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  1. Old Comment
    xan's Avatar

    Sanity Zone 10-2-2013 Shut Down and Loving it.

    As for taxation and subsidies, this area is more complicated due to the policy need to distribute the burden of tax as fairly and equitably as possible. The challenge of any tax system is to not encourage adverse behaviors or discourage positive behaviors. The reason we tax virtually everything is so that one can't escape paying into society. No activity should get special treatment. Some activities are not taxed directly, like charities that promote a social good (like cancer research, or the ASPCA) but the salaries paid to the employees do get taxed.

    Our government uses the tax system to alter behaviors. One major criticism of this is that the tax may not achieve its objective (see tobacco tax) or cause inadvertent transfers of wealth (see carried interest rule). Until a tax is implemented and behaviors adjust, one cannot accurately predict whether tax policy will be successful. However, if a type of tax consistently produces similar effects, one can predict the outcome probabilties. New taxes are the hardest to characterize. Debate rages on a transaction tax for trading shares on NYSE and NASDAQ. Arguments for are that traders can manipulate share prices with small fast trades, and that a tax makes this unfair strategy come with a penalty. Arguments against include that most trades are simply portfolio adjustments, not manipulations, and that those trades bear too much burden.

    The taxes raised under the plan are mostly on the product sellers, like drug companies and device manufacturers, and some system suppliers. The theory is that these companies benefit most from reimbursement in these plans, so they should subsidize the least able to pay. The estimates are that the revenues from these sources plus the receipts from those insured should provide adequate coverage from the costs of adding the newly covered. Now, you can argue that these costs are already being borne by the system because those poor are getting healthcare for free. But if you agree that individuals who have been purchasing healthcare plans are already bearing too much of the burden of subsidizing the poor, this leaves only corporate profits as a source to make up lowering premiums for those who have been forced to subsidize for so long.

    As it relates to other forms of subsidies in healthcare, Medicare is a classic example. One of the largest, most successful and most popular government run programs in history, Medicare relies on taxing all wage earners while none of them can draw benefits until (and if) they reach the age of eligibility. Young healthy wage earners pay for the care of the elderly. This single payer system is similar to programs in Europe and Asia. There are some differences in its administration and coverage, but when politics are removed from its management, it is a highly efficient (2% administrative costs vs. 15-20% for private plans) program. CMS sets prices and some outcome benchmarks, making it a very "regulated" program. It is ironic to see those demanding government get out of their healthcare but to leave their Medicare alone.

    A difficult transition that is being forced through the tax/subsidy/reimbursement program is the one from an "emergency care" model to a "preventive care - outcomes" model. This is the trickiest because a transition of this nature is best achieved through a single payer paradigm. However, in an attempt to keep the historical insurer based model, taxing profits and altering some reimbursement schemes are the only ways to change behaviors (I'd include regulations, but standard of care tends to change faster than legislation is capable of keeping up with that change, so policy makers are reluctant to codify medical practice into law).

    Emergency care is the best model for suppliers of care because the demand curve is inelastic, which means that people will pay whatever is being charged because they have no negotiating leverage. Moving the model to a preventive care paradigm means that providers essentially get paid for patients NOT touching the system. This gives the patient more flexibility and causes the system to allocate resources more efficiently. Rather than dedicate resources to the worst cases and denying primary care that would obviate the emergency, the policy intent is to encourage a more proactive care system, lowering the risks of adverse medical emergencies and improving quality of life.

    This will be complicated. It certainly can't be achieved without an iterative process of test-adjust-test. To say that the initial implementation isn't optimal so it should be abandoned is like advocating firing Drew Brees before week 1 because he already didn't win that season's Super Bowl.

    I cannot say whether this program will work or not. However, the way it is structured is the only way to preserve a free market, insurance based system in which almost half the population participates in the market as a free/public good.

    The baffling fact is that those who object to this plan haven't offered any comprehensive alternative that preserves a free market insurance based system. There is a lot not to like. There's a lot to like. Same as any other massive overhaul of a broken system.

    The reason why Republicans want to delay implementation for a year is because insurance programs only work if the pool is big enough to cover the costs. Delay would stop the pool from getting bigger, leaving only sick and those with insurance having to raise their premiums to cover those sick. Because many of the programs in the ACA are wildly popular so much so that they will survive any repeal, delay would crush traditional insurers, disrupting the system and creating massive chaos. I'm not sure that this has been factored into the strategies for holding Government hostage to repeal.

    As I said in the beginning of this post, this will be a wild ride because disinformation and rhetoric will ultimately be stripped away and we will have to deal with the reality of the situation.

    Is it truly worth obliterating the US economy and harming US families for this?
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    Posted 10-10-2013 at 09:38 PM by xan xan is offline
  2. Old Comment
    WHODATINCA's Avatar

    Sanity Zone 10-2-2013 Shut Down and Loving it.

    >The US Government has never exhibited the ability to
    > efficiently execute a project

    Really? So, WWII didn't impress you? The moon landing? Nor, the Hoover Dam? The interstate highway system? Taking out bin Laden?

    I guess it depends on your definition of efficiency, but our government IS capable of executing a project -- at least it was until a few days ago.

    Here are actual and projected of the impacts the government shutdown:

    Thousands of workers are laid off at defense contractors

    Federal government cannot pay bills and our credit rating is lowered again -- resulting in a huge increase in our debt due to cost to borrow money

    VA stops paying pensions and other benefits

    Federal Courts shutdown

    19,000 children left out of Head Start programs

    How the ripple effects of the government shutdown might spread, day by day - U.S. News

    And, Oak, I'm sorry but, a law does not have more weight, significance, relevance or authority than any other law by virtue of the length of it's existence. In the current moment, all laws have same enforcement imperative.

    Of course, a law ( or portion thereof ) can gain more gravity by being challenged in the courts and then reaffirmed by the setting of judicial precedent -- but the setting of precedent is only tangentially time-related.
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    Posted 10-10-2013 at 04:03 PM by WHODATINCA WHODATINCA is offline
  3. Old Comment
    xan's Avatar

    Sanity Zone 10-2-2013 Shut Down and Loving it.

    Oak, I just don't know where to begin. I'll try, but just realize I'm not defending, just explaining.

    The "mandate" portion of the ACA requires everyone to participate in the current insurance based model who is eligible. (Those not are covered by Medicare and Medicaid). One does not have to purchase insurance, but opting out will trigger a penalty of 95% of a "bronze" level plan, making purchasing a plan almost a no-brainer. A plan can be purchased similar to the way one shops for airfares on Orbitz. For the first time ever, Insurance companies must delineate each plan's specifics and characterize the premium costs to the insured. In this way, consumers have better information about the coverage that they are buying and the company through whom they will purchase plans. The Federal government put a set of minimum coverage requirements on all plans, but beyond those minimums, consumers can add features and pay extra for them.

    From an "economics of insurance" analysis, this is the optimal arrangement. The more participants in the pool, the lower the participant's cost for participating in the pool as risk is spread out over a larger population. Even the "old" model insurance works exactly the same way but insurers had to advertise to attract healthy participants for a larger pool. The mandate simply substitutes out some of the need to advertise for those same healthy individuals.

    The mandate also eliminates the "free rider" issue that plagues all public goods. Being purposely simple for the purposes of this discussion, hospitals and doctors and clinics are essentially open to the public. In some instances hospitals are required by law to provide care even if the patient cannot pay. Patients know this and are therefore have no incentive to purchase insurance knowing that they can successfully access the system. This is fundamentally unfair to those who pay for insurance because the costs of these "free riders" are passed on to those who pay. Prior to Oct. 1, the number of free riders was increasing far faster than new purchasers of insurance. This reality of cost shifting had to be addressed because the rich were/are forced to pay for care for the poor. By disconnecting the mandate, one would effectively destroy the insurance model, because only rich+poor health people would buy "insurance." Proponents of "personal accountability" and "anti-government takeover of healthcare" recognize that this is the only way to make the system fair and equitable.

    The core difference between the "old" model and the "Obamacare" model is the transparency. Insurers are required to spell out specifics of coverage under Obamacare in a way that the average consumer can understand while stating a price that can be compared to other companies' plans. Kinda like looking at labels and prices when shopping at the supermarket. Aside from the requirements of the minimums, there are few new requriements that impact the insurer, other than they are limited to spending no less than 85% of policy revenues on delivery of care, no discriminating for pre-existing conditions, and that children up to 26 can buy into parents' existing plans.

    The "exchange" feature of the ACA is about as free market as one can get in a healthcare system based on insurance, as the government does not set the price nor does it deliver the care. You have to remember that the insurance model is an extreme rarity in the world healthcare markets, as most nations with any meaningful healthcare infrastructure are single payer. The Massachusetts exchange paradigm was shared with all the states that chose to make their own exchange, and the Federal Government modified that model to account for those states who chose not to create an exchange. Having been implemented for over 10 years, the Mass model was fairly debugged.

    I'll get to other points later. Problem is that criticisms are usually short but explanations are usually long, especially with healthcare. I guess up next is taxes and subsidies. Which is unfortunately more involved.
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    Posted 10-10-2013 at 02:32 PM by xan xan is offline
  4. Old Comment
    TheOak's Avatar

    Sanity Zone 10-2-2013 Shut Down and Loving it.

    Xan,

    So now as a country we accept the Microsoft model of get something to market regardless of how broke it is and we will fix it later? Obamacare is the equivalent of Windows ME.

    Put your heart strings aside because I know you are smarter than that, or you are just in the mood for a debate; either way I'm your Huckleberry.

    The huge difference between the Microsoft model and the Obamacare model is quite easy to differentiate. Even though the Microsoft model put a product on the shelves that is not 100% ready for market, they do go through a beta process to work out the majority of the bugs. Obama care had no such test, actually it was voted on with nearly zero vetting, then pushed to market with no beta runs. Obama throws out the Microsoft model and fans drink it up by the gallon and start using it. The rule for beta/pilot testing is that you NEVER test on the active system.

    My opinion of Obamacare is not fabricated based on the opinions of news organizations. The US Government has never exhibited the ability to efficiently execute a project, the inefficiency of our Government is tax money waste at a time when we are at our credit limit and they have no business being in the business of anything.

    Look at post Enron GAAP it grew from a pamphlet to a document the size of 10 bibles stacked.. small font and extra thin paper. That effort created more loopholes than it closed and now with in the next 3 years we will be moving to the European model, one smaller than the original.

    More importantly, I have a choice when it comes to my operating system, Obamacare offers no choice of financial separation. The program will be heavily subsidized and that involves my taxes going to it.

    The touch of Government in any business is the equivalent of a cc of Brown Recluse venom, once it makes contact the decay process begins immediately in regards to risk assessment and liability based decisions. See Subprime Mortgage Crisis. One the Government realizes they did wrong, then the market still has to correct. Market correction due to Government stupidity is very costly to this nation and its people.
    permalink
    Posted 10-10-2013 at 09:14 AM by TheOak TheOak is offline
  5. Old Comment
    TheOak's Avatar

    Sanity Zone 10-2-2013 Shut Down and Loving it.

    WHODATINCA - So the stand that a law that is 3 years old should be accepted because it is law but one that is 222 years old needs to be changed?
    permalink
    Posted 10-10-2013 at 08:51 AM by TheOak TheOak is offline
  6. Old Comment
    TheOak's Avatar

    Being held hostage again.

    What the republicans are saying is as reliable a litmus test on reality as what the Democrats are saying.

    The reality is that BOTH party's refuse to budge and that makes it a 50/50 blame hostage situation on the parties. If you are going to insist that law is law then you are resigned to standing ground that Democrats should just accept the Second Amendment.

    I am resigned to not allowing partisan news organizations and inept politicians dictate my perception of reality.
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    Posted 10-10-2013 at 08:50 AM by TheOak TheOak is offline
  7. Old Comment
    xan's Avatar

    Sanity Zone 10-2-2013 Shut Down and Loving it.

    All new ventures go through startup issues. Nothing works perfectly out of the box, especially something as complicated as healthcare. The shakedown that Mass did will help other states implement their programs (California premiums are already lower than some of the more optimistic projections and account creation is faring well. Because people have until Dec 15 to sign up and their plans don't activate until Jan 1, it will be tough to say how well this will work until people start showing up in the providing chain.)

    However, because the bulk of the implementation of the law covers disclosure by health insurers on these "Orbitz.com" comparison shopping sites, scale is not a factor that will determine its success. That's because large scale interactive shopping sites have been implemented in good working order for over 15 years.

    What will be complicated is getting providers to reorient their business model from a "payment for throughput" scheme to a "pay for performance" scheme. It means that hospitals and doctors and clinics will have to stay completely up to date on the best practices and be very aggressive in managing their patients. Otherwise they will be disadvantaged economically. If your model is simply "see 40 patients a day - earn $250K per year" then you will hate Obamacare because you will no longer be paid simply for laying eyes on a patient. You will get penalized if that patient isn't managed to the best practices.

    What I find interesting is that when this program ramps up, demand for nurses, technicians, and other healthcare professionals will skyrocket because all those people who now have insurance will flood into the system. That will be horrible for the economy because wages will be paid out to millions instead of dividends to thousands. And wages carry a much higher tax rate than do dividends (15-34% progressive + 10% FICA/Medicare vs 15% flat) Its a dastardly wealth transfer scheme that hits the bullseye of class warfare. I don't know why this doesn't get more attention from people that hate Obama.
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    Posted 10-09-2013 at 11:52 AM by xan xan is offline
  8. Old Comment
    TheOak's Avatar

    Sanity Zone 10-2-2013 Shut Down and Loving it.

    Making wholesale healthcare change in the state of Massachusetts is no where the scale of this nation...

    Xan, you know better than that argument, what is it you say about presenting an argument with that many holes and what you would be told?

    Lets see California pull it off independently then we can talk. Illegals weigh heavily on this... And you know that.
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    Posted 10-09-2013 at 08:25 AM by TheOak TheOak is offline
  9. Old Comment
    WHODATINCA's Avatar

    Sanity Zone 10-2-2013 Shut Down and Loving it.

    Hmmmm....tip of my hat to the Cowboys. I underestimated them.

    But, as always, Who Dat!!!
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    Posted 10-06-2013 at 09:54 PM by WHODATINCA WHODATINCA is offline
  10. Old Comment
    xan's Avatar

    Sanity Zone 10-2-2013 Shut Down and Loving it.

    Regardless of one's political stripes, when presented with information that is in direct contradiction to one's expectations, one will discount thay information and hold on tighter to the initial position. It's called the backfire effect and it can even cause people who are normally proficient in a task not to be able to perform the task if they believe the task will result in proving themselves out of step with reality.

    Explains a lot on both sides of the aisle.
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    Posted 10-06-2013 at 04:40 PM by xan xan is offline
  11. Old Comment
    WHODATINCA's Avatar

    Sanity Zone 10-2-2013 Shut Down and Loving it.

    Thank you, Xan.

    IMO, the reason conservative logic is difficult to follow is because they have disengaged themselves from the facts. That makes debate chaotic, incomprehensible, exhausting and, often, futile. Fox News gives the assist here.

    A study by Fairleigh Dickinson University study shows Fox News viewers are the least informed ( What you know depends on what you watch: People learn most from NPR, Sunday Morning Shows, The Daily Show; least from MSNBC, Fox News ). The poll asked questions about international news (Iran, Egypt, Syria and Greece were included) and domestic affairs (Republican primaries, Congress, unemployment and the Keystone XL pipeline.)

    The pollsters found that people who don't watch any news were able to get 1.22 of the questions on domestic policy right. But, someone who watched only Fox News would be expected to answer just 1.04 domestic questions correctly -- a figure which is significantly worse than if they had reported watching no media at all.

    If strategically this was a football game -- I say the Republican chatter sounds alot like the Cowboys pre-game today. They need a reality-check. The Broncos will no doubt give it to them.
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    Posted 10-06-2013 at 04:22 PM by WHODATINCA WHODATINCA is offline
  12. Old Comment
    xan's Avatar

    Sanity Zone 10-2-2013 Shut Down and Loving it.

    Even the Heratige Foundation, the biological mother of the Affordable Health Care Act, can't make the preposterous claim that the law will bankrupt insurance companies. RomneyCare in Massachusetts sees near universal coverage and more than adequate profits for payers. Insurance company profits are increasing in states in which the ACA law has been in place before the Oct. 1 start date. The biggest fear of opponents is not that the law will cause problems but that people will be happy with it, and they hate this President so much that it would be galling to them for it to succeed. You don't have to like this President, but you do not get to make sh up and promote fiction and bad policy without being called on it. At least not in this blog.
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    Posted 10-06-2013 at 11:50 AM by xan xan is offline
  13. Old Comment

    Sanity Zone 10-2-2013 Shut Down and Loving it.

    And Obamacare will permanently bankrupt all other forms of insurance, as well as social security. Which means unless you're rich, you're going to be thoroughly screwed if you plan on ever retiring.

    When you only look at short term problems, you are likely to only find short term solutions, which when you stop and think about it, is not a solution at all. That's how we end up with Obama care.
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    Posted 10-06-2013 at 12:20 AM by burningmetal burningmetal is offline
  14. Old Comment
    WHODATINCA's Avatar

    Sanity Zone 10-2-2013 Shut Down and Loving it.

    Regarding the blog we are discussing, I just want to say that the Republicans holding our government hostage because they don't agree with a legally passed law -- makes them traitors -- and responsible for increasing our debt which they say hypocritically say they care about.

    According to the economic consulting firm IHS Global Insight the government shutdown is costing us about $1.6 billion a week, $300 million a day, or $12.5 million an hour.

    Money for nothing: Government shutdown costs $12.5 million per hour - NBC News.com
    permalink
    Posted 10-05-2013 at 06:45 PM by WHODATINCA WHODATINCA is offline
  15. Old Comment
    WHODATINCA's Avatar

    Sanity Zone 10-2-2013 Shut Down and Loving it.

    So, your avatar choice says nothing about you, huh?

    > The media is controlled by voter ignorance.
    Huh?

    > the issue is "has your government become so powerful that
    > you need to control it"?
    I believe the Framers envisioned a representative democracy in which the people are imbued with the power to make changes to their representation --- if their representatives do not serve their interests.

    >The ignorance of the people is the direct cause of the power swings.
    So in your mind -- if Americans were smart -- the conservatives would be elected 100% of the time?

    >State Government ... is all that is needed.
    Could be confused with feudal clans.
    Or, simply, secession. I see you live in Texas.


    I am not calling for anarchy -- so just cut that **** out. It is disrespectful.

    And, re: CA is "happy" -- have you ever been to California? This state is not happier or unhappier than any other state.

    Honestly Oak, for the most part, your logic eludes me and your perceptions simultaneously confuse and amuse. The question arises -- how did he get there from here? But, hey dude, rock on with your bad self.
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    Posted 10-05-2013 at 06:40 PM by WHODATINCA WHODATINCA is offline
  16. Old Comment
    TheOak's Avatar

    Sanity Zone 10-2-2013 Shut Down and Loving it.

    There is no anger in me about our government. Your assumptions are incorrect again, much like believing I selected an avatar based on my perception of what my personality is.

    I hardly call those ideas "creative" as they do not address the underlying issue of voter ignorance. The media is controlled by voter ignorance. The media no longer reports the raw unadulterated news, they now feed the masses what the masses want to see and hear. They dramatize it, add a pinch of panic, plate it on which ever direction they want it to go and then serve it.

    The issue is not who controls the government, the issue is "has your government become so powerful that you need to control it"? The framers idea of Government was minimalist at best and never reaching a size where it needed to be controlled. If the Federal Government needed any controlling the Constitution does that. It is not the Government that decides on the Constitution, it is the Constitution that grants the Government its power.

    Here is the wash, unless you are deluded beyond reason you recognize that eventually there will always be a swing of ownership. The people grow restless and bored with the same government after a while. The more the Government, the more the swing. The ignorance of the people is the direct cause of the power swings. The more the people need, the more they will cast a vote for whom ever promises to fulfill that that need... But these are politicians and not leaders. They will gladly throw out empty promises that they know they will be in office before they will ever have to be held accountable for.

    Federal Government size does not equate to power, that is done through corruption. Government size only equates to inefficiency, and cost.

    You keep reverting to a lack of huge federal government equating to feuding clans... That is the media story you bet down hard on... In the absence of a huge bloated federal government then you have State Government and that is all that is needed. This is protected by the 10th Amendment, it is why Obamacare is a federal tax and nothing else. If it is not a Federal Tax then it is imposing on the States Rights to opt out.

    I do not "roll", and my boots do not have straps. You think in cliche's and that is preventing you from seeing the reality. The only person calling for or mentioning anarchy is yourself.

    The only reason California is happy is because they see their way of life being imposed on the rest of the nation... It will swing again one day and when California has the way of life of another state that is less liberal imposed on them they will be calling for less Government.


    So, again... I am not angry. I am amused. Amused by all the people chasing rainbows.
    permalink
    Posted 10-05-2013 at 06:39 AM by TheOak TheOak is offline
  17. Old Comment
    WHODATINCA's Avatar

    Being held hostage again.

    Thanks for the post Homer -- totally agree.
    permalink
    Posted 10-05-2013 at 02:02 AM by WHODATINCA WHODATINCA is offline
  18. Old Comment
    WHODATINCA's Avatar

    Being held hostage again.

    Oak, are you actually watching the news?!? Are you hearing what the Republicans are saying? The Republicans are holding the country hostage because of the ACA ( Obama Care ).

    Wow. Facts needed here too.
    permalink
    Posted 10-05-2013 at 02:00 AM by WHODATINCA WHODATINCA is offline
  19. Old Comment
    WHODATINCA's Avatar

    Sanity Zone 10-2-2013 Shut Down and Loving it.

    >Who might your governmental appointed custodian be?

    With a government, there is a government ... no custodian necessary.

    Look, you are pissed because you have lost control of your government. I get it. The answer to your loss of control is not killing off the government. At least, I don't think so, but maybe you are an anarchist. But, if you aren't then, the answer I recommend to you is to regain control. Otherwise, without a governing body, you will need a fifedom.

    But, if you believe in government, as long, as it is with the consent of the governed, the question is -- how will you regain control? Will it be anarchy? Revolution? Getting corporate money out of politics? Doing away with the Electoral College? Dismantling the Federal Reserve? There are lots of creative ideas.

    And, I like the libertarian ideals of "pull yourself up by your boot straps" and together "let's roll..." mindset. I think it is needed especially now in wresting OUR government back from the people and organizations who control it. And, so, we come full circle.

    I want to ask you, Oak -- has the media brainwashed you so much that you think you can't see the truth? Because, I don't think the media has brainwashed me so I can't see the truth, either. And, on certain points we may disagree. But, I hope we agree that we prefer a government, of the people, by the people, for the people. And, I want to direct your attention to the OZ you mention. Who owns the media?
    permalink
    Posted 10-04-2013 at 04:45 PM by WHODATINCA WHODATINCA is offline
  20. Old Comment
    TheOak's Avatar

    Sanity Zone 10-2-2013 Shut Down and Loving it.

    BTW The "Law" also states that Congress will set a budget each year and stay under the Debt Ceiling.

    You live by the sword, you die by the sword.
    permalink
    Posted 10-04-2013 at 04:15 PM by TheOak TheOak is offline

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