cannedjam

If the current health care legislation is so great why is it that so many politically influential groups are seeking exemptions from its grasp?

In a closed door meeting with labor leaders, the president and congress secured member support by exempting unions from an additional tax on so called cadillac insurance plans, a tax that you and I must pay on the same level of coverage.

So what makes the union member living next door more deserving than you? That’s a good question, perhaps you should ask your congressman (that is if he will even take your call).

Despite the fact that Obama repeatedly promised an open and transparent discussion on health care, specifically in front of CSPAN cameras, much of, if not the entire process of hashing out a deal has occurred behind lock and key with zero public oversight. Deals with union leaders, big pharma, and various other special interest groups have been cut in direct contradiction with multiple Obama campaign pledges.

The president was not elected for his ideas. He was not elected because he is black, not because he is a great leader, but rather on the singular promise of being an agent of change. Change that he has failed to institute at every imaginable level in his first year in office. Instead of change we have been met with arrogance and dishonesty at every step of the process. Special exemptions, favortism inequality, bribes, strong arming, back room dealing, and an overall cloak of secrecy is not exactly what people thought they were voting for. Instead of shutting lobbyists out of the White House as promised, Obama has installed them a side door and bricked over the windows so we can’t see in. This administration makes the Bush White House look like a fish tank.

Never has an administration broken so many promises in such little time. So on Tuesday, when one of the most liberal states elects a Republican to fill the vacant seat of the man who championed this cause, perhaps Obama will wake up and finally start listening to the people (yeah right). His arrogance is astounding but his current downfall is epic.

JAM Economics, Politics Health Care

JAM Economics, Politics healthcare

What is the biggest most immediate threat that America faces, our growing debt (specifically to China), lack of health insurance, or global warming?  This is the question that should be posed to all our politicians.

What is more likely to cause the downfall of America as we know it, rising tides or rising debt? If you listen to Washington and the media their is no question. But as everyone jumps on the green bandwagon and the insurance farce our balance sheet continues to go deep into the red. The dollar continues to lose its value as our so called allies quietly celebrate, and China steadily buys up our debt and owns our government.

There is no doubt in my mind that this is the most immediate and real threat to America’s world status and our future as a country. So when your congressman or senator tries to cram debt contributing legislation down your throat (be it cap and trade or Obamacare) ask him what he thinks our biggest threat is.

Washington needs to wake up. Congress needs to start worrying more about our future than their own. The treasury needs to stop printing money, and American voters need to demand more.

The average American household’s share of federal obligations is a staggering $550,000. This is the amount of money (not covered by taxes) that the federal government would need to put aside (per household) to cover all outstanding obligations. $64 trillion. What could your family do with half a million dollars? I bet it could afford some kick ass health insurance and a nice shiny hybrid car.

JAM Economics, Politics Cap and Trade, Congress, Health Care, National Debt

Which is more important, lowering the price of health care, or increasing the number of insured? The question is important because the answers can be mutually exclusive.

If everyone is insured, yet have little personal stake in funding the system (i.e. small co-pays or very low deductibles), prices can and will increase decidedly. When someone else is picking up the tab there is little incentive to seek out the lowest cost options. Efficiency takes a back seat to indulgence, and over consumption becomes the norm.

If you have a rich uncle and he is treating you to dinner, there is way more of a chance of you ordering the $50 lobster and $9 baked potato, than there would be if you were going Dutch. If your rich uncle is paying for your health care, there is way more of a chance of you getting a gamut of unnecessary and costly tests, than there would be if you were flipping the bill.

With the current insurance model, and even more so with the one proposed by Obama, patients and even doctors have little knowledge of what procedures cost. You pay your $15 dollar co-pay no matter if you come out of the office with some aspirin, or if you had a full body MRI and heart bypass surgery. When no one cares about cost, the only one left to reign in the spending is the insurance company themselves, who as a result are perceived to be heartless and without compassion.

If we used this logic in other industries, costs would be so astronomically high that our economy would come to a halt. Imagine if everyone had retail insurance and all clothing only cost $15 no matter the brand or quality. Everyone would be shopping exclusively at Brooks Brothers and Coach, people would be hoarding merchandise making it more scarce, and prices would sky rocket for the insurer.

In fact, the only sectors in the medical industry that are seeing higher quality at lower prices are in the elected fields. Lasik eye surgery and plastic surgery procedures continue to improve while prices continue to decline. These are also the only two sectors of the industry that fall outside of the grasp of the insurance model, and as a result are exposed to open pricing and competition. If you ask someone how much their corrective eye surgery cost they can tell you without skipping a beat, try getting an answer from them as to how much their last family doctor visit cost their insurance company. This is proof that a greater share of the responsibility on the patient leads to competition, which leads to greater efficiencies and lower aggregate costs for everyone.

In addition to a lack of shared responsibility, other cost increasing inefficiencies exist in the system. Cookie cutter pricing, known as “community rating” (as opposed to “experience rating”), mandates that everyone pays the same premiums regardless of expected cost. This is imposed out of “fairness”, however, it allows for an obese smoker who ignores his diabetes to pay the same in premiums as a healthy marathon runner who eats a balanced diet. There are no incentives for living a healthy life, and as a result the system inadvertently subsidizes unhealthy and costly behavior. With “community rating” men and women must be treated the same, even though women visit the doctor and utilize the health care system significantly more than men (I don’t hear much outcry over the fact that men pay higher auto insurance premiums than women). Someone who is 300lbs overweight cannot be denied coverage, and in addition is allowed to pay the same price as a 110lb yoga instructor.

When you don’t allow an insurance company to assess risks and assign costs appropriately, the least risky among us must pick up the tab. Fair? I am pretty sure someone would complain if the village drunk was allowed to pay the same amount for car insurance as everyone else.

As a result of these regulations, the perception of health insurance as a product, shifts to health insurance as a right, and once the core principles are abandoned, we are left with government subsidized health charity, operating under the guise of “insurance”.

This system can achieve universal coverage, but at what cost? It rewards unhealthy lifestyles and fosters preventable diseases, punishes the least risky among us, takes personal responsibility out of the equation, significantly increases price, and installs a huge government apparatus that is so cumbersome and bloated that it would be virtually impossible to reverse.

Off the top of my head I can think of a few easy, cost effective ways, using free market ideals to achieve systematic efficiency, and healthier Americans (without abandoning what makes us great as a nation);

1) Tax free health savings plans
2) Higher deductibles with lower premiums
3) Increasing competition by allowing out of state health insurance

These three things would be a good start.

JAM Economics, Politics Health Care

In the middle of a health care debate, what we are seeing is the attempted wholesale abandonment of the free market system that has propelled the United States to the forefront of innovation.

Through years of research, experimentation, and tremendous amounts of risk taking the American drug industry has emerged as the world leader. Everyone is told that if you work hard enough you will be rewarded, but what they fail to tell you is that if you succeed in creating something that is vital, it will be taken from you, and those who should be praising your innovation will turn on you when they feel entailed to your product.

The Obama administration is seeking to further limit the amount of time drug companies can hold onto their patents before cheaper generics can be manufactured. Sure, if you pay out of pocket for a drug that is $5 a pill, wouldn’t it be great if someone else could make it and sell it to you for 50¢ a pill? Never mind the $5 goes toward recouping the billions of dollars worth of research and development costs, the billions of dollars in current R&D costs for future drugs, and establishes a financial incentive for people to invest in emerging pharmaceuticals. Never mind that limiting the reward for the risks of developing drugs, limits the incentive to create new drugs, never mind that, no, let’s focus on the fact that there is a pill that will let you keep shoving doughnuts in your pie-hole while keeping your cholesterol down - and it’s too expensive for you to afford.

I guess the free market is good enough to foster the development of breakthroughs, but evil once it comes time to cash in on them. We would never be where we are if not for the profit motive, but now that we have arrived, let’s turn our back on it. Sounds good to me, seeing that we have already cured every disease that has ever and will ever exist. Pack it in boys, let’s start handing this stuff out. Job well done.

Okay, okay, I know what some of you are thinking, “wow this guy is an ass, I can’t believe he is sticking up for the drug companies who have us all by the short hairs”. Well, believe it, I believe unless you can do it yourself, you are at the mercy of those who can. I paid $3000 to have my apartment rewired because I don’t have the skill to do that myself. So unless you have some centrifuges, mass spectrometers, and electrophoresis gel hanging around your living room, and the knowledge, time and skill to develop your own medications, then I guess you will just have to pay for it.

I fail to realize how just because a product is for your health, it is not expected that you to have to pay for it, or those who sell it are demonized because they make money. I don’t know about you, but I am pretty happy lock smiths make money, because the one time I needed one he was still in business, and I was willing to pay him pretty much whatever it took to get in my house. When the cable company refused to give me the cable package for what I was willing to pay them, I said, “I understand your position, but understand mine, I am not willing to pay this and I am willing to go without cable if this is what it will cost”, they called me back and gave it to me for what I was asking - this is how a price is established. If I was going to die, and someone invented a pill to keep me alive, I would pay whatever it cost and chock the rest of my life up to bonus time. I for one am grateful that people make money by saving other people’s lives, because the alternative is a lot more costly.

JAM Economics, Politics Health Care, Obama