Month: June 2022

A Third of States Lost Population in 2021

Mary Pat Campbell

Link: https://www.pewtrusts.org/en/research-and-analysis/articles/2022/04/25/a-third-of-states-lost-population-in-2021

Graphic:

Excerpt:

Among the 17 states where population declined over the year, losses were greatest in New York (-1.58%), Illinois (-0.89%), Hawaii (-0.71%) and California (-0.66%). Losses in these states were driven by people moving away.

Four states experienced population declines because more people moved out than in, and more people died than were born: Massachusetts, Mississippi, Michigan, and New Mexico. The data does not separate deaths related to COVID-19 from others.

Aside from states with declines, population grew slower over the year than over the 2010-20 period in 19 states. Among them, Washington, Colorado, and Oregon experienced the biggest slowdown in growth compared with their decade-long pace.

After Idaho and Utah, population grew the fastest in Montana (1.66%), Arizona (1.37%), South Carolina (1.17%), Delaware (1.16%), and Texas (1.06%). Gains in each came mostly from new residents moving into the state.

Fourteen states grew more quickly than their 10-year paces. Idaho, Montana, Maine and New Hampshire sped up the most.

Nationwide, gains from international migration exceeded gains from the natural increase in 2021. It was the first time that newcomers from other countries contributed more to population growth than gains from births in a given year, according to the U.S. Census Bureau.

Author(s): Joanna Biernacka-Lievestro & Alexandre Fall

Publication Date: 12 May 2022

Publication Site: Pew

Top 10 Medicare Bills Introduced in 2022

Mary Pat Campbell

Link: https://www.thinkadvisor.com/2022/04/28/top-10-medicare-bills-introduced-in-2022/

Excerpt:

Here’s a look at the top-performing Medicare bills introduced since Jan. 1.

We searched Congress.gov for new Medicare bills, then ranked the bills based on co-sponsorship bipartisanship and numbers.

Some of these bills could pass on their own. Others could surface as provisions in much larger bills, such as a Ukraine aid bill or a COVID-19 pandemic response funding bill.

What It Means

These measures seem to have the legislative mojo to go places.

Each sponsor has managed to overcome the current hostility between Republicans and Democrats and persuade at least one member of the opposite party to sign on as a co-sponsor.

Author(s): Allison Bell

Publication Date: 28 April 2022

Publication Site: Think Advisor

Status of the Social Security and Medicare Programs

Mary Pat Campbell

Link: https://www.ssa.gov/OACT/TRSUM/index.html

Graphic:

Excerpt:

• The Old-Age and Survivors Insurance (OASI) Trust Fund, which pays retirement and survivors benefits, will be able to pay scheduled benefits on a timely basis until 2034, one year later than reported last year. At that time, the fund’s reserves will become depleted and continuing tax income will be sufficient to pay 77 percent of scheduled benefits.

• The Disability Insurance (DI) Trust Fund, which pays disability benefits, is no longer projected to be depleted within the 75-year projection period. By comparison, last year’s report projected that it would be able to pay scheduled benefits only until 2057.

• The OASI and DI funds are separate entities under law. The report also presents information that combines the reserves of these two funds in order to illustrate the actuarial status of the Social Security program as a whole. The hypothetical combined OASI and DI funds would be able to pay scheduled benefits on a timely basis until 2035, one year later than reported last year. At that time, the combined funds’ reserves will become depleted and continuing tax income will be sufficient to pay 80 percent of scheduled benefits.

• The Hospital Insurance (HI) Trust Fund, or Medicare Part A, which helps pay for services such as inpatient hospital care, will be able to pay scheduled benefits until 2028, two years later than reported last year. At that time, the fund’s reserves will become depleted and continuing total program income will be sufficient to pay 90 percent of total scheduled benefits.

• The Supplemental Medical Insurance (SMI) Trust Fund is adequately financed into the indefinite future because current law provides financing from general revenues and beneficiary premiums each year to meet the next year’s expected costs. Due to these funding provisions and the rapid growth of its costs, SMI will place steadily increasing demands on both taxpayers and beneficiaries.

• For the sixth consecutive year, the Trustees are issuing a determination of projected excess general revenue Medicare funding, as is required by law whenever annual tax and premium revenues of the combined Medicare funds will be below 55 percent of projected combined annual outlays within the next 7 fiscal years. Under the law, two such consecutive determinations of projected excess general revenue consitute a “Medicare funding warning.” Under current law and the Trustees’ projections, such determinations and warnings will recur every year through the 75-year projection period.

Publication Date: accessed 9 June 2022

Publication Site: Social Security Administration

Geico ordered to pay $5.2M to woman who got HPV in a car

Mary Pat Campbell

Link: https://www.autoblog.com/2022/06/08/insurance-company-payout-hpv-car-sex/

Excerpt:

Per The Kansas City Star, the woman initiated a claim with Geico in February 2021 after learning that she’d contracted the sexually transmitted infection from a partner who knew but did not disclose his status. Since the incident in question happened in her partner’s car, she argued that his liability insurance was responsible for damages. A settlement was reportedly offered to Geico, whose lawyers declined. As anybody who’s had legal entanglements with an insurance company can probably guess, the case went to arbitration.

In what we’re certain was a surprise to Geico’s legal team, arbitration did not go their way. The woman’s partner was found liable and the arbitrator approved an award of $5.2 million in damages to be paid out by the insurer despite requests by Geico for a new hearing. The insurance company appealed to the courts on several grounds, claiming that the process denied it the ability to have its day in court. The company’s appeal was denied on all points.

Author(s): Byron Hurd

Publication Date: 8 June 2022

Publication Site: Autoblog

Beyond Insurance

Mary Pat Campbell

Link: https://www.youtube.com/watch?v=_Ba5wBGeUBk&t=1s&ab_channel=DominicLee

Video:

Description:

In a groundbreaking TED-style talk, Dominic Lee, ACAS takes the audience on a multisensory journey beyond the boundaries of traditional insurance. He presents a framework for the actuarial profession to step into the future and claim its rightful place as a dominant force in the world of risk: Reimagine, Embrace and Explore.

Author(s): Dominic Lee, ACAS

Publication Date: 6 July 2021

Publication Site: YouTube

What happens when the public health emergency associated with COVID-19 ends?

Mary Pat Campbell

Link: https://contingencies.org/the-great-unwinding/

Excerpt:

The ongoing COVID-19 pandemic has now spanned three years. A lot has changed and will continue to change once society and every industry, especially health care, adjusts to the new post-COVID world. With the pandemic, a federal public health emergency (PHE) was declared, and legislation was then passed that had a major impact on how health care is administered from both an operational and financial perspective. Many temporary provisions were put into place that mostly impact Medicaid but ultimately affect all health insurance payers. As we look ahead to a point at which the PHE ends, those temporary provisions start to end in what many in the industry are calling the “unwinding of the PHE.” This article aims to provide an overview of the flexibilities that have been offered as a result of legislation tied to the PHE, examine the impacts of increased Medicaid enrollment, and assess how the risk profile of covered lives for all health insurance payers has changed.

The PHE that has been in effect because of the virus SARS-CoV-2 (which causes the disease COVID-19, or simply COVID), was declared on March 12, 2020, retroactively effective as of Jan. 31, 2020. 

….

Where does this leave us now? At the time of this writing, the PHE is under its ninth renewal (90-day extensions) and is set to expire July 15, 2022. HHS has previously informed states that at least 60 days’ notice will be provided, which means the end of the PHE will occur July 2022 or later. States receive the additional FMAP bump through the end of the quarter in which the PHE ends, which is slated to be Sept. 30, 2022. Before the omicron wave, many thought the PHE would end in early 2022. Popular opinion seems to have shifted to a later time period, with mid-to-late 2022 being the likely end of the PHE. Any continued uncertainty with the pandemic, such as another wave of cases, is likely to extend the PHE.

As we get close to the end of the PHE though, the focus shifts from case counts and test kits to the virus becoming endemic and moving past the PHE. This puts, front and center, the unwinding of all of the operational and financial elements that have been tied to the PHE since FFCRA was passed. When the unwinding starts, it will radically change the risk profile of Medicaid and all other health payors. Measuring and mitigating against this changing risk profile is where the nature of our profession as actuaries becomes critical. The biggest driver in the changing risk profile is the enrollment growth that has occurred with Medicaid since the pandemic began, as a number of these new members are at risk of losing their coverage.

Author(s): Colby Schaeffer

Publication Date: May/June 2022

Publication Site: Contingencies

Providence voters back $515m pension bond in low-turnout election

Mary Pat Campbell

Link: https://www.bostonglobe.com/2022/06/07/metro/providence-voters-back-515m-pension-bond-low-turnout-election/

Excerpt:

Fewer than 3,600 city voters on Tuesday backed Mayor Jorge Elorza’s proposal to borrow $515 million to shore up Providence’s ailing pension fund, according to unofficial results from the Board of Canvassers.

But even fewer voted against the bond.

In a special election that saw just 4 percent of the Providence’s 124,000 registered voters participate, the $515 million pension obligation bond won approval by a wide margin, with 70 percent supporting the proposal.

The plan still needs to be approved by the state Senate, but Tuesday’s vote dramatically increased the likelihood that Providence will be allowed to borrow $515 million and deposit the proceeds into the retirement system to invest.

Elorza has said the infusion of cash from the bond will allow the city to stabilize its pension fund, which has just 26 percent of the $1.6 billion it needs to pay current and future retirees over the next several decades, according to the city’s financial records.

Publication Date: 7 June 2022

Publication Site: Boston Globe

The EEOC wants to make AI hiring fairer for people with disabilities

Mary Pat Campbell

Link: https://www.brookings.edu/blog/techtank/2022/05/26/the-eeoc-wants-to-make-ai-hiring-fairer-for-people-with-disabilities/

Excerpt:

That hiring algorithms can disadvantage people with disabilities is not exactly new information. In 2019, for my first piece at the Brookings Institution, I wrote about how automated interview software is definitionally discriminatory against people with disabilities. In a broader 2018 review of hiring algorithms, the technology advocacy nonprofit Upturn concluded that “without active measures to mitigate them, bias will arise in predictive hiring tools by default” and later notes this is especially true for those with disabilities. In their own report on this topic, the Center for Democracy and Technology found that these algorithms have “risk of discrimination written invisibly into their codes” and for “people with disabilities, those risks can be profound.” This is to say that there has long been broad consensus among experts that algorithmic hiring technologies are often harmful to people with disabilities, and that given that as many as 80% of businesses now use these tools, this problem warrants government intervention.

….

The EEOC’s concerns are largely focused on two problematic outcomes: (1) algorithmic hiring tools inappropriately punish people with disabilities; and (2) people with disabilities are dissuaded from an application process due to inaccessible digital assessments.

Illegally “screening out” people with disabilities

First, the guidance clarifies what constitutes illegally “screening out” a person with a disability from the hiring process. The new EEOC guidance presents any disadvantaging effect of an algorithmic decision against a person with a disability as a violation of the ADA, assuming the person can perform the job with legally required reasonable accommodations. In this interpretation, the EEOC is saying it is not enough to hire candidates with disabilities in the same proportion as people without disabilities. This differs from EEOC criteria for race, religion, sex, and national origin, which says that selecting candidates at a significantly lower rate from a selected group (say, less than 80% as many women as men) constitutes illegal discrimination.

Author(s): Alex Engler

Publication Date: 26 May 2022

Publication Site: Brookings

Legacy Debt in Public Pensions: A New Approach

Mary Pat Campbell

Link: https://crr.bc.edu/briefs/legacy-debt-in-public-pensions-a-new-approach/

Graphic:

Excerpt:

The inclusion of “legacy debt” – unfunded liabilities from long ago – with current liabilities impedes effective pension policy.

A new approach would separate legacy debt from other unfunded liabilities in order to:

spread the legacy cost over multiple generations; and

properly identify fixed vs. variable costs.

It would also use the municipal bond yield – rather than the assumed return on assets – to calculate liabilities and required contributions.

This approach, by properly allocating costs, would improve intergenerational fairness, government resource decisions, and public credibility.

Author(s): Jean-Pierre Aubry

Publication Date: June 2022

Publication Site: Center for Retirement Research at Boston College

The Empire of Fees

Mary Pat Campbell

Link: https://www.city-journal.org/how-charges-and-fines-drive-government-growth

Excerpt:

hen I wake up in the morning at my home in Austin, Texas, I turn on the lights, and thereby provide a few cents to the city government’s electric company. I flush the toilet, owing a few more to Austin’s sewer service. When I pour myself a glass of water, the city water department gets a piece. After I get dressed and step outside, I watch the city take my trash, my recycling, and my compost—each pickup costs a few dollars. Sometimes, I discover a $25 ticket for parking my car in the wrong spot. Then I swallow my anger and drive down the MoPac highway, where I pay a toll to the Central Texas Regional Mobility Authority. I park in a garage downtown owned by the Austin Transportation Department, pay them a few bucks, and walk to my office. If I need to take a trip out of town, I pay $1.25 for a Capital Metro District bus to the city-owned Austin-Bergstrom International Airport, where, along with the price of my plane ticket, I pay a $5.60 fee for the benefit of being patted down by a TSA agent, a Passenger Facility Charge, and a small part in any rents the city charges restaurants and retailers. Only when I’m in the air does the drain to the government stop.

In one typical morning, I handed over money to several government bodies. But I didn’t pay any taxes—only fees, charges, and fines. These are the future of government in the United States.

The idea that government operates just by taxing and spending money is anachronistic. A growing share of its revenue comes from charges that the government imposes in exchange for its services or as a penalty for breaking its rules. In 1950, about 1 percent of Americans’ income went to charges from state and local governments. Today, that number is 4 percent. Include federal fees and charges, themselves the fastest-growing part of federal revenue, and that number rises to over 5.5 percent. Though largely hidden from the public, fees and charges account for most of the growth in government over the past 70 years and have become the top source of revenue for state and local governments.

Author(s): Judge Glock

Publication Date: Spring 2022

Publication Site: City Journal

Jacksonville’s public pension reform helps the city get an improved credit rating

Mary Pat Campbell

Link: https://reason.org/commentary/jacksonvilles-public-pension-reform-helps-the-city-get-an-improved-credit-rating/

Excerpt:

The city of Jacksonville is about to enjoy the benefits of a credit rating boost. Moody’s Investors Service moved the Florida city’s credit rating to Aa2 from Aa3, citing pension reform among the main reasons for the upgrade. The credit rating increase will allow the state to borrow funds at a lower interest rate and invest in more infrastructure and public services. 

Five years ago, the Jacksonville City Council approved a pension reform package while enacting innovative changes, reducing debt by more than $585 million and adding over $155 million to pension reserves. A key element of the pension reform that led to reduced debt was closing the city’s three pension plans to new public employees in 2017. Since that change was put in place, over $715 million has been used to grow Jacksonville’s economy and invest in public services for its population. In addition, credit rating agencies, such as Moody’s, assign “grades” to governments’ ability and willingness to service their bond obligations, taking into consideration the jurisdiction’s economic situation and fiscal management. Since the pension reform reduced budgetary pressure, it improved the chances of the city getting a credit upgrade. 

Author(s): Jen Sidorova

Publication Date: 1 Jun 2022

Publication Site: Reason

Court Rejects Legal Challenge to Illinois Pension Consolidation

Mary Pat Campbell

Link: https://www.ai-cio.com/news/court-rejects-legal-challenge-to-illinois-pension-consolidation/

Excerpt:

An Illinois Circuit Court judge has denied a lawsuit that sought to stop the consolidation of the state’s 650 firefighter and police officer pension funds, rejecting the plaintiff’s claims that a law enacting the move violated the state’s constitution.

In 2019, the Illinois General Assembly passed a bill that allows for the consolidation of 650 police and firefighter pensions in order to pool their funds into two statewide funds for investment purposes—one for police and one for firefighters. The move is intended to help improve the financial stability of the pension funds and ease pressure on local governments to raise taxes to fund those pensions.

However, in February 2021 18 police and firefighter pension funds, including active and retired members, filed a complaint against Illinois Governor J. B. Pritzker, who signed the bill into law. The lawsuit alleged that the consolidation violates two provisions of the Illinois Constitution: the pension protection clause and the takings clause.

The plaintiffs claimed that they had a contractual and enforceable right to exclusively manage and control their investment expenditures and income, including interest dividends, capital gains and other distributions on investments, which they said the consolidation infringed upon.

Author(s): Michael Katz

Publication Date: 27 May 2022

Publication Site: ai-CIO