This is the twelfth of a series of commentaries, written from a free market, individual-centered perspective, examining the serious deficiencies of our current health-care system, the underlying root causes of those problems, the looming government fiscal catastrophe secondary to health-care entitlement spending, the failure of the recently passed health-care “reform” to address the grave problems facing our nation related to health-care delivery, the harm the recently passed health-care “reform” will cause to our seriously ill economy; and a proposal for a framework to truly, effectively, and sustainably reform our health-care delivery system. This report continues outlining a framework for true and viable health-care reform.
Components for True Health-Care Reform: – Tort Reform
Successful reform must also incorporate tort reform including capping of non-economic reform. The previously referred to 2009 CBO Tort Reform Report estimated Federal health-care expenditure would decrease by $54 billion over 10 years enacting tort reform that included:
A cap of $250,000 on non-economic damages e.g. pain and suffering, punitive damages, etc.
A cap on rewards for punitive damages of $500,000 or twice the award of economic damages, whichever is greater.
Modification of the “collateral source” rule to allow evidence of income from such sources as health and life insurance, workers’ compensation, and automobile insurance to be introduced at trials or require that such income to be subtracted from the jury award.
A statute of limitations – one year for adults and 3 years for children – from the date of discovery of an injury.
Replacement of joint-and-several liability with a fair-share rule, under which a defendant in a lawsuit would be liable only for the percentage of the final award that was equal to his or her share of responsibility for the injury.
Tort reform would not only decrease private and governmental health-care expenditure but would, as seen in the Texas experience decrease medical malpractice insurance premium cost and improve access to physicians, particularly specialists.
Components for True Health-Care Reform: – Health-Care Insurance Regulation Reform
Legislative components of such insurance reform should include decreasing the number of mandated covered services thus making more affordable basic policies available. Successful reform must also increase competition among insurance companies. By simplifying insurance regulation and thereby decreasing the cost and complexity of selling health-care insurance, more companies would enter the market. Insurance sales should be allowed and encouraged across state lines. More companies competing can only lead to increased customer service and decreased premium pricing. Additional legislation allowing individuals and groups to pool together and negotiate premium price would further stimulate higher customer service and lower rates.
On the other side of the insurance market, insurance companies should be allowed to fairly price risk of utilization of health-care services into their premiums. For the healthy and young, true risk assessment would directly lower premiums. Lifestyle choices and predispositions such as smoking, obesity, sedentary habits, unhealthy eating, drug and alcohol abuse, etc lead to a disproportionate amount of health-care expenditure and should be reflected in the price of the premium. Such premium setting not only fairly treats healthy people and people that have made healthy life style choices, but incentivizes others who have not made those choices to consider them. “Fair” pricing would afford many more young families and individuals the ability to obtain health-care insurance.
It is correctly argued that without “guaranteed issue” or “community rating”, insurance would be prohibitively expensive for those with pre-existing medical conditions or conditions e.g. older age, etc., likely to require medical services. Yet, allowing premiums to be fairly priced for all risk pools would encourage more insurance providers to enter that market, encourage competition, and result in the best pricing for premiums for all risk pools. Still for some or even many in the higher risk pools, insurance may be prohibitively expensive; but allowing pricing to reflect actual risk brings more transparency to that problem. Rather than burying those costs in a “community rating” pool, establishment of state-based or national high risk pools with a government subsidy program for those in need would fairly and compassionately address the issue of those with pre-existing medical conditions. Clearly, such focused government assistance is much preferable to massive takeover and bureaucratic expansion of our health-care system. (The passed bill does create a state-based health-insurance exchange for persons with pre-existing conditions. It is to be funded with $5 billion of Federal money to fund the program until 2014. As it turn out, the chief actuary for the Centers for Medicare and Medicaid Services recently reported that money will run out next year or in 2012. So states that join the program would get financially saddled with yet another unfunded Federal program.)
Components for True Health-Care Reform: – Federal Tax Treatment of Health-Care Premiums
Correcting the tax bias that preferentially promotes employer-provided health-care insurance over individual-purchased (owned) insurance would likely be the simplest reform to enact and yet have a most profound effect. As mentioned earlier, the CBO estimated up to 25% of absent health-care insurance is secondary to change in employment. Without the present tax bias and with the ability to form group association health plans, most individuals and families would undoubtedly buy their own insurance policy on the open market. Not only would the policy be portable and no longer tied to employment but they would choose a policy that best fits their needs and pocketbooks. This reform would have an additional huge beneficial consequence. With individuals obtaining their own health-care coverage, businesses would no longer have all the associated costs direct and indirect, e.g. administrative costs, of providing employee health insurance benefit. That decreased cost structure would make them more competitive in their local, national, or world market. Further, without the huge expense of the health-care benefit, employee take-home wages would significantly rise.
Call to Action: Though passed by an appalling political process and with complete disregard of our Constitution, though containing ineffective and even harmful policy, though disregarding the inalienable rights given to us by our Creator, the passed health-care reform bill is not the end of the debate but rather a new beginning. It is an opportunity to contrast irresponsible policy with prudent policy, to contrast misconceived policy with thoughtful policy, and to contrast policy that places government in the center with policy that places the individual in the center. Get in the fight and stay in the fight. We have learned, the hard way, the consequences of leaving it up to the career politicians. Contact your legislators and demand they exercise the privilege the voters gave them to represent us to effectively address health-care delivery and the other problems facing our states and nation. Learn about the issues and talk to others about the issues. We must join and financially support conservative think tanks that promote traditional American economic principles, personal freedoms, and values; and that shine the light of accountability on irresponsible or faulty government action and policy. Those organizations include The Heritage Foundation, The State Policy Network, The Commonwealth Foundation and your state’s conservative think tank (see SPN for your state’s organization). We must join and support our local grass roots organizations like the York 9-12 Patriots, York County Action, York Campaign for Liberty, and others, so we can take back the political process that has become corrupt and ineffective. We must work to bring up, from the grass root level, candidates – principled persons (Republicans, Democrats, and Independents) who will actually solve problems, who will respect the Constitution of the United States, and who will honor the “consent of the governed” entrusted to them by the citizens of our counties, states, and country.
God Bless and God Bless America!
Tuesday, June 29, 2010
Tuesday, June 22, 2010
Sensible Health-Care Reform (Part 11): Components of True and Viable Health-Care Reform (Part I)
This is the eleventh of a series of commentaries, written from a free market, individual-centered perspective, examining the serious deficiencies of our current health-care system, the underlying root causes of those problems, the looming government fiscal catastrophe secondary to health-care entitlement spending, the failure of the recently passed health-care “reform” to address the grave problems facing our nation related to health-care delivery, the harm the recently passed health-care “reform” will cause to our seriously ill economy; and a proposal for a framework to truly, effectively, and sustainably reform our health-care delivery system. This report begins the outlining of a framework for true and viable health-care reform.
Components for True Health-Care Reform
There is a better alternative, a better way. The following proposal could be written in comprehensible terms in a bill under 10 pages; as opposed to over 2000 pages of unintelligible government speak. These proposals would enhance an individual’s right of self-determination, not unjustly appropriate that right. These proposed reforms would not create yet another fiscally unsustainable entitlement or another massive impersonal and unresponsive bureaucracy. (The passed bill creates 159 new Government agencies.) While not an all encompassing solution to our health-care system’s short comings and not without some difficulties that would need to be worked out, the following rational and viable framework for reform would bring us a long way to more affordable and responsive health-care for all and to financial viability of health-care expenditure in the public and private sectors. I must point out that not being all encompassing is a strength of the proposal and not a deficiency. The more expansive the reform and the more the reform attempts to address and control every aspect of health-care, the more detrimental unintended consequences will occur. Experience has demonstrated time and time again that massive, “intelligent” central planning can not begin to achieve the remedial and beneficial outcome of the “invisible hand” of the free markets. Some might argue that the system requires radical and immediate reform. And although this and other reviews of our health-care system has enumerated significant deficiencies in our system, we must still remember the system remains operational and has served most of us very well. Incremental reform allows assessment of a policy intervention, including the unanticipated consequences, and then adjusting or adding further policy based on that reassessment.
Components for True Health-Care Reform: – A More Patient-Centered Utilization and Payment System
To truly reform and improve our health-care system, first and foremost, reform must restructure health-care insurance payment, shifting from the current 3rd party payer system to a more patient-centered system. There is a better alternative, a better way. First and foremost, reform must restructure health-care insurance payment, shifting from the current 3rd party payer system to a more patient-centered system. Patient-centered means not simply financial responsibility for but also financial control of utilized health-care services. Employing a combination of tax credits and tax deductions along with eliminating the Federal bias for employer-provided insurance would return the funds currently being transferred to the 3rd party payers – private thru wage reduction for health-care benefit and governmental thru taxes – to the individual consumer to fund high deductible policies and associated health savings accounts (HSAs). Individual financial control and responsibility for health-care expenditure would not only stimulate more informed and thoughtful utilization of health-care services, but would also bring significant competitive forces to bear on providers (physicians, other practitioners, and facilities) and would result in greater accountability and transparency with regard to indications for health-care services, as well as, with regard to cost, quality, and customer satisfaction.
In such a system, individuals, just like for their automobiles and homes, would be primarily financially responsible for routine medical care. For non-maintenance health-care issues, high deductable policies in conjunction with HSAs would similarly help contain costs, improve service, and discourage waste. Finally, for more extraordinary conditions and expenses, medical services payment should be structured so that 3rd party payers progressively assume more and more of the cost, but ideally never all of the cost. Always maintaining some consumer responsibility will maintain a degree of beneficial disincentive for excessive health-care utilization. Such a system would also put more of end of life expenditure decisions into the hands of individuals and families, and their physicians; rather than, God forbid, government panels.
As mentioned above, restructuring the payment system to make health-care services utilization more patient-centered would further promote development of readily available health-care service resources regarding indications for those services as well as for cost, quality, and customer satisfaction measures for practitioners and facilities providing those services. Market forces would promote development of measures of quality as well as transparency in reporting of those measures. That transparency would not only identify higher quality medical care services and thus stimulate broader higher quality but would also promote elevated quality of those services that currently generally are inadequate – management of chronic disease. The medical societies of the various medical disciplines, who in the present system have never felt compelled to do so, would be motivated and professionally bound to formulate guidelines outlining indications for diagnostic interventions e.g. imaging, physiologic testing, etc, as well as expected outcome measures for medical and surgical therapeutic interventions. Such information would significantly inform patients in their utilization of health-care services but patients would still depend on the expertise, ethical standards, and professionalism of their physician.
Let’s look at a case example how a more patient-centered system would work. It was previously mentioned in our current 3rd party payer system, patients not uncommonly demand specific diagnostic testing despite their physician’s opinion that the test is not necessary to appropriately care for them. In a patient-centered system, if a physician orders an expensive test such as an MRI, most patients would want to be assured by their physician that the MRI would significantly contribute to the evaluation and treatment of their condition. Likely, that person would have earlier chosen a physician recommended to them by friend or family, or based on information from an internet physician rating site. That person would further select an MRI provider on the basis of readily available transparent costs and quality measures because that MRI provider would be competing with other providers (the more, the better) for their business.
The next Dr. Right will outline further the components of true and viable health-care reform.
Call to Action: Though passed by an appalling political process and with complete disregard of our Constitution, though containing ineffective and even harmful policy, though disregarding the inalienable rights given to us by our Creator, the passed health-care reform bill is not the end of the debate but rather a new beginning. It is an opportunity to contrast irresponsible policy with prudent policy, to contrast misconceived policy with thoughtful policy, and to contrast policy that places government in the center with policy that places the individual in the center. Get in the fight and stay in the fight. We have learned, the hard way, the consequences of leaving it up to the career politicians. Contact your legislators and demand they exercise the privilege the voters gave them to represent us to effectively address health-care delivery and the other problems facing our states and nation. Learn about the issues and talk to others about the issues. We must join and financially support conservative think tanks that promote traditional American economic principles, personal freedoms, and values; and that shine the light of accountability on irresponsible or faulty government action and policy. Those organizations include The Heritage Foundation, The State Policy Network, The Commonwealth Foundation and your state’s conservative think tank (see SPN for your state’s organization). We must join and support our local grass roots organizations like the York 9-12 Patriots, York County Action, York Campaign for Liberty, and others, so we can take back the political process that has become corrupt and ineffective. We must work to bring up, from the grass root level, candidates – principled persons (Republicans, Democrats, and Independents) who will actually solve problems, who will respect the Constitution of the United States, and who will honor the “consent of the governed” entrusted to them by the citizens of our counties, states, and country.
God Bless and God Bless America!
Components for True Health-Care Reform
There is a better alternative, a better way. The following proposal could be written in comprehensible terms in a bill under 10 pages; as opposed to over 2000 pages of unintelligible government speak. These proposals would enhance an individual’s right of self-determination, not unjustly appropriate that right. These proposed reforms would not create yet another fiscally unsustainable entitlement or another massive impersonal and unresponsive bureaucracy. (The passed bill creates 159 new Government agencies.) While not an all encompassing solution to our health-care system’s short comings and not without some difficulties that would need to be worked out, the following rational and viable framework for reform would bring us a long way to more affordable and responsive health-care for all and to financial viability of health-care expenditure in the public and private sectors. I must point out that not being all encompassing is a strength of the proposal and not a deficiency. The more expansive the reform and the more the reform attempts to address and control every aspect of health-care, the more detrimental unintended consequences will occur. Experience has demonstrated time and time again that massive, “intelligent” central planning can not begin to achieve the remedial and beneficial outcome of the “invisible hand” of the free markets. Some might argue that the system requires radical and immediate reform. And although this and other reviews of our health-care system has enumerated significant deficiencies in our system, we must still remember the system remains operational and has served most of us very well. Incremental reform allows assessment of a policy intervention, including the unanticipated consequences, and then adjusting or adding further policy based on that reassessment.
Components for True Health-Care Reform: – A More Patient-Centered Utilization and Payment System
To truly reform and improve our health-care system, first and foremost, reform must restructure health-care insurance payment, shifting from the current 3rd party payer system to a more patient-centered system. There is a better alternative, a better way. First and foremost, reform must restructure health-care insurance payment, shifting from the current 3rd party payer system to a more patient-centered system. Patient-centered means not simply financial responsibility for but also financial control of utilized health-care services. Employing a combination of tax credits and tax deductions along with eliminating the Federal bias for employer-provided insurance would return the funds currently being transferred to the 3rd party payers – private thru wage reduction for health-care benefit and governmental thru taxes – to the individual consumer to fund high deductible policies and associated health savings accounts (HSAs). Individual financial control and responsibility for health-care expenditure would not only stimulate more informed and thoughtful utilization of health-care services, but would also bring significant competitive forces to bear on providers (physicians, other practitioners, and facilities) and would result in greater accountability and transparency with regard to indications for health-care services, as well as, with regard to cost, quality, and customer satisfaction.
In such a system, individuals, just like for their automobiles and homes, would be primarily financially responsible for routine medical care. For non-maintenance health-care issues, high deductable policies in conjunction with HSAs would similarly help contain costs, improve service, and discourage waste. Finally, for more extraordinary conditions and expenses, medical services payment should be structured so that 3rd party payers progressively assume more and more of the cost, but ideally never all of the cost. Always maintaining some consumer responsibility will maintain a degree of beneficial disincentive for excessive health-care utilization. Such a system would also put more of end of life expenditure decisions into the hands of individuals and families, and their physicians; rather than, God forbid, government panels.
As mentioned above, restructuring the payment system to make health-care services utilization more patient-centered would further promote development of readily available health-care service resources regarding indications for those services as well as for cost, quality, and customer satisfaction measures for practitioners and facilities providing those services. Market forces would promote development of measures of quality as well as transparency in reporting of those measures. That transparency would not only identify higher quality medical care services and thus stimulate broader higher quality but would also promote elevated quality of those services that currently generally are inadequate – management of chronic disease. The medical societies of the various medical disciplines, who in the present system have never felt compelled to do so, would be motivated and professionally bound to formulate guidelines outlining indications for diagnostic interventions e.g. imaging, physiologic testing, etc, as well as expected outcome measures for medical and surgical therapeutic interventions. Such information would significantly inform patients in their utilization of health-care services but patients would still depend on the expertise, ethical standards, and professionalism of their physician.
Let’s look at a case example how a more patient-centered system would work. It was previously mentioned in our current 3rd party payer system, patients not uncommonly demand specific diagnostic testing despite their physician’s opinion that the test is not necessary to appropriately care for them. In a patient-centered system, if a physician orders an expensive test such as an MRI, most patients would want to be assured by their physician that the MRI would significantly contribute to the evaluation and treatment of their condition. Likely, that person would have earlier chosen a physician recommended to them by friend or family, or based on information from an internet physician rating site. That person would further select an MRI provider on the basis of readily available transparent costs and quality measures because that MRI provider would be competing with other providers (the more, the better) for their business.
The next Dr. Right will outline further the components of true and viable health-care reform.
Call to Action: Though passed by an appalling political process and with complete disregard of our Constitution, though containing ineffective and even harmful policy, though disregarding the inalienable rights given to us by our Creator, the passed health-care reform bill is not the end of the debate but rather a new beginning. It is an opportunity to contrast irresponsible policy with prudent policy, to contrast misconceived policy with thoughtful policy, and to contrast policy that places government in the center with policy that places the individual in the center. Get in the fight and stay in the fight. We have learned, the hard way, the consequences of leaving it up to the career politicians. Contact your legislators and demand they exercise the privilege the voters gave them to represent us to effectively address health-care delivery and the other problems facing our states and nation. Learn about the issues and talk to others about the issues. We must join and financially support conservative think tanks that promote traditional American economic principles, personal freedoms, and values; and that shine the light of accountability on irresponsible or faulty government action and policy. Those organizations include The Heritage Foundation, The State Policy Network, The Commonwealth Foundation and your state’s conservative think tank (see SPN for your state’s organization). We must join and support our local grass roots organizations like the York 9-12 Patriots, York County Action, York Campaign for Liberty, and others, so we can take back the political process that has become corrupt and ineffective. We must work to bring up, from the grass root level, candidates – principled persons (Republicans, Democrats, and Independents) who will actually solve problems, who will respect the Constitution of the United States, and who will honor the “consent of the governed” entrusted to them by the citizens of our counties, states, and country.
God Bless and God Bless America!
Tuesday, June 15, 2010
Sensible Health-Care Reform (Part 10): The Passed Health-Care Will Further Exacerbate the Current Unprecedented Economic Decline (Part II)
This is the tenth of a series of commentaries, written from a free market, individual-centered perspective, examining the serious deficiencies of our current health-care system, the underlying root causes of those problems, the looming government fiscal catastrophe secondary to health-care entitlement spending, the failure of the recently passed health-care “reform” to address the grave problems facing our nation related to health-care delivery, the harm the recently passed health-care “reform” will cause to our seriously ill economy; and a proposal for a framework to truly, effectively, and sustainably reform our health-care delivery system. This report argues further that the passed health-care bill will aggravate the current unprecedented US economic decline.
The Passed Health-Care Bill – Will Contribute Further to an Unprecedented Economic Decline
The passed health-care “reform” not only expands the broken government health-care entitlement system but, in an attempt to pay for the new program, foolishly enacts new taxes on the struggling economy. Among others, the bill imposes a new 3.8% tax on investment income on individual filers with incomes >$200,000 or joint filers with combined incomes >$250,000 (Yet another example of discrimination against the institution of marriage). The writers of this new tax say the rich can afford to pay more, but in fact, this tax hurts everyone. Discouraging investment further impedes the economy. And less investment in the markets means less growth and value of our stock markets in which all working households have a stake. A recent dynamic analysis done by the Heritage Foundation estimates this tax alone will:
Result in an average of 115,000 lost job opportunities per year
Reduce productivity by an average 0.01 percentage points per year
Cause a loss of $1.37 in gross domestic product (GDP) for every dollar of additional revenue collected
Reduce household disposable income by $17.3 billion per year
Reduce the stock of household real net wealth by an average $267 billion per year
The passed health-care reform bill also levies new taxes on medical device manufacturers and pharmaceutical companies – the same previously discussed industry that has created unprecedented medical care and technologic advances. Increased taxation of these companies will result in less investment back into the business, less growth of the business, and less hiring. Medtronic, a medical device manufacturer, estimated that the new tax would spur layoffs of 1000 workers.
The new law also eliminates a corporate tax subsidy in the 2003 Medicare prescription drug benefit program that encourages companies to provide drug benefits to their retirees. That subsidy costs taxpayers $665 per covered retiree but the same drug benefit provided by Medicare would cost taxpayers $1,209. The tax treatment change in the new bill will cost companies that provide the retirement drug benefit, $233 per covered retiree. As a result, most companies will eliminate their retiree drug benefit programs, sending those persons into the Medicare program, adding further to overall Medicare expenditure, i.e. Federal deficit. You would have thought this is a no brainer – $665 per retiree taxpayer burden ($233 per retiree additional corporate tax break) vs. $1209 per retiree taxpayer burden. Further because of the resultant change for corporations’ anticipated retiree health-care costs liability, this tax change has triggered a rash of corporate downward earnings revisions including – AT&T, $1billion; Deere & Co., $150million; 3M, $90million – with obvious implications for stock valuation and the markets. (When these companies announced their earnings restatement, Commerce Secretary Locke derided that action as “premature and irresponsible”. Democrat Representative Waxman of California vowed to call these CEOs in for Congressional hearings because those earning restatements conflicted with “independent analyses, which show the new law will expand coverage and bring down costs." Turns out the companies were following SEC accounting rules and we haven’t heard anything further about Congressional hearings.)
The new law also imposes new mandates on businesses of greater than 50 employees. These employers who do not offer “government approved” health plan or pay at least 60% of the employee’s health-care premium will pay a $2000 tax for every employee beyond the first 30 employees. Further, hires from low or moderate income households, who qualify for Federal health-care premium subsidy and who choose to accept that subsidy, will now generate a $3000 employer-paid tax per hire. Beyond the usual economic and employment implications of the increased cost of doing business these misconceived mandates will:
Encourage businesses to stay below or get below 50 employees – hardly a pro-employment policy.
Discourage employers from hiring individuals from households that economically qualify for Federal health-care premium subsidy.
Encourage businesses to opt out of providing health-care by paying the $2000/employee tax and shifting the cost of their health-care to the Federal government and thereby greatly exacerbating the disastrous Federal entitlement fiscal situation – This financial inducement in truth is a disguised and devious mechanism leading to a single-payer (and highly rationed) health-care system.
The next Dr. Right will begin outlining a framework for true and viable reform.
Call to Action: Though passed by an appalling political process and with complete disregard of our Constitution, though containing ineffective and even harmful policy, though disregarding the inalienable rights given to us by our Creator, the passed health-care reform bill is not the end of the debate but rather a new beginning. It is an opportunity to contrast irresponsible policy with prudent policy, to contrast misconceived policy with thoughtful policy, and to contrast policy that places government in the center with policy that places the individual in the center. Get in the fight and stay in the fight. We have learned, the hard way, the consequences of leaving it up to the career politicians. Contact your legislators and demand they exercise the privilege the voters gave them to represent us to effectively address health-care delivery and the other problems facing our states and nation. Learn about the issues and talk to others about the issues. We must join and financially support conservative think tanks that promote traditional American economic principles, personal freedoms, and values; and that shine the light of accountability on irresponsible or faulty government action and policy. Those organizations include The Heritage Foundation, The State Policy Network, The Commonwealth Foundation and your state’s conservative think tank (see SPN for your state’s organization). We must join and support our local grass roots organizations like the York 9-12 Patriots, York County Action, York Campaign for Liberty, and others, so we can take back the political process that has become corrupt and ineffective. We must work to bring up, from the grass root level, candidates – principled persons (Republicans, Democrats, and Independents) who will actually solve problems, who will respect the Constitution of the United States, and who will honor the “consent of the governed” entrusted to them by the citizens of our counties, states, and country.
God Bless and God Bless America
The Passed Health-Care Bill – Will Contribute Further to an Unprecedented Economic Decline
The passed health-care “reform” not only expands the broken government health-care entitlement system but, in an attempt to pay for the new program, foolishly enacts new taxes on the struggling economy. Among others, the bill imposes a new 3.8% tax on investment income on individual filers with incomes >$200,000 or joint filers with combined incomes >$250,000 (Yet another example of discrimination against the institution of marriage). The writers of this new tax say the rich can afford to pay more, but in fact, this tax hurts everyone. Discouraging investment further impedes the economy. And less investment in the markets means less growth and value of our stock markets in which all working households have a stake. A recent dynamic analysis done by the Heritage Foundation estimates this tax alone will:
Result in an average of 115,000 lost job opportunities per year
Reduce productivity by an average 0.01 percentage points per year
Cause a loss of $1.37 in gross domestic product (GDP) for every dollar of additional revenue collected
Reduce household disposable income by $17.3 billion per year
Reduce the stock of household real net wealth by an average $267 billion per year
The passed health-care reform bill also levies new taxes on medical device manufacturers and pharmaceutical companies – the same previously discussed industry that has created unprecedented medical care and technologic advances. Increased taxation of these companies will result in less investment back into the business, less growth of the business, and less hiring. Medtronic, a medical device manufacturer, estimated that the new tax would spur layoffs of 1000 workers.
The new law also eliminates a corporate tax subsidy in the 2003 Medicare prescription drug benefit program that encourages companies to provide drug benefits to their retirees. That subsidy costs taxpayers $665 per covered retiree but the same drug benefit provided by Medicare would cost taxpayers $1,209. The tax treatment change in the new bill will cost companies that provide the retirement drug benefit, $233 per covered retiree. As a result, most companies will eliminate their retiree drug benefit programs, sending those persons into the Medicare program, adding further to overall Medicare expenditure, i.e. Federal deficit. You would have thought this is a no brainer – $665 per retiree taxpayer burden ($233 per retiree additional corporate tax break) vs. $1209 per retiree taxpayer burden. Further because of the resultant change for corporations’ anticipated retiree health-care costs liability, this tax change has triggered a rash of corporate downward earnings revisions including – AT&T, $1billion; Deere & Co., $150million; 3M, $90million – with obvious implications for stock valuation and the markets. (When these companies announced their earnings restatement, Commerce Secretary Locke derided that action as “premature and irresponsible”. Democrat Representative Waxman of California vowed to call these CEOs in for Congressional hearings because those earning restatements conflicted with “independent analyses, which show the new law will expand coverage and bring down costs." Turns out the companies were following SEC accounting rules and we haven’t heard anything further about Congressional hearings.)
The new law also imposes new mandates on businesses of greater than 50 employees. These employers who do not offer “government approved” health plan or pay at least 60% of the employee’s health-care premium will pay a $2000 tax for every employee beyond the first 30 employees. Further, hires from low or moderate income households, who qualify for Federal health-care premium subsidy and who choose to accept that subsidy, will now generate a $3000 employer-paid tax per hire. Beyond the usual economic and employment implications of the increased cost of doing business these misconceived mandates will:
Encourage businesses to stay below or get below 50 employees – hardly a pro-employment policy.
Discourage employers from hiring individuals from households that economically qualify for Federal health-care premium subsidy.
Encourage businesses to opt out of providing health-care by paying the $2000/employee tax and shifting the cost of their health-care to the Federal government and thereby greatly exacerbating the disastrous Federal entitlement fiscal situation – This financial inducement in truth is a disguised and devious mechanism leading to a single-payer (and highly rationed) health-care system.
The next Dr. Right will begin outlining a framework for true and viable reform.
Call to Action: Though passed by an appalling political process and with complete disregard of our Constitution, though containing ineffective and even harmful policy, though disregarding the inalienable rights given to us by our Creator, the passed health-care reform bill is not the end of the debate but rather a new beginning. It is an opportunity to contrast irresponsible policy with prudent policy, to contrast misconceived policy with thoughtful policy, and to contrast policy that places government in the center with policy that places the individual in the center. Get in the fight and stay in the fight. We have learned, the hard way, the consequences of leaving it up to the career politicians. Contact your legislators and demand they exercise the privilege the voters gave them to represent us to effectively address health-care delivery and the other problems facing our states and nation. Learn about the issues and talk to others about the issues. We must join and financially support conservative think tanks that promote traditional American economic principles, personal freedoms, and values; and that shine the light of accountability on irresponsible or faulty government action and policy. Those organizations include The Heritage Foundation, The State Policy Network, The Commonwealth Foundation and your state’s conservative think tank (see SPN for your state’s organization). We must join and support our local grass roots organizations like the York 9-12 Patriots, York County Action, York Campaign for Liberty, and others, so we can take back the political process that has become corrupt and ineffective. We must work to bring up, from the grass root level, candidates – principled persons (Republicans, Democrats, and Independents) who will actually solve problems, who will respect the Constitution of the United States, and who will honor the “consent of the governed” entrusted to them by the citizens of our counties, states, and country.
God Bless and God Bless America
Wednesday, June 9, 2010
Sensible Health-Care Reform (Part 9): The Passed Health-Care Will Further Exacerbate the Current Unprecedented Economic Decline (Part I)
This is the ninth of a series of commentaries, written from a free market, individual-centered perspective, examining the serious deficiencies of our current health-care system, the underlying root causes of those problems, the looming government fiscal catastrophe secondary to health-care entitlement spending, the failure of the recently passed health-care “reform” to address the grave problems facing our nation related to health-care delivery, the harm the recently passed health-care “reform” will cause to our seriously ill economy; and a proposal for a framework to truly, effectively, and sustainably reform our health-care delivery system. This report argues that the passed health-care bill will aggravate the current unprecedented US economic decline.
The Passed Health-Care Bill – Will Contribute Further to an Unprecedented Economic Decline
Considering the unsustainable and untenable Federal government fiscal state, the brutal unemployment levels, and the increasing citizenry dependence on government subsidy, we find ourselves in the midst of an historic and unprecedented economic downturn. Unless we implement rational and thoughtful policy to reverse these conditions, moving further down this same economic road can only lead to catastrophic economic collapse. The CBO in multiple reports describes the Federal fiscal trajectory as unsustainable, primarily secondary to entitlement health-care deficit spending. Federal debt held by the public jumped from 41% of GDP in 2008 to 60% in 2009 and is projected to climb to 100% of GDP by 2029 and 468% of GDP by 2060. Although for specific economic conditions, deficit spending can be helpful to the economy; ongoing debt growth beyond growth of the economy is inherently unstable. Without systemic reform, health-care spending deficit growth likely will exceed the above dire projection as economic growth rates fall further and further behind. In the long term, deficit spending represents shifting future consumption to present consumption, with less present investment i.e. savings, and therefore lower output of goods and services in the future. Further, progressive disparity between debt growth and that of economic growth will reach a point where investors will be unwilling to buy debt, leading to a significant risk of accelerating inflation, and subsequent economic calamity.
The Federal deficit worsens as more individuals lose their jobs with tax revenues falling and unemployment benefits rising. In this flagging economy, unemployment hovers around 10% with 4.2 million jobs lost in 2009. At the time of this writing, 460,000 more persons applied for first-time jobless benefits for the week ending April 3. In February, the Bureau of Labor and Statistics estimated the underemployment rate (includes those working part-time looking for full-time work, those unemployed looking for work, and those unemployed who have stopped trying to find work) at17%. A recent Gallup poll found the underemployment rate closer to 20%. For workers under the age of 25, unemployment stands at 20%. (A new Federal policy to eliminate unpaid internships, a tried and true mechanism for young adults to obtain valuable job skills, will further darken the employment picture for young job seekers.) Even more disturbing, the “long-term” jobless rate” – out of work for more than 27 weeks – in February 2009 was 25% of all the unemployed and by this past February had increased to 44% of the unemployed. Undoubtedly ongoing extension of jobless benefits contributes to the long-term jobless rate as it discourages the unemployed from seeking a new job.
As unemployment persists or deteriorates further, the number of citizens depending on the government climbs and the number of tax paying citizens falls. 60.8 million persons now depend on government for housing, health-care, and subsistence. The Index of Dependence on Government, a measure of citizenry dependence that considers government (taxpayer) subsidies for housing, education, health and welfare, farm and agriculture, and retirement has increased 31% since 2001. 36% of tax filers paid no income tax in 2008 and many of those actually received payments in the form of tax credits - $70 billion. In 2009, that number likely will have increased substantially because of further economic and employment decline and new Obama administration tax credits. The expansion of the number of citizens dependent on government and the ensuing contraction of tax paying citizens threatens the very foundation of our democratic republican system of government.
From a self-centered standpoint, as taxpayers, we understand that as unemployment persists or grows and citizenry dependence on government grows, we and future taxpayers will personally assume increasing excessive tax liability. Such confiscation of our wealth and redistribution of that wealth undoubtedly is unjust. Yet we must also recognize the terrible injustice of past and ongoing faulty and misguided government policies that hurt the economy, increase unemployment, and encourage dependence on government. These terrible policies, in the end, take away the individual’s unalienable right and bestowed human dignity to support one’s self and family and to make one’s own life decisions; and instead replace that right and dignity with “socially just” government provision of a meager and joyless “equal” existence.
The next Dr. Right will further argue that the passed health-care bill will worsen the current unprecedented economic crisis.
Call to Action: Though passed by an appalling political process and with complete disregard of our Constitution, though containing ineffective and even harmful policy, though disregarding the inalienable rights given to us by our Creator, the passed health-care reform bill is not the end of the debate but rather a new beginning. It is an opportunity to contrast irresponsible policy with prudent policy, to contrast misconceived policy with thoughtful policy, and to contrast policy that places government in the center with policy that places the individual in the center. Get in the fight and stay in the fight. We have learned, the hard way, the consequences of leaving it up to the career politicians. Contact your legislators and demand they exercise the privilege the voters gave them to represent us to effectively address health-care delivery and the other problems facing our states and nation. Learn about the issues and talk to others about the issues. We must join and financially support conservative think tanks that promote traditional American economic principles, personal freedoms, and values; and that shine the light of accountability on irresponsible or faulty government action and policy. Those organizations include The Heritage Foundation, The State Policy Network, The Commonwealth Foundation and your state’s conservative think tank (see SPN for your state’s organization). We must join and support our local grass roots organizations like the York 9-12 Patriots, York County Action, York Campaign for Liberty, and others, so we can take back the political process that has become corrupt and ineffective. We must work to bring up, from the grass root level, candidates – principled persons (Republicans, Democrats, and Independents) who will actually solve problems, who will respect the Constitution of the United States, and who will honor the “consent of the governed” entrusted to them by the citizens of our counties, states, and country.
God Bless and God Bless America
The Passed Health-Care Bill – Will Contribute Further to an Unprecedented Economic Decline
Considering the unsustainable and untenable Federal government fiscal state, the brutal unemployment levels, and the increasing citizenry dependence on government subsidy, we find ourselves in the midst of an historic and unprecedented economic downturn. Unless we implement rational and thoughtful policy to reverse these conditions, moving further down this same economic road can only lead to catastrophic economic collapse. The CBO in multiple reports describes the Federal fiscal trajectory as unsustainable, primarily secondary to entitlement health-care deficit spending. Federal debt held by the public jumped from 41% of GDP in 2008 to 60% in 2009 and is projected to climb to 100% of GDP by 2029 and 468% of GDP by 2060. Although for specific economic conditions, deficit spending can be helpful to the economy; ongoing debt growth beyond growth of the economy is inherently unstable. Without systemic reform, health-care spending deficit growth likely will exceed the above dire projection as economic growth rates fall further and further behind. In the long term, deficit spending represents shifting future consumption to present consumption, with less present investment i.e. savings, and therefore lower output of goods and services in the future. Further, progressive disparity between debt growth and that of economic growth will reach a point where investors will be unwilling to buy debt, leading to a significant risk of accelerating inflation, and subsequent economic calamity.
The Federal deficit worsens as more individuals lose their jobs with tax revenues falling and unemployment benefits rising. In this flagging economy, unemployment hovers around 10% with 4.2 million jobs lost in 2009. At the time of this writing, 460,000 more persons applied for first-time jobless benefits for the week ending April 3. In February, the Bureau of Labor and Statistics estimated the underemployment rate (includes those working part-time looking for full-time work, those unemployed looking for work, and those unemployed who have stopped trying to find work) at17%. A recent Gallup poll found the underemployment rate closer to 20%. For workers under the age of 25, unemployment stands at 20%. (A new Federal policy to eliminate unpaid internships, a tried and true mechanism for young adults to obtain valuable job skills, will further darken the employment picture for young job seekers.) Even more disturbing, the “long-term” jobless rate” – out of work for more than 27 weeks – in February 2009 was 25% of all the unemployed and by this past February had increased to 44% of the unemployed. Undoubtedly ongoing extension of jobless benefits contributes to the long-term jobless rate as it discourages the unemployed from seeking a new job.
As unemployment persists or deteriorates further, the number of citizens depending on the government climbs and the number of tax paying citizens falls. 60.8 million persons now depend on government for housing, health-care, and subsistence. The Index of Dependence on Government, a measure of citizenry dependence that considers government (taxpayer) subsidies for housing, education, health and welfare, farm and agriculture, and retirement has increased 31% since 2001. 36% of tax filers paid no income tax in 2008 and many of those actually received payments in the form of tax credits - $70 billion. In 2009, that number likely will have increased substantially because of further economic and employment decline and new Obama administration tax credits. The expansion of the number of citizens dependent on government and the ensuing contraction of tax paying citizens threatens the very foundation of our democratic republican system of government.
From a self-centered standpoint, as taxpayers, we understand that as unemployment persists or grows and citizenry dependence on government grows, we and future taxpayers will personally assume increasing excessive tax liability. Such confiscation of our wealth and redistribution of that wealth undoubtedly is unjust. Yet we must also recognize the terrible injustice of past and ongoing faulty and misguided government policies that hurt the economy, increase unemployment, and encourage dependence on government. These terrible policies, in the end, take away the individual’s unalienable right and bestowed human dignity to support one’s self and family and to make one’s own life decisions; and instead replace that right and dignity with “socially just” government provision of a meager and joyless “equal” existence.
The next Dr. Right will further argue that the passed health-care bill will worsen the current unprecedented economic crisis.
Call to Action: Though passed by an appalling political process and with complete disregard of our Constitution, though containing ineffective and even harmful policy, though disregarding the inalienable rights given to us by our Creator, the passed health-care reform bill is not the end of the debate but rather a new beginning. It is an opportunity to contrast irresponsible policy with prudent policy, to contrast misconceived policy with thoughtful policy, and to contrast policy that places government in the center with policy that places the individual in the center. Get in the fight and stay in the fight. We have learned, the hard way, the consequences of leaving it up to the career politicians. Contact your legislators and demand they exercise the privilege the voters gave them to represent us to effectively address health-care delivery and the other problems facing our states and nation. Learn about the issues and talk to others about the issues. We must join and financially support conservative think tanks that promote traditional American economic principles, personal freedoms, and values; and that shine the light of accountability on irresponsible or faulty government action and policy. Those organizations include The Heritage Foundation, The State Policy Network, The Commonwealth Foundation and your state’s conservative think tank (see SPN for your state’s organization). We must join and support our local grass roots organizations like the York 9-12 Patriots, York County Action, York Campaign for Liberty, and others, so we can take back the political process that has become corrupt and ineffective. We must work to bring up, from the grass root level, candidates – principled persons (Republicans, Democrats, and Independents) who will actually solve problems, who will respect the Constitution of the United States, and who will honor the “consent of the governed” entrusted to them by the citizens of our counties, states, and country.
God Bless and God Bless America
Subscribe to:
Posts (Atom)
