“Health Insurance? What Me Worry?”–Trumpcare for Dummies.

The “repeal and replace” debate has created more confusion than clarity. Cutting to the heart of it, the question is: “How do you incentivize young and healthy people to buy health insurance?”

1Sam_thumb_w_580Health insurance seems so complicated:   different plans, deductibles, out-of-pocket costs, premiums, enrollment periods.  So many companies, so many options, so little time.

The American Health Care Act (AHCA) will be voted on in the House tomorrow.

Here is an effort to explain in simple terms the essential weakness of the AHCA, which has become known as “Trumpcare.”  It is the same weakness that has plagued the Affordable Care Act (“Obamacare”).

In summary, both assume the costs of health insurance and health care will come down over time if more people are incentivized to buy health insurance.  The difference is in the form of the incentive.  How how do you get more people to participate?  Negative incentive or positive?  Stick or carrot?

Obamacare uses the stick.  Trumpcare, the carrot.  Both depend for success on which kind of incentive works best to get the most people to get with the program.

Why is it important to have more people participate?  It has to do with the spreading of risk and cost.

Insurance is simply a financial tool to do that–spread risk and cost.  Car insurance is a familiar example to those fortunate to have a car.  The law requires everyone who drives (good driver or bad) to have car insurance. You may never have an accident, but your premiums go to help share the costs of those who do.

Health insurance plans do the same.  They allow us to shift our individual health risk and cost to insurance companies, which then spread the risk to a larger population of participants (so called “risk pools”).  Our own risk pool may include fellow workers (through employer-sponsored plans) or fellow citizens who buy on the state sponsored exchanges.

The larger and more diverse the risk pool, the further the risk is spread and the lower the costs of insurance should be to each participant, which brings us back to the central challenge faced by both Obamacare and Trumpcare.

Under Obamacare, if everyone without employer sponsored insurance had bought health insurance on the exchanges, premiums would be lower, mainly because younger and healthier people diversify the risk.

To put it another way, if younger and healthier people do not join the pool, or opt out, aggregate and individual premiums rise, because the risk ends up being shared only among an older, less healthy group.

This, in fact, was the cause of the premium increases in the Obamacare exchanges. Younger and healthier people opted out of the risk pools because it was less expensive to pay penalties than remain in the pools.

This problem also threatens Trumpcare, and it will continue to be a subject of debate. Instead of forcing participation (with the combination of mandates, penalties and subsidies) the AHCA hopes to attract younger, healthier people to participate by providing tax incentives (no mandate or penalty*).  Carrots instead of sticks.

[* Trumpcare will have a 30% “penalty” (a premium surcharge) for a lapse in coverage.  This will be payable to the insurance companies.  They need the money.]

The challenge in both cases (Obamacare and Trumpcare) is that to maintain the now popular features of Obamacare–mandating coverage for those with pre-existing conditions and making health insurance affordable for more people–it is critical to have the participation of the younger and healthier crowd.

Obamacare mandates participation.  Trumpcare bets younger, healthier people will opt for health insurance at the right price.  This also assumes young and healthy people will be rational about their health care decisions and lose their “what-me-worry” attitudes of invincibility.  If they buy health insurance only when they finally get sick, Trumpcare (and the country) will suffer a fate worse than Obamacare.

The what-me-worry attitude is just too familiar and too pervasive.  The Trumpcare switch to a “free market,” hold-out-the-carrot set of incentives is bound to fail.  Health insurance and healthcare costs will continue to spiral.  Tens of millions will lose insurance.

It is no surprise that a senior officer of the American College of Physicians, which represents 148,000 doctors and medical students, on Monday said he had “never seen a bill that will do more harm to health.”

ACP

“Fix Obamacare! Stop Wasting Time and Money Tearing It Down.”

The Republicans have burned a lot of time and money trying to dismantle Obamacare. Instead, they and the Democrats should be collaborating to fix it.

For more than 20 million previously uninsured Americans, health insurance through the Affordable Care Act (the “ACA” or “Obamacare”) has been a boost in ways that cannot be measured in dollars and cents:  better health, lower stress, more productivity, making life better for everyone.

“Instead of collaboration to make Obamacare better, Congress spent $87 million of taxpayer dollars on 60 efforts to repeal it.”

The efforts to “repeal and replace” appear to give priority to cutting taxes for the wealthy, and assuring big profits for health insurers, rather than bringing health care to more Americans.  (By the way, can you imagine how great it would be if everyone here was healthy–or at least healthier?)

What is most upsetting is that these same conservatives, through their politics, have done their best to cripple Obamacare and now use the damage they have wrought as a cover for their efforts to repeal and replace it.

I am not saying Obamacare is perfect.  Even President Obama called for improvements. But instead of collaboration to fix the current law, Congress spent $87 million of taxpayer dollars on 60 unsuccessful attempts to repeal it.

Those who sponsored those efforts knew full well that President Obama’s veto pen was always ready.  The only explanation for their bullheaded behavior is that it was a craven, partisan effort to manipulate public opinion and weaken Obamacare.

“Conservatives, through their politics, have done their best to cripple Obamacare and now use the damage they have wrought as a cover for their efforts to repeal and replace.”

They have now turned up the volume on words and phrases, like “disaster,” “imploding,” “death spirals,” and other highly-charged rhetoric that exaggerates and misleads.  (Remember “Death Panels”?)

Of course, this has been calculated to further undermine confidence in the current law and drive away demand from the individual insurance markets.

In addition, on the very day of his inauguration, President Trump’s first order of business to call for “repeal and replacement” of Obamacare and non-enforcement of its mandate and penalties.  For the continued viability of Obamacare, this was like draining the air from your tires and putting sugar in your gas tank.

The new American Health Care Act (the “AHCA” or “Ryancare”) has problems that become more apparent every day.  It is based on false economics, false hope and deserves to fail.  Then, attention should turn to fixing Obamacare, to make it work better, more fairly and for more people.

It’s time to fix Obamacare and to stop the waste of time and money tearing it down. “Collaboration” is NOT a dirty word.

Nor, by the way, is “Public Option.”

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Paul Ryan and His $1.5 Million Powerpoint Presentation

With all the money the Insurance Industry has pumped into lobbying and campaign donations, we can certainly depend on our politicians to do what is best for the country. Right?

As you may have seen in my last blog post, the profits of the largest health insurance companies have been hurt under Obamacare.  It is encouraging that these companies and other members of the Insurance Industry are still investing in maintaining the freedom of our markets.

I have dug into the numbers to have a better understanding of their valiant efforts during Obamacare.

“Majority Leader Paul Ryan has received $1,576,754 in Insurance Industry campaign donations since 2010.”

According to Opensecrets.org, the total amount they invested in our political processes in 2016 was almost $80 million, up from around $45 million in 2010, the year of the enactment of Obamacare.

In addition to payments to industry lobbyists, these amounts include donations to incumbent politicians, assuring that caring, experienced public servants, like them, remain in office.

Majority Leader Paul Ryan, the most visible and devoted advocate for dismantling Obamacare, has received $1,576,754 in Insurance Industry campaign donations since 2010. This is the largest amount given to any one member of Congress during the years of Obamacare.

paul ryan presents2

At the same time, we can be proud of our very own Senator Mike Crapo, who has also been among the top congressional beneficiaries of Insurance Industry campaign donations, with  a very respectable $543,750 since 2010.

In addition, it is so comforting to know that around 70% of total Insurance Industry investment in our government has gone to Republican defenders of freedom and free markets.

I am sure Leader Paul Ryan, Senator Crapo and their congressional colleagues–with the benefit of Insurance Industry support and lobbying–are doing their objective, level best to craft a healthcare plan that will be good for the whole country.

Obamacare vs. Trumpcare: My Boat or Yours?

There’s nothing wrong with healthcare providers and insurance companies making a profit. Right?

rettungsboot_07You feel a sharp pain in your chest.  A spouse or friend rushes you to the hospital. You are having a heart attack and need immediate attention.

“Wait!” you cry from the gurney as the IV is being placed. You blurt out last-minute instructions as the sedatives begin to take effect: “Make sure to get a bid from at least three doctors. Negotiate the operating room expenses and the room rate.  If St. Luke’s is less expensive, pull me out of here. . . . and don’t . . . .”

When this moment occurs, if it hasn’t already, I’m sure you will demand this kind of price check.  We want our healthcare providers and insurers to make a profit; however, we must keep them honest, with competition and tough negotiation.

“Free markets and profit incentive are essential to the American system, even with healthcare.”

Free markets and profit incentive are essential to the American system, even with healthcare.  Government involvement, like Obamacare, hampers the markets and hinders the effects of profitability.  Look at what’s happened to health insurance companies, for example.

Take Aetna and Humana. They are two of the largest health insurers and agreed to participate on the Obamacare individual exchanges. Last year they reported losing money and threatened to withdraw from the exchanges unless their proposed merger was approved by Obama’s Justice Department.  Of course, It wasn’t.

Since 2010, when Obamacare went into effect, these two companies have distributed to shareholders a total of $2.6 billion in dividends and $19.4 billion in stock buybacks.  This represents a total of about $22.0 billion of distributions to shareholders between 2010 and 2016, an amount that could have been much higher if not for the effects of Obamacare and a blocked merger.

Under the new healthcare proposal from the Republicans, Aetna, Humana and the other health insurance providers will be freed of the anti-market, unprofitable restrictions of Obamacare and able to better serve their shareholders.

Better stock performance and removal of the Obamacare tax burden on the wealthy will be a big boost for those who really drive our economy.

Luxury Yacht.

Take super yachts, for example, those luxury boats longer than 79 feet.  Super-yacht sales have been down under Obamacare.

In 2010, the year Obamacare was enacted, combined reported sales of super yachts were over $3.0 billion.  In 2016, they had dropped to around $2.8 billion.  In 2010, the average price of a super yacht was $15.0 million and by 2016 it was less than $8.0 million.

Once the Republican healthcare proposal is in place, fewer people may have health insurance, but yacht budgets should increase, creating good jobs for yacht builders, brokers, crew members and others.

Hang in there yacht people.  Relief is on the way.

“The only thing we have to fear is fear itself!”

Here was the fear described by President Franklin D. Roosevelt in his first inaugural address, “nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.”

From the other side of the coffee shop, close to the door, came shouted words of accusation.

A man was yelling at the shop’s young manager.  He accused her of being responsible for the theft of his lap top computer.  Apparently, hours before, he had left it unattended at one of the shop’s several tables and, he claimed, it had been stolen.

As he turned to shout at customers, I jumped from my seat and rushed to see if I could help.

The manager and I coaxed the man out the door, and I stood with him in the cold while the manager went to call the police.  The poor guy was wild-eyed, disheveled and smelled of alcohol.

I tried to calm him down and help him understand his own responsibility for the loss of the computer. But he challenged my involvement.

“What makes you think you can tell ME what to do?” he spluttered. “Who are YOU?”

“I’m just a regular guy,” I said. “Standing up for what is right.”

Thankfully, the police arrived quickly and I stepped away, back into the shop.

The manager, in tears, came to thank me for my intervention and to fill out an incident report.

Later, at home, I told my wife about the episode.

“What if he had a gun?” she cried.

Had not thought of that.

The next day I read about another wild-eyed drunk who menaced two Indian men in a Kansas bar.  The man had been ejected from the bar but came back with a gun, killed one of the Indian men, wounded the other and shot a young American who had tried to wrestle the gun away.

I marveled at the heroism of the young American, but trembled as I remembered the coffee shop incident of the day before and Idaho’s new “permitless” concealed carry law.

Here was the fear described by President Franklin D. Roosevelt in his first inaugural address, “nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.”

fdr inauguration

Fear is again doing its best to take hold, competing with our better instincts to help others by causing indecision, hesitation and moral uncertainty.

Because of fear, belligerence is on the rise. Immigrants are being rounded up and roughed up by those with new authority.  Refugees, who desperately seek sanctuary, are being turned away by baseless travel bans.  Senseless acts of vandalism and violence against innocent Jews, Muslims and people of color have multiplied.

Do we have the courage to resist?  To confront verbal and physical violence?  To oppose politicians and policies that fuel fear with falsehoods and conspiracy theories?

For my part, I certainly hope so.  The costs of cowardice are too high.

“Get out there and fight for what you know is right!”

Our foundational values are now at risk of being overrun by a growing mob mentality of anger and fear.

As we left the house for school or to “hang” with friends, Mom would look piercingly into our eyes and say, “Remember who you are and what you represent!”  She said it louder and more often during our stupid, hormone-soaked teenage years.

She always reminded us of being part of something bigger than ourselves—family, community, country—and she reinforced principles taught at home, school and church.

40211223 - giving a helping hand to another

Among them, the “Golden Rule”—to treat others as we would want to be treated—a universal moral compass to point us toward the values of acceptance, respect and compassion.

This ancient wisdom has nourished the roots of civilization and united communities.  Sadly, it is now threatened by an angry and fearful mob mentality whipped to a frenzy by divisive and hateful political rhetoric.

Presidential palaver and policies, with the cowering silence of congressional leaders, have given official license to racism and xenophobia and consequent vandalism and violence.

The dark vision painted in the election and since has causal connection to the shocking desecrations of Jewish cemeteries; to multiplied vandalism and bomb threats at mosques, synagogues and community centers; and to the shooting of two innocent Indian men in Kansas by a drunken xenophobe, who believed they were Iranian and yelled “Get out of my country!” before he pulled the trigger.

This darkness will be hard to erase.  Belated, scripted words delivered to a crowd of genuflecting congressional cowards will not by themselves call back the hounds of fear and anger already unleased.  It will require much more—even from us.

Today, Mom would not just urgently whisper, “Remember who you are and what you represent.” She would push us out the door and shout: “Get out there and fight for what you know is right!”

“OK, Mom.  We’re on it!”

To Blog or Not to Blog? That is the Question.

Looking for a more constant outlet to strenuously defend fundamental values and to persistently expose falsehoods and fallacies.

2-1I love this high school picture of my Mom.  Among all the things she accomplished in her life, she was a writer of plays, novels and inspiring letters.  She was also an avid reader, who surrounded herself (and her kids) with books.  She was consistently thoughtful, passionate and principled.  I strive to follow her example.

My own reading and writing has most often been connected to my work.   As a lawyer, I read the law and wrote mind-numbing contracts and prospectuses.  As an investment banker and businessman, I have studied financial reports and industrial analysis, and written book-length descriptions of companies and projects.

Then I ran for the U.S. Senate in 2016.  This was a drink-from-a-firehose education, like doing a post-graduate program in months instead of years.

With this experience came deeper understanding of the issues we confront as Idahoans and Americans.  It also motivated me to a passionate purpose: to promote factual clarity and reason in what appears to be an officially-sanctioned atmosphere of “fake news” and fallacy.

In the clearest and simplest terms I can muster, I seek to correct factual misrepresentation and logical absurdity–and to beat back the impending threats to our most fundamental values.

For these reasons, I have written about honesty, trust, acceptance, compassion, respect and decency.  I have given priority to exposing the factual errors and illogic behind travel bans, “extreme vetting,” “repeal and replace,” and the “Con-Con” movement that threatens to muck up our Constitution.

The Idaho Statesman and the Post-Register have been exceedingly gracious in publishing my work (and I will continue to submit articles to those and other papers).  However, I am looking for a more constant outlet to strenuously defend our values and to persistently expose falsehoods and fallacies, including those emanating from our state and federal governments.

To blog or not to blog?  I will blog, and I hope you will join me.