The GOP, the Health Insurance Mandate and Insurance Exchanges

                        Robert A. Levine   5-7-12

In America, politics trumps principles every time in this day and age, to the detriment of the democratic system. Even if a measure is consistent with a party’s principles, it will be rejected if it’s important to the opposition party and particularly if it’s part of their legislative agenda. The health insurance mandate and insurance exchanges are prime examples of this practice.

The individual health insurance mandate, which was formulated in 1989 at the conservative Heritage Foundation, a GOP think tank, was included in a bill introduced by Republicans in 1993. And in 2007, a bipartisan health care bill sponsored by both Republicans and Democrats contained the mandate. Another concept, health insurance exchanges, was also generated by the Heritage Foundation and is quite compatible with the free-market ideology of the Republican Party. But because these precepts are essential for the Democratic Affordable Care Act (ACA), they’ve been attacked unmercifully by Republicans, who have mobilized citizens against this legislation.

 The hypocrisy of Republicans in opposing these ideas is highlighted by two recent articles, one by Joe Klein in Time (http://ti.me/IEgTYB) and another by Jonathan Cohn and David A. Strauss on Bloomberg (http://bloom.bg/Iq3phu).

The individual mandate is a way to broaden the risk pools for health insurance. Because the mandate provides an incentive for healthy young people to obtain coverage (by a financial penalty if they don’t), insurance companies will be able to insure individuals with pre-exiting conditions and not lose money. Without the individual mandate, insurance companies could not afford to cover those who are already sick or injured.
In questioning the constitutionality of the mandate when the ACA came up before the Supreme Court, Justice Scalia raised the possibility of a “broccoli mandate,” with government forcing citizens to buy broccoli. However, a well functioning market for food and broccoli already exists, and there is no national crisis regarding broccoli as there is with health care costs, so this argument was spurious. Similarly, the analogy of a burial insurance mandate put forth by Justice Alito was fanciful since there’s also no crisis in this area. As a possible precedent for the individual mandate, Cohn and Strauss cite the Militia Act signed by George Washington in 1792 that required all men to purchase a gun and knapsack to defend liberty. Is that very different than requiring every citizen to purchase health insurance?

As for the insurance exchanges, Klein notes that they are a “classic Republican idea ..employ(ing) market discipline to control prices.” In addition, they allow insurance companies to compete to enroll members by providing transparency about prices and benefits. Yet because the Affordable Care Plan and its provision for the exchanges were passed by the Democrats, the GOP is fighting the exchanges on a state level where there have been attempts to implement these marketplaces.

Whether or not the Affordable Care Plan is the best way to reform health care is beside the point. Republicans are trashing concepts they originated and previously supported simply because they have been advanced by the Democrats and don’t want to provide the Democrats with a political victory. This is emblematic of the way business is conducted in Washington and why the political parties and Congress have such low public approval ratings.

I personally believe a single payer system, with physicians on salary to eliminate financial incentives for unnecessary care, along with malpractice reform, is the only way health care costs will be brought under control. Since this is unlikely in the current political environment, I’m willing to give the ACA a chance to see whether it meets its stated goals. Although Republicans have been attacking the ACA, there have been no realistic plans put forth by the GOP to provide coverage to the uninsured while attempting to control costs.

Resurrecting Democracy

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Dysfunctional Washington- What Does the Future Hold?

                   Robert A. Levine   5-3-12

With the vast majority of Americans disgusted with Washington and polls showing that Congressional approval rates are in the toilet, can we anticipate that the discourse might improve in the future? Can we expect that politicians will take citizens’ displeasure to heart with positive steps to improve the atmosphere in Washington, so that the important business of the nation can be accomplished? Unfortunately, the answers are no and in fact it is more likely that the political climate will deteriorate in the years ahead.

A recent article in Politico by Charles Mahtesian and Jim VandeHei spelled out the reasons why the situation appears so bleak.( http://go.politicoemail.com/?qs=67d22cc68366780fe484783c07fb312183a2b7697dbdc4f50575b972c7aae470) Basically, it’s the loss of centrists and moderates on both sides of the aisle with greater polarization in both the Senate and the House. Whereas twenty years ago, 40% of Senate Republicans were considered moderate, barely 10 % can be so-labeled today. In the House, it was 30% twenty years ago and almost none currently. Similarly, moderate Democrats now constitute 12% of the party in the House versus 35% in 1989. Moderate Democrats in the Senate are 15% compared to 27% 20 years ago.

The refusal of Tea Party activists to support any Republican who is not to the extreme right of the political spectrum has resulted in moderate conservatives being shunted aside in Republican primaries or having to retire. And right-wing conservative Super PACs, from outside the contested state or congressional district, with vast sums of money since the Citizens United ruling, have supported the most partisan candidates with attack ads. To make matters worse, the candidates being skewered cannot respond effectively to these ads, as they don’t have the financial resources to mount a defense.

Centrist Democrats have also gone down to defeat or retired, with the liberal wing of the party and organized labor going after incumbents who have not hewed to the party line, particularly in regards to health care. This is particularly true in the House where Jason Altmire and Tim Holden were just defeated in Pennsylvania Democratic primary races. The list of moderate Democrats Senators not running for re-election include Ben Nelson of Nebraska, Joe Lieberman of Connecticut, Kent Conrad of North Dakota and Jim Webb of Virginia.

Republican moderate Susan Collins of Maine is also retiring along with moderate conservative Kay Bailey Hutchinson of Texas. The reasons for all of these retirements include the partisanship in Washington and the inability to legislate effectively. In addition, there’s the fact that campaigning opens up moderate candidates to blistering attack ads, often personal in nature, augmented by Citizens United Super PAC money. As examples of internecine combat in the Republican Party we just have to look at the battles Oren Hatch of Utah and Charles Grassley of Indiana are going through, because these long time conservatives are not deemed conservative enough by extreme elements in their party. Interestingly, Oren Hatch received a 100% rating from the American Conservative Union and the Chamber of Commerce in 2010, but that isn’t considered adequate by the far, far right. Maybe it’s the fact that in the past, they were willing to talk across party lines and were even cordial at times to Democrats.

The loss of moderates in the House and Senate are going to make compromise on any issue more difficult to accomplish, and the atmosphere in Washington is bound to become even more toxic. Perhaps the saddest aspect of the current political climate is the fact that the moderate middle, including independents, moderate Republicans and centrist Democrats, has no bloc to represent their views, despite the fact that they are the largest percentage of voters.

 To change the political environment so that government can function again, campaign financing reform, including limitations and transparency on Super PAC donations is necessary, despite the Citizens United ruling. Perhaps it will take a constitutional amendment, but it must happen if American democracy is to prosper. And the way both the Republicans and Democrats have evolved over the past several decades, it is evident that a third party of the center is needed to represent the moderate middle and bring common sense and compromise back to Washington. Neither of these remedies will be easily accomplished, since both current parties and the deep pockets behind them will fight fiercely to keep these prescriptions from being realized.

 Resurrecting Democracy
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A Reminder- How Government Helps Make the "Self-Made" Man

                                    Robert A. Levine   April 30, 2012

There are myths proclaimed by some right-wing partisans and Ayn Rand acolytes that “rugged individualists” working alone have been responsible for America’s great accomplishments and that government is the enemy of progress. In their quest to reduce taxes, particularly for the wealthy, and cut the size of government, this myth has been promulgated by ideologues to gain support from the middle-class, needed to elect legislators who share their vision.

Unfortunately, many Americans have accepted this narrative and because of it, often vote against their own interests. In a recent essay, The Future of History, Francis Fukuyama noted “individuals are not sovereign entities, but beings heavily shaped by their surrounding societies.” Pounding away at the failings of “big government,” conservatives have ignored the positive effects of government and the fact that no one in the modern interconnected world is able to make it on his or her own. Aside from its role in national security and protecting Americans from foreign threats, the federal government is a necessary part of citizens’ everyday lives and provides the internal fabric that holds the nation together. Unlike the 18^th century, for an individual to be successful in this day and age, government help is essential.

Businesses could not function without the nation’s infrastructure (though it currently needs work). Building the interstate highway system, bridges and tunnels and maintaining them, was and is a federal concern. The integrity of America’s ports and airports, and air traffic control, all comes under the aegis of federal agencies. Products and people could not move if it were not for the government. Apportioning the broadcast spectrum for TV, radio, cell phone companies and so forth, insuring the safety of transmission lines, pipelines, and so forth, are all functions of the federal government.

In addition to regulating interstate commerce, international trade agreements negotiated by the federal government set the ground rules for US trade with other nations, and have opened up markets for American products. American businesses are also protected by the government when foreign companies dump their goods in this country. Intellectual property rights, here and abroad are nominally safeguarded by the government, though in this area federal agencies have fallen short. The Export-Import Bank helps American companies sell their products to other nations.

Funds for research and development, since WW II, have come from the federal government over and above the private sector and have resulted in many benefits. The development of much of the Internet, global positioning systems, drones, came from work funded by DARPA (Defense Advanced Projects Research Agency). The NIH and funds for medical research have led to many advances, including treatments for cancer and other diseases.

Educational standards are promoted by the federal government and funding is provided to support K-12 schools and higher education, in addition to Head Start. Pell grants, Stafford loans and other programs allow many students to attend colleges they would otherwise not have been able to afford.
The safety of the foods Americans eat and the medications they use are federal government responsibilities. Federal regulators protect investors from financial predators and uphold the integrity of the banking system.
The government provides a safety net for older people and the disabled through Social Security, keeping them from impoverishment. Medical care for seniors and those who can’t afford it is covered by Medicare, Medicaid and other programs.

Businessmen and entrepreneurs need government to help them communicate with their suppliers and customers, receive materials and get their goods to market. The educated work force that businesses require depends on the local, state and federal governments, with federal agencies providing a supervisory role and extra funding. A large part of the health and safety of their workers is a federal responsibility. People who claim to have made it on their own are either unwilling to acknowledge the actions of government for ideological reasons, or are engaged in self-promotion.

The federal government is inefficient in many of its operations, but its expansion has occurred during both Democratic and Republican administrations. Those who rail against the government should focus on fixing it and not just making it smaller so they can pay less in taxes. And the money saved should go to paying down the deficit. For different reasons, both the weak and strong among us need a robust federal government in today’s world.

Resurrecting Democracy
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Corporate Ethics- An Oxymoron?

Robert A. Levine 4-26-12

Two front page articles in the New York Times earlier this week reminded me of just how pervasive the lack of ethics has become in the corporate world, where making money is the only thing that counts. Perhaps the same level of corruption has always been there but is reaching public awareness more frequently now.

One of the articles was about the way Walmart’s business in Mexico had been able to expand rapidly by bribing officials to expedite the necessary permits. When an internal investigation by Walmart uncovered this corrupt behavior in 2005, it was suppressed by corporate executives and those involved were allowed to go unpunished. In fact, the major figure responsible was subsequently promoted to vice-Chairman of the company.

Another report examined the actions of insurance companies in changing to a new payment method for out-of-network care. This change increased patients’ costs while it saved the insurance companies money. However, this new method contravened a previous settlement the companies had made with New York State over manipulation of data that was supposed to improve payments to providers and protect policyholders from additional costs.

Also this week, 60 Minutes on CBS examined the fraud and deception by Lehman Brothers officers prior to its bankruptcy in 2008. To date, none of the executives of Lehman Brothers, including the Chairman Richard Fuld, have been charged with criminal activity by the government. They have been able to walk away with tens to hundreds of millions of dollars obtained at the expense of shareholders.

Similarly, none of the executives of any of the other financial firms that precipitated the recession, and necessitated the bailout by American taxpayers, have ever been brought before the criminal bar of justice. Angelo Mozillo, Kerry Killinger, Stanley O’Neal, Charles Prince are but a few of the names that live in infamy. Reports have confirmed that these executives and others provided false information about their companies to stockholders, investors and regulators or condoned activity by employees to make it seem as if their firms were healthy when they were actually in dire straits. They also vetted investment vehicles, like CDOs, they knew were of poor quality to unsuspecting buyers. There were real estate loans as well, approved for applicants by mortgage brokers even though it was known the applicants could not afford them. Unsurprisingly, these loans subsequently went bust and contributed to the economic meltdown. But the more loans handed out, the greater the bonuses received by the mortgage brokers and banking executives.

There are also instances of short cuts taken by corporate executives to save money that increased risks and flouted safety regulations, resulting in deaths or environmental damage. BP fits into this category with its Alaska pipeline spill and Deepwater Horizon blowout in the Gulf. The mine explosion in West Virginia in the Upper Big Branch mine owned by Massey Energy that killed twenty-nine miners is another example.

At random, other instances of corporate malfeasance that come to mind include the Enron debacle, the TYCO scandal and the Savings and Loan scandal. But in addition to these illustrations of corruption that are well known to the public, there are almost daily instances of illegal and unethical behavior by corporations and their executives to enhance corporate bottom lines along with executive salaries and bonuses.

Capitalism provides people with the opportunities to make money. Human nature drives some of them to illegal or unethical behavior to increase their remuneration. It is up to the government to provide a strong regulatory structure and prosecution of lawbreakers to minimize corrupt behavior. This also helps the economy by maintaining a level playing field so that honest businessmen and women have a fighting chance in the marketplace.

Resurrecting Democracy
www.robertlevinebooks.com

The Big Game Redux

The Big Game Redux

            Robert A. Levine   4-25-12

Last week in an article entitled The Big Game, I decried the skewed funding by state and local governments that favored athletics over academics. I focused particularly on Texas, where there was inordinate spending on high school athletic facilities and coaches while funding for teachers and academics was being reduced. College coaches were also receiving outlandish sums compared to faculty members, while student tuition was being increased. I noted that this emphasis on athletics over academics did not bode well for the United States in terms of the nation’s ability to compete economically in the years ahead, since an educated populace is a vital resource.

An article yesterday by Jordan Weissmann in theatlantic.com (http://bit.ly/IrgVUe) describes a situation that has arisen at the University of Florida in Gainsville where its sports budget has been increased at the same time funding for its computer science department is being slashed. This is the result of the state cutting the university’s budget by 30% over the last six years, a total of $240 million. Much of the athletic department budget is covered by $36 million in annual contributions from alumni, and the athletic department does generate income for the school, providing $6.1 million to the university’s operating budget last year. However, if the state and the university’s alumni had some foresight, they would be funding an expansion of the computer science department before contributing money for sports. Florida and the nation will certainly derive more future benefits from the computer scientists that the university produces than from its football players.

Resurrecting Democracy

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Moral Hazard, Health Care Coverage and the Individual Mandate

            Robert A. Levine   4-23-12

Whether the Affordable Care Act (ACA), now before the Supreme Court, will survive in its current form is in some doubt, with the individual mandate particularly in danger of being overturned. Though Congress has the power to regulate interstate commercial activity, opponents of the law believe it can not impose a tax or fee on inactivity, such as the failure of citizens to purchase health insurance.

The individual mandate was included as part of the law to pressure young healthy people to obtain insurance. This was to balance the cost of insuring men and women with chronic illnesses and pre-existing conditions. Without the mandate, it was believed many young Americans would not bother with coverage, as is currently the case. If that happened, writing policies for those with pre-existing conditions would not make financial sense for the insurance companies, or the premiums would be too expensive for those who were sick.

Many individuals in their twenties and thirties do not see the need for heath insurance, assuming they are unlikely to become seriously ill or injured and that it is a “waste” of money. They know that if necessary, they can always receive Emergency Room care without insurance, and think they will be able get coverage after the fact. And if medical expenses become crushing because of a major illness or injury, the involved person (having limited assets) can simply declare bankruptcy, erase the debt and start over. This is a prime example of moral hazard, where the economic risks of illness for uninsured people is placed on the backs of others.

Health insurance allows individuals to receive care without having to worry about financial ruin in case they are faced with unexpected medical expenses. An immediate expenditure of funds to buy coverage guards against the possibility of much greater losses in the future. Carrying health insurance requires men and women to take responsibility for their own well being and not be dependent on the social safety net should they fall ill. It is unfair to other citizens for uninsured people who can afford coverage to receive medical care. It means their care is paid for by government subsidies to hospitals (which is bourn by taxpayers) or by an increase in insurance premiums for all policyholders. However, as long as men and women know they can obtain medical treatment in Emergency Rooms or walk-in clinics, and that they will be hospitalized if necessary even without coverage, there is less incentive for them to purchase insurance. And bankruptcy is an easy way for young people who have not yet accumulated significant assets to discharge debt.

If the ACA or the individual mandate is voided by the Supreme Court, a way must be found to persuade reluctant citizens who have the financial means to buy health insurance. A law that prohibited medical facilities from providing care to those who did not have coverage would certainly be effective, but this is a non-starter. It contravenes societal and medical mores about treating sick or injured patients regardless of economic circumstances. A more realistic approach would be to enact a law that prevented medical expenses incurred by uninsured men and women from dismissal through bankruptcy. Citizens who were irresponsible and neglected to obtain insurance would be indefinitely liable for all their medical expenses, eliminating some degree of moral hazard.

If this measure were passed, those who were too poor to pay for coverage would enroll in Medicaid and those who could afford it would be more inclined to purchase insurance. Allowances would have to be made for people who were emotionally disturbed or mentally impaired.

Though not a perfect answer, the above strategy is a logical approach to the problem of citizens who choose not to purchase health insurance, shifting the cost of their care onto the government and those who have coverage. If the individual mandate or the Affordable Care Act is overturned, Americans who are not obtaining health insurance might be motivated to do so by legislation that does not let them off the hook for the medical expenses they incur.

Resurrecting Democracy
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Turning Back the Clock Politics

                    Robert A. Levine   4-19-12

The gridlock in Washington and the difficulty Congress has in passing significant legislation does not require intricate analysis and pontificating by pundits over its cause.

Conservative initiatives that would have Americans live in the past are the main divide between conservatives and liberals or moderates. It’s the reason conservatives want to expel moderates from the GOP whom they label as RINOs (Republicans In Name Only). The more conservative a politician is, the more he or she sees the past through rose-colored glasses and wants to move America back in time. They want to go back beyond the Great Society of Johnson, the New Deal of Roosevelt, and even measures favored by Nixon such as the EPA.

Examining conservative stances, their love affair with the past becomes readily apparent. Smaller government and lower taxes head the list. This is in disregard of globalization and the problems raised, the complexity of citizen’s lives, the need for an adequate safety net, protection against external and internal enemies, a suitable infrastructure for the nation, food, drug and environmental monitoring, safety standards for air travel and automobiles, allocating the wireless spectrum and off shore drilling, and numerous other functions of government in the modern world. Conservatives would like to shrink the federal government’s role and spending in virtually all of the above areas, except for the military.

As for lowering taxes, America’s marginal income tax rates are among the lowest they have ever been and among the lowest in the developed world. During the early 1950s through 1963, the marginal tax rate was above 90%, and as recently as 1979 it was 70%. In moving the nation back past the New Deal, conservatives would probably be happy with the income tax rate of 7% that was in place in 1913.
And conservatives want government to be less intrusive in people’s lives, except when it comes to hot-button issues of importance to them, such as a woman’s right to choose and same-sex marriage. This really has to do with religious beliefs and government should not be involved in regulating these areas. However, many conservatives would like the wall between government and religion to be torn down and for policy to be concordant with religious practices. Perhaps they would feel more comfortable in the Massachusetts’ colony in the 17^th century, when religion and government walked hand in hand, controlling people’s lives.
Conservatives also do not think contraceptive coverage should be an expected part of health insurance since this could lead (God forbid) to women’s sexual freedom and possibly sexual relationships outside of marriage. Better that America should go back past the 1960s, before oral contraceptives became widely accepted and state laws banning the sale and use of contraceptives were overturned by the Supreme Court. And conservatives believe a woman’s place is still in the home with the man as the breadwinner for the family, with no need for equal pay for equal work laws.

There’s also the “old West” model of society that conservatives promote; every citizen packing guns and standing their ground against whomever they see as miscreants. There’s no acknowledging the danger of weapons in an overwhelmingly urban nation and that weapons should be limited to hunting, sport shooting or home protection.

Their rejection of scientific information take us back in time as well, with an unwillingness to accept evolution, the “big bang” theory or global warming, and a desire to teach non-science in the classroom.
In addition, conservatives are suspicious of America being corrupted by foreign influences. This may be one of the reasons for their adamant opposition to sensible immigration reform, besides the economic grounds and possible racism. The overwhelmingly WASP nation that existed around the time of the revolution would probably fit the bill for them.

Unfortunately, the Supreme Court is currently dominated by conservatives who hold many of the above views and would like to take America back to a simpler and more freewheeling time of robber barons and gunslingers.

If conservative ideology becomes more ascendant in the future, America will indeed be returned to a previous era, its stature in the world eroded, economic inequality heightened, and the gains women have made rolled back. Perhaps if the electorate truly understood how conservative policies would change the nation, America might remain in the present with a brighter future.

Resurrecting Democracy
www.robertlevinebooks.com