Browsing the blog archives for March, 2014.

The Obamacare Alternative

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There might be one last chance to get rid of Obamacare IF the right people are elected and IF legislators are willing to take a bold stance. When I state my opposition to Obamacare, I am frequently asked what I would do to “solve the problem.” I put a proposal on the table before the Affordable Care Act was passed, but it’s time to address it again. You might not like everything I have to say, but don’t decide until you read the entire post. I’ll try to keep it as short as possible.

First things first…we must identify the problem, and it must be significant enough to warrant government action. It’s a problem when Americans without insurance get hit with a huge medical bill. They get treated anyway (EMTALA), so either the bill either destroys them financially or gets passed along to the taxpayer, or both. This problem is substantial and it MIGHT warrant government action IF the action actually helps solve it.

It’s also a problem when Americans do not take care of day-to-day health issues because they choose not to. The CHOICE to which I refer includes those who “cannot afford” to go to the doctor but seem to find a way to pay for their cars, cell phones, and cable TV. This is an unfortunate situation, but it is not a problem that warrants government action. As a matter of fact, Washington is already doing too much harm in this area already.

Distinguishing between these two types of problems is important because those on the left emphasize the first kind when proposing alleged solutions to the second kind. In other words, they carp about the $100,000 cancer bill that wipes out a family and offer all-inclusive Obamacare as the solution. If you have a mouse loose in your kitchen you need a mousetrap, not complete fumigation of your entire property.

So let’s talk about the first problem, catastrophic health care. Even if you don’t like the idea of the government paying for anyone’s healthcare, EMTALA already guarantees it and this policy is not going to change. Besides, this is the problem that concerns many Americans. If you don’t address it, you won’t gain enough momentum to win the battle. I suggest that we do the following legislatively as a package:

  1. Repeal Obamacare.
  2. Provide a government-financed, basic catastrophic healthcare plan to all American citizens not on Medicare. For example, it might pay 75% of medical bills in excess of $15,000 per individual per year. The plan would be administered by insurance companies base don a bidding process. You don’t choose your doctor or your hospital. The idea here is to make a catastrophe manageable, NOT pay the entire bill or provide special benefits. If that’s not good enough for you, then you need to purchase an additional policy on your own.
  3. Finance the catastrophic plan with a payroll tax added to Social Security. This means that ALL WAGE EARNERS must pay for it up to the current wage limit.
  4. Americans who buys their own policies get a credit for the average basic catastrophic healthcare cost. For the sake of argument, let’s assume that this is $1500 per person per year. When someone purchases a more complete policy (i.e., lower limits, choose your own doctor, etc.), this $1500 is transferred to the new insurance company and reduces the cost accordingly, so those who buy their own insurance aren’t paying twice.
  5. Other provisions, such as the ability to purchase health insurance across state lines, flexibility for health savings accounts, etc, would also be included.

This type of plan offers many benefits, including:

  1. It addresses the trauma of catastrophic healthcare coverage and removes it from political debate.
  2. It requires ALL wage earners to pay for the program, although low wage earners will pay less.
  3. It makes the issue of pre-existing conditions less relevant because everyone receives catastrophic care.
  4. It reduces the amount of unpaid hospital bills passed along to those who are insured because a significant portion would be covered by the catastrophic plan.

This plan isn’t ideal. For example, some will argue that a government-financed catastrophic plan can easily expand, but this expansion is already happening anyway. Some (like me) who want to eliminate payroll and income taxes altogether would argue that this plan expands the roll of the IRS. I would prefer a complete replacement of income taxes with a sales tax, in which case the catastrophic care tax could be rolled into the sales tax. Those on the left would argue that it still leaves unpaid bills for those who receive catastrophic care. This is true, but it’s their responsibility to purchase their own policy or budget accordingly if they want additional coverage. They will argue that we’re creating a two-tier healthcare system. I agree, but there’s no alternative unless you are willing to merge both tiers in the middle. I’m not.

If you still have doubts, ask yourself why such a simple, limited, and clearly defined approach like mine was rarely if ever discussed by those on the left before Obamacare came along. The answer is twofold. First, by addressing the real problem and nothing more, it removes much of the emotional appeal for national healthcare—what socialists really want. Second, this plan requires that all wage earners pay for it through payroll taxes; on net, it doesn’t add to wealth redistribution.

I believe we can only get rid of Obamacare if we offer a package deal that takes the catastrophic card off the table in a simple and efficient manner. This is one way to do it.

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Update on the GM Crisis

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Details on the GM crisis are continuing to unfold. According to the Wall Street Journal, it appears that the entire ignition problem can be traced to a $2-5 part. Transportation Secretary Anthony Foxx is insisting that the NHTSA would have acted sooner, but its investigation of 3 of the crashes in question were inconclusive. Here are the 3 key issues at this point.

1. GM knew there was an ignition problem–probably for 10+ years–and could have fixed it but did not. GM has immunity for pre-2009 cases because of the bankruptcy deal and is not commenting on calls to waive it. The company insists that it’s committed to doing the right thing, but that currently includes $500 for unhappy customers towards the lease or sale of a new GM vehicle. Just imagine if Toyota had suggested this as the fix for it’s brake crisis.

2. The NHTSA either chose not to pursue the case or lacked the ability to investigate complaints properly, or both. Our taxpayer funded “watchdog” is demanding answers from GM but it is unclear what will be done if the answers are not satisfactory. A serious, independent investigation of the NHTSA is in order.

3. At least some of the GM executives involved in the bankruptcy restructuring negotiations had to have known at the time this would probably be made public at some point, but they said nothing. That deal was pushed by President Obama and the UAW. It allowed the “new GM” to obtain tax benefits by counting some future profits against some “old GM” losses, but did not require the “new GM” to accept product liability linked to the “old GM.”

A few Democrats are calling for more investigations, but none have called for GM to waive its immunity and accept all legal responsibility. In the end, GM might very well be pressured into establishing a “fund” for the victims, but my guess is nothing more. The goal now is the pin the problem on the “old (pre-bailout) GM.” It’s still difficult to tell exactly how this case will end, but it has already raiseed serious questions about GM, the NHTSA, and the entire bailout process. There’s still more to come.

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GM is back…

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It hasn’t been long since President Obama proclaimed a bailout victory for General Motors, but the automaker is back in the news. It seems that GM knew about an ignition switch defect for 9 years and did nothing about it. At least 13 Americans died driving Chevys as a result.

This revelation reminds me of the Toyota brake crisis in 2009-2010, when the company was accused of ignoring a faulty electronic throttle, ultimately causing some cars to accelerate out of control and klling drivers. The mainstream media, big labor, and the Democrats pounded the Japanese carmaker for months, even demanding that the CEO testify before Congress. Perhaps you remember that former Toyota attorney and self-described whistleblower Dimitrios Biller claimed to have evidence of widespread corporate negligence. You may recall when James Sikes claimed that his 2008 Prius began to accelerate on its own and could not be stopped. At one point, US Secretary of Transportation Ray LaHood declared, “We’re not finished with Toyota…” and even advised Toyota owners not to drive their cars.

In the end, Biller’s claims were dismissed and he was ordered to pay $2.6 million for confidentiality breaches. Sikes’ story turned about to be a fraud as well. And on February 8, 2011, the long-awaited US government investigation showed no link between electronic throttles and unintended acceleration in Toyota vehicles. Most of the customer complaints turned out to be driver error and the legitimate ones were tied to sticky floor mats, not a mechanical cover-up. Toyota’s long-term reputational and sales losses will never be fully known, but they were astronomical, and certainly not proportional to the company’s negligence in the case.

But now it’s GM’s turn. Amidst the current crisis, CEO Mary Barra claims she’s personally directing the recall of 1.37 million GM cars. According to a company spokesperson, “GM is focused on ensuring the safety and peace of mind of our customers involved in the recall. Our principle throughout this process has been to put the customer first, and that will continue to guide us.” All of this sounds nice, but terms of the Obama-brokered bankruptcy shield GM from liability stemming from incidents prior to 2009. This means that many or perhaps all of the families who lost loved ones as a result of GM’s negligence may recover nothing, even though some of the GM representatives negotiating the bankruptcy were probably aware of the problem.

What I don’t hear now is the NHTSA constantly demanding answers and massive recalls from GM. I don’t hear US Secretary of Transportation Anthony Foxx advising owners of GM vehicles not to drive them. Sure, the regulators are going through the motions. I see only modest coverage of this scandal in major print and television outlets.

Why the double standard? Toyota is a foreign-owned company and has built high quality cars in Japan and in the US for decades largely without union interference. On the other hand, the UAW owns a significant chunk of GM and the carmaker must succeed to justify the Obama bailout. The Administration has a personal stake in this debacle and will do all it can to minimize its effects.

It will be interesting to see how this case unfolds, but it already smells of cronyism.

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Who Decides…A Final Thought

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My previous post was apparently a bit controversial. Society programs us to think certain ways on certain issues. The same guy who demands his freedom on issue A is often unwilling to let you exercise yours on issue B. There’s a shortage of intellectual honesty.

The Constitution is an excellent philosophical and practical guide when individual rights are in question. I’m not interested in arguing the same sex marriage issue in this post, but IF there is such a thing as a legally recognized marriage between two members of the same sex, THEN individuals who pursue this course must understand that others might have serious moral concerns about the lifestyle. Those who object to the concept of same sex marriage are free to make their arguments in the public square, but they are NOT free to threaten or assault their opponents. But gay couples must recognize that when their lifestyle directly challenges a moral conviction, others should not be forced to engage in commerce they find offensive. Some tolerance is required on both sides.

It will be interesting to see what happens if a gay couple insists that an Islamic bakery prepare their wedding cake.

Pedro made an interesting point when he asked why businesses are not afforded the same rights as individuals? They should be, as businesses are merely individuals engaging in commercial activity. But the media and the political left constantly scapegoat firms as villains looking for opportunities to deprive employees of health care, pay people less than they should, and otherwise cheat the general public. But free exchange is moral and is largely responsible for the advanced society in which we live. Those running the country fail to understand this and are doomed to paddle upstream until they do.

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