A Little More of That
Red State looks at Tom DeLay's impact on state races in Texas. Florida News looks at who takes money from Tom DeLay and who gives it back.
Christian Liberal is not an oxymoron
[CREW] has been searching for a Member of Congress to file with the committee, but so far, no Member has stepped up to the plate. Do they fear retribution? We think they do..."
But serving in Congress also gave Chris a chance to see firsthand the crippling effect of cynical partisanship. Honest debate was less common than partisan gamesmanship, genuine compromise was virtually unheard of, and the public interest consistently took a backseat to political interest. Chris became a prime target of the infamous 2003 Republican redistricting effort in the Texas Legislature, and he was defeated in his bid for reelection after his district was redrawn.
Not content to stand idly by and stomach the violation of laws and abuse of power that accompanied the redistricting effort, Chris filed a formal ethics complaint against House Majority Leader Tom DeLay in June, 2004, breaking a seven-year "ethics truce" in Congress. Four months later, the House Ethics Committee responded by unanimously admonishing DeLay on two of Chris's charges and leaving a third on the table pending a criminal investigation in Texas.
Tonight, there is violence in our streets, corruption in our highest offices, aimlessness amongst our youth, anxiety among our elders, and there's a virtual despair among the many who look beyond material success for the inner meaning of their lives. And where examples of morality should be set, the opposite is seen. Small men, seeking great wealth or power, have too often and too long turned even the highest levels of public service into mere personal opportunity.
Now, certainly, simple honesty is not too much to demand of men in government.
There are 49 days left to the election, and this number 49 is
significant because in 1949 a young reform mayoral candidate beat the
Frank Hague machine, and now a young reformer is going to beat the
current machine and turn government back to you. That reformer is me.
Suppose a brother or sister is without clothes and daily food. If one of you says to him, "Go, I wish you well; keep warm and well fed," but does nothing about his physical needs, what good is it? In the same way, faith by itself, if it is not accompanied by action, is dead.
While President Bush zooms around on Air Force One, talking to pre-screened crowds about his plans for Social Security, blithely ignoring the reality that Americans hate his ideas, he is totally ignoring the real emergency in America’s Social Safety Net.
If you look at the latest report from the Medicare Trustees (www.ssa.gov/history/pdf/tr00summary.pdf) (sorry, I can't get it to work as a link). I’ll summarize for you: Medicare is in deep doo-doo. Let me hype some hysteria before I save the universe.
The DI (Disability Income) portion of the fund will begin paying out more than it takes in no later than the year – wait for it – 2007. The HI (Hospital Insurance) portion will last a full three years later and begin losing money in 2010. The worst case scenario is that both will be flat broke by 2012. However, they are supposed to last until 2023 and 2025 respectively.
To me, burning very expensive jet fuel in Air Force One to run around playing Chicken Little about Social Security while totally ignoring Medicare is tantamount to auditioning for the role of Nero. All we need is a fire and a fiddle.
The SMI (Supplemental Medical Insurance) portion – the part that pays for Medicare B – is expected never to run a deficit because the government exercised rare good judgment and passed a law that requires annual costs be automatically split between government and recipients in such a way that costs are just covered. However, by only covering those people who are both poor and most likely to have high medical bills – the “typical” Medicare recipient makes only $14,300 and has at least two chronic medical conditions – the cost of Medicare B will continue to rise. From around $66 last year, the monthly cost of buying Medicare B for beneficiaries is now $78.20.
At the lower cost, when combined with out-of-pocket expenses, it still represented as much as 23% of the average recipient’s total expenditures. If Medicare B continues to cover only the old and sick; it will continue to rise and eventually become too expensive for recipients to pay for. Already, studies estimate that only half of all eligible people actually enroll in Medicare B programs to help pay the costs of premiums. As the cost of Medicare B rises, healthy people opt out of the program, so that only the very worst remain covered. Currently, only 5% of all Medicare recipients account for 47% of Medicare B spending. 20% of all recipients account for 84% of spending. The more that healthy people that drop out the worse the program works for everyone.
The only way to reverse this trend is to use the principles of insurance. Rather than the inevitable cutting of benefits, raising of entry requirements, and/or raising of taxes, it is better – and more actuarially sound – to expand the program. If you open it, as it now exists, then the government will be bound to kick in 75% of monthly premiums. That will hardly begin to save money.
However, it can be saved by operating under good insurance principles and opening it to any American to buy into at full cost. That raises the price from $78 per month to $78 per week. That’s a lot of money. If the cost is split between employer and employee, then the total out-of-pocket is $39 per week. A rise in minimum wage of $1 per hour allows an employee to pay that without actually losing any money they already have. Granting a tax abatement to small businesses to cover that same level of expense makes it a wash to small employers.
This proposal gives millions of Americans access to health care. It protects Medicare B for older Americans, and possibly even makes it cheaper for them. It allows small businesses to build a benefits package that will compete with larger employers. A safety net that makes the market place more competitive. That should be something that both Conservatives and Liberals can get behind.
I am forced to admit that, as much fault as I find in Ayn Rand’s Objectivism philosophy, she did provide one of my favorite quotes in arguing for it.
“A lie,” she writes in Atlas Shrugged is the worst insult you can give a man. It tells him that you find him incapable of dealing with reality.”
Reality is certainly a problem for many people on the political right. Take, for instance, this quote from the 2004 State of the Union Address,
“A government run health care system is the wrong prescription. By keeping costs under control, expanding access, and helping more Americans afford coverage, we will preserve the system of private medicine that makes America’s health care system the best in the world”. Actually, it is the last part that shows a distance from reality. The Heritage Foundation was quick to pick up the lie to push its own agenda for health care, though.
The truth, however, is that by almost any objective measurement, the US does not have the best health care system in the world. For instance, Health Policy Reform actually finds that the US lags behind such countries as the UK, Germany, and Switzerland. Groups like Physicians for a National Health Program are even pushing to implement systems that emulate those in other countries.
Such efforts, however, are as much lacking a touch of reality as those of the far right. The truth is that there are too many interests vested in the current system to implement such a huge upheaval. While I believe all elephants can be eaten one bite at a time, it would be pure gluttony, and foolish, to try to eat the biggest elephant simply because it looks tasty.
Health care reform is badly needed, but it must begin with where the system is now. It isn’t exactly broken, because it works for a lot of people. What is needed is a way to make it profitable for those who lack access to the system to gain that access. That means finding a way to enlarge the system while still operating on sound. Specifically, we have to utilize the principle of risk averaging and the law of large numbers.
Risk averaging is exactly what it sounds like. Let’s say there is a ten percent chance of every person in America incurring a one hundred dollar health care bill this month. If you have a group of one hundred people; then you can be sure that ten of them will need to pay one hundred dollars worth of medical bills each. You don’t know which ones, and it doesn’t matter. What matters is the risk is averaged among the whole group. To be profitable, you only have to charge the hundred people enough to pay a little more than the total of the medical expenses. In this example, you only have to charge each of the hundred people ten dollars to break even. If you charge eleven, you make profit.
The law of large numbers says that such percentages are more precise in larger groups. The ten percent chance in the above example is for every month, so some months you’ll have more and some you’ll have less. To remain solvent, you have to maintain a large amount of reserves to cover the months when lots of people get sick. If you increase the pool from one hundred people to one thousand people; the monthly expenses get larger, but the percentage fluctuation from month to month gets smaller. If you increase the pool to a million people; then the law remains true.
In other words, insurance works best when it insures a lot of people who might need it, but won’t necessarily need it all the time. If you have a small group; then it doesn’t work so well. If you have a group that has a lot of sick people; then it doesn’t work so well. Interestingly enough, a large portion of people who do without health care fall into the first group and a large portion of people in the second group are covered as a group in violation of good insurance principles.
The first group is the seventeen million people in the country who work full-time in this country but do not have health insurance. The vast majority of these people work for small employers (less than a hundred people) where it is too expensive for the employer to provide health care benefits. These people, who are generally between twenty-five and fifty, usually have at least one child to take care of – who usually doesn’t have health insurance, either.
The second group is the forty-one million people who are enrolled in Medicare. Since only the elderly and disabled are eligible for this program, it operates against principles of good insurance. Rather than spreading risk between members, it builds risk cumulatively. The result is higher costs to the government, higher costs to beneficiaries, and higher costs to taxpayers who ultimately pay for the program.
The solution is simple. Combining the two groups would create a larger group – which by itself averages costs downward – and a healthier group – which pushes average costs downward. Providing small business owners a tax incentive to help pay for this coverage would also allow them to compete more effectively with larger companies who can afford private benefit programs. Opening Medicare B for full buy-in to all Americans (and even non-Americans – why deny a foreigner the ability to see a doctor if they can pay for it?) accomplishes this and does it in a way that makes sense – and dollars.
The only thing standing in the way of this plan is an ideology that is blind to the real suffering of both elders and working people. It is an ideology that defines as good the effects of any tragedy so long as the government does not try to mitigate the effects. It is not too much of a stretch to say it is an ideology that is killing people. It is certainly an ideology that denies reality. As Rand would say (though she would choke in fury at my using her words to justify helping people), it is an ideology that hands us, the American people, the worst insult possible.
The first two minutes of every hour you, and every American who has a job, work is dedicated to one specific government program – Medicare. If you are self-employed, you pay the equivalent of four minutes of every hour for Medicare tax. According to the Bureau of Labor Statistics that means one hundred forty million people will pay three percent of every penny they make to make sure that Medicare has enough money to provide health care for the aged, disabled, and dependent. Even setting aside the fact that Congress has decided to cut ten billion dollars over the next four years, Medicare still qualifies as the most unfair tax paid by many Americans.
It is unfair because about three and a half million self-employed persons and well over fifteen million employees do not have health insurance for themselves. Yet every week, these employees donate an hour and twenty minutes of their pay to providing someone else with insurance. What could be more unfair than to ask someone to give up money they desperately need to provide a benefit they don’t receive themselves to someone they don’t even know?
Don’t for a minute think that it is only part-timers or teens working after school, either. The Robert Wood Johnson Foundation released a statistical report this week that debunks that favorite Republican myth. In Texas, up to a third of all employees do not have health benefits. Almost a fifth of the states have more than a fifth of their employees that are ineligible for benefits. Somehow, I don’t think there are that many kids working after school. If there are that many part-time workers; then our economy is seriously about to crumble.
Let’s not forget the kids, though. In more states than not, employees with kids but without insurance outnumber employees with kids and insurance. That puts a strain on the states’ Medicaid program – which provides insurance to poor children. That, in turn, puts a strain on the states’ budgets. That would normally mean that state governments take higher taxes from their citizens – but everyone knows that all taxes are evil. So, what it really means is that money that should go to education and other vital programs are short-changed. In other words, the pain gets spread around further, but not necessarily any thinner.
What makes it even more unfair is that it is totally unnecessary. The federal government already runs a program that would alleviate this problem. It’s the very same program these people are already paying taxes for but are barred from participating in. It’s Medicare. Medicare B is an HMO-like program where recipients pay a small monthly participation fee – currently around fifty dollars a month. The government matches this at a rate of three to one to provide health insurance. For those that don’t like “big gubment” running their lives, Medicare C offers buy-in to privately run HMOs for slightly higher costs.
If Medicare B were open for buy-in at full cost (paying all four dollars instead of just one); then a completely portable and cost-efficient basic medical coverage would be available to every American. If this were enacted in conjunction with a one dollar an hour minimum wage hike, plus a tax incentive of equal value to small employers, the cost would be fully recovered by both employer and employee. It still wouldn’t cover the cost of prescription medicines or hospitalization, but it would be a step in the right direction. If existing insurance companies were allowed to compete through Medicare C; then competition will still work to keep costs down.
More workers covered, small businesses better able to provide benefits (which results in fewer missed work days and less job turnover), and more money flowing into Medicare. Someone please tell me where there is a downside to this!
Rather than tearing Medicare apart, what needs to be done is to expand it. Insurance works best when very large groups exist to defray average costs. What group can possibly be bigger than the entire population of the United States? (Okay – technically, the world’s population, but that is beyond the scope of this discussion.) Another aspect of Medicare B is that it automatically adjusts the monthly premiums to be revenue neutral. That means that as more people enter the insured group, driving down the average cost of insuring each one, individuals are rewarded by paying a lower monthly fee. Wow! We can actually maintain benefits and lower the out-of-pocket expenses for seniors.
It isn’t wrong to stand up for those who are striving to make their lives better. In fact, it is morally reprehensible to kick them in the teeth by refusing to allow them a means to take care of them selves and their families. Medicare B is not a perfect plan. It does, however, take the injustice out of the first two minutes of every hour fifteen million Americans will work today.