One Small Cut for Health Care Costs

The ACA, or Obamacare, does nothing to reduce the cost of health care or even stem the cost increases.  It’s a numbers game to get more people with policies, even if they can’t afford to use those policies when they get sick because of high deductibles and copays.  Now I’d like to look at a few ways those costs could be reduced.

Drug prices are skyrocketing, even for generic varieties.  That’s because many countries have price controls on drugs while the US does not, so US patients are subsidizing drug development.  US patients are subsidizing something else too: advertising.  Many doctors don’t like it when patients come to their office demanding a drug they saw on TV or even self-diagnosing, and many countries don’t allow prescription drug advertising.  Advertising contributes nothing to our health, so let’s end the practice and save some money.  The second way to reduce drug costs is to end a form of price fixing.  When a patent on a popular drug expires the manufacturer can pay off (bribe) generic drug makers to delay introducing generic versions, thus continuing their profits to the detriment of patients.  This needs to stop.

You can’t reduce health care costs by increasing taxes on health care, so abolish the medical device tax permanently.  Right now that tax is only on hold.  A 2.3% tax on medical devices would cause immediate price inflation of more than that amount because of the overhead required to process it.  See my post “Just Because You Can Make It Complicated Doesn’t Mean You should” for the argument against excess overhead.

The country needs tort reform.  Medical malpractice insurance is expensive, in fact, so expensive in some specialties that doctors are leaving their practices.  In our lawsuit-happy country jury awards have become virtually unlimited so insurers have no way of estimating costs.  Doctors are human, sometimes they make mistakes and victims deserve compensation, but that compensation should be reasonable.  With tort reform victims would be entitled to full compensation for actual losses including any out-of-pocket medical expenses but “intangible losses” would be capped at some multiple of the actual loss, possibly in a range of 2-10 times.  The cap could even depend on whether the intangible loss was temporary or permanent.  With a 5x cap a person who suffered $50,000 actual loss would recover the full loss but they couldn’t get more than $250,000 for an intangible award.  This may sound unfair but the “lawsuit lottery” is equally unfair because two people with similar injuries can get very different awards depending on the composition of the jury.  Negotiated settlements are fair but mandatory arbitration is not because it deprives victims of their day in court.  When arbitration pits an individual against a company the company is likely to win.  The cap would be lifted if the harm was intentionally inflicted, in which it would also be a criminal case.  Since few people enter the medical profession to inflict harm that shouldn’t be a common occurrence.  Insurance is a business of numbers and as long as one of  those numbers is “infinity” costs can’t be controlled.

Advertisements

How Has That “Hope and Change” Worked Out?

No more mister nice guy!

I’ve suggested ways to help the economy and pointed out problem areas, but now, as we approach an election that will determine the fate of our nation, it’s time to start looking at the current political situation in more detail. A good place to start is to see where the Obama administration has taken the country in the past 7 plus years. It’s pretty much the wrong direction.

One obvious fact is that the national debt has more than doubled and is now topping 19 trillion dollars. That’s a sum that even billionaires can’t comprehend. That’s an enormous debt to pile on our children, their children, and generations to come. Even worse, the debt escalation shows no sign of slowing as Democrats just can’t stop spending, even on low value programs. It’s a cancer that could cripple and bring down our republic.

Second is the complete lack of accountability in this administration. I addressed that in my “No Accountability, No Consequences, No Problem” article. The idea that so many people in high responsibility, high paying jobs aren’t held responsible for incompetence, lying, or outright wrongdoing is unacceptable. How many “average workers” enjoy such protection?

The nation is dangerously divided racially and economically. This is unfortunate because our first black president should have been able to heal many differences. Instead he has worked like a community organizer and divided the nation. You can refer to Saul Alinksy’s “Rules for Radicals” for the list of community organizer tactics.

There’s also more tension between police and civilians, with increases in both random attacks on officers and fatal shootings of unarmed suspects. This is dangerous for both sides and comes at a time when cooperation is vital to counter gang and terrorist threats.

The economic stimulus that was supposed to lift the country out of a severe recession didn’t help a lot of people. The top 1% enjoyed huge stock market gains thanks to Fed policies while working people saw stagnant wages and retirees still get zero interest on their savings. Too many people are working below their abilities or working several part-time jobs to survive. Good paying manufacturing jobs are being replaced by low wage service jobs. American IT workers are being replaced by H1B visa holders (even though that’s illegal). Welfare has expanded and programs have seen no reform to make welfare a hand up, not a handout for life.

The US is experiencing an unprecedented drug addiction epidemic, with overdose deaths reported every day.  This is a clear sign that people are unhappy, depressed, frustrated, or frightened by the direction the country is taking.  Since existing actions aren’t curbing the epidemic and the government isn’t willing to secure our southern border to cut off the flow of illegal drugs it’s taking the one-size-fits-all approach of intimidating doctors and making it harder for legitimate pain sufferers to get medication.

The signature ACA is just a numbers game to get more people on insurance rolls. It has given people insurance plans that they can afford to buy (thanks to subsidies), but can’t afford to use (thanks to sky high deductibles), yet insurance companies are losing money. That’s not a sustainable way of doing business. Once taxpayers have to bail out insurers and families can’t use their policies the country is on a path to a single payer system. While the simplicity of single-payer seems attractive, would you trust the government to manage it after the way the VA has treated our veterans? One basic failure of the ACA is that it does nothing to control costs; the other is “one-size-fits-all”.

The unconstitutional Department of Education has asserted even more control over public schools through Common Core, which, like the ACA, is a “one-size-fits-all” program. States, communities, and parents are being phased out of public education (except to pay the bills).

There has been no reform in taxation, immigration, or criminal justice; areas where both parties should be able to find some common ground.

Our infrastructure is deteriorating. Our electric grid and communications systems are vulnerable to cyber attacks. We are relying on luck, and when a hostile nation or terrorist group strikes, it will run out in an instant and we’ll learn about life in the Middle Ages.

We have seen erosion of our Constitutional rights, privacy, and even private property as the government finds more ways to seize property without adjudication..

We have seen the rise of two state “religions”: climate change and political correctness. Climate change is a matter for scientists; political correctness is simply stupid.

Our foreign policy has been inconsistent; our objectives unclear. Our support of “change” in the Mideast to oust repressive dictators hasn’t brought people freedom; it’s led to violence. The world has seen the rise of the most brutal terrorist organization in recent history, ISIS. It is anything but a “JV Team” and as more groups with similar goals pledge allegiance to ISIS this threat won’t be stopped anytime soon. Our military is seen as weakening as powerful nations like China extend their military influence and North Korea is testing ballistic missiles. If a large scale war breaks out the US cannot afford to be on the losing end.

Many people in this country are angry. The “hope and change” hasn’t made their life better. Can things get worse? Definitely! The Democrats’ favorite candidate, Hillary Clinton, has promised four more years of the current administration’s failed policies and attacks on our rights. She’s been a liar her entire career, but Democrats ignore that fact because she’s “entitled” to be president. Since when is any public office an entitlement? The last person to rule our soil as an entitlement was King George III.

No Bailout! You Asked For It, You got It, Deal With It.

In “The ACA: If You Can’t Fix It, Tax It” I looked at some of the problems with the Affordable Care Act, affectionately called “Obamacare”.  Recent news articles suggest that the situation is even worse than predicted earlier.  Insurance companies lobbied for Obamacare because they saw a potential revenue windfall.  It hasn’t happened, in fact, they’re losing billions of dollars!  A major health insurer has said it will exit most exchanges in 2017, and if it does, other companies  will follow.  Along with the fact that several state insurance co-ops have gone bankrupt this would mean the collapse of Obamacare.

The insurance companies have an alternative, though: a taxpayer bailout.  Give us the money or we’ll walk.  Since Congress must approve such a bailout our lawmakers hold the future of a flawed law in their hands.  Actually the term “bailout” is inaccurate because that term implies a one-time payment.  What would actually be needed is a yearly subsidy because, as long as people get sick, Obamacare won’t be profitable for a private company.  Once taxpayers have to subsidize insurance companies the country would be running a bizarre “multi-payer-with-single-payer-rules” system with executive bonuses thrown in.

So what’s happened?  Enrollment figures aren’t nearly as high as projected.  While insurers expected lots of young healthy enrollees, what they got are older sicker people with high medical expenses.  This is a direct consequence of the socialist “one-size-fits-all” plan.  Many young healthy people want to buy an inexpensive catastrophic illness coverage plan and pay for routine expenses out of pocket.  Such plans aren’t allowed under the ACA.  Many single men don’t understand why they should have to pay for maternity benefits either, since they’re biologically incapable of ever using them, and women don’t see why they should have to pay for PSA tests.  Some families simply can’t afford the combination of high premiums and sky-high deductibles.  Subsidies may lower the policy cost but not the deductibles, which can top $12,000 a year.

All business decisions involve risk.  In this case the insurers bet the wrong way by making a politically expedient but economically bad choice.  Should the taxpayers be put on the hook for multi-year bailouts of for-profit companies?  Should our tax dollars fund executive bonuses?  Is Obamacare “too big to fail”? If you agree that the answers are “NO” tell your senators and representatives “no bailout, not now, not ever”.

If the law is that bad, fix it or flush it.

RIP 10th Amendment: What’s Left for the States?

When the Constitution was being drafted the anti-Federalists feared that a central government would become too powerful and oppressive, so they demanded a bill of rights, which became the first 10 amendments.  The first 9 of these grant rights to the people, while number 10 grants rights to the states.  We’ve seen attacks on the 1st and 2nd amendments; the 4th through 6th are in question as the government can now conduct warrantless surveillance and detain people indefinitely without charges, counsel, or trial; and the 10th has been overwhelmed.   We don’t hear much about the 10th though.  It’s the one that says “The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people”.  We could call it the “vanishing amendment”.  Over the years the Federal government has used a combination of legislation (aided by a broad interpretation of the “commerce clause”) and “carrot-and-stick” (C&S) motivation to infringe on states’ rights.  For example, the Feds responded to states’ resistance to a 55 mph national speed limit in 1974, by threatening to withhold highway funds.  Those funds were paid by taxpayers who had every right to expect highway repairs without being held hostage to Federal demands.  This administration has imposed even more Federal control on two of the last remaining state responsibilities: health care and education.

The ACA imposes a “one-size-fits-all” health care plan on the nation.  In an effort to insure around 15% of the population that was uninsured it has taken affordable plans that worked away from millions of people, forcing them into expensive plans with ridiculously high deductibles, narrow networks, less access to cancer centers, and often higher drug costs.  It’s a giant tax increase, and the IRS, a bloated and politicized agency, is it’s enforcer.   The sole purpose of a tax should be to raise revenue, and the sole job of the IRS should be to collect that revenue.  It shouldn’t be a welfare agency or a health care cop.  The president is even attempting to institutionalize his attack on the 2nd amendment by nominating a left-wing campaign supporter for Surgeon General, where he could use his position to intertwine health care with gun control.  It’s obvious where that could lead.

Government control of education is prohibited by law, but it has used C&S to barge into education with politically popular but academically unsuccessful programs like Head Start and No Child Left Behind.  The latest push into public education is Common Core, a “one-size-fits-all” education program that reduces local control and establishes a privacy-violating student database.  Admittedly it’s not a Federal program; it was heavily funded by Bill Gates.  It’s goal is to turn out obedient workers, something J. S. Mill warned about in 1859.  Even though barred from imposing a national curriculum the Feds are using C&S with promises of money or relief from other requirements for states that adopt Common Core.  Testing and textbook companies are happily complying because they see dollar signs, as do technology vendors.

Now if we add in the Feds’ interference with states’ efforts to curb voter fraud and illegal immigration (a Federal responsibility that it’s willfully neglecting), what’s left for the states?  State land permits don’t mean much any more either.  A state can issue a pond permit to a farm owner and the EPA can then fine the owner for digging it.  The EPA owns the water and the BLM owns the land.

I’ll close with two remarks.

Notice the “one-size-fits-all” similarity.  This is characteristic of socialism, where the individual is subordinate to the state.  Individualism is not a valued trait with socialists.

Also note that the 10th amendment, while granting rights to states, does not empower them to deny to the people the rights enumerated in the first nine.

E is for Epidemic

E is also for Enterovirus and Ebola, two diseases we’ve heard a lot about.  Before discussing them consider one simple fact.  The President, the CDC, and Immigration all have the authority and responsibility to secure our borders against foreign disease; in fact there’s a list of diseases that will prevent a legal immigrant from entering.  These include TB, plague, and hemorrhagic fevers like Ebola.  This administration failed.

Enterovirus EV-D68 reached epidemic levels, infecting children in almost every state, paralyzing some and killing others.  Enteroviruses, which include polio, have been around for years, but it’s a strange coincidence that this particularly virulent strain hit so hard right after illegal immigrants from Central America were distributed around the country just in time for school to start.  We don’t know what other diseases or parasites they carried because the CDC won’t release the facts.  We do know that an outbreak of measles is spreading in the Southwest.  Another coincidence?

Ebola reached epidemic levels in western Africa but not in North America.  It’s high fatality rate and long incubation period make it both fearsome and hard to contain.  There are only four hospitals in the US with containments certified for the deadliest diseases, of which Ebola is one, yet we’re told most hospitals can safely treat Ebola patients.  Yeah, sure.  Sending our troops to help contain Ebola in Africa is potentially a suicide mission.  Even highly trained and equipped health care workers caught Ebola.  The best containments to prevent Ebola from spreading in the US are our borders. Like terrorists, it’s better to keep diseases out than fight them once they’re here.  As soon as one traveler arrived from Africa with Ebola there should have been restrictions on arrivals from infected nations.  Other countries did.

The impact of a major epidemic could surpass the worst disaster movie, with riots, food shortages, and economic collapse.  We’ve heard all those, so consider a less-discussed scenario.  During the Black Death (1348-51), people didn’t understand that the plague was caused by germs hosted by fleas hosted by rats, but they did observe it spread faster in crowded cities, so some fled to the countryside.  What would happen today if large numbers of people fled big cities and arrived in small ones expecting food, shelter and medical care?  Martial law is a sorry response to a situation that could be prevented by government officials doing their jobs.

Politicized agencies are ineffective agencies. Politicized agency heads must be replaced.

ACA: If You Can’t Fix It, Tax It.

The “you have to pass it to find out what’s in it” remark signals a government out of control, as does the fact that the president has amended the law numerous times with no authority to do so.  Let’s look at some of the problems that have arisen while seeing what’s in it.

A “side-effect” of the ACA is the demise of employer-based health insurance plans among small businesses, as well as loss of spousal coverage at larger businesses.  This was probably intended as employer health benefits weren’t taxable while ACA plans are bought with after-tax dollars.  Tax-free benefits have annoyed big spending government officials for years.  Small employers may even give their employees raises to help compensate for the loss of a benefit, but those raises are taxable and may result in the employees becoming ineligible for a subsidy.  This is a de facto tax increase.  The employer mandate will impose a large burden on larger companies with it’s “one-size-fits-all” plan requirements, and their only alternative is, of course, to pay a tax.  Individuals who choose not to be insured will again, pay a tax.  Another tax increase is the medical device tax that hits every provider, and thus every patient who seeks health care.  There are also tax increases on “high income” individuals and a tax on “Cadillac” insurance plans.  So, besides tax increases, what else is wrong with the ACA?

The subsidies, like EITC, can serve as a disincentive to work.  Anyone can look at the eligibility requirements and figure out that if they make too much money health insurance will become a larger burden on their finances and the net result will be negative.  For small employers the ACA provides a disincentive to hire full-time workers.

The word “Affordable” is a misnomer.  The ACA does nothing to control the cost of medical care.  It imposes taxes.  It gives us a thousand new IRS agents in an already bloated agency but not one new doctor to meet an increased patient load.  It fails to include tort reform that might lower doctors’ insurance.  It does nothing to negotiate lower drug costs.  It does not reduce the overhead associated with medical administration and billing that consumes up to one-third of health care costs.  The replacement of group plans offered by small businesses with individual plans will raise costs as individuals have no bargaining power with insurers, providers, or drug companies.

Whether or not premiums are more affordable depends on who you are and where you live.  While some have found lower premiums many more have experienced sticker shock when their old but adequate (for them) plans were canceled and they had to shop on the exchanges.  Unreasonably high deductibles that can range up to $10,000 or more have hit almost everyone.  With high deductibles and co-pays, reasonably healthy people will pay all their health care expenses while the insurance company pockets the premiums and pays nothing.  Is this what they call “wealth redistribution”?  Actually it’s form of rationing as people avoid going to the doctor.

The ACA failed to address monopoly situations as has occurred in NH where a single insurer had imposed a narrow network that excluded many doctors and hospitals.  That situation is relieved in 2015 but a good law wouldn’t have allowed it to happen.  Many people had to switch doctors and travel further for care for no good reason.

Finally there are the many misleading statements that accompanied the ACA, like “you can keep your plan”, “you can keep your doctor”, “costs will be reduced” and even “no new taxes on people making less than $250K a year”.  The cost burden falls mainly on the middle class who make less than that figure but more than what would qualify them for a subsidy.  The ACA also contains a marriage penalty that can be a disincentive to marriage.

Liberals have raised taxes, increased the size of government, discouraged small business health benefits, and established disincentives to work, hire, or marry in order to insure a small percentage of the population that was uninsured.  How is this moving forward?

Before ending let’s look at two things that are right with the ACA.  You can’t be denied coverage for pre-existing conditions.  That was a win for the people because many people are born with medical conditions they have no control over.  Your policy can’t be canceled for being sick.  That’s another win.  Denying policy renewal because a claim was submitted is and will continue to be common in both the home and auto insurance businesses, however.

I won’t suggest a replacement because, in spite of liberal remarks that conservatives have criticized the ACA while offering no alternatives, there are several proposed alternatives that avoid putting the government in charge of your health care.

The best health care plan is not a mandate, it’s the one that works best for you.

Pro-this, Anti-that; Whose choice is it?

Labels pigeonhole people, but we love ’em.  Let’s look at the idea of “choice” on both sides of the aisle.

Conservatives who oppose abortion on demand call themselves “pro-life”.   Unless they’re also pacifists, however, “pro-life” is too broad a term and they’re really just “anti-abortion”.  Liberals who support a woman’s right to abortion on demand call themselves “pro-choice”.  That’s too broad a use of the word choice.  They’re really “pro-choice on abortion”, hence simply pro-abortion, right?  They certainly wouldn’t call themselves “anti-life”.

Choice is a freedom word and it’s political opposite is control.  Most “pro-issue” people are actually “pro-choice” on their issue; it’s the “anti” folks who want to restrict everything they don’t like.  While liberals demand choice on abortion they’d rather control and limit choice on everything else.

We’ll start with school choice.  Why do parents line up for hours to register their children for charter and magnet schools, both of which are public schools that operate outside of the mainstream?  Why do they spend money on private schools while paying taxes for public schools?  They want a quality education, discipline, and in some cases values that reflect their own, that’s why.  They realize that “one size fits all” doesn’t work for all, that education and indoctrination are not the same thing, and that dumbing down won’t help the US compete globally.  Fundamentalist religious schools that “don’t teach science” are often used as the example against school choice, but they’re a small part of the private school sector.  Secular private schools and most church-affiliated schools have full science departments and often enviable AP programs.  Clearly many parents are “pro-school-choice”,.

People who are labeled “pro-gun” don’t want to arm anyone who doesn’t want to be armed; they just don’t want their freedom of choice restricted.  The “anti-gun” faction, however has an agenda to restrict that freedom.  Anyone who simply doesn’t like guns simply doesn’t own one.  While both sides argue over interpretation of the 2nd amendment they forget that self defense is a fundamental human right that existed long before the Constitution.

What about health care choice?  Many people can’t keep their choice of plans, doctors, or hospitals, but they can pay more because the ACA is “one-size-fits-all”.  Everyone has access to birth control whether they need it or not, but some have lost access to cancer centers that they need to stay alive.  What’s the point of having world-class treatment centers if they’re only for multimillionaires?

Labels get weirder on the immigration issue.  Except for xenophobes, the majority of people who are labeled “anti-immigration” are actually “pro-legal-immigration”.  They want the immigration process to be fair, equal, and secure for the immigrants and the nation.  Anyone who is “pro-immigration” in the sense of opening our borders to the world doesn’t understand that bringing all the starving people in the world into one country would just create one more starving country.

So, what’s your label?