Insurance relief

Some months ago, I pointed out that Senator Rubio put a nail in the coffin of Obamacare when he slipped a clause into a large bill which took away the part saying that the government would reimburse insurance companies that lost money on Obamacare. This week Governor Dayton proposed that the state spend 540 million over the next two years to cover insurance company losses due to Obamacare. This is for the 4% of Minnesotans who do not have company insurance or government insurance. The measure, called “reinsurance,” would spend $542 million in state money over two years to try to lower premiums in the individual market. That covers roughly 4 percent of Minnesotans who have neither employer-sponsored insurance nor a government health plan such as Medicare or Medical Assistance.

MN health care

The Republican attempt to replace Obamacare has come up short and so Obamacare remains the law of the land. For Minnesota tax payers this is not good news. There are over 100,000 Minnesotans who receive subsidies to pay for their health care and many of these pay nothing for their plans and they have no deductible meaning their insurance is free. This leaves the other 123,000 Minnesotans left on Obamacare to pay the full amount. Throughout history various people have gained positions of power by promising to take from those who have a lot and give to those who have little. It has been pointed out that this does not work because there have always been too few rich and too many poor. It is possible to take from the middle upper income group and give to the middle lower income group since there are large numbers in both groups and this is what is happening in the health care situation. Even though these two groups have large numbers the rest of the state tax payers are being asked to pony up $313 million to shore up Obamacare. This will get worse in future years unless something in the law is changed. If and unless the two parties in Washington get together there will be a lot of people who will be unable to afford insurance just so the low income people can have free insurance. These numbers do not include the 200,000 Minnesotans who still have no health insurance.

Insurance

The Patient Freedom Act is a health care plan proposed by four Republican Senators and one of the more interesting aspects to it is that states can choose to keep Obamacare if they want. They did this knowing that the senate will need some Democrats to vote for the plan. This is a replace without repeal proposal. Senator Schumer, the senate minority leader, said he was opposed to the plan. A number of new ideas have come up regarding health care and this is the up side to open discussion, something that was missing when Obamacare was enacted. Ideas like using co-opts to form group insurance plans that allow preexisting conditions but still keep everyone in the plan. The idea to expand and fund health savings accounts not just for employer plans. The 60 million people under expanded Medicaid cost the government 660 billion or $11,000 per person. A major medical plan with a $10,000 annual deductible cost $2,500 per year. If the government puts the $11,000 into a health savings account and the person uses $2,500 to buy a major medical plan leaving $8,500 to cover their medical expenses for the year. Any money left over they keep until retirement at which time they can use if for whatever purpose they choose. These people will then be careful shoppers for health care and use only when necessary. The number of claims will drop drastically which in turn cuts administrative cost. Providers will love being paid up front instead of waiting months for insurance checks. This is the same concept that employers can use but it will now apply to everyone. Insurance companies will oppose this since it will eliminate millions of jobs in their industry.

Health plans

Health care has shown everyone that the Democrats are more adept at presenting plans than are the Republicans. When Obamacare came out the cost were estimated at 848 billion over ten years. Recall this plan was put together behind closed doors and then thrust upon the American people with the promise that it would insure 31 million new people and would save the average family $2,500 per year. Later when the CBO report came out it said the cost would be 2 trillion over ten years and the number of new people insured would be 25 million leaving 31 million still without insurance. Here is where we stand today; About 44 million people in this country have no health insurance, and another 38 million have inadequate health insurance. How did they keep the cost under one trillion which was their goal? They based the cost on the ten years between 2010 and 2019 but provided services only for the last 6 years so the 848 billion was really over 6 years not ten as advertised. Smart! Remember, they gamed this thing so that it wouldn’t take effect until 2014, which means that the cost of the first four years of implementation was essentially zero. So, let’s do the math on that: In 2009, we were told it would cost $848 billion to insure 31 million people. That’s $27,000 per newly insured person. Now we’re told it will cost $2.004 trillion to insure 25 million people. That’s $80,000 per newly insured person—about a three-fold increase since passage. Now as bad as all that looks realizing that $8,000 per year ($80,000 divide by ten) is not bad for health insurance. The problem is the deductibles are so high that most people still pay out of pocket for most of their insurance needs. The exception is low income people who pay no cost and have no deductibles so that $8,000 per year is foist upon the middle income working people and added to their cost. The bottom line is that we have spent a lot of money and still have a lot of people uninsured which points out that something must be done but the Republicans have not figured out what. We are moving toward single payer or Medicare for all but no one has come to that realization except Obama and that was his goal all along. My compromise plan is to put all uninsured people into Medicaid and let the rest use heath savings accounts.

credits

A tale of two health care plans. Obamacare was put together behind closed doors and was only released to the public when it was a finished product. As Pelosi said, we have to pass it to find out what’s in it. The Democrats voted for a plan they had not read and had no idea what it cost. They were roundly criticized for this. Part one of the Republican health care plan has been released and it is getting plenty of scrutiny from all sides. They didn’t do this because they wanted this to be transparent but because they wanted it to be part of a reconciliation bill which means it only requires a simple majority for approval. This means they can just cut spending for Obamacare. The next parts of the Republican plan will be subject to filibuster and this will slow things down considerably. In general the public wants openness but they don’t like watching the sausage being made and there will be changes as the negotiations continue. One of the main sticking points for Republicans is the tax credits. In the past Republicans have been against such things on principal but many think they were wrong on the earned income credit. For those not familiar with the tax law, in the past if a person on welfare went to work they would lose some or all of their benefits depending on how much they earned. The government decided it could not allow people to continue welfare after they went to work set up the earned income credit. A low income working family can now receive up to $6,000 per year as a reward for working. With welfare they were punished for working. Sometimes tax credits make sense and before they are dismissed out of hand things should be looked at more closely. Perhaps this tax credit is one of those times.

Medicare cheap

A friend wrote me the other day saying how much he loved his Medicare and I can understand why. Medicare Part A covers hospital expenses and is free. Medicare Part B covers 80% of doctors expenses and cost $100 per month. In addition a good supplement to Medicare cost $150 per month for a total of $250 per month or $3,000 per year. The average cost of a heart transplant is $1.2 million and the cost to a Medicare recipient is almost nothing. How can the cost of health care for elderly people with their high morbidity rate be so inexpensive? There are 46 million retired people on Medicare and the cost to the government is $650 billion or $14,000 per person. Where does the other $11,000 come from? Guess! But you say this is not welfare, I paid for this while I was working. NOT! When Medicare came out in 1965 it cost me $3 per month. Even my last year working when I made $50,000 my Medicare cost was $725 per year. That means I paid in about $12,000 and my employer paid in another $12,000. The average person receives about $180,000 in benefits. I bring this up because most people on Medicare are not concerned about the cost only what they have to pay and that is very little. I have heard older patients say they are astounded seeing their hospital bill but they are not concerned.

college cost

Today on Public Radio they were discussing the high cost of college and how tuition has increased as student loans became more available. They mentioned that many poor people cannot afford college. I have a way to help these people get a good education and at the same time perform a valuable patriotic service. They can join the military. If you sign up for three years of military service you are eligible for the GI Bill. If you then decide to attend the University of Minnesota the government will pay 100% of your tuition and fees plus $1,000 per year for books. They will also pay you $1,245 a month for housing and $100 per month for tutorial help. There is no tax to you for any of these benefits. If you decide to go to a private college the government will pay $22,000 per year for tuition and fees and most universities participate in a plan called Yellow Ribbon Program that will pay the rest of your tuition. The books and housing are the same as for public schools and these payments last for four school years, nine months per year or a total of 36 months. This means the student can have summers off to earn extra income and not graduate with a load of student debt. Most people feel that students older than average called SOTAs make better students plus there is the pride in knowing that you have paid your own way. In addition there are many educational benefits available during the three years of active duty. This can also be used for non-college career choices like trade schools.

Prove innocence

On the news today I heard a person say that if you haven’t done anything wrong you should welcome an investigation to prove your innocence. Buyer beware! Recall the case of Scooter Libby an assistant to VP Chaney. He was accused of releasing the name of Valarie Plame as an agent for the CIA. While his case was being adjudicated Richard Armitage admitted to the prosecutor Patrick Fitzgerald that he was the one who outed Plame and that Fitzgerald asked him to remain quiet while he continued the prosecution. During cross examination Libby lied to the Grand Jury in order to keep himself from looking guilty for a crime he did not commit. He was thus found guilty of perjury on a statement that had nothing to do with the crime he was charged with. After his conviction Armitage came forward and expressed his sorrow for what happened. Libby had to pay a $250,000 fine plus many more thousands in legal fees and was sentenced to prison but President Bush commuted his sentence. He lost his job and was disbarred. When the prosecutor goes fishing you cannot be sure what he may find.

First

I find watching the debate about the new health care plan interesting. One group says that Obama took too long getting Obamacare going and it used up all of his political capital and the Republicans are doing the same thing with all of their bickering. Another group says that you don’t have to pass everything in the first six months. Many experts say that they are trying to pass a bill that no one knows about and the second group of experts tells everything that is wrong with the bill that no one knows about. As usual these people are taking past each other. From a strictly political standpoint it would be to the Democrats advantage if they could keep the fight over health going until the next election and then they could say nothing was done. This was the strategy used by the Republicans when Obama was in office. The Republicans could offset some of this by going ahead with tax reform, immigration reform and infrastructure. The argument is that tax reform must follow health care reform since there are many tax changes in the new health care proposal. If that is the case then proceed with immigration and infrastructure while they argue over health care.

SOFA

Obama ran on the campaign pledge of bringing a responsible end to the Iraq War, and announced shortly after taking office that combat operations would end in 2010 After the success of the surge in 2008 Iraq had settled down and things were looking positive. Military people told the President that he should leave a residual force of about !0,000 troops there to maintain stability but Obama refused giving as an excuse that he could not extend the status of forces agreement (SOFA). That is an agreement that protects US troops from being accused of a crime and convicted in an Iraqi court. Critics said Obama was just using that as an excuse to pull out. Many feel that the pullout opened the door for ISIS. In any event a few years later Obama put 5,000 troops back in Iraq and they still do not have a SOFA. This adds credence to the claim that Obama just wanted out and used the SOFA as a reason. In the news today it was announced that US Marines are now on the ground in Iraq and there still is no SOFA.

Health plan

As four Republican Senators are holding out on the new health care plan I am reminded of the two Democratic Senators who held out against Obamacare and how they were handsomely rewarded. -- Sen. Mary Landrieu, D-La., won between $100 million and $300 million in additional federal aid for her state's Medicaid population. The deal, secured before she cast her critical vote in favor of bringing the health bill to the floor, was immediately dubbed the "Louisiana Purchase," though the actual Louisiana Purchase was considerably cheaper. -- Nebraska's Nelson won permanent federal aid for his state's expanded Medicaid population, a benefit worth up to $100 million over 10 years. These two hold outs then voted in favor of Obamacare. I wonder what it will take to get the last two Republican Senators to vote for the new plan. In case you find this disgusting here is how it works. "This is just part of the normal legislative process," said Jim Manley, spokesman for Senate Majority Leader Harry Reid.

Transportation

The two major uses of fossil fuel are power plants and transportation. Power plants are slowly converting to natural gas and this has lowered emissions to where CO2 levels are down to where they were 20 years ago. The U.S. Department of Energy says natural gas burns much cleaner than coal or oil — producing about 70 percent less carbon emissions — and estimates that replacing 3.5 million oil-burning heavy duty vehicles (trucks) with CNG-powered ones would reduce oil consumption by 1.2 million barrels per day Throughout the US garbage trucks, buses and companies are joining the band wagon. UPS (NYSE:UPS) announced plans to build an additional 12 compressed natural gas (CNG) fueling stations and add 380 new CNG tractors to its growing alternative fuel and advanced technology fleet. The CNG fueling stations and vehicle purchases totaling $100 million are part of UPS’s ongoing commitment to diversify its fuel sources and reduce its environmental impact. Changing transportation to natural gas is a way to quickly have a profound effect on CO2 emissions but the urgency is not there. Why not?

New health care

The replacement plan for Obamacare was released today and will likely change as the conference committee debates the issue. First off it will cover all Americans so it will be more expensive than Obamacare since there are still 33 million people without coverage. Second the subsidies will be replaced with tax credits. I assume these will be refundable meaning that you get the credit even if you own any taxes. Under the old Medicaid the counties and federal government paid the bill but this new plan will send federal money to the states and the states will fund the program. The idea is to move control of health care closer to home. In addition each person will be allowed to purchase the plan that best suits them. The complaint under Obamacare was that a young single man had to buy a plan that included maternity benefits the one size fits all problem. The tax credits range from $2,000 per year to $14,000 per year depending on age and income. States will be given federal dollars to help insurance companies with the cost of covering those will health problems that prevent them from getting standard cost plans. Like the old Medicaid there will be no existing conditions clause but unlike Medicaid there will be a penalty of coverage is dropped and then reapplied for. This was a problem with Medicaid. People would wait until they got sick and then buy insurance and when they recovered they would drop the plan. For those with company plans which includes 150 million people the idea of health savings accounts will be the key point. These plans will have high deductibles and the company and employee will share the premium cost. The companies will also share in the deductible and any funds not used will be carried forward and eventually end up as retirement money. There will be an incentive for individuals to shop for health care and to spend only when necessary. This was one of the weaknesses of Obamacare and I offer one example to illustrate. When a new mom found out she could get a breast pump at no cost she got rid of her old one and got a new one. Then she found out she could get two, one for home and one for work and this is just what she did. The number of small claims will be greatly reduced and thus will the administrative cost (paper work). This will mean the loss of jobs in the insurance industry but to what extent is hard to say at this point. Insurance companies will be able to operate across state lines so competition will be fierce. Health care providers like doctors, and clinics will be relieved not to have to deal so much with insurance companies and will be paid up front for most services. The two benefits from Obamacare that are retained are the no pre-existing conditions clause and children stay on parents plan until age 26. These will be part of the Obama legacy and he will get credit for having moved the country to universal health care.

Four years

Minnesota High Schools are in a quandary. Many students especially minorities are not able to do the basic work and the schools realize that keeping them in school is essential both for the students future and the $15,000 per year per student that each school receives. The warning signs for trouble are commonly known as the ABC’s; attendance, behavior and course performance. The best incentive for a student to stay in school is a diploma and schools have made that available for those who follow the AB but have trouble with the C. Generally speaking, Minnesota high school students must take and pass MCAs in reading and writing as a requirement for graduation. Students have more than one chance to earn passing scores on the MCAs. These tests replace the Basic Skills Tests previously required for graduation. Students must also take the MCAs in science and mathematics; however a passing score on these assessments is not required for graduation. Evidence shows that if you can keep a student in high school for four years this greatly reduces the chances that the student will end up in prison and thus every effort is made to keep them in school. The cost of $15,000 per year pales in comparison to the $42,000 per year cost in prison. Many of these students realize that they are not able to do the work and thus feel like they are not smart and often times are bored and cause disruption in the classroom. There are special rooms set up where these students can go and special teachers there to supervise their behavior. The word is out that all you have to do is show up and halfway behave and you will get your diploma. It’s not the best system but it’s what we got.

Cut backs

As the President puts forth his plan to cut government departments, I am reminded of our little town Hastings and what happened during the housing bust of a few years ago. There were many local contractors who either cut back or went out of business during this time. The city has 6 people who inspect new construction and none of those were laid off during these rough years. Hastings is a microcosm of the country as a whole since during down times government employees are usually secure in their jobs. In the past federal departments referred to a cut as instead of growing by 5% they would only grow by 4% and this was called a one percent cut. It was a commonly referred to practice of always making sure you spent all of you money so you would not be subject to less money the next year. Supposedly this is about to change in the Trump administration but that remains to be seen. I have heard all of my adult life promises to cut the fat from government but I have yet to see that happen. I do remember when Clinton revamped welfare and the cries were that poor women and child would be tossed out into the streets but nothing came of that and when the dust settled people found a way. In 1978 California passed a large tax cut called Prop 13 and predictions abounded about the devastating effects that would follow. On June 6th, 1978, nearly two-thirds of California's voters passed Proposition 13, reducing property tax rates on homes, businesses and farms by about 57% After this cities cut back and absorbed the shock and then things just continued along and the state grew at a rapid rate over the next 20 years. There is usually no way to predict in advance how cut backs will work. I suppose you have to pass it first and then figure out what will happen.

News

I remember when Obama was President and the Benghazi incident was hot, the news people often complained that nothing could get done because of the distraction. Now the Russian incident is causing the same concern. It appears that the press believes that the only thing the government can concentrate on is what they put in the news. Has the congress gone into hibernation waiting for the latest scandal to be resolved? Not hardly. Work is continuing on the tax laws, replacing Obamacare, reforming emigration law and going after ISIS. The press seems to think that what they report determines what the government does when in fact the reverse is true except for ratings. When the press finds something that is easy to explain and scintillating they go all out with it and it is they who can only do one thing at time. What is more news worthy, tax reform or a Trump tweet? That is why a sex scandal always leads in the news.

Black abortions

February is Black History month and there were many posters on the school walls and one in particular caught my attention. It said in 1900 there were 8 million blacks in America and today there are 42 million. It stated that Blacks contribute over 1 trillion dollars to the economy. Since 1973 when abortions became legal there have been over 58 million reported abortions. Of these 42% were to black babies. If those 24 million Black babies had lived and they were half female they would produce 2.4 babies per mom or 28.8 million more Black citizens. On average Black people vote at a 40% rate so this would have meant an additional 11.5 million votes and since Blacks have voted over 80% for democrats since 1970 this means 9.2 million more democratic votes. This means there would have been no Republican elected president since Reagan. There have been 6 Supreme Court judges appointed since then and three of these by Republican Presidents and these likely would have been different. Finally these additional Blacks could have added another 600 billion to the GDP. Roe v Wade like most government programs has unintended consequences.

Dem plans

The Democratic plans to win back the White House in 2000 center around challenging Trump at every opportunity and winning back the Reagan Democrats, who represent a major portion of what Hilary called the deplorables. They are taking their key from the way the Republicans went after Obama on every issue. While the Republicans never achieved their goal of making Obama a one term president they did make great gains in state legislatures and governors. The Democrats would like to do both but will settle for 8 years of Trump if they can get back some of the state offices. The latest example of challenge is the upcoming investigation into Attorney General Jeff Sessions and his relationship with the Russians. This will go on for years and follows the Republican obsession with Benghazi. It is the way our system operates and sometimes things of significance are uncovered but most often nothing comes of it.

Speech

Who is John Galt was the famous question posed in Atlas Shrugged and after last night’s speech people are asking, who is Donald Trump. He is the pragmatist that was always there and is now out in the open. He is taking apart the old enmity between liberal and conservative and using the Clinton strategy of triangulation. To satisfy the left he is open to legal status for some illegal immigrants, he is pushing for infrastructure projects and he is not touching social security or Medicare and for unions revamping NAPTA. For the conservatives he wants lower taxes, more military spending, immigration reform that starts border with control, repeal and replace of Obamacare, and appointing a conservative to the court. For the majority he wants better care for veterans, new manufacturing jobs, educational help along with fighting crime for the inner cities, support for NATO and destroying ISIS. Experts say that words matter but actions speak louder than words. We will see.