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Posts Tagged ‘cost of jails’

Vol. 52 October 1, 2011 Medical Costs of Prisons, Medicare Cost Projections

In current events, evidence-based medicine, government, health care reform, medical economics, politics on October 1, 2011 at 12:21 PM

Please excuse the September 15th hiatus. The cyber-devils made my website go down and it took a
while for my consultant to diagnose the problem between the website host and the domain registry.
It was more like “Who’s On First” then “Tinker to Evers to Chance”.

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25% of all Americans with HIV, 33% of Americans with hepatitis C, and 33% of all heroin users spend some time in prison. (1)

U.S. has 5% of the world’s population and 25% of the world’s prisoners. That was 2.8 million prisoners in January 2008.

40% of federal inmates have mental disorders which is 4X the rate in the general population. If you count all types of jails, the number peaks at 60%. The largest facilities housing psychiatric patients in the U.S. are jails. 7% of inmates receive mental health treatment while incarcerated.

Released prisoners are 129 times more likely to die of a drug overdose within 2 weeks of release then the general population. Most are uninsured. They are terminated by Medicaid upon incarceration and are ineligible to re-enroll upon release in most states. The Affordable Care Act permits former prisoners to receive health care coverage.

State correctional spending is the fastest-growing sector of government spending other than Medicare.

Rhode Island spends an average of $41,346 per year per inmate. That jumps to $109,026 per year per inmate for maximum security inmates. Massachusett’s average annual cost per inmate is closer to $46,000.

The $5.6 TRILLION surplus projection in 1995 that turned into a $6.2 TRILLION deficit projection was spurred in part by the $272 BILLION prescription drug coverage (Part D) and the $1.9 TRILLION tax cuts passed during George Bush’s administration (plus a couple of wars, of course). (2)

The savings in Medicare costs projected by “health care system redesign” and changes in coverage and/or benefits will have their first real effect in 2022. “People say you can’t solve the deficit problem without dealing with health care, but you can’t solve the near-term deficit problem by dealing with health care either.” (3)

Under Rep. Ryan’s proposal, if you are under 55 years old you will pay $12,500 out-of-pocket for your health care  while the government will spend $8,000  in 2022 . Under current policy that cost to you would be $6,250 with the government paying $8,500.

$500 BILLION has already been cut from Medicare costs by reducing payments to Medicare Advantage plans (HMO-like plans that studies showed did not reduce medical costs for enrollees) and to acute care hospitals (Helps explain all the recent public scrambling for “policy reviews” and pleas for help coming from many urban acute care hospitals in most states.)

Medicare is projected to consume 6% of the GDP (Gross Domestic Product) in 2035. Raising the eligibility age for Medicare from 65 to 67 in 2014 would reduce Medicare costs only about 0.4% of that 2035 GDP. (5)

If you are 65 years old today you paid an average of $150,000 in Medicare and Social Security taxes over your lifetime and will receive about $350,000 in retirement benefits. A 46-year-old under current policy will pay over $200,000 in Medicare and Social Security taxes and will receive over $500,000 in retirement benefits. (6) Hence, all the discussion about higher premiums for the affluent, restrictions on gold-plated Medigap plans, and increases in co-insurance and deductible amounts.

My Conclusions:
1. It seems to cost more to consider drug addiction a crime than to treat it as a medical disorder.
2. Medical technology will continue to improve and cost more, so be prepared to pay more taxes and/or higher premiums for your health care insurance at any age.

References:
1. Medicine and the Epidemic of Incarceration in the United States, NEJM 362;22 June 2, 2011, Rich et al
2. Money, Pat Regnier and Amanda Gengler, October 2011, p.107-115
3. Henry Aaron, economist, Brookings Institute, ibid
4. Kaiser Family Foundation, Congressional Budget Office, ibid
5. Congressional Budget Office, ibid
6. Urban Institute, ibid

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