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Healthcare Insurance History

Last 21 Days ACA Healthcare History

On September 7th and shortly after Pelosi and Schumer decided to be nonpartisan and help Republicans who still had an ounce of decency to pass hurricane Harvey aid and set a new National Debt Limit, I wrote about the inherent dangers of being so magnanimous. Lets face it, during the Obama 8 years, Republicans made it a vow even before he took office to oppose everything coming from the other side of the aisle even refusing to participate in committee meetings. The ACA passed by Democrat votes only.

The danger with being nonpartisan with Republicans and passing good things which are beneficial to the constituency is you allow Republicans afterwards to concentrate on issues which will not favor the constituency or Democrats. Passing hurricane aid and a new debt limit did allow Republicans to get back to the more partisan effort of defunding the ACA and more money for the already rich through tax reform. The two are interlinked. The repeal passes funding for tax reform.

Angry Bear wrote on September 7 about the danger inherent in helping Repubs, wrote again on September 13 about Republicans being confident on defunding the ACA and its impact, again on September 15 about trusting Trump and Republicans with a hand-shake-deal, and last week on September 21 when Kimmel called Cassidy out as a liar and Krugman, other columnists, and blogs finally woke up to the impending danger of the Graham – Cassidy Bill.

Angry Bear called it early in the month on Republican treachery to defund the ACA. The vote will be this week before the 30th. I do not trust McCain. Hopefully, I am wrong on McCain.

Older Healthcare Insurance History

I thought this comment by a blogger was interesting to read as we wait for the Senate to take up the Graham – Cassidy Healthcare Insurance Bill which will defund the ACA if passed this week. I wander the blogosphere and I run into some interesting people from time to time. This particular commenter had a wealth of knowledge on healthcare insurance going back a ways. I have captured the commenter’s words to present them to Angry Bear. Hope you enjoy them.

“When, early in our adventures in managed care, I was marketing for clients like Sisters of Providence, who were attempting to set up their own managed care, non-profit PPO (which ultimately they did not see to completion), in the late 1980s, health care insurance was still non profit.

At that time ‘commercial insurers’ did not refer to health insurers at all. Commercial insurers provided for-profit RISK insurance — which health ‘insurance’ isn’t (and can’t be without defeating its original purpose; to help more people afford care while helping providers maintain expensive facilities and services). Health insurance was created as an additional way, beyond taxes and charity, to socialize increasing health care costs — to assure the healthy, self-interestedly, that the resources to meet their inevitable health care needs would be there when needed. And to ensure hospitals would have a revenue stream to help them maintain the increasingly sophisticated and varied resources to meet the modern care needs of their communities.

Although the first actual, modern health insurance program is credited to a hospital in Texas in the 1920 which contracted with school district employees to provide services to for a monthly premium (it was non-profit); proto-insurance schemes based on the same principle — asking healthy EMPLOYED people to contribute a modest monthly amount to cover care if and when they were injured or ill — were used long before. The Sisters of Providence, for instance, established the first hospitals in my part of the world, the Pacific Northwest, in the middle of the 19th century, offered loggers care for their not-infrequent injuries for a payment of $1 a month (this I understand having cut down trees while gaffing up them). The connection between health insurance and employment did not, as many people believe, just arise as a government idea with favorable WWII tax policies. It arose from a much older recognition of the reality that injury and illness compromise patients’ ability to work, earn and pay — and the recognition the employed, especially those in the more commonly dangerous occupations, had both the income with which to make regular payments and an incentive to make arrangements to provide for themselves, as eventual patients, with care when needed despite the economic vulnerability illness caused — while providing providers with resources that helped maintain facilities and services and workforce to provide that care.

Until the advent of ‘managed care,’ which deregulated the health insurance market in ways giving insurers a greater ability to limit who was covered and what was covered — to their own benefit (but not necessarily to the benefit of our social need for broadly available health care, or increasingly, premium payers’ needs either). In fact, commercial insurers avoided the health insurance market like the plague.

It was understood by everyone that there was no way to make a profit in it While still meeting policy holders actual needs.

Health insurance was created solely as a way to socialize costs for health care consumers.

It did and does not and can not work like a car, flood, or even life insurance where insurers work out, and profit from, fairly reliable actuarial probabilities about what percentage of policy holders are likely to ever make a claim, the likely length of time the average policy holder will be paying premiums before making a claim, and from those probabilities charge — and deny coverage — accordingly. People, the overwhelming majority of policy holders, will depend on health care coverage again and again and again — for services large and small — with more and more needs, and more serious needs, accumulating over time.

Inviting commercial insurers into the market as we did in the late 70s and 1980s, with managed care, was a big mistake.

But many countries, Germany, Switzerland, France, provide excellent, cost-effective universal systems that are not single payer — they rely in different ways on a networks of non-profit and public insurance. Although some countries allow for-profit insurers who provide some limited extra coverage, they are very limited.

I don’t think we should throw their examples out while looking for the best way for the US to provide universal coverage.

Especially considering how many Americans do receive coverage through insurance at work, and are happy with that coverage, and our long history with that method of socialization.”

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Gentrification

by Peter Dorman (originally published at Econospeak)

Gentrification

This is the bane of urban development, right? Old housing stock, built for yesterday’s working class, is spiffed up and priced far out of reach of today’s regular folk. High end shops replace hardware stores, bric-a-brac recyclers and appliance repair centers; a tide of designer coffee flushes out the cheap, refillable kind. Who can afford to live there?

But wait! Those refurbished old houses are beautiful. It’s a pleasure to peruse delicate artisanal fabrics and custom-designed furniture. The food is fresher, healthier and tastier. And what’s the alternative—to put a blanket over everything old and keep out all improvements? Is gentrification even a problem?

It is. It’s wrong if whole neighborhoods are uprooted, unable to afford housing and services available to them for generations, and the dynamism of city life is crippled if only those who have already made it can make their home there.

Regulations that restrict the development of new housing have rightly come under attack. Encouraging infilling and greater density benefits the environment and keeps housing costs down, but that only moderates the impact of gentrification. The luxury apartments that replace old single family houses are still beyond the means of most of us.

My hypothesis is that the basis of gentrification as an urban problem, rather than a type of broad-based development that benefits everyone, is extreme inequality of income. Gentrified neighborhoods are those outfitted for the upper echelon to spend their money on, and prices are geared to what the traffic will bear. The rest of us can’t afford it.

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Insanely Concentrated Wealth Is Strangling Our Prosperity

Dan here…Angry Bear Steve Roth’s clear and thorough writing continues…please go to the original for more graphs…I could not include the largest in the Angry Bear format in its proper place.  Go straight to read more to view the whole post….

By Steve Roth (originally published at Evonomics)

Insanely Concentrated Wealth Is Strangling Our Prosperity

Remember Smaug the dragon, in The Hobbit? He hoarded up a vast pile of wealth, and then he just hung out in his cave, sitting on it (with occasional forays to further pillage and immolate the local populace).

That’s what you should think of when you consider the mind-boggling hoards of wealth that the very rich have amassed in America over the last forty years. The picture at right only shows the very tippy-top of the scale. In 1976 the richest people had $35 million each (in 2014 dollars). In 2014 they had $420 million each — a twelvefold increase. You can be sure it’s gotten even more extreme since then.

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A thought for Sunday: the most important issue in the 2016 election was…

A thought for Sunday: the most important issue in the 2016 election was . . .

This is a post I’ve been meaning to write for several months. For a while after the election last year, there was a debate about whether the “economic anxiety” in the (white) working class was the most important factor vs. was it simply a matter of racism. The consensus has nearly settled on the narrative that racism was decisive, to the point where “economic anxiety” has become a taunt, and some who embrace identity politics actively disparage progressive economic issues.

I’m here to show you data that – in part – disputes that consensus. What was the most important issue in the 2016 presidential election?  The below data on that issue all comes from the Voter Study Group, from its survey published several months ago: “Insights from the 2016 Voter survey.”

In the below graphs, the potency of various issues are examined in terms of how well they lined up on a liberal/conservative or favorable/unfavorable axis, but for simplicity’s sake it is pretty clear that they correlate with a vote for Clinton (left) or Trump (right).  The more vertical the line, the more decisive the factor, whereas a horizontal line means that the factor made essentially no difference in whether a vote was for one candidate or the other.  the 2016 results are in red, vs. the 2012 results in gray. What I’ve done is to delete the names of the nine factors they tested, so you won’t be swayed by any pre-existing opinion you might have had about the factor.  Here they are:
I’ll give away one finding right away.  The most decisive factor, shown at the right of the lowermost column, is party affiliation. D’s voted for Clinton. R’s voted for Trump.
But after that, it’s pretty clear that the close runner-up for most decisive factor in how people voted is the issue at the left of the middle column, which was …
the economy!
That’s right. The single most decisive factor in the 2016 vote was how people felt about the economy.

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Ta-Nehisi Coates and the Limited Art of Interpretation

by Peter Dorman (originally published at Econospeak)

Ta-Nehisi Coates and the Limited Art of Interpretation

Among the least persuasive writers on contemporary politics, for me, is Ta-Nehisi Coates.  Mind you, I often agree with him, but only because I agreed with him before reading him.  If I go into a piece of his with a different perspective, nothing he says has an effect on me.

Now, if I were intellectually stubborn, the sort of person who rarely changes his mind, that would be a statement about me, not Coates.  In fact, I’m always changing my mind.  Nearly every day my views are shifting, sometimes only slightly, sometimes a lot.  When I go back and read what I wrote several years ago, my first instinct is to grab an editor’s pen.  Maybe I’m too susceptible to persuasion.

But not by Coates.  The thing is, he seldom makes arguments in the sense I understand that term.  There isn’t extended reasoning through assumptions and implications or careful sifting through evidence to see which hypotheses are supported or disconfirmed.  No, he offers an articulate, finely honed expression of his worldview, and that’s it.  He is obviously a man of vast talents, but he uses them the same way much less refined thinkers simply bloviate.

But that raises the question, why is he so influential?  Why does he reach so many people?  What’s his secret?

No doubt there are multiple aspects to this, but here’s one that just dawned on me.  Those who respond to Coates are not looking for argumentation—they’re looking for interpretation.

The demand for someone like Coates reflects the broad influence that what might be called interpretivism has had on American political culture.  This current emerged a few decades ago from literature, cultural studies and related academic home ports.  Its method was an application of the interpretive act of criticism.  A critic “reads”, which is to say interprets, a work of art or some other cultural product, and readers gravitate toward critics whose interpretations provide a sense of heightened awareness or insight into the object of criticism.  There’s nothing wrong with this.  I read criticism all the time to deepen my engagement with music, art, film and fiction.

But criticism jumped channel and entered the political realm.  Now events like elections, wars, ecological crises and economic disruptions are interpreted according to the same standards developed for portraits and poetry.  And maybe there is good in that too, except that theories about why social, economic or political events occur are subject to analytical support or disconfirmation in a way that works of art are not.  How should we hear The Rite of Spring in the twenty-first century?  Colonial or pre-postcolonial?  Racist or deracializing?  These are meaningful questions, and thoughtful criticism can help us explore them more deeply, but neither evidence nor reasoning can resolve them.  If you want to know why the US election last year turned out the way it did, however, reasoning and evidence are the way to go.

Coates is an interpreter.  His latest piece in the Atlantic, The First White President, reads the election the way a film critic would read a film.  There are references to factual events, like quotes taken from the campaign trail, but they serve the same function that references to camera angles serve for a critic interpreting the latest from Darren Aronofsky.  In the end, Coates wants to convey his sense of what the election means, that it is a reflection of the deep racism that was, is and will continue to be the core truth of America.  If anything was different, it was that eight years of a black president ratcheted up the racism and allowed a sociopathic white extremist to prevail.  Post-election concern for the well-being of the white working class by white pundits is itself a further reflection of this truth, a turning away from the ugly reality of bigotry. This is a reading of the election as a cultural artifact.

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“We Made Certain they knew that”


I was always very candid with my patients. They want to know that you are working for them, not someone else. We made certain they knew that.” Tom Price, MD – Secretary of HHS

Republicans, the Trump administration, led by Graham and Cassidy are moving forward to defund and cripple the ACA bringing millions of people back to when states decided who could have a smidgen of healthcare and who could not. This comment by Dr. and Secretary of Health Tom Price in 2016 is priceless and is the opposite of what he said then. Both he and his fellow Republicans are deliberately misleading constituents and his patients about their intentions with the ACA. Tom Price is more concerned with the politics of the ACA rather than his constituents well being. Recently, commentator/comedian Jimmy Kimmel brought this to the forefront in his monologue about Senator Cassidy who was a guest on Jimmy’s show and made comments about the most recent Republican Healthcare bill.

The same as other recent healthcare bills by Republican, the Graham – Cassidy bill will return healthcare back to pre-2008 when states could deny able-bodied people healthcare, had limited funding, could allow denial of insurance based upon pre-existing conditions, eliminate premium subsidies, not subsidize out of pocket expenses, cap healthcare, etc. These are all the things Senators Graham and Cassidy claim will still be covered in their state block grant bill for healthcare. Except, there is no mandate by Washington forcing states to have the same as what is offered today. It is all a state rights gambit with some states being generous and many not being so generous.

Kimmel: “I don’t know what happened to Bill Cassidy, but when he was on this publicity tour, he listed his demands for a health-care bill very clearly. These were his words. He said he wants coverage for all, no discrimination based on preexisting conditions, lower premiums for middle-class families and no lifetime caps. Guess what? The new bill does none of those things.”

Cassidy “just lied right to my face” according to Kimmel.

Graham: “He didn’t give (Cassidy) the courtesy of hearing his side of the story. He went on national TV and called this man — who has worked for the underprivileged and health care all of his life — a liar, (Graham referring to Cassidy), who practiced medicine before he entered politics. And I think that’s inappropriate.

I don’t like the idea of calling this good man a liar without ever talking to him first. That really says more about Mr. Kimmel then it does Dr. Cassidy,'”

The Cassidy-Graham bill would do away with Obamacare’s Medicaid expansion, subsidies for private insurance, eliminate the requirement that Americans have insurance under the Affordable Care Act, and reduce payments to insurers for out-of-pocket costs. In their place, it would offer states a block grant they could use to spend on health care as they saw fit. The block grant would be 17% less than what total federal spending would be in 2026 meaning states would struggle to cover the same number of people.

There is nothing to talk about with Mr. Cassidy or even Mr. Graham both of who are indignant at being called out by Kimmel.

There will be resources in your state; but, those resources may not be of the same value as under the ACA. The Graham – Cassidy plan will favor states which did not expand Medicaid or have not had higher premium/csr subsidies. It is obvious what Graham and Cassidy are doing. Punish states which expanded Medicaid and reward states which did not expand Medicaid. California would lose $27 billion in funding, New York would lose $18 billion in funding while Texas would be rewarded with $8 billion in funding.

In a letter to both Senators Graham and Schumer, this is what the America’s Health Insurance Plans (Modern Healthcare, September 20, 2017, Matthew Weinstock), the industry’s “main lobby group” had to say on the Graham-Cassidy legislation. The Graham – Cassidy healthcare plan fails to meet five crucial tests:

• stabilizing the insurance market;
• ensuring Medicaid reforms meet beneficiaries’ needs;
• guaranteed access to coverage for all Americans, including those with pre-existing conditions;
• time for the industry to prepare for any changes to existing law;
• and getting rid of health insurance and excise taxes.

The last item called out by the America Health Insurance Plans is the Cadillac tax, which was meant to tax excessive executive healthcare plans and also force “consumers to have more skin in the game” with higher co-pays and deductibles. People would then decide if they really needed to go to the doctor or not avoiding cosmetic or unneeded doctor visits. The attempt on the later is misguided as the commercial healthcare industry has a much larger impact on rising healthcare costs than consumer doctor visits. The emphasis needs to be on controlling the commercial healthcare industry and how healthcare serves are delivered to patients with better outcomes. Most of the burden of controlling healthcare costs has been shifted to the consumer through this tax by Congress and for-profit healthcare insurance companies.

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Carbon Gridlock Redux in Washington State

byPeter Dorman (originally published at Econospeak)

Carbon Gridlock Redux in Washington State

A year ago—it already seems like another era—an initiative to set up a carbon tax in Washington State, I-732, was defeated by the voters.  The proposal was to use the money for tax reductions in accordance with the standard economic view that taxing “bads” rather than goods generates a double dividend.  I disagree with that (I think the deadweight loss case against taxes is weak), but I agree that carbon prices operate like a sales tax and are regressive, so it’s a good idea to return the money according to an egalitarian formula, preferably equal rebates per person.

But most of the political left sees it differently.  When they look at carbon pricing they see a big new revenue stream that can be used to fund all the things they have been unable to get in a period of conservative (or neoliberal) political dominance.  They want infrastructure, mass transit, community development projects and environmental restoration, and for them returning the money is unthinkable.  So the left in Washington State, including unions, social justice organizations and most of the environmental activist community, opposed 732, denouncing it as a corporate subterfuge.  A carbon tax is always going to face headwinds, but with the left as well as much of the right in opposition, it was doomed.

So here we are again, looking at another round of state carbon tax initiatives for 2018.  The group that organized the left campaign against 732, the Alliance for Jobs and Clean Energy, is drafting their version, which will surely funnel most of the money to the causes (and in some cases the organizations) of their constituents.  But, perhaps in a play to get a bigger voice in the process, the Affiliated Tribes of Northwest Indians, an umbrella group of 57 tribal governments in the region, has just announced it has begun drafting its own initiative, one that earmarks most of the money for environmental purposes, with a chunk dedicated to the tribes.  The prospect is for heated backroom meetings, where the leadership of various organizations push and pull to divvy up the potential carbon cash.  Whether the product of this process can survive at the polls is another question.

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Social justice activism in your own backyards?

by Peter Dorman (originally published at Econospeak)

Another Year of Equity at Evergreen

The following email was forwarded to me and many other Evergreen faculty:

On [date deleted], students, staff and faculty of The Evergreen State College will hold a Re-Convocation Rally on Red Square to express and affirm their commitment to goals of equity, inclusion and success for all in pursuit of higher education. The rally is organized by Staff and Faculty Acting for Equity, a group that works in partnership with Evergreen students. Rally organizers stated that the “focus will be on healing from the events of last spring and celebrating our collective cultural wealth as the Evergreen community.” Evergreen community members and friends are invited to participate in an afternoon of speakers, music, dancing, discussion, and creative expression.

Staff and Faculty Acting for Equity said in a statement that “the Re-Convocation Rally will carry forward the community spirit and dedication to equity that motivates Evergreen. We believe that our success as members of a community is dependent not only on ourselves, but on the success of the most vulnerable. We acknowledge the particular strengths of and challenges faced by first-generation, Black and Brown, undocumented, Latinx, trans*, queer, veteran, and disabled students who have been traditionally underserved by higher education. We strive to center their voices as we move toward more equitable outcomes for all our students.”  (I deleted the date—PD)

Needless to say, I agree with nearly all the sentiments expressed here—until I come to the final sentence, which manages to pack, depending on how you count them, two-and-a-half to three untenable and politically destructive assumptions in just its first six words.

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Does Single Payer Pay for Itself?

by ProGrowthLiberal (originally published at Econospeak)

Does Single Payer Pay for Itself?

Was this the message of the title of the latest from Dean Baker:

The economies of a single system can be viewed as analogous to the Social Security system, which has administrative costs that are less than 1/20th as much as privatized systems in places like Chile and the United Kingdom. The analogous institution in the health-care sector is of course Medicare, which has administrative costs of less than 2 percent of benefits in the traditional fee-for-service portion of the program, roughly a tenth the cost for private insurers.

I will agree that the 20% gross margins received by the health insurance companies are obscene. This margin breaks down into a 14% operating expense to premium revenue ratio and a 6% operating margin. I would imagine competition could cut the former in half and the latter by a factor of two-thirds. I’m suggesting a 2% operating margin is reasonable as the reserve to premium revenue ratio is close to 25% for health insurance and an 8% cost of capital is more than reasonable. But Dean is arguing that we can live on a 1% gross margin, which seems to be very ambitious. OK- governments might be able to lower the cost of capital but nearly eliminating administrative costs sounds incredible. But what do I know – so I did a Google search and came across this interesting discussion:

The correct way to estimate administrative savings is to use actual data from real world experience with single-payer systems such as that in Canada or Scotland, rather than using projections of costs in Vermont’s non-single-payer plan. In our study published in the New England Journal of Medicine we found that the administrative costs of insurers and providers accounted for 16.7 percent of total health care expenditures in Canada, versus. 31.0 percent in the U.S. – a difference of 14.3 percent. In subsequent studies, we have found that U.S. hospital administrative costs have continued to rise, while Canada’s have not. Moreover, hospital administrative costs in Scotland’s single-payer system were virtually identical those in Canada.

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