes a move.

The central bank now believes inflation will fall well short of its 2 percent target this year.
The post-meeting statement said inflation "has declined recently" even as household spending has "picked up in
recent months," the latter an upgrade from the May statement that said spending had "rose only modestly." The statement also noted

that inflation in the next 12 months "is expected to remain somewhat below 2 percent in
the near term" but to stabilize.

On top of the rate hike, the committee said it will begin the process this year of reducing
its balance sheet , which it expanded by buying bonds and other securities in order to fight the housing crisis. Minutes from the May
meeting indicated officials already had begun discussion about putting a set limit each month on

the amount it would let run off as it conducts its policy of reinvesting proceeds. However, many Fed
watchers did not think the FOMC would include language on the balance sheet in the statement, with Chair Janet Yellen more likely to address the
issue at her post-meeting news conference.

"The combination of a rate hike and shrinking the balance sheet

equates to a tightening monetary policy at a time when inflation
is lower than expected

," said Kathy Jones, senior fixed income strategist at Charles Schwab.

A statement on the program said the roll-off is targeted to start this year, though no specific date was
provided.

"The committee currently expects to begin implementing a balance sheet normalization process
this year, provided the economy evolves broadly as anticipated," the post-meeting statement said.
According to information released Wednesday, the roll-off cap level will start at $6 billion a month for the level of principal payment proceeds from
Treasurys it will let run off without reinvesting. The remainder will be reinvested.
The Fed will increase that cap level at a pace of $6 billion each quarter over 12 months until the cap reaches $30 billion a month.

For agency and mortgage debt, the cap will be $4 billion a month initially, with quarterly increases of $4 billion until the level reaches $20 billion a
month.

Once both targets are met, the total runoff per month will be $50 billion. Several Fed officials have said publicly they expect the runoff program to
continue until the balance sheet declines to about $2 trillion to $2.5 trillion.

Fed officials voted to move forward with both moves despite some wobbly economic data lately
indicating that growth won't reach the lofty 3 percent projections from the Trump White House.
Retail sales data have indicated a still-struggling consumer and payrolls growth has

slowed considerably over the past few months.

Still, the Fed actually increased its anticipation for GDP growth in 2017, bumping it up to 2.2 percent from the 2.1 forecast in March. Unemployment also is expected to decline
more this year than anticipated, with the new forecast at 4.3 percent against the previous 4.5 percent.

The summary of economic projections points to a 1.6 percent headline rate for personal consumption expenditures, the central bank's preferred inflation indicator. That was cut
sharply from the 1.9 percent forecast in March. Core inflation, which excludes food and tumbling energy prices, was cut from 1.9 percent to 1.7 percent.

However, the forecast for 2018 and 2019 was unchanged at 2 percent for both levels.

"Near-term risks to economic outlook appear roughly balanced, but the committee is monitoring inflation developments closely," the committee said.

"The primary story is they put in place to start tapering the balance sheet, without putting any target date around it," said JJ Kinahan, chief market strategist at TD Ameritrade.
"I don't know that it necessarily tells us anything other than we are going to continue to play this game and it's going to make the press conferences more important."

The so-called dot plot, which charts individual FOMC members' expectations for where the funds
target will land, indicates officials overall are holding to their expectations. The funds rate
projection for the end of 2017 remains 1.4 percent, which would indicate an additional hike
before the end of the year. Fed funds futures market had been giving another move this year just a 35 percent chance, according to
the CME.

Monetary policy doesn’t have a sustained impact on the economy

Jeffrey Lacker 16, President, Federal Reserve Bank of Richmond, The Johns Hopkins Carey
Business School, 2/24/16, "Can Monetary Policy Affect Economic Growth?,"
https://www.richmondfed.org/press_room/speeches/jeffrey_m_lacker/2016/lacker_speech_2
0160224
Monetary policy’s ability to affect real economic activity — when monetary policy is being reasonably well-executed —
can be quite limited and is almost always short-lived.2 In the standard models used in policy analysis, monetary
policy’s effects on the real economy generally derive from frictions that impede the rapid
adjustment of the overall average level of prices, such as the fact that it takes time for households and firms to adjust their
behavior in response to changes in the stance of monetary policy. Such frictions are, almost always, short-run phenomena that
generate transitory deviations in real activity, and their empirical significance is a matter of ongoing research and debate.
Medical Tourism
 AT: Mexico Turn
Zero risk of Mexican state collapse---consensus of credible experts
Jean Daudelin 12, Professor @ Carleton, teaches on development and conflict. He is a
specialist of Latin America, particularly Brazil, Central America and Colombia, where he has
researched religious movements, indigenous politics, urban violence, economic integration, and
regional politics. His current research focuses on property rights and conflict, on Brazilian
foreign policy and international relations in the Americas, and on crime and violence in Latin
America, “The State And Security in Mexico” http://books.google.com/books?id=o-
Tu81Bq6s4C&pg=PA127&lpg=PA127&dq=mexico+state+collapse&source=bl&ots=Yhx_8YtFb4
&sig=pa7WFUmTZL9ABazqwXvl8euUKw&hl=en&sa=X&ei=46UHVNGWOIfxgwSRlYDACg&v
ed=0CB8Q6AEwATgU#v=onepage&q=mexico%20state%20collapse&f=false
A careful look at the evidence and the fact that the U.S. seems to be disengaging from what has ultimately been a limited
involvement in the region's drug and organized-crime scene suggests that, from whichever angle one looks at
the problem, the latter does not represent a very significant threat to U.S. security. In that context, a sizable
increase in Canada's involvement can hardly be justified by the dangers the problem represents to its main ally. The prospects
of narco-traffickers provoking a state collapse in Mexico are essentially nonexistent,
notwithstanding alarmist declarations by some U.S. public officials.14 No reputable expert on
the country has supported that view .54 Such prospects for Guatemala, Honduras, or even El Salvador are much less
far-fetched, however, which is why an effort is currently being made by the World Bank, the European Union, the U.S., and Canada
to bolster the region's governments* individual and collective capacity to confront the organized-crime challenge." It is difficult to
argue, however, that the emergence of a narco-state or some kind of state collapse in Central America and the Caribbean would
represent a significant threat for Canada itself. These
regions—Central America and Haiti in particular—have long been
plagued by corruption, violence, and instability and have previously-seen long episodes of civil war
without any ripple effect on Canada. Were such developments to occur, they would create, relative to North America, the
situation that currently exists in the urban peripheries of large Latin American countries, such as Colombia or Brazil, whose stability
and economic prospects are not significantly impacted by the anarchy and violence that prevail in small "uncontrolled territories."
Off
 2AC – T Single Payer
Counterinterpretation – NHI requires two things – a legal
requirement for insurance and universality – the ACA currently fails
this test but the plan makes it NHI
Thomas Bodenheimer 16, MD, MPH, Founding Director of the Center for Excellence in
Primary Care, University of California-San Francisco; and Kevin Grumbach, MD, Founding
Director of the Center for Excellence in Primary Care, University of California-San Francisco,
2016, Understanding Health Policy: A Clinical Approach, Seventh Edition, p. 185-196
The subject of national health insurance has seen six periods of intense activity, alternating with times of political inattention. From 1912 to 1916, 1946 to 1949, 1963 to 1965, 1970 to 1974, 1991 to 1994, and 2009
to 2015 it was the topic of major national debate. In 1916, 1949, 1974, and 1994, national health insurance was defeated and temporarily consigned to the nation’s back burner. Guaranteed health coverage for two

groups—the elderly and some of the poor—was enacted in 1965 through Medicare and Medicaid. In 2010,with the passage of the Patient Protection and Affordable Care Act, also known as the Affordable
Care Act (ACA) or “Obamacare,” the stage was set for the expansion of coverage to millions of uninsured people.
National health insurance means the guarantee of health insurance for all the nation’s
residents —what is commonly referred to as “universal coverage .” Much of the focus, as well as the political contentiousness, of national
health insurance proposals concern how to pay for universal coverage. N ational h ealth i nsurance proposals may also address provider

payment and cost containment .¶ The controversies that erupt over universal health care coverage become simpler to understand if one returns to the
four basic modes of health care financing outlined in Chapter 2: out-of-pocket payment, individual
private insurance, employment-based private insurance, and government financing. There is general

agreement that out-of-pocket payment does not work as a sole financing method for costly contemporary health care.
National health insurance involves the replacement of out-of-pocket payments by one,
or a mixture, of the other three financing modes .¶ Under government-financed national health
insurance plans, funds are collected by a government or quasigovernmental fund, which in turn pays hospitals, physicians, health maintenance

organizations (HMOs), and other health care providers. Under private individual or employment-based n ational h ealth i nsurance, funds

are collected by private insurance companies, which then pay providers of care.¶ Historically, health care financing in the United States
began with out-of-pocket payment and progressed through individual private insurance, then employment-based insurance, and finally government financing for Medicare and Medicaid (see Chapter 2). In the
history of US national health insurance, the chronologic sequence is reversed. Early attempts at national health insurance legislation proposed government programs; private employment-based national health
insurance was not seriously entertained until 1971, and individually purchased universal coverage was not suggested until the 1980s (Table 15-1). Following this historical progression, we shall first discuss

The ACA represents a pluralistic approach that draws on

government-financed national health insurance, followed by private employment-based and then individually purchased coverage.

all three of these financing models: government financing, employment-based private insurance, and
individually purchased private insurance.¶ GOVERNMENT-FINANCED NATIONAL HEALTH INSURANCE¶ The American Association for Labor Legislation Plan¶ In the
early 1900s, 25 to 40% of people who became sick did not receive any medical care. In 1915, the American Association for Labor Legislation (AALL) published a national health insurance proposal to provide
medical care, sick pay, and funeral expenses to lower-paid workers—those earning less than $1,200 a year—and to their dependents. The program would be run by states rather than the federal government and
would be financed by a payroll tax–like contribution from employers and employees, perhaps with an additional contribution from state governments. Government-controlled regional funds would pay physicians
and hospitals. Thus, the first national health insurance proposal in the United States was a government-financed program (Starr, 1982).¶ In 1910, Edgar Peoples worked as a clerk for Standard Oil, earning $800 a
year. He lived with his wife and three sons. Under the AALL proposal, Standard Oil and Mr. Peoples would each pay $13 per year into the regional fund, with the state government contributing $6. The total of $32
(4% of wages) would cover the Peoples family.¶ The AALL’s road to national health insurance followed the example of European nations, which often began their programs with lower-paid workers and gradually
extended coverage to other groups in the population. Key to the financing of national health insurance was its compulsory nature; mandatory payments were to be made on behalf of every eligible person, ensuring
sufficient funds to pay for people who fell sick.¶ The AALL proposal initially had the support of the American Medical Association (AMA) leadership. However, the AMA reversed its position and the conservative
branch of labor, the American Federation of Labor, along with business interests, opposed the plan (Starr, 1982). The first attempt at national health insurance failed.¶ The Wagner–Murray–Dingell Bill¶ In 1943,
Democratic Senators Robert Wagner of New York and James Murray of Montana, and Representative John Dingell of Michigan introduced a health insurance plan based on the social security system enacted in
1935. Employer and employee contributions to cover physician and hospital care would be paid to the federal social insurance trust fund, which would in turn pay health providers. The Wagner–Murray–Dingell
bill had its lineage in the New Deal reforms enacted during the administration of President Franklin Delano Roosevelt. ¶ In the 1940s, Edgar Peoples’ daughter Elena worked in a General Motors plant
manufacturing trucks to be used in World War II. Elena earned $3,500 per year. Under the 1943 Wagner–Murray–Dingell bill, General Motors would pay 6% of her wages up to $3,000 into the social insurance
trust fund for retirement, disability, unemployment, and health insurance. An identical 6% would be taken out of Elena’s check for the same purpose. One-fourth of this total amount ($90) would be dedicated to
the health insurance portion of social security. If Elena or her children became sick, the social insurance trust fund would reimburse their physician and hospital.¶ Edgar Peoples, in his seventies, would also
receive health insurance under the Wagner–Murray–Dingell bill, because he was a social security beneficiary.¶ Elena’s younger brother Marvin was permanently disabled and unable to work. Under the Wagner–

government-
Murray–Dingell bill he would not have received government health insurance unless his state added unemployed people to the program.¶ As discussed in Chapter 2,

financed health insurance can be divided into two categories. Under the social insurance model,
only those who pay into the program, usually through social security contributions, are eligible for the program’s benefits.
Under the public assistance (welfare) model, eligibility is based on a means test; those below a certain
income may receive assistance. In the welfare model, those who benefit may not contribute, and those who contribute (usually through taxes) may not benefit (Bodenheimer &
Grumbach, 1992). The Wagner–Murray–Dingell bill, like the AALL proposal, was a social insurance proposal. Working people and their dependents were eligible because they made social security contributions,
and retired people receiving social security benefits were eligible because they paid into social security prior to their retirement. The permanently unemployed were not eligible.¶ In 1945, President Truman,
embracing the general principles of the Wagner–Murray–Dingell legislation, became the first US president to strongly champion national health insurance. After Truman’s surprise election in 1948, the AMA
succeeded in a massive campaign to defeat the Wagner–Murray–Dingell bill. In 1950, national health insurance returned to obscurity (Starr, 1982).¶ Medicare and Medicaid¶ In the late 1950s, less than 15% of the
elderly had health insurance (see Chapter 2) and a strong social movement clamored for the federal government to come up with a solution. The Medicare law of 1965 took the Wagner–Murray–Dingell approach
to national health insurance, narrowing it to people 65 years and older. Medicare was financed through social security contributions, federal income taxes, and individual premiums. Congress also enacted the
Medicaid program in 1965, a public assistance or “welfare” model of government insurance that covered a portion of the low-income population. Medicaid was paid for by federal and state taxes.¶ In 1966, at age
66, Elena Peoples was automatically enrolled in the federal government’s Medicare Part A hospital insurance plan, and she chose to sign up for the Medicare Part B physician insurance plan by paying a $3
monthly premium to the Social Security Administration. Elena’s son, Tom, and Tom’s employer helped to finance Medicare Part A; each paid 0.5% of wages (up to a wage level of $6,600 per year) into a Medicare
trust fund within the social security system. Elena’s Part B coverage was financed in part by federal income taxes and in part by Elena’s monthly premiums. In case of illness, Medicare would pay for most of
Elena’s hospital and physician bills.¶ Elena’s disabled younger brother, Marvin, age 60, was too young to qualify for Medicare in 1966. Marvin instead became a recipient of Medicaid, the federal–state program for
certain groups of low-income people. When Marvin required medical care, the state Medicaid program paid the hospital, physician, and pharmacy, and a substantial portion of the state’s costs were picked up by

Medicare is a social insurance program, requiring individuals or families to have made

the federal government.¶

social security contributions to gain eligibility to the plan. Medicaid, in contrast, is a public assistance
program that does not require recipients to make contributions but instead is financed from
general tax revenues. Because of the rapid increase in Medicare costs, the social security contribution has risen substantially. In 1966, Medicare took 1% of wages, up to a $6,600 wage level
(0.5% each from employer and employee); in 2015, the payments had risen to 2.9% of all wages, higher for wealthy people. The Part B premium has jumped from $3 per month in 1966 to $104.90 per month in

Many people believed that Medicare and Medicaid were a

2015, higher for wealthy people.¶ The 1970 Kennedy Bill and the Single-Payer Plan of the 1990s¶

first step toward universal health insurance. European nations started their national health insurance programs by covering a portion of the population and
later extending coverage to more people. Medicare and Medicaid seemed to fit that tradition. Shortly after Medicare and Medicaid became law, the labor movement, Senator Edward Kennedy of Massachusetts,
and Representative Martha Griffiths of Michigan drafted legislation to cover the entire population through a national health insurance program. The 1970 Kennedy–Griffiths Health Security Act followed in the
footsteps of the Wagner–Murray–Dingell bill, calling for a single federally operated health insurance system that would replace all public and private health insurance plans.¶ Under the Kennedy–Griffiths 1970
Health Security Program, Tom Peoples, who worked for Great Books, a small book publisher, would continue to see his family physician as before. Rather than receiving payment from Tom’s private insurance
company, his physician would be paid by the federal government. Tom’s employer would no longer make a social security contribution to Medicare (which would be folded into the Health Security Program) and
would instead make a larger contribution of 3% of wages up to a wage level of $15,000 for each employee. Tom’s employee contribution was set at 1% up to a wage level of $15,000. These social insurance
contributions would pay for approximately 60% of the program; federal income taxes would pay for the other 40%.¶ Tom’s Uncle Marvin, on Medicaid since 1966, would be included in the Health Security
Program, as would all residents of the United States. Medicaid would be phased out as a separate public assistance program.¶ The Health Security Act went one step further than the AALL and Wagner–Murray–
Dingell proposals: It combined the social insurance and public assistance approaches into one unified program. In part because of the staunch opposition of the AMA and the private insurance industry, the

government-financed national health

legislation went the way of its predecessors: political defeat.¶ In 1989, Physicians for a National Health Program offered a new

insurance proposal. The plan came to be known as the “ single-payer ” program, because it would establish a single
government fund within each state to pay hospitals, physicians, and other health care providers,
replacing the multipayer system of private insurance companies (Himmelstein & Woolhandler, 1989). Several versions of the single-
payer plan were introduced into Congress in the 1990s, each bringing the entire population together into one health care financing system, merging the social insurance and public assistance approaches (Table 15-

THE
2). The California Legislature, with the backing of the California Nurses Association, passed a single-payer plan in 2006 and 2008, but the proposals were vetoed by the Governor.¶

EMPLOYER-MANDATE MODEL OF NATIONAL HEALTH INSURANCE ¶ In response to Democratic

Senator Kennedy’s introduction of the 1970 Health Security Act, President Nixon, a Republican, countered with a plan of his own, the nation’s first employment-based, privately administered national health
insurance proposal. For 3 years, the Nixon and Kennedy approaches competed in the congressional battleground; however, because most of the population was covered under private insurance, Medicare, or

The essence of the Nixon

Medicaid, there was relatively little public pressure on Congress. In 1974, the momentum for national health insurance collapsed, not to be seriously revived until the 1990s.

proposal was the employer mandate, under which the federal government requires (or mandates) employers

to purchase private health insurance for their employees.¶ Tom Peoples’ cousin Blanche was a receptionist in a physician’s office in 1971. The
physician did not provide health insurance to his employees. Under Nixon’s 1971 plan, Blanche’s employer would be required to pay 75% of the private health insurance premium for his employees; the employees
would pay the other 25%.¶ Blanche’s boyfriend, Al, had been laid off from his job in 1970 and was receiving unemployment benefits. He had no health insurance. Under Nixon’s proposal, the federal government

No longer was national health insurance equated with government

would pay a portion of Al’s health insurance premium.¶

financing. Employer mandate plans preserve and enlarge the role of the private health
insurance industry rather than replacing it with tax-financed government-administered
plans. The Nixon proposal changed the entire political landscape of national health insurance, moving it toward the private sector.¶ During the 1980s and 1990s, the number of people in the United States
without any health insurance rose from 25 million to more than 40 million (see Chapter 3). Approximately three-quarters of the uninsured were employed or dependents of employed persons. In response to this

Clinton submitted legislation to Congress in 1993 calling for universal health

crisis in health care access, President

insurance through an employer mandate . Like the Nixon proposal, the essence of the Clinton plan was the
requirement that employers pay for most of their employees’ private insurance premiums . The proposal
failed.¶ A variation on the employer mandate type of national health insurance is the voluntary approach. Rather than requiring employers to purchase health insurance for employees,
employers are given incentives such as tax credits to cover employees voluntarily. The attempt of some states
to implement this type of voluntary approach has failed to significantly reduce the numbers of uninsured workers. ¶ THE INDIVIDUAL-MANDATE

MODEL OF NATIONAL HEALTH INSURANCE¶ In 1989, a new species of national health insurance appeared, sponsored by the
conservative Heritage Foundation: the individual mandate. Just as many states require motor vehicle drivers to purchase automobile insurance, the Heritage plan called for the

federal government to require all US residents to purchase individual health insurance policies. Tax
credits would be made available on a sliding scale to individuals and families too poor to afford health
insurance premiums (Butler, 1991). Under the most ambitious versions of the individual mandate, employer-sponsored

insurance and government-administered insurance would be dismantled and replaced by a

universal, individual mandate program. Ironically, the individual insurance mandate shares at least one feature with the single-payer, government-financed
approach to universal coverage: Both would sever the connection between employment and health insurance, allowing portability and continuity of coverage as workers moved from one employer to another or
became self-employed.¶ Tom Peoples received health insurance through his employer, Great Books. Under an individual mandate plan, Tom would be legally required to purchase health insurance for his family.
Great Books could offer a health plan to Tom and his coworkers but would not be required to contribute anything to the premium. If Tom purchased private health insurance for his family at a cost of $10,000 per
year, he would receive a tax credit of $4,000 (i.e., he would pay $4,000 less in income taxes). Tom’s Uncle Marvin, formerly on Medicaid, would be given a voucher to purchase a private health insurance policy.¶

With individual mandate health insurance, the tax credits may vary widely in their amount depending
on characteristics such as household income and how much of a subsidy the architects of individual mandate proposals build into the plan. In a generous case, a family might receive a $10,000 tax credit,
subsidizing much of its health insurance premium. Another version of individual health insurance expansion is the voluntary concept, supported by President George W. Bush during his presidency. Uninsured
individuals would not be required to purchase individual insurance but would receive a tax credit if they chose to purchase insurance. The tax credits in the Bush plan were small compared to the cost of most
health insurance policies, with the result that these voluntary approaches if enacted would have induced few uninsured people to purchase coverage.¶ The Massachusetts Individual Mandate Plan of 2006¶ Nearly
 The
20 years after the Heritage Foundation’s individual mandate proposal, Massachusetts enacted a state-level health coverage bill implementing the nation’s first individual mandate.

Massachusetts plan, enacted under Republican Governor Mitt Romney, mandated that every state resident must have health
insurance meeting a minimum standard set by the state or pay a penalty. The law provided state subsidies for purchase of
private health insurance coverage to individuals with incomes below 300% of the federal poverty level if they are not covered by Medicaid or through employment-based insurance. The law did

not eliminate existing employer-based or government insurance programs for those already
covered by those mechanisms.

Prefer our interp:

Overlimiting – debate gets value from refining new arguments – that
process is tapped out by Wake if the aff only has single payer or public
option – but our topic still has limits based on guaranteed
universality and basic care

Conceptual precision – their interp produces poor debates over an

abstract version of NHI that cannot account for virtually any
country’s healthcare system, which is always a mix of public-private
administration – distorts the literature and undermines the search
for the best policy option

Ground – the most balanced topic is centered on whether greater

government intervention in insurance is good or bad, which still
builds in neg ground while they limit core topic discussions like the
ACA

Reasonability -- centering debates on the best interpretation of the

topic creates a moral hazard to go for topicality
 2AC – UCC CP
Doesn’t solve coverage or costs
Ross Douthat 13, Contributor at the New York Times, former editor of the Atlantic, “Why
Not Medicaid For All?” 10/22/2013, https://douthat.blogs.nytimes.com/2013/10/22/why-not-
medicaid-for-all/
The liberal counterpoint, and it’s a reasonable one, is that stratification is inevitable in any health care system so long as inequalities of income and wealth exist (and

in the kind of system that represents the beau ideal for right-
conservatives are obviously not proposing to do away with those!). For instance,

of-center health policy types, instead of universal Medicaid we would have some kind of subsidized
catastrophic insurance combined with health savings accounts that are tax-advantaged for most people and directly funded up to a certain level for the poor.
This mix, Medicaid’s conservative critics plausibly argue, would reduce certain kinds of stratification: If you
want an appointment with a physician, the cash in a health savings account would probably get
you faster service and a better doctor than Medicaid access does right now, and if you needed
some kind of major surgery private catastrophic coverage likewise would probably widen your
range of options relative to what public coverage makes available to the poor today. ¶ But there’s a
lot of potential medical spending that falls in between the routine and the hyper-expensive,
between what an H.S.A. covers and where a high-deductible plan kicks in. And in that middle zone,
lower-income Americans would almost certainly be burdened with higher out-of-pocket
costs — and be able to afford fewer doctor visits, fewer tests, fewer procedures than wealthier
Americans — under the catastrophic-insurance model than under a Medicaid-For-Most
alternative. Their access to some forms of care might be better, and their protections from financial ruin reasonably solid, but the financial and
personal strain of dealing with some forms of illness, whether chronic or unexpected, would
undoubtedly be greater under the preferred conservative model than under a single-payer
system.¶ The argument that this strain notwithstanding, the catastrophic system is actually better for human
welfare rests, I think, on two foundations. The first is the view that comprehensive health insurance is, at its
heart, a deeply wasteful use of resources: Modern people, and especially modern Americans, are much more likely to

overconsume health care than to underconsume it, which is why the correlation between health insurance and health outcomes is
surprisingly unclear, and why you end up with data like the much-discussed Oregon study earlier this year, which revealed that a major Medicaid expansion had basically no

This doesn’t mean that social insurance shouldn’t protect people

impact on the physical health of the newly-covered.

against adverse medical outcomes and unaffordable medical bills, but it suggests that there are better ways to
allocate our resources than comprehensive coverage, and that most people would be better off if public policy didn’t push so much
money into that direction. (The column-length version of this argument is here.)¶ Now many liberals would dispute the premise that health insurance doesn’t have a big impact
on health. (Hence the inevitable to-and-fro over what the Oregon Medicaid data actually showed.) But they could also agree, or semi-agree, with that premise and still reject the

there’s no
right’s policy prescriptions. Yes, these liberals would say, maybe we should spend less on health care and consume fewer medical services overall. But

need to jerry-rig some kind of untested-except-kinda-in-Singapore catastrophic-plus-H.S.A.’s setup

that might leave big gaps in coverag

e , since we already know that single-payer systems have by far the best track record in accomplishing the cost-reduction feat. Just look at the difference between what Western
European countries spend on health per capita and what America spends — or, to return to my colleague’s argument, just look at the difference between what Medicaid spends
and what our private insurers pay out. There’s
no comparison: If you want people to spend less on health care, socialized medicine rather than
catastrophic coverage is obviously the way to go.¶ And this is where we start to really get down to ideological bedrock, because conservatives and libertarians
(and a few liberals) then look at the European/Canadian model and say, Surely there’s a better way than that. Yes, we concede, the strictly socialized systems do seem to save
money relative to our mixed, kludge-y, public-private mess. But we also think that Americans really do get something for all the extra money that we spend: Specifically, a
system that appears to drive a leonine share of global health care innovation, creating the drugs and procedures and life-extending technologies that then ripple outward,
improving health and life expectancy in the developed and developing world alike. And the great fear on the right is that if we, too, end up controlling costs from the top down
the way other countries do, then we won’t just squeeze waste out of the system, we’ll squeeze out innovation and drive out talent as well … and worse, we won’t even know it,

these are the two foundations for the

because we’ll just assume that the innovations that we get are the only ones there could have been.¶ So

conservative perspective on these issues. First, that our health care sector is oversubsidized and
a great deal of health care spending is unnecessary, and second, that controlling this spending
through the kind of price controls that other nations employ has long-term costs that are
unquantifiable but potentially enormous. Which in turn leads to the basic calculus in favor of
the catastrophic alternative: That when it comes to long-run human welfare, for the poor as well as the rich, X (the cost-inflation reductions achieved by
cost sharing and price transparency) plus Y (the gains to innovation from maintaining or increasing the role of market forces in American health care) is greater than Z (the

is not a calculus that

costs, financial and medical, of not covering as much care for low-income people as a single payer system would).¶ Again, this

can be proven without some recourse to underlying ideological assumptions .

Conservative have examples and data points at our disposal — the quasi-free market success of Singapore, the role that cost sharing has played in the recent slowdown in health

no major existing national model that exactly matches what we’re

care cost inflation — but as liberals reasonably note,

seeking. What we have, instead, are basic beliefs about how the world works, tested across a wide variety of human spheres, and a sense that while health care is
exceptional in some Arrovian respects (hence the need for some substantial public provision), it is not immune to the bottom-up, trial-and-error, Adam Smith-ian forces that

in developed countries, the well-

drive innovation and cut costs in most sectors of the economy. Which leads, in turn, to our conviction that

intentioned pursuit of universal comprehensive insurance has too often left those forces bridled
rather than unleashed.

The Singapore model fails---coverage, moral hazard and costs

Justin Hugo 17, Contributing Writer for The News Lens from Singapore, "Tough Pill to
Swallow: Why Singapore's Healthcare Model Should Not Be Followed", 5/22/17,
https://international.thenewslens.com/article/68844
[Citing WHO and London School of Economics peer reviewed studies]
Compared to the other high-income countries, Singaporeansare over-paying in terms of out-of-pocket expenditure for health. The
average in these countries was only 21.2 percent in 2014. Singapore’s was 55 percent.¶ So, the first
point you need to know is that, in countries where citizens pay between 7 to 15 percent of their wages into
social security for health, what they pay covers for 45 to 80 percent of the country's total health
expenditure. But in Singapore, Singaporeans pay a similar 8 to 10.5 percent of their wages into
Medisave but it only pays for 5.5 percent of total health expenditure. But when taking the other countries as
benchmark, Singaporeans' Medisave should be risk-pooled and should instead pay for more than 50 percent of total health expenditure.¶ Granted that
there are some who point to how Medisave is a medical savings account (MSA) and is not a public health insurance scheme, but Singapore
is
the only country in the world which has implemented a nationwide MSA (Medisave) scheme. No
other country has deemed it fit to introduce a similar scheme on a national level. There are small-scale city-level schemes in China and MSAs in
MSAs are problematic .¶ A World Health Organisation
America and South Africa are operated privately on an opt-in basis. But

(WHO) discussion paper wrote as far back as 2002 that, “ there is no clear evidence that Medisave has

significantly reduced consumer moral hazard and thereby contributed to

containing costs .” In fact, “ Singapore's health spending continued to grow after the
adoption of the MSA system .Ӧ A 2010 WHO report followed up with an analysis by explaining that,
“ MSAs may actually be widening rather than filling the coverage gap .” The report goes on to say

how, “there appears to be an erosion of solidarity as one proceeds from social health insurance to
private health insurance to MSAs.” A study published by the LSE Research Online last year also concluded
that, “country experiences with MSAs indicate the schemes have generally been inefficient
and inequitable and have not provided adequate financial protection.”¶ The study surmised that, “ the
lack of interpersonal risk pooling in MSAs is a key limitation .” WHO made a similar
conclusion in its 2010 report: “eliminating risk pooling in favour of individual inter-temporal
pooling raises issues to policy-makers of trading equity for efficiency.” Moreover, WHO opined: “But is it
efficient? Time-pooling fails in situations where individuals do not require healthcare where
individuals suffer from chronic conditions and are unable to adequately access healthcare.” This is
what a World Bank publication which compiled the proceedings of a World Bank Conference in 1997, said as well, that " having households
pay more out of pocket at the point of service could raise already high barriers for low-income
families to fully participate in the health care delivery system,” as the Singapore healthcare system has shown .¶ In
short, the main and critical problem is that Medisave, as a MSA, does not have a risk-pooling mechanism and
therefore exacerbates inequality. Where healthcare costs are constant regardless of the salary of a patient, but where the adequacy of
Medisave contributions for healthcare payments is dependent on the salary of the worker, Medisave is by design regressive
and would mean that low- and middle-income earners lose out, as their Medisave savings would be sapped away faster, by virtue of them earning lower
wages and therefore having lesser Medisave contributions that can be used.

Perm do the plan and all non-mutually exclusive planks

Solving uncertainty through the ACA is key – only that solves market
contractions
James McCarthy 17, former Senior Editor at Maine Biz, 6/7/2017, Political uncertainty
fueling double-digit ACA individual rate hikesPolitical uncertainty fueling double-digit ACA
individual rate hikes,
http://www.mainebiz.biz/article/20170606/NEWS01/170609970/political-uncertainty-
fueling-double-digit-aca-individual-rate-hikes
All three health insurers offering coverage in Maine's Affordable Care Act marketplace are seeking double-digit rate hikes for
individual health insurance plans in 2018.¶ Harvard Pilgrim Health Care is seeking the largest rate increase, proposing an average
proposed hike of 39.7%, followed by Anthem Blue Cross and Blue Shield with 21.2% and Community Health Options with 19.6%.¶
The insurerscite political uncertainties surrounding the future of the ACA as a key factor in
driving up premium rates for the individual market — most notably, the Trump administration's
loosening of the federal government's enforcement of the mandate requiring individuals who
aren't insured to sign up for coverage or face a financial penalty.¶ "Without enforcement of the
coverage mandate, membership is expected to drop, with the healthier individuals more like to
forego coverage," Harvard Pilgrim stated in its submission filed with the Maine Bureau of
Insurance. "This will drive up the average cost of health care for the individual market.
Therefore an adjustment is needed to account for the higher expected claims costs."¶ The proposed
rate hikes in the individual market are for coverage that would begin on Jan. 1, 2018. Proposals also were submitted by the three
insurers and two others, Aetna and United HealthCare, in the ACA-compliant small group market. Hearings on the rate proposals by
the Maine Bureau of Insurance would begin in July.¶ The Portland Press Herald reported that the Bureau of Insurance estimated
that of the 85,300 Maine residents covered by ACA-compliant individual insurance plans in the first quarter of 2017, CHO had the
largest market share with 35,100 Mainers, followed by Anthem with 27,700 and Harvard Pilgrim with 21,400.¶ Other factors driving
the rate hikes¶ A shrinking
risk pool that would result in a greater percentage of older and potentially
less healthy people remaining in the Maine ACA individual marketplace isn't the only concern
expressed by the insurers in their rate filings.¶ Anthem and Harvard Pilgrim highlighted the
political uncertainty surrounding the continuation of Cost Share Reduction subsidies, which
the ACA required insurers to offer enrollees with incomes 100% to 250% of the poverty level for
silver-level plans. The subsidies were intended to help insurers reduce deductibles and copays
for the qualifying customers; to compensate for the added cost to the insurers, the federal
government had promised to reimburse them for the higher costs.¶ But, like many of the ACA's provisions,
the future of those payments — which the Congressional Budget Office estimated would cost $7 billion in fiscal year 2017, $10 billion
in 2018 and $16 billion by 2027 — is uncertain.¶ "A lack of CSR funding introduces a level of volatility which
compromises the ability to set rates responsibly," Anthem stated in the cover letter accompanying its filing, noting
that without CSR funding premium rates for silver plans could increase by an additional 20%

and possibly "necessitate additional adjustments."¶ Among the possible adjustments Anthem cited if the CSR
subsidies are eliminated:¶ "Reducing service area participation"¶ "Requesting additional rate increases"¶ "Eliminating certain
product offerings"¶ "Exiting certain individual ACA-compliant markets altogether."¶ In its filing memorandum, Lewiston-based
Community Health Options noted the major driver of its rate increase is its expectation that the individual risk pool in Maine will
shrink.¶ "We expect that a weak individual mandate combined with higher premiums in the
individual market will lead to increased market contraction in 2018," CHO's consulting actuary
Kathleen E. Ely stated in the insurer's cover letter. "Healthier people and those whose premiums are unsubsidized
will be more likely to not continue to purchase health coverage."¶ Noting that CHO's individual 2017 risk pool
is older and enrolled in "less rich plans" than in 2015-16, Ely wrote that early 2017 claims through March were running 9% higher
than expected.

HSAs bifurcate the insurance market---causes a massive premium

spike
Michael Hiltzik 16, Pulitzer Prize-winning journalist, LA Times Columnist, 11-18-2016,
"Health savings accounts: Another conservative 'reform' nostrum that chiefly benefits the rich,"
LA Times, http://www.latimes.com/business/hiltzik/la-fi-hiltzik-hsa-20161118-story.html
“HSAs are great tax shelters for the well to do,” observes healthcare analyst Wendell Potter, a former Cigna
insurance executive. “But most Americans simply don’t have the extra cash to put into such an account.”

Under existing law, a health savings account must be paired with a high-deductible, low-premium “catastrophic” health plan,
defined as a plan with a deductible of at least $2,600 for a family. In the case of an unexpected medical event, the idea is that the
HSA will cover the deductible and other expenses until the insurance kicks in.

The HSA contribution comes out of pre-tax income; employers who offer such arrangements often kick in a few hundred bucks to
seed the accounts, contributions to which are limited to $6,750 per family per year (in 2017). Unspent money in an HSA can be
rolled over to future years, so the accounts can grow substantially for users without large medical expenses.

Superficially, that might sound like a good deal for many Americans. The vast majority have very little contact with the healthcare
system: As the accompanying chart shows, the top 1% of spenders account for 20% of all spending, and the top 5% account for nearly
half.

Only 5% of the population accounts for nearly half of all healthcare spending. But HSAs won't
be much use to you if you become a member of that 5%. (National Institute for Health Care Management)
In the words of Richard Mayhew of balloon-juice.com, this arrangement is “good for people who have very strong reasons to believe
that they are healthy and have sufficient access to resources to afford the high deductible after they get hit by a meteor.”

They’re bad for the unlucky, however: those with expensive chronic conditions, such as diabetes or multiple
sclerosis, and those who suffered an earlier catastrophic event that drained their HSA , and then get hit
by a second meteor. Of course, most people can’t know with any certainty which of these categories
they’ll land in during any year, since the time frame dividing the lucky from the unlucky can be a nanosecond.

HSAs also are dangerous for the healthcare system overall. That’s because they bifurcate the
insurance pool, potentially paring younger, healthier customers out of the pool and leaving those
expensive, unlucky patients for whom HSAs are unsuitable to face higher premiums.
In the years before the ACA when health savings accounts experienced their initial vogue, this prospect worried healthcare
experts. George Halvorson, then the CEO of Kaiser, warned that they were “a step backward” from bringing
health coverage to more Americans.

Links to inflation
 2AC – Smoking PIC
These fools said Single-Payer in the CP text, c’mon now

Perm do the counterplan---they have to be both functionally and

textually competitive---any other standard justifies bad counterplans
like delay and penny-less which compete on the likely function but not
the effect of the plan---makes it impossible to be aff because they steal
the entire 1AC and generate bad net benefits that wouldn't stand
scrutiny if unconnected to a counterplan---leads to less nuanced
engagement between teams over the substance of the aff which
undermines debate's educational potential.

Moral hazard doesn’t make sense in context of smokers---decades of

advertisements and addiction means non-insured people will smoke
regardless

Healthcare moral hazard is overblown---even if there is one, it is

economically efficient
Elise Gould 13, Economic Policy Institute citing Nyman, economist specializing in health and
healthcare issues and Chetty, professor of economics at Stanford University, specializing in the
field of public economics, "Increased health care cost sharing works as intended", May 8,
www.epi.org/publication/bp358-increased-health-care-cost-sharing-works/
Not all moral hazard is inefficient¶ The movement of people into less-comprehensive coverage is
often identified as a policy benefit—under the theory that when people have more “skin in the game” (i.e., face a higher share of total health spending) they will become
more careful consumers of health care and will forgo unneeded care only previously purchased because they were not facing its full cost. Among economists, this problem is

called moral hazard. This theory implies there is an optimal level of cost sharing and some of the additional health care purchased by the insured represents economic inefficiency.
Nyman (2007) directly questions this theory by arguing that a large portion of moral
hazard represents health care that sick consumers would not otherwise have
access to without the income that it transferred to them through insurance. This portion of moral hazard —the transfer of income— is
efficient and generates a welfare gain .¶ Nyman illustrates this phenomenon through a useful example of a woman who has just been diagnosed with breast
cancer. Without health insurance, she would not be able to afford both the mastectomy and the breast reconstruction needed to correct the disfigurement caused by the mastectomy. With health insurance, she can
afford both. One might argue that insurance is inefficient (causing moral hazard) because the breast reconstruction was not medically indicated and she only chose to have that procedure because it was made
inexpensive by her insurance. In a social experiment, one could theoretically transfer to her the full cost in dollars (of both procedures) and then view whether she spent it on the mastectomy and the breast
reconstruction to determine if it is just the price reduction from insurance that provides the incentive or the income transfer from insurance that drives her decision-making. If she still purchases both procedures

insurance, by relieving a liquidity

with the cash transfer that she could have used to purchase other goods and services, then this would show that

constraint, leads to efficient decision-making and that presumed inefficiencies

from insurance’s price distortion are overstated .¶ This recognition that not all
moral hazard is economically inefficient is becoming well-understood
in other branches of economics. Chetty (2008) makes similar arguments in the context of
unemployment insurance, focusing on the fact that unemployment insurance benefits solve a liquidity problem rather than creating a disincentive to look for work. His research
differentiates the moral hazard effect from the liquidity constraint by comparing households that can and cannot smooth consumption through a spell of unemployment with assets or income from other sources,

his analysis could apply even more strongly to the case of liquidity
such as a working spouse. Chetty suggests

constraints in the purchase of health care . On net, it is conceivable that the welfare gain from efficient
moral hazard outweighs in both size and importance the welfare loss from excessive medical care. This would
be particularly true in the case of individuals with serious illnesses who require expensive treatments.
 2AC – Tax Reform Good (Life Sciences)

Tax Reform Won’t Pass

1. Freedom caucus opposition
Joe Perticone 9-26, Business Insider Reporter, 9-26-2017, "Conservatives are drawing a
red line that could doom the GOP's tax reform efforts," Business Insider,
http://www.businessinsider.com/tax-reform-freedom-caucus-corporate-tax-rate-2017-9
WASHINGTON — Republicans are considerably more optimistic about party unity in reforming the tax
code compared to the several failed attempts to repeal and replace Obamacare.

But a
battle over the corporate tax rate still looms on the horizon, threatening the GOP's
efforts at passing significant legislative achievement this year.
During a forum with conservative lawmakers on Tuesday morning, House Freedom Caucus Chairman and North Carolina Rep. Mark
Meadows said any corporate tax rate above 20% could be a deal breaker.

"If the corporate rate is above 20% and if the small business rate is above 24% I would vote against it," Meadows said,
clarifying that his position was not representative of the entire Freedom Caucus.

However, others in the ultra-conservative faction of Republican lawmakers drew the same line in the
sand on the corporate rate.

Virginia Rep. Dave Brat told the Washington Examiner that 20% was his limit. Texas Rep. Louie Gohmert did not draw a red
line, but expressed fears that the Republican leadership would hike it up from the desired sub-20% rate.

2. Split on 2018 budget

Tara Golshan 9/13, staff writer for Vox, 9-13-17, “It’s mid-September and Republicans still
can’t pass a budget,” https://www.vox.com/policy-and-
politics/2017/9/13/16301714/republicans-cant-pass-budget
It’s mid-September and Republicans still can’t pass a budget, a legislative holdup that could
derail the centerpiece of President Donald Trump’s congressional agenda: tax reform.

Since coming back from August recess, Republican House leadership has been aggressively whipping the
2018 budget resolution, a nonbinding government spending guideline that both chambers have to pass if Republicans want
to circumvent the threat of a Democratic filibuster in the Senate on tax reform. They haven’t had much success,
according to House Freedom Caucus chair Rep. Mark Meadows (R-NC), whose group of archconservatives
has been standing firm against the resolution.
“There still not enough votes to pass it,” Meadows said Tuesday.

That’s because the budget fight is really about tax reform: a clash between Republican
leadership and a caucus of archconservatives who see this moment — months before any major tax bill is
likely to come before the full House — as their best chance to force deep cuts to both tax rates and social
welfare spending.

Republicans are unified in their goal to cut taxes, but they are locked in an intraparty
struggle of how deeply to cut rates — and whether to offset those cuts at all. Already one of House
Speaker Paul Ryan’s proposals to offset costs — the border adjustment tax, which would tax foreign imports and exempt exports,
raising money because the US currently imports more than it exports — has been nixed amid widespread opposition among
congressional Republicans.
The conservative members of the House Freedom Caucus say they are pushing Ryan to adopt an
alternative plan: one that relies on draconian welfare spending cuts and incredibly optimistic
economic growth projections in order to avoid swelling the deficit. Ryan has resisted their
efforts and is now setting expectations for a potentially smaller tax cut package, which
conservatives will be likely be unhappy with.
Rather than stage that fight over an actual tax reform bill, when the White House and conservative leaders will undoubtedly ramp up
the pressure to pass something, the Freedom Caucus members have chosen to make their tax stand over
the budget resolution.

Without the Freedom Caucus on board, the resolution will almost certainly fail a floor
vote — which is why caucus members have identified the budget resolution as their best leverage
to get what they want on tax reform, Freedom Caucus member Rep. Mark Sanford (R-SC) said earlier this summer.
And so the budget resolution has become a proxy war within the Republican Party, amid more
reports of President Trump’s meetings with Democrats on tax reform.
It is the same game of chicken with the same key players that nearly killed the House health care bill in March. If
neither
faction blinks, Republicans, in control of the House, Senate, and White House, will be stuck in a
stalemate: No budget resolution means no Republican-led tax reform .

For now, at least, Freedom Caucus members are saying they’re willing to take that chance.
Republicans have tied their whole agenda to something that’s really hard to get done
At the beginning of this year, thinking only Senate Democrats — with the power of a filibuster — would
stop them from repealing Obamacare and cutting taxes, Republican leadership devised a plan to
bypass Democrats altogether: They would tie their major agenda items to the budget through
“budget reconciliation,” a bill that can impact spending, revenue, or the debt ceiling, with only a party line vote in the
Senate.

It’s a process President Bill Clinton used to pass welfare reform in 1996 and President George W. Bush used to pass tax cuts in 2001
and 2003. It’s how President Barack Obama saw through several budgetary amendments to the Affordable Care Act. Republicans
also attempted to use budget reconciliation to try to pass an Obamacare repeal bill in the Senate.

Budget reconciliation requires passing a budget resolution, forcing Republicans to thread the
needle between members’ competing spending priorities and the larger contingents of tax
cutters, deficit hawks, and defense hawks. This is hard, and because budget resolutions don’t
actually fund the government or go to the president’s desk, and spending bills can be done
without them, it’s a step that’s often skipped.

Republicans have tied their hands. The budget resolution unlocks a path to tax
But this year
reform, and depending on how the instructions for budget reconciliation are written, it can also
dictate how Republican actually implement tax cuts.
In budget reconciliation, each committee is instructed on how much savings it must produce in order to pass a “reconciliation bill.”

Committees can only find these savings through mandatory spending — which most notably covers programs like Medicare,
Medicaid, and welfare programs such as cash assistance and food stamps. But there are some limitations: Trump has
repeatedly promised Medicare wouldn’t be touched under his presidency, and per reconciliation
rules, Social Security funding cannot be cut.
If these reconciliation instructions are written strictly in the budget resolution, the level of
required mandatory savings could influence how Republicans can approach tax reform —
specifically how they pay for their tax cuts. With Obamacare repeal, Republicans passed what is called a “shell
budget,” with loose instructions that essentially gave them the flexibility to do whatever they wanted on spending within the budget
reconciliation guidelines. But leadership promised the GOP conference that that was a one-time deal, and with tax reform the
conference would pass a real budget.

The Freedom Caucus is holding leadership to that — they won’t support a “shell budget” for tax
reform.
“We want a real budget that has real reconciliation instructions, that has real revenue targets and real spending cut targets,”
Meadows said. “That is what we were promised by our leadership — that we wouldn’t be asked to vote for another shell budget.”

How do you solve a problem like ... cutting taxes without blowing up the deficit

In any scenario, Republicans are relying on projections of increased economic growth from tax
cuts to offset the revenue losses from those cuts. But under most projections, growth alone won’t be
enough to offset the full losses from the deepest cuts Republicans originally discussed, including
a drop in the corporate rate from 35 percent to 15 percent. In recent weeks, both the White House and GOP
leaders have said the reformed corporate tax rate would likely be between 22 and 25 percent.

Ryan and the tax-focused Ways and Means Committee Chair Rep. Kevin Brady (R-TX) are
adamant about executing a revenue-neutral tax plan . To do that, they originally floated implementing a
border adjustment tax, which some analysts projected would result revenue-neutral after economic growth is factored in. But that
plan has since been dropped after the Republican Party balked at the idea of adding a tax to a tax cut bill.

The most conservative faction of the Republican Party says there is no need for revenue
neutrality with tax reform, arguing that deep cuts to corporate tax rates would lead to what looks
like extremely unrealistic GDP growth. But it’s unlikely Republicans will be able to convince
members to vote for tax reform that has the possibility of blowing out the deficit .

The Freedom Caucus’s alternative is to make up the difference with deep cuts to welfare
programs. Meadows said his caucus has identified upward of $500 billion in mandatory savings options Republicans could
exercise. Most other House Republicans, though, seem unlikely to go along with those cuts — and
they won’t come close to making up the difference in revenues anyway.

The aff ends the repeal and replace debate---that spares time for tax
reform
John King 9-24, CNN Chief National Correspondent, 9-24-2017, "Why health care is stealing
tax reform's legislative thunder," CNN, http://www.cnn.com/2017/09/24/politics/ip-
notebooks-bannon-murkowski-tax-reform/index.html
1) Tax reform vs. health care reform
When companies roll out a new product, the smart ones craft an announcement and marketing plan.

Tax reform is a signature GOP promise and central to President Trump's agenda. So there IS a careful rollout
plan that includes presidential travel to Indiana and outreach to interest groups with a big stake in the debate.
Butthere is one problem . The chaos that is the GOP's Obamacare repeal-and-replace debate seems likely
to suck up a fair amount of oxygen this week, because there is a last-ditch legislative push and a
Saturday deadline to use a rule that allows passage with just a majority vote in the Senate.

CNN's Phil Mattingly has been reporting on the rollout plan, and the timing challenge.

"When you talk to Republican aides as this prepares to roll out, what they're preaching is patience. They've
been working
behind the scenes in a really kind of normal, unified roll-out manner with the White House --
Senate aides, White House aides," Mattingly explained.

Ryan wants tax reform more than Trump does which means Ryan will
do anything to keep Trump on board for tax cuts---he’ll never
backlash to anything because tax reform is his priority, not Trump’s---
they are 100% backwards about political capital and cooperation on
this issue
Marissa Martinelli 17, Slate editorial assistant, 2/16/17, “Samantha Bee Explains How Paul
Ryan Abandoned His Principles and Became the Taylor Swift of the Republican Party,”
http://www.slate.com/blogs/browbeat/2017/02/16/samantha_bee_on_trump_s_faithful_hus
ky_paul_ryan_and_why_he_s_like_taylor.html

Ryan has big plans . He wants to repeal the Affordable Care Act, privatize Medicare, and cut taxes ,
Paul

and to do so, he’ll need to stay in the good graces of Donald Trump—whatever
the cost to his integrity. Samantha Bee dedicated a segment of Full Frontal to the speaker of the House on Wednesday,
tracking his path from a principled social and fiscal conservative to President Trump’s “faithful husky.”

Ryan was once considered the conscience of the Republican Party—or to put it another way, he was at least willing to
feebly denounce the racist things Trump said and did during the campaign, though without ever
actually condemning Trump himself. “Watching Ryan play moral watchdog was like watching Taylor Swift pretend to
be surprised at awards shows. Bland and fake, but weirdly compelling,” noted Bee, playing side-by-side clips of the two. “Take
another cue from Taylor Swift, Mr. Speaker: Know when to dump the guy you’ve only been pretending to like to help your career.”

Now , though, Trump is president of the United States, and nothing , not even the blatantly
unconstitutional and immoral Muslim ban, will make Ryan speak up and risk
upsetting the president —because doing so would mean jeopardizing his own
agenda . “

Paul Ryan would put Cthulhu in the White House if it would let him privatize Medicare,”
said Bee. “Sure, it’s an eldritch creature of infinite darkness, but it can sign 20 tax-cut bills at once .”

Hey, there’s a reason Ryan was voted “Biggest Brown-Noser” in high school.
The only internal link in their ev is repatriation---that empirically
fails to motivate research---just goes into executive paychecks
Matthew Rozsa 17, breaking news writer for Salon, MA in History from Rutgers University-
Newark, 1/1/17, “Donald Trump’s corporate tax amnesia: Repatriation didn’t work in 2004, and
it won’t work in 2017,” http://www.salon.com/2017/01/01/donald-trumps-corporate-tax-
amnesia-repatriation-didnt-work-in-2004-and-it-wont-work-in-2017/
When the Democratic staff of the Senate Permanent Subcommittee on Investigations released
its report in 2011 on the effects of the 2004 repatriation plan, it discovered that, despite costing
the government $3.3 billion in estimated lost revenue over a decade, the 15 companies that most
profited from it actually cut almost 21,000 jobs between 2004 and 2007.

Additionally, repatriation incentivized American companies to channel even more of their

earnings into offshore bank accounts.

Even though the 2004 repatriation bill specified that the funds should be earmarked
for hiring workers or conducting research (which slightly decreased in pace
despite this bill), American workers did not feel the effects of the repatriation plan.

“There is no evidence that the previous repatriation tax giveaway put Americans to work, and
substantial evidence that it instead grew executive paychecks, propped up stock prices,
and drew more money and jobs offshore,” said Sen. Carl Levin, chairman of the
subcommittee, in a statement at the time. “Those who want a new corporate tax break claim it
will help rebuild our economy, but the facts are lined up against them.”
That last sentence could have been uttered verbatim about Trump’s repatriation plan today and
be just as accurate.

Big Pharma amended bylaws to require significant R&D spending---

concerned about public perception of price hikes
Jared S. Hopkins 17, reporter for Bloomberg News covering the U.S. pharmaceutical
industry, 5-9-17, “Pharma Lobby Ousts 22 Drugmakers Amid U.S. Pricing Debate,”
https://www.bloomberg.com/news/articles/2017-05-09/pharma-lobby-ousts-22-drugmakers-
amid-u-s-pricing-debate
The pharmaceutical industry’s powerful Washington trade association fell in size by almost two
dozen companies after revising membership rules amid the debate over U.S. drug prices.

Pharmaceutical Research and Manufacturers of America, or PhRMA, will require that members
spend at least $200 million a year on research and development and that their R&D
spending is at least 10 percent of global sales

. The changes, reported by Bloomberg Sunday, follow a three-month review that has already seen several member companies leave
the lobbying group.
“Being a member of PhRMA means being committed to doing the time-intensive, scientifically sound research it takes to bring bold
new advances in treatments and cures to patients,” said Joaquin Duato, chairman of PhRMA and Johnson & Johnson’s worldwide
chairman for pharmaceuticals, in a statement announcing the changes.

Drugmakers of all sizes use price increases to raise revenue. The changes will result in a trade
group made up of mostly large, established drugmakers, such as Pfizer Inc., GlaxoSmithKline
Plc and AstraZeneca Plc. Some smaller companies that have attracted the ire of insurers,
patients and politicians for buying older drugs and raising their prices will be shut out. Companies
that don’t yet have drugs on the market will also be less likely to remain with the group.

Eli Lilly & Co. supports the membership criteria, which will “allow the association to focus even more effectively on the issues that
are important to research-based biopharmaceutical companies,” Mark Taylor, a spokesman, said in an email.

The drug industry is one of Washington’s most powerful. In 2016, PhRMA spent nearly $20
million on lobbying, according to the Center for Responsive Politics. PhRMA is in the midst of a media advertising campaign
and public events effort to highlight the value of members’ treatments.

Pricing Outcry

Companies are embroiled in a national debate over U.S. drug pricing . Industry critics
range from patients to President Donald Trump, who’s accused drugmakers of “getting away
with murder.” His administration has said he wants to use the government’s negotiating power
to lower drug prices, but he hasn’t provided details.
PhRMA’s website now lists about three dozen member companies. All those affected by the changes are
eligible to reapply for membership, according to the trade group. Some companies that fall short of eligibility now
had recently resigned from the group.

Pharma loves insurance expansion---it brings them millions of new

customers
Brett Norman 16, reporter at POLITICO, covering health care and pharma politics, Sarah
Karlin-Smith, health care reporter, specializing in covering the policy and politics that affect the
drug industry, 7-13-16, “The one that got away: Obamacare and the drug industry,”
http://www.politico.com/story/2016/07/obamacare-prescription-drugs-pharma-225444
President Barack Obama’s
landmark health care bill shook up the health care system. One key player
escaped the upheaval largely unscathed: Big Pharma.
Scrounging up all the money to pay for Obamacare’s massive coverage expansion brought deep pay cuts to hospitals and health
plans. And for those industries, it fundamentally changed the rules of the game.

Insurers have to cover sick people, no matter how costly their illness. Hospitals must meet new benchmarks for things like
readmissions or face penalties. Doctors are caught up in a rapid industry consolidation and must adapt to new payment models,
changing traditional practice.

The pharmaceutical industry, on the other hand, hasn’t much changed — except its prices are
higher and there’s nothing in the health law that allows the government to push back.
Prescription drugs are now the fastest growing category of medical costs. Pharma
companies are charging $84,000 for a new hepatitis C cure, more than $14,000 for new cholesterol treatments. Novel cancer
therapies routinely run six figures.

“There was nothing in the deal that was a structural reform of the [drug] industry,” said John
McDonough, who was a top health policy adviser to the late Sen. Ted Kennedy (D-Mass.) during health law negotiations “They
were first in line; they were on the winning side; they got a good deal that they could live with
and they stuck to it.”
With drug prices rising — and both Democrats and Republicans telling pollsters how much they
worry about that — policymakers can’t pull out any game-changing tools from their Obamacare
bag in response. Big Pharma is still plenty powerful — it’s been showing just how powerful this
spring. It ignited a campaign against a Medicare proposal to experiment with new ways of
paying for some high-cost drugs, including cancer infusions, that now cost Medicare about $20 billion a year.
Technically that payment experiment doesn’t require Congress’s assent — but Congress could block it or scale it back, and there are
moves afoot to do precisely that. Lobbyists
say it’s just a matter of time before Medicare downsizes its
proposal, as politicians bemoan rising drug prices but don’t act on them.
Former Rep. Henry Waxman (D-Calif.), a frequent critic of the pharmaceutical industry and one of the authors of the health law as
the then-chair of the House Energy and Commerce Committee, sees the Obamacare negotiations back in 2009 as a missed
opportunity.

The industry’s deft positioning at the time let drugmakers avoid “changes that would have made
our problems on runaway pharmaceutical prices a lot easier now” — and in the foreseeable
future.
Zeke Emanuel, a former White House adviser on health reform, said drug costs can only be blamed on the ACA to the extent that
nothing put in place then to address pharmaceutical pricing. “Drug companies, could have behaved differently,” Emanuel said. “But
they didn’t.”

Stephen Ubl, the current CEO of the Pharmaceutical Researchers and Manufacturers of America, vigorously defends the industry,
and says the criticism is “myopic and misinformed.” At the lobby’s 2016 annual meeting he called drug costs “a relatively small and
stable share of overall health care spending.” He argued that drugs “stand the best chance of ameliorating,” the financial burden of
chronic disease.

Under one of his predecessors, former Louisiana Republican Rep. Billy Tauzin, the
industry moved smartly and
swiftly as Obamacare was taking shape. It was first to the negotiating table with Senate Finance
Committee Democrats and the White House. The drug companies agreed to pay $90
billion to help fund the law’s insurance expansion — an expansion t

hat would also happen to deliver millions of new, paying customers to the drug
companies.
Otherwise, drug companies were left to carry on business as usual.

No reimportation of medicines from countries like Canada, where they’re sold at a fraction of what Americans pay — an idea that has
reemerged recently but has not gotten traction.

No government negotiations of drug price — although both Donald Trump and Hillary Clinton have endorsed Medicare
negotiations. Congress has repeatedly nixed the idea.

Democrats had majorities in both houses of Congress when the health law deal was cut, but the
negotiators caved on their party’s longstanding proposals — seen as a mortal threat by pharma
— in exchange for the industry’s buy-in and financial support for getting the historic health
reform bill enacted. They’ve been talking about the spiking drug prices, and holding hearings. But no action agenda has taken
hold.

Looking back six or seven years, Tauzin explained that PhRMA decided it was better off making a deal — and heading off a more
radical health transformation, like the kind of single payer plan Bernie Sanders ran on this year, or even the public option that
Clinton has endorsed.
“We had a choice [to] make sure it wasn’t going to be a single-payer government system,” Tauzin told POLITICO, recalling PhRMA’s
thinking at the time. “If we were not at the table, it would be likely we would become the meal.” The agreement was brokered with
Senate Democrats and the White House in the early summer of 2009.

drug spending has spiked to historically high levels — 2014 saw the biggest
Since then,
increases in more than decade. The hikes were fueled by Obamacare’s coverage expansion,
a wave of new treatments and industry chutzpah.
It’s not just breakthrough drugs that are soaring. Drugmakers are hiking prices of older
medicines too; pharma bad boy Martin Shkreli’s 5,000 percent increase of the AIDS drug Daraprim last year was the most
brazen example, but hardly the only one.
 2AC – Innovation (Disease)

Drug prices will inevitably increase---shortages can’t be overcome

with price-cutting measures
Jacqueline Belliveau 17, Editor at Xtelligent Media, 7-28-17, “Hospitals to See 7.61% Rise in
2018 Prescription Drug Rates,” https://revcycleintelligence.com/news/hospitals-to-see-7.61-
rise-in-2018-prescription-drug-rates

Hospitals and health systems should anticipate a 7.61 percent increase in prescription
drug rates in 2018 , researchers predicted in a recent Vizient study.

Using the group purchasing organization’s 2016 and 2017 data on hospital and non-acute facility
purchasing, researchers found that the provider organizations should see a 0.46 percent boost in
prescription drug rates for contracted products and a 7.15 percent growth in non-contracted
product prices.
Health systems and hospitals bought more non-contracted medications in 2016 and 2017 as
providers used more expensive specialty drugs.
“The latest Drug Price Forecast highlights numerous
market dynamics that continue to contribute to rising
pharmaceutical costs and exacerbate the challenge of managing health system pharmacy
expenses,”

stated Dan Kistner, Vizient’s Senior Vice President of Pharmacy Solutions. “Pharmacy leaders – now more than ever – must be
proactive and strategically plan to address these issues and implement cost-saving and quality optimization measures.”

Rising prescription drug rates have been a major challenge for hospitals and health systems . A
recent Premier survey showed that growing drug prices was a top concern for healthcare executives
for the third year in a row.
Another survey from the healthcare industry group also revealed that 96 percent of healthcare executives reported significant growth
in inpatient drug spending over the past five years, with rising prescription drug rates as the primary driver of budget increases.

The Vizient study showed that disease-modifying antirheumatic agents experienced the greatest price hike during the study’s
timeframe, with an increase of 14.78 percent. Other therapeutic categories with significant prescription drug rate growth included:

• Immunomodulatory agents with a 9.06 boost

• Anti-neoplastic agents with a 4.75 percent growth

• Hematopoietic agents with a 1.53 percent increase

• Plasma critical care drugs with a price increase between 1.96 percent and 3.19 percent

• Infectious disease medications with a 0.66 percent increase

With increasing prescription drug rates, health system and hospital pharmacy leaders may be looking to healthcare cost reduction
initiatives. However, persistent drug shortages may counter their progress with cutting costs, the study
stated.

While the number of new drug shortages fell to 120 in 2016 from 142 the previous year and 185 in 2014, the number of active and
ongoing drug shortages stabilized during the period.
For example, the number of persisting drug shortages only declined by 10 from the fourth quarter of 2015 to the final quarter in
2016.

According to a 2016 Government Accountability Office (GAO) report, drug

shortages primarily occurred between
2012 and 2015 because of a declining number of suppliers, supplier failures to comply with
manufacturing rule, and manufacturers operating under low profit margins for generic drugs .
 2AC – Recruitment DA

Army recruitment is on track for this year – cash bonuses, new high
school graduates, and reserves transferring to active duty are
bolstering numbers now no need for immigrant recruits
Meghann Myers 17, Senior reporter at Army Times, “Growing the Army: Service offers big
bucks, second chances to boost the force,” 6/11/17, Army Times,
http://www.armytimes.com/news/your-army/2017/06/11/growing-the-army-service-offers-
big-bucks-second-chances-to-boost-the-force/
The Army has a mandate to get to 1,018,000 soldiers — 476,000 of those active duty — by the end of September.
To get there, the service is
doing almost everything it can, from offering generous cash bonuses to giving
second chances to officers who've been passed over for promotion.
But unlike previous build-ups, the service isn't dropping enlistment standards or making exceptions to keep unqualified soldiers on
the rolls. This has translated into big bucks and major incentives, as well as a fast-track to active duty, for some soldiers.

"It doesn't seem like big numbers, but because we don't have stop-loss or the draft, this is big," Sergeant Major of the Army Dan
Dailey told Army Times earlier this year.

The effort started with big bonuses to keep enlisted soldiers in the Army and has spread up and
down the ranks, even saving the careers of some O-6s.
In total, the active force must jump from a planned 460,000 soldiers to 476,000; the National Guard from 335,000 to 343,000; and
the Army Reserve from 195,000 to 199,000.

As of June 2, the active Army has reached 55 percent of its recruiting and 73 percent of its
retention goals, according to personnel officials.
Here's how they've done it and what they plan to do with all those extra soldiers.

Retaining talent

Every year, the Army offers selective retention bonuses to in-need military occupational specialties, but this year, the flood gates
opened.

In January, the retention office announced $10,000 bonuses for any soldier with the option to separate in fiscal year 2017,
regardless of MOS, rank or special skills, who agreed to stay for one more year. That dropped to $5,000 in April, when the Army
decided to shift its focus to locking soldiers in for longer terms.

"We got indications from the field that, with the extension bonus, we've probably achieved all we're going to achieve, so let's redirect
that to re-enlistment," Dailey said in May.

SRBs have fluctuated several times throughout the year, adding and subtracting certain MOSs, ranks and skill levels based on need.
The most recent tweak, in May, resulted in 22 MOSs getting dropped from the list — including junior infantrymen — but increased
pay-outs of up to $90,000, for everyone still eligible.

There are also opportunities for soldiers to put off their next permanent change of station move based on the length of their re-
enlistment.

"And that’s a result of asking through the chain of command," Dailey said. "We actually asked. We said, ‘What is it that would keep
you on the team?’ And they said, ‘Well, if I got to stay where I am.’ "

Soldiers are eligible for up to 18 months of stabilization with a three-year re-enlistment. For every six months more on the
enlistment contract, stabilization goes up another year, capping out at three extra years at a duty station.

For those thinking of joining this year, the message has been resounding.
"The Army’s hiring," Maj. Gen. Jason Evans, the head of Human Resources Command, told Army Times in March, when he
was director of military personnel management in the Army G-1. "We’re doing this responsibly with a focus on quality."

To recruit 6,000 more soldiers this year than originally planned, new enlistees in 94 eligible MOSs have the option to sign up for just
two years and pocket up to a $40,000 bonus, the deputy commanding general of Army Recruiting Command told Army Times in
February.

They’re going, ‘Four years? Six years?’" Brig. Gen. Donna Martin said of the average young person considering enlisting. "That seems
like forever, right?"

But now, the motivated recruit looking to move on and head to college by age 20, for example, is
able to do two years in the Army and get out with 80 percent of their GI Bill benefits.
It’s a very quick offer for the purposes of growing the Army this year, but leadership is counting on a good portion of those recruits
falling in love with the service and staying on.

"Not until after those two years did I realize, this is my calling," Dailey said of his original enlistment, one of the several times the
Army has offered two-year contracts. "Had I not been afforded that opportunity, maybe to somebody’s benefit now, I might not have
been the sergeant major of the Army."

Staff Sgt. Jerome Martinez, a drill sergeant with the 31st Engineer Battalion, lines up his new soldiers at Fort Leonard Wood,
Missouri. The post is beefing up its basic training capacity in order to train more incoming soldiers as the Army continues to grow.

Photo Credit: Stephen Standifird/Army

And more recruits means more recruiters, so the Army set a goal to get 600 more personnel to recruiting stations while
offering them an extra $500 a month for up to a year.

Beyond that, 79R professional recruiters are eligible for a fat re-enlistment bonus — between $9,800 and $36,800 based on rank
and number of years on the contract.

As of June 6, USAREC was at 54 percent of its active duty and 66 percent of its reserve
component goal for the fiscal year, spokesman Brian Sutton said.

The numbers might seem low for having a little less than four months left to make their numbers, but that percentage is
standard for this time of year .

"If you were to look at a year-by-year chart of our 12-month period of recruiting, we have something that we call our bath tub
months in late winter, early spring," Sutton said.

As high school graduations wrap up, recruiting numbers tend to spike, first for those who were waiting to
finish school to sign up, then later as people enjoy their first few months out of school but come to the realization that it’s time to
take the next step.

"There is a push, I think, in the minds of a young person, that they’re going to have to figure out a path for the future," Sutton said.
"Really, we’ve got our biggest months ahead of us for recruiting numbers."
Go active duty

Because the active component needs to add 16,000 bodies to the rolls this year, the
Army figured it could get the Army
Reserve and National Guard to their new end strength numbers while enticing some soldiers from the
reserve component to go active duty.

"One of the fundamental changes that is bigger than we had anticipated is the call to active duty of our officers," Lt. Gen. Thomas
Seamands, then the head of Human Resources Command, told Army Times in April.

Up until late last year, the Army had spent years drawing down the total force to get to 980,000, Seamands said, much of that by
asking active duty soldiers to transfer to the reserve component.
"Nowthat the force is getting larger, we’re asking for officers and NCOs in the reserve
component to consider going on active duty," he said.
The original goal was to add a couple hundred, but almost 1,000 packets came in, and Seamands said they were prepared to accept
the majority of them.

Reserve component soldiers have until July to contact a local recruiter and get a packet in.

"They’ll come into a unit, they’ll be ready on day one to go out and lead soldiers ,"
Seamands said. "Many of them, I suspect, will return to the reserve component in three or four years to continue their Soldier for
Life approach to what they’re doing, having had the additional experience and education having been an active duty soldier."

Recruiters have also put the feelers out to recently separated soldiers.

"We’refocusing our recruiting effort on prior service personnel, for those who have separated
honorably," Evans said.
Returning soldiers would just need to complete a two-week re-greening course via Training and Doctrine Command.

"About 7,000 have separated in the last year, and we’d like to tap into that population of folks to see them
come back in," Evans added.
 2AC – Federalism DA
Federalism is dead---drug laws, tort reform, sanctuary cities, gun
control, the commerce clause, spending power
Robert Levy 17, PhD in business from the American University, Chairman of Cato, director of
the Institute for Justice, the Foundation for Government Accountability, March/April 2017,
“Volte-Face: Federalism in the Age of Trump,” https://www.cato.org/policy-report/marchapril-
2017/volte-face-federalism-age-trump
In the aftermath of the Trump election, liberals seem to have rediscovered federalism — although
grounded less on principle than on the conviction that states’ rights might better serve the progressive
agenda. Not to be outdone, Republicans, who now control both legislative and executive branches, appear
willing to abandon federalist principles in favor of strong central government freshly
enabled to advance conservative preferences.
That role reversal is reflected in positions on issues such as drug legalization, tort reform,
sanctuary cities, and gun control — reinforced by flawed views of the Constitution’s Commerce
Clause, spending power, and the Second Amendment.

Let’s start with Congress’s power to regulate interstate commerce. Marijuana in some form
is now legal in 44 states. But under federal law, the use, possession, sale, cultivation, and transportation of
marijuana is illegal. What say our conservative champions of federalism? Republican drug warriors — buttressed by
liberal Justice John Paul Stevens’s 2005 opinion in Raich v. Gonzales — have invoked the infinitely elastic
Commerce Clause to justify national prohibition. Indeed, Attorney General Jeff Sessions criticized
President Barack Obama for not being tough enough on marijuana, saying “You have to have leadership
from Washington.” And White House press secretary Sean Spicer confirmed on February 23 that the Justice Department will be
doing more to enforce federal marijuana laws.

Never mind the warning from conservative Justice Clarence Thomas, who dissented in Raich despite his
antidrug predilections. Thomas wrote that Raich used marijuana that had never been bought or sold, had
never crossed state lines, and had no demonstrated effect on the national market. He added, if
Congress can regulate that under the Commerce Clause, then it could regulate
virtually anything — quilting bees, clothes drives, and potluck suppers.

Or consider tort reform — especially malpractice cases, in which the litigants are almost always from the same state.
Nowhere in the Constitution is there a federal power to set rules that control lawsuits by in-state plaintiffs against instate doctors for
in-state malpractice. Some malpractice awards may be shocking, and the impact may be widespread. But not
every national
problem is a federal problem. Nonetheless, House Speaker Paul Ryan and Tom Price, secretary
of health and human services, have pledged to include tort reform in their replacement for the
Affordable Care Act

. Theysay frivolous lawsuits are inflating malpractice insurance premiums, which raise health
care costs. The remedy: nationalize malpractice relief. So much for the federalist notion that the states should
serve as 50 experimental laboratories.

Ditto when it comes to the spending power and sanctuary cities . Mayors in several cities —
including Los Angeles, Chicago, and New York — have refused to cooperate with federal immigration
authorities in detaining and deporting illegal aliens. In response, President Trump has promised
to cut federal funding for those cities. That threat ignores two principles of federalism.

First, while federal law supersedes conflicting state law, and states may not impede federal
enforcement, neither the president nor Congress can commandeer state officials to execute
federal law. Second, the feds may not deny funding to states in a manner that essentially
compels cooperation. That’s how the Obama administration tried to force states to expand Medicaid — by withholding all
Medicaid funding if a state said no. The Supreme Court reminded the administration that a coercive condition imposed on receipt of
federal funds is incompatible with federalism and thus unconstitutional.

Finally, consider the Second Amendment and the right to bear arms . On November 8,
voters in California, Nevada, and Washington opted for stricter gun control. Some conservatives
demand national gun control standards. But Second Amendment rights are not absolute.
Local jurisdictions retain the ability to regulate the manner of carrying guns, prohibit carrying in sensitive places, bar weapons that
are not covered by the Second Amendment, and disqualify possession by dangerous individuals. And federalism
dictates
that what’s allowed in the hills of Montana need not be allowed in downtown Chicago.
Recall that the essence of federalism is dual sovereignty — shared authority between federal and
state governments to shield individuals from concentrations of power. Justice Anthony Kennedy in United
States v. Bondput it this way: “By denying any one government complete jurisdiction over all the
concerns of public life, federalism protects the liberty of the individual.” That means the proper
balance between federal and state power must be rooted in the Constitution’s embrace of
limited government and individual liberty — not liberal or conservative politics.

No issue spillover – federalism precedents are obsolete – governance

is contingent
Yishai Blank 10, Senior lecturer at the Buchmann Faculty of Law, April 2010, FEDERALISM,
SUBSIDIARITY, AND THE ROLE OF LOCAL GOVERNMENTS IN AN AGE OF GLOBAL
MULTILEVEL GOVERNANCE . Fordham Urban Law Journal,
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1724574
One of the hallmarks of our age is a realization - a product of objective discoveries and of ideological
transformations - that a growing number of contemporary problems and challenges require decision-
making and implementation at different territorial spheres and by different governmental (and
political) levels. n1 Immigration, climate change, labor standards, and the economic
crisis are high-profile examples of the fact that it is no longer possible - nor is it desirable - to
think, decide, and implement rules and policies only at the federal level or at the state
level o

r at the local level ; rather, it has become necessary to govern them at many levels of government -
sub-national, national, and supra-national - simultaneously. Yet, our legal systems and political institutions
have not yet
adapted themselves to this realization and they do not reflect it fully or sufficiently. Furthermore, as I argue in this
Article, the two most dominant political theories that are supposed to offer a solution to this growing need of, and belief in,
multilevel governance - federalism and subsidiarity - are inadequate and incapable of doing so. And while both theories are
invaluable sources for inspiration for the creation of a legal (and political) system that will better fit our changing realization
regarding the multi-spheral (global, national, regional, and local) nature of human conflicts and contemporary challenges, I claim
two things regarding them: first, that they should be understood as distinct from each other (despite the fact that they are often
confused and not theorized as distinct political theories); and second, that subsidiarity is better fit for the task of articulating
multilevel governance, even if only as a tool for loosening the grip of federalism over our political and legal theory.¶ The
growing
understanding of the need to govern and solve problems at various territorial spheres and by
multi-tiered governmental institutions should be read as manifesting three processes that have
become emblematic of our times: globalization, urbanization, and the shift from government to
governance. These three tectonic shifts involve fundamental material and ideological transformations that are reconfiguring
individuals, societies, and governments all over the world. And it is indeed the intersection of these three
phenomena that this Article identifies as the source of the need to rethink our current political-
legal models. Together, these processes require not only a new division of power between different
levels of governments in order to manage various resources more effectively, or [*511] in order to
tackle different challenges more efficiently; they suggest that it is imperative that we
conceptualize afresh the relationship between different territorial spheres - and therefore
between competing identities and political affiliations - and that we form new legal principles in
order to govern and regulate these new relationships. In this Article, I suggest that the theory of subsidiarity,
problematic and incomplete as it may be, might include some important ideas regarding the desirable relations between different
spheres of government, between different territorial spheres, and between different sites of identification (subjective and collective).

No warming impact---their predictions are wrong and adaptation

solves
Oren Cass 17, senior fellow at the Manhattan Institute, Winter 2017, “How to Worry about
Climate Change,” National Affairs, http://www.nationalaffairs.com/publications/detail/how-to-
worry-about-climate-change
Even focusing within that range, estimates
for the expected environmental impacts of warming vary
widely. The IPCC represents the gold standard for synthesizing scientific estimates, and,
crucially, its best guesses bear little resemblance to the a pocalyptic
predictions often repeated by activists and politicians . For instance, the IPCC estimates that
sea levels have risen by half a foot over the past century and will rise by another two feet over the current century. At
the high
end of the 3-to-4-degree range, it reports the impact on ecosystems will be no worse than that of
the land-use changes to which human civilization already subjects the natural
world .

The responsibility
for translating these and other disruptions into economic costs falls to Integrated
Assessment Models (IAMs). To create its "Social Cost of Carbon," the Obama administration surveyed this economic
literature and focused specifically on three models whose forecasts themselves vary widely, even starting from a common level of
warming. For warming of 3 to 4 degrees Celsius by 2100, the middle of the three models estimates an annual cost of 1% to 3% of
GDP. The low case estimates 0 to 1%. The high case estimates 2% to 4%. While
4% is a large dollar amount, arriving
at that impact over nearly 100 years implies almost imperceptibly small changes in
economic growth .
The specifics of this high-case model are informative: The Dynamic Integrated model of Climate and the Economy (known as the
DICE model) developed by William Nordhaus at Yale University estimates 3.8 degrees Celsius of warming by 2100
costing an associated 3.9% of GDP in that year. But over time, this cost is the equivalent of slowing
economic growth by less than one-tenth of one percentage point annually. By 2100, regardless of
climate change, the world is more than six times wealthier than in 2015 under this model; global GDP is
$500 trillion. The effect of climate change is to reduce that gain from a multiple of 6.7 to a multiple of 6.5. The economy also
continues to grow, so that the climate-change-afflicted world of 2105 is already much wealthier
than a world of 2100 facing no climate change at all.
Such estimates might seem counterintuitively low, especially given the rhetoric often employed. Part of the explanation lies in the
almost incomprehensible economic progress that human civilization is capable of making over the course of a century. The annual
cost identified by Nordhaus in 2100 is $20 trillion — massive by the standards of 2015, manageable by the standards of 2100.
Further, that cost repeats every year even as the impacts are spread over many years. Thus, over the 2090 to 2110 time period,
Nordhaus envisions the world spending a stunning $350 trillion to cope with climate change. One might despair over what else such
resources might accomplish over that time period. But one must also recognize that the
economy of 2100 will likely be
able to allocate those resources toward climate change while also allocating to every other facet
of society far more resources than are available today.

Corroborating these models , the IPCC concludes that "for most economic sectors, the impacts
of drivers such as changes in population, age structure, income, technology, relative prices, lifestyle,
regulation, and governance are projected to be large relative to the impacts of climate change." In
other words, other worrying problems have a far greater capacity to influence progress.

None of this means the dislocations from climate change would be painless or the disruptions cheap. It is merely to
observe that the impacts expected from climate change over the next hundred years look similar to
those through which both civilization and our planet have successfully muddled
over the past hundred and continue to struggle with today. Other worrying problems have their own
anticipated but less-severe analogs, too. Whether a global pandemic strikes, epidemics will inevitably occur like the 2014 Ebola
outbreak in West Africa that claimed more than 10,000 lives and cost the three countries at its center more than a tenth of their
GDP. Whether artificial intelligence makes humans superfluous, self-driving vehicles could throw millions out of work in the years
to come. Some countries will default on their debt; some business cycles will spawn deep global recessions.

These challenges are not existential threats or even ones that require analysis outside the
standard policy process — that is, they are not really worrying problems at all.
EXTREME CASES

If expected climate change represents the most likely outcome, extreme climate change
represents the worst case: Models could be underestimating the warming that emissions will cause; feedback loops
could send a 3-degree increase suddenly careening higher; or even at the expected level the climate could hit a tripwire that
collapses global ecosystems or ocean currents or ice sheets or some other prerequisite of modern
civilization.
Any of these things may be true — as is the nature of genuinely forecasted challenges, they are mostly non-falsifiable. But while
extreme climate change is a quintessentially worrying problem, it is also one that has no guarantee or even
likelihood of occurring . Certainly, the "scientific consensus" or even the "scientific mainstream" on climate
change does not extend to confidence in such scenarios .
To compare extreme climate change with other worrying problems, it is helpful to consider the dimensions that make a problem
"worrying": that it is forecasted, irreversible, and pervasive. On all three, climate change appears less worrying than most.

Consider, first, the magnitude of the forecasted impact. Many worrying problems feature the
credible prospect of killing a significant share of the human population or erasing modern
civilization. Not extreme climate change . For instance, even considering higher temperature
increases, the IPCC concludes that:
Global climate change risks are high to very high with global mean temperature increase of 4°C or more above preindustrial levels
in all reasons for concern, and include severe and widespread impacts on unique and threatened systems,
substantial species extinction, large risks to global and regional food security, and the combination of high temperature
and humidity compromising normal human activities, including growing food or working outdoors in some areas for
parts of the year.

Obviously, each of those effects would entail enormous economic costs, carry severe consequences for entire
nations, and wreak havoc with the natural environment. But as a worst case, it nevertheless pales in
comparison to catastrophes that might kill a significant share of the human population or erase
the basic physical and economic infrastructure of modern civilization.

Serious efforts to quantify existential threats concur . A 2016 report by the Global Priorities Project at Oxford
offered as its example of a worst
case that climate change could "render most of the tropics substantially
less habitable than at present," as compared to hundreds of millions or billions of deaths associated
with other challenges. Another Oxford study from 2008 asked conference participants to estimate the
probability of various global catastrophes leading to human extinction in the coming century, and
did not even see fit to include climate change as an option , while respondents gave molecular
nanotechnology, super-intelligent artificial intelligence, and an engineered pandemic each at least a 2% chance of erasing humanity
by 2100.

Some analysts nonetheless place climate change among humanity's genuinely existential threats on the
basis of its "fat tail," arguing that some unknowable but non-zero chance exists at the far-right end of the
probability distribution for an outcome with essentially infinite cost. But this is true of all worrying
problems — indeed, the characteristics of worrying problems might be viewed as those that generate such unknowable non-zero
probabilities. Climate change cannot be distinguished from other worrying problems on that basis .
Rather, the argument begs the question: What characteristics of climate change make its tail
relatively fatter or thinner?

The weight
accorded to a worrying problem's forecasted effects depends greatly on the number of
causal steps between the underlying phenomena and worst-case outcomes . Where
fewer steps are necessary, or where steps are relatively more likely to occur, the probability of the worst case arising should increase.
For instance, whether an engineered pandemic devastates humanity depends on development of the necessary technology (highly
likely), its use by a malicious actor (indeterminate), and its spread defying efforts at containment (indeterminate). Generally
speaking, technological threats will have the shortest chains while sociological threats will have the longest ones.

Climate change would appear to sit somewhere in between. It has a very short chain to some impact — indeed,
higher atmospheric concentrations of carbon dioxide are already having effects. But the connection from warmer
temperatures to civilizational catastrophe is highly attenuated . The initial warming must cross
thresholds that produce feedback loops. The ensuing warmth must produce environmental effects that cause unprecedented
crises across societies. Those crises must in turn overwhelm the coping capacity of the entire global
community, which must in turn produce wide-scale breakdowns in social order or trigger military conflict,
which must in turn metastasize into...what? Certainly, one can invent a scenario . But the
specifics quickly become hazy, and a worst case entirely outside of human experience
difficult to articulate.
The intent of this analysis is not to dismiss the severity of worst-case climate scenarios or to suggest that "wide-scale breakdowns in
social order" are acceptable. But all worrying problems have worst-case forecasts that look this way, all
with indeterminate probabilities of occurring, which leaves only a few options: We could become overwhelmed with despair,
emphasize whichever problems are most politically useful, or seek out qualitative and quantitative bases for analysis. Too much
discussion of climate change adopts the first or second approach. Efforts at the third approach will inevitably be imprecise and
imperfect, but the burden of proof should lie on those declaring that climate change stands apart
from other worrying problems to explain why that is so. The suggestion here is not that the forecasted threat of
climate change does not belong alongside other worrying problems, only that the nature of its forecast cannot be what separates it as
uniquely worrying.

WORRYING IN SLOW MOTION

In the other ways climate change is a worrying problem, meanwhile, it is less worrying than most. This is
especially true with respect to irreversibility. While President Obama has lamented that climate change is a
"comparatively slow-moving emergency," the one thing worse is a fast-moving one. Most worrying problems have
worst-case scenarios that sweep the globe in a matter of months, days, or even minutes. For
climate change, the damage unfolds over decades or centuries. This has several implications.
First, while climatechange is irreversible compared to the typical policy problem, it does allow for some potential
interventions even once well underway . For instance, natural processes already exist for
extracting carbon dioxide from the atmosphere, and new technologies could be developed that accelerate
those processes or create artificial ones. Alternatively, humans could use so-called "geoengineering" to effect other
changes in the climate system that might counteract an intensifying greenhouse effect. These approaches offer no guarantee or even
likelihood of success; turning to geoengineering might be seen as a disaster in its own right. But they offer more cause for optimism
than exists with many other worrying problems.

time permits adaptation . While the prospect of losing 50% of existing agricultural capacity
Second,
is daunting, over a 50-year period only 1% of capacity needs to shift annually. By comparison, over the
past 50 years, total agricultural output has tripled . Similarly, the need for hundreds of millions of people
to migrate over a century amounts to little out of the ordinary on an annual basis. There are, for instance, more than 200 million
migrant workers within China, as well as another 200 million international migrants and at least 60 million refugees around the
world right now. The United Nations estimates 2.5 billion people will migrate to cities in just the next 35 years. Further migration, or
perhaps the gradual abandonment of some cities or even entire regions, would obviously be extraordinarily costly and disruptive in
human, economic, and environmental terms. But the reason such adaptations are rarely mentioned in the context of other worrying
problems is not that they would be unnecessary, but rather that, in those other cases, they would be either impossible or else futile.

Purveyors of creatively catastrophic climate cases also face a Catch-22: Developing ever-more
extreme scenarios typically requires ever-longer timescales . Even higher
temperatures and risks of further dominos falling are threatened — by 2300, or after "centuries."
Confident forecasts of multi-meter sea-level rises are issued, to occur over multiple millennia.
Harvard University's Martin Weitzman, the leading proponent of the case that climate change presents a uniquely "fat tail," falls into
precisely this trap: The worst case he offers relies on continued temperature increases over multiple centuries. But if
heightening the threat requires extending the timeframe further, it becomes diluted threefold: More
time becomes available for adaptation, for economic progress and technological
innovation that render the threat irrelevant, or for the model to fail . Any impact forecasted for 200,
let alone 2,000, years into the future becomes almost inherently less cognizable than those already under study for 2100.
1AR
Topicality
 XT Not government
Their definitions are based on over-simplifications of health policy---
leads to less nuanced, educational debates about different
mechanisms
Federico Toth 16, Associate Professor. Department of Political and Social Sciences, University
of Bologna, May 2016, “Classification of healthcare systems: Can we go further?,” Health Policy,
Vol. 120, No. 5, p. 535-543

This article deals with a

classic topic, already widely explored and debated in the literature: the
classification of healthcare systems. The topic is worth revisiting because of its undeniable
centrality . Indeed, every scientific community aims at defining firm and widely shared
classification criteria, an indispensable condition for the advancement of
comparative research. This applies to all subject areas, and the study of healthcare systems
is no exception.
Over the years, many proposals have been put forward to classify healthcare systems. Many works propose to classify systems “on
base 3” [1–5]. The
most widely used classification indeed subdivides healthcare systems into three
large models [2]: (1) voluntary insurance; (2) social health insurance (SHI); (3) national health service
(NHS). The breakdown of healthcare systems based on these three ideal types can be considered the standard tripartite
classification[5], which many authors have shared and used in their research [4,6,7].

Other scholars have proposed classifications of healthcare systems “on base 4” [8–11]: each of these proposals, however, uses
different classification criteria, and different labels to identify the four types.

Wendt et al. [12] went as far as theorising the existence of 27 different possible healthcare system “combinations”. However, 24 of
these combinations can be considered hybrid forms, leaving only three pure models (and thus returning, even in this case, to a
trichotomous classification). Böhm et al. [13] analysed the 27 combinations mentioned above and pointed out that many of them are
“scarcely plausible” from a logical viewpoint, and that, in practice, some types are not applicable in the real world: healthcare
systems in OECD countries can therefore be grouped under five main models.

Regardless of whether the classification is on base 3, 4 or 5, all

the foregoing proposals seem to have – some more, some
less – the same limits: (1) they end up including in the same category healthcare systems that differ
from one another (some typologies also result in the opposite problem, in that similar systems fall into different categories); (2) for
each country, only the prevailing model is taken into account, which risks being an oversimplification. Let us
discuss a few examples.

Some classifications place the healthcare systems of Australia and Canada in the same category as those of countries like the UK,
Italy or New Zealand [3,11,13–15]. But the Canadian and Australian systems are not organised like the British or the Italian NHS
[16,17].

In many research works, Switzerland is listed with social health insurance countries like France or Germany [3,13,18,19]. But the
Swiss model is substantially different from the classic Bismarckian prototype and adheres to different logics [13,20].

The United States is another example. Labelling the American system as a simple case of “voluntary private insurance” is an obvious
over-simplification. The American system is a very complex patchwork [21], where government intervention is anything but minor,
as demonstrated by the fact that, in the USA, public health expenditure is around 7.9% of GDP [22]; it is therefore higher than that
of “universalist” countries such as the UK, Spain, Italy or Canada. Given its complex architecture, the US system cannot be classified
as a mere private insurance system.

These few problematic cases – but there are many others – lead us to consider the classifications of
healthcare systems proposed to date in the literature as not fully satisfactory. In this work, we ask
ourselves whether we can go further.

We ought to clarify right from the start that the author does not consider the classic tripartite classification and the other types
proposed so far wrong, or useless: they are certainly helpful. However, it all depends on the type of analysis that one wants to make.
If a certain degree of simplification is acceptable, then the classifications proposed so far, starting from the standard tripartition, are
adequate. Conversely, a deeper
analysis that places greater emphasis on the differences between
systems, and aims at fully understanding the architecture of each healthcare system,
requires the adoption of a more sophisticated conceptual scheme .
In the following sections we shall outline 10 models of healthcare organisation: these types in part take up and in part develop the
classification proposals already presented in the literature. However, this work is not limited to proposing a new typology, but rather
aims to suggest a classification logic that differs from traditional pigeonholing. The classic classification logic starts off
by defining some ideal models, and then tries to make the different objects of analysis – in our case, the
national healthcare systems – fit into one, and only one, of the identified models, so as to obtain
classes as homogeneous as possible [23]. It is, however, generally agreed that national healthcare systems are, in
actual fact, hybrid and composite systems that mix and combine elements inspired by different
models [1,8,12,13,24,25]. Grouping countries on the sole basis of the prevalent model thus risks
producing simplistic descriptions of the national systems that are quite far from the actual
state of affairs.
To avoid this limitation, we propose to make a different use of the typology. The ideal types will serve primarily to identify and label
the different elements composing each national healthcare system. The typology will therefore be the common analytical framework
through which we can put the system's components into focus, understand how each component works and grasp the relationships
between the various subsystems. This will make it possible to compose a concise overview, revealing the logic underlying the overall
design of each healthcare system. We shall refer to this way of proceeding as the “identikit logic”: indeed, it aims at providing more
accurate and realistic descriptions of each single national healthcare system, reconstructing the various combinations based on
which it was designed.

Some authors [4,26] suggest to consider

the healthcare system as a triangle, due to the relationships
existing between the three different categories of subjects: users, providers and insurers. When
focussing on the relationship between users and insurers, we are talking about the financing of the system; financing methods
usually also affect the manner in which providers are paid. When considering the relationship between providers and users, we are
instead dealing with healthcare service provision; service provision methods are in turn affected by the relationship that users and
providers have with insurers.

Some healthcare system classifications made in the past almost exclusively consider the financing dimension [1,25,27]. Many
authors, however, believe that focussing only on financing is reductive, and that a proper classification should also include the
service provision dimension [2,4,12,26,28]. Sure enough, financing mechanisms on the one side and provision methods on the other
are considered the two “core dimensions” [13] required to classify healthcare systems [2,11,14,26,29]. Fully agreeing with this
approach, in this work we shall take these two dimensions into account, first discussing them separately and then intercrossing
them.

In Section 2, we shall start from healthcare service financing mechanisms, comparing five different financing systems. In Section 3,
we shall discuss the provision of healthcare services and, in particular, the relationship between providers and insurers. We shall
therefore make a distinction between integrated and separated systems. By intersecting the financing and service provision
dimensions, we obtain 10 different types of healthcare organisation.

As already mentioned, at this point, however, the logic will not be to pigeonhole the various national systems into these 10 types. The
operation suggested in this work will rather be to draw up an identikit picture of each single healthcare system. The concepts of
“population segmentation” and “healthcare segmentation”, as defined in Section 4, will be key to reasoning according to the identikit
logic. Section 5 will attempt to elucidate the usefulness of the framework proposed here, providing some concrete examples of
“identikit” pictures. The last section will wrap up the discussion, underscoring the elements of greater originality of this work.

2. Financing models

Multiple criteria can be used to classify the financing mechanisms of healthcare systems.

A first, widely used criterion concerns the public or private nature of the insurance scheme [25,30]:
insurers may indeed be public, private for-profit or private non-profit entities [6,12,26].

A second criterion refers to the level of compulsoriness of the insurance scheme [14,25], hence the
freedom of choice granted to the insured [31]: there are indeed voluntary insurance programs, compulsory schemes
where it is possible to choose the insurer, and systems that leave no choice to the citizen, who is required by law to take out an
insurance and is assigned by law to a given insurer.
We can thus make a distinction between single- or multi-payer systems [27]. In the case of multi-payer
systems, it is important to determine whether the relationship between insurers is competitive or not [25,26].

Many classifications attach great importance to the contribution method[4,8,25,30]; the

insurance scheme may indeed be
financed by taxes, social security contributions proportional to the salary, or insurance
premiums; in the latter case, the formula by which premiums are calculated is of relevance [25,26].
Another criterion used to categorise the different health insurance schemes is the basis for eligibility[1,24,26]: belonging to a
particular insurance scheme may, indeed, depend on being residents in a particular country, having paid regular contributions,
belonging to certain “weak” or “privileged” categories [24]. The eligibility criterion usually influences the rate of insurance coverage
of the population [2,4], and this represents a further classification criterion.

Financing schemes can finally be compared according to the level and modes of regulation of financing bodies and the insurance
market [25]; public regulation can be more or less stringent [6].

Trying to
condense the foregoing criteria, three ideal types of financing systems were
developed : (1) voluntary insurance (called both “private health insurance” and “voluntary health insurance”); (2)
social health insurance; (3) universal coverage.

The proposal put forward in this article is to keep the three models mentioned above and add two more :
the category of “ residual” programs, and national health insurance . For the sake of completeness, we
should not forgo mentioning that some authors have identified an additional financing model: the Medical Savings Accounts (MSAs)
[7,26,27,32]. This latter model is still scarcely widespread. It has been adopted in Singapore and – to a lesser extent – in the United
States, South Africa and China. However, the MSA system is not autonomous in any of these countries: it is always combined with
some other form of insurance coverage. For this reason, MSAs will not be discussed in this work.

We shall therefore focus on five financing models. Let us consider them individually.

2.1. Voluntary insurance

The voluntary insurance model does not envisage the obligation to obtain insurance coverage against
health risks. Tax or cash incentives may be provided to those who opt for insurance [26], whereas penalties may be imposed on those
who, despite having the economic means, decide against insurance. In any event, citizens are basically free to choose whether or not
to sign up for insurance [25]. Thosewho cannot or do not want to get insurance coverage will pay for the
required healthcare services out-of-pocket.
Conversely, those wishing to take out a health insurance policy can choose from a number of private insurers. The latter are in
competition with one another, and can offer policies tailored to individual subscribers. Insurers may be for-profit insurance
companies or non-profit institutions and funds [33]. In the former case, the premium will probably be risk rated, i.e., calculated on
the basis of the individual risk of each single subscriber [4]. Nothing prevents non-profit insurance entities from calculating
premiums based on individual risk, but they often prefer community rated or group rated insurance premiums [26], meaning that
they discriminate on the basis of the characteristics of larger groups (all belonging to a given group thus contribute in the same way),
rather than of individual subscribers.

2.2. Social health insurance

The basic principle behind the

social health insurance (SHI) model is that the state requires certain
categories of workers to pay contributions from their salary into a sickness fund. Sickness funds are
quasi-public, non-profit organisations subject to strict governmental regulation, appointed to collect their subscribers’ contributions
[18]; in
exchange, sickness fund subscribers receive total or partial reimbursement of the medical
expenses incurred.
The SHI model therefore divides the population into two groups, who have different levels of freedom. On the
one hand, there are those who, as members of certain professions, must pay mandatory
contributions. They cannot choose whether or not to sign up for the health insurance scheme as they are forced to do so. On the
other hand, there are those who are not subject to any obligations; they may, if they wish, take out a
voluntary insurance policy, or bear out-of-pocket spending for their healthcare.
The classic SHI model – for the sake of clarity, the one introduced by the late 19th-century Bismarckian legislation – provides for
different sickness funds, not in competition with one another, to be operative within the same country: workers are assigned to a
given fund by law, depending on their profession. Only in recent times, some countries have introduced a variant of the original
model: the worker is entitled to choose his/her own sickness fund [34]. In these countries, including Germany, it is mandatory to
pay contributions, but one can choose which sickness fund to sign up for.

We ought to recall that an

essential feature of SHI is that it is a typical occupational system: the
obligation to pay health contributions is not prompted by nationality or residency, but rather by
one's occupation. We should also point out that the contributions to be paid into a sickness fund – which may be co-paid by
employee and employer – are not calculated as a percentage of the overall income, but only of the earned income [26,34].

2.3. Residual programs

In countries where either voluntary or social health insurance prevails, there often are programs
that can be defined as “residual”. The term “residual” is taken from the literature on the Welfare State [35,36]. The programs
that we define as residual for the purposes of this article are those that are financed by general taxation and
intended for particular target populations . The beneficiaries of these programs are generally
the most vulnerable categories, those that are most exposed to health risks: low-income individuals, the elderly and
minors, persons suffering from serious illnesses, prisoners, and refugees. Various countries have residual programs not only for the
“weaker groups”, but also for certain professional categories considered particularly worthy of protection by the state, such as the
military or civil servants.
A key difference between residual programs and other financing models is that in the latter those who pay earn the right to benefit
from the program being financed. In the case of residual programs, this is not necessarily true: beneficiaries coincide only in part (or
not at all) with those who finance such programs. A healthcare program for the unemployed, for example, is financed by tax payers
who do have a job; healthcare for prisoners is paid by those who are not in prison; a program designed for minors is financed by
adults who pay taxes, and so on. Residual programs are, in short, programs financed by the community, but only available to
particular categories.

2.4. Compulsory national health insurance

The label “ national health insurance” has been used in the literature with multiple
meanings [11,13,14,24,37]. It is therefore necessary to immediately clear up possible
misunderstandings . In this work, national health insurance (NHI) is understood as the principle according
to which the state requires all residents to take out a private health insurance policy
covering essential healthcare services, using individual resources. There not being one single
public scheme into which contributions can be paid, the policy has to be taken out with
different, for-profit or non-profit insurers in competition with one another . The NHI is therefore a
multi-payer system , in which citizens can choose their insurers.
The state may provide subsidies for low-income citizens (who might otherwise find it difficult to pay
the insurance premium regularly), and may impose a regulation, even a very strict one, of the insurance market.
The insurance packages usually differ from one another, and may provide coverage additional to the minimum required by law; we
must therefore bear in mind that there may be differences between the services provided to individual healthcare users.

2.5. Universalist system

A universalist system is defined as a single-payer insurance scheme (therefore, one for the entire
population) covering all residents and financed through taxation. The universalist system, as we shall see later, is
not synonymous with the National Health Service.

Compared with other insurance schemes, the universalist system is marked out by the fact that the right to
healthcare is not linked with payment of a premium or a contribution, but to residing in a given
country. Healthcare is therefore a right of the citizens of that country.
From the point of view of those who have to contribute financially, the universalist system does not grant freedom of choice. Aside
from the few countries where some form of opting out is possible, residents cannot choose whether or not to finance the universalist
scheme: they are required to pay taxes, and therefore also to finance the program. And, given that (direct) taxes are usually paid
more than proportionally with respect to income, the universalist scheme turns out to be a typically progressive financing system
[26,27].

It is important to underscore that, unlike the SHI model, the universalist system envisages taxation not only on earned income, but
on all forms of income. Financing of the universalist scheme therefore has a clear redistributive intent: the richest end up paying, at
least in part, the healthcare services provided to the poorer citizens.

Mandates for coverage are NHI---international definitions provide

analytical precision
OECD 4 – Organisation for Economic Cooperation and Development, Study on Private
Health Insurance, June 2004, “PROPOSAL FOR A TAXONOMY OF HEALTH INSURANCE,”
https://www.oecd.org/els/health-systems/31916207.pdf
A simplified classification of health insurance schemes into mandatory and voluntary is
proposed:

Mandatory health insurance includes schemes where individual participation is compulsory

by government through legal stipulation4 , whether there is a unique system or a choice among
scheme/insurer. The mandate can apply to the entire population or to groups within it (e.g.,
individuals with income lower than a threshold). When mandated health insurance
covers the population at large such as all residents of a country, the scheme can be
referred to as National Health Insurance ( NHI ).

Voluntary health insurance includes insurance where insurees participate on a voluntary basis, or
where employers can choose themselves whether to offer health insurance cover to their employees either
voluntarily or per effect of collective agreements.

NHI is legally enforced national coverage – it does not have to be

government administered or financed
Monte Pratt 16, CEO of M.A. Pratt and Associates Consulting Partners, 3/9/2016,
NATIONAL HEALTH INSURANCE - MODELS OF HEALTH INSURANCE EXPLAINED. SO
THEN WHICH NHI BUSINESS MODEL WILL THE GOVERNMENT DECIDED ON?,
https://www.linkedin.com/pulse/national-health-insurance-models-explained-so-which-pratt-
1000
IV). National Health Insurance Fund (NHI) - National Health Insurance (NHI) is sometimes called Statutory
Health Insurance (SHI) as it is a legally enforced scheme of health insurance that insures a
national population against costs of healthcare services. NHI may be administered by the public
sector, the private sector, or a combination of both. National or Statutory health insurance does
not equate to a government-ran or a government-financed healthcare scheme, but
rather, NHI is usually established by national legislation and traditionally includes the following noted features:¶ i).
National Health Insurance in some countries, such as Australia's Medicare System (AMS) or the
UK's National Health Service (NHS), contributions to the national health system are made via
general taxation. Of course in practice, most persons paying for ‘insurance coverage’ will join a NHI Scheme, and even though
payments are not optional, and most NHI Scheme finances are raised mainly by a local work-force tax. In most large
countries, where NHI scheme involves a choice of multiple insurance funds, the ‘rates of
contributions’ may vary and the person(s) has to choose which insurance fund to belong.¶ ii).
N ational H ealth I nsurance Programs may in differ both how the funding is collected, and in how
medical and healthcare services are provided. In countries like Canada, payments are made by
the government directly from ‘tax revenue’, and funds collected are administered by
government. An other funding approach is where countries implementing national health insurance by
legislation, thus requiring compulsory contributions to its competing insurance fund. These insurance
funds (may be run by public bodies, private for-profit companies, or private non-profit
companies), must offer a minimum standard of medical and healthcare coverage. In addition
they are not allowed to ‘discriminate’ between client/patients by charging different coverage
rates based on age, occupation, and/or previous health status.
Econ
 Interest
1. They’ve set the threshold at any spending---Their evidence says
Trump spending is inevitable so it’s not unique offense
Shawn Tully, 2-22-2017, "The Yuge-est Threat to the Trump Economy: Spiking Interest
Rates," http://fortune.com/2017/02/22/trump-economy-interest-rates//)
NU = Yellow
The Trump economic plan has spawned a bull market in optimism, sending CEO spirits and stock prices soaring. But
a spike in another metric–interest rates–threatens to scuttle the President's
pledge to restore American growth to heights unseen since well before the Great Recession. In the minutes to its January meeting, the
Fed revealed that "many" officials had advocated raising rates "fairly soon," so long as the economy kept chugging. But after hiking

its benchmark rate in December for the second time in a decade, the Fed was wary of adding another increase because of "considerable uncertainty"

surrounding the Trump administration's "expansionary fiscal policy," and its possible impact on what matters

most to the Fed: the future course of inflation. While the Fed cautiously assesses Trumponomics, investors are taking the lead. The bond market has
already seen a notable shift. Since mid-2016, the rate on 10-year Treasuries has jumped a full point, to 2.43%. And 60% of that the increase came in the three months and change

Sundry market watchers

following the election. (For more on the president's economic agenda, read "The Promise and the Peril of the Trump Economy.")

think that rates will keep climbing. In a recent report, Ryan Sweet, an economist at Moody's
Analytics, predicts that the 10-year will yield 3.2% by the fourth quarter of this year. That would mean a
jump of roughly 80 basis points from today's level, and a rise of 104 basis points from the final quarter of 2016, which would be one of the largest 12-month increases since the

1990s. The power behind the surge: Investors are betting that Trump's policies will spur inflation, now running
at a modest 1.6%, to rise swiftly. The reason is two-fold. First, the new president promises
increased spending on infrastructure, veterans' benefits, and the military, while at the same time
championing steep corporate and personal tax cuts. It's likely that the plan will greatly deepen annual
federal budget deficits that are already on course to reach over $1 trillion, or 19% of all spending,
in 2023. Sweet predicts that the Trump plan could cost an additional $1.5 trillion over the next
decade. That extra spending means that lenders would get a lot more worried about
America's debt and deficits a lot sooner. As the U.S. strives to borrow more than the Chinese and other foreign governments feel
comfortable lending, the Treasury will need to offer far higher rates to entice them to keep lending. Those same creditors will also fret

that the big stimulus will hike inflation, and will demand a cushion in the form of
richer yields. The second factor: The stimulus is coming at a most unusual time, when the economy is already near full
employment, and many industries are tight on capacity in plants and production
facilities. "The Fed isn't worried right now about how this will be paid for, but about whether all this spending and tax cuts will boost the
economy, and boost inflation," says Paul Ashworth, an economist with Capital Economics in Toronto. "For the Fed, it's all
about inflation." The fear is that the spending will rapidly lift wages because of a
shortage of workers, and that the extra take-home pay, enhanced by lower taxes, will chase cars and appliances that are in short supply. The new
administration's hardline stance on illegal immigration could speed up this cycle, by
exacerbating the labor shortage. Put together, that's a classic recipe for inflation. Trump has a
totally different vision. In his mind, the plan will create a virtuous cycle of investment and durable growth. Companies will spend heavily on capital investment, and as they
expand, pull millions of working-age folks who've quit the labor force back into offices and factories. The surge in capex will raise productivity through purchases of efficient
machinery, and innovative technology that makes supply chains more efficient. That combination would cause production and the labor force to expand in tandem with demand
for both products and workers, thus holding real prices in check. It's obvious, however, that both investors and the Fed think that a surge in prices is far more likely than the

If a surge in the labor

supply side revolution that Trump promises. The evidence is the rate rise that's already occurred as a harbinger of inflation to come.

and output doesn't occur, the spike in growth will fade quickly. "You're juicing the
economy for a short period," says Ashworth, "but it can't grow at 3% without high inflation because productivity and labor can't keep up. You run up
against hard constraints." In that scenario, the Fed is forced to raise rates even further to stanch inflation, causing a recession. "We haven't repealed the business cycle," says

A crucial, mainly overlooked driver is

Doug Duncan, chief economist at Fannie Mae. "This is already one of the longest expansions on record."

the dollar. The greenback is already sitting at lofty levels, having appreciated by 20% against a broad basket of currencies over the
past three years. But two forces could push the dollar far higher. First, the gigantic borrowing on its own will raise rates well above those of nations from France to South Korea
that aren't in expansion mode. Foreign governments will pile into Treasuries for their safety and fat yields. Second, as part of its campaign to quell inflation, the Fed would be

likely to adopt a strong dollar policy, once again, by keeping rates at levels that would attract plenty of cash from abroad. That combination of
circumstances would make our cars and drugs a lot more costly in foreign markets, lowering
exports, and dampening growth, and with it, inflation. At the same time, a weak dollar would make imports of
clothes, cell phones and PCs far cheaper, exerting more downward pressure on prices

a. Finishing Cox UQ evidence

," said Kathy Jones, senior fixed income strategist at Charles Schwab.

A statement on the program said the roll-off is targeted to start this year, though no specific date was
provided.

"The committee currently expects to begin implementing a balance sheet normalization process
this year, provided the economy evolves broadly as anticipated," the post-meeting statement said.
According to information released Wednesday, the roll-off cap level will start at $6 billion a month for the level of principal payment proceeds from
Treasurys it will let run off without reinvesting. The remainder will be reinvested.

The Fed will increase that cap level at a pace of $6 billion each quarter over 12 months until the cap reaches $30 billion a month.

For agency and mortgage debt, the cap will be $4 billion a month initially, with quarterly increases of $4 billion until the level reaches $20 billion a
month.

Once both targets are met, the total runoff per month will be $50 billion. Several Fed officials have said publicly they expect the runoff program to
continue until the balance sheet declines to about $2 trillion to $2.5 trillion.

Fed officials voted to move forward with both moves despite some wobbly economic data lately
indicating that growth won't reach the lofty 3 percent projections from the Trump White House.
Retail sales data have indicated a still-struggling consumer and payrolls growth has

slowed considerably over the past few months.

Still, the Fed actually increased its anticipation for GDP growth in 2017, bumping it up to 2.2 percent from the 2.1 forecast in March. Unemployment also is expected to decline
more this year than anticipated, with the new forecast at 4.3 percent against the previous 4.5 percent.

The summary of economic projections points to a 1.6 percent headline rate for personal consumption expenditures, the central bank's preferred inflation indicator. That was cut
sharply from the 1.9 percent forecast in March. Core inflation, which excludes food and tumbling energy prices, was cut from 1.9 percent to 1.7 percent.

However, the forecast for 2018 and 2019 was unchanged at 2 percent for both levels.

"Near-term risks to economic outlook appear roughly balanced, but the committee is monitoring inflation developments closely," the committee said.

"The primary story is they put in place to start tapering the balance sheet, without putting any target date around it," said JJ Kinahan, chief market strategist at TD Ameritrade.
"I don't know that it necessarily tells us anything other than we are going to continue to play this game and it's going to make the press conferences more important."

The so-called dot plot, which charts individual FOMC members' expectations for where the funds
target will land, indicates officials overall are holding to their expectations. The funds rate
projection for the end of 2017 remains 1.4 percent, which would indicate an additional hike
before the end of the year . Fed funds futures market had been giving another move this year just a 35 percent chance, according
to the CME.

b. Inflation won’t change fed plans---they’ll stick to their plan

Greg Robb 5/3, senior economics reporter, 5/3/17, "Fed to signal rate-hike plan in place
despite soft economic data," www.marketwatch.com/story/fed-to-signal-rate-hike-plan-in-
place-despite-soft-economic-data-2017-04-27

The Federal Reserve will signal no change in its plans to gradually raise interest rates
despite recent weakness in the economy.
The government’s official scorecard for the U.S. economy in the first quarter pointed to the
weakest growth in three years , although possibly limited by fleeting factors as the Fed has suspected.

Gross domestic product increased at a meager 0.7% annual pace in the first three months of the
year, down from 2.1% and 3.5% in the back half of 2016. Economists polled by MarketWatch had forecast
a 0.9% increase.
Fed officials have said repeatedly they believe the economy’s sluggish performance so far this year is temporary.

Chicago Fed President Charles Evans, a voting member of the Fed who has been dovish in the past, said recently that he has more “confidence” in the
economy.

While markets have gotten used to the Fed pulling back from hiking rates at the first sign of the
economy softening, Fed Chairwoman Janet Yellen and her colleagues are now seen as less skittish,
economists said.

Economists surveyed by MarketWatch see growth rebounding to a 2.8% rate in the second quarter.

The bar to disrupting the Fed’s plans is higher now that it was in previous
“

years ,” said Rob Martin, an economist at Barclays, in a note to clients.

The Fed envisions two more rate hikes this year and economists and the market see
quarter-point moves in June and September.
There is unanimous agreement that the Fed will hold rates steady at the end of the meeting because it comes so soon after the central bank tightened
policy in mid-March, the second rate hike in 12 weeks.

The central bank will release a policy statement at 2 p.m Eastern. There will not be a Yellen press conference or updated economic forecasts.

With the market placing a greater than 50% probability on the next hike coming in June,
the Fed does not have to send a very strong signal in the statement, said Julia Coronado, chief economist at
MacroPolicy Perspectives.

Ellen Zentner, chief U.S. economist at Morgan Stanley, agreed: “the Fed need only deliver a benign statement.” That would
only have to change close to the June meeting, she added.
 AT: Bubble

The bubble’s media hype

Morgan Housel 16, Partner at Collaborative Fund and a former columnist at The Motley Fool
and The Wall Street Journal. “The Difference Between a Bubble and a Cycle.” Collaborative
Fund. September 27. http://www.collaborativefund.com/blog/the-difference-between-a-
bubble-and-a-cycle/.
According to various media sources we now have at least 14 bubbles:¶ A new real estate bubble.¶ A bond bubble.¶
A tech bubble.¶ A VC bubble.¶ A startup bubble.¶ A stock bubble.¶ A shale oil bubble.¶ A healthcare bubble .¶ A dollar

bubble.¶ A college tuition bubble.¶ A Canadian housing bubble.¶ A central bank bubble.¶ A social media bubble.¶ A China

bubble.¶ One economist recently gave up and just said “Everything’s a bubble.” ¶ At a conference I attended a few years

ago, Yale economist Robert Shiller said something amazing: The word “bubble” wasn’t even in the economic

lexicon 25 years ago. Not in textbooks, not in papers, not in schools. But now we have bubbles everywhere .¶ How did that
happen?¶ The good news is, I don’t think it did happen.¶ Markets have been rising and falling for centuries, but the term “bubble” is new. Since it’s new,

there’s no official definition of what it is. Since there’s no definition, anyone can classify anything they want as a
bubble and no one can prove them wrong. What began as a serious topic among economists has
become a job-security loophole for pundits .¶ Shiller, in his book Irrational Exuberance, tried to solve this problem.¶ He says
spotting a bubble is like diagnosing a mental illness. “The American Psychiatric Association’s diagnostic and statistical manual, which defines mental illness, consists of a
checklist of symptoms” he once said.¶ He used this as a template to come up with his own checklist of bubble symptoms:¶ Rapidly increasing prices.¶ Popular stories that justify
the bubble.¶ Popular stories about how much money people are making.¶ Envy and regret among those sitting out.¶ Cheerleading by the media.¶ It’s so simple, and so smart.¶

a lot of assets can give off the scent of a bubble

But it’s far from perfect. Just as someone in a bad mood isn’t necessarily depressed,

without actually being one002E¶ My favorite example of this is Microsoft in the early 1990s.¶ Shares
tripled from 1988 to early 1990. People were telling stories about how computers would change the world. Bill Gates was celebrated on magazine covers as one of the
youngest billionaires of all time.¶ Then, after years of hype, shares fell 31% in the middle of 1990.¶ It checked

every box of being a classic bubble, down to the crushing loss of losing a third of your money in a few months.¶ But Microsoft
wasn’t a bubble in 1990. It wasn’t anything close. Even if you start from the peak, shares
increased six-fold over the next five years, and 74-fold over the next ten years. It’s only obvious
in hindsight, but shares were massively undervalued at a time when they looked like a clear-cut
bubble.¶ We see this so often.¶ Was Amazon a bubble in 1999? It checked all the boxes, but it wasn’t. Shares are eight times higher today than they were
back then. Same with Facebook in in 2012, and GM in 1960. Was China a bubble in 2007? It looked like it, and then its economy hit a wall. But then it came roaring back just as
fast. So who knows? The number of bubbles we predicted with foresight is an order of magnitude larger than the number of bubbles we now acknowledge with hindsight.¶ In my

most of what people call a bubble turns out to be something far less sinister: A
experience,

regular cycle of capitalism.¶ Cycles are one of the most fundamental and normal parts of how
markets work. They look like this:¶ This cycle is self-reinforcing, because if assets didn’t get expensive they’d offer big
returns, and offering big returns attracts capital, which makes them expensive. That’s why cycles
are everywhere and we can never get rid of them.¶ To me a bubble is when this cycle breaks. I have my own definition: It’s only a bubble
if return prospects don’t improve after prices fall. It’s when an asset class offers you no hope of recovery, ever. This only happens when the entire premise of an investment goes
up in smoke.¶ That was true of a lot of dot-com stocks, which weren’t bargains after they fell 90% because there was still no tangible company backing them up. It was true of
homes in the mid-2000s, because you stood no chance of enjoying a recovery if you were foreclosed on. It was true of Holland’s 1600s tulip bubble, as the entire idea that tulips
had any value went up in smoke.¶ But it wasn’t true of stocks in 2007. Yes, the market fell 50%. But that made it so cheap – particularly compared to the alternative of bonds –
that buyers instantly came rushing back in. Prices hit a new all-time high by 2013.¶ It wasn’t true of the crash of 1987, when stocks fell 25% in one day, but were back at all-time
highs within 18 months.¶ I don’t even think it was true for stocks in 1929. Yes, shares fell almost 90% by 1932. But business wasn’t broken, and valuations had never been
cheaper after the crash. Adjusted for inflation and dividends, stocks were back at a new all-time high by 1936, seven years after the peak.¶ I wouldn’t call those bubbles. Prices
went down and then came back up in a few years. What did you expect them to do? Go up 1% a month forever? Ha! It never works that way, and it never will. What we
experienced were cycles, albeit huge ones.¶ This is an important distinction to make, because whether something is a bubble or not impacts how you invest and respond to

Cycles, by and large, shouldn’t, because

market changes.¶ Bubbles should be avoided, because you risk widespread permanent loss of capital.

all they imply is that you have to be patient and humble to earn long-term returns, which is par
for the course for successful investing.¶ If you find an asset whose price looks expensive and is
probably going to fall, you likely haven’t found a bubble. You’ve found capitalism. Excesses will
correct, recover, and life will go on.¶ But that raises a question: If we know cycles are regular, why not try to get ahead of them by buying and selling
before they turn?¶ Because regular does not mean predictable.¶ We can say, in hindsight, that you should have sold stocks in 1999 and repurchased them in 2002. We can say, in
hindsight, that you should have gotten out of the market in 1929 and bought back in in 1932. But not one person in a million actually achieved this, which should make us
question how feasible it is do it in the future. Look at the returns of macro hedge funds, which try to ride the ups and downs of cycles and bubbles. You would not wish them
 The investing world becomes a lot less scary when you view most booms and busts
upon your worst enemy.¶

as cycles rather than bubbles . Will things ebb and flow, sometimes by a lot? Well, yeah. That’s what you signed up for as an investor. But is
everything with a valuation above its historic average a civilization-shattering bubble? Not by a
long shot .¶ Three years ago Robert Shiller won the Nobel Prize in economics for his work spotting bubbles .
He shared the prize with Eugene Fama, who emphatically states that bubbles can’t be spotted,
and are only obvious with hindsight.

Healthcare stock growth is sustainable---mergers, new drugs, and

growing demand means fears of a bubble are overblown
ZER 15---Zacks Equity Research. 9/8/15, “Healthcare Boom a Bubble? 4 Stocks to Buy
Anyway” https://www.zacks.com/stock/news/189222/healthcare-boom-a-bubble-4-stocks-to-
buy-anyway
Thanks to Obamacare, investors have been overly upbeat about the dramatic exuberance seen of late in the U.S. healthcare sector.
But it’s time we question the rationality of this tremendous upsurge. More specifically, is
everything a boom out here or is it just a bubble?
Healthcare stocks have skyrocketed 136% in the last 5 years, the finest performance of any sector in this
period. Although the broader market indexes have hit their all-time highs during this period, the pace of increase in healthcare
stocks makes the S&P 500’s gain (73%) look like child’s play. What's more impressive is that even in this phase of massive global
sell-offs, the sector has not only held its own but also maintained a stable uptrend.

"You really have some powerful long-term tailwinds, including innovation and the aging of the population which can continue to
drive the stocks higher," according to Marshall Gordon, senior research analyst at ClearBridge Investments.

While instances of innovations are embodied in Gilead’s (GILD - Free Report) blockbuster hepatitis C virus drugs, Harvoni and
Sovaldi, which have occupied the market in a controlling way leading to the rise in the stock price to a ‘never-before’ level, we can
also find the healthcare stock index behavior absolutely rational when we consider the much talked about reforms that have opened
access to healthcare services for many an American.

The “Disputers”

There are some economists belonging to the opposite camp. They believe that the contraction has already started to creep
in from late 2014, especially in the field of biotech. Economic analyst and Forbes contributor Jesse Colombo asserts that, “Though
everyone is aware of the perpetually rising cost of healthcare, virtually nobody has connected the dots and realized that
healthcare has become the ultimate bubble that will put the housing bubble to shame.”
These economists believe that the affordable care act has already driven the stocks to their maximum potential and even beyond, not
always supported by sound fundamentals. The pendulum is now gathering momentum to swing in the other direction.

They’re apprehensive about rising healthcare costs to an unrealistic level, outstripping wage growth and the rate of inflation. This
has forced many Americans to back out from enrolling themselves under incredibly expensive health insurance benefits. It has
resulted in reduced doctors’ visit even for essential treatments.

No discussion on the healthcare cost racket is complete without mentioning the overpaid treatments of American doctors and of
course the hospitals. The profits for hospitals have hit the roof in recent years by overcharging insurers and patients alike. Although,
the CBO (Congressional Budget Office) has recently asserted about health insurance subsidies and the rising per-beneficiary cost of
healthcare that will boost healthcare spending over the next decade, the near-term outlook is still bleak.

Time to Run Away?

In the face of such odds, is a massive sell-off in the cards with the sector approaching an
absolute bear territory? Before we scurry in panic let’s realize that there are no dearth of drivers
for the space. The merger and acquisition trend, encouraging industry fundamentals, promising
new drugs, growing demand in emerging markets, ever-increasing healthcare spending and
Obamacare play major roles to make it a lucrative bet over the long term.
The Winning Strategy

We have shortlisted healthcare stocks that have impressive yet sustainable growth prospects.