What’s a little fraud among friends? Medicare, Medicaid fraud enforcement

There is a 31 year old Las Vegas, Nevada resident who recently pleaded guilty to two felony counts related to health care fraud. [LVSun] There were 100 prosecutable health care fraud cases in Nevada in 2012, that would be 100 too many.  The frauds come in a variety of manifestations: drug abuse, bogus claims, over-billing, identity theft, and staged “accidents and injuries.”  Some felony-minded souls appear to believe that a little fraud is allowable in order to reap a bit of reward from the burgeoning coffers of the health insurance corporations.  It isn’t.  The situation becomes unconscionable when Medicare and Medicaid are the targets of the fraudulent activities.

Last year saw some particularly egregious cases, such as the following:  “federal authorities announced on May 2 they had arrested 107 health care providers, including doctors and nurses, in several cities and charged them with cheating Medicare out of $452 million.”  [Forbes]

Speaking of Medicaid, in  April 2012 an Inspector General’s report for FY 2011 informed us:

In fiscal year 2011, MFCUs conducted 10,685 Medicaid fraud investigations and saw 824 convictions. MFCUs conducted 4,134 investigations into patient abuse and neglect, including patient funds cases, and saw 406 convictions. [FHC] *MFCU: Medicaid Fraud Control Units

The top five states for Medicaid fraud prosecutions were: California, Texas, New York, Ohio, and Kentucky.  [IG2012]  The report on Medicare wasn’t any more comforting:

Federal officials set up the Medicare Fraud Strike Force in 2007, which visited at random nearly 1,600 businesses in Miami, ground zero for Medicare fraud, that had billed Medicare for durable medical equipment.  Officials found that nearly a third of the businesses, 481, didn’t even exist, yet they had billed Medicare for $237 million over the previous year, according to National Public Radio. [Forbes]

Medicare and Medicaid aren’t functions of those ravenous profit centers otherwise known as the health care insurance corporations, thus even the dubious rationalization doesn’t apply.  That hasn’t stopped the fraudsters:

“Since their inception in March 2007, Medicare Fraud Strike Force operations in seven districts have obtained indictments of more than 825 individuals who collectively have falsely billed the Medicare program for more than $2 billion .  In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.”  [DoJ]

That’s the bad news, there is some good news to report on the subject of Medicare fraud:

“The Obama Administration has made important strides in reducing fraud, waste, and abuse across the government. Over the last two years, the Centers for Medicare & Medicaid Services (CMS) has implemented powerful new anti-fraud tools and designed and implemented large-scale, innovative improvements to our Medicare program integrity strategy to shift beyond a “pay and chase” approach to preventing fraud before it happens. CMS is also collaborating more with the private sector, law enforcement, and our state partners to harness best practices in our fight against health care fraud.

These efforts are paying off. In FY 2012, the government recovered a historic $4.2 billion and has returned a record-breaking $14.9 billion dollars to taxpayers between 2009 and 2012, up from $6.7 billion dollars over the prior four years.”  [DHHS]

We could happily note the improvement in Medicare fraud enforcement efforts and the returns that accrue to American taxpayers, BUT the House Republicans — in the “interest” of saving taxpayer dollars (and not raising taxes on millionaires and billionaires) — offer their “serious” budget proposal which transforms Medicare into a voucher/coupon program in which the Every Man For Himself policy extends into the health care insurance domain.

What could possible go wrong? Let us count the ways.  (1) Nothing in the GOP or Ryan Plan puts the brakes on the increases in health care costs — only in the individual’s remuneration for health care insurance costs.  There is no inducement in this proposal to reduce either the costs or the urge to game the system because of the mounting out of pocket costs.  (2) It is assumed that if Medicare as we know it is mutated into a privatized system that the fraud enforcement costs will be reduced at the federal level, which totally ignores the expenses incurred at the state levels wherein much of the anti-fraud activities take place.  (3) We cannot assume that the expenses involved in prosecuting national cases of interstate health care insurance fraud will be magically disappear by merely transferring the locus of funding — the Department of Justice might still exercise its authority to prosecute such cases — of course at public expense for the benefit of the health care insurance industry.

What we should be considering, in our own economic self interest, is the enhancement of funding for Medicaid Fraud Control Units, and the efforts to increase the effectiveness of the Health Care Fraud Prevention and Enforcement Action Team (HEAT), a joint project of the Department of Health and Human Services and the Department of Justice.

Yes, We Could Be Having A Serious Deficit Reduction Discussion?

At some point in the ongoing discussion about federal debts and budget deficits everyone needs to get serious.  Serious, that is, about doing that which will reduce our federal deficit spending.  Really serious, not as in “let’s wave a Debt Crisis Flag every three months to advance an agenda including the privatization of Social Security and the voucherization of the Medicare program.”

Let’s start with the obvious.  Social Security doesn’t add a dime to the national debt.  If the words of a progressive blogger won’t suffice, how about listening to former President Ronald Reagan?  (video here)  So, discussing “reforms” to the self funded Social Security program as a means to reduce the national debt is extraneous to any serious deficit reduction discussion.

One way to approach the privatization of Social Security is to change the frame of reference, such as altering the connotation of “entitlement” from some earned benefit to which we are entitled because we paid for it, to one which has a tinge of “welfare” about it.  Social Security is not a welfare program — it is an earned benefit.  People who have paid into it all their working lives have every right to expect to be getting something back.  Social Security is not a retirement program.  It is a program which seeks to prevent abject poverty for elders.   Nothing in the Social Security program prevents anyone from maintaining a self-contributory retirement account of any shape or form.   Indeed, the benefits from Social Security are low enough that retirement to the Gated Golf Paradise Of Your Choice can only happen if you have a self-contributory retirement savings program. Anyone suggesting that “entitlements” such as Social Security “have to be reformed” to ease the burden on the federal debt (1) doesn’t have a clue what they are talking about, and (2) is regurgitating anti-safety net talking points from radicals who want to privatize all retirement income programs to the benefit of Wall Street investment firms.

Medicare does have some issues.  The first, and most readily apparent, is that the Medicare Part D (prescription drug) segment is, and always has been, underfunded.  However, the really big monster under the Medicare bed is the increasing cost of health care in America.  When private health care corporations started buying up religious organization/private, state, and locally supported hospitals the profit motive surged in the sector.  Health care must now generate a profit.  Savings, which were once achieved for the purpose of reducing costs for local tax payers or donors to religiously based institutions, now accrue to the corporate bottom line — not to taxpayers, donors, or patients.

The second factor is technology.  We do have the best medical treatment providers in the world.  However, best often translates into “most expensive.” We have all manner of devices and gadgets and equipment and gear to save or sustain lives.  Our hospitals take it as their mission to save or sustain life, which is all well and good until the emotional meets the economical.  There are “death panels” in this country, but they aren’t governmental — they are familial, with families making ‘end of life’ decisions which horrifically in some instances are based on what the family can afford.   Frankly speaking, we don’t do a very good job of educating our citizens about advance directives.  Some conservatives set up a howl when they noticed the Affordable Care Act provided for paying physicians or other medical professionals who provided ‘end of life’ counseling for their patients — however, a little counseling might go a long way toward reducing the anxiety of hospital personnel and the trepidations of family members.  It could also provide some savings in the long run.

Returning to the Big Problem — the Medicare Part D component; we knew in 2003 that the Part D segment would  cost approximately $534 billion.  [Foster pdf] Simply put, “the drug benefit had no dedicated financing, no offsets and no revenue-raisers; 100% of the cost simply added to the federal budget deficit,..” [Forbes]  The part about “dedicated financing” is important.  While the Social Security trust funds have dedicated financing (payroll taxes) there were no provisions to increase the revenues available to finance the Part D enhancement.   There is something unappealingly ironic about the current GOP insistence on “entitlement reform” because “Medicare is broken,” when it was the GOP majority in 2003 that Broke the Program.

Ways to ‘reform’ the Medicare program have been suggested which do not require “voucherizing” the entire thing and sending seniors back to pounding pavement in order to find affordable health insurance plans.  We could consider means testing for the prescription drug benefit.  We might take under advisement lifting the earnings cap for payroll taxes from the current $110,000 level and dedicating a portion of the revenues toward the Part D program.  We could allow the Department of Health and Human Services to negotiate for prescription drug prices the way the Veterans Administration bargains for prescription drugs for VA hospitals and clinics.

If we are REALLY REALLY SERIOUS about ‘reforming’ Medicare then it would be helpful to get past the silly voucherization proposals, referred to as “structural reform” in Speaker Boehner’s response to the President, [Boehner pdf]  and get to the core of what makes health care expensive — we could talk about health care cost containment, dedicated financing for Medicare, and lifting the earnings cap.   We might also want to take a deep breath and see if the Affordable Care Act’s provisions, such as eliminating tax payer subsidies for profitable private Medicare Advantage insurance policies, could achieve some savings over the next decade.

However, it’s getting relatively obvious that the Republicans aren’t terribly serious about deficit (debt) reduction when their offers are strictly ideological (privatize and voucherize) and the proposals don’t address the monster of their own creation — the lack of financing for Medicare Part D.

Buzz Words and Generalities.   Speaker Boehner is offering (pdf) “pro-growth tax reform that closes loopholes and deductions while lowering rates.”   This phrasing is coming perilously close to the older verbiage: Waste, Fraud, and Abuse.  As if we could make up any gaps in program funding by simply cutting out the WFA.  Most anti-tax advocates cite the WFA as some massive potential figure which if reduced could cure all our fiscal woes.  When pressed to provide total figures associated with the largely mythical WFA these advocates provide outlier examples of welfare fraud, some particularly egregious Pentagon payments to contractors, and perhaps a bit of information from Internet e-mail chain letters.  The WFA numbers have yet to yield up the level of financing needed to close budget gaps in the Pentagon or any other government activity.

The arithmetic from “loopholes and deductions” doesn’t add up either.  The same sort of fantastical thinking is required to equate the WFA savings and the L&D revenues.  These mythological creatures are based on the same gossamer upon which anti-tax advocates conjure up the notion that an inordinate amount of the U.S. budget is allocated to foreign aid.  The average American has come to believe that foreign aid takes up 10% of the federal budget, when if fact it consumes only 1%. [NYM]

The Republicans also appear to be consuming their own rhetoric on savings associated with reductions in federal employee compensation.

“Cutting pensions and benefits for government workers is popular, but once again most Americans overestimate how much that costs the government. On average, Americans think the federal government spent 10 percent of its 2010 budget on pensions and retiree benefits; the OMB figures indicate the real number is about 3.5 percent.” [CNN]

The moral of this story is that if the amounts of spending on pensions and benefits, or the amounts that can be retrieved by closing loopholes and eliminating deductions, are grossly inflated, then the resulting policy and budget decisions will be widely off the mark.

Unfortunately, the same type of ideologically based proposals which are the core of Speaker Boehner’s “structural reforms” i.e. voucherization and privatization of Medicare appear to inform his suggestions about federal employee compensation, and another favorite GOP target, SNAP (food stamps.)

The program is already under assault from all sides, considering the appropriations being entertained in the agriculture bill.

The Senate’s version of the farm bill would reduce overall funding by $23 billion, with a reduction in food stamps of $4.5 billion over five years. The House Agriculture Committee is proposing to cut funding by $35 billion — with nearly half the overall cut coming from reductions in food stamps by $16 billion over five years. [Atlantic]

But there’s a problem here.  Food stamps have a beneficial effect on the national economy.

“Those who believe in cutting SNAP funding as a cost-saving measure should know that food stamps boost the economy — not put a strain on it. Supporters of federal food benefits programs including President George W. Bush understood this, and proved the economic value of SNAP by sanctioning a USDA study that found that $1 in SNAP benefits generates $1.84 in gross domestic product (GDP). Mark Zandi, of Moody’s Economy.com, confirmed the economic boost in an independent study that found that every SNAP dollar spent generates $1.73 in real GDP increase. “Expanding food stamps,” the study read, “is the most effective way to prime the economy’s pump.” [Atlantic]

If the object of the game is to increase federal revenues by generating a higher GDP along the formula proposing that a growing economy produces jobs, and more jobs yield more taxable income, and more taxable income means more revenue — then the GOP has the SNAP portion of the argument exactly backwards.  They are proposing to cut a program which actually generates more economic growth.   If one seriously believes that economic growth means more revenue and hence less indebtedness, then one can’t seriously advocate cutting programs which elevate levels of economic growth.

All Pain and No Gain.  The two sides don’t seem to be speaking to the same fiscal slope, cliff, gully, whatever.  From the Republican perspective the damage to the economy might be done by The Specter of Rising Taxes.  Those legendary Job Creators — who are now seeing record corporate profits while wages continue to stagnate — might not invest, and hence there will be no economic growth.  This is fundamental Supply Side Hoax thinking.  That it has been, and still is, a hoax is demonstrated neatly by this graph from the Federal Reserve Bank of St. Louis:

The blue line represents wages, the red line corporate profits.  If corporate well being were the driver of overall economic growth and  well being then why has the blue line been trending downward since 1970?  The answer is simplicity itself: Supply Side Economics is a Hoax of the First Water.

A deficit reduction plan predicated on ideology, urban legends, misunderstandings, and economic illiteracy isn’t SERIOUS.   That conclusion further advances the argument that the Republicans aren’t really serious about debt or deficit reduction, but merely see the issue as a flag to be waved in the van of their attack on the social safety net, a banner of privatization signaling their allegiance to Tea Party politics.

Playing Percentages With Grandma? Romney-Ryan Medicaid Budget Cuts in NV

The median annual household income in Nevada is $55,726. [Census]  The total population estimate for 2011 is 2,723,322 and of these approximately 12.5% are over 65 years of age.  Some simple arithmetic shows that about 340,415 Nevadans are over 65 years old.   So what?

The question is important because some of these individuals will need home care services to deal with infirmities, some will need assisted living to remain independent, and others will require institutional care, aka nursing facilities.

As we can see from the Kaiser Family Foundation graph above,  more Medicaid resources have been allocated for home and community based care since 1995.  Long term care, which prior to 1995 meant institutional care for the most part, is now 43% home/community based health care services.   The issue now becomes do we want to fund the Medicaid program at a level which will allow more low income  Nevada residents over the age of 65 to remain at home, or do we cut program services such that we cope with only the most medically fragile?

The family issue, for that household earning the $55,726 annually, is how to provide care for an elderly relative who requires medical assistance beyond the financial capacity of the family to provide but who doesn’t need institutional care?  There is no answer to this inquiry from the Romney/Ryan budget.

In fact, if as Senator Heller and some of his colleagues recommend,  we repeal the Affordable Care Act (Obamacare) and do what the Republican ticket suggests — transform the Medicaid program into a block grant scheme — we cut approximately 38% from Medicaid services. [KFF pdf]  If we drill down into state by state statistics, if Obamacare were repealed and the Ryan Budget was adopted our Medicaid program in Nevada stands to lose about 44% of its funding. [KFF pdf]

No one would (or should) be so callous as to suggest we slash funding for those with the most serious medical needs, especially those who need nursing facility care.  However, if we’re looking down the line at a 44% reduction in Medicaid funding for state services then the obvious cuts would come “at the margins.”

Who’s marginal?  Are low income single mothers with two dependent children under the age of 6 marginal?  Are low income elderly persons who can still function — albeit barely –  independently marginal?

The Medicaid program in Nevada* is an insurance program which pays servicers to perform some or all of the following tasks:

-Adult Day Care
-Assistance Shopping for Essentials
-Caregiver Respite
-Case Management
-Companion Care
-Homemaker
-Housekeeping
-Laundry
-Meal Preparation
-Personal Care
-Personal Emergency Response System (PERS)

* In order to qualify for the Nevada Home and Community Based Waiver as of 2012, the applicant’s monthly income must be less than $2,094.  Their countable assets must be valued at less than $2,000.

Now, how many families can afford privately financed adult day care, companion care, housekeeping help, meal preparation, personal care, and shopping assistance? On $55,726 a year?  On an income of approximately $2,000 per month?

The obvious conclusion is that perhaps the Republicans are advocating for Crowded Housing?  If they bemoan the fact that recent college graduates are staying home with parents in a tight economy, think how much more familial the entire living situation becomes when the grandparents — or Uncle Festus or Aunt Minerva — move in?  Especially when the elderly relatives are simply in need of the kinds of home or community based services likely to be declared marginal in cost cutting binges?

While this might all sound a little facetious, the fact is that most houses in the U.S. ( some 67%) have two or three bedrooms. [Census] Every parent’s dream for when the offspring depart, be it the new guest room, the man cave, the sewing room — whatever — fails when a no long total independent older relative needs a safe place to live.

A modicum of concern for middle income families who are struggling to maintain their standard of living might be in order.   If we can assist middle income families with the costs associated with the care of a low income elderly relative; if we can chip in a bit so that a low income  elderly person can remain independent as long as possible — then why is is necessary to cut 44% of the Medicaid program in Nevada so that millionaires and billionaires won’t have to revert to paying the income taxes they were paying back in the Clinton years –  39.6%.  (They are current paying 35%.   All this for 4.6%. )

Let’s guess that the hedge fund managers and Wall Street wizards won’t be decimated by a 4.6% tax increase, but a 44% reduction in Medicaid funding in Nevada will have a profound effect on the other 99.99%.

Heller’s Helpers: Ralph Reed’s Ruminations

The latest flyer in my mail box encourages me to vote for Senator By Appointment Only® Dean Heller in the Nevada senate race because he opposes Obamacare.  The Faith and Freedom Coalition of Duluth, GA assures me that Senator Heller would “repeal Obamacare.”  I’m not surprised, after all this is Jack Abramoff’s former buddy Ralph Reed’s outfit — he, the refuge from the defunct Christian Coalition, would like me to believe that his Koch Brothers financed FFC has my lily-white interests at heart.

So, let me review, it’s supposed to be in my interest to repeal provisions which:

1. Require the posting of health insurance policy information online for easier access by customers?
2. Prohibit health insurance corporations from denying health insurance policy coverage for children with pre-existing medical conditions?
3. Prohibit health insurance corporations from abusing rescission clauses to deny claims for medical treatment?
4. Eliminate those junk insurance policies sold with defined life time benefit limits?
5. Restrict health insurance corporations’ use of annual limits on health insurance coverage?
6. Allow a policy holder to appeal health care insurance corporation decisions in an external review process?
7. Establish consumer assistance services to help people select from a variety of health insurance plans in their area?
8. Provide tax breaks for small businesses which offer health care insurance as part of their employee benefits?
9. Offer relief for about 4 million senior citizens threatened by the infamous Medicare Part D “donut hole?”
10. Provide that cancer screenings, like mammograms or prostate exams, be offered without charging a co-pay or deductible?
11. Fund programs which seek to promote anti-obesity, and anti-smoking campaigns?
12. Fund efforts to crack down on, and prosecute, instances of Medicare fraud?
13. Provides access for individuals to purchase affordable health care insurance policies even if they have pre-existing medical conditions?
14. Extend health insurance policy coverage for young adults?
15. Expand health insurance coverage for early retirees?
16. Fund training programs for primary care physicians, physicians assistants, and nurses?
17. Require that health insurance corporations justify their policy premium increases?
18. Help states offer extended Medicaid coverage for low income, blind, aged, or disabled persons?
19. Fund increased health care resources for rural areas?
20. Funds to construct and maintain community health care centers in under-served areas?
21. Offer prescription drug discounts for senior citizens?
22. Provide wellness visits for elderly Americans?
23. Improve health care services for senior citizens after hospitalization?
24. Assist states toward providing more independent living and assisted care for disabled persons?
25. Require corporations selling health care insurance policies to use at least 80% to 85% of the premiums they collect on — health care?
26. Cut over-payments to health insurance corporations offering Medicare Advantage policies?
27. Offer financial incentives to hospitals that improve the care they provide to their patients?
28. Encourage integrated health care delivery to reduce the need for re-admission to a hospital?
29. Reduce paperwork and administrative costs in health care services?
30. Expand preventative health care services.
31. Initiate pilot programs which bundle health care service billing, to replace the current fragmented billing systems?
32. Increase Medicaid payments to physicians?
33. Provide funding for the Children’s Health Insurance Program?
34. Prohibit the sale of health insurance policies which discriminate on the basis of gender?
35. Eliminate the annual limits on insurance coverage?
36. Provide for health insurance coverage for individuals who are participating in clinical trials?
37. Establish affordable health insurance exchanges in all states?
38. Increase the Small Business Tax Credit for employers who offer health insurance coverage.
39. Promote individual responsibility for health insurance coverage?
40. Increase access to Medicaid services for newly eligible individuals?

I don’t think so.

Senator Heller would probably like to generalize his opposition to Obamacare, it makes for nice soundbites  — but how many of its individual provisions would he really like to repeal?  Perhaps we can guess they’d be the ones putting a crimp in the health insurance corporations’ style — and bottom lines?

Senator Rubio Comes To Nevada Bearing News From The Scarlett O’Hara School of Business Administration

Bill Clinton summarized the GOP theme for 2012: “We left him a total mess, he hasn’t cleaned it up fast enough, so fire him and put us back in.” [MST]  Now Sen. Marco Rubio (R-FL) is pushing the theme in Las Vegas:

Obama “doesn’t understand the free enterprise system,” Rubio said, arguing government is too big and is hurting small business and job growth with too many regulations and taxes.  [LVRJ]

Fact check time.  Actually in terms of the total number of regulations adopted, the Obama Administration is well behind the administration of President George W. Bush.  President Bush approved 931 regulations in his first three years, President Obama has approved 886.  [FC]  So, what would those “too many regulations” concern?

Investment Sector Regulations

The first, and most obvious source of Republican distress over regulations are those which seek to curtail the antics of the investment sector.  Implementation of the Dodd Frank Act means that financialists, eager to pick up where they left off before their pipe dreams of exploiting securitization in the housing market exploded like a pipe bomb, don’t care to have any restrictive oversight of their transactions in the derivatives market.   The MegaBanks would ever so much like to go back to the days before the Volcker Rule and be able to use insured deposits as a back stop for their proprietary trading.  And, the MegaBanks don’t want to write ‘living wills‘ in case their trading desks get out of hand (again) and bring the bank down into insolvency or illiquidity.

The banking sector is also feeling the heat from the Consumer Financial Protection Bureau — which is (to their horror) protecting consumers.   Most recently American Express felt the hammer come down on their illegal practices:

“The Consumer Financial Protection Bureau (CFPB) today announced an enforcement action with orders requiring three American Express subsidiaries to refund an estimated $85 million to approximately 250,000 customers for illegal card practices. This action is the result of a multi-part federal investigation which found that at every stage of the consumer experience, from marketing to enrollment to payment to debt collection, American Express violated consumer protection laws.” [CFPB]

Federal regulators also fined American Express $27.5 million for the illegal activities, and about 250,000 American Express customers will be getting refund checks.

Back in September 2012, the FDIC and CFPB ordered Discover to pay $200 million to 3.5 million card holders and fork over a $14 million civil penalty for deceptive practices. Discover also agreed to stop its deceptive marketing, to make restitution to customers who made purchases, provide refunds to customers without requiring more consumer actions, and to submit to an independent audit.  [CFPB]

Further, what may have the financial sector’s panties in a bunch are the proposed rules from the CFPB on home mortgages.  The CFPB explains:

Mortgage Terms: Under the proposed rule, creditors would have to make available to consumers a loan without discount points or origination points or fees, unless the consumers are unlikely to qualify for such a loan. These options would enable a consumer buying or refinancing a home to better compare competing offers from different creditors, better able to compare loan offers from a particular creditor, and decide whether they would receive an adequate reduction in monthly loan payments in exchange for the choice of making upfront payments.

Interest rates and points: Consumers can pay points, which are expressed as a percentage of the loan amount, and fees to covers costs associated with origination or prepaid interest charges. While these points and fees come in many different names and combinations, they all should function similarly to reduce the interest rate and thus a consumer’s monthly loan payments.

Qualifications for mortgage initiators: Under state law and the federal Secure and Fair Enforcement for Mortgage Licensing Act, loan originators currently have to meet different sets of standards, depending on whether they work for a bank, thrift, mortgage brokerage, or nonprofit organization. The CFPB is proposing rules to implement Dodd-Frank Act requirements that all loan originators be qualified. The proposal would help level the playing field for different types of loan originators so consumers could be confident that originators are ethical and knowledgeable.

Steering: In 2010, the Federal Reserve Board issued a rule that was designed to curtail the practice of loan originators directing consumers into higher priced loans based not on the consumer’s interest, but on the possibility that the loan originator could earn more money. The Dodd-Frank Act included a similar provision banning the practice of varying loan originator compensation based on interest rates or other loan terms. The CFPB’s rule would implement the Dodd-Frank Act provision and clarify certain issues in the existing rule that have created industry confusion.

Mandatory arbitration: The proposal implements Dodd-Frank Act provisions that, for both mortgage and home equity loans, prohibit including mandatory arbitration clauses in loan documents and increasing loan amounts to cover credit insurance premiums.

OK, now who wants to go back to a system in which mortgage terms were intentionally incomprehensible, when a homeowner could pay points and be essentially paying for nothing, when homeowners were steered into mortgage deals in the interest of the bankers, when there were no background checks of any kind on mortgage sellers and no required training, and when if serious problems arose there was no way for the “little guy”  homeowner to have his day in court?

Does anyone really want to go back to the “say anything” days of credit card marketing?  Money kept in the pockets of middle class working Americans by not allowing mortgage manipulation and credit card rip offs is money they could be saving or spending on their families — a far better way to grow this economy than by allowing the rip-off artists to game the system for their own benefit.

Health Care Regulations

Contrary to right wing radio talkers, there has been no government take over of health insurance in this country, and contrary to the hopes of the Single Payer advocates there is no government sponsored health care for anyone other than people over 65 who are enrolled in Medicare.

What we did get in the Affordable Care Act were requirements that health insurance corporations selling group or individual policies provide comprehensive health care insurance coverage.

Under the terms of the Affordable Care Act when the insurance corporation says it is selling you or your business a “comprehensive” or “basic” policy, the policy must include coverage of preventative health care services, inoculations, cancer screenings,  and between 80% and 85% of what they take in as premiums must be used to pay for HEALTH care — NOT executive compensation, advertising campaigns, or other non-medical administrative expenses.

So, would we like to go back to the bad old days of denial of coverage for pre-existing conditions (like being born with a food allergy, or having chicken pox), or for autism screening, for mental health care services, or when the insurance corporations could charge more for women’s policies just because they were women?

We could, for the sake of the MegaBanks and the large health insurance corporations, shave many of the Obama Administration’s new regulations, but the ultimate loser would be 99% of Americans who can’t afford to be ripped off, and shouldn’t be paying health insurance policy premiums for basic services they aren’t getting.

About Those Taxes

Let’s haul out this chart again, illustrating the point that the federal tax rates at their lowest rate at least since 1979.

The chart doesn’t conform to the received wisdom of some in the corporate media and many in the Republican Party — but that’s where we are.  There have also been some 18 tax breaks for American small businesses.  The President has also suggested a tax reform package which would cut taxes for those earning less than $200,000 per year.  [WH] The median income for a family in Nevada was $48,927 in 2011. [DoN]

So, where are all those regulations and taxes ‘hurting’ American small business owners?  The garage owners, the beauty shop operators, the small independent retailers, the lawn care services, the framing subcontractors, the dry cleaning companies, the small hardware store owners, the local lumber yard?

The Republicans need a cover story.  If a regulation impinges on the bottom line of Merger Mania Wealth Management LLC, then they decry all regulations as an impediment to economic growth.  If a regulation requires Bleedem Health Inc. to report a higher “medical loss ratio” then all regulations are detrimental to our economic growth rate.   It’s the old “de-regulation mythology” of the last three decades — and we saw where it got us in 2007-2008.

The Republicans need a narrative.  “Tax and spend” Democrats has served nicely.  No matter that the tax rates are the lowest since the Eisenhower Days, no matter that the rates can be graphed to illustrate the point.  The narrative remains because it serves the interests of large corporations and major banking operations.   Tax dollars appropriated to subsidize multi-national oil corporations are ‘beneficial,’ but tax dollars expended to train workers for 21st century jobs or veterans who seek college degrees ‘create a culture of dependency?’

We DO understand the free enterprise system, and we understand that it works best when there’s a level playing field, with rational controls to prevent exploitation, and consideration given to our entrepreneurs and our labor force of the future.   The short-term vision of the current GOP leadership mirrors the myopia of our current corporate titans — what works to increase the Quarterly Earnings Report is good.  Tomorrow we’ll leave for later.

This Scarlett O’Hara School of Business Administration combined with the  Mr. Magoo Department of Finance perspective is more destructive of American economic progress than the tepid regulations of the Dodd Frank Act and the implementation of the Affordable Care Act provisions combined.

Perhaps they just don’t understand the free enterprise system?

Sunday Stroll: Ladies Day

Elections have consequences.  There could be significant consequences for the Medicaid program in Nevada depending on the outcome of the 2012 election.  Here are two, improved graphics from yesterday’s post illustrating who is served by the Nevada Medicaid program — and who will be impacted by proposals from the GOP (Ryan Budget) to transform Medicaid into a block grant program, and to cut funding by approximately one-third.

The question becomes — where will we cut? From the 58% of the program which serves children?  If we cut all funding from adults, that would save only 19% and we should remember that 150,200 of the people served are adult females, some of whom are pregnant receiving pre-natal care.

Speaking of women:  Planned Parenthood Federation of America informs us there were 133,246 uninsured women in Nevada as of 2008-2009.  Thanks to the Affordable Care Act (Obamacare) 66,623 are likely to qualify for Medicaid in 2014, and  55,963 are likely to qualify for premium credits in the health insurance exchanges.

Laying aside the Republican hyperbolic hysterical generalities about Socialism, Non-existent Death Panels, and Killing Grannies — the Affordable Care Act has some definite benefits for women, which ought to be considered before voting in favor of a candidate who wants to repeal it:

#1. Preventative and wellness visits to a physician — coverage must include screenings for breast and cervical cancer.  #2. Coverage for gestational diabetes screening. #3. HPV-DNA testing for high-risk human papillomavirus (HPV) DNA testing every three years, regardless of Pap smear results. Early screening, detection and treatment have been shown to help reduce the prevalence of cervical cancer. #4. STI counseling and HIV testing.  #5. Contraceptive and contraceptive counseling — and no the government isn’t paying for this, and employers aren’t paying for this — the insurance has to cover it.  #6. Breast feeding support, supplies, and education.  #7. Domestic violence screening and counseling services.  [Time]  And, by the way — health insurance corporations may no longer charge women more for an insurance policy just because they are — you know — female.

Women on the Reservation:  While the Republican controlled House of Representatives stews about expanding efforts to extend protection for Native American women under the provisions of the Violence Against Women Act, [The Hill] there’s still a major domestic violence problem on Reservations.   If one applied the GOP logic to the situation: “Suppose your sister was with you in Washington, DC, and her husband beat her up,” Moore says, “but because he was from Virginia, Washington couldn’t do anything about it.” [MJM]

There’s a little bit of help on the horizon from the Obama Administration’s Department of Justice.  Help for at least four tribes.

“Through this special initiative, OVW will support salary, travel and training costs of four tribal SAUSAs, who will work in collaboration with the U.S. Attorneys Offices in the Districts of Nebraska, New Mexico, Montana, North Dakota and South Dakota.  Specifically, OVW will award cooperative agreements to four federally recognized tribes to select qualified applicants in cooperation with the U.S. Attorney Offices to serve as cross-designated prosecutors.  These prosecutors will maintain an active violence against women crimes caseload, in tribal and/or federal court, while also helping to promote higher quality investigations, improved training and better inter-governmental communication.”

The ladies on the following Reservations will be a bit safer — Pueblo of Laguna in New Mexico,  Fort Belknap Tribe in Montana, Winnebago Tribe in Nebraska, Standing Rock Sioux Tribe, in North Dakota and South Dakota. Or, the House Republican leadership could stop hiding behind technicalities and vacation days and pass the re-authorization of the Violence Against Women Act.

Twenty Three Cents Worth:   Lily Ledbetter (video) spoke to the disparity of pay in too many American workplaces, 23 cents worth on average.  Let’s play with the calculator — the median expected salary for an entry level accountant in this country is $44,456 dollars per year.   [Salary.com] If a husband and wife were both entry level accountants, and the pay was equal, their combined earnings would be $88,912.   However, if her salary is only 77% of her husband’s she earns about $34,231.  Their combined earnings are reduced to $78,687.12.   Wonder what they could have done with $9,000?  Wonder what the local economy could have done if family earnings were what they should be?  Do the arithmetic.

Republican YOYO Home Economics: Medicaid Slashed, Other Support Burned

Former President Clinton advised the delegates to the 2012 Democratic Convention to listen carefully to what the Republicans were offering in regard to Medicaid, and those of us in Nevada should be “listening with both ears.”  Here’s the description of the Medicaid program as stated by the Nevada Department of Health and Human Services, the program:

“Provides health care coverage for many people including low income families with children whose family income is at or below 133% percent of poverty, Supplemental Security Income (SSI) recipients, certain Medicare beneficiaries, and recipients of adoption assistance, foster care and some children aging out of foster care. The DHCFP also operates five Home or Community-Based Services waivers offered to certain persons throughout the state. The Division of Welfare and Supportive Services (DWSS) determines eligibility for the Medicaid program.”

Listing those categories focuses on the aims of the program — it is to serve (1) low income families with children; (2) elderly Nevadans; (3) low income Nevadans over 65 years of age; (4) families receiving assistance for adopted children; (5) children in foster care.  Who was enrolled in Nevada’s Medicaid program as of fiscal year 2009:

What services were provided to those enrolled in Nevada’s Medicaid program?

During fiscal year 2010, 68.1% of the spending from the Medicaid program went for acute care, 25.6% was allocated for long term care, and 6.3% was used for “disproportionate care – hospital payments.”

The spending for long term care breaks down as illustrated in the following chart:

11.1% of the long term care funding was allocated to facilities for the intellectually disabled, 2.9% went to services for the mentally ill — and notice – 86% was used to provide home health & personal care, and nursing facility care.  In other words, 86% of Nevada’s Medicaid expenses for long term care went toward serving those least able to care for themselves.  The other 14% was used to provide intermediate and long term care for those unable to care for themselves because of intellectual limits or mental illness.

Here is exactly why President Clinton told his audience to “listen up:”

My view is get the federal government out of Medicaid, get it out of health care. Return it to the states.” – Romney, South Carolina GOP Primary Debate, Jan. 20, 2012.

In case anyone is remotely confused about what that statement from the former Massachusetts Governor means, he’s speaking about transforming the Medicaid program into Block Grants.

More specifically, the former Governor is adopting the block grant proposal for Medicaid set forth in his running mate’s “Path to Prosperity” budget plan:

“The plan also would repeal health system reform law provisions that will expand Medicaid coverage starting in 2014. Instead, states would receive block grants, which would free states “to tailor their Medicaid programs to the unique needs of their own populations,” the budget says.”  [AMA]

The tailoring is to be done with less cloth:

The Ryan budget would cut $2.4 trillion from Medicaid and other health programs. Reduced spending would increase the number of uninsured dramatically, Park* said. “Those who retain coverage will have benefits scaled back and have higher cost-sharing.” [AMA] (emphasis added)

We can drill down further into what Governor Romney and Representative Ryan have in mind for the Medicaid program by looking at the Congressional Budget Office’s analysis of the Ryan position:  Medicaid and the Children’s Health Insurance Program (CHIP)—from 2 percent of GDP in 2011 to 1¼ percent in 2030 and 1 percent in 2050.

Now is the moment to recall that 58% of those who receive Medicaid assistance for their health care needs in Nevada are children, and the AAP isn’t thrilled at cuts to that constituency:

“American Academy of Pediatrics President Robert W. Block, MD, said the proposal would undo investments in health programs for children. More than half of Medicaid recipients are children, but their care accounts for up to only one-quarter of the program’s costs.

“Whether considering fiscal year 2013 federal spending bills or reviewing long-term budget proposals, Congress must seize this opportunity to invest in the future of our country by protecting children’s health,” Dr. Block said.” [AMA]

Dr. Block has reason to be concerned, if we return to the Congressional Budget Office’s analysis we can see why.  In two paragraphs from their analysis of the Ryan “Path” the non-partisan office explains why the proposal would make deep cuts, and place greater burdens on the states:

“The specified path (Ryan Plan) would cause federal spending on Medicaid and CHIP to decline relative to GDP in coming decades, rather than to rise sharply as in the other policy scenarios that CBO has analyzed, and would include no exchange subsidies (see Figure 3). As a result, by 2050, such spending would be 76 percent below what would occur for Medicaid, CHIP, and exchange subsidies under the baseline scenario and 78 percent below what would occur under the alternative fiscal scenario. Because spending on CHIP and exchange subsidies represents a relatively small share of the amounts in the baseline and alternative fiscal scenarios, most of the reduction would have to come from the Medicaid program.” [CBO] (emphasis added)

The Republicans do, indeed seem serious about eliminating Medicaid as a federal program and shifting the expenses for health care access to low income elderly, the disabled, the intellectually disabled, elders in nursing facilities, and children in poverty to the states.  The CBO explains the nature of this shift:

The responses of the states would be of particular importance. If states were given additional flexibility to allocate federal funds for Medicaid and CHIP according to their own priorities, they might be able to improve the efficiency of those programs in delivering health care to low-income populations. Nevertheless, even with significant efficiency gains, the magnitude of the reduction in spending relative to such spending in the other scenarios means that states would need to increase their spending on these programs, make considerable cutbacks in them, or both. Cutbacks might involve reduced eligibility for Medicaid and CHIP, coverage of fewer services, lower payments to providers, or increased cost-sharing by beneficiaries—all of which would reduce access to care. (emphasis added)

Translation: Even if the states were able to achieve all the vaunted efficiencies a “flexible” plan might provide — the cuts proposed are so deep and so drastic that citizens in the United States who are lower income elderly or the disabled in nursing homes, and those who are low income and living in foster care, or families in poverty — would have reduced access to care. Period.

These aren’t generic numbers and pie in the sky statistics we’re talking about, we’re speaking of 25,841 elderly Nevadans, 40,898 disabled Nevadans, 55,626 adult Nevadans – mostly women, and 168,070 Nevada children.

So, here’s a question for Governor Romney and Representative Ryan — If no matter how much efficiency the state of Nevada squeezes from your block grants for Medicaid, Nevada and the other states will still have to either appropriate significantly more revenue, or drastically reduce services — how is your plan anything other than a proposal to shift the burden of health care costs, for the least able among us, from the federal treasury to the state treasuries and the pockets of low income Americans?

Where, Governor Romney and Representative Ryan, does the Nevada Legislature start cutting? From the acute care services for adopted or foster children? From the acute care for pregnant women? From acute care for children in poverty who have asthma, autism, broken arms, or sprained ligaments?  From the long term care for the elderly who need home health care services and personal care to avoid institutional living?  From the long term care for the indigent mentally ill?  From elderly residents of nursing facilities?  From disabled children who need home health care? Where?

Perhaps cuts aren’t the only option. Must the Nevada government raise the eligibility standards such that only those living at “25%” of the official federal poverty level can receive assistance?  Here are the 2012 guidelines from the Department of Health and Human Services –

How much more should a family of four living on $1,920.83 per month  have to pay for basic health care?  How much more should a young man and his pregnant wife living on $1,260.83 per month have to pay for pre-natal care, and expenses associated with the birth of their first child?  For a political party which lauds its “Pro-Life” stance — asking low income families to dig deeper to pay for health care to make up for federal and state budget issues (while proposing more tax cuts for the top 1% of American income earners), makes it sound as though the GOP is the Pro-Birth, not Pro-Life party.

How much more should a young family have to pay for health care before the cost of health care begins to impinge on the capacity to put a roof over their heads?

Or their ability to put food on the table?  It’s likely going to cost our young family with two children under the ages of 19 approximately $366.40 to $578.40 per month to keep everyone fed. [USDA] Our hypothetical family might be lucky to have $764.43 per month remaining after housing and food for utilities, clothing, transportation costs (auto payments or bus fare) — that $764.43 translates to about $25.48 per day to cover ALL the basic family needs listed previously… including Health Care.  But wait, the Romney/Ryan budget cuts nutrition assistance too, drawing fire from the U.S. Conference of Catholic Bishops:

“Cuts to nutrition programs such as the Supplemental Nutrition Assistance Program (SNAP) will hurt hungry children, poor families, vulnerable seniors and workers who cannot find employment. These cuts are unjustified and wrong.” [The Hill]

And what other program do the Republicans fantasize about turning into a Block Grant Program and then cutting?  Housing subsidies. [TO.org]  There was some discussion of the Ryan proposal on this topic at the March 21, 2012 House Budget Committee hearing:

“Rep. David Price (D-NC) asked Donovan what the implication of the Ryan budget cuts would be on HUD programs such as public housing, Choice Neighborhoods, HOME and others.  Donovan responded that, under the proposed Ryan budget, approximately one million households could lose their housing.  Of the one million households at risk under the Ryan budget, Donovan estimated that 585 thousand would come from the Housing Choice Voucher Program, 425 thousand from the Project-Based Voucher Program, and 110-180 thousand from homeless assistance programs.  He also mentioned that an estimated 17 thousand jobs would be lost from CDBG, and cuts to the HOME program would mean tens of thousands of new affordable housing units would not be built.”  [CLPHA] (emphasis added)

So, no help for financially fragile families for health care, or housing, or food — or anything, but tax payers in the top 1% of all our income brackets will get more, yet more generous, tax breaks.  Little wonder the Bishops were annoyed.  Less wonder Sister Simone Campbell from Nuns on the Bus received a standing ovation at the Democratic National Convention.

A person doesn’t have to be Roman Catholic to find the Republican proposals supported by Governor Romney and created by Representative Ryan astonishing in their parsimony and appalling in their avarice.

Perhaps one has to be incited by the fact that a family in Las Vegas might have an air-conditioner, or a DVD player, or a functional motor vehicle — “Look,” cry the miserly, “They have nice stuff, and they got it by doing nothing.” Not. So. Fast.   As of 2010 not that many Nevadans were receiving public  assistance. [Census] In fact, about 3% of Nevadans were receiving public assistance. [Census pdf]

Thus much for the Miserly Myth that “They’re all sitting around collecting welfare, and learning to be dependent on Guv’mint.”  Perhaps we should add the usual follow up, “and they’re doing it on my hard earned tax dollars.”  The latter portion is correct, we do pay taxes which support assistance programs for fragile families.  However, the Grinches among us appear to believe they are the only ones chipping in.

S’cuse me Mr. Grinch, but I really don’t mind paying a fractional portion of my income to insure NO child goes to bed hungry, NO elderly person with dementia is left alone, NO foster child is left with an untreated case of pneumonia, NO pregnant woman is without pre-natal care, NO family is homeless, NO mentally ill person is abandoned, NO disabled child is without care.

This is what Democrats mean when we say, “Just Say No.”

References and Resources:  * Edwin Park, CBPP.  Congressional Budget Office, Ryan’s Specified Paths, March 2012. (pdf) “House Republican Budget Seeks to Slow Medicare, Slash Medicaid,” American Medical Association, April 2, 2012.   Kaiser Family Foundation, State Health Facts, Database.  “Public Assistance Relief,” Census, Department of Commerce, pdf.  “HUD Secretary Defends FY13 Budget Before House Appropriators,” CLHPA.   “Four Ways Romney and Ryan Would Roll Back the 20th Century ,” Jake Blumgart, AlterNet, September 5, 2012.  “What Paul Ryan’s Budget Actually Cuts,” Brad Plumer, Washington Post, August 12, 2012.  USDA, Cost of Food Plans, Center for Nutrition Policy and Promotion, May 2011 (pdf).  ASPE, Department of Health and Human Services, HHS Poverty Guidelines 2012. Congressional Budget Office, “The Long-Term Budgetary Impact of Paths for Federal Revenues and Spending Specified by Chairman Ryan,” March 2012, pdf.   Kaiser Family Foundation, link to interactive database for state health care statistics.

Heller Stalwartly Defends Corporate Bottom…Lines

Nevada’s Senator By Appointment Only™ Dean Heller (R-NV) would have us believe we can’t afford the provisions of the Affordable Care Act. [Heller] Why? Because, evil of all evils — the act raises taxes.  Whoa, now we need to ask the same question which should be raised every time a Republican says “It (whatever IT might be) raises taxes,” — taxes on whom? The GOP controlled House Ways and Means Committee says all the taxes will “cost taxpayers over $675 billion in the next ten years.”  [HouseWM]

“Additional 0.9 percent payroll tax on wages and self-employment income and new 3.8 percent tax on dividends, capital gains, and other investment income for taxpayers earning over $200,000 (singles)/$250,000.”

“2.3 percent excise tax on medical device manufacturers/importers*”

“Annual tax on drug manufacturers/importers *

OK, are you a person earning over $200,000 in adjusted gross income annually? If so you’ll see a 0.9% increase on your payroll taxes — the money you pay into your ‘entitlements’ like Medicare and  Social Security — programs you are entitled to receive because you’ve paid for them.

Are you a person whose income is derived from dividends, capital gains, and other investments?  Assuming you haven’t stashed them behind blockers in the Cayman Islands… If most of your income comes from investments then you’ll see a 3.8% tax increase. If your income comes from your salary or wages, and precious little comes from your Wealth Management Account, then you won’t see an increase here.

Are you a manufacturer or importer of medical devices and equipment?  If so, then you’ll be liable for a 2.3% excise tax — If you aren’t an importer or manufacturer of medical devices and equipment, then this tax doesn’t apply to you.  And, before we start to fee weepy about this sector of the economy, the Department of Commerce has some nice things to say about it:

“The market was valued exceeded $100 billion in 2010, representing about 40 percent of the total medical technologies industry. U.S. exports of medical technologies in key product categories identified by the Department of Commerce (DOC) were valued at approximately $38.09 billion in 2010, exceeding imports valued at $32.73 billion. With new and innovative technologies coming to market, the U.S. medical technologies industry is highly competitive and well-positioned for future growth.”

The arguments against the imposition of this excise tax are generally NOT that the corporations can’t afford to pay it, but that the taxes might impinge on investments in R&D, and the profitability of the corporation.  [CoSpGaz]

Are you a pharmaceutical manufacturing corporation? Are you Pfizer Inc. with a return on equity of 10.66%, and a $178.74 billion market cap? Are you Merck, with an 11.86% return on equity and a $131.21 billion market cap?  If you aren’t a pharmaceutical manufacturing corporation then this tax increase doesn’t apply to you.

Let’s look at some of the other taxes involved in the Affordable Care Act legislation:

“Cadillac tax” on high-cost plans *

Annual tax on health insurance providers *

Limit deduction for compensation to officers, employees, directors, and service providers of certain health insurance providers. [HouseWM]

The taxpayers in these cases are the health insurance corporations.   The first thing requiring some explication is the “Cadillac Health Plan.”  The Kaiser Foundation offers this explanation:

“Sometimes referred to as a “Cadillac” or “gold-plated” insurance plan, a high-cost policy is usually defined by the total cost of premiums, rather than what the insurance plan covers or how much the patient has to pay for a doctor or hospital visit.”  [...] “high-cost health plan is defined as costing more than $10,200 for an individual or $27,500 for a family, including worker and employer contributions to flexible spending or health savings accounts.”  (emphasis added)

What Senator Heller forgot (?) to mention is that (1) the tax doesn’t go into effect until 2018, giving the insurance companies time to make adjustments based on savings, and (2) that the thresholds for the tax are flexible in order to allow for pools of high risk policy holders like police officers or firefighters.

Are you a health insurance corporation?  Aetna, Cigna, Anthem Blue Cross? Another major health insurance corporation?  If your answer is NO, then this tax increase doesn’t apply to you.

Are you the CEO, COO, CFO or other corner-office executive with a major health insurance corporation?  Your compensation is deductible as a business expense — but under the terms of the Affordable Care Act the corporation may no longer be able to take an unlimited deduction for your compensation. This item really has nothing to do with YOUR taxes, but it has everything to do with the deductions corporations are allowed for executive compensation.

Here we go again, when Senator Heller and his Republican cohorts speak of raising YOUR taxes they are very careful to keep it generic, as if YOU includes the Top 1% of American income earners, hedge fund managers, medical device manufacturers, pharmaceutical manufacturers, health insurance corporations and the owners thereof.

But, but but but… the corporations will just pass the tax expenses along to the consumers and we’ll all have to pay!  The pass along argument is not a policy decision — it is a corporate decision.  The corporation is not required to pass along the tax — it could reduce executive compensation? It could reduce dividends?  To do so might annoy the shareholders and executives, but if the corporation thinks more of its shareholders and its executives than it does of its customers, then that in itself says much about the company.

At the risk of facetiousness — here’s the one that must have galled Speaker of the House John Boehner (R-OH) — “Impose 10 percent tax on tanning services *”

Are you the owner of a tanning bed salon?  If yes, then after I’ve seen two friends die from skin cancer, I’d like to talk to you some other day.  If no, then this tax doesn’t apply to you either.

Protecting Their Bottom (Lines)

So, Senator Heller may say, “Seven-term Congresswoman Shelley Berkley keeps voting for ObamaCare with no regard for the devastating consequences the law has for Nevadans.”   However, unless those Nevadans are in the Top 1%, are hedge fund and other wealth managers or get most of their income from investments not wages and salaries, are health insurance corporations or their executives, are medical device manufacturers, are pharmaceutical manufacturers, or tanning salons — those “burdensome taxes” aren’t yours.

We could just as easily argue that Nevada’s Senator By Appointment Only™ Dean Heller (R-NV) stands stalwartly by the side of the 1%, the investors and wealth managers, the pharmaceutical manufacturers, the medical device manufacturers, and the salon service owners — defending their corporate bottom lines.

Suppressed Information: Muddling Medicare Part 2

Analyzing what the Romney-Ryan ticket would actually DO to the Medicare system as we know it is difficult because there’s a big difference between speechifying and informing.  The Republican proposals are a fact-checker’s nightmare because the GOP campaign refuses to be nailed down to many specifics.

The Romney Plan is just like the Ryan Plan — almost, nearly identical. No, completely different! [Salon] The Romney/Ryan plan would ultimately cost seniors some $60,000? [TP] No, maybe not, because the public is looking at the numbers from the “old” plan.  Well, what numbers should we be looking at?

Perhaps we’re supposed to look at the White Board?

“The whiteboard had four quadrants, with a column for his plan and another for Obama’s plan, and a row for how the two plans would affect “seniors” and the “next gen.” Under Obama’s plan, Romney wrote “$716 billion cut” next to current seniors and “bankruptcy” next to next generation. For his plan, he wrote “no change” for current seniors and “solvent” for future generations.”  [Salon]

First, we know the charge that the Obama Administration cut $716 from Medicare is bogus.  We also know that under at least one of the incarnations of the Ryan Budget almost the same savings were found in the current Medicare program.  We know that under the Administration’s plan the savings are returned to the Medicare program, part of them fill in the infamous Do-Nut hole in prescription drug coverage.  We’re left guessing if the Romney “plan” — whatever it might turn out to be — would keep the savings for the benefits side of Medicare program or follow the Ryan Plan and have the savings revert to the Treasury to pay down the federal deficit.

I’m not the only one who finds the various expressions of Governor Romney’s position confusing.

“First, there is the issue of the $716 billion the president’s health care law will take from Medicare to cover costs across the board. Ryan’s budget cuts the same amount from Medicare, but rather than re-investing the money, it is used – or not used – to ease the deficit.” [Salon]

Romney is less clear about where the cuts would go, or if there would be cuts at all.

“Governor Romney believes Obamacare was a terrible mistake and has repeatedly made clear he believes it must be repealed in its entirety. This includes,” a campaign official said, “repeal of President Obama’s $716 billion in cuts that slash provider payments and Medicare Advantage and threaten seniors’ access to care.”  [ABC]

The last line approaches word salad but contain a kernel of truth.  The Obama Administration does cut payments to providers — NOT beneficiaries, and cuts the subsidies to insurance corporations for Medicare Advantage policies.  Whether this “threatens seniors’ access to care” is highly debatable.

David Horsey of the Los Angeles Times opens his article on the contortions of the Romney campaign with regard to the Ryan plan with a cartoon showing Romney in “Olympic Flip Flop Mode.”   Horsey may have also found the core of the problem:

“Not that he would stick with it if it brings him political heat. Almost daily, Mitt Romney reinforces the perception of himself as a man with no deep political convictions. There seems to be no position he will not give up if it has become a political liability. Much has been said about his switcheroos on healthcare, immigration, gay rights and Planned Parenthood since he was governor of Massachusetts. Anyone who thinks he really knows what Romney would do as president regarding Medicare or any number of other major issues, must be using a top-notch crystal ball.” [LAT]

Why be so coy about the specific proposals to change the Medicare program, why hide the details?   Perhaps we are in Romney Land now in which details and specifics are to be kept hidden lest they be criticized?  As in what happened when Romney was about to discuss his energy proposals?

“I know that we have members of the media here right now, so I’m not going to go through that in great detail,” Romney said, according to a pool report from the event.”  [HuffPo]

OK, we could think former Governor Romney didn’t want reporters letting his cat out of the bag before the big roll out.  However, when the big roll out day came — poof!  The Secret Energy Plan was little more than an extension of Drill Baby Drill [WaPo] as if the reporters in the room couldn’t have figured that out for themselves.

There’s a pattern developing with the Romney Campaign which a convention isn’t going to ameliorate.   The Romney Campaign is going for style points over substance, with a serious case of obfuscation in the process.

No, “you people” don’t need to see my tax returns because you’ll just pick over them and find things with which to attack me.”

No, “you people” don’t need to hear the specifics of my Medicare proposals, which are almost identical, very close to, and completely different from the Ryan Plan because you’ll just pick them apart and use the specifics to attack me.

No, “you people” don’t need to hear more about what tax loopholes I would close to make up for the revenue lost by maintaining tax breaks for the top 2%, “I’ll get there when the time comes.”

No, “you people” don’t need to know about which cabinet departments I would eliminate because if that information is released to the public then there will be serious issues raised, and I’ll be attacked.

No, “you people” don’t need to know the specifics of my budgeting plans to reduce the deficit, because they “can’t be scored.”

No, “you people” don’t need to know the specifics of my immigration policy, my education policy, my trade policy, my fill in the blank policy… because what you don’t know won’t come back to bite me. And, “I Will Not Be Bitten.”

There’s something ironic about the  Etch-A-Sketch candidate using a White Board to “explain” his Medicare policy — both can be erased.  What’s a fact checker to do when the “facts” about policy proposals can be altered, changed, hidden, and erased whenever it is politically expedient to do so?

What are voters supposed to do?  There’s a patronizing tone to all this, “Now, children, you sit quietly and don’t whine. Daddy will always do what’s best for you.   … Trust him.”

Reagan was right on one point: Trust but Verify.

Suppressed Laughter: Muddling the Medicare Issue

There are those who find the Democratic charge that the Republicans would end Medicare as we now know it risible, but there are some very practical reasons for stifling the guffaw.

Let’s start with the proposition that the current Medicare program is a very popular single-payer system for providing health insurance coverage to individuals in the United States who are over 65 years of age.   Let’s also accept that a single payer system like Medicare has helped reduce the financial strain on our elderly.  [CMS pdf]

Additionally we can find historical data indicating that those elderly citizens who have annual incomes of $40,000 or less spend a higher percentage of their income on health care than those more affluent: [CMS pdf]

We also know that the elderly have moved from a demographic group less likely to have health insurance coverage to the one in 2000 most likely to be covered:

“Prior to Medicare’s enactment, about half of America s seniors did not have hospital insurance. By contrast, 75 percent of adults under 65 had such coverage, primarily through their employer. For the uninsured, needing hospital services could mean going without health care or turning to family, friends and charity to cover medical bills. More than one in four elderly were estimated to have gone without medical care due to cost concerns (Harris, 1966). Today, Medicare covers nearly all of the elderly (approximately 97 percent), making them the population group most likely to have health insurance coverage.”  [CMS pdf]

At this point it ought to be reasonable clear that if (1) we want elderly Americans to have affordable health care insurance, and (2)  especially want those at the lower end of the income scale to secure affordable health care insurance, then by those standards the current program is successful.

If It Ain’t Broke Why Fix It?

Across the philosophical divide:   One important facet of current conservative thinking holds that any government program which offers services to individuals  in the form of a social safety net “creates dependency.”   The proponents of this argument rely on philosophic arguments almost as arcane as the extensions of Anselm of Canterbury’s Scholasticism before Abelard arrived to rescue the scholars.

Theoreticians are invited to weigh in on discussions bounded by such definitional perimeters as the following from the libertarian Cato Institute:

“The central idea behind the theory is that government officeholders, as individuals, have strong incentives to alter important political transaction costs facing the public and facing others in government in order to secure more of what they want with less resistance. As economists use the term, transaction costs are costs to individuals of negotiating and enforcing market exchange agreements, including information costs, negotiation costs, enforcement costs, and the like.”

One is pretty much left to imagine what “and the like” might mean.  However, the message is clear – government office holders have an incentive to promote their programs and to minimize the resistance to those projects.  This assumes that people are naturally resistant to efforts by their own government to assist them, and that all government services must be resisted.  In other words, in order for this argument to work in general terms we’d have to assume that everyone is naturally a radical libertarian.

We’d also have to assume that the populace doesn’t want the government to “alter important transaction costs” on its behalf.   This is a hard point to sustain given that most citizens don’t appear to be enthusiastic supporters of personally negotiating defense contracts — which if we were to extrapolate the localism of the initial argument to its illogical extreme would be required to reduce “Constitutional level political transaction costs.”

Culturing Dependency:   The current arguments from the radical Right, framed philosophically as described above, march to the next milepost — that citizens are naturally “free” (individualistic) and any government programs which provide services to the elderly (or indeed anyone else) create a dependency on government action at the expense of individual “freedom.”

All we have to do to subscribe to this position is to completely ignore the preface to Robert’s Rules of Order:   “Where there is no law, but every man does what is right in his own eyes, there is the least of real Liberty.” (Henry M. Robert)

There are also some uncomfortable questions raised by this proposition.  Does hiring a local police force create a dependency on my part for the protection of my life and property?  Does having a local fire department make me dependent on government for fire suppression, rescue, and EMT services?  Does having a Department of State make me dependent upon government for the implementation of foreign policy?   Does having a Department of Commerce make me dependent upon government for statistical reports on my economic environment?

Splitting Differences:  If the answers to the questions above are equivocal, then it’s probably because there are some definitions of “legitimate” and “illegitimate” government services involved.  If a person defines government as only responsible (legitimate) for national defense and foreign policy, then only government programs in those realms are legitimate.  If, however, we see government as formulated for We The People, life gets a bit more complicated:

 ”…of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”

Now we add “establish Justice, insure domestic Tranquility, … promote the general Welfare…” to the list of legitimate concerns of our government.  It’s time to come back around to the main argument.  If Medicare is a popular single payer system for promoting the availability of health insurance coverage to elderly individuals, and if it is successful in that regard, then why argue that it’s illegitimate?

The Magic Market:  The “market” in whatever form it may take is supposed to be the ultimate form of human transaction — the most efficient, the most efficacious, the most Free.  Except when it isn’t.   We’ve had an unpleasant taste of what happens in unregulated, or poorly regulated, financial markets.  Unfortunately, the after-taste is still lingering.  We are now told by the radical Right that an unregulated health insurance market will meet the needs of elderly Americans for their health insurance coverage.  Probably not.

The first point to acknowledge is that the Romney/Ryan plan for Medicare essentially changes the Medicare program from a single payer system to a voucher plan which “incentivizes health insurance corporations to provide coverage for elderly people.”    This is not “Medicare as we know it,” it is Medicare as the Insurance Corporations would like to have it.

The insurance corporation argument is underpinned by the notion that medical care is a commodity which can be purchased by a consumer from a provider, and this is true up to a point, but it’s a point that is very quickly reached.   The problem, as Professor Krugman points out, is that medical care isn’t bought and sold like a loaf of bread.   A person making up a list of groceries may include bread, but if the price of a loaf is too high then it’s logical to skip the purchase or substitute another commodity.  The market works.  However, if a quintuple  by-pass is needed then price is not the determinant of the “purchase.”  The result of “gee, I don’t think I can afford that right now” is poor health or even death.  The Magic Market doesn’t work in this instance.

The second problem with the Magic Market solution is that no one is shopping in the ambulance.   The victim of a motor vehicle accident or a heart attack, even if fully conscious, isn’t saying “Get me to the cheapest Emergency Room,” he’s saying, “Get me to the nearest Emergency Room.”

The third problem with the Magic Market solution is that the health insurance corporations themselves aren’t subject to it.  Under the terms of the McCarran-Ferguson Act of 1945 health insurance corporations are exempt from anti-trust laws.  This is both good and bad news; the bad news is  they may collude to limit access to their products or divvy up regions as sales territories.   The good news is that they are able to share information which might serve in some cases to reduce premium costs.  [KaiserNews]  Either way, the policy purchaser is dealing with a provider which is not subject to the same “free market” forces as the consumer.

The fourth problem inherent in the current privatization of the Medicare program is that it hasn’t worked.  Medicare Advantage was supposed to be the insurance industry version of the original Medicare program, and IF the free market worked the way the ideologues on the Right predicted, then we’d expect massive consumer shifts to the privatized version.  Hasn’t happened.  Altogether too many Medicare Advantage policy holders are there because their employers, many in the public sector, have been pressured into adopting Medicare Advantage plans.  [HealthBeat]*   If the Free Market worked as predicted, then the pressure would not be necessary.

Finally, the “free market” Medicare Advantage plans can hardly be called “private” when the companies offering them are getting an $8.9 billion subsidy from the Medicare program.  [TP]  Further, if the private market-driven plans can produce lower health care costs, then why haven’t they? [Incidental Economist]

Stop Laughing

If the current Republican calls to eventually replace the original Medicare program with a “market-driven” plan are (1) philosophically dubious, (2) politically questionable, (3) grounded in doubtful Constitutional theory, (4)  and premised upon illogical and indemonstrable market behavior; then why would challenging the practicality of such a plan be laughable?

Arguing that Medicare will still be existent even if privatized into a program run by insurance corporations is roughly analogous to contending that an orange is still an orange after it has been reduced to juice and pulp.   The result may be many things — but it’s not an orange.   Nor, would our original Medicare program be the same Medicare which now serves half of our elderly citizens who live on $21,000 per year or less.  [AARP]  Still suppressing that guffaw?

References: “Medicare – A Profile, 35 years of Medicare,” HCFA, July 2000. (pdf)  Charlotte Twight, “Medicare’s Origin,” Cato Journal, Volume 16, No. 3.   Kenneth J. Arrow, “Uncertainty and the Welfare Economics of Medical Care, American Economic Review, December 1963 (pdf).  Paul Krugman, “Why Markets can’t cure healthcare,” New York Times, July 25, 2009.  *Desert Beacon, “Medicare Disadvantage,” August 22, 2012.  AARP Fact Sheet: Who Relies on Medicare – Profile of the Medicare Population (pdf).