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Many Demands on Middle Class Paychecks

Ask middle-class Americans how they’re doing, and you’ll often get the same answer: there are still too many demands on my paycheck.

Several recent surveys reach this conclusion, even though wages have been rising consistently at a time of low inflation.

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Medicare Part D’s Effect on Evergreening, Generics, and Drug Prices

The brief’s key findings are:

  • Medicare Part D, introduced in 2006, has clearly helped seniors by expanding
    drug coverage, but a key question is how it has affected the cost of drugs.
  • By boosting demand and shifting market power from manufacturers to insurers, Part D could affect the behavior of both brand-name and generic drug producers.
    • Brand-name firms could be more likely to maintain monopoly power by
      making small changes to their drugs (“evergreening”); and
    • Generic firms – with no such leverage – might be less likely to introduce
      alternatives due to a greater loss of bargaining power to insurers.
  • The analysis finds that Part D has, indeed, increased evergreening and reduced
    generic entry, and both effects have put some upward pressure on drug prices.
  • Overall, though, Part D has kept drug prices lower than they otherwise would
    have been.

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What Happens When You Don’t Pay a Hospital Bill

As Americans sink under medical expenses, debt collectors go to great—and sometimes strange—lengths to collect.

On March 8, 2011, Joclyn Krevat, an occupational therapist in New York, was sitting at her computer when she received a most unusual LinkedIn request. The wording was the familiar: “I’d like to add you to my professional network.” The sender was familiar, too, but not for the reason Krevat expected. It was from a debt collector.

Karen Pollack, the head of a debt-collections practice called KP Recovery Solutions, had been trying to collect on some medical bills Krevat had recently incurred for a heart transplant. Krevat’s debts, which were reviewed by The Atlantic, made up plot points in the worst kind of American health-care horror story. In December 2009, Krevat, who was 32 at the time, thought she was coming down with the flu. Instead, she was admitted to the hospital and diagnosed with giant cell myocarditis, a severe inflammatory heart disease that can lead to heart failure. After seven weeks on life support, a heart became available, and she had a transplant. For a year afterward, she wasn’t able to return to work.

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