Tag Archives: economics

Four Pillars of a Health Care System?

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The Wall Street Journal posited this in a Wednesday op-ed.

1. Provide a path to catastrophic health insurance for all Americans.

The WSJ then supports this with old saws: being covered generally leads to better medical results, health insurance is good for the wallet, and so on.  Then they want a government solution—while they carefully avoid saying how they would pay for it:

The ObamaCare replacement should make it possible for all people to get health insurance that provides coverage for basic prevention, like vaccines, and expensive medical care that exceeds, perhaps, $5,000 for individuals.

Those Americans who don’t get health insurance through employers, or Medicare and Medicaid, should be eligible for a refundable tax credit….

They don’t even say why catastrophic health insurance should be particularly targeted by Government.  They ignore an actual market solution for this: free market competition, accompanied with lower tax rates (which leave more money in people’s pockets), and no annual or income caps or requirements for high deductible insurance plans (and no requirement for any insurance plan at all) on Health Savings Accounts.  Folks are fully capable of making their own decisions about the structure of their health insurance plans without the Know Betters of Government holding them by the hand.  And insurance companies, in a fully competitive environment, are fully capable of developing and delivering the products actual customers want without Government mandates.  If that includes catastrophic insurance plans, those will appear.

2. Accommodate people with pre-existing health conditions.

See above regarding free markets.  Of course such coverage would come at a higher cost than other sorts of health coverages; the risk being transferred to the insurer is higher.  But even this risk is not certain.  Folks who’ve had a heart attack (or more than one), for instance, have a preexisting condition (unless a single heart attack has occurred sufficiently far in the past that a medical doctor (the patient’s, not the insurer’s or a Government hireling) says it’s a one-off and not preexisting), but not everyone who’s had heart attacks will have their next one simultaneously.  Even a preexisting condition can be amortized across time given a free market that allows pooling of [those who’ve had heart attacks] so that premiums can be adjusted to match the actual payout requirements, the actual risk—just like “ordinary” insurance plans.

So as long as someone remains insured, he should be allowed to move from employer coverage to the individual market without facing exclusions or higher premiums based on his health status.

This conflates two separate questions.  The preexisting question is addressed just above.  The mobility of an insuree (or someone who’d like to buy a health insurance plan) is separate: and yes, in a free market environment, an insuree would be able to take the plan he’s purchased, whether originally obtained through his employer (unless it was the employer who actually did the purchase and the premium payments) or bought on the individual market, with him wherever he went or to whatever job he moved.  The latter case, too, would reduce or eliminate the need for the new employer to offer health insurance coverage through his benefits program.

3. Allow broad access to health-savings accounts.

There should be a one-time federal tax credit to encourage all Americans to open an HSA and begin using it to pay for routine medical bills. And HSAs combined with high-deductible insurance should be incorporated directly into the Medicare and Medicaid programs.

Another Government solution—again carefully unpaid for—and it’s much too timid.  I addressed HSAs and their market availability above.

4. Deregulate the market for medical services.

This is the only move necessary.  It’s the move to enable the free market solution.

Full stop.

Obstruction

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With full control of Congress and the White House, Republicans have anticipated being able to repeal the law using a special budget maneuver that would allow them to get around a filibuster by Democrats in the Senate.

Yes and no.  The budget maneuver is reconciliation, and it’s usable only on budget matters.  That means that Obamacare will be defunded pretty straightforwardly, but the law itself still will be on the books—for a future Progressive-Democratic Party-controlled Congress to re-fund using the same budget reconciliation maneuver.  The law itself needs to be fully repealed, too; defunding it can only be a stop-gap measure.

Eight honest Progressive-Democrats are going to have to find the moral courage to step up and support actual repeal.

And there’s this.

[T]o replace it, they likely would need the support from eight Democrats and all 52 Republicans in the Senate (if Republican John Kennedy wins a December 10 runoff in Louisiana) to reach the 60 votes needed to clear the chamber’s procedural hurdles.

That procedural hurdle is the filibuster.  For this, too, eight honest Progressive-Democrats are going to have to find the moral courage to step up and support replacement with legitimate health insurance market paradigms.

Fat chance, but the fight needs to be carried out loudly, with no room for Senate Progressive-Democrats to hide behind their excuses and their crocodile tears over Americans being too stupid to take care of themselves and so need these Know Betters to do for them.

Senate Minority Whip Richard Durbin, a Democrat from Illinois, predicts Republicans will have difficulty passing a replacement health law.

Yup.  Look for continuation of Progressive-Democrats’ past six years of obstructionism into the next two or more years.

Tax Cuts and Deficits

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The Wall Street Journal had a piece earlier in the week that focused on Republicans’ dismay over President-Elect Donald Trump’s tax cut plans, his infrastructure spending plans, and the deficits that would seem to result from the two.

However.

Once again, the pundit takes tax cuts (and individual spending items) in isolation. Of course, he knows better: broad spending cuts must accompany tax cuts—and isolated spending items—even dynamically, in order to achieve budget surpluses and so reductions in our debt.

The last two times Republicans reclaimed the White House from Democrats—in 1981 and 2001—they also successfully pushed for large tax cuts. Deficits nonetheless rose during their administrations.

This happened because both times Republicans accepted Democrat promises to support spending cuts “later,” and both times Democrats welched on their promises. Since Democrats cannot be trusted, the Republicans this time around will have to cut taxes and spending while arranging spending increases on particular items without Democrat “help.”  And they have the numbers to do that, including without Democrat involvement at all, since all those worthies are interested in is their knee-jerk obstruction of all things not Democrat.

The Courts Get Another One Right

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This case involves how much Federal control over land deeded by the Feds to a State the Feds retain when they make the deed.  In the particular case, the Feds, ‘way back in 1949, deeded land to Ohio (in particular, the Muskingum Watershed Conservancy District) subject to the criteria that the land had to be used for flood control, conservation, and recreation.  Lately, Ohio began allowing fracking under the land.

“Environmentalists” objected and sued to try to force the land back into Federal hands.  The relevant Federal district court dismissed the suit, and it wound up in the Sixth Circuit.  The Sixth waived the BS Flag at the suit.  Although much of the Court’s ruling was based on a technicality (the suit was brought as a violation of the False Claims Act perpetrated by Ohio for allowing the fracking; the Court demurred), there is another reason to applaud the outcome.

In ruling that there was no violation of the FCA, the Court also said in part,

neither the relators’ [the “environmentalists”] complaint nor their proposed amended complaint includes facts that show how MWCD would have known that the fracking leases violated the deed restrictions or how MWCD “act[ed] in deliberate ignorance” or in “reckless disregard” of that fact.

Indeed, fracking occurs well underground and so well away from any activities related to flood control, conservation, and recreation, which are surface or near-surface activities.  Thus, since fracking does not interfere with or otherwise impact such activities, it cannot violate deed restrictions that involve strictly those activities.

This was just a naked attempt by these relators to prevent us from getting cheap energy out of the deep earth cheaply.

The Sixth Circuit’s ruling can be seen here.

 

h/t Institute for Justice

Foreign Investment Risk

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The People’s Republic of China seems about to illustrate one form of this risk.

The State Council, China’s cabinet, will soon announce new measures that subject many overseas deals to reviews of “strict control,” according to people with direct knowledge of the matter and documents reviewed by The Wall Street Journal.

Targeted for particular scrutiny by the pending measure are “extra-large” foreign acquisitions valued at $10 billion or more per deal, property investments by state-owned firms above $1 billion, and investments of $1 billion or more by any Chinese company in an overseas entity unrelated to the investor’s core business.

This is nothing but an overt attempt to restrict capital flows across the PRC’s borders.  Restricting such flows from one nation to another, no matter the rationale, elevates the risk of foreign investment.  The investor, whichever the nation of his domicile, cannot count on a reliable income flow from his investment or even being able to get his money back from that investment at the expiration of the arrangement.

Separately, it demonstrates an attitude toward law and government that’s been extant in the PRC and its antecedents for thousands of years: “I don’t like what you’re doing—this investment plan of yours—here’s a nice ex post facto law that makes your activity illegal.”