Happy Wednesday! Today is the one-year anniversary of President Biden’s signing the CHIPS and Science Act into law, and the president marked the date with an event touting the bill’s effects and the broader gains in the economy recently. Here’s what you should know.
Biden Celebrates a Hot Economy Summer
President Biden is visiting Arizona, New Mexico and Utah this week to promote his economic agenda, labeled Bidenomics, and his investments in clean energy, manufacturing and efforts to combat climate change.
“Our plan is working,” Biden said, noting that more than 13 million jobs have been created since he took office. “We’ve created more jobs in two years than any president in American history has in a four-year term.”
The unemployment rate has stayed below 4% for the longest stretch in 50 years, Biden said. “And not only have we recovered all the jobs we lost during the pandemic, we now have more jobs than we did before the pandemic,” he said.
He added that inflation has fallen to its lowest point in two years and the U.S. has the lowest inflation rate of any major economy. He also celebrated what he called a boom in manufacturing investment. “Last quarter, factory construction contributed more to the gross domestic product than any time in 40 years,” he said.
In the year since he signed the CHIPS and Science Act, Biden said Wednesday, companies have announced more than $166 billion in projects to bring semiconductor manufacturing back to the United States. The White House also says that companies have invested about $110 billion in clean energy since Biden signed the Inflation Reduction Act, which was loaded with climate provisions.
Biden said that he wants to U.S. to regain its former industrial might. “For the longest time we’ve been told to give up on American manufacturing. That can’t happen again,” he said. “America used to lead the world in manufacturing. We’re going to do it again.”
Why it matters: It’s been a hot economy summer, with solid data offering Biden an opportunity to tout the progress on jobs and inflation and tell voters how his legislative successes, including the Inflation Reduction Act and the CHIPS and Science Act, have factored into an industrial resurgence.
But as the president tries to make his case head of the 2024 election, the economy still faces real threats — see, for example, the downgrade of 10 regional banks’ credit ratings by Moody’s Investor Service, which also warned about other players in the industry or persistent fears about a potential meltdown in the commercial and residential real estate markets.
And even as Biden is trying to celebrate recent economic gains and claim credit for them, his efforts to score points with the American public may be overshadowed by the legal troubles of his predecessor and potential 2024 challenger, which dominate news cycle after news cycle.
Medicare Advantage Bonus Payments to Top $12 Billion This Year
Under the Affordable Care Act, private insurance companies that offer Medicare Advantage plans are eligible to receive bonus payments as a reward for quality, and the value of those payments has been rising significantly, coming to at least $12.8 billion in 2023, according to a new analysis by KFF, a nonprofit group formerly known as the Kaiser Family Foundation.
The payments in the health care program that provides coverage to roughly 31 million people have quadrupled since they began in 2015 and are up nearly 30% just in the last year. The payments are based on a five-star rating system, and 85% of Medicare Advantage enrollees are in plans that will receive the bonuses.
The largest plan providers will receive the largest payments. UnitedHealthcare and Humana cover about 47% of Medicare Advantage enrollees and will receive 49% of the bonus payments. UnitedHealthcare will receive the largest total, $3.9 billion. Kaiser Permanente will receive the largest payment on a per-user basis, $523 per enrollee.
While the bonus payments are meant to reward high-quality insurance programs, some critics have questioned the rating system that determines which companies get extra money.
“Quality indicators for Medicare Advantage were established to help consumers make informed decisions when choosing among Medicare Advantage plans and encourage plans to compete based on quality,” KFF’s Jeannie Fuglesten Biniek, Anthony Damico and Tricia Neuman write. “However, the Medicare Payment Advisory Commission (MedPAC) and others have argued that the star ratings incorporate too many measures, do not adequately account for social risk factors, and may not be a useful indicator of quality because star ratings are reported at the contract rather than the plan level.”
As Medicare Advantage continues to grow — it now covers more than half of the Medicare-eligible population — policymakers may need to revisit the bonus system as spending levels increase. “Understanding the effects of the quality rating system and associated bonus payments, including the implications for Medicare spending and beneficiary premiums, will be increasingly important as Medicare Advantage enrollment continues to climb,” the KFF authors write.
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Fiscal News Roundup
- President Joe Biden Is Expected to Unveil His Request for Additional Ukraine Aid on Thursday – Politico
- Biden’s Health Care Wins Are Being Undone — and at the Worst Possible Time – Politico
- House GOP Moderates’ Patience With Conservative Demands Wearing Thin – The Hill
- Inside the House GOP Plan to Avoid a Farm Bill Floor Catastrophe – Politico
- Moody’s Downgrades 10 Regional Banks as Crisis Pressures Persist – Washington Post
- Wall Street Falls Hard for Once-Unloved 20-Year Treasury Bonds – Bloomberg
- Biden Says He Has ‘Practically’ Declared a Climate Emergency. But He Actually Hasn’t – Politico
- Georgia Is Now the Only State With Work Requirements in Medicaid – CNN
- Why GOP Hopefuls Aren’t Talking About Health Care Costs – The Hill
- White House Downplays CNN Poll Showing Majority of Americans Oppose More US Aid for Ukraine – CNN
- Biden-Backed Bus Maker Got Millions in Aid Before Bankruptcy – Bloomberg
- Drugmakers Say They’re Adjusting Their ‘Thinking on Price’ of First Postpartum Depression Pill Approved in the US – CNN
- First American City to Tame Inflation Owes Its Success to Affordable Housing – Bloomberg
- NYC Mayor Puts $12 Billion Cost on Migrant Crisis, Blames ‘Broken’ National Immigration System – Politico
- Under Biden, US Oil Production Is Poised to Break Trump-Era Records – CNN Business
- Mortgage Rates Climb Toward 7% After America’s Credit Rating Was Downgraded – CNN Business
Views and Analysis
- Maybe Fitch Had a Point After All? – Bloomberg Editorial Board
- The Economy Is Strong, but Small Businesses Are as Pessimistic as Ever. Here’s Why – Gene Marks, The Hill
- Populism Thrives Because People Are Mad, and Also Because They’re Sad – Charles Lane, Washington Post
- Almost 3.8 Million People Have Lost Their Medicaid Coverage Since the End of the COVID-19 Public Health Emergency – Akeiisa Coleman, Commonwealth Fund
- Why Are Groceries So Expensive? – Paul Krugman, New York Times
- The Invisible Laws That Led to America’s Housing Crisis – Nathaniel Meyersohn, CNN Business
- Covid’s Summer Resurgence Resists Easy Answers – F.D. Flam, Bloomberg