Posted on 03/22/2017 3:41:04 PM PDT by Wolfie
Go Ahead...You Own It
I had an "interesting" debate on Twitter last night with someone who is involved in the health insurance game in some way and apparently has cancer patients as clients. He is a strong shill for (supporter of) the "Obamacare Repeal/Replace" process by his own admission.
The debate was plenty fun and decent right up until I pointed out that on the math the Federal Government spent $1,417 billion last fiscal year on Medicare and Medicaid, up from $380 billion in 1998, which incidentally was 37% of all federal spending last year -- and it's accelerating at ~8-9% a year as it has been for the last several decades (with some notable outlying years.)
At this rate it will cross $2,000 billion, or more than half (by a good margin) of the current federal budget within 5 years. That will blow a $600 billion additional annual deficit hole in the budget into a rising rate environment which the government will not be able to finance.
That's math, not politics.
For this I was told I was a conspiracy nut and belonged on Infowars. Never mind that every one of my figures came from the Treasury itself in the form of its official published balance sheet. If that's tinfoil.....
Yeah.
Following my assertion that the AHCA does zero to address cost, which he admitted is correct, and that if we do not address cost and thus drop that $1,417 billion precipitously the government's budget will be destroyed and thus collapse on the clear evidence and trends published by our government's own Treasury Department he declared that he was storming off and blocking me -- and did exactly that.
So what do we have here? When I bring up arithmetic and facts that are published by our own government along with the published growth rates and what that will inevitably lead to, pointing out that there is exactly one way to stop what is otherwise inevitable predicated on the laws of mathematics I get called a conspiracy nut?
30 year trends in data published by our own government is a conspiracy? A statement that we cannot finance another $600 billion a year rising to somewhere around $2.5 trillion a year within five more in a rising rate environment is open to question?
REALLY?
Or is the truth that the light came on in his head -- he is shilling for a bill that is an outrageous and open fraud upon the public since it will not address cost (which he admits) but will further advance the collapse of our federal government's ability to fund itself, and thus operate!
It's a hell of a lot easier to just slam the door than take on the math and either find an error in it (in which case you win) or admit you're wrong and change your position, especially after you've been lobbying lawmakers, eh?
If you're wondering why despite my repeated public statements (including right here, again) that I'm willing to show up in DC (or anywhere else for that matter) and have this debate in public, under oath if the body sponsoring same would like it that way and hash it all out there have been no takers among the political class you now know why. Most of those in the political class do know what the math shows -- they're simply intentionally sticking their fingers in their ears and repeating "na-na-na-na-na-na" because the minute they stop the entire charade they've been running on health care comes crashing down around them.
It's damn hard to continue supporting stupid once you admit it's stupid and won't work - so the entire game is to refuse to have the debate at all in an effort to prevent being tagged with the label "financial rapist" by everyone around you.
Here's a bit of history -- all fact, not conjecture. The insurance and medical industry was in the beginning stages of collapse in 2008. Annuities are funny things; you promise to pay X, you take in Y, you invest it with a return of Z in a bond ladder and the books balance. You hope.
You get in a lot of trouble when the promise to pay X ends up as X+ and the return Z doesn't materialize. You can get in lethal trouble that way, in fact, and quite easily. This is how the pension systems in our states, cities and private instances have blown up, and most of it has come from health care.
Then there are all the pigs at the trough in health care itself. See, while health care counts toward GDP, and is nearly 20% of it today (up from about 3% 30ish years ago) most of it doesn't produce anything. Not one car, one house, one television set. Oh sure, it might allow someone to keep making those things -- maybe -- but at what cost? Yes, there are exceptions, but most of those exceptions (e.g. childbirth) are actually quite cheap in percentage terms.
The ugly part is that much medical care is actually negative to GDP. Why? Consider the drug addict who mainlines opiates and destroys his heart valves. "Fixing" it costs upward of $500,000, all said and done. Will that person ever produce more value than that with their remaining life? Definitely not if they keep using drugs; they'll die. The sad reality is that most of them do exactly that.
How about the Type II diabetic that winds up running through a quarter-million bucks in drugs, amputations, dialysis, blindness and death because they won't change their food intake and stop eating carbohydrates? How far does he or she go before the ability to produce is destroyed, at which point they're on disability and go from producing something to a net consumer of everyone else's production? By the way that specific instance when you add it all up nets out to somewhere around $400 billion a year for Medicare and Medicaid now! That's crazy on any objective basis; you could literally give everyone in the country -- man, woman and child $1,000 a year instead with money left over -- or adequately feed everyone who is hungry in sub-Saharan Africa (all ~230 million of them!) with a lot of money left over.
I'm not going to talk ethics regarding the two examples above in this post because that's a thorny discussion indeed! But you can't escape the mathematical outcome that results from allowing these people to impose their costs on everyone else. There are plenty of people in the lower and middle economic strata -- in fact, most -- who can easily wind up being a net negative to GDP and the problem becomes much worse when medical costs ramp by a factor of six compared against GDP and not all of the conditions in question come as the result of voluntary lifestyle choices.
But in all cases you eventually run out of people who can and will pay when exponential cost expansion occurs, especially when at the same time you ramp cost the income base you rely on to pay taxes to fund it is being destroyed one drug addict or Type II diabetes sufferer at a time.
Always.
It was starting in the 1990s and early 2000s and everyone in the industry, never mind anyone running a company (like me) knew it. The so-called "High Risk Pools" were collapsing. That's a fact, and it was cited as one of the reasons we had to pass the PPACA - to put a stop to their collapse by forcing everyone into paying for those who were very sick or nearly dead! The stories of people who were unable to get into those pools at all due to lack of funding were well-circulated and the crimp put on treatments paid for by them were both well-documented and publicized -- again, due to lack of funds.
I wrote article after article on this in the 2009 timeframe with the facts and figures from our own government and those making similar claims. The PPACA was basically a bailout of the medical industry engineered to force a more-level slam of the cost on everyone in the country.
But... it failed. It failed because nothing was done about the actual problem and costs continued to ramp. The PPACA managed to get a lower growth rate in Medicare and Medicaid spending for two years but it then returned to its previous trend! The negative GDP problem got worse rather than better in aggregate and moved even further up the income scale on an individual basis. The government tried to finance that through even more deficit spending but doing so just destroyed productivity and tax receipts.
That's the funny thing about cost-shifting -- it can never solve a cost problem. It just moves the problem somewhere else. Where it moved it was on the back of productivity and tax receipts, both of which have been horrifyingly bad since the 2008 crash. Last fiscal year tax receipts rose by less than 1% despite all the new taxes in the PPACA and higher rates generally while productivity improvements have all but disappeared.
The AHCA cannot resolve this problem because it intentionally refuses to address the driver of the problem in the first instance. Returning to "High Risk Pools" is idiotic because those very pools were on the verge of collapse prior to the PPACA and were a big part of why Obamacare was written and passed! The insurance and medical lobbies wrote the PPACA to get rid of those problems and pools, or so they thought.
They tried denying math but failed because the laws of mathematics are not suggestions. You can't get rid of a cost by making someone else pay it; you simply move it and eventually it comes back and bites you.
The answer to the problem cannot lie in "more insurance" or "restructuring" health insurance and let me remind you that my debate "partner" admitted the AHCA will do nothing to address the total cost of health care. It just moves money around, something I noted back when it was first released (and much to the detriment of state budgets.)
The answer to the problem is, and can only be, a return of the medical industry to its historical 3-4% of GDP.
How?
Enforce the damn law -- specifically, 15 USC and State Consumer Protection laws. Enforce them in a simple fashion: Everyone must post a price and everyone pays the same price; any sort of hiding, collusion, cost-shifting or similar is met with indictments, prosecution and prison for consumer fraud and racketeering along with violations of the Sherman, Clayton and Robinson-Patman acts.
What your insurance covers is between you and the insurance company; the provider of service has nothing to do with it. I remind you that insurance companies are not immune from anti-trust when they "negotiate" with providers and that this is a matter of settled law; they tried to run that claim in the 1970s and lost at the US Supreme Court.
Forcing published pricing and charging everyone the same price for the same service or product of like kind and quantity, disconnecting it from alleged "insurance" will force competition into the market immediately.
Medical costs will immediately drop like a stone. How much? Let me point out that from one "direct concierge care" site we have some examples of what market prices would look like - $4 for an A1c test, $3.13 for a CBC (complete blood count), $7 for a PSA screen, $275 for an MRI (damn close to what you can buy it for in Japan - cash, of course), $37 for an X-ray and $167 for a CAT scan. On drugs how about $1.98 for 90 Prozac pills, or $1.44 for 30 Prilosecs? This place claims these offers are "at their cost" with your "membership"; note that they are not selling at a loss and the maker/operator of same is still making a profit! Why would you fork over a "co-pay" of $10 or $20 when you can pay $1.50 for your prescription in cash?
Why would you need "health insurance" to cover routine medical care and prescriptions if you could buy services and drugs at prices like that -- or at a 20% markup from them with a bunch of competitors in a given area?
We can have that sort of pricing for medical care today, right now, right here, everywhere in the country: Enforce the damned law today and that's the pricing we will have for medical services and drugs TOMORROW.
We need no legislation to do any of this -- just enforcement of existing law.
We do, however, need some legislation as well. Specifically, we need to repeal the reimportation ban on pharmaceuticals, and we need to add to Robinson-Patman inclusion of international sales. That will force "best price" everywhere and pharmaceutical costs will fall like a rock here in the United States. Oh, those other nations? They'll get to pay their ratable share of the development of drugs -- and it'll be about damn time.
In terms of legislation it's pretty easy -- you can see some ideas here and here.
Note the dates.
If we fail to address cost in this manner then it matters not whether the AHCA passes. I hope it doesn't, simply because bad laws are worse than no laws, and I'm not vindictive.
You see, if they pass it they own it -- and everything that comes after it as a result.
All Ryancare does is change the name of Obamacare to Trumpcare and hangs it around the President’s neck.
It is designed to insure he is not re-elected.
Bottom line:
If we continue with government picking up the bulk of the cost for health care, we eventually bankrupt the government.
If government forces the insurance companies to pick up the tab, we eventually bankrupt the insurance industry.
The founders never intended for government to be a charity.
The founders never intended to delegate the power to force the people to purchase contracts they do not want or cannot afford to the government.
The only solution is the one the founders intended. Leave government out of it.
In crisis management, Reagan’s Law ALWAYS applies: In our present crisis, Government is not the solution to our problem; government is the problem.
Yes, yes and yes.
“It is designed to insure [President Trump] is not re-elected.”
Knowing Ryan, that makes perfect sense.
Under any other name, Obamacare is still an albatross, the owner/wearer of which is sure to drown. Don’t let it be attached to your name or your neck.
Kill the bill.
Repeal obamacare or let it die on its own.
I still have faith in President Trump to do the right thing!
Right now every one pay for high risk pool. And Hospitals are over charged. We need to reform social program.
you know how I know no one is actually reading Karls article? Because in it he states the solution. Enforce 100+ year old antitrust law. End price discrimination price fixing and pricing after the fact. You know its cheaper most places in the US to get on an airplane and fly to Japan to get an MRI then get one here?
That’s true,people went to Mexico to have operation. Another problem he didn’t mention why people have chronically illness. Gmo foods,chemtrail,Roundup,vaccine are the cause of the majority of diseases & illness.
Denninger’s solution is brilliant, simple, legal and doable. this should be required reading for everyone in congress.
Quite right. But it’ll never happen. On the plus side, we get to see Medicare implode the Federal Government sometime in the next 8 years.
Denninger has been pushing this for a decade, he has met with congressional staff that acknowledge they know the issue but don’t dare touch it.
I think Denninger forgot to factor in, we are going to have a lot less illegals and their children stressing the medical system and a lot more legal immigrants that are skilled and so more likely to be healthy. Also, there's a provision that if someone is on Medicaid, and receives a windfall, they're going to cough some of that up towards the premiums the state has been paying for them. And we'll have the states tightening up their numbers of temporary medical welfare recipients - all in work programs, so more are expected to be employed sooner.
Denninger goes on to suggest we need food and fitness police, genetic disease police, on-going drug testing to see if anyone is an addict, and government regulated pricing of the insurance and health care industries. How does that fit with a no-government solution?
What I'm reading from bits and pieces of the bill is a major shift back to the states, with federal block grants for medic-aid instead of an open checkbook, tightening up welfare-to-work, and forcing states to spend more state funds on their own residents, including reinstituting high-risk pools for those who wouldn't qualify for Medicare.
I'm pretty sure Medicare Disability already covers permanently disabled/terminal patients regardless of age. Parents keep their kids until 26 (a carrot for Dems which costs the government zero). Ages 50-64 will get premium assistance until Medicare kicks in. The only segment exposed to premiums are those making over $75K and those ages 27-49, height of career time. This group will be the largest, shopping around to buy the coverage they want, and if they don't, and then show up at the hospital expecting care, they pay a 30% premium penalty - not 30% of the cost of care - but don't expect taxpayers to absorb someone's 30% premium penalty if they don't fork over like everyone else who lives insurance poor. Although I'm sure a noble person could exercise the option to pay full cash for the stay.
To reduce premiums without government price controls, we need labor, insurance, hospitals, etc all on the same page, all willing to compromise. And we need different legislation to enable across state line sales. We'll get premium assistance/tax credits rather than hold our breaths on that one. BUT, (horsetrading was going on) it looks like we might even be able to strip out the requirement for policies to have specific coverages, so maybe you'll be able to buy a hospital only policy. So the projected costs for premium assistance/tax credits tank. And the cost of states' medic-aid will tank, too.
The dems set a landmine for us. If we do nothing, we will be blamed because we hold the House, the Senate and the WhiteHut. If we do something, and are blocked by the Dems, the Dems will be blamed. For the first time in decades we have a House that is moving faster than 10mph for more than 2 days in a row. We cannot do nothing and expect another opportunity to magically come along before 2018. This is our moment.
So, with all that said, would somebody, please tell me, what am I missing, what is missing from the bill that's so critical, what can't we pencil in at 11pm tonite, that we shouldn't push it through tomorrow?
Well put. It’s a never-Trumper who’s doing it, too.
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