Today’s Policy Agenda: Medicare Advantage May Be Worth It

Even a small percentage of kids not getting vaccinated could resurrect infectious diseases.

At FiveThirtyEight, Emily Oster shows why vaccination rates of 95 percent may not be enough to protect communities against some diseases. Oster reviewed National Immunization Survey results to compare vaccination rates with instances of Pertussis (commonly known as whooping cough), a potentially deadly infection of the lungs common in infants. She found that lower vaccinations rates were correlated with higher infection rates, even when looking at vaccination rates in the 95 to 99 percent range:

But this doesn’t quite add up: Epidemiology suggests that having a 95 percent vaccination rate is enough to keep a disease extremely rare, thanks to something called “herd immunity.” So Oster hypothesizes that the issue is, understandably, that some places within states have worse-than-average vaccination rates, so states with 95 percent vaccination rates overall have, say, more local communities with below 95 percent rates than 99-percent-vaccinated states.

So Oster looked at Pertussis vaccination rates in counties across the state of California, and the differences in infection rates are stark: Infection rates in the counties with vaccination rates of between 77 and 86 percent are about three times higher than rates in counties with at least a 94 percent vaccination rate. And the fact that such places exist even when all U.S. states have objectively high state vaccination rates for Pertussis means that individual vaccinations are still important. Oster summarizes:

For parents, this information would seem to caution against reliance on herd immunity. Yes, if your county (or better, your neighborhood) has a 99 percent vaccination rate, you’re probably safe. But knowing that your state vaccination rate is 95 percent really isn’t enough. For the vast majority of people, there is absolutely no medical reason not to vaccinate, and the idea that there are no benefits is foolish.

The low near 6 percent unemployment rate masks a big problem: underemployment.

Bloomberg’s Jeff Kearnes and Jenna Smialek report that millions of part-time workers are looking for full time work, but can’t find it:

The high share of workers who are part time for economic reasons is one reason that the Labor Department’s broadest measure of unemployment remains far above its 8.8 percent pre-recession level. U6 unemployment, which includes involuntarily part time and discouraged job seekers in addition to the jobless, is 12.2 percent, or almost double the 6.2 percent level of the main unemployment rate. Both increased by 0.1 percentage point in July from five-year lows in June. 

About 7.5 million Americans are working part-time for economic reasons, which is down from a high of over 9 million in March 2010. But before the recession, fewer than 5 million part-time workers were looking for full-time work. The high involuntary unemployment rate indicates that, even with the total unemployment rate at just 6.2 percent, the labor market still has a long way to go in terms of recovery.

Federal Reserve Chief Janet Yellen has said that the Fed will take the involuntary part time employment rate into consideration when deciding when to raise interest rates. Economists currently predict rates will begin rising in the third quarter of next year, reaching 1.13 percent by the end of 2015, but it’s not clear if the underemployment problem will be much better by then.

Medicare Advantage costs more, but it could be a good investment.

At the Upshot, Austin Frakt discusses whether or not Medicare Advantage is a good use of taxpayer money. Medicare Advantage, a private managed-care alternative, costs 6 percent more than traditional Medicare, and the amount of seniors who choose Medicare Advantage plans has nearly tripled since 2005, more than doubling as a share of Medicare beneficiaries:

Studies show, Frakt points out, that Medicare Advantage out performs traditional Medicare on several measures: Patients are more likely to get important vaccinations and various screenings for health problems they’re predispositioned to experience. And, the HMOs that provide Medicare Advantage plans have an incentive to use high-quality providers and provide such services because keeping their enrollees healthy can save them money down the road — and Medicare advantage enrollees tend to stick with their plans.

Is the extra spending on Medicare Advantage actually a good investment? Frakt reports that, for now, some health economists who have researched the topic cautiously say that Medicare Advantage is probably worth it, noting that opposition to its slightly higher upfront costs may be short-sighted. (Moreover, Medicare Advantage, if payments were structured somewhat differently, could cost noticeably less than it does now – for a theoretical and delicious explanation of why that’s the case, Reihan has a cheeseburger analogy here, and James Capretta and Yuval Levin lay out how a Journal of American Medicine Study found such savings.)

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