by | CONSTITUTION, FREEDOM, GOVERNMENT, OBAMA, OBAMACARE
The basic premise that everyone should be protected in case of serious illness or injury with appropriate insurance is not an unsavory idea. But the concept of an individual mandate does nothing. Not only does it not help with that problem of encouraging everyone to carry coverage, it confuses the entire idea of what “health insurance” is or is supposed to be — so much that it affirmatively discourages or reduces the likelihood that people will have insurance. I propose that the concept of health insurance should only really be related to major medical situations, like other true “insurances”.
The individual mandate is both unconstitutional and ineffective because it leads to a poor allocation of resources. In order to understand why, it requires an understanding between the difference of real health “insurance” and what currently counts as health insurance (a broad medical coverage plan).
Insurance, by definition, is a payment of a premium to cover the very unlikely event that would result in high economic consequences. Therefore, it has the effect of relatively low premiums to protect against that economic possibility.
In contrast, what counts as medical insurance in this country is a small portion of real insurance, but is largely pre-paid medical care: you pay your monthly premium which you get back every time you go to the doctor because you’ve already contributed x so many dollars a month which covers the doctors’ fees (minus a “co-pay” or “deductible”). It’s not an efficient practice, however, nor a cost-effective one. It gives the false impression that going to the doctor is cheap, when in reality, you’ve already paid in advance for doctor visits – that you may or may not have.
This is in contrast to other types of true insurance. I submit it is necessary to remodel the health insurance system after other insurance sectors – such as life, fire, or home insurance. For instance, it is both accepted and reasonable that you will pay more for life insurance at the age of sixty than at twenty-five. The reason for this practice is the understanding that the risk is higher.
Likewise, people buy fire insurance because the economic loss is from a fire is extraordinarily great and the cost for coverage is relatively low. But even with fire insurance, you pay more if you home is made of wood and not brick, and if you live farther from a fire station than closer — that is the matter of risk.
Everyone should have routine doctor visits. If everyone paid for those out-of-pocket, it would be more economically viable, because one would only be paying for what he needed – and would probably result in more healthy citizens who have an economic incentive to take better care of themselves. Instead, the government intentionally combines and obfuscates the meaning and definition of insurance to include medical coverage or routine costs. The only people who truly need that are the same people who can’t afford anything — and should be treated like those who can’t afford routine food.
You don’t need insurance to go to a doctor. That is welfare. For the average person who pays 15-20K a year of medical coverage, a very large percentage of the cost is not insurance – it’s the prepaid care for a larger pool of people. Therefore, individuals are really overpaying when it is set up this way because the real insurance part is intentionally combined with health care so you can hide the cost of those with higher risks, i.e the cost is buried within premiums.
The term “individual mandate” is intentionally confusing. The individual mandate — as the administration would describe it — is a requirement that everyone buy their own health insurance. The basic concept of everyone having their own health insurance is not, in and of itself, terrible — if health insurance were actually insurance in the same way life or fire insurance are. Obama Care, however, is not and therefore the individual mandate is not a mandate to buy health insurance as we’ve been told — it’s a mandate for universal and pre-paid medical care.
Since people of different ages, medical conditions, pre-existing situations, etc have different anticipated costs, the purpose of an individual mandate has nothing to do with getting people to buy their own insurance. It is the forcing of individuals to buy into a system that makes people pay for medical treatments that are not theirs, support welfare, and overpay for services in order to create a coverage that is similar for all person. That is legal plunder and anti free-market. The health care industry would best serve our citizens if Obama Care and the individual mandate was rescinded and if it restructured health insurance as a ‘true insurance’.
by | ECONOMY, OBAMACARE, POLITICS, TAXES
FLASHBACK: Don’t forget that the House voted to repeal the Medical Device Tax on June 7, 2012 with “H.R. 436, the Protect Medical Innovation Act of 2012”. The Senate never did — not then, not now. Who’s looking out for businesses? See my post from June 2012:
This little-talked about tax seems to be absent from news coverage. Are media outlets are avoiding discussion of Obamacare items in advance of the Supreme Court ruling expected later this month? In case you missed it, on June 7th, the House voted 270-146 to repeal the medical excise tax. The bill must now pass the Senate, where current speculation is that it will not pass.
What is the medical excise tax? Medical device manufacturers employ 360,000 people in 6000 plants across the country. This law imposes a new 2.3% excise tax. It exempts items retailing for <$100. [Bill: PPACA; Page: 1,980-1,986]
Many are ardently opposed to the new tax, and rightfully so. As an excise tax, it taxes gross sales – even if the device company doesn't turn a profit that year. Note: this tax is one of many slated to go into effect January 2013.
As a revenue raiser, its impact is nominal. The government speculates it could raise $20-$30 billion. Though that sounds like a lot to you and me, it's a drop in the bucket in terms of government revenue.
Furthermore, from an business perspective for the companies subject to this tax, the extra resources needed to comply will be burdensome for companies. Price changes and paperwork will take time and manpower away from the company's main purpose -- to produce a product -- in order to handle this new regulation.
From a common sense perspective, why would the federal government want to make medical devices -- which save lives -- more expensive? Will the Senate support small businesses and repeal an unnecessary, expensive, and burdonsome tax? The House has done so. The Senate should follow suit.
by | ARTICLES, CONSTITUTION, FREEDOM, OBAMA, OBAMACARE, POLITICS, TAXES
On this two year anniversary of ObamaCare, we must remember a greater anniversary, the sage words spoken 237 years ago today.
It is in vain, sir, to extenuate the matter. Gentlemen may cry, Peace, Peace– but there is no peace. The war is actually begun! The next gale that sweeps from the north will bring to our ears the clash of resounding arms! Our brethren are already in the field! Why stand we here idle? What is it that gentlemen wish? What would they have? Is life so dear, or peace so sweet, as to be purchased at the price of chains and slavery? Forbid it, Almighty God! I know not what course others may take; but as for me, give me liberty or give me death!
This begs the question. If ObamaCare was such a monumental piece of legislation as the White House claims, why no mention in the news today?
by | ECONOMY, OBAMACARE, TAXES
New estimates released from the CBO suggest that ObamaCare will cost at least $1.76 TRILLION over ten years — up from the $900 Billion touted by Obama.
Democrats employed many accounting tricks when they were pushing through the national health care legislation, the most egregious of which was to delay full implementation of the law until 2014, so it would appear cheaper under the CBO’s standard ten-year budget window and, at least on paper, meet Obama’s pledge that the legislation would cost “around $900 billion over 10 years.” When the final CBO score came out before passage, critics noted that the true 10 year cost would be far higher than advertised once projections accounted for full implementation.
By this time next year, we’ll have the full ten years (2014 – 2023) time frame to get the truest estimate of cost, which is likely to exceed $2 trillion.
Philip Klein, the Washington Examiner correspondent who covered the above information, also released a corollary article that discusses the impact of employer health-care changes and the rising number of Medicare recipients on ObamaCare costs and coverage. And for those who love raw date, the entire CBO report can be accessed here.
$2 Trillion is far, far different then $900 billion. No wonder HHS Secretary Sebelius claimed during testimony that she has no idea if ObamaCare will add to the deficit. The Supreme Court case at the end of this month will be worthwhile keeping an eye on. Hopefully they’ll overturn this monstrosity of a bill and safeguard the American people.
by | ARTICLES, GOVERNMENT, HYPOCRISY, OBAMA, OBAMACARE
President Obama made it a priority of his busy day of not producing a workable budget or cutting the deficit to be supportive of the coed student who complained about the cost of her contraception. He calls and apologizes to her for her interaction with Rush Limbaugh. But our Commander-in-Chief has yet to call the family of slain soldier from Virginia, Army Sargeant Timothy John Conrad, who died February 23, following the Koran-burning incident (which Obama apologized on behalf of America for.)
Turns out that Ms. Fluke is not a 23-year old. According to the Gateway Pundit, she revealed on the Today Show with Matt Lauer that she is actually a 30 year-old. She is also a women’s rights activist, as well as the past president of Law Students for Reproductive Justice.
Should we even be surprised anymore?
by | ARTICLES, ECONOMY, OBAMACARE, POLITICS, TAXES
The WSJ had a fantastic piece today, reminding us of the new taxes yet to come, signed into law under Obama. And he wants MORE tax increases as part of this deficit negotiation?
Go read the full synopsis right now. Some of the additional taxes are listed below
• Starting in 2013, the bill adds an additional 0.9% to the 2.9% Medicare tax for singles who earn more than $200,000 and couples making more than $250,000.
• For first time, the bill also applies Medicare’s 2.9% payroll tax rate to investment income, including dividends, interest income and capital gains. Added to the 0.9% payroll surcharge, that means a 3.8-percentage point tax hike on “the rich.” Oh, and these new taxes aren’t indexed for inflation, so many middle-class families will soon be considered rich and pay the surcharge as their incomes rise past $250,000 due to tax-bracket creep. Remember how the Alternative Minimum Tax was supposed to apply only to a handful of millionaires?
Taxpayer cost over 10 years: $210 billion.
• Also starting in 2013 is a 2.3% excise tax on medical device manufacturers and importers. That’s estimated to raise $20 billion.
• Already underway this year is the new annual fee on “branded” drug makers and importers, which will raise $27 billion.
• Another $15.2 billion will come from raising the floor on allowable medical deductions to 10% of adjusted gross income from 7.5%.
• Starting in 2018, the bill imposes a whopping 40% “excise tax” on high-cost health insurance plans. Though it only applies to two years in the 2010-2019 window of ObamaCare’s original budget score, this tax would still raise $32 billion—and much more in future years.
• And don’t forget a new annual fee on health insurance providers starting in 2014 and estimated to raise $60 billion. This tax, like many others on this list, will be passed along to consumers in higher health-care costs.
by | BUSINESS, ECONOMY, OBAMACARE, POLITICS, TAXES
The current assertion that we are in a recession because the wealthy companies haven’t put money back into the system is just plain wrong. But even our president is peddling this idea. Last month, Obama chided businesses to hire more workers. Specifically, he said “it is time for companies to step up. American taxpayers contributed to that process of stabilizing the economy. Companies have benefited from that, and they’re making a lot of money, and now’s the time for them to start betting on American workers and American products.”
The problem with such a statement is the fact that although some companies are profitable, it doesn’t mean that they can afford to increase their hiring. Yelling at businesses to do so only makes him look like a petulant child.
The reality is that Obama’s unfriendly business policies have substantially contributed to the present uncertainty in the business world regarding long-term planning. The economy works on a set of facts; the existing tax rates have been in place since 2003 and there have not been higher rates since then. Making large changes, such as tax increases– as has announced he plans to do — will most certainly affect the economy, because there will be even less capital for companies to maintain and grow their enterprises.
In addition to tax rates, increased regulation and new regulation due to Obamacare are all causes for concern to businesses. Entities such as the EPA, SEC, NLRB and Dodd-Frank all have their hand in the pot. With pressure to keep up and comply with government’s nanny state, business owners are hesitant to invest. Unless changes are made to allow companies more freedom, they will hold on to their money. Other decisions, such as not pushing a Free Trade Agreement, and an enormous increase in spending since FY2008 all feed the hesitation and money pinch that the businesses feel.
Without true business-friendly reform, entrepreneurs will look elsewhere — namely abroad — to fund their ventures where businesses are welcomed, appreciated, and cultivated.
by | OBAMACARE, POLITICS
During the health care debates last year, there had been much talk and support on the Left for the concept of a “public option” in the bill. The rationale behind this, according to the federal government, was that there is not a sufficient free market for health insurance in some parts of our country.
Accordingly, they deemed it their job to get consumers the best coverage at the best price, by offering a competing a public option, seemingly on par with private insurers.
I believe the promulgation of the public option was deceitful. There was never going to be an equal footing, as the Government would severely limit the range of allowable insurance and then use its financial and political muscle to gain customers, as acknowleged by Senator Chuck Schume, among others. Nevertheless, it had so much support that it was included in most of the drafts of the health care bill.
Reflecting on the merits of the public option argument as we debate how to reign in our excessive government spending, my question is this: if this “public option” was viewed as a necessity in terms of competition and cost, why should there not be a “private option” in every area that the Government – federal, state, local – has staked out an unnecessary monopoly for itself?
Other than National Defense and the Criminal Court Systems, there appears to be no reason – other than creation of a power base to enable the bloated government salaries that we see today – that the private sector should not be given an opportunity to compete on a level playing field.
Based on the government’s rationale, there should be a “private option” in virtually every area of public service.
by | ECONOMY, NEW YORK, OBAMACARE, POLITICS
Having dinner with Scott Rasmussen a couple weeks ago, we got onto the subject of Social Security. He remarked that people have different ideas about Social Security reform. Some people suggest raising taxes or the retirement age, other people want to go with privatization, still others propose reducing the benefits. Interestingly, Scott had a entirely different idea that is simple but brilliant.
Here’s the scope: Allow each Social Security recipient the latitude to pick how he wants his money accrued and allotted. For instance, if you want to retire at 70, then you can. If you want to retire at 65, so be it. If you want to increase benefits, you can tweak your contributions as such. With each person controlling the time frame and/or amount to be collected and reserved, this solution alleviates that one-solution-fits-all approach to reform that undoubtedly helps some and hurt others.
I think Scot’s idea has great potential.
by | ARTICLES, ECONOMY, OBAMACARE
Mitch Daniels does a great job on this opinion piece to the WSJ on February 7th. I have reposted the articles in its entirety below.
AN OBAMACARE APPEAL FROM THE STATES
Unless you’re in favor of a fully nationalized health-care system, the president’s health-care reform law is a massive mistake. It will amplify all the big drivers of overconsumption and excessive pricing: “Why not, it’s free?” reimbursement; “The more I do, the more I get” provider payment; and all the defensive medicine the trial bar’s ingenuity can generate.
All claims made for it were false. It will add trillions to the federal deficit. It will lead to a de facto government takeover of health care faster than most people realize, and as millions of Americans are added to the Medicaid rolls and millions more employees (including, watch for this, workers of bankrupt state governments) are dumped into the new exchanges.
Many of us governors are hoping for either a judicial or legislative rescue from this impending disaster, and recent court decisions suggest there’s a chance of that. But we can’t count on a miracle—that’s only permitted in Washington policy making. We have no choice but to prepare for the very real possibility that the law takes effect in 2014.
For state governments, the bill presents huge new costs, as we are required to enroll 15 million to 20 million more people in our Medicaid systems. In Indiana, our independent actuaries have pegged the price to state taxpayers at $2.6 billion to $3 billion over the next 10 years. This is a huge burden for our state, and yet another incremental expenditure the law’s authors declined to account for truthfully.
Perhaps worse, the law expects to conscript the states as its agents in its takeover of health care. It assumes that we will set up and operate its new insurance “exchanges” for it, using our current welfare apparatuses to do the numbingly complex work of figuring out who is eligible for its subsidies, how much each person or family is eligible for, redetermining this eligibility regularly, and more. Then, we are supposed to oversee all the insurance plans in the exchanges for compliance with Washington’s dictates about terms and prices.
The default option if any state declines to participate is for the federal government to operate an exchange directly. Which got me thinking: If the new law is not repealed by 2013, what could be done to reshape it in the direction of freedom and genuine cost control?
I have written to Kathleen Sebelius, secretary of Health and Services (HHS), saying that if her department wants Indiana to run its program for it, we will do so under the following conditions:
• We are given the flexibility to decide which insurers are permitted to offer their products.
• All the law’s expensive benefit mandates are waived, so that our citizens aren’t forced to buy benefits they don’t need and have a range of choice that includes more affordable plans.
• The law’s provisions discriminating against consumer-driven plans, such as health savings accounts, are waived.
• We are given the freedom to move Medicaid beneficiaries into the exchange, or to utilize new approaches to the traditional program, instead of herding hundreds of thousands more people into today’s broken Medicaid system.
• Our state is reimbursed the true, full cost of the administrative burden to be imposed upon us, based on the estimate of an auditor independent of HHS.
• A trustworthy projection is commissioned, by a research organization independent of the department, of how many people are likely to wind up in the exchange, given the large incentives for employers to save money by off-loading their workers.
Obviously, this is a very different system than the one the legislation intends. Health care would be much more affordable, minus all the mandates, and plus the consumer consciousness that comes with health savings accounts and their kin. Customer choice would be dramatically enhanced by the state’s ability to allow more insurers to participate and offer consumer-driven plans. Through greater flexibility in the management of Medicaid, the state might be able to reduce substantially the hidden tax increase that forced expansion of the program will impose.
Most fundamentally, the system we are proposing requires Washington to abandon most of the command-and-control aspects of the law as written. It steers away from nanny-state paternalism by assuming, recognizing and reinforcing the dignity of all our citizens and their right to make health care’s highly personal decisions for themselves.
So why would Ms. Sebelius and HHS agree to this de facto rewrite of their treasured accomplishment? A glance at the recent fiasco of high-risk pools provides the answer. When a majority of states, including Indiana, declined to participate in setting up these pools, which cover those with high-cost, existing conditions, the task fell to HHS. As widely reported, it went poorly, with costs far above predictions and only a tiny fraction of the expected population signing up.
If the feds can’t manage this little project, what should we expect if they attempt it on a scale hundreds of times larger and more complex? If it were only Indiana asking, I have no doubt that HHS would ignore us. But Indiana is not alone. So far, 21 states—including Pennsylvania, Texas and Louisiana—have signed the same letter. We represent more than 115 million Americans. Washington’s attempt to set up eligibility and exchange bureaucracies in all these places would invite a first-rate operational catastrophe.
If there’s to be a train wreck, we governors would rather be spectators than conductors. But if the federal government is willing to reroute the train to a different, more productive track, we are here to help.
Mr. Daniels, a Republican, is the governor of Indiana.
