Power Play

One of the worst consequences of America’s long Presidential election is that the issue of Clean and Renewable Energy Technologies became terribly politicized. An area where America’s two largest political parties should have naturally found common ground to work together, instead became frightfully polarizing owing to a combination of mutual vote-bank politics and bungling. Regardless of who wins next week’s contest, public policy initiatives in cleantech will suffer in the short and medium term from these debacles.

To make matters worse, a wave of high profile failures particularly in the solar and battery technology sector are contributing towards a bearish market sentiment to domestic cleantech investing.

However global trends emphatically indicate an increasing desire particularly in the developing world to move away from hydrocarbon dependence, leaving the door open for American companies with their strong advantage in high-tech R&D to capitalize despite domestic sluggishness.

India is already becoming a hub for cleantech innovation with both extensive economic linkages to both the United States and emerging markets in Asia. Despite its sometimes  glacial bureaucracy, India is coming out all barrels firing on massive development of solar grids, deployment of electric vehicles, and sweeping away its archaic power infrastructure.

Last month India’s government approved a $4B plan to spur both electric vehicle production over the next seven years with a target of putting over six million all electric vehicles on the road. This is in concert with over 3 gigawatts of solar power expected to be installed in India over the next four years. Much of this is expected to come from American companies such as First Solar.

Simply put, all American solar and renewable energy companies, NEED an India strategy. Moreover the American legislature needs to be supportive of companies doing business in India. In this current economic environment the jobs and export income from healthy cross border trade is too precious to be sacrificed for political expediency.

Health Care in the Presidential Debates

Guest post by Amit Rao

Understanding the health care policy claims made by President Obama and Governor Romney during the first presidential debate.

Americans tuning in to the first presidential debate on October 3, 2012, saw President Obama and Governor Romney clash over a variety of domestic issues. On health care, one of the major policy areas debated, both candidates sought to draw stark contrasts on Medicaid, Medicare, the Patient Protection and Affordable Care Act (PPACA), and rising health costs. This blog post provides general background on the health policy claims made by both candidates, concentrated around the following main questions:

What does Governor Romney’s proposal to block grant Medicaid to the states mean?

  • President Obama and Governor Romney began their health care discussion by disagreeing on Medicaid, the public insurance program that covers over 60 million low-income individuals.
  • President Obama argued that Governor Romney’s plan to replace Medicaid with block grants would cause a “30 percent cut in Medicaid over time,” cutting crucial care for children with disabilities and seniors in nursing homes.
  • Governor Romney responded, claiming Medicaid block grants – which essentially give states federal funding to freely manage their own Medicaid program’s eligibility and benefits – would enable state Governors to explore new ways to restrain costs while still caring for the poor. He stated his proposal would allocate to the states the same funding they receive now, set to grow at a rate of inflation plus one percent.

Compared to Medicaid’s current federal-state structure, in which the federal government establishes baseline requirements and provides unlimited matching funds, Governor Romney’s plan would enact significant changes to the program’s benefits and funding. Under a block grant system, states are given a fixed payment and increased flexibility to manage their Medicaid programs.  Governor Romney’s block grant proposal would reduce federal funding for state Medicaid programs over time. The Congressional Budget Office (CBO) estimates that, under the  block grant proposal specified by vice presidential candidate Representative Paul Ryan’s (R-WI) plan, the amount of money spent on Medicaid would drop from 2 percent of GDP in 2011 to 1.25 percent by 2030 and then further to 1 percent by 2050.

If states are unable to achieve significant efficiency gains through the unrestricted block grants, the reduction in federal funding could force states to increase their own share of spending, make considerable cutbacks to benefits, or both. As the CBO notes, “cutbacks might involve reduced eligibility for Medicaid, coverage of fewer services, lower payments to providers, or increased cost-sharing by beneficiaries – all of which would reduce access to care” for Medicaid enrollees, composed of half children, one quarter working parents, and one quarter seniors and people with disabilities.

The Centers for Medicare and Medicaid Services (CMS) projects that Medicaid expenditures will grow at an average annual rate of 8.1 percent over the next 10 years. This growth rate is due in part to the expansion of the Medicaid program in PPACA.  If all states choose to expand their Medicaid program, Medicaid spending will increase by $564 billion between 2014 and 2020, and nearly 26 million people will be newly enrolled in the program by 2020.

Governor Romney’s plan calls for state waivers to replace PPACA. To what extent Medicaid would or could expand under these state waivers is unknown.

What impacts will President Obama’s $716 billion in Medicare cuts have on the program’s sustainability?

  • President Obama first brought up the oft-debated $716 billion cut to Medicare from PPACA, stating that the cost savings came from “no longer overpaying insurance companies… and providers.”
  • Governor Romney countered that the $716 billion in Medicare reductions would come from care to current beneficiaries.

The PPACA implements $716 billion in reductions to Medicare’s future payments to insurers and providers over the period of 2013 to 2022. These reductions do not target current retirees’ benefits or eligibility – the PPACA actually increased Medicare recipient benefits for preventive care and prescription drugs. Instead, the cuts focus on reducing payments to private insurers given through Medicare Advantage. According to the Medicare Payment Advisory Committee, Medicare Advantage plans are reimbursed at a rate of 114 percent of traditional Medicare’s costs per beneficiary. PPACA also reduces Medicare reimbursements to hospitals, insurance companies, and drug manufacturers. Under these reductions, the federal government’s total spending on Medicare will still increase annually, but at a slower rate than before.

While these changes do not directly affect beneficiaries, Governor Romney is correct that some providers may stop serving Medicare patients because of the reduced reimbursement rates. The proportion of providers likely to respond this way is not known. Almost all doctors currently accept Medicare patients, in spite of receiving lower reimbursement rates than from private beneficiaries, because of the vast pool of seniors the program supports.

For Medicare’s long-term sustainability, repealing the $716 billion in reductions to the program’s future payment growth would cause the Medicare Part A trust fund (which provides for inpatient care) to become insolvent approximately eight years sooner, in 2016 instead of 2024. Reinstating the higher payment rates to providers and insurers would increase the amount Medicare spends each year, and thus deplete the trust fund more quickly.

Do PPACA’s regulations and Independent Payment Advisory Board (IPAB) constitute a “government takeover?”

  • Governor Romney accused President Obama of enacting a “federal government takeover of health care” through his reform law, by mandating to providers what care they must provide and instituting an unelected board to tell people what kind of treatments they can have.
  • President Obama denied the assertion, emphasizing that PPACA strengthens private insurance by instituting consumer protections and expanding access and that the law explicitly prohibits the board Governor Romney referred to from making decisions about what treatments are given.

PPACA does increase the federal government’s role in health care, primarily through the (now optional) expansion of Medicaid. In addition, the law enacts a variety of regulations that insurance companies and providers must follow, such as extending coverage to those with preexisting conditions, eliminating annual and lifetime caps on care, and requiring large group insurers to spend at least 85 percent of premium dollars towards direct medical care.

Though PPACA significantly increases government regulatory control over the insurance market, the law relies predominantly on private sector infrastructure to extend health insurance coverage.  PPACA requires all non-Medicare or Medicaid eligible Americans to purchase private insurance, and provides subsidies to help low-income Americans afford coverage. In doing so, the law directs millions of new customers to private insurance companies.

PPACA does call for the creation of an Independent Panel Advisory Board (IPAB), to “reduce the per capita rate of growth in Medicare spending.” Governor Romney rightly states that this board of health care experts is unelected, but all 15 members must be first appointed by the President and confirmed by the Senate. Contrary to Governor Romney’s assertion, however, the law specifically states that IPAB cannot deny health care treatments to beneficiaries. Instead, IPAB must make recommendations to Congress to restrain Medicare spending that do not affect beneficiaries. Congress can implement cost control measures to replace IPAB’s recommendations.

What effects has PPACA had on health insurance premiums?

  • Governor Romney argued that because of President Obama’s reforms, health care costs have gone up by $2,500 per family.
  • President Obama countered that while health care premiums have increased, they have gone up slower over the last two years than any point in the last 50 years – implying that this trend occurred because of his health reforms.

Both candidates were partially accurate on their remarks regarding rising health care premiums. Health care costs have continued to rise each year under President Obama, but not primarily because of his policies. According to the Kaiser Family Foundation’s annual survey of health care costs, since 2009 the average family’s health insurance premiums have increased $1,698, due to the rising cost of health care. Such trends have persisted for decades, with average family health insurance premiums rising 97 percent since 2002. Studies show that PPACA has had some impact on rising health care costs since 2010, although minimal. The law’s consumer protections have been found to increase premiums, relatively modestly for employer plans and slightly more significantly for individual plans, but in return consumers are receiving more robust benefits.

While still rising, it is true that the rate of health care cost growth has lessened over the past two years. Health Affairs reports in January 2012 that health spending increased more slowly over the past two years than in another other window over the past 50 years, at rates of 3.8 and 3.9 percent respectively. This has not occurred predominantly because of PPACA, as the law’s main provisions do not take effect until 2014. Instead, experts attribute the slowing of health care cost growth mainly to consequences of the recession and changing behaviors by consumers and providers that have reduced the overall use of health care goods and services. Read more about the drivers of health care cost growth here.

With the rising prominence of health care issues in the 2012 presidential election, understanding the context behind the candidates’ claims is vital for deciding between their dueling visions for health policy.

Full transcript of the presidential debate is available here.

About the Author:

Amit Rao currently works on development and health policy in Washington, D.C. Prior to moving to D.C., Rao graduated from the University of North Carolina with a Bachelor of Arts degree in political science and philosophy and a minor in public policy. All views expressed here are strictly his own.

The Crazy Lone Gunman

Guest post by Inderpal Singh Mumick

Another senseless shooting, this one in Oak Creek, Wisconsin. Every few weeks or months there seems to be a random shooting somewhere in America. The story line never seems to change much. A “sick” person, acting alone, decides to take the lives of many. In July, twenty people met an untimely end in Aurora, CO. Their “fault” – wanting to see the first showing of the latest batman movie. A year ago, Gabrielle Giffords was injured, and six innocent victims died just because they came to meet with her. And last month, Oak Creek upped the ante further by taking the unjustified, cold-blooded shootings to a place of worship. Six people are dead simply because they went to pray at a Gurudwara (Sikh place of worship).

Personally, the tragedy hit home like none other to date. This was a shooting in a Gurudwara, the place I go for peace. Much more than just a place to pray, the Gurudwara is a part of life. When our first son was born, my wife and I went to the Bridgewater Gurudwara to ask for God’s blessing, and to find out the first letter of his name, as is customary in Sikhism. The Guru Granth (holy book of the Sikhs) opened to a page starting with “K”, and we named him Kieraj. When our girl was born, we did the same (“R” led to Ruhani), and repeated it for our youngest son (“S” became Saran).

Was it an attack on the Sikhs, and our way of living? Were Sikhs being discriminated because of our unique identity? Sikh men wear turbans, and all Sikhs do not cut their hair. Was it meant to be an attack on Muslims? Many people in the western world confuse Sikhs to be Muslims. Either way, it was an attack on a place of worship, and an attack on one place of worship is an attack on every place of worship.

As a society, we need to reflect on what is going on in our beloved country that is leading to such hatred, craziness, and terror, so that we can find ways to prevent more tragedies.

I know I speak for my whole community when I say that our hearts go out to the innocent victims who gave up their lives on that unfortunate day, and to Lt. Murphy who acted with valor, and did not hesitate to protect his fellow Americans though they looked different from many other Americans, and worshipped in a different way. May WaheGuru (God) bring a speedy and painless recovery to him, and to the other injured individuals who are hospitalized.

The only way we can move forward is to think of the positive. One positive outcome of this horrid event is that various communities have come together like never before. The pastors, the bishops, the imams, the monks, the rabbis, and the community leaders have all shared the pulpit to deplore the violence and to ask for tolerance and love.

However, coming together is not enough. Education is the key to preventing future tragedies. We need to educate our law enforcement officers, the TSA, the airlines staff, the judiciary, the armed forces, the legislatures, and the teachers. Most of all, we need to educate school children and others in the younger generation. It is the younger generation that has the power to ensure that peace and tolerance will push out hate and ignorance. In Berkeley Heights, NJ, where I live, students are assigned a project in middle school where each student researches one religion, and presents it to the class. They make posters and powerpoints to share their learning. My two sons were the only Sikh boys in their middle school and therefore looked different from everyone else; yet they have been well assimilated into the school and into the community. Our daughter has just been elected President of her class. Kudos to Ms. Judith Rattner, the superintendent, and Mr. Frank Geiger, the principal of the middle school. I encourage every school in the country to adopt such a project in their curriculum so that they can foster a positive and tolerant environment.

Sikhs may dress differently, but are very much a part of our mainstream society. They are scientists, engineers, doctors, police officers, teachers, army men, businessmen, executives, governors, and prime ministers. The first Asian American congressman, Dalip Singh Saund, was a Sikh. Nikki Haley, the current governor of South Carolina, was born a Sikh. The current prime minister of India, Manmohan Singh, is a Sikh. Sikhs are hard working, peaceful people who believe in one god for all. Sikhs believe in equality amongst all people, regardless of race, religion, caste, and gender; thus, our Sikh values have much in common with our American values.

It is our duty as a community to eradicate the hatred that has been built against Islam, especially after 9/11. If Sikhs are being attacked because of being mistaken as Muslims, it begs the question: Why are we tolerating the hatred against Muslims? Muslims, like any other faith in this melting pot of America, have also made countless contributions to our society. Salman Khan founded Khan Academy (www.khanacademy.org), helping educate children around the world for free. All three of my children use the Khan Academy regularly, as do their friends and classmates. The most well known actor in India today is Shahrukh Khan. His blockbuster movie “My Name is Khan” is an eye opener on how Muslims feel in America, and the challenges they face.

At a memorial service in Oak Creek, WI, U.S. Attorney General Eric Holder said,
“In the recent past, too many Sikhs have been targeted and victimized simply because of who they are, how they look, and what they believe. That is wrong. It is unacceptable. And it will not be tolerated.”

The people who carry out the heinous acts are “crazy.” If they survive the attacks, as they did in Arizona and Colorado, they are declared too mentally ill to even stand trial. At the same time, these “mentally ill” people are able to purchase guns and ammunition. Why is it that a mentally ill person can buy guns and tons of ammunition? Will we give a pilot license to a mentally sick person and allow him to fly an airplane. Will we allow a pilot to keep his license if he becomes mentally ill.

Eric Holder has called for a national discussion on changing laws to prevent future shooting attacks. Should we require a certification of mental stability to buy a gun or to buy ammunition? Should there be a re-certification every few years?
Let us have a debate, and let us work to prevent future shootings by “The Crazy Lone Gunman,” who, unfortunately, has made himself a familiar presence in our society.

(This post was originally published at http://mumick.blogspot.com and has been republished here with the author’s consent.)