Tag Archives: markets

A New Welfare Trap

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This one is in the offing at the State level, and comes as a result of the punitive tax for not buying health coverage was repealed last December.

At least nine states are considering their own versions of a requirement that residents must have health insurance….

And

Maryland lawmakers are pursuing a plan to replace the ACA mandate, which requires most people to pay a penalty if they don’t have coverage. California, Connecticut, Hawaii, Minnesota, New Jersey, Rhode Island, Vermont, and Washington, as well as the District of Columbia, are publicly considering similar ideas.

Notice that.  These are Progressive-Democrat-run states.

The less well off who couldn’t afford either the penalty or the remaining costs—high deductibles, low per centage of plan provider payments even after “coverage” kicked in—under Obamacare still won’t be able to afford mandated coverage in these States.

Beyond that, they won’t be able to leave the State and relocate to one that doesn’t inflict these costs.  Their already limited economic resources are a barrier to such relocation.  Added to that, though, will be the lack of portability of the mandated coverage plans: having been dragooned into one by, say California or DC, they won’t be able to take it with them, even to Connecticut or Minnesota.  Or to a State that doesn’t require them to buy something they don’t want.

Progressive-Democrats really are that desperate to keep their welfare “recipients” trapped in welfare cages. Aside from that bit of self-serving…nonsense…the move also demonstrates the Progressive-Democrats’ utter contempt for us Americans.  We are, their behavior and policies say, just too mind-numbingly stupid to be entrusted with our own choices.  We have to be led by our Betters, forced for our own good, to do certain things.

Martin Feldstein Thinks the Markets are Headed for a Fall

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He’s right, to an extent.  The Price-Earnings ratio for aggregated publicly owned businesses is at historic highs.  His reasoning centers on four factors: the Fed’s raising of its benchmark interest rates, which will make money cost more for businesses; the Fed’s reducing its own government bond holdings, which will contribute to upward pressure on interest rates generally; the Federal government’s needing to borrow to cover its still enormous deficits; and heretofore easy money has made the labor market too tight.

However.

There are a couple things about Feldstein’s four reasons. One is that the improving economic activity will greatly mitigate (albeit not eliminate) stock price falls by raising business earnings to meet those falling stock prices—both the numerator and the denominator of the P/E ratio, after all, are dynamic, not only the numerator (albeit the one is capable of moving faster than the other).  Prices won’t fall as far as Feldstein seems to think.

Another thing is that Feldstein’s third reason is a prime argument for the Progressive-Democratic Party to get out of the way and allow Federal spending to be cut.

A third thing is that Feldstein is overstating the case in his fourth reason.  The labor market isn’t as tight as it might seem, given that the underemployed per centage remains at elevated levels, as does the number of workers who’ve left the labor market because they’ve given up; the latter is a population that can be persuaded to return to the labor force.

“Insurance” Costs

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My Medicare-aged wife broke her wrist, which necessitated surgery, and our health plan provider sent us an accounting of the costs involved.  Following are the high points of those costs.  It’s necessary to emphasize that the surgery is relatively routine following a wrist “fracture,” since the wrist is little different from a sack of pig’s knuckles, and where the arm bones, the ulna and radius join the wrist is more of an abutment than a joining.  The “fracture” was more of a slight jumbling of those pig’s knuckles and small breaks of the ends of the ulna and radius; the surgery was to rearrange the knuckles and repair the fractures with a plate and some bolts.  Really quite routine and minor (save the post-op pain and the long recovery time and discomfort); that emphasizes the nature of the costs.

The initial care was in the ER of a hospital not “in network;” the injury occurred, also, 100 miles from home.

ER Service Provider’s bill to the Plan Total cost
(Plan approved)		 Plan paid We paid
Wrist X-ray $342.31 $0 $0 $0
Apply splint $479.34 $0 $0 $0
ER Visit $764.99 $193.01 $115.65 $75.00
Totals $1,586.64 $193.01 $115.65 $75.00

 

Actual treatment:

Service Provider’s bill to the Plan Total cost
(Plan approved)		 Plan paid We paid
Wrist X-ray $33 $873 $8.56 $0
Surgery* $24,691 $1,021 $757 $264
New Office Outpatient $285 $166.51 $143.58 $20**
Follow-up X-ray $94 $30.74 $30.13 $0
Elbow X-ray $102 $27.04 26.50 $0
Long arm splint $132 $90.13 $88.13 $0
Cast supporting splint $125 $12.27 $12.27 $0
Totals $738 $326.69 $300.81 $20

*Two separate charges, for two separate actions in the wrist’s surgery. I’ve lumped them together here.
**Copay

Just summing those high points, here are the totals.

ER Service Provider’s bill to the Plan Total cost
(Plan approved)		 Plan paid We paid
Totals $27,316.64 $2,413.70 $1,182.02 $359

Notice that: the hospitals and the surgeon paid that vast majority of the costs of the provided health services.  Our health plan provider refused to pay them and the health providers were not allowed to bill us under the terms of their contract with the plan provider.  There’s no doubt, too, that the basic charges are inflated to cover those lost costs and the costs these entities incur when patients are uncovered or prove to be scofflaws.

Compare, in particular, the cost of similar surgery—nearly all inclusive—at a cash only (no health coverage plans) hospital in Oklahoma.  While the procedure listed isn’t exactly comparable to my wife’s situation, it’s close enough for this exposition.  The Surgery Center of Oklahoma’s price is $4,300; although the pre-op diagnostics like those initial X-rays are not included in the charge.

Keep in mind, too, that while Obamacare has made this situation far worse (and worsening), this sort of thing has been happening much longer than Obamacare’s existence.

One more thing.  A Medicare patient paying cash for a procedure in lieu of a Medicare plan’s coverage in order to get a lower total cost?  My GP tells me that it’s illegal for her to accept cash from a Medicare plan-covered patient.  I have to be uncovered altogether, beyond basic Medicare A, before she can accept legal tender.

It’s time we moved to a market-oriented system of health care and of health insurance.  See that Oklahoma hospital.

Spotify and Crony Capitalism

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Spotify AB wants to do an initial stock offering, an IPO, on the New York Stock Exchange, and the company wants to do it without benefit of bank underwriters.  Oddly, the NYSE has to ask the SEC for permission to amend its own rules to allow this.  Even more strange, the SEC is dithering over granting that permission—to allow the private enterprise, the NYSE, to conduct its own business as it sees fit, and more proximately, to allow the private enterprise, Spotify, to conduct its business as it sees fit.  The SEC is claiming, with a straight face, that it has until the middle of February to make up its mind.

That the Government agency even thinks it needs to think about this is shady.  Government mandating bank involvement in a private enterprise company’s public offering? That would be textbook crony capitalism.

The SEC had concerns that Spotify’s direct listing could open the door for other companies with potentially risky financial profiles to access the public markets without giving investors sufficient protection[.]

Caveat emptor.  Government-favored bankers Us investors don’t need the protection of Big Brother. I understand that personal responsibility is anathema to Government bureaucrats, but this is a shield too far.

The SEC needs to reject such…stuff…stop dithering, and grant the permissions out of hand.

The Question is a Non Sequitur

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John McKinnon and Brent Kendall, in their Wall Street Journal piece, asked Is FTC Up to the Task of Internet Regulation?

His piece is about the split between what the FCC (the erstwhile “regulator” of the Internet, courtesy of the Obama administration) and the FTC are qualified to regulate.

The question is a bit of a non sequitur, though. The Internet is merely a transport medium, and it needs very little regulation. The FTC is fully up to the task of regulating (ideally with a similarly light touch) trade, which is independent of the medium—highway, railroad, snail mail, or electronic—over which the traded products are transported.

And: lightly regulated commerce is highly conducive to innovation.  Just look at our communications system since the breakup and deregulation of Ma Bell.  And the Internet between its inception and the Obama FCC-imposed impediment.