Author: bill

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The Federal Health Insurance Exchange Is A Lousy Tool To Fix These Health Care Problems

I was reading John Graham’s post, What is To Be Done with Health Insurance Exchanges, Post-Obamacare?, and could not resist saying the federal health insurance exchange is a lousy tool to fix these health care problems. Here are my reasons.

1. The cost of health care for people with high cost, pre-existing conditions is being spread across a fairly small group of people buying their health insurance via the exchanges. If health care for people with pre-existing conditions is society’s responsibility than the cost should be spread over a much larger group of people. Until we solve the problem with paying for pre-existing condition health care in a more equitable manner, health insurance exchanges will be plagued with high risk premiums and are likely to fail.

2. Health exchanges in general are a lousy way to subsidize health insurance for people earning less than 400% FPL if you want to control health care costs. This is the same problem faced by expanding Medicaid. The Oregon Medicaid experiment leads us to speculate that this group of people will consume more health care services without an improvement in health care outcomes. A health insurance credit is probably a step in the right direction of simplifying the subsidy system while providing subsidies and cost control incentives.

3. With the market distortions from pre-existing conditions and subsidies and overall incompetence in the roll-out, it is hard to imagine health insurance exchanges as an adequate substitute for the fair, unbiased health insurance market place we expected in 2013. As a person who has purchased health insurance from eHealthinsurance.com in the past, I have to assign blame for the overall incompetence of healthcare.gov to politics. The ACA made purchasing health insurance unnecessarily complicated. When you combine the public’s unfavorable view of the federal health exchange with its history of being a political football, this would be a good time to look at a replacement that involves less federal government and political partisanship. The original ACA plan relied on state exchanges and we should go back there in a modified form. My personal favorite idea is to simplify the enrollment process and replace the federal exchange with state exchanges run in cooperation with insurance companies and insurance marketers. eHealthinsurance.com and other companies like them already had the infrastructure in place. You can call this the Halbig solution with adults in the room. If we cannot get rid of the amateurs in the federal government we should at least minimize their damage.

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Does Socialism Work? A Classroom Experiment

Here is a old joke Dan Mitchell posted in 2011. I thought it was worth keeping and repeating.

An economics professor at a local college made a statement that he had never failed a single student before, but had recently failed an entire class. That class had insisted that Obama’s socialism worked and that no one would be poor and no one would be rich, a great equalizer.

The professor then said, “OK, we will have an experiment in this class on Obama’s plan”. All grades will be averaged and everyone will receive the same grade so no one will fail and no one will receive an A…. (substituting grades for dollars – something closer to home and more readily understood by all).

After the first test, the grades were averaged and everyone got a B. The students who studied hard were upset and the students who studied little were happy. As the second test rolled around, the students who studied little had studied even less and the ones who studied hard decided they wanted a free ride too so they studied little.

The second test average was a D! No one was happy.

When the 3rd test rolled around, the average was an F.

As the tests proceeded, the scores never increased as bickering, blame and name-calling all resulted in hard feelings and no one would study for the benefit of anyone else.

To their great surprise, ALL FAILED and the professor told them that socialism would also ultimately fail because when the reward is great, the effort to succeed is great, but when government takes all the reward away, no one will try or want to succeed.
It could not be any simpler than that.

There are five morals to this story:

1. You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.

2. What one person receives without working for, another person must work for without receiving.

3. The government cannot give to anybody anything that the government does not first take from somebody else.

4. You cannot multiply wealth by dividing it!

5. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that is the beginning of the end of any nation.

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Virginia Tech is the 3rd best college campus in the US

I have to brag a little about one of my alma maters, Virginia Tech. Business Insider says it is the 3rd best college campus in the US. A couple of years ago I took my gave my son a guided tour of Virginia Tech. We were going to my niece’s wedding in Charlottesville so a stop at Virginia Tech was along the way. At this time he was planning on going to West Point but he had been accepted at Virginia Tech, too.  I thought this was just a fun diversion. We arrived on  a Friday so it was a school day. It has been many years since I found myself wandering through campus on a school day. My son got a first hand glimpse at what college students and college life look like. It was fun. I reminisced about classes I took in the various buildings. My son wanted to visit the ROTC office so we wandered in that direction. When I was at Virginia Tech participation in the Corp was at an all time low. The Vietnam war had just ended and not many young people wanted a military life. I did not know a single person in the Corp so I only knew in a general sense where the ROTC buildings were located.  I got us in the vicinity before we finally resorted to looking at a map. Several students noticed our confusion and stopped to offer help. One of them knew where it was located and provided directions to the Military building. Although we had not planned on talking to the Commandant the secretary offered to check and see if he was available. He was available. He was a cheerful, helpful guy who answered my son’s questions. He was an older embodiment of the friendly students who gave us directions to the building. I was impressed with everyone’s friendliness. Evidently my son was impressed, too. The next day he announced that he was going to Virginia Tech.

Virginiatech-burrusshall-fromdrillfield

Photo courtesy of Wikimedia Commons

Blacksburg, Virginia

Virginia Tech’s campus has the exclusive use of Hokie Stone, a combination of different colored limestone, which adorn most of its buildings and other campus features, including a memorial to the 2007 massacre at the school.

Blacksburg, Virginia, where the campus is located, is the largest town in Virginia and boasts close relations with the university. V.T. also took home the top spot in campus food.

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Things That Make Me Go Hmm… Are Health Exchanges Medicaid For The Middle Class?

I have been thinking about this HHS quote I saw on a Zane Benefits blog post today. It got me to thinking. Are health exchanges sustainable if only 13% are paying the full price for health insurance? If health exchanges are not sustainable without government subsidies then they begin to look like Medicaid for the middle class. Does this mean that we are gradually turning our health care system into one modeled after Medicaid? I want the old health care system! It was not only cheaper but it provided me with better health care options than this new, improved one.

According to the U.S. Department of Health & Human Services (HHS), 87 percent who purchased health plans through Healthcare.gov in 2014 qualified for premium tax credits, with the tax credit covering 76 percent of the premium cost.

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Takeout-style Kung Pao

I saw this recipe on SeriousEats and thought it would be a good match for us. I had all of the ingredients in the kitchen except for the Chinese wine and peanuts so I used sherry and cashews instead. The meal has some nice bursts of flavor in it. It is a good leftover meal, too. Here is the recipe list if you are too lazy to go over to Serious Eats.

Ingredients

  • For the Chicken:
  • 1 1/2 pounds boneless skinless chicken thighs, cut into 3/4-inch chunks (see note above)
  • 1/2 teaspoon kosher salt
  • 1/4 teaspoon ground white pepper
  • 1 teaspoon dark soy sauce
  • 1 teaspoon Shaoxing wine (see note above)
  • 1/2 teaspoon sugar
  • 1/2 teaspoon roasted sesame oil
  • 1/2 teaspoon cornstarch
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  • For the Stir-Fry:
  • 1 tablespoon dark soy sauce
  • 1 tablespoon Shaoxing wine
  • 1 tablespoon distilled white vinegar
  • 2 tablespoons homemade or store-bought low-sodium chicken stock
  • 1 tablespoon sugar
  • 1 teaspoon roasted sesame oil
  • 2 teaspoons cornstarch
  • 3 tablespoons vegetable, peanut, or canola oil, divided
  • 1 large red bell pepper, cut into 3/4-inch dice
  • 1 large green bell pepper, cut into 3/4-inch dice
  • 2 stalks celery, cut into 3/4-inch dice
  • 1/2 cup roasted peanuts
  • 2 teaspoons minced fresh garlic (about 2 medium cloves)
  • 2 teaspoons minced fresh ginger
  • 1 scallion, white and light green parts only, finely minced
  • 8 small dried red Chinese or Arbol chilies (see note above)

Takeout-style kung pao chicken

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The Problem With Solar Power In One Graph

My electric company replaced my electric meter last month with a smart meter and said I could view the meter data online. So when I was paying the bill last month I took a look to at the data. The hourly data looked interesting since at first glance it looked like it peaked during dinner time. To get an idea of electrical usage on a typical day I download July’s data and averaged it per hour. Sure enough it peaks around dinner time. My first thought was how is solar power going to help me if it peaks around lunch and I need it at dinner time. The only remaining question was how much solar power was being generated around dinner time. So I went over to PVWatts® Calculator to estimate my solar power capability. As you can see below the solar power drop off is significant after 3 pm. By the time my air conditioner and stove are creating my peak electrical demand, solar power has become an insignificant contributor. It looks like I need a significant investment in batteries for this project to provide most of my electrical power in July and an even larger investment in solar panels and batteries to provide the power in my peak electrical usage months of December, January, and February.

SolarChart2014

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Greg Sargent’s Post Confirms My Suspicion That Democrats Were Not In Agreement About Subsidies

I think Greg Sargent’s post makes a good argument that the Democratic Party was not in agreement about how subsidies could be used to encourage state exchanges. The first faction thought subsidies should be offered to both the state and federal exchanges but it is not clear how this plan would encourage states to set up exchanges or how a federal exchange was constitutional. The question whether a federal exchange was constitutional was key part of Senator Ensign’s question to Senator Baucus. Without state exchanges all of the political and budgetary risk depends on a successful federal exchange roll-out.

The second faction thought that subsidies should only be offered in conjunction with state exchanges. This resolves the constitutionality question. Although there may be some roll-out problems they expected that most of the states would successfully implement the exchanges. The interesting quirk in the Senate finance bill was that they did not plan to set up a federal exchange but expected that they could delegate the work to a nonprofit. Their plan expected the federal government would take the lead in setting up  “an exchange for any state that refused to build one” but it would  “appoint some nonprofit entity to actually run the darned thing afterward.” This arms length approach to running an exchange for a state looks like it skirts the constitutionality question.

In hindsight I think the first faction did not care whether exchanges were constitutional or worked and that is why their wording did not end up in the merged bill. The second faction looks a little more pragmatic about having a plan that encouraged states to set up exchanges. They felt that the success of the Affordable Care Act probably depended on a majority of the states successfully implementing exchanges and a little “cooperative federalism” bribery with subsidies was necessary. Since their wording was likely to be constitutional and encourage states to set up exchanges, it is logical to see why the merged bill was very similar to that used on the Senate Finance bill.

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My Idea For Fixing The Influx Of Central American Children Streaming Into The U.S.

Why don’t we set up boarding schools in their native country? It is probably cheaper and more compassionate than George Wills idea. Having your kid in a local government run boarding school is definitely less stress on the family than having the kid in child welfare services somewhere in America with no family or friends. We could call them refuge schools. Maybe we would even ask the Catholic church for some advice on how to run them. They have a few centuries of experience.

Here is another idea. If these kids graduate from a refuge school and a U.S. university or serve in the U. S. military for four years, we could offer them the same immigration opportunities as the Dream Act kids. These are the high value kids we want in the USA. It would be a nice way to motivate the kids.

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The Latest GDPNow Forecast For Second Quarter Growth is 2.7%

I have a certain fascination with forecasts so on August 1st we shall see if the GDPNow method is better than the professional forecasters. Here is what the Atlanta Federal Reserve site said in the last report.

The final GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2014 was 2.7 percent on July 25, unchanged from its July 17 reading. The first GDPNow model forecast for GDP growth in the third quarter will be released August 1.

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Do We Still Have “Cooperative Federalism” If States Are Unwilling To Cooperate?

Glenn Reynolds has interesting post over at the Instapundit stating that “Senate Hearing: Tax Credits are available for State Exchanges Only. Senator Baucus explains how The Affordable Care Act sets conditions where Tax Credits are available for State Exchanges Only.“. I watched the video several times and did not hear where tax credits were available for state exchanges only. That part was muddled. Senator Baucus did make a strong argument that the Affordable Care Act as a form of “cooperative federalism” in which states agree to rewrite state laws to comply with ACA recommendations and implement health insurance exchanges in exchange for tax credits. If he wittingly failed to mention that citizens would get tax credits from federal exchanges then he was deliberately negotiating in bad faith. Then it struck me. For states that refused to set up health insurance exchanges you would have to describe them as unwilling participants. What did these states get in return for rewriting laws and generally given up their prerogative to write health care laws? Do we still have “cooperative federalism” if 34 states are unwilling to cooperate? Do we have “cooperative federalism” if the states who did cooperate get nothing in return for their efforts? The states who opted out thought that they had gotten out of the individual and employer mandate by not establishing health insurance exchanges. Instead they got a deal with the government that looks like it has the same legal standing as a shotgun wedding.