Obama funding plan for health insurance losses is a bailout

Jul 15, 2014 0:51:43 GMT pjohns1873 said:

Sadly, I do not see, in any of the above, any support for the view that "hundreds of millions of Americans" wish to exist as mere nomads; lacking which, your argument is grievously undercut, it seems to me. And that, regardless of what John Locke may have observed in a time in which a nomadic existence was not nearly so unusual as it would be today.

As for ObamaCare, I would warmly embrace a repeal-and-replace strategy--not merely a return to the status quo ante (even though it was superior to ObamaCare, in my opinion)--including the following Republican-inspired ideas:  tort reform (i.e. placing strict limits on the amounts that are subject to lawsuits--which would be entirely uncongenial to the Democrats' lawyer base); permission to sell policies across state lines (just as with any other type of insurance); and expansion (rather than contraction) of HSAs.

However, this is not to say that all the good ideas as regarding healthcare reform derive from Republicans.  From the Democratic side, there are these (very good) ideas:  an end to all annual or lifetime limits on the healthcare-insurance carrier's financial responsibilities (that one-million-dollar cap may look pretty generous, until a major and lengthy illness actually comes along); an end to exclusions for pre-existing conditions (although I would not necessarily be opposed to our creating high-risk pools, as an alternative); and an annual cap on the out-of-pocket expenses for which the policyholder is liable (my own policy caps that at $5,000 per year for a single person, or $6,000 per year for a family, as long as one stays in-network; the out-of-network cap is a bit higher, and does not apply to the difference between the Submitted Charges and the Plan Allowance).   

Your argument that an Inalienable Right ceases to exist because most people would not choose to exercise it is an invalid argument.

Republicans have always offered proposals that affect those with health insurance but not proposals that affect those without health insurance and that is the problem. "Repeal and Replace" was often a Republican mantra but they've never offered any proposal to "Replace" Obamacare.

Of note on "tort reform" I would agree but not with the Republican proposal. They wanted to limit punative damages that include payments for the "pain and suffering" of the victim of malpractice and to that I disagree. They should have focused on the attorney fees that come out of the plaintiff's award (but are never a consideration when establishing the plaintiff's award). For example a $5 million award to the plaintiff was typically reduced to $3 million because the attorney for the plaintiff received 40%. My suggestion for tort reform would be to cap the attorney's fees as that would reduce the number of frivolous lawsuits. Screwing the victim of medical malpractice is not a viable proposal IMHO but that's what Republicans proposed. I would also focus on doing a better job of dealing with doctors that engage in medical malpractice. It is my understanding that about 5% of all doctors are responsible for 95% of all malpractice cases but little is being done to address this.

Jul 15, 2014 18:33:26 GMT pjohns1873 said:

It would be a severe mistake, I believe, to reflexively oppose anything suggested by "the other side"; so I will consider your porposals seriously.

Capping the attorneys' fees seems reasonable enough.  (In 2007, my own disability-insurance attorney won the case for me, on appeal--it is my understanding that most such cases are denied initially--and Tennessee caps attorney fees at just $5,300 for this particular service.) 

However, I do not see this as being mutually exclusive with the goal of capping awards for "pain and suffering" (which is inherently subjective;  and, as regarding which, juries tend to be very generous with others' money--especially if those others have the proverbial Deep Pockets.) 

There have actually been several Republican proposals to repeal and replace ObamaCare--Rep. Paul Ryan was the sponsor of one of these--but the GOP can be rightfully faulted, I believe, for not having coalesced around just one of these proposals, so that it might be advanced aggressively.  (Still, Harry Reid--who is President Obama's water carrier--doubtless would not allow any such proposal to see the light of day in the Senate, as long as he remains Majority Leader.) 

And why might it be considered "an invalid argument" to note that pure theory (which is about as substantive as cotton candy is) is irrelevant to the matter at hand? 

We should note that the Courts have reduced unreasonable jury awards for pain and suffering. We should also note that while stories of high pain and suffering awards do make the news they are extremely rare and are often related to class-action lawsuits where the individual actually receives a relatively small pain and suffering award. Overall they are statistically unimportant cost-wise from a overall malpractice standpoint. More costly are the frivolous lawsuits that cost far more to address and limiting attorney fees will reduce the number of frivolous lawsuits. 

Perhaps you're referring to Rep Paul Ryan's 2009 proposal described by the short summary below.

paulryan.house.gov/uploadedfiles/pcasummary2p.pdf

It is problematic on many counts. First of all it couldn't be accomplished without additional revenue in spite of his claims and he provided no funding mechanism. Next is that it relied on State Insurance Exchanges that Republican States rejected under the Obamacare. Next is that it doesn't mandate that a person have "insurance" so we're left with the same problem that Obamacare has where only the "sick" would choose the insurance driving up coverage costs and those that don't have insurance would still become sick and still require medical services placing a financial burden on society.

But it was better than nothing because at least it was a proposal. It had a few good ideas and while basically it was unworkable at least it was something that could be reviewed and discussed.

Here's a problem I see from a political perspective. The GOP would have to propose a plan that is superior to Obamacare but if it did then even Democrats like Harry Reid would be forced to accept it. Obviously it requires bi-partisan support because we've seen what happens when one party imposes "their" plan with Obamacare. We need a proposal that would gain both the support of Democrats and Republicans because "it's just that good" and that is what would be best for America. Obamacare was a one-party legislative program and Americans always get screwed when that happens. Bi-partisanship is necessary in addressing the health care issues in America.  

Jul 16, 2014 18:16:34 GMT pjohns1873 said:

First, let me say that I agree completely with your observation as concerning the need for bipartisanship. (You may note that I mentioned, in another post, that neither major party has a monopoly on good ideas in regard to healthcare:  the Republicans have some good proposals, I believe, that have simply been ignored; whereas the Democrats also have proposed some good things.)

I do not believe that enormous jury awards for malpractice are "statistically unimportant cost-wise," since I have read (and heard on the news) that these awards have resulted in a considerable rise in doctors' malpractice insurance--even for just a run-of-the-mill general practitioner, it now can easily run over $100,000 per year--and that cost, of course, is then passed along to the consumer (which is to say, to these doctors' patients). 

The plan of Rep. Ryan, to which I refer, was proposed (I believe) in 2012.  (It is the plan that replaces traditional Medicare with premium support for private insurance plans.) 

I have also seen good ideas from both Republicans and Democrats and the focus of Congress should be to merge those ideals into a comprehensive plan that addresses the concerns from both of these political parties. It is the merging of good ideas that leads to consensus but the intransigent stance of both Democrats and Republicans has resulted in the worst possible situation for Americans.

For every case you hear of where there was a large jury award there are thousands upon thousands of much smaller malpractices suits that all would fall below the "caps" proposed for pain and suffering. It is the volumn of malpratice lawsuits that's driven up the premium costs and not the large settlements. In many cases the insurance company will simply pay a frivolous lawsuit for a small amount (e.g. under $100,000) because it's less expensive than fighting the lawsuit. That is really what's driven up the costs of malpractice insurance and not the very rare large, multi-million dollar, pain and suffering awards. Of course the attorney's taking $40,000 out of a $100,000 award encourages these frivolous lawsuits which is why I believe that this is the issue that needs to be addressed. They file many lawsuits in the hopes that they will be uncontested so they can slip a quick bundle of cash into their pockets without really doing any work at all.

Ah, I remember Ryan's more recent proposal now. As I recall he linked the payments with a national COLA that disregarded the fact that medical cost increases are more than the average cost of living. This would result in every decreasing support for the person because their increased "subsidies" would never keep up with the increases in the costs of the medical insurance. He did this because to actually pay for the projected increases in the costs of medical services would have required additional tax revenues in the future (the same problem that Medicare faces today) and so he decided to simply not fully fund the costs in the future. Eventually it would make "Medicare" completely worthless. Had it tied the increases of subsidies to the increases in medical services costs it would have been a more viable plan but as it was it was correctly rejected.

BTW Congress recently changed the COLA for Social Security that unlinked it from expenditures that seniors make and this is related. Seniors typically have higher medical expenditures than the average person and that is no longer a consideration in the COLA formula for Social Security. So as medical service costs increase at a higher rate than the average cost of living seniors will actually lose purchasing power over time. It was a means to screw the Social Security recepient in order to reduce the expenditures.

Jul 17, 2014 20:04:00 GMT pjohns1873 said:

First, I want to thank you for the information as regarding Social Security COLAs. (Although I consider myself a bit of a news junkie, I somehow missed this.) Although my medical expenses are not especially egregious--my own healthcare-insurance plan is really excellent--I am not especially happy about anything that would attenuate the annual increases in Social Security benefits.  Was this change signed into law by the president (or even allowed to become law without his signature)?

I think we are agreed that neither major party has a monopoly on good ideas, as regarding healthcare.

Many states have laws against "frivolous" lawsuits; the case is summarily dismissed; and the bringer of the lawsuit is financially penalized. 

An article in Insurance Journal, from less than one year ago, authored by Steve Cohen (who is a lawyer-to-be who "hopes to be a plaintiff's advocate," according to the description offered), is in essential agreement with your position--that a limit on jury awards is inconsequential as a driver of increasing costs for malpractice insurance--but he notes that states that have enacted tort reform have seen malpractice-insurance rates rise by an average of just 6 percent, whereas rates in other states (without such tort reform) have risen by an average of 13 percent.  (Over a 10-year period, the former would result in an increase of about 79 percent, whereas the latter would result in an increase of over 239 percent--a difference that is hardly "negligible," as the author phrases it.) 

If Rep. Ryan's plan was flawed, that simply means that it should be worked upon--in a bipartisan manner--not just cavalierly discarded.    (Democrats frequently like to speak of how Republicans should seek to "improve" ObamaCare, rather than rejecting it in toto; but they do not appear to be very inclined to work with Republicans as regarding Rep. Ryan's proposed plan for healthcare reform.)    

Yes, the Social Security COLA change was approved by Congress and signed by the President. It's sole purpose was to reduce Social Security benefits over the long term by using an inappropriate COLA formula. As you do know as a retiree your expenditures today are NOT the same as what they were when you worked for a living. For example you may not use as much gasoline because you don't commute to work daily. The COLA formula should be based upon what retirees spend their income on.

There are many forms of tort reform that do not reduce the payments for pain and suffering. In fact one proposal I had was to separate "pain and suffering" from the "punative" damage award altogether. Make i a separate category just like compensatory damages are a separate category.  That way the savings aren't coming out of the injured party's bank account. I just don't believe that the "savings" should come out of the victims bank account.  

Rep Ryan's proposal could be worked upon but it shouldn't be based upon a reduction in benefit over time and that is what it was designed to nefariously accomplish when I read it. It had the same flaw that I noticed with the change in COLA calculations for Social Security because it used the overall cost of living increase due to inflation that's about 3% as opposed to the average cost increases for medical services that have been over twice that amount. It's very much like the problem you showed where tort reform resulted in lower malpractice insurance costs but just the opposite. Over time people would have to continually pay more and more for the private insurance under Ryan's proposal and retirees on a fixed income can't afford that.

Rep Ryan's plan did not address "Obamacare" at all and was, from what I recall, only about Medicare (and perhaps Medicaid) but the problems of the annual increases in the costs of medical services not being accounted existed under Ryan's proposal because it sought to balance the expenditures by not funding the cost increases over time.

Republicans continue to refuse to address the insurance for about 40 million Americans that are still uninsured from what I understand. They're going to have to address that problem and not just making insurance more affordable for those that already have insurance. Rep Ryan's proposal for Medicare didn't add even one person to the ranks of the insured in America. Republicans are good at addressing the insured but not worth a damn at addressing the uninsured.

Yes, some ideas can be addressed and improved so they're acceptable. I believe I've mentioned Sen. Paul's proposal for a flat tax with an exemption before and if he'd dump the Capital Gains tax and include all income it would be very similar to my proposal. His plan also included an exemption virtually identical to mine with the difference being his would be at about $48,000/yr for a family of four while mine was for $50,000/yr for a family of four. Not much of a difference but he wants to retain the crony capitalism of the Capital Gains tax loophole where wealthy investors are treated favorably under out tax codes while the workers are getting screwed.

Jul 18, 2014 23:51:14 GMT pjohns1873 said:

You are correct in your observation that I do not use as much gasoline now as I did when I had to commute 20 miles each way (a 40-mile round trip) to work.

I am not sure I understand what you are saying about making punative damages a "separate" category, so that the savings do not come out of the plaintiff's award. Could you clarify, please?

Your assertion that Republicans "are not worth a damn at addressing the uninsured" seems to presuppose that Republicans should embrace some form of UHC.  And I simply disagree. 

By the way, it is entirely possible for retirees to avoid having to live on a "fixed" income--which is to say, an income that is steadily eroded over time by the ravages of inflation.  One financial instrument that I looked into last year (although I did not purchase it; I may do so in the future) offers either a 5 percent or 10 percent annual increase (although it starts at a lower figure if one chooses the latter).   

Currently "pain and suffering" are a component of "punative damage" awards that are different from compensatory awards. Compensatory awards exclusively address lost income. For example if a person is in a car accident and loses time from work they receive compensatory damages for that and it is taxable income to them because they would have been taxed on that income had the accident not occurred. Punitive damages include pain and suffering of the victim related to that same accident. A person with broken bones from a car accident suffered considerable phyical pain from those broken bones but didn't lose any income because of the pain and suffering so it's non-compensatory in nature and is not subject to taxation. A person that, let's say, lost the use of their legs can receive compensation for the fact that they can't walk related to employment but that doesn't compare to their loss of the ability to walk for any purpose for the rest of their live. It's not all about just not earning money (compensatory) but also about the actual pain a person experiences as well as the adverse effects on the value of life, or suffering, of the person. Not everything in life it tied to a paycheck. Some malpractice cases result in a shorter life expectancy for the victim so how much is one year of life really worth? It's very subjective in many cases of course because a person can't purchase additional years of life at any price.  

Punative damages also include a financial penalty for those that caused the problems of the victim to act as a deterant. That part of the "award" has to be enough to impose an actual "penalty" on the accused. For example if a $10 billion corporation causes severe damages to a person a $100,000 punative damage award isn't really a deterant to them from doing it again to someone else in the future. So the size of the punative damages often relates to the size of the entity causing the harm because it is designed to "hurt" them financially to prevent a re-occurance by the entity.

Often the tort reform that seeks to limit punative damages really seeks to limit them to the point that they're not punative at all and don't result in a deterant to the entity. That's counter-productive to the purpose of punative damages because they need to impose a financial cost great enough to act as a deterant.

Let me rephrase the issue of not being concerned about the uninsured to apparently not being concerned about people standing on the corner across the street from a hospital that are being denied medical services because they can't afford the medical services and don't have insurance that would pay for those services.

UHC would address ALL Americans but all Americans are not the problem. Over 80% of Americans already have health insurance of one kind or another. Only somewhere between 10% and perhaps 15% of Americans have a problem so instead of "Universal Health Care" we're actually talking about "Limited Health Care" that is necessary. I oppose UHC as well which is why I oppose a single-payer system for the United States.

Yes, there are some financial investments that don't pay out the full amount of proceeds and therefore continue to build assets but logically those are only related to those with incomes already in excess of their spending needs. That is probably less than 50% of retirees depending upon Medicare although I don't have any statistics to back up that opinion at this time.

Jul 19, 2014 19:42:44 GMT pjohns1873 said:

I agree that pain and suffering should be compensated; and I further agree that it is just about impossible--in fact, it really is impossible--to determine just how much even one year of a person's life is worth. (Some things are just not amenable to a clinical cost-benefit analysis.)

However, I do have a problem with you tacit assumption that awards should be gauged according to a company's market cap--and therefore, according to its ability to pay.  A company worth $10 billion that has caused a person to become a parapalegic is no more reprehensible than a company worth $10 million that has done the same thing, under the very same circumstances.  ("From each, according to his ability to pay"--the second half of the core Marxist dictum--is not at all in line with my own thinking.) 

As for those who are "standing across the street from a hospital," but "don't have [medical] insurance," I should probably note that just today--yes, earlier today--I went to the dentist (who is not ordinarily open on Saturday; but this was an exception) and purchased a crown for $749, on sale.  But my dental insurance (which is attached to my medical insurance; the latter is excellent, whereas the former is sub-mediocre) will not pay even one cent toward it.  So I had to pay the amount, in full.  (As it happens, I was able to do so; but if I had not been able to do so, the dentist's office would have made arrangements for me to pay a bit each month.  In fact, I was offered precisely that.) 

There are actually all sorts of financial instruments available.  One that I currently own pays me dividends--some of the companies in each basket of stocks pay monthly, whereas others pay quarterly--and the $60,000 that I invested last fall is now worth about $64,000, despite my receiving direct deposits each month of around $200 from this investment.  (And, believe me, I am very far from being wealthy.)     

One of the purposes of "punative damages" is to deter an enterprise from causing the same harm in the future. If the "cost" is insignificant to the enterprise it has no deterance effect. Would you agree with that? I don't have a "magic" solution to that problem. We both seem to agree that "pain and suffering" payments to the victim of malpractice are justifiable and that "savings" for malpractice insurance should not be realized by reducing the payments to the victim that suffers because of the wrongful action. Don't financially penalize the victim to save the perpetrators of malpractice money seems to be a reasonable argument.

What about the person that can't make monthy payments? There are tens of millions of Americans that can't even afford to pay they current bills much less assume a new financial obligation. You keep forgetting that fact.

We can also note that many that could actually afford a phyical exam will choose not to because of ofter pressing financial obligations and when they don't have that phyical exam a curable illness will often go undetected. By the time the illness becomes evident it's too late to cure and the person dies from it. If they had insurnace they would have had the physical exam, the illness would have been detected while still cureable, and they would have lived. This is where the 45,000 estimated deaths from lack of insurance are generally coming from. Without the insurance people will not spend the money for routine physical exams when they have other pressing financial obligations. With insurance they will and their lives are saved (at a much lower cost overall).

The average assets of a person at retirement age are only about $100,000 and most of that related to their home ownership. For perhaps 40% of Americans they have literally no investment assets that generate any income at retirement. They have Social Security and that's it and Social Security for these people sucks because they receive less than $15,000/yr from it and often as low as $8,000/yr or less. Ever tried to live on $660/mo when you have to pay rent, utilities, food, and other basic expenditures and you physically can't work anymore?  Social Security, in spite of liberal propaganda, really sucks for most people.

Getting back to this thread.

We're seeing projections of rate increases from 8% to as much as possibly 20% for 2015 under Obamacare. Those that currently have health insurance because of the subsidies will not be able to afford this increase if it's an "out of pocket" increase for them. Additionally if these increases are "out of pocket" the formula for the subsidies is out of date because the costs to the person for the insurance will be more than they can afford.

Of note this problem is an implementation problem and not a long term problem. It exists because the "penalties" for not insuring were not great enough  to induce "healthy" people to take out private insurance as well as the fact that the Employer Mandate was delayed. Both of these resulted in "healthy" people not becoming insured so the costs incurred by the insurance companies are disproportionately related to treatments of "sick" people with high medical costs. This is an "implementation" problem that will sort itself out over the next 5-10 years but it is a current problem to be dealt with.

What should Congress do about this problem.  

Jul 20, 2014 17:09:39 GMT pjohns1873 said:

The person who cannot afford even monthly payments probably has no one but himself (or herself, as the case may be) to blame for it.  This is where the matter of personal responsibility comes into play.  (I simply decline to see the individual as some lost soul, unfairly buffeted by The Impersonal Forces of Society.) 

The belief that people have "no one but themselves to blame" when it comes to takeing on additional debt is very uninformed. Let me provide an example related to Detroit residents and they water service (ironically John Locke argued that all people have a Right to Water). Detroit had a problem with collection of the water bills so it began shutting of customer water supply. It allows them to come in and pay just 30% of the bill and carry the balance forward increasing their future bills. Read the next two paragraphs from a story about it.

finance.yahoo.com/news/happens-detroit-shuts-off-water-115500945.html

So the city manager, Latimer, is claiming that most are just irresponsible because they come in to make a payment the facts show otherwise. The people can't afford the water and their other bills as well. They're "robbing Peter to pay Paul" because they can't live without water. They also can't live without electricity so when their power is turned off they'll have to rob funds that are needed to pay the rent or the water bill. 

What part of that do you fail to understand. Millions of households just don't have the money to pay all of the bills. Some are not able to get work, like in Detroit, while others are simply paid so little and the cost of living is so high that they're always "short of cash" when it comes to paying their bills. They literally live hand-to-mouth from week-to-week and any new "cost" is unaffordable for them.