Relevant and even prescient commentary on news, politics and the economy.

Are They Allowed To Write That

Robert Waldmann

wonders why ROBERT PEAR and DAVID M.HERSZENHORN of the New York Times broke the main rule of fair and ballanced journalism — one must never question the honesty of a Republican. Out of some residual respect for journalistic standards, they put their gasp reporting after their jump.

On the Senate side of the Capitol, where efforts to produce a bipartisan health care measure continued in the Finance Committee, top Republicans seemed eager to avoid early compromises that would let Democrats head to their home states for the August recess boasting of any progress.


Mr. Grassley and Mr. Enzi clearly face a tough balancing act, as their party’s leadership maneuvers to torpedo any emerging compromise and force Democrats to start over.


Mr. Grassley angrily dismissed suggestions that he and Mr. Enzi were being pressured by party leaders.

“What you are observing is a continuation of where we have been for a doggone long time,” he said. “The trouble is you all are looking for news and there ain’t no news.”

Some Republicans have begun to warn that Mr. Grassley should tread carefully on the health care bill if he wants to become the senior Republican on the Judiciary Committee, a post that he is in line to take in the next Congress, when his term on the Finance Committee will be up.

And there have even been suggestions that Mr. Grassley, who is up for re-election next year, could face a primary challenge …

Then they close with a sentence whose clear meaning is, I think, not changed in the slightest by my edit in [brackets]

“Earlier in the day, Mr. Enzi said the legislation was simply not finished. ‘The bill is not ready for prime time, so I don’t know any way that it could be completed today or next week and then we are at the August break,’ he [lied].

Before the jump, their article notes that Waxman, top blue dogs and progressives have reached so, Sen Grassley, you aint got an excuse left with support from the top blue doggone.

Comments Off on Are They Allowed To Write That | |

Per Capita Spending and Life Expectancy Statistics

by reader Sammy

“Are Per Capita Spending and Life Expectancy Statistics an accurate measure of US Health Care Efficiency?”

Proponents of some degree of nationalization of health care generally cite some variation of the following “The US spends more per capita on health care than any other country, and yet has one of the lowest life expectancies of any developed country” as proof of the need for government intervention. But is that statement meaningful?

This University of Iowa study provides some data that casts some serious doubt.

Let’s break the statement into it’s two parts.

1) “The US spends more per capita…

Yes, but the US makes more per capita. They spend more per capita on LOTS of things as GDP increases.

So the question is, does the US spend more than “expected” given higher GDP. The study conclusion: “Not Obvious” as seen by the graph below.

(rdan…graph corrected)
2) “….. and yet has one of the lowest life expectancies of any developed country.”

(Rdan…My impression is in comments)

This is even more interesting. The US has far higher fatalities from homicide and traffic accidents than other countries which impact the life expectancy statistics.

While this might have some implications regarding crime or traffic legislation, it does not on Health Care, unless one were to assert that US trauma care is dramatically inferior.

So the authors controlled for the differing non-health care related deaths to develop a life expectancy table that could more accurately reflect the relationship between health care quality and life expectancy:

The US jumps from 15th on the list with a life expectancy of 75.3 to 1st with a life expectancy of 76.9.

So one of the central and oft-quoted motivations for government control of health care “The US spends more per capita on health care than any other country, and yet has one of the lowest life expectancies of any developed country” is quite misleading.

Comments (3) | |

15 month withdrawal from Iraq a worthy effort?


A reader complained of lack of coverage of the ME at AB now compared to a few years ago, and charged it was a ‘pass’ on President Obama because he was our darling messiah. And of course ignoring the build up in Afganistan. Now this memo could be used to declare victory of the Bush planning and eventual response to realities of Iraq via General Patreaus and his policies. So here we go again.

Colonel Reese is reported by the NYT to have issued a memo recommending withdrawal from Iraq within 15 months, assuming all things remaining the same.

For all of these problems, however, Colonel Reese argues that Iraqi forces are competent enough to hold off Sunni insurgents, Shiite militias and other internal threats to the Iraqi government. Extending the American military presence in Iraq beyond 2010, he argues, will do little to improve the Iraqis’ military performance while fueling a growing resentment.

“As the old saying goes, ‘Guests, like fish, begin to smell after three days.’ ” Colonel Reese wrote. “Since the signing of the 2009 Security Agreement, we are guests in Iraq, and after six years in Iraq, we now smell bad to the Iraqi nose.”

The memo continued, referring to the Iraq Security Forces: “The massive partnering efforts of U.S. combat forces with I.S.F. isn’t yielding benefits commensurate with the effort and is now generating its own opposition. We should declare our intentions to withdraw all U.S. military forces from Iraq by August 2010. This would not be a strategic paradigm shift, but an acceleration of existing U.S. plans by some 15 months.”

Before deploying to Iraq, Colonel Reese served as the director of the Combat Studies Institute at Fort Leavenworth, the Army’s premier intellectual center. He was an author of an official Army history of the Iraq war — “On Point II” (warning…pdf) — that was sharply critical of the lapses in postwar planning.

The book is a usefull read too. See this announcement 7/31 by Defense Sec. Gates.

Comments Off on 15 month withdrawal from Iraq a worthy effort? | |

Inner workings of a PR campaign


Wendall Potter in his new position at the Center for Media and Democracy will hopefully provide insights into the inner workings of his former employer, health insurance company CIGNA corporation. Bill Moyers has a series of interviews scheduled where Wendall Potter lays out his case.

As a consumer, if predictions come true that premiums double in the next ten years if we leave the current system in place, (?$30,000 a year? for a family plan), and my wages increase about 15%, rationing and lack of coverage are guaranteed, including the predictions of reducing treatment for old people….except it would be done privately by companies like BC/BS, by a faceless employee. Intelligent cost control anyone???!!

Update: A national average is about 12,800, so a doubling would be less at $25,600/year.

Update 2: Reader Wasaa says: “Your rate of doubling from $12,800 to $25,600 a year assumes that the same percentager of businesses will offer health insurance benefits to their employees. What we have seen over the past 10 years is the % of small businesses providing health insurance to their employees has plummeted to around 30%. Small businesses get whacked very hard because there is no adequate pool in which to be a member that will drive costs down. My insurance is $18,000/yr for the family (with a pre-existing condition clause and a $5K individual/ $10K family deductable). As insurance becomes more expensive, less businesses will provide it causing even higher costs to be born by the individuals who still have insurance.”

BLS offers these stats on who pays: BLS

Comments Off on Inner workings of a PR campaign | |

Office of Special Inspector General quarterly report


SIGTARP’s Niel Barofsky and his staff have issued a first try at a cohesive description of funds expended for the fifty or so programs handing out money, but also a description of the potential expenditure (unlikely to happen). The link is to the site, which contains the report and the data in two separate, large pdf documents.

OMB has a good starting description of the attempt at transparency. The Inspector General’s office might be put under direct Dept. of Treasury control…I understand the impulse, given the trash talk flying around the medias in healthcare, tax policy, citizenship, and other advertizing endeavors, but best to keep the data flowing. I am sure the sheer volume of docs will keep people from actually reading it…most of us will rely on trusted sources to interpret the data. Please avoid simply repeating slogans if you comment.

Comments Off on Office of Special Inspector General quarterly report | |

Raising the Social Security Earnings Cap: Four Options Scored by SSA

by Bruce Webb

I haven’t posted on Social Security for a while for a pretty simple reason. Nothing has been going on. Until today when Social Security released the following Policy Brief: Distributional Effects of Raising the Social Security Taxable Maximum.

This policy brief analyzes the effects on taxpayers and Social Security beneficiaries of either eliminating the taxable maximum (tax max) for Social Security or raising it to a level so that 90 percent of all Old-Age, Survivors, and Disability Insurance (OASDI)–covered earnings would be subject to the payroll tax. Under both scenarios it is possible to either calculate benefits based on the current-law tax max (no max and max 90) or to credit the new taxable amounts toward benefits (no max plus benefits and max 90 plus benefits).

Historically Social Security had tapped the top 90% of income. Due to the skewing of income we have seen over the last couple of decades that percentage is down to about 84%. Various plans including LMS and the Obama preliminary plan have suggested adjusting the cap upwards, with or without a donut hole, either to the traditional 90% level or following Medicare with no limit at all. Additionally there has been debate whether this cap increase should be accompanied by additional benefits. This study finally, thankfully puts some numbers in play. Those interested should read the whole thing. The current projected payroll gap is 2.00%. An increase to a 90% level with no increase in benefits, which is in the range of what both LMS and the Obama cap increases propose, fills only about half of the gap. On the other hand extending FICA to all income with no increase in benefits backfills the whole thing. Personally I still favor the Northwest Plan that would leave the capp unchanged, but for those who would like to play mix and match here is your opportunity. (The tables are easier to read in the HTML version, these are copied from the PDF).

Tags: Comments Off on Raising the Social Security Earnings Cap: Four Options Scored by SSA | |

Was it a Gang of Seven?

by Bruce Webb

Max Baucus of Montana (pop 935,670- 89.2% white)
Kent Conrad of North Dakota (pop 636,677- 90.1% white)
Jeff Bingaman of New Mexico (pop 1,928,384- 42.8% white)
Michael B. Enzi of Wyoming (pop 509,294- 88.8% white)
Charles E. Grassley of Iowa (pop 2,966,334- 91.5% white)
Olympia Snowe of Maine (pop 1,321,505 – 96% white).

Most people following the Health Care debate are aware that progress is now under the effective control of six senators who in aggregate are clearly center-right, and from small mostly rural states as seen here (table lifted from Nathan Newman at TPM Cafe). And most of us are equally aware that the party split of what is being called the Baucus Committee is 3 Dem to 3 Repub while the overall makeup of the Senate would suggest a ratio of 3 to 2. All of which has implications of their own, it is a funny kind of democracy that freezes out the representatives of the vast majority of Americans and the whole political spectrum from the center leftward (though I don’t know a lot about Bingaman, I hardly think he is a Russ Feingold type, please comment.)

So please lets talk about all of this. I just want to throw in one last morsel. Last week it was widely reported that Republican Hatch Leaves Bipartisan Health-Care Talks, which as a supporter of health care reform with a public option I regarded at least as a small positive sign that the balance might have swung a little. But given what we are being told now about the makeup of the Baucus Committee this seems to mean that the original ‘Bi-Partisan Committee’ was made up of FOUR REPUBLICANS and three democrats, and those latter three including a chairman hostile to progressive solutions and the author of the Social Security/Medicare gutting Conrad-Gregg legislation. What the hell is up with that?

I understand that it is hard to avoid people taking a least a little bow towards the Pete G. Peterson crowd, but given a 60-40 split turning over negotiations to a group split on paper 4-3 the other way, and given ideological predilections even farther than that is to turn the term ‘bi-partisan’ from an inside joke to an outright laugh riot.

Am I missing something here? Was it somehow not a Republican majority Gang of Seven that appointed itself to be the mediators on this issue? And if so why is Harry Reid even listening? What kind of a Majority Leader just abdicates leadership to the other side on what might be the defining piece of legislation of the decade?

Tags: , , Comments Off on Was it a Gang of Seven? | |

HR3200 Sec 116: Golden Bullet? or Smoking Gun?

by Bruce Webb

On Sunday the CBO released a letter addressed to Rep. Dave Camp, the Ranking Member on Ways and Means, which among other things measured the impact of HR3200 (the House Tri-Committee Health Care Affordability bill) and a public option on employer covered insurance. On net it turns out that they project more people on employer paid insurance than current law. Additional Information Regarding the Effects of Specifications in the America’s Affordable Health Choices Act Pertaining to Health Insurance Coverage

I provide the link for anyone who wants to explore some of those issues. But in this post I want to explore one provision that seems to have contributed to this outcome. Now there has been much wailing and gnashing of teeth among the Single Payer Now! contingent that HR3200 with or without a public option just is a huge windfall to the private insurance companies by providing them with a individual mandate that delivers millions of new customers without cost controls with the end result that insurance companies will just cherry pick their way to billions in profits. Now if they would have paused for a second to wonder why people like Kennedy and Waxman would just sell them out this way they might have been tempted to examine the bill language. But since there was no such pause I guess I will have to step in. So in re-examining the bill yesterday I came across this section whose import I had kind of missed before. pg. 24-25


(a) IN GENERAL.—A qualified health benefits plan shall meet a medical loss ratio as defined by the Commissioner. For any plan year in which the qualified health benefits plan does not meet such medical loss ratio, QHBP offering entity shall provide in a manner specified by the Commissioner for rebates to enrollees of payment sufficient to meet such loss ratio.

(b) BUILDING ON INTERIM RULES.—In implementing subsection (a), the Commissioner shall build on the definition and methodology developed by the Secretary of Health and Human Services under the amendments made by section 161 for determining how to calculate the medical loss ratio. Such methodology shall be set at the highest level medical loss ratio possible that is designed to ensure adequate participation by QHBP offering entities, competition in the health insurance market in and out of the Health Insurance Exchange, and value for consumers so that their premiums are used for services.

Why is this the Golden Bullet for those of us pushing the Public Option? And why contrawise is it reason for the insurance companies to go ballistic? Well a little discussion of that under the fold.

This provision, if implemented correctly, almost totally strips the ability of insurance companies to combine cherry picking and premium increases to continue the huge profits they garner today. What it does is to establish a minimum ‘medical loss ratio’ which in simpler terms means a set ratio of care actually paid for to premiums collected. If by whatever means whether that be gaming the risk pool so an to only insure people unlikely to make claims or by denying coverage to insurees on a case by case basis your medical loss ratio drops below an established level the insurance company has to rebate the difference. In practice this prevents insurance companies from just arbitrarily jacking up rates and simultaneously takes the profit out of cherry-picking the risk pool. In a word this Sec automatically limits profits by establishing indirect price controls. Which is not going to make the insurance industry happy.

To see how this works. Under HR3200 Sec 111 bans limitations based on pre-existing conditions, Sec 114 mandates equal coverage for mental health and substance abuse treatment (p. 23), Sec 113 establishes strict limits on varying premiums across the risk pool (p.21), while section 112 guarantees enrollment and renewal, i.e. no more canceling people who actually dare to claim coverage for getting seriously ill. Now cynics can and do argue that insurance companies are extraordinarily skilled in working their way around these kind of restrictions and this is true enough. On the other hand the better they are at ducking the requirements of Secs 111-114 the more exposed they are to our Sec 116.

Lets say you have a company that against all law and regulation manages to have a plan that only in practice enrolls healthy adults aged 25-35 who rarely if ever use much health care. Under the current system this result yields ideal profits with collections but no payouts. Under Sec 116 your profits would be limited to the medical loss ratio. The answer for the insurance companies is to make up the difference with volume, the incentives are there to provide insurance as opposed to denying it.

Sec 116 would not eliminate all gaming as companies would still have an advantage if they shift their very high cost insurees over to the public option. But from the perspective of the government these are exactly the pool of people likely to end up on medicaid or qualifying for Medicare under Social Security disability anyway, for them the Public Option may just be a way station while they wait to qualify for DI.

What does this have to do with the CBO Report cited? Well Sec 116 prevents the Public Option from drawing too much of the overall pool away from the private plans not because it doesn’t have the ability to undercut them on cost, but because it forces them to compete for their share of the overall pool or risk seeing their gross profits squeezed.

I am still trying to work out in my head where the limits are here, and where the sweet spot for balancing the size of your coverage pool vs level of care the company ends up having to pay, but on a top down look it seems like insurance companies under something close to HR3200 end up making money by insuring people and not by denying coverage in whole or in part. It transforms the industry into a straight service industry from its current predatory model.

Sec 116: Golden Bullet for coverage, Smoking Gun for profits. It just depends which side of the divide you come down on.

Tags: , Comments Off on HR3200 Sec 116: Golden Bullet? or Smoking Gun? | |

Coping…will this influence local races?

Birth and Hawaii at TPM.

The House resolution to celebrate the 50th anniversary of Hawaiian statehood — which included language recognizing the state as President Obama’s birthplace, in a none-too-subtle jab at the Birthers — passed this evening by a 378-0 vote.

Among the Yes votes: Rep. Bill Posey (R-FL), the lead sponsor of the infamous “Birther Bill” to require presidential candidates to present their birth certificates, and who had previously said he wouldn’t “swear on a stack of Bibles” that Obama is a natural-born American citizen. Several other co-sponsors of the Birther Bill also voted yes: Marsha Blackburn (R-TN), Dan Burton (R-IN), John Culberson (R-TX), Bob Goodlatte (R-VA), Randy Neugebauer (R-TX), and Ted Poe (R-TX).

Comments Off on Coping…will this influence local races? | |