Daycare costs harder to afford than college for many; Nation’s fertility rate hits record low

A schoolteacher, who wished to stay unidentified, attempts to catch snowflakes while leading her students to a library from school in the Harlem neighborhood, located in the Manhattan borough of New York on January 10, 2014. REUTERS/Adrees Latif

By Gail MarksJarvis

CHICAGO (Reuters) – Americans are not having enough babies.

The nation’s fertility rate hit a record low in 2017, and one has to wonder: Could the cost of raising children be discouraging a generation that was choked by the Great Recession?

Employment is strong, but pay has been stagnant. College student loans average $35,000, and renting or buying a home is unaffordable in most metro areas. Throw daycare costs of $10,000 a child into the mix, and families ask themselves: How can they afford a baby?

Childcare is the third-largest expense in the family budget, behind food and housing, according to the U.S. Department of Agriculture, which calculated last year that middle class families spend $233,610 raising a child to the age of 18.

“Daycare is a crisis and a much bigger problem than college,” says Betsey Stevenson, an associate professor of public policy at the University of Michigan, who wonders why there is not a massive public outcry for relief.

Both presidential candidates raised the issue in the last campaign, and Congress then doubled the child tax credit to $2,000.

But there has been no daycare legislation. Rather than organizing politically, it appears that 20- and 30-somethings are voting with their reproductive systems.

The only age group with a rising fertility rate in 2017 was women 40 to 44 years old, according to the National Center for Health Statistics. In addition, 20 percent of parents in a Care.com survey said they would have fewer children than they wanted because of childcare costs.

Lisa Anderson, 30, is among the stressed-out mothers. She commutes daily from a rural home to work at her government consulting job in downtown St. Paul, Minnesota, devoting a quarter of her family income to her 10-month-old son’s daycare.

She worries how she and her husband will afford a second child. Daycare for one baby costs close to $10,000; with two, it would total half of the couple’s take-home income.

With about $1,000 in monthly student loan payments, “I’m starting to regret what I spent on graduate school,” Anderson said. But she and others in her generation cannot undo past decisions, they can only control when and if they’ll have children.

BIG COSTS

For working parents, daycare costs are rising at almost twice the nation’s inflation rate since the recession.

Government guidelines suggest a ratio of 10 percent of income for childcare. But the median family with children under six earned $68,808 in 2016, about $20,000 short of making the median $8,320 annual daycare cost affordable, according to a Brookings Institute analysis of Census data.

Infant care at $10,400 is harsher, and the quality daycare preferred by people with incomes over $150,000 costs $11,652, according to Brookings analyst Grover Whitehurst. In expensive areas of the country, that goes up to $18,000 per child.

Nannies are even more costly – averaging about $28,905 a year nationally, according to Care.com. As a result, only about 4 percent of families use them, according to Census data.

Most parents have limited options for cutting costs other than drawing on help from family, sharing caregivers, compromising quality and having fewer children.

Some states offer subsidies, but most go to low-income people. Families get a little tax relief if they claim the Child and Dependent Care Tax Credit at tax time or use a flexible spending account at work to stash money away for childcare on a pre-tax basis.

Financial planners calm parents by telling them they can catch up with retirement and college saving after their children enter school.

But Rachel Brewer, a San Diego mother of three children between seven and nine, questions that. “Kids were the cheapest when babies. I spent $5 for a can of formula. Now, I sweat bullets every time I take the kids to the dentist,” she said.

(The opinions expressed here are those of the author, a columnist for Reuters.)

(Editing by Beth Pinsker and Dan Grebler)

Obamacare 2018 enrollment clouded by uncertainty

A man looks over the Affordable Care Act (commonly known as Obamacare) signup page on the HealthCare.gov website in New York in this October 2, 2013 photo illustration.

By Yasmeen Abutaleb

WASHINGTON (Reuters) – As Americans begin signing up for Obamacare health insurance plans on Wednesday, experts expect reduced participation as a bitter political debate clouds the program’s future.

Republicans in Congress have repeatedly failed to repeal and replace former President Barack Obama’s healthcare law, which they have said drives up costs for consumers and interferes with personal medical decisions. Democrats have warned that repeal would leave millions of Americans without health coverage.

President Donald Trump promised to kill the law in his 2016 election campaign, and he has taken executive and administrative actions to undermine it.

“The market’s going to be extremely confusing. There’s going to be entire complexity of choice,” said David Anderson, a health policy researcher at Duke University.

The Center for American Progress, a liberal think tank, estimated this week that 2018 enrollment would have held steady from 2017, with 12.2 million people either signing up for or being automatically re-enrolled in individual health coverage under the Affordable Care Act had there not been administration efforts to undercut it.

The Trump administration has cut the 2018 enrollment period in half to six weeks from Nov. 1 to Dec. 15 for states using the federal Healthcare.gov website. Enrollment previously ran until Jan. 31, and many consumers often signed up in the last two weeks, according to state officials and organizations that help people choose insurance.

Senate Republicans and Democrats are working on legislation to stabilize Obamacare markets in the short term. The nonpartisan Congressional Budget Office estimates that four million fewer people will sign up for Obamacare private insurance than previously forecast due to Trump administration policies.

Still, CBO expects total enrollment to reach 11 million in 2018, up from the around 10 million who obtained and paid for coverage in 2017.

The administration has cut off billions of dollars in subsidies that insurers use to discount out-of-pocket medical costs for low-income Americans, slashed Obamacare advertising and cut funding to groups that help people enroll in health insurance. Several insurers have exited Obamacare markets due to concerns over subsidies and other Trump actions.

The Department of Health and Human Services said on Monday that premiums for the most popular Obamacare plans would rise 37 percent in 2018. Americans eligible for Obamacare tax credits to buy insurance may pay less for coverage, but costs would increase for middle-class consumers who do not get subsidies.

“It’s been such a flood of information. A lot of the population thinks the Affordable Care Act has already been put under,” said Daniel Polsky, a professor at the University of Pennsylvania and executive director of the Leonard Davis Institute of Health Economics. “The strange premium increases are going to be very confusing for consumers.”

The Trump administration is now planning changes for 2019. Last week, it proposed a rule giving states more flexibility over the benefits that must be covered by insurance. Under Obamacare, all insurers have to cover a set of 10 benefits, such as maternity and newborn care and prescription drugs.

(This version of the story corrects reference to CBO estimate on enrollment in paragraphs 7-8, clarifies estimate from think tank in paragraph 5)

 

(Reporting By Yasmeen Abutaleb; Editing by Michele Gershberg)

 

Trump tells Republicans to get back on healthcare bill

U.S. President Donald Trump calls on Republican Senators to move forward and vote on a healthcare bill to replace the Affordable Care Act in the Blue Room of the White House in Washington,

By Susan Cornwell

WASHINGTON (Reuters) – U.S. President Donald Trump and members of his administration on Sunday goaded Republican senators to stick with trying to pass a healthcare bill, after the lawmakers failed spectacularly last week to muster the votes to end Obamacare.

For the second day running, the Republican president tweeted his impatience with Congress’ inability to deliver on his party’s seven-year promise to replace the Affordable Care Act, President Barack Obama’s signature healthcare bill commonly known as Obamacare. Members of his administration took to the airwaves to try to compel lawmakers to take action.

But it was unclear whether the White House admonishments would have any impact on Capitol Hill, where Republicans who control both houses signaled last week that it was time to move on to other issues.

Republicans’ zeal to repeal and replace Obamacare was met with both intra-party divisions between moderates and conservatives and also the increasing approval of a law that raised the number of insured Americans by 20 million.

Polling indicates a majority of Americans are ready to move on from healthcare at this point. According to a Reuters/Ipsos poll released on Saturday, 64 percent of 1,136 people surveyed on Friday and Saturday said they wanted to keep Obamacare, either “entirely as is” or after fixing “problem areas.” That is up from 54 percent in January.

With the U.S. legislative branch spinning its wheels, the executive branch pledged to look at rewriting Obamacare regulations. Health and Human Services Secretary Tom Price told ABC’s “This Week” that he would change those regulations that drive up costs or “hurt” patients.

Price sidestepped questions about whether there were administration plans to waive Obamacare’s mandate that individuals have health insurance, saying “all things are on the table to try to help patients.”

But Price also told NBC he would implement Obamacare because it is the “law of the land.”

That Obamacare was still law clearly angered Trump, who has no major legislative accomplishments to show for his first half-year in office. “Don’t give up Republican Senators, the World is watching: Repeal Replace …” the president said in a tweet on Sunday morning.

 

NOT ‘TIME TO MOVE ON’

On Friday, Senate Republicans failed to collect enough votes to repeal even a few parts of Obamacare. That capped a week of failed Senate votes on whether to simply repeal, or repeal and replace, the 2010 law, while Trump repeatedly berated lawmakers in a late attempt to influence the legislation.

“The president will not accept those who said, quote, ‘it’s time to move on,'” Kellyanne Conway, a senior counselor to Trump, said on Fox News Sunday. Senate Majority Leader Mitch McConnell, a Republican, had made exactly that comment before dawn on Friday morning after the failed healthcare vote.

The White House budget director, Mick Mulvaney, said on Sunday lawmakers should stay in session to get something done on healthcare – even if this means postponing votes on other issues such as raising the debt ceiling.

“So yes. They need to stay. They need to work. They need to pass something,” Mulvaney said on CNN.

The House of Representatives has already gone home for its August break and the Senate is expected to do the same by mid-August.

Mulvaney also said Trump was seriously considering carrying out threats he tweeted about on Saturday, when the president said that “if a new HealthCare Bill is not approved quickly, BAILOUTS for Insurance Companies and BAILOUTS for Members of Congress will end very soon!”

That tweet appeared to be referring to the approximately $8 billion in cost-sharing reduction subsidies the federal government pays to insurers to lower the price of health coverage for low-income Americans.

The Saturday tweet also appeared to be a threat to end the employer contribution for members of Congress and their staffs, who were moved from the normal federal employee healthcare benefits program onto the Obamacare insurance exchanges as part of the 2010 healthcare law.

“What he’s saying is, look, if Obamacare is hurting the American people – and it is – then why shouldn’t it hurt insurance companies and more importantly, perhaps for this discussion, members of Congress?” Mulvaney said on Sunday on CNN.

Some Republicans have said they are trying to find a way forward on healthcare. Senate Republican Susan Collins, one of three Republicans who voted against repealing parts of Obamacare on Friday, told NBC that Congress should produce a series of bills with bipartisan input on healthcare, including appropriating the cost-sharing subsidies.

The Senate has one vote scheduled when it reconvenes on Monday afternoon: whether to confirm a U.S. circuit court judge. Senate aides said they had no guidance for the agenda beyond that vote.

 

(Additional reporting by Sarah N. Lynch, Roberta Rampton, and Caren Bohan; Editing by Phil Berlowitz and Mary Milliken)