Blogs

Constance  Thank you for commenting. I do have some ideas of what should be done and have been debating whether or not to provide them taking into account the current state of government etc. I do not know if I have the interest (because I have a low opinion of my fellow voters, mainly) or stamina (it is a multi-faceted topic with many ‘moving and stationary parts’) or necessarily information (the field is vast and I know a lot about some things, and very little – for example, the state’s role in Medicaid - about others. I do know a little bit about economics and staying clear of ideology when facts and reason should be at play. Finally, my view of the starting point – that is, NOW -is likely different from yours. But a fair minded person will accept that much of what I picture as ‘now’, is close in most, but perhaps not all, respects. With that preface….

As to the starting point, we have 13? million with health insurance that didn’t have it before, and what, 20-30 millions on the exchanges. Most of that is good news from at least one viewpoint – people having insurance – if not from other viewpoints – is there a better way/cheaper way/no forced choice way/why only one choice way?, etc., etc. The stock market has set new records regularly from the spring of 2016 – pre-election – so some people are doing very well. Great wealth has been created – think about your 401k/403b investments. (No financial genius did that.) Automobile sales have set new records, including types for average joes and working stiffs, so investment bankers and pensioners are not the only people with disposable income. In spite of Fox News, and its Australian owner, Murdock’s propaganda, economists say we are at full employment. And we are at the totem of 3% GDP growth rate. Yep. Heard it yesterday. (Edit: Reference added below)

Granted there are many under-employed. Some may be discouraged to have left the workplace. I haven’t seen a reliable figure on this. What is assured is this: the need for workers in any industry is and will be threatened by automation, and other electronics, and cheap energy into the unforeseeable future, barring the Rapture, alien-invasion, rogue asteroid hitting Earth, thermo-nuclear warfare, or a zombie apocalypse – the Earth ending as we know it. So those that do not have marketable skills (knowledge, skills and abilities) will not be competitively employed. It will only be more accentuated as time goes on. Also, manufacturing in this country will never again be a major employment sink for any but skilled and specialized (think of all the electronics going into vehicles today) workers. So, if you have a friend or relative, with SKILLS, who is out of work for longer than a year, then likely something other than the ACA is the cause.

Competitiveness with other countries will only get more intense. Some countries invest as much or more in its citizens – in job terms – than the US. The US has had great success post WW2 in having a very responsive economic system, and got a huge boost due to the GI Bill of Rights educating a great many (and funding at low interest small businesses and home-building) and the US having the only intact and solvent 1st World economy until the 1960s. Money and people move around quickly under rule of law, with employers able to hire and fire with great rapidity and set up and close down businesses with ease. The world is catching on and catching up. Plus the rest of the world largely believes in science and the value of facts over ideology when it comes to public policy matters. And it appears we cannot distinguish STEM (science, technology, engineering and mathematics) prepared foreigners, even those trained in the US, from unskilled immigrants.

YOUR QUESTIONS ADDRESSED: So that is the backdrop. Plus things like having no ‘health system’ at all, but a hodge-podge of public/private entities and both taxable and tax exempt motives. So, the ACA was a construct – an omnibus bill – did many things, related and unrelated to any concept of ‘system’ - super-imposed (mostly) on the hodge-podge. So the first decision for reformers (wanting to do something responsibly) is to either scrap the hodge-podge and start afresh – like single payer or (modified) Medicare for all, or change so much of what is in place.

1. How do you pay for it? The personal mandate (must have health insurance or must pay a tax – the Individual Shared Responsibility Provision) is economically sound as a principle. The problem is that the penalty was not set high enough to change behavior. Instead of repealing the personal mandate, the associated penalty needs to be increased. This will be the cheapest, and taxpayer free way, to improve the healthcare exchanges. Getting more healthy people into the exchanges will get more insurers into the exchanges, providing more choice and lowering costs through less risk for the insurers and more competition between them. Some R senators no longer talk about repealing the personal mandate. I haven’t heard any say to increase the penalty, however. If the hodge-podge is to be maintained in some form, the most important action would be to increase the penalty. And depending on the type of single payer or (modified) Medicare alternative is in effect, then having a robust penalty for not having insurance would still be needed. EVERY BODY needs to be in the risk pool.

Secondly and Thirdly, the Additional Medicare Tax (rich person’s tax) in the ACA could add a second tier of taxes (higher rate) at higher incomes to cover shortfalls, and the Net Investment Income Tax (tax on passive income) could have a second tier of tax (higher rate) applied to larger investment income levels. That is two ways to fund what is needed. They will not miss it. “Don’t tax you. Don’t tax me. Tax the person behind the tree.” You now know who is behind the tree.

2. Will eliminating state lines to offer insurance provide value, especially small insurers? I do not see any economics behind this. The rich get rich, and the bigger get bigger. The big insurers would maintain their bigness – what is to prevent this? I do not see it. Cutting out the states means that either the feds will have to regulate the insurers, or the insurers will pick and choose which state controls their activities in all other states. If you know anything about Pennsylvania’s success in regulating insurers, a reasonable person would not want that foisted on his/her own state.

3. What if Medicaid had fewer restrictions or having a subsidized risk pool? The fewer restrictions I’ve heard about is related to funding – giving the money to the states as a block grant versus earmarked by the feds for Medicaid. My opinion of state governments is lower that Congress. How many states are well run? Hardly any. George Mason Univ has a unit that assesses state governments. We should be ashamed to tolerate the finances we have. I already mentioned Kansas’s governor and his screwball ideology that made matters worse in that state. I’m all for experiments, but like all good experiments, there needs to be controls, limits, boundaries, and other scientific method norms. If Pennsylvania got a hunk of cash, it would likely put into its failed pension system which the R assembly in 2001 made worse by bumping legislators pensions, going from a surplus to a huge deficient in spite of a record increase in the stock market since then.

Risk pools do not work. And if anything must be subsidized I would opt for the entire system (the exchanges) to get the subsidy. If only the very sick get a subsidy, then how will the working class afford anything?

4. As to everyone hurting, not every one is hurting. Many people are doing just fine. The ‘working people’/not working poor would benefit directly from increasing the penalty of the individual mandate. Please see #1 above. That is the easiest and cheapest way to lower every one’s insurance premium quickly. Getting even lower pricing will entail some serious changes such as getting to lower infant mortality rates; having primary care more accessible; having fewer specialists in more areas. And lots more.

Now as to taxes, it is clear that paying for things isn’t high priority in this country. The R Congress and president is clamoring for a tax cut. Borrow and spend is the R way. Perhaps tax and spend is the D way. The common word is SPEND. The country has a SPENDING problem. Like setting state and other public pensions higher than anything that can be sustained. It is what a crazy person would do. Won’t go on.    Pete


References:

https://www.irs.gov/affordable-care-act/affordable-care-act-tax-provisions

http://www.taxpolicycenter.org/briefing-book/what-tax-changes-did-affordable-care-act-make

https://www.bloomberg.com/news/articles/2017-09-28/u-s-second-quarter-growth-revised-upward-to-3-1-annual-pace

So what exactly would you propose? And who exactly would pay for it?  The problem of paying is still the problem.   Someone has to pay.  Who?  Also would the state line change not allow the carriers to better footing in the market so increases competition and thus allow market to be more ?   Just trying to see all angles here.  Not just who this hurts.   No saying that beefed up Medicaid might not help but restrictions and a pool that is subsidized for the .   Quoting Bloomberg is nice but it doesn't answer all of the questions or the issues.  Just pointing out who it hurts doesn't help.  Right now everyone is hurting.  Including all the working not just the working poor.  This is going to hurt no matter what we do so what is the next best step? How about solutions and not just bashing.   All for everyone coming up with something but do something.  What we have is not working.