Tag Archives: political economy

How Does This Work?

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The CMS has a Request for Proposal out [emphasis added]:

Solicitation Number: RFP-CMS-RMADA-2014
Notice Type: Modification/Amendment
Synopsis: Added: Nov 20, 2013 1:17 pm

The purpose is to develop a Research, Measurement, Assessment, Design, and Analysis (RMADA) IDIQ [Indefinite Delivery, Indefinite Quantity contracting/procurement type] to respond to expanded needs of the Patient Protection and Affordable Care ACT (ACA) and Health Care reform ACT (HCERA).  The work awarded under the RMADA will involve the design, implementation and evaluation of a broad range of research and/or payment and service delivery models to test their potential for reducing expenditures for Medicare, Medicaid, CHIP, and uninsured beneficiaries while maintaining or improving quality of care.

Section C of this RFP has this expansion [emphasis added]:

…the [CMS] will award task orders (TOs) for a wide range of analytic support and technical assistance activities that support models and demonstration programs created or derived under the auspices of the Patient Protection & Affordable Care Act (ACA), and future health reform legislation where new delivery and payment reform models are enacted.  The demands of new reforms created under ACA have redefined the way CMS approaches and conducts research activities and demonstrations affecting Medicare, Medicaid, CHIP, and uninsured populations.  The role of state and private sector payers is also redefined as many of the new models include multiple payers working in collaboration with CMS to reform the care delivery system.  The RMADA will provide CMS with a robust tool to meet those challenges.  Some of the major activities this umbrella contract will address include the following: designing, maintaining and refining model/demonstration design and operations; monitoring model site implementations; designing and carrying out surveys and other data collection activities; obtaining and analyzing secondary data sources including Medicare, Medicaid and Children’s Health Insurance Program (CHIP), and private payer sources that support model design and evaluations.  Some other evaluation activities envisioned under the RMADA include reporting on formative and summative analyses, providing rapid cycle quarterly evaluation feedback to all model participants and CMS, and the creation of summative annual and final program findings.

Aside from only just figuring out that “The demands of new reforms created under ACA have redefined the way CMS approaches and conducts research activities and demonstrations affecting Medicare, Medicaid, CHIP, and uninsured populations” and “The role of state and private sector payers is also redefined…,” they’ve also just discovered HHS, or its CMS ObamaMart Project “Integrator,” hadn’t thought about doing these things from the jump.

As a result, now they want to spend an additional $7 billion of our money on their failure.  Probably, it’s too much to hope for any of these billions being committed to saving pennies will be committed to reducing the costs of all that added reporting and paperwork.  Or even that the entire $7 billion could be saved (and sent over to Treasury to reduce our national debt) with withdrawing this foolish RFP.

Another Failed Government Farm Policy

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The US government is being forced to support sugar companies even though taxpayers are already footing a $280 million bill stemming from loans the companies can’t repay.

The loans are all part of the Feds’ farm policy of propping up sugar prices.  So 300 million American sugar consumers can pay artificially high prices to benefit a few sugar farmers.

All told, Alexandra Wexler wrote in her Wall Street Journal article at the above link,

processors defaulted on $171.5 million in 2013, even after the USDA spent $106.7 million buying sugar to boost prices.

Wexler quite properly decries the matter, but she lays it off to a government problem.  No.  This failure, and these bankruptcies, in fact aren’t costing the US government anything, and the US government isn’t at all being “forced to support sugar companies.”  This failure is costing American citizens—us taxpayers—those of us who fund the government—all this money.  This failure is a part of we American citizens’ being “forced to support sugar companies.”

Wealth Redistribution, Industrial Style

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…additionally, with industry as helpless victim, a taxpayer bailout.  It’s an Obama two-fer: spreading the money around and bailing out an industry.

Built in to Obamacare, it turns out, is another form of wealth redistribution.  In order to guarantee every insurance company a profit (as opposed to, more properly, engendering an economic environment within which every insurance company has an opportunity for a profit), Obamacare has embedded in it something called a “risk corridor.”  Here’s Power Line‘s description of what this corridor is:

The risk corridor program, by its design, is basically a risk sharing program among insurance companies, administered by the government.  Companies that make out better than expected provide funds for companies that make out worse.

Wealth redistribution on an industrial scale.  But wait—there’s more:

If essentially all insurance companies make out much worse than expected, as may well be the case, the risk corridor concept won’t work as intended.  It will work only if reinvented to force taxpayers to subsidize the industry.

The Obama bailout.

Should It Be?

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Fox News asked, over the weekend, whether ObamaCare can be saved.  But the real question is whether it should be—that hasn’t been established, yet.

Indeed, the basic question is whether this country should be providing universal health welfare—which is what Obamacare attempts to do; this law eliminates any insurance aspect from its purported health “insurance” program—at all.

Obamacare, as it stands, is not what Americans want.  Poll after poll, across the three years since the law’s enactment, demonstrate this.  The law’s internal contradictions, quite apart from its masquerade as insurance, make its efficacy—its very legitimacy—nonexistent.

Obamacare has the poor subsidizing the better off: young and healthy are required to buy “insurance” they don’t need at inflated prices in order that older Americans can buy “insurance” at artificially depressed prices.

Single men and empty nesters are required to buy “insurance” that covers women’s prenatal and maternity care—as well as the extremely cheap commodity of birth control pills so that women of child-bearing and rearing age can buy these coverages at artificially deflated prices—and get their birth control pill for “free.”

Millions of Americans (5 million and counting in the private individual market, the ObamaFix notwithstanding, with small business policies to follow in a few months and the employer mandate to take effect in a year) are being forced off their insurance policies, policies for which preference has been demonstrated both by Americans’ purchase of them and the hue and cry over their loss, all so that they will be driven into the ObamaMart to buy government-approved “insurance” at much higher premiums and much higher deductibles.

The law’s design is explicit: to redistribute wealth.  Period.  This is a redistribution of wealth from those who don’t have it to those who, if not exactly wealthy, generally are better off and certainly more established.  This is a redistribution of wealth, also, from one group of sort-of-haves to a different group—government preferred—of sort-of-haves.

Blinder Strikes Again

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Professor Alan Blinder (Economics and Public Affairs, Princeton University) opened his Wall Street Journal op-ed, this time, with a correct statement.

But a badly designed website doesn’t signify a badly designed policy.  The goals, principles and major design features of the ACA are barely affected by the government’s health-exchange website catastrophe.  If you liked the basic ideas before, you still should.  If you didn’t, you still shouldn’t.

True enough, the ObamaMart Web site is just the front end of Obamacare (it’s also the back end, handling all of your personal financial and medical history and doing so in an enormously error-prone fashion and so far with no security at all—security has never been seriously tested), it is not Obamacare itself.

But from here, as is usual with Blinder, it’s all downhill.  First is his typically Progressive dishonesty in his characterization of those who oppose Obamacare:

…the enemies of health-care reform are telling [Americans] that ObamaCare is a failure.

Of course, because Obamacare is the only way to reform the health insurance industry (which Blinder also dishonestly conflates with health care).  It couldn’t possibly be that there are other ways to achieve reform, like the half-dozen, or so, House offerings that reform through patient-centric—that is to say, individual American-centric—market solutions.  No, Progressives know that Americans are too stupid to make their own decisions.

Then he gets to his point:

The three central elements of ObamaCare are insurance reform, getting (most of) the uninsured covered, and containing the upward spiral in medical-care costs.  Each remains in place.

He sees this as a plus, not the failure that it is.  Sad.  In turn:

There is no insurance reform, only the destruction (leaving aside its nationalization) of the insurance industry.  The price of an “insurance” policy now is completely divorced form the risk being “insured.”  The young are being required to pay inflated prices for policies they do not need, generally do not want, and cannot afford solely and explicitly to pay for the depressed prices the old otherwise would pay.  Single men and empty nesters are being required to purchase prenatal and maternity coverage, children’s dental coverage, even contraceptive coverage (as if this commodity wants “insurance” coverage at all) so that women, in particular, and families generally, who might actually…benefit…from such policies can pay lower rates for them.  The list goes on.  This isn’t insurance, it’s naked wealth redistribution.  Even when there’s no wealth to redistribute.

“Getting most of the uninsured covered?”  That wasn’t the original promise; that started out being “all of the uninsured.”  Whether we wanted the insurance or not.  Aside from that, it’s not even coming close to getting all covered, because of Blinder’s third point:

Costs, of this health welfare program, anyway, are spiraling rapidly out of control.  The premiums available already are well documented to be in the two- and three-digit per centages higher—and that’s just for the premiums.  Deductibles are skyrocketing.  These are costs that have to be paid by the “insuree” before his coverage kicks in.  And it resets every year, while those premiums and the costs of being sick just keep on keepin’ on.

And there’s Blinder’s cynical non sequitur:

Millions of people under the age of 26 are already benefiting by being kept on their parents’ policies.

Yet,

To make universal coverage work, the government needs to bring [young people] into the insurance pool as counterweights to the high-risk people.

Meaning that millions of the young folks Obamacare so desperately needs to buy “insurance” so as to fund artificially low premiums for the rest aren’t buying “insurance;” they’re just jacking up the cost of their parents’ “insurance.”  How does that work, exactly, Alan?  How are these “millions of people under the age of 26” being brought “into the insurance pool as counterweights?”

And his bodice-rending closer:

[T]he status quo ante was so unacceptable.  America cannot be a humane society if we leave 15% of our population uninsured.  America cannot be an efficient society if we spend 50% to 100% more of our incomes on health care than other countries, and yet don’t get better health outcomes.  We can’t let a botched website get in the way of goals that big.

Unfortunately, Progressives like Blinder remain in the way, actively blocking market solutions and individual choice (we’re too stupid to be trusted with our own choices, remember) that actually would bring down the costs of true insurance on the one hand and the costs of health care on the other.  And leave a significant per centage of us without health insurance because that’s our choice.