Senator Brian Bingman = Admiral Ackbar

The federal health care bill, lovingly referred to as Obamacare by most Republicans, stipulates that every state needs to set up a health insurance exchange where consumers can access information about cost and coverage of every insurance carrier in the state. It is a free-market idea, one that makes comparing different plans easier and expands consumer choice. But a fully functioning exchange would require some additional investment in information technology infrastructure, which is why the federal government is giving away millions of dollars worth of grants to the states to help them set their exchanges up.

Enter Senator Brian Bingman (R-Sapulpa), the president pro-tem of the Oklahoma Senate. He told reporters that a bill passed by the state House of Representatives that helps establish a state health insurance exchange would not be considered by the Senate. "We're concerned about actually falling into the trap ... of adopting the Obamacare, which is really what we're against," said the Senator, who last month released a joint statement with Governor Mary Fallin and House Speaker Kris Steele (Republicans all) saying he supported the federal grant. Steele and Fallin both still support getting free money from the federal government to better the lives of their fellow Oklahomans. And it's not like these people could ever be described as liberals.

"My hope is that the federal health care bill will either be ruled unconstitutional by the Supreme Court or that Congress might take up legislation to repeal it and replace it with other free-market health care reform initiatives," Fallin said. "But whether that happens or not, the federal health care bill is still the law of the land."

If Oklahoma fails to take action to establish its own health insurance exchange, Fallin warned the federal government will impose its own system on the state.

"I don't think it's helpful to the state of Oklahoma not to have a plan in place," Fallin said. "I also think it puts us on a dangerous path of the Obama administration being able to come in and force a federal exchange on our state."

So Fallin fears a trap just as much as Bingman does. She is just responding a little bit more proactively than he is.

Oklahomans passed a bill last November allowing Oklahoma to opt out of any federal health care law due to a fear of government intrusion (and therefore socialism). The Senate president pro-tem thinks that accepting money from the federal government would trap the state into accepting government intrusion (and therefore socialism). The Governor thinks that not creating an exchange would lead to government intrusion (and therefore socialism).

Our governor, our state leaders, and the majority of state voters are all a bunch of Admiral Ackbars, too blinded by right-wing dogma to see that the whole point of Obamacare is to offer choices to consumers to get us a step closer to universal health insurance coverage.

Health Care Concerns: Interstate Commerce Clause

As far as I can tell, 100% of the non-spamming readers of this site have law degrees. So I need your help with these two questions: does the government really have the power to force people to buy a private insurance plan, and is a tax on the uninsured an overreaching form of discrimination?

I was listening to an interview with the Attorney General of Virginia Ken Cuccinelli on NPR the other day, and his gripes with the new health care law seemed to be well-thought-out and well-articulated (unlike his gripes with homosexuals). Ken Cuccinelli is suing the government because he believes the law is unconstitutional because it compels all citizens to buy a product from a private marketplace. And honestly, I can't immediately think of a private good or service required by all individuals, not just car-owners or house-owners or business-providers.

Another worry of mine about the health care bill is the prospect for the private insurers in the exchanges to jack up prices. They will no longer be allowed to rescind policies or deny policies to people, but as far as I can tell, there's nothing that says they have to provide a policy at a low price. And, like so many Republicans have argued, there is nothing in the health care law to control costs of medical service. So rising insurance premiums will surely keep rising without any market control method of the size that only a government could provide. This was the rationale behind the extinct public option, after all. (Hell, it's the rationale behind single payer coverage too).

It was thought to be the news in California of Anthem Blue Cross's 39% rate hike that steeled the nerves of Democratic lawmakers and helped them finally pass the health care law. But what is the method by which this new law would be able to stop rate hikes like this? Increased competition? There are many health insurers with many plans in California already. It doesn't stop them from raising rates. The market for health insurance contains too much friction for people to be able to switch insurance policies. And because of measures that strengthen employer-based health insurance policies, the health insurance market should continue to operate opaquely.

I don't like the private-insurance-only health care bill, but only time will tell if it makes the country better or worse.

Health Care Reform - It's Gonna Suck

…Health care has been moving target for republicans …. the Democrats will shift, thinking they have something that the Republicans will go for, and then the Republicans will shift further. And [the Republicans] make a big deal about something that distracts and frightens the voters like those so-called death panels, then the Democrats drop that and Republicans find something else to object to.

Cokie Roberts, NPR’s Morning Edition, August 17, 2009.

Health care reform, as I want it (legitimate socialized medicine, with doctors employed by the government) has always been doomed. Health care reform, as I would accept it (mandatory single-payer government baseline insurance with plenty of room for supplemental insurance policies) has also been doomed for a long time. But it's looking more and more like health care reform, as the President originally wanted it (public "option" insurance) will also be doomed. If a final bill makes it all the way through both chambers of Congress this year, that bill would be generously described as "watered-down" and more accurately described as "gutted". Both Democrats and Republicans will claim victory, both for the actual passage of the bill and for the holes shot into it. Bipartisanship in action.

But even I can't dismiss all of the points that have been made by conservative analysts in the media over the last month. One in particular that I've heard only a couple of times is this: you can't expect to have a government option on health care, or provide semi-universal coverage, without raising taxes. This is true. For any meaningful reform to take place, it's going to take a lot more efficiencies than just computerizing medical records. A lot of inefficiency comes from the complicated method of filing and paying insurance claims, and fighting with insurance adjusters for money, which is mostly done by people in the doctor's office. Like any other marketplace, health care works more efficiently when there isn't market friction caused by complicated rules, policies, procedures, and differences in plans; and substantial savings could be derived by simplifying the terms of all insurance plans, or of course by having a baseline plan for which the rules about what is covered and what isn't are widely known and accepted (socializing medicine, for instance). But the inefficiency involved is paid for by the private marketplace; no public savings could be achieved by such a reform. It would benefit society as a whole, but at an expense to government (and therefore to taxpayers). And yet no Democrat wants to admit this.

Another Republican-derived point is that it would be unfair to the upper 5% of income earners to be taxed to pay for a service that gets used entirely by the lower 95% of income earners. I sort of agree with this. I understand progressive taxation, but on a government program as expensive as a proposed Medicare-for-all, I would want it to be paid for like Social Security is now (or for that matter, like Medicare is now); that is, as a social contract with everybody so that everybody pays a little bit and everybody gets to use the service. I'm saying I'd be in favor of tax increases on everyone if I got to have a medical insurance program that everyone got to use. Mr. Obama, please raise my taxes.

As usual, the problem with having politicians in charge of social programs is that politicians play politics all the time, and only consider the good of society if the good of society is popular at the moment. What's popular at the moment is views from "Main Street, America" of people angry about the government paying for things they can't afford, and are feeling like outsiders, which pays dividends for the Republican congressmen who believe they too are outsiders. The lock-step-feel of Congressional Republicans is back now that they've been put back into their comfortable roles as outsiders from beyond the Beltway. And as the Obama administration wastes more and more time trying to get a weak health care bill passed, the Republicans may use the time to get another Newt Gingrich-like movement going.

Private Insurance Makes Nick's Law More Expensive

Since the election in November, both the state House and state Senate of Oklahoma are now controlled by Republicans for the first time in roughly forever. And while the House and Senate have only been in session for one month, they've already started kowtowing to corporate interests, especially in regards to health care coverage.

"Nick's Law" was a bill that would require health insurers in the state of Oklahoma to cover the diagnosis and treatment of autism in children. On Tuesday the state House Economic Development and Financial Services Committee voted 10-5 along party lines against a motion to send the mandate bill to the House floor. And if killing this bill wasn't enough, they then voted 9-5 for a "do-not-pass motion that under House rules will prevent the mandate idea from being considered again until a new Legislature is seated in 2011", metaphorically shooting the bill a couple extra times in the head just to make sure it's really dead. Elsewhere though there are 18 states with similar autism mandates and many more with legislatures considering mandates right now, which follows the advice Rep John Carey, D-Durant, will be giving to parents of autistic children: "...move to another state."

According to that article, there was a study performed for the state House that said an autism mandate would increase health insurance rates by at least 7.8% and possibly as high as 19.8%. 7.8% to 19.8%!? Without being privy to the methodology of that study, I think that sounds really high and I would like to quibble with it.

According to that article, one mother of an autistic child said that therapies cost $30,000 a year, and another father of an autistic child said he spends up to $5,000 a month, which could be as high as $60,000 a year. For the sake of this back-of-the-envelope calculation, let's use $45,000 a year. And a well-known statistic from autismspeaks.org states that 1 out of 150 children are affected by autism. All other data will come from the Kaiser Family Foundation's statehealthfacts.org.

If there are 971,331 children in Oklahoma, autism could be expected to affect about 6,475 of them. This would make the cost of all treatments for all autistic kids in Oklahoma $291 million per year. There are about 3.5 million people in Oklahoma, only 2,845,529 of them with health insurance coverage. If we assume all autistic kids will have 100% of their therapies covered by health insurance, then we can expect only the 2.8 million people in the state with health insurance will have to pay any more in premiums. This works out to an average of $102 increase per person per year. Currently, the average premium for an individual in Oklahoma is $3,967 ($635 paid by the individual on average, the rest by his/her employer). If the average premium increased $102, the new average due to autism coverage would be $4,069 ($651 paid by the employee), an increase of 2.6%. For the insured employee, the cost of the autism mandate would be on average $1.33 a month. If you told me we could cover autism diagnosis and therapy for all autistic children in Oklahoma and I'd only have to spend roughly a dollar a month extra, I'd totally be down.

Ah, but of course I'm thinking about this from a not-for-profit and governmental sort of viewpoint. It's fine to think about averages and cost spreading in these terms when your pool of customers is as large as an entire state, but if you're only insuring a few hundred thousand people just like 20 other private insurance companies in the state, you have to be prepared for more statistical anomalies. Like what if for some reason autism just happens to affect 1 in 50 children in your particular pool of customers? This could be within one or two or three standard deviations of the 1:150 rate. In order to break even in such a scenario, you would have to increase rates three times higher than the statistical average calculated in the previous paragraph. Now we're up to a 7.8% rate increase for private insurance simply because private insurers can't spread risk like a government insurer could.

Plus, as an insurance company, you don't simply break even with treatments. There are a lot of claims adjusters and management types to pay, and the probably-publicly-traded company needs to earn a profit for its shareholders. Add a few more percentage points to that total, and you could be up to somewhere like 13% increase in premiums. Oh, and the CEO really likes travelling to exotic getaway vacations, corporate meetings in Switzerland, and owning a few houses and boats, and really, who wouldn't? So if you can squeeze just a bit more out of the pool of insured customers, say to the tune of 19.8%, you could have your shareholder meetings in Tahiti, and of course you'd deserve it because you just figured out a way to turn a mental ailment into ungodly sums of money for your company.

So the cost of "Nick's Law" may in fact be a 7.8% to 19.8% increase in private insurance premiums. This is all the more reason why we need universal health insurance. (Maybe after that we can tackle that cost of $45,000 per year per child by putting socialized medicine in place. But first things first.)

(For more, visit nickslawok.blogspot.com)

Why Automaker Bailouts are Bad, Except for Maybe the One I Propose in this Post

Allow me to be the 80 millionth person to put in my two cents against the proposed U.S. automaker bailout. This is one of those issues where I strip off all my Democratic/Socialist clothes and swim in Ron Paul's kool-aid. But I'm completely in agreement with all the most curmudgeonly conservative politicians on the issue of federal bailouts. If a business is about to fail because it can't adapt to the current market, because it made poor choices in the past about how to spend its capital to yield the greatest profitability, or because it's in deeper debt than it can possibly ever pay back, the bad business should just be allowed to fail, regardless of how many people the bad business employs or what percentage of market share it has. People will find a way to replace whatever the bad business produced with something more efficient. This is capitalism doing its thing with its invisible hand. As Ron Paul said, "An essential element of a healthy free market is both success and failure must be permitted to happen when they are earned."

People give many reasons why the "Big 3" have arrived at this point where they need to beg Congress for money. The American automakers don't make cars that Americans want to buy. Reliability and quality have been demoted down from job 1 to job 347 or so. They didn't foresee how high gas prices would lower demand for their large energy-inefficient vehicles. They pay people not to work all day. They pay high health care, high wages and high pension costs because they are unionized. They have too many brands and too many dealerships to be efficient. The interest in the debt they have already accumulated is dragging down the companies. These reasons are all absolutely true. So why should the federal government hand these companies a free Christmas bonus for a job so poorly done? It's going to take some massive restructuring to turn GM and Ford around (Chrysler should just cease to exist), restructuring that can only happen under Chapter 11 bankruptcy. Delaying the Chapter 11 filing with a federal bailout is like setting $25 billion dollars ablaze, equivalent to the average annual salary of 370,000 GM employees.

There are many arguments put forth in favor of the U.S. government giving money to the automakers. Some say that going into Chapter 11 bankruptcy would cause consumers to avoid Detroit's products because of a fear that their warranty would not be upheld. I believe bankruptcy is unavoidable, but consumers don't buy cars for the warranty anyways. If they did, the Big 3 automakers would have a much larger market share than Toyota since the American automakers' warranties are usually much better than those of foreign manufacturers. In other words, people prefer buying cars that are reliably built and don't even need warranties.

Many put forth the argument that the American automakers are such a large part of our economy that their failure would be devastating (the same argument used two months ago for the financial services industry). These people also frequently use inflated employment numbers that count people who deal not only with the Big 3 but also with foreign automakers. And it assumes that all 240,000 people directly employed by American carmakers and the other million or so in businesses reliant on the Big 3 wouldn't be able to find other jobs in industries that aren't tanking. But it is true that no member of the United Auto Workers would be able to find a job with such sweet benefits, and as cushioned as their salaries and benefits are, it would still produce many undue hardships on those employees.

I may not be in favor of handing GM and Ford free money to spend however they want, but I am in favor of helping out GM and Ford tackle some of these union benefits. Okay, so here's my plan: I propose the federal government assumes responsibility for the health care benefits and pension benefits enjoyed by UAW members. Instead of asking for wage concessions from UAW, I propose that the automakers be allowed to set wages based on the market, like the foreign automakers operating in America do. I would also propose eliminating by executive fiat the state franchising fees that make it difficult to eliminate car brands and dealerships that aren't profitable, like Pontiacs, Mercuries and everything Chrysler makes. In exchange, I would raise corporate taxes on the Big 3 as well as personal income taxes on their employees in order to offset the costs of the medical care and pension benefits. If they choose to continue making vehicles that drive consumers to purchase more reliable higher quality foreign brands, the Big 3 should be allowed to fail.

Since this whole system would be inherently unfair to the hard-working foreign-owned manufacturers here in the United States, I would offer the same deal to them: health care and pension benefits in exchange for higher taxes. And then when it becomes clear that this gives an unfair advantage to employees in the auto manufacturing industry, I would extend health care coverage, pensions and higher taxes to every citizen of the U.S. Then when it would become clear that health insurance is horribly inefficient, I would urge the government to use its massive leverage to reform the health care system so that hospitals and health clinics, like schools and fire departments, are owned and managed by the government on a not-for-profit basis.

Now that's a bailout!

Oklahoma's Terrible Health Care Legislation Obviously Influenced by Lobbyists

You may hear some ranting liberal go on about health insurance company lobbyists being the scumsucking scourge of the legislative process in America, but sometimes it's hard to pinpoint the end result of all the influence peddling. However a new bill passed by the Oklahoma House of Representatives erases any doubt as to the end result of all that congressional backscratching.

Health insurance companies don't really cover all health care needs. The insurance companies are always trying to get out of covering people for certain tests or procedures regardless of the benefit received from those tests and procedures (even if they can save lives) because they can get rather expensive. Health insurance companies aren't interested in health; they're interested in making money. In order to coax health insurance companies into covering the tests and procedures that they should be covering anyways, the state legislature has created mandates in the past to force any insurance company wanting to do business in the State of Oklahoma into covering certain procedures. The legislature's list of 14 mandates includes coverage for prostate exams, mammograms and treatments for diabetes and certain types of mental illness. The state had to create these blanket mandates because it is impossible for an individual to negotiate medical coverage a la carte, and insurance is worthless if it doesn't cover whatever your particular ailment happens to be.

House Bill 3111 solves a problem that never existed. The bill requires that any future mandate legislation be accompanied by a cost-benefit analysis to be paid for not by the state legislature but by the organization requesting the additional coverage. But the really pernicious clause of the bill calls for a limit on lawmakers introducing and passing a bill mandating coverage unless the bill is introduced in an odd-numbered year and then may be acted upon by legislatures in an even-numbered year. There are a couple of ways of looking at the effects of this proposed bill. It could kill half of the proposed mandate legislation, legislation that only exists because the government cannot rely on private insurance (or the free market in general) to look out for what's best for the people of the state, since the amount of time that a bill can be introduced is slashed in half. Or it could simply create a couple of extra unnecessary bureaucratic steps; a couple more hoops to jump through before anybody could be screened for ovarian cancer, for example. It doesn't eliminate the legislature's ability to pin a mandate on the tail of the insurance companies, it just blindfolds the legislature and spins it around a few times. One thing is for certain though; the insurance companies will save a lot of money while the mandate tightrope walk is slowing down legislative efforts. And you must be a Republican or a lobbyist to believe those savings will be passed down to you the consumer.

House Bill 3111 was passed by the Republican controlled House 53 to 46, with no Democrats voting in favor, and two Republicans (one of whom is the only medical doctor in the House) voting against. There are some good quotes from pissed-off Democrats in the state House in this article, such as the one from Scott Inman, D-Del City: "What this bill was all about was the insurance industry saying we want more time to be able to kill any mandate bill that comes down the pike." Or these from Ryan Kiesel, D-Seminole: "It is repugnant that an insurance company that takes your dollars won't cover an exam that can save your life.... We're not asking insurance companies to do something that's out of the ordinary. We're asking them to do something that they should be doing already."

Two more quick points:

1. This bill is a perfect example of the process by which individual rights and freedoms are taken away by those in power. Curtailing freedom is never done in one fell swoop; it's always a long road that starts out with limits, then restrictions, then obstacles, then narrowly viewed readings, until finally whatever right was there is effectively gone and nobody notices that they don't have it anymore. Now, medical insurance may not be a right like free speech or not having your stuff illegally searched and siezed, but the process is the same.

2. The talk of the nation shouldn't be about "Universal Coverage" or "Covering the Uninsured" because insurance doesn't take care of you, doctors and nurses and hospitals do. Getting sick isn't something that can be planned, and it isn't limited to certain people, and it isn't cheap. That's why if our government exists to protect and serve the people over which it rules, and if it believes that a healthy population is in the interest of the state, the government should be the entity that dispenses the health care, not the health insurance.