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What Republican Iowa Senator Grassley Really Thinks . . .

of His Constituents.

Iowa Republican Senator Grassley came out publically stating he wants to eliminate the estate tax to help Iowan farmers stay on their family farms. In rebuttal, the Des Moines Register had this to say:

Of the numbers of Iowans paying the estate tax, they can be quantified in the dozens each year. Out of the 1.45 million Iowans filing federal tax returns, the numbers of Iowans over the last five years paying estate taxes numbers from 32 in 2012 to 61 in 2015 according to IRS data. Further-more, the vast majority of those probably were not farmers or small business owners.

Despite evidence to the contrary, Finance Committee member Sen. Chuck Grassley still insisted the estate tax is potentially a ruinous burden on Iowa farmers and small business owners.

Earlier this year either in a blatant misleading statement or in total ignorance, Grassley said;

“The federal estate tax may force family members to liquidate to pay the death tax. It is harder than ever for families to pass down the family-run farm or business from one generation to the next. The death tax creates financial hardship for family businesses to survive and thrive.”

Today, the estate tax is a 40 percent tax on wealth assessed when a person die. It is applied on assets > $5.5 million for individuals and $11 million for couples. The House and Senate proposal doubles those exemptions to $11 million and $22 million. The House version abolishes the tax completely in 2024.

Iowan Republican U.S. Reps. Steve King and David Young joined the chorus with King insisting the estate tax;

“often falls hardest on family-owned farms and small businesses.”

and Young called the repeal being a massive giveaway:

“a ‘myth,’ that the repeal of the estate tax would be a massive giveaway to the wealthiest Americans.

The estate tax (sometimes called the death tax) negatively impacts farms and businesses all over the 3rd District. … Death should not be a taxable event and families should not have to fear the Internal Revenue Service and more taxes making it more difficult and costly to pass on the farm or family business to the next generation.”


No shame amongst politicians who are either ignorant on the topic, outright lying, or believe the populace is so unknowledgeable of the facts, they can say anything and be believed.

Kristine Tidgren, assistant director of the Center for Agricultural Law and Taxation at Iowa State University, told the Register;

“I have not come across any examples of an Iowa family that had to sell the farm to pay the estate tax,” adding, “I don’t think the current estate tax system threatens family farmers.

IRS data from 2016 confirmed the 682 tax filers in the entire country who owed estate taxes owned farm assets and represented ~ 13 percent of the 5,219 estate tax returns in which taxes were owed.

Even that numeric likely overstates the number of primarily farm operations subject to the tax. A 2015 Congressional Research Service report projects that 65 farm estates annually across the U.S. face an estate tax liability. Less than a quarter of these, the report finds, lack sufficient funds to pay their tax bills.

There is no fool like an old fool and Senator Grassley who has served 7 terms in the Senate confirmed it by getting indignant when challenged on his beliefs.

“I think not having the estate tax recognizes the people that are investing, as opposed to those that are just spending every darn penny they have, whether it’s on booze or women or movies.”

Grassley could not have stated it any better what he thinks of his constituents. His work, argument, and effort is not to eliminate the estate tax to benefit working constituents; but, it is an effort to protect and separate the ownership class from the rabble, his constituents. His comments prompted a pointed response from Pat Rynard of the Iowa Starting Line:

It is difficult to think of a more condescending, elitist worldview – that if you are not ultra-wealthy, it is clearly because you are wasting all your money on alcohol, frivolous fun, and prostitutes (I assume that’s what he meant when he said women). Certainly, it could not be because people are struggling to find decent-paying jobs, are burdened with debt from the college education needed to attain better jobs, or are paying outrageous sums for health insurance and medical bills. Nope, it must be because they are all getting hand jobs from hookers in the back of a dark movie theater while downing a bottle of Jack Daniel’s.

Describing himself as a farmer Senator Grassley runs a farm in Butler County with his son and grandson. Initially Grassley stated his own family farm would not be subject to the estate tax and then changed his mind after rethinking his farm.

If he and his wife died on the same day, the estate would be subject to the $5.5 million exemption rather than the $11 million exemption and likely would have to file an estate tax return.

Enough said.

Mr. Grassley will retire on lifelong healthcare benefits and a nice government pension thanks to his liquor swilling constituents who repeatedly elected him to office. Later in another interview, Mr. Grassley stated his comments were taken out of context.

Hat Tip to Tom Sullivan @ Hulabaloo.

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CVS Phamacy Chain buys Aetna Healthcare Insurance

Pharmacy chain CVS Health has agreed to buy health insurer Aetna for $69 billion in cash and stock, retaining its current management, the companies announced late Sunday.

The deal brings together one of the largest providers of pharmacy services with the No. 3 U.S. health insurer, which together would establish a healthcare giant with more than $240 billion in annual revenue.

The CVS-Aetna deal would likely give the combined company bargaining power in negotiating with hospitals and pharmaceuticals if they chose to go in that direction. There has not been much to control the rising cost of pharmaceuticals since Congress has blocked Medicare/ACA (Part D) from negotiating pharmaceutical pricing. The possibility of more insurers combining with pharmacy retail businesses. United Healthcare may be looking to do the same.

Interesting Direction . . . .

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Healthcare Costs and Its Drivers Today

I have been doing my typical reading on healthcare in the US and ran across several articles which seemingly come together at various points in the dialogue and are written by different authors. I decided to tie them together into a much wider and telling story.

An interesting point being was made by MedPage Today’s Dr. Milton Packer on his blog, “people suffer and die because Payors (Healthcare Insurance) is cost effective.” He starts his discussion on the opiate epidemic in the US, opiates are being prescribed by doctors for pain relief and . . .

“Patients are becoming addicted to opiates after the initial 10 day prescription with one-fifth of patients still using opiates a year later. There is no need to prescribe opiates as other less addictive pain-relief formulations are available, which are not commonly prescribed.” This raises the question of why?

Payers will not pay for the alternatives. The less-addictive opiates are more expensive and payers have declined to support them. Patients get addicted because prescribing for the lower cost and highly addictive opiates saves the payers money initially (me).

September 17, 2017, the New York Time and ProPublica (independent, nonprofit investigative journalism organization) collaborated on an article concerning the opiod epidemic in the US.

At a time when the United States is in the grip of an opioid epidemic, many insurers are limiting access to pain medications that carry a lower risk of addiction or dependence, even as they provide comparatively easy access to generic opioid medications.

The reason given: Opioid drugs are generally cheap while safer alternatives are often more expensive.

While the pharmaceutical manufacturers, distributors , and doctors have come under scrutiny; insurance companies and the pharmacy benefit managers (CVS Caremark, Express Scripts and OptumRx) make the final decisions as to what is covered. It could be something as simple as a higher tier and deductible to block usage.

A little side trip here and a continuation of the above. A week or so ago, I ran across another MedPage Today article by Dr. Packer; “ Who Actually Is Reviewing All Those Preauthorization Requests and How the System Works.” Dr. Packers was giving a talk on advances in medicine with regard to heart failures to a room of about 20 or so doctors who were retired.

Since many of them were no longer involved in active patient care, he wondered why they might want to hear a presentation on new advances in heart failure. Here was their answer:

Doctors: “We no longer care for patients, but we care about what’s going on. You see, most of us are employed by insurance companies to do preauthorization for drugs and medical procedures.”

Dr. Packer: I just gave a talk about new drugs for heart failure. Are you responsible for preauthorizing their use for individual patients?

The answer; “Yes.”

So did I say anything today that was helpful? I talked about many new treatments. Did I say anything that you might use to inform your preauthorization responsibilities?

“Oh, we’ve heard about those drugs before. We are asked to approve their use for patients all the time; but, we don’t approve most of the requests. Nearly all of them are outside of the guidelines we are given.”

I just showed you evidence that these new drugs and devices make a real positive difference in people’s lives. People who get them feel better and live longer.

“Yes, you were very convincing. But the drugs are too expensive. So we typically reject requests, at least the first time. We figure that, if doctors are really serious, then they should be willing to make the request again and again.”

If the drugs will help people, how can you say no?

“You see, if it weren’t for us, the system would go broke. Every time we say yes, healthcare becomes more expensive, and that isn’t a good thing. So when we say no, we are keeping the system in balance. Our job is to save our system of healthcare.”

But you are not saving our healthcare system. You are simply making money for the company that you work for. And patients aren’t getting the drugs that they need.

“You really don’t understand, do you? If we approve expensive drugs, then the system goes broke. Then no one gets healthcare.”

“Plus, if I approve too many expensive drugs, I won’t get my bonus at the end of the month. So giving out too many approvals wouldn’t be a smart thing for me to do. Would it?”

Now before you start on insurance companies and doctors; understand, this is not as free a market place as many would assume. In all of their political wisdom, Congress favors pharmaceutical companies over doctors, insurance companies, and the welfare of the constituents. Through legislation, Congress has made it impossible for insurance companies to negotiate pharmaceutical pricing in Medicare Part D insurance and also the ACA. Furthermore with the consolidation happening in healthcare, negotiation by insurance companies with a consolidating and growing healthcare industry is becoming more and more difficult as the former does not have as great of leverage. You have read my argument calling out of Single Payor, Medicare-for-All, Public Option, etc. as the cure for today’s healthcare issues and rising cost not being enough as the ACA and Part D were specifically blocked or the cost issue unaddressed in the legislation written by Congress. If these issues are not addressed from the very beginning, we will be fighting the same issues with rising costs a decade later with other programs.

At this point, I begin to disagree with Dr. Packers as he goes on to say:

“So we spend more for healthcare than any other country in the world; but, Americans do not get the care they need. There is a simple reason. Treatment decisions are not being driven based on a physician’s knowledge or judgment. They are being driven by what payers are willing to pay for.”

It is true that patients may not get some of the healthcare they need at the time due to denial, which can be appealed to the ACA, and can be a tiring process. It could be approved, passed on to patients, resulting in higher premiums the following year, and the Part D Risk Corridor program pay for it if excessive for the present year. What Dr. Packers does not mention is the rising prices and cost of drugs being blamed by pharmaceutical company on R&D, tooling up to manufacture, etc. The counter argument is much of the R&D is funded by the US government through tax deductions and write-offs for pharmaceutical R&D and capital Overhead. Pharmaceutical profits are double digit at ~25% beating out hospital supplies and healthcare insurance, which is already limited in what can be charged back to the insured by the MLR. To blame insurance companies totally for the higher costs in healthcare is false. Furthermore, a doctor’s decision do not always lead to less costly cures or practices.

Maggie Mahar of Health Beat Blog would take the subject of costs a step farther and state Medicare will approve anything the FDA approves for usage regardless of the quality of outcome when measured against older proven treatments. Notably the VA does limit its pharmacy and its care is rated higher than that of today’s commercial, for-profit healthcare to which most citizens are exposed.

Dr. Donald Berwick, President Obama’s proposed appointment for Medicare and who was in charge of Medicare and Medicaid for 17 months stated;

“20 to 30 percent of health spending is ‘waste’ that yields no benefit to patients, and that some of the needless spending is a result of onerous, archaic regulations enforced by Medicare and Medicaid.

He listed five reasons for what he described as the ‘extremely high level of waste.’ They are overtreatment of patients, the failure to coordinate care, the administrative complexity of the health care system, burdensome rules and fraud.

Much is done that does not help patients at all and many physicians know it.”

That is the same Medicare/Medicaid being touted by many proponents today as an alternative.

Speaking of costs and pricing for pharmaceuticals, there have been recent incidents of skyrocketing costs on particular drugs. A short while ago, I wrote a post concerning the appointment of Alex Araz as the new HHS Secretary replacing Dr. Tom Price. Formerly, Alex Araz was the CEO of the pharmaceutical giant Eli Lilly & Co.’s U.S. division. He also served under George W. Bush administration as the HHS General Counsel and Deputy Secretary. During that stint, he received praise for his management competence with the HHS; although, he did not have a healthcare background prior to this position.

Here it gets interesting when examining what took place during his tenure with Eli Lilly. One of the leading costs identified in pharmaceuticals increases has been in the rising cost of diabetes medication.

“While the Tweeter-in-Chief, Trump tells us presidential campaign contributor Alex Azar will be a ‘star’ who will lower prescription prices,”

Public Citizen’s Peter Maybarduk (Director) had this to say: “Eli Lilly is notorious for spiking prices of a century-old isolated hormone during Azar’s tenure as president and vice president. Eli Lilly raised the price of Humalog by 345%, from $2,657.88 per year to $9,172.80 per year.

Maybe President Trump in appointing Alex Azar to be HHS Secretary should have asked the 6 million diabetic Americans whose insulin prices have more than tripled under Azar’s watch at Eli Lilly.”

This has nothing to do with R&D and has more to do with pharmaceutical companies controlling the market regardless of supply and throughput restricted manufacturing (capacity).

What I have tried to do is tie these articles together into one cohesive story of how the pharmaceutical industry, insurance, and healthcare can have an impact on healthcare costs. For those who are interested, my background does include working in the manufacture of hospital supplies and pharmaceuticals. Using various citations from these articles, I have tried to touch upon the impact of insurance companies, the healthcare industry, government intervention under the HHS, one particular Med in the market place, etc. Overall, what is going on in the marketplace.

Another article, I read the other day gets into the foundation of what is happening based upon a recently completed study by JAMA. Using this study, the Methods Man, Dr. Perry Wilson (MedPage Today) examines what is driving healthcare costs in his article Here’s What’s Really Driving Healthcare Costs using data from Factors Associated With Increases in US Health Care Spending, 1996-2013 and the US Disease Expenditure Project. Dr. Wilson breaks it down using three simple charts which I have consolidated to one.

Dr. Perry Wilson starts off making an overall point about the rising cost of healthcare from 1996 to 2013 and stating; “after accounting for inflation, healthcare expenditures increased $933.5 billion from 1996 to 2013.”

Going on: “Healthcare expenditures in the US being high and rising rapidly is nothing new, but the study appearing in the Journal of the American Medical Association identifies the exact components of healthcare that are driving those soaring costs. The data from this study suggests traditional economic forces break down in the US healthcare market.

Different chronic diseases have different patterns of price increases. The biggest increase was seen in diabetes care, as you can see here, driven largely by the rising costs of pharmaceuticals.”

The Chart breakdowns reveal the various impacts of healthcare costs moving from left to right and then downward:

• 50% of the increase in healthcare costs was simply due to higher prices.

• Inpatient care or Service Utilization (purple) went down from 1996 – 2013 as outpatient treatment increased; however, the price of the remaining inpatient care went up much more – increasing overall inpatient care spending by around $250 billion.

• Different Chronic Diseases have different patterns of price increases. The biggest increase was seen in diabetes care and driven largely by the rising prices of pharmaceuticals.

The takeaway drawn by Dr Perry Wilson: “Regardless of the disease, it is clear, the price of what we’re buying – whether a drug, an ED visit, or a hospital stay – not the amount of what we’re buying is the major driver of cost increases. Efforts to reduce the consumption of healthcare may not bend the cost curve as much as efforts to reduce its price.”

You can not make an argument about the regulation of costs “not” being one of the dynamic components of a healthcare plan given the continuous unhindered industry driven rising cost of healthcare. Yet, every healthcare plan I have read fails to mention cost regulation specifically, provide remedy for it, and many assume a natural occurrence of control.

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Elections November 2017

In Virginia, Gilespie has lost. Trump claims it is because Gilespie did not embrace him. New jersey elected a Democrat for a Governor also. In both Virginia and New Jersey these were not close races as both Democrats won by good margins of 9% and 13%.

The Virginia House of Delegates picked up 14 more Democrats along with selecting the first transgender to be a in a state legislature. This would be enough Delegates to flip the House to the Democrats. Democratic candidates for Lieutenant Governor and Attorney General were also elected in Virginia.

New York City Mayor Bill de Blasio won a second term.

The Maine Medicaid Expansion was approved by a 17% margin. Maine was the first state to put the decision to a vote. In Utah and Idaho, there are efforts to place a similar initiative on next year’s ballot.

It is not on the chart; but, Detroit’s Mayor Mike Duggan won also.

A big evening for nation wide state Democrats.

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Donna Brazile’s Trash Talking HRC

Nancy LeTourneau at Washington Monthly has an article up on HRC and her running for the presidency. It is a worthy read as it refutes Donna Brazile and Elizabeth Warrens accusations using Open Secrets (Hillary Victory Fund) on HRC funding the DNC and the states in addition to when she took control.

Here is what is in question as written by Nancy Letourneau:

“So it is not unusual for a nominee to exert control over the DNC once they have been chosen. As CNN reported, that transition began in June 2016, when Clinton had secured enough votes to win the nomination. Brazile’s own account of her conversation with Gary Gensler, the chief financial officer of Hillary’s campaign, happened after the Democratic Convention—meaning that the transition had already taken place.

Brazile does, however, suggest that the agreement she reviewed in August 2016 had been signed in August 2015. It has now become apparent that she needs to share what she saw with the public, because in releasing John Podesta’s hacked emails, Wikileaks provided the final template for the 2015 agreement between the Clinton campaign, the DNC and state parties. The emails to which the document were attached include talking points to share with state parties encouraging them to sign up. Nowhere in the text of the agreement is there any reference to the kind of control of the DNC by the Clinton campaign that Brazile wrote about.

As Nancy said, it is time for Donna to release the document she is claiming gives the control in 2015.

The funding as can be found in Open Secrets:

“Amount raised – $529,943,912


Clinton campaign – $158,200,000
DNC – $107,533,318
State parties – 38 states each received between $2,494,000 and $3,423,484”

“Brazile also recounts the concerns raised about the Hillary Victory Fund by Politico in May 2016 about money from the fund not getting to the states that had signed the agreement.” It looks like HRC shared the funding to me.

Again Democrats as led this time by Donna Brazile are investing in self destruction for 2018. During the Kerry campaign I had asked a few “why” questions of Donna via email. Rather than answer the questions, she just resorted to accusations of harassment which was completely off base. Having done the same with Senators and Congressmen, I am used to blunt replies; but, they were in answer to a question. She chose not to answer. I do not find Donna to be genuine.

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Well, it’s not just power that women like Clinton are asking for; it is responsibility

This is just a conversation between two people of a similar age, looking at what happened, and what changed. Worthy of posting.

esmensetoo: There are women who fear a loss of privilege and an increase in expectations, and economic responsibility, for women from “feminist” striving. “If she can do that maybe I’ll be asked and expected to do it too.”

Plus, “working class,” as defined in many polls and studies does not necessarily mean “working women.”
Trump’s support, including his support among white “working class” women, was older and more affluent. These are women less likely to have “had” to work — who, because of the economic realities of their younger adulthood, and the greater ability to maintain a middle class life and even gain affluence on one salary — the husband’s — experienced more economic flexibility to stay home with children and, if and when they did choose to work, it truly was a matter of choice in which adequate, fair pay wasn’t essential. Older, white women are less likely to have a college education than younger women, which defines them as “working class.” But that doesn’t mean their households are less affluent.

They are the women more likely to see the demands of feminism and ambitions for power of women like Clinton as a loss; a loss of the protection of male earnings, with an increase in economic expectation for women like themselves.

In my generation — the eldest cohort of the Baby Boom — even in working class households white women were brought up with the expectation that they wouldn’t work outside the home, at least once their children were born. Even if they trained in traditional occupations, teaching and nursing, they expected that they would take years off to raise children — and outside of those occupations there really wasn’t anything else for women that would provide a lifetime “career.”

Of course, many of us found that expectation was unrealistic; and younger women even more so. We took on more economic responsibility both because we had to and wanted to — and started demanding more rights and resources and opportunities to go along with it.

( I went to an excellent public high school in a New Jersey community that was basically a bedroom community for professors from Rutgers and Princeton, and professionals from surrounding think tanks and research centers — a very highly educated population — in the early 60s. Although the importance of education was stressed for everyone in that community and college admission was a goal for almost everyone, girls were told that their education would be important for their FAMILIES; their children. And, of lesser importance, their communities. Education for women was couched in the language of service, NEVER ambition or earnings.)

Me: We pulled that off with the advent of children. We already had the house, dog, fenced yard, etc. Smaller home but very affordable on a heavily treed lot.

My wife was a Patent and Trademark Paralegal and she made more money than I did initially even though I had the BA, etc. She stayed home with our first and the others. Did all of the school things moms did when they were growing up. We agreed to do it this way. We did not have new cars and stuff and we had our funding issues.

You are right and we were very lucky to have done it the old way. Elizabeth Warren was right, the one income family became extinct unless you were fortunate enough to have money in the beginning. New and young families could not afford what we were able to do on one income. Eventually, she did go back to work and we fund a lot of those things for the offspring.

esmensetoo: That’s pretty typical, and was much more possible, in earlier post-war boom times. And still true for a lot of early Boomers when they entered the work force. Living on one income might require some belt tightening in the beginning but it was doable and as time went on economic prospects improved. And, often, once children were older, women went back to work, or school and work (my mom went to college at 50).

I worked through school and in the years before my son was born, but, while I was doing things I enjoyed, I didn’t really think of it as a “career.” I stayed home with my son for the first two and a half years of his life. But then BOTH my parents became terminally ill. My Mom was only 56 — years away from Medicare. Their illnesses were galloping through the lifetime limits on my father’s good union health insurance, which would not be available to her if he died first anyway, and neither would any accumulated pension. Plus inflation and recession were both raging and negatively affecting my husband’s business. And housing and health care costs were going through the roof. Faced with a lot of conflicting needs — from all the people I loved and cared about — I decided that I could best meet them by going back to work to provide some additional stability, and extra economic resources that might end up being crucial to my Mom’s care.

I always say I didn’t get ambition until AFTER I had a child — but it was really not just about wanting to help secure his future; my parent’s challenges, and the fragility of the “stagflation” economy, made me realize I had to be prepared to provide serious economic support when needed. And that made me much more willing to confront the inequalities that could limit my ability to do so. I was newly ambitious in this sense; I wanted the work I did to PAY, and I wanted the people I did work for to take me and my work as seriously as I took them and the work they needed done. I was empowered to speak up.

I still feel lucky that I had the “choice” to spend those early years with my son — years when he got my entire attention. But I also feel lucky that I had the opportunity and ability to contribute to my parent’s needs and peace of mind at the end of their lives, to our family business, and provide resources for my son’s future.

Being economic providers as well as caretakers got even more important for women younger than me. Inflation meant a second income became essential for just qualifying for a mortgage; but their paychecks often covered the house payment and day care, and little more. But those paychecks didn’t come with benefits like family leave.

I was inspired as a feminist in my early years in the workplace by older women; working or once middle class white women who returned to the workplace as widows, or with ill and disabled husbands whose needs had devastated family income and resources, or with elders or children with serious needs that demanded their support, or after divorce, or after freeing themselves and their children from abuse; and minority women who had always worked and expected to work to help stabilize and support families challenged by the instability, lesser wages and lesser opportunity that challenged their community and their partner’s work lives — women with big responsibilities, for themselves and others, in an economy and work places that offered them little pay and benefit, and, even less respect.

When I returned to work my feminism was further inspired by women younger than me — whose gains were not yet adequate to their needs, and yet were being constantly undermined by on-going economic weakness. Both young men and young women needed full-time work to afford to buy homes and have children — for instance — but the expectations and demands of the workplace, losses in worker protections and rights, growing job insecurity and economic instability, constant inflation in the basics of housing, education and healthcare, were all undermining all their gains. Leaving them further behind, rather than ahead.

In the early 90s I attended a retirement party for a woman who had worked in the advertising department of a large retailer since she was a young student at the University of Washington. She recounted her more than 30 year career, with gratitude, to the mostly much younger women who were there to honor her. She had worked for the company to help pay for her education in the summers and on special projects. Had joined the staff full time after graduation; working to help her husband finish his schooling and get established in his career, to help them save for house, etc. She left when her first child was born and returned, part time, when her youngest child started school. And then, as they grew older and more independent, she came back to work full time; to help provide resources for their education and help enhance their opportunities in other ways, and to contribute to her and her husbands’ retirements, and out of the pure satisfaction of work she loved and was good doing it.

She had “had it all.” It was such a contrast to what the young women in that room, doing the same work she had always done, pursuing the same careers, were struggling with and could expect. Was this progress, or were we going backward?

I’ve read that studies have shown that women’s economic progress peaked in the early 80s and they’ve been losing ground ever since.

That certainly feels true.

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House Passes Senate Tax Reform Budget Resolution and Creates 2018 Budget

Everyone is reporting a 2018 Budget has been passed. Tucked away inside the 2018 Budget is a Tax Reform Resolution which allows the House to write the bill.

The House has passed the Senate Tax Reform Budget Resolution creating a $1.5 trillion deficit with a 216-212 vote. What this means in the Senate is a majority vote is only necessary to pass the Tax Reform bill which Trump has been campaigning and tweeting silly comments. Unless the House and Senate can provide the necessary revenue generation in the Tax Reform bill at 10 years out, it will be subject to a sunset the same as the Bush’s 2001-2003 tax breaks were. The key to this budget is the resolution for tax reform which will be looking at state income and property tax deductions on federal income tax returns, 401k tax exemptions, capping 401k contributions, Medicare and Medicaid cuts, and the old standby cuts to the ACA.

Tax reductions for the 1% of tax paying households making >$500,000 annually as funded by everyone else.

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What is the Matter With the Iowa ACA?

The story as it is told is “Iowa’s Healthcare Market has imploded.” Companies have gone out of business, lost money, premiums increased, policies canceled, etc. “ With Obamacare’s fifth open-enrollment season kicking off on Nov. 1, the consequences are playing out across one of America’s most politically influential states as residents struggle to maintain coverage.” It has been difficult to implement the ACA with the issues in the healthcare exchanges, Republicans badmouthing the ACA, and its first attempt at a US healthcare policy. Just one insurer is willing to sell policies in 2018 in Iowa. Why did it end up this way and what caused it?

Gov. Kim Reynolds: “Obamacare is unaffordable, unsustainable and unworkable and Obamacare has driven out consumer choice and competition.”

Trump: “Obamacare is finished. It’s dead. It’s gone. There is no such thing as Obamacare anymore.”

Vanessa Beauregard a resident of Iowa: “I cannot believe our politicians and government have put us in this situation. It’s just not right when you’re not a deadbeat.”

Dave Anderson, a health insurance expert at Duke University. “It’s hard to build inexpensive networks when the only hospital within 30 miles has you over a barrel.”

Aaron Todd, chief strategy officer for the Iowa Primary Care Association.: “There wasn’t a political will to make hard decisions or move people. They basically saw [keeping the noncompliant plans] the ACA as a relief valve.”

Nick Gerhart, who authorized the noncompliant plans to remain in the market as the state’s insurance commissioner. : “Why would I stand in the way of people keeping their insurance? It was a viable option. What does it look like if they’re in? The [premium] increases still would have been significant.” Disagreeing with these being a destabilizing factor.

Here is the story as I know it, a half commitment to the ACA with a lot of resistance from Republicans, and negativism from pundits.

CoOportunity turned out to be the canary in the co-op coal mine.” In the three years previous, 19 of the 23 nonprofit coop startups across the country, seeded with $2 billion in loans, had collapsed after piling up huge financial losses. One Republican appointee, Gerhart blames the disastrous performance in part to a lack of effective oversight from federal officials at the Center for Medicare & Medicaid Services. However, this is not the complete story as told.

“Effectively you’re running a venture capital firm out of CMS with nobody who understands insurance.”


After three years of procrastinating, Wellmark entered Iowa’s exchange. It too did not go well for reasons I will explain. Its troubles were attributed to a single patient who was costing the company $1 million a month in claims, a 17-year-old boy with hemophilia.

One would think the designers and legislators of the ACA would have put in place some protections for experienced insurance companies just entering the new market and the new startup Coops which were sponsored to compete with for-profit insurance companies. Install something akin to the Risk Corridor and the Reissuance programs which exist in the Medicare Part D drug program to protect insurers for exactly these reasons. Ahhhh, but they did do so.

If one could look to one or two things which plagued the ACA in Iowa, one would look to the Risk Corridor Program and Reissuance Program. Both were put in place to:

– Compensate insurance companies for startup losses whether nonprofit or for-profit.

– Cover those instances when an insurance company would end up with one, two, or a few of the $1 million dollar or the high insured a company had to cover, could not deny because of pre-existing conditions, or cancel a policy or change a item coverage due to illness or disorder (which by-the-way exists in Advantage programs).

So what happened?

The Risk Corridor program in the PPACA protects insurance companies from losses during the first three years if they did not estimate premiums properly which can happen in new markets with new different characteristics. With the mandate to insure all with pre-existing conditions, keeping children on parents plans, the exchanges, etc.; the Risk Corridor program was put in place (besides two other safe guards) giving insurance companies and Co-ops a three year window to get it right. Besides looking at losses, the Risk Corridor also looked at the profits of companies who had estimated accurately, had excess profits as a result, and required them to pay a ratio of excess profits into the Risk Corridor fund to help underwrite the losses of other companies. Outside of a plus or minus 3% was the basis for whether you gave up a ratio of profits or received a ratio of funding from the Risk Corridor program. The Risk Corridor program is nothing new and was used successfully with Medicare Part D forcing the evil and low profit insurance companies to share profits with the government. It still is in place for Part D and “still” generates additional revenue for the government. I do not recall any Republicans complaining about funding for drug insurance companies then; but then too, Part D was Bush’s legislature while the PPACA legislation was Obama’s. Strictly politics and constituents have paid the price of it.

Depicting the Risk Corridor particulars rather than attempting to explain it in writing will give a better explanation. Click on the image to better read the chart. Please note the plus or minus 3% and then the different ratios of revenue sharing or funding from and to healthcare companies and Co-ops. Besides being extra cash for the government, this fund was used to cover losses experienced by the drug insurance companies for the same reasons depicted above which occurred in the ACA.

invisible hand Again, what happened? The Risk Corridor program worked well for Part D, brings in revenue for the government, and is still in place. February 2014 found Rubio testifying to the House Committee on Oversight and Government Reform on behalf of his bill. At the same time the CBO released their evaluation of the ACA Risk Corridor program. Instead of being detrimental to the economy and a fiscal drag, the CBO projected the federal government would collect $8 to 16 billion from ACA healthcare insurers. Premiums would outpace claims, $8 billion would be distributed to the plans losing money, and $8 billion in additional revenue would be left for the federal government. Another and a House probe suggested initially there would be a shortfall with claims exceeding premiums.

The Republicans were not sitting idle and were investigating ways to derail the PPACA. As the ranking member of the Senate Budget Committee, Senator Jeff Sessions and the chairman of the House Energy and Commerce Committee, Michigan Representative Fred Upton came up with a plan to attack the legality of the Risk Corridor payments. They joined forces with the Appropriations Panel Chairman Colorado Representative Jack Kingston whose panel funds the Department of Health and Human Services and the Labor Department. Kind of get the picture of where this is going so far?

Senator Jeff Sessions wrote a letter to the GAO questioning whether the Risk Corridor payments were being appropriated correctly. Eventually the Appropriations Panel forced the HHS to make changes in how they appropriated funds allowing Congress to stop all appropriations. The PPACA could no longer appropriate the funds as they were subject to the discretion of Congress. The GAO issued an opinion on the legality of what the HHS was doing with funds.

GAO Letter to Senator Jeff Sessions. September 30, 2014:

Discussion; “At issue here is whether appropriations are available to the Secretary of HHS to make the payments specified in section 1342(b)(1). Agencies may incur obligations and make expenditures only as permitted by an appropriation. U.S. Const., art. I, § 9, cl. 7; 31 U.S.C. § 1341(a)(1); B-300192, Nov. 13, 2002, at 5. Appropriations may be provided through annual appropriations acts as well as through permanent legislation. See, e.g., 63 Comp. Gen. 331 (1984). The making of an appropriation must be expressly stated in law. 31 U.S.C. § 1301(d). It is not enough for a statute to simply require an agency to make a payment. B-114808, Aug. 7, 1979. Section 1342, by its terms, did not enact an appropriation to make the payments specified in section 1342(b)(1). In such cases, we next determine whether there are other appropriations available to an agency for this purpose.”

Further down in the GAO letter, the GAO did leave the HHS an out of using other already available appropriations for the Risk Corridor payments to insurance companies. Classifying the payments as “user fees” was another way to retain the authority to spend other appropriations already made by Congress. Otherwise if revenue from the Risk Corridor program fell short, the administration would need approval for addition appropriations from Congress. As it was, the HHS could no longer appropriate funds to make Risk Corridor payments unless the funds were already appropriated by Congress or Congress approved new funds which was not going to happen with a Republican controlled House.

Appropriations Panel Chairman Rep. Jack Kingston put the final nail in the coffin by inserting one legislative sentence in Section 227 of the 2015 Appropriations Act (dated December 16, 2014) which escaped notice. In the 2015 Appropriations Act, the sentence inserted said no “other” funds in this bill could be used for Risk Corridor payments.

Sec. 227.

None of the funds made available by this Act from the Federal Hospital Insurance Trust Fund or the Federal Supplemental Medical Insurance Trust Fund, or transferred from other accounts funded by this Act to the “Centers for Medicare and Medicaid Services–Program Management” account, may be used for payments under section 1342(b)(1) of Public Law 111-148 (relating to risk corridors).

This action blocked the HHS from obtaining any of the necessary Risk Corridor funds from other Congressional appropriated program funds identified in the 2015 Appropriations Act.

Nothing was said by Senator Sessions, Representatives Upton or Kingston before passage on what they had managed to do. It was Senator Rubio who issued a news release saying the provision was appropriate even though he had little to do with it. In the end, Colorado Rep. Jack Kingston’s one sentence purposely created a $2.5 billion shortfall in the Risk-Corridor program in 2015 as the HHS had collected $362 million in fees. Insurers who had misjudged the market sought nearly $2.9 billion in payments. Gerhart’ canary in a coal mine played out with many nonprofit insurance Co-ops failing due to a lack of reimbursements for losses, for-profit healthcare insurance companies lost money, healthcare insurance companies began to raise premiums to compensate, and some healthcare insurance companies recognizing an untenable environment created by Republicans took their losses and left the healthcare exchange market.

If you wish to know why there are few insurance companies and no Coops issuing healthcare policies on the healthcare exchanges, why the policies are arbitrarily expensive by default, and why companies are leaving or going bankrupt, etc. Ask your Republican Senators and Representatives why they sabotaged the Risk Corridor and Reissuance Programs. It is all politics with little regard for constituents.

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Odds and Ends October 23, 2017

Hurricane Relief: Interesting developments going on in the Senate. Senator John Cornyn (R-TX) is taking to task administration officials and conservative movement leaders by holding up the confirmation of Russ Vought as the right hand man to Mick Mulvaney’s at the Office of Management and Budget.

Wonder why he would do this? Apparently Senator Coryn believes there should be more funding for Texas’ hurricane relief. He has made it clear that Vought will be held up until he gets more funding for Texas.

Congress has already approved two emergency supplemental appropriations without corresponding revenue/budget offsets. Did anyone hear lately, what is going on in Puerto Rico? Same here, nada. I did not hear anything either even after a couple of notes sent to my Senators Stabenow and Peters. I guess Puerto Ricans as US citizens are not white enough.

Tax Reform Budget Resolution: If the Senate gets its way and it probably will, the Tax Reform Budget Resolution just passed by the Senate will create a $1.5 Trillion deficit. The Senate and the House now have to agree upon what will go forward as a Budget Resolution so they can do their magic and prevent Democrats and the majority of the nation any voice in giving aid to the wealthiest and richest in income 1% of the taxpaying households. On the table to pay for all of this give away is a $1 trillion cut in Medicaid and a $400 billion cut in Medicare. Two of the heroes who killed the ACA repeal-and-replace, etc. bills, Senators McCain and Collins, can be seen yukking it up as they leave the Senate. I wrote on this earlier. Gotta look good for those wealthy donors in the 2018 elections.

CSR Rescue: Another surprise ACA Bill to rescue the CSR where if nothing happened, those who received the CSR and anyone up to 400% FPL might and probably would be better off. Senate Health Committee Chairman Lamar Alexander (R-TN)

“If they don’t, there will be chaos in this country and millions of Americans will be hurt.”

As if concern for constituents being hurt and running around confused due to all the chaos created by supposition, conjecture, and innuendo was ever a concern for Trump or Republicans? The elimination of the CSR subsidy would be included in premium subsidy increases. The only issue here is the confusion which has been created by Trump and Republicans attacking the ACA. The CBO has estimated this confusion would smooth out over a couple of years if other factors do not disrupt the market place exchanges.

Twelve Republicans and 12 Democrats initially signed on to the bill, which would continue ObamaCare’s insurer subsidies for two years and give states more flexibility to waive ObamaCare rules. The giving of states greater flexibility is a mistake as history has shown states tend to punish those who can not find jobs and the low in income by cutting their healthcare. Here again McCain and Collins are in support.

Reported today, Schumer and the rest of the Democrats have rolled in support of Alexander’s bill. We are going back to 2010 when garbage healthcare policies which covered little will be put in place.

More on this later.

Going to Bat for Trump: I am lost in this one. Trump’s personal handler John Kelly took Representative Frederica S. Wilson (D – FL) to task for publicizing the call between Mr. Trump and Myeshia Johnson, whose husband, Sgt. La David T. Johnson was killed in an ambush in Niger. I am sorry; but, this sounds to me like an excuse for DT for getting it wrong in what he said to Mrs. Johnson. Donald Trump has problms saying “good morning” in passing.

This was a mistake. “ Every morning, I wake up in my office and scroll Twitter to see which tweets I will have to pretend that I didn’t see later,” said Representative Paul Ryan, who is often asked what he thinks about Trump’s controversial tweets. For months, he responded by saying he didn’t respond to the president’s tweets.”

“A handful of armchair psychoanalysts — reporters for major news organizations, no less — have decided that it all began at the 2011 White House Correspondents’ Association dinner, where Trump was the butt of jokes by President Obama and “Saturday Night Live” comedian Seth Meyers.

Trump was so humiliated by the experience, they say, that it triggered some deep, previously hidden yearning for revenge.”

We can see this in Trump’s efforts to erase Obama’s legacy whether it hurts people or not. This is not about politics, it is revenge. Paul Ryan should watch his step.

Calling out President Trump: “We’ve seen our discourse degraded by casual cruelty,” former President Bush said during a 16-minute address at “The Spirit of Liberty” event. “Bullying and prejudice in our public life sets a national tone and provides permission for cruelty and bigotry. The only way to pass along civic values is to first live up to them.”

Bush started two wars, at least one under false pretenses, and never suffered any consequences for the hundreds of thousands of lives lost in the process, Bush was responsible for the lacking response to Hurricane Katrina and the suffering, deaths, and displacement that resulted from it, Bush savaged the environment by backing out of the Kyoto Protocol and weakening the Clean Water Act, Bush ginned up homophobia by pushing in 2004 for a constitutional amendment banning same-sex marriage, Debt held by the public increased from $3.5 trillion to nearly $6 trillion and gross federal debt rose from $5.6 trillion to nearly $10 trillion, the financial crisis in 2007/8.

Is this the best we can find to speak for us?

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