Archive for the ‘#randpaul’ Tag

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I voted for Rand Paul in the Alaska Republic Primary in 2016. He’d already withdrawn from the race the week before, but still appeared on the ballot and I prefer his libertarian-conservative Republicanism over what any of the other GOP candidates were offering.

Image result for image of rand paulLast night, he tried to block the spending bill with a procedural rule to maintain spending caps. He considers the bill to be fiscally irresponsible. He’s not alone, but he stuck his head up out of the gopher hole and said what needed to be said. The rest of the GOP just kept marching toward the cliff.

What happened to the GOP that existed during the Obama administration? Paul Ryan used to be a deficit hawk. So what the heck are they doing?

Yeah, they claim it’s a fiscal experiment. The government doesn’t usually do this kind of spending during a time when the economy is growing. What if they did?”

Well, according to the economists I read and respect, with such a debt growing every day, it’s likely to slow the economy rather than stimulate it. That’s why Obama’s spending programs didn’t have a stimulative effect. The economy was being dragged by growing debt. So, they may just have negated the positive economic effects of tax relief and reduced regulation.

So, here’s my point here — We could have elected someone as President who understands the damage government spending can do to the economy. We could have elected someone other than Donald Trump. Why didn’t we?

Could it be that “conservatives” really don’t mind big government spending so long as it is being spent on what they like rather than on what they don’t.

Posted February 10, 2018 by aurorawatcherak in politics, Uncategorized

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Entitlement Reform is the Real Answer   Leave a comment

Senator Rand Paul has introduced an alternative health care bill to what he calls, “Obamacare Lite,” a.k.a. the American Health Care Act, introduced by House Speaker Paul Ryan. Now that the House has failed to pass the AHCA, they should perhaps go speak with Senator Paul and see about introducing a version of the bill in both houses, so as to assure passage.

While Paul’s plan is more free-market oriented than Ryan’s, no offered plan addresses the entitlement elephant that must be slain before anything resembling a free market in medical care can emerge.

Related imageWhen demand significantly increases, supply and other factors being equal, prices go up. Economics 101. Most of us learned that in high school … and it’s true, everywhere and at every time, even under government price fixing because the cost of artificially controlling price is usually something we don’t really want … like fewer jobs or less access medical care.

While Medicare and Medicaid’s effect on the federal budget is generally acknowledged (and then quickly swept under the rug), there’s seldom mention of the percentage of overall healthcare spending that is tax-subsidized and the effect that has on prices.

The Georgian Institute of Technology did a study and found that of over $2.5 trillion in total U.S. health care spending in 2014, Medicare, Medicaid and “Other Public Insurance” accounted for 44% of it. By comparison, spending by private insurance companies accounted for only 33%, with out-of-pocket spending a mere 13%. Most of the remaining 10% was attributed to “other payers” (probably health care cooperatives and primary care clinics).

In other words, almost half of all medical care purchases in the United States occur free of strong price-limiting market forces like the freedom to not purchase and finite demand.

Yes, the patients have a choice of which medical services they utilize. They just don’t pay for them. Taxpayers foot the bill and we haven’t any choice in the matter.

In economics terms, “demand” means not only the desire but the ability to purchase a product at a given price. I may want to purchase a Caribbean island for my exclusive use, but my paycheck will never stretch to buy one even on credit, so I don’t represent “demand” for a private Caribbean island. I’ll have to leave that demographic to Richard Branson.

Price is determined by the intersection of supply and demand. By adding over $1 trillion to the total funds available for medical care spending, government health care programs significantly increase demand. When demand significantly increases, supply and other factors being equal, prices go up. Economics 101 … again.

If half of all automobiles were purchased by government programs, the price of automobiles would behave just as medical care prices do now. Of course, politicians and other “experts” would become all lathered over how to solve the “automobile crisis” and ensure everyone has the opportunity to exercise their “fundamental right” to drive to work.

Anyone who points out these rather uncontroversial economic realities can expect to be answered with, “What? You want to let my grandmother just die because she can’t afford health care? Do you believe only rich people should be treated for sickness and injuries and everyone else should just be left to suffer?”

Invariably, opponents of these programs take the bait and respond as if government health care programs were solely entitlements for consumers. They’re not. They’re actually for providers, who demand fees their markets won’t bear.

Rick is a doctor (albeit one who works on a salary) who works for a hospital and Lela spent 15 years solid and another 10 before that intermittently working for physicians and clinics. We have a unique opportunity to understand their thinking. Rick’s wife worked for some evil HMOs for much of her career. There are, with exceptions, two things we agree are true about most physicians:

  • They are among the most generous and compassionate people in society.
  • They share academia’s absolute contempt for the free market.

This naturally leads to a Jekyll-Hyde approach to reimbursement. When faced with a patient who has no ability to pay for needed care, a physician will still provide care without hesitation and usually without complaint. They make enough money that they don’t see the occasion charity case as a hardship to themselves. Physicians and hospitals provide a considerable amount of care every year for which they are not paid, without complaint.

The moment there is a payment avenue, that same physician suddenly loses his compassion and any tenuous connection with economic reality. Lela and I have both heard physicians say “I’m entitled to higher compensation in return for the years of training I completed and the money I spent acquiring it.”

I (Rick) work for a salary, so I have no dog in this fight, but I think they’re wrong. Yeah, my skills are scarce and so are worth more in the market than skills that are less scarce. But I am only  entitled to what others have agreed to pay me … like everybody else. This culture of entitlement extends throughout the medical care industry. Even the doctors I work with in research, who are also paid a salary, will argue for our entitlement.

 

Related imageI’m not suggesting physicians’ salaries necessarily must be cut to restore price reality to medicine. A free market may reduce their compensation or it may not and I don’t really care. I’m more concerned about the many costs other than the physician’s salary involved in medical care delivery because there is no real pressure to improve efficiency in any of them.

How many times do you provide your insurance information to your doctor’s office? Brad’s been going to a lot of doctors lately, so he’s kept track for me. They ask for it on the phone before even agreeing to make an appointment. Then, he writes it on a form when he gets to the office, sometimes more than once, on more than one form. Why? They’ve already captured that info on the phone. It’s in their billing system. Do they not have a photocopier?

“Seriously, I’ve been a mental patient for 15 years, 12 of them at this agency. Don’t you have a photocopier? Why do I have to keep writing down the same [story] over and over again?” Spoken to Lela when she was an administrator for a community mental health center.

Many medical practices run the way they did in the 1950s because they don’t have to change. Half their revenues are guaranteed, at any price, by a customer base that can’t say no. Meanwhile, grocery stores, which provide products just as vital to human survival as medical care, operate on razor-thin margins. Their prices behave normally when adjusted for inflation. No one seems curious about why there’s a difference.

Occasionally, you hear proposals to phase out Medicare and Medicaid … followed quickly by weeping and gnashing of teeth and caterwauling that mass die-off will occur if there’s any major market disruption. That’s just another manifestation of the strange notion that medical care is sacred, far more than any other good or service … it cannot be changed or reformed.

While there are plenty of government interventions on the supply side that artificially inflate medical care prices, the most effective way to normalize pricing would be to abolish Medicare and Medicaid tomorrow. Okay, maybe allow people a year to get find alternative coverage. That would cut demand for those services immediately by over $1 trillion per year. Economics 101, again. With a significant decrease in demand comes a significant decrease in prices.

There would still be doctors, hospitals, pharmaceutical companies and other providers who want and need to deliver care and make profits. Only they’d have to adjust their business models to deliver their products at prices their customers could afford. Yeah, that sounds scary, but industries have repeatedly demonstrated their resilience to disruption throughout history. Doctors are really brilliant people with higher than average IQs and a lot of education. They’re not imbeciles. The turmoil would be far briefer and less harmful than the hysterical predictions would lead us to believe … predictions offered, by the way, from those benefiting from the current system.

Abolishing these programs won’t cut off Granny. It will cut off McKesson, Merck and a lot of very wealthy medical providers from the government till. We’d all be treated much more like customers by the people whose medical services we purchase and medical insurance premiums would plummet.

Proposals like Senator Paul’s will produce positive results on the margin, but until the entitlements are abolished, they won’t succeed in restoring normalcy to the health care market.

Rand Paul’s Actual Obamacare Replacement   Leave a comment

Image result for image of rand paul obamacare replacementSo, what’s in Rand Paul’s Obamacare Replacement Act (S. 222)? I couldn’t find a convenient cut-and-paste, so I went to the act text myself and started listing the specifics. To make it easier on myself, I paraphrased in some instances. The text of the bill is here, so you can check it out for yourself.

Understand that this is what’s going on in the Senate as opposed to the House. Hopefully, the admixing of the two will provide an improved product. At this point in time, the (House) American Health Care Act is pretty bad, but Paul’s plan is much much better. It still doesn’t address entitlements, but it’s a step in the right direction.

  • Repeal the individual and employer mandates, rating restrictions, rate review, essential health benefits requirement, medical loss ratio, and other insurance mandates.
  • Provides 2-year open-enrollment period under which individuals with pre-existing conditions can obtain coverage.
  • Restores HIPAA pre-existing conditions protections, which guaranteed those in the group market could obtain continuous health coverage regardless of preexisting conditions.
  • Equalizes the tax treatment of the purchase of medical insurance for individuals and employers by providing a universal deduction on both income and payroll taxes regardless of how an individual obtains their insurance. This equalizes the premium burden between the individual and group markets while not interfering with the employer-provided coverage.
  • Provides individuals the option of a tax credit of up to $5,000 per taxpayer for contributions to an Health Savings Account while allowing contributions contributions to remain tax preferred. It also removes the maximum contribution limit to HSA, so if you can save for surgery or extended care treatment. Eliminates the requirement that a participant in an HSA be enrolled in a high deductible health care plan. Also enables individuals who are eligible for Medicare, VA benefits, TRICARE, Indian Health Service, and health care sharing ministries to be eligible to establish an HSA.
  • Allows HSA funds to be used to purchase insurance or pay insurance premiums.
  • Allows an account holder to rollover HSA to spouse, child, parent, or grandparent.
  • HSA’s would be protected similarly to retirement accounts during bankruptcy.
  • Certain exercise equipment and physical fitness programs would be treated as medical care.
  • Nutritional and dietary supplements would be treated as medical care.
  • Doctor access fees could be paid from HSA funds.
  • HSAs could be used for pre-paid physician fees, as in direct practice medicine.
  • Allows Medicare enrollees to contribute their own money to the Medicare Medical Savings Accounts.
  • Amends the Internal Revenue Code to allow a physician a tax deduction equal to the amount the physical would otherwise charge for charity medical care or uncompensated care due to bad debt, up to 10% of the physician’s gross income for the taxable year.
  • Establishes Independent Health Pools (IHPs) to allow individuals to pool together for the purpose of purchasing insurance. This would include non-profit organizations, including churches, trade associations, etc.
  • Requires that the IHP will provide insurance through contracts with insurance issues in fully insured plans and not self-insure.
  • Allows insurers to sell policies in all states. (There are exceptions. Go to the text for clarity).
  • Allows Association Health Plans (AHPs) which allow small businesses to pool together across state lines through their membership in trade or professional association. (In other words, small groups can now become large groups). While AHPs currently exist, strict ERISA requirements are nearly impossible to meet. (Again, a complicated point, so go to the text for clarity)
  • Provides an exemption from Federal antitrust laws for health care professionals (excluded from the NLRA)  engaged in negotiations with a health plan regarding the terms of a contract under which the professionals provide health care items or services.
  • Provides new flexibilities to state in their Medicaid plan design, in order to test new coverage rules without interference from federal agencies.
  • Amends the definition of “health insurance coverage) to clarify that stop-loss insurance is not health insurance. This is designed to prevent the federal government from using rule-making to restrict the availability of stop-loss insurance used by self-insured plans.

And, yeah, that’s the whole thing. It’s four pages. The highlighted text are the suggestions Rick has been making for years.

Rand Paul’s plan is much more free market than the GOP House plan. It still doesn’t go far enough, but it does away with most of the things in Obamacare that are going to bankrupt the middle class and the government and returns health care, medical care and medical insurance decisions to the people, where they should always have remained.

 

 

 

 

 

 

 

 

 

 

 

 

Defining Terms & Addressing Actual Problems   6 comments

According to the media and the CBO, about 20 million (could be 24 million) Americans will lose their “health care” under the GOP plan to replace (uh, tweak) Obamacare.

Image result for image of a doctor's scaleI’d be horrified if I knew what that meant. How exactly could I, an active, healthy, middle-aged person who eats (relatively) healthily and enjoys the outdoors (in some months) “lose” my health care? It’s not a cell phone or sweater that can be stolen or left on a park bench. Health care is what I do to keep myself health – diet, exercise, avoiding risky behaviors (uh, except for going into the Alaska wilderness well-armed) and not abusing drugs, including alcohol. I did that before Obamacare was enacted and I will continue doing it after that mistake is reformed or collapses of its own bureaucratic inefficiencies. It really can’t be taken from me because it doesn’t rely on anyone else but me.

You see, health care is not medical care. The terms “healthcare”, “medical care” and “medical insurance” are often used synonymously, but they really have radically different meanings. No, we’re not talking semantics here. There are serious policy implications of using the wrong words. This sort of lazy use of language by the media and politicians leads to an entitled attitude among the people.

 

Medical care or treatment is what you seek from medical professionals when you have a medical problem and aren’t in good health. See the difference? When I become unhealthy, I seek medical care because my health care has proven inadequate.

Medical insurance is what you obtain to protect yourself financially from a catastrophic illness or injury requiring expensive medical treatment.

Back before Obamacare, you could save a lot of money by taking care of your health (health care). Brad and I only ever satisfied our deductibles when we had babies or when our daughter needed braces. That’s because we work hard on our health care. Not everyone does, however.

The total cost of medical care in the US would be significantly reduced if Americans simply took care of their health. Examples?

  • Overeating is estimated to cost the nation $200 billion for the treatment of diabetes and heart disease alone, not including joint problems caused by being overweight.
  • Smoking-related medical problems are estimated to cost the nation $133 billion.
  • Alcohol and drug abuse add another $350 billion.
  • Sexually-transmitted diseases add $16 billion.
  • Reckless driving and other reckless behavior add untold billions more.

And none of these figures include the cost of Social Security Disability payments or other income support for those incapable of working due to medical problems stemming from overeating, smoking, drug addiction, sexually-transmitted diseases or reckless behavior.

Using these figures, the total cost of preventable illnesses and injuries is $699 billion at the minimum. We could round it to a nice neat $1 trillion when all the other costs are included. That’s $2,184 to $3,125 per citizen. In other words, the 30% of the population that foregoes health care (by not taking care of their health) are inflicting these medical care costs on everyone else.

There are those who will insist that society has a moral responsibility to provide medical care to those who can’t afford it, but virtually nothing is mentioned about the moral responsibility of individuals to not inflict costs on the rest of society because they lack self-control and self-respect.

So why doesn’t the media cover that? Take a really good look at the advertising on media and you’ll see the reason. Notice all the commercials for drugs and snake oils to address the infirmities and conditions stemming from a lack of personal health care. They would lose advertising dollars if they addressed the real issues of health care rather than demanding that we all pay for the medical care of everyone else.

When Obamacare first came under consideration, it was designed to address the approximately 6% of the country that lacked health insurance. Many of these people were healthy and health-caring individuals who didn’t want to pay for health insurancebut we were told we had a moral obligation to force them to submit and spend money on something they didn’t feel the need to buy. It’s a lot easier to put pressure on 6% of the country than on 30% of the country. So, no politician in his right mind would dare bring up the issue of health care when he could focus on the feel-good topic of medical care.

Let’s be honest about this. Very few people need anything more than a high-deductible medical insurance policy with a health savings account. The 70% of us who take care of our health generally don’t consume a lot of medical care. Common sense dictates that you have a low-premium, high deductible policy so that you can pool risk of a catastrophic illness with others, but it’s really pretty silly that we think we can’t afford over-the-counter medications and contraception. The vast majority of us could if we spent our money wisely. Yet, here in the United States medical care/insurance ranks 5th behind housing, food, cars, and entertainment. In other words, we subsidize medical care/insurance so that the masses can buy “stuff” rather than save money toward their old age and so that old people don’t have to move in with their kids when they stop making an income.

The cowardly framers of public opinion say that medical care/insurance must be socialized (provided by the government) because it’s a fundamental necessity. Oddly, they don’t advocate the same for food, shelter, clothing and transportation. Well, there were a few Obama czars who were hardcore Marxists who might have liked to see these industries socialized for the “good of the poor”, but they knew Americans would object to being forced en mass to buy their food in government markets, live in public housing, wear a standard uniform of clothing, and ride the same model of bicycles to work. Even the Chinese have finally rejected that way of life. Still, the American poor are kept dependent upon targeted social-welfare programs, such as food stamps, housing vouchers, and free-ish medical care through Medicaid.

Of course, if you debate these folks, they will insist that medical care/insurance is different. It doesn’t have the immediacy of food, shelter, clothing, and transportation. Because it’s not something people need every day, it requires people to plan ahead, defer gratification, make trade-offs, and save for medical emergencies. Valid point. The 30% of the population that doesn’t take care of its health probably has difficulties in these areas as well.

May I submit that there are ways of addressing this sad side of human nature other than socializing the entire medical industry, engaging in massive income transfers, or hatching unwieldy centralized plans in Congress that will only serve to raise costs and make people even less willing to take care of their health. Rick and I have been hinting at this through this series, but you can also find these ideas in many other sources including medical journals.

Simply put, you don’t put the problems of the 30% of the population who are poor decision-makers on the backs of the 70% who are able to think ahead. Instead, you find a way to address just the 30% and let the 70% go on making good decisions for themselves.

Although Rick and I were skeptical of Rand Paul’s plan before the text was available and still believe it needs to go further, it is certainly better than what the House GOP is offering with the American Health Care Act. It’s filled with details that put good decision-makers back in control of their own health care, which includes medical insurance in case they need medical treatment.  Check it out. https://www.paul.senate.gov/imo/media/doc/ObamacareReplacementActSections.pdf

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