Wednesday, March 22, 2006

Insurance

Healthcare in this country is too expensive. Republicans know it and democrats know it. The argument here, as is any political issue, is what can be done about it. Yes, managed care (your HMOs, your PPOs, your POSs) was a Reaganistic initiative which promised lower costs (which it did) but over the years it has been bastardized by both parties who are owned by the healthcare lobbying groups. Of course this all flows back to the need for campaign finance reform, but I digress.

The democratic solution is to have someone else pay for it, their employer or the government, anyone but themselves, because every democrat knows they don't want to pay for it because it's too expensive.
Republicans know it's too expensive to and we can tell this because, if they're an employee, they're happy to have the company pay for it or, if they run a business, they're shifting some cost to employees and/or changing to cheaper plans and/or doing without. The summary is this; democrats: Who's going to pay for it? Republicans: This costs too much. Same problem, what do we do about it?

Before addressing any solution, the question that begs to be answered is why is healthcare so expensive? One large reason is we are pathetic consumers of our healthcare. Most of us know where the best place to go to buy shoes, groceries, clothing, etc is. Does anyone know who the doctor is that gives the cheapest physical is? Probably not. We don't shop around for the best deal in medical care like we shop around for everything else because we're conditioned to paying a premium plus a co-pay and we have no incentive to look for a better deal. This has led to us a system that is rife with waste and abuse. Waste in that the doctors\hospitals try to collect on everything imaginable for a hospital stay or an office visit and they charge the maximum that the insurer will allow regardless of what the actual cost of the treatment is. Abuse in that we as consumers do not take a more active role in taking care of ourselves (extra sour cream on that burrito please or I’ll exercise tomorrow) or we go to the doctor or emergency room for every scraped knee or sniffle. “Guilty!”

Lasik Eye Surgery is a medical procedure that has operated completely outside the confines of medical insurance. In its early days this procedure was about $5,000 an eye with so-so results. Currently, two eyes can be done for under $2,500 with guaranteed results. In essence, this medical procedure, subjected only to free market forces, resulted in lower costs and better results. This is much like the world of plastic surgery but since I’ve never had a boob job (at least not yet) eye surgery just seem to fit. Since there are no “deep pockets” paying the bills and cost has become the overall driving consumer factor, providers are forced to look for ways to be more competitive, i.e. lower costs or offering better technology and better results. Does anyone know of an insurance bound medical procedure that can make the same claim?

Imagine (you know I like to live in a hypothetical world) if there was no health insurance and everyone had to pay out of pocket with our meager paychecks. Would doctors still be able to charge $100 for a 10-minute office visit, or would people either stop/postpone visits or shop around for someone charging less, thus putting the $100 doctor out of business? Would hospitals be able to charge $40 for a Tylenol, or would they have to lower their costs to a realistic figure because people would demand they do so or go elsewhere? We allow these outrageous and ever growing costs because "we" think we're not really paying them, the insurance company is paying them. And whenever the providers raise their rates, as they often do, then the insurance outfits just raise their rates, and we pay it because we are too complacent to say enough is enough (where are our leaders, our rebels, our patriots!).

Am I saying the elimination of all health insurance is the answer? Absolutely not. Heck, Cooper’s surgeries and medical care was well over $500,000 to date, 99 percent of which was paid by insurance. I do think we will always need some type of catastrophic coverage for these situations. However, I do believe the costs would be significantly lower if some of the burdens imposed by insurance were removed. My point in all this is the democratic solution of getting more people health insurance coverage plays right into the hands of the medical profession and the insurance companies. Do you think the insurance companies DON’T want to collect more premiums and up their profits, do you think the doctors DON’T want more people coming in with a runny nose? I think not. Oil company executives have to be scratching their heads thinking “how can we be more like the insurance companies”?

Health insurance through my company costs $11,098 per annum. My company pays $7,800 and I pay $3,298. Pretty good deal for me when compared to what my employer pays. I like to think that if our doctor’s offices were no longer allowed to bill the insurance companies and had to answer to my wallet, costs would go down. I believe I could be a better consumer if a significant portion of that money was given back to me and the rest went to some type of catastrophic insurance policy. Maybe I’m just stuck in the hypothetical. Maybe the democrats are right; that I’m better off as an indentured servant. God, I hope not.

Tuesday, March 14, 2006

One Party Dominance?

Today's "Howard Dean" style of politics leads people to believe that one man or one party is responsible for the ills of our nation. Tell a lie enough times, eventually it becomes the truth. The democrats have found that it is easier to deceptively convince people how bad the republicans are than it is to convince people that their way is better. Their whole campaign strategy is and has been "vote for me, I'm not a republican."

Luckily, that is not how American politics work. The two party system currently in place provides checks and balances so that one sector of citizenry doesn’t end up dominating the political system. The conservative Republicans try to get your vote by appealing to your head. They tell you that you and the majority can have it better than you would if liberal Democrats ran the country for very long. They tell you Democrats prefer "peace through compromising treaties," as opposed to "peace through military strength." They tell you America has been morally declining because of the liberals' socially engineered permissive society, where anything goes." They tell you the liberals want to take guns from everyone in order to "appear" tough on crime, when all we really need are old-fashioned criminal laws making it safer for all law-abiding citizens. Upon hearing this, a majority of Americans would think in their heads that the conservatives were right and would cast their votes for conservative Republicans. Liberal Democrats try to get your vote by appealing to your heart. They tell you that you and the majority are behind the eight ball and the rich are richer thanks to you. They tell you government would be in your bedrooms, telling you what you could and couldn't do legally in a sexual relationship, if the conservative Republicans had their way. They tell you Republicans would arm America with enough nuclear weapons to kill the whole world hundreds of times over.

The majority of Americans seem to feel they are somewhere in between, voting for liberals sometimes and conservatives sometimes, thus giving America a mixture of government working at cross purposes.

Liberalism by its definition is a philosophy that advocates the freedom of the individual and governmental guarantees of individual rights and civil liberties. While honorable in its aim, the results of liberalism have been to the detriment of society as a whole. Does the ability to go out in the streets and attack your nation's policies, or betray your oaths to your government or spouse make us a better country? Liberals believe that these individual freedoms are what's most important and that we are better off as a country with freedoms of abortion, divorce, no regard for religion. That we are better off without the blanket of moral judgments that religion imposes. While I think that individual freedoms are great, the reality is that with rare exception we don't exist as individuals. We exist as members of a society, and being a member of a society requires that some individual freedoms be sacrificed for the betterment of the society. The Founding Fathers understood that, and enumerated a solid set of freedoms that every American should have for a good quality of life. It seems to me that they were on the right track as many of the "freedoms" added more recently have done little more than drag society down.

Thursday, March 09, 2006

Swim Lessons

I guess it’s a good thing but it still kind of drives me nuts. The two boys will not get undressed in the locker room if there are other gentlemen around. It makes for a slow time in trying to get them dressed after their swim lessons. How do you teach a kid when it’s okay to be naked and when it isn’t okay to be naked in front of a stranger? I guess locker room etiquette will have to come when they are a little older. I do try to convince them that as long as I or their mother are there (you know Sheri likes to change in the men’s locker room too) its okay. I even said to them Monday after lessons “I’ll take my swim suit off, look it doesn’t bother me none. It doesn’t bother me but what did bother me was when Cooper said to the guy next to us “Ha Ha, look at my Daddy’s butt!” What makes this even funnier is the guy instinctively DID look at my butt trying to humor my kids. He thought I didn’t catch him but I swear he turned three shades of red and he was black.

The locker room is also where the song “drying my nads” (a little ditty I taught them after their baths) comes back to haunt me.

Never a dull moment.

Wednesday, March 08, 2006

Social Security (Feb 2005)

President Clinton, in a major policy speech delivered in February 1998 at Georgetown University, warned about "the looming fiscal crisis in Social Security" that "affects every generation. He also stated "if you don’t do anything, one of two things will happen. Either it will go broke and you won’t ever get it, or if we wait too long to fix it, the burden on society … of taking care of our generation's social security obligations will lower your income and lower your ability to take care of your children to a degree that most of us who are you parents think would be horribly wrong and unfair to you and unfair to the future prospects of the united states.” This was an acknowledgement of the impending doom by the highest ranking democrat of that time. Three national panels had already been commissioned during the Clinton administration to review Social Security reform options: the Bipartisan Commission on Entitlement and Tax Reform (1993-1995); the 1994-1996 Advisory Council on Social Security; and the 1997-1998 National Commission on Retirement Policy.

All three of the Clinton commissioned panels offered long-term reform plans that included individual accounts. Now, no one from the left will even acknowledge there is a problem. Their only rebuttal is that the stock market is too "risky". If the stock market is so risky, why does virtually every union pension fund in America invest the bulk of their assets in the “risky” stock market? According to the Federal Reserve, state and local government employee pension funds have nearly $3 trillion in assets, 66 percent of which is invested in corporate equities (i.e.: stocks). So if majority of us hedge our financial futures based on the stock market in one way or another, why the sudden disdain for doing the same with a portion of social security.

The theory behind Social Security is that it's a form of insurance, while in practice it's nothing more than a pyramid scheme. In such a scheme, early investors can only be paid off by adding an even larger number of participants. To keep the status quo is unacceptable, Social Security is going bankrupt and sooner or later this pyramid scheme will collapse.

Currently, we are in a situation where many people depend on Social Security for their retirement and it cannot be funded indefinitely. It is unrealistic to think that rapid economic growth will provide enough taxes to sustain benefits at current levels. Today, retired Americans get benefits two to five times greater than the amount they and their employers paid in. Whether its tomorrow or 20 years from now, it will go broke and I for one am planning my retirement on that theory.

President Bush in his address to the nation suggested something like the system currently in place for federal workers, the Thrift Savings Plan (TSP). This would allow U.S. workers to shift some of their payroll taxes into personal investment accounts. The TSP is a $148 billion-401k type program that lets government employees save for retirement by investing pretax dollars into funds that mirror the market. Three of the funds are based on stock indexes, one is a bond index and one is government securities fund. The highest 10-year annual compound return on investment was 11 percent. Is it a mere matter of coincidence that this fund with the highest return on investment was the U.S. Company stock fund?

Latest Missive

Its tax time again and with it we’ll hear the pleas for tax reform. We’ll hear calls for the elimination of income taxes and converting to a consumption tax or a flat tax. While these reformists make a good case, serious tax reform in all reality is not going to happen. Serious tax reform will only occur once we eliminate the current campaign finance rules. Over the last 30 years or so lobbying has become big business in our nation’s capital. Our congressman and senators spend their time satisfying the needs of the lobbyists. The end goal of lobbying to get a specific tax rule that allows the lobbyist to justify to his clients that he is doing something for their money. Our representatives then provide the arcane rule to justify the support of the lobbyist. I thought we were supposed to be a government of “we the people” not a government of “they the special interests”.
How did our representatives become so beholden to their lobbyists and not their constituents? Many Americans just don’t see or chose not to see the relationship between our annual tax liability and the efficiency (if one can say that with a straight face) of our government. The most important feature of our existing tax policy is that the money does not come straight from our pockets. If we don’t have to write a check for it, we simply don’t seem to care how our government spends our money. We do our taxes and the most important line is the last, the amount of our refund. Talk about being lulled into complacency. Imagine for a second we eliminated withholdings and required everyone to pay their taxes in lump sum. Would we not become a nation of concerned tax payers and voters overnight? Would we not demand better accountability from our representatives?

Our progressive system of income taxes only compounds this problem. Progressive taxes breed corruption, complacency and class warfare. Believe the liberal scare mongering or not, but a small group of higher income taxpayers pay most of the individual income taxes each year. Taxpayers who rank in the top 50 percent of taxpayers by income pay virtually all individual income taxes. In all years since 1990, this group has paid 90 percent of all individual income taxes. In 2000 and 2001, this group paid over 96 percent of the total. So if I pay $1.75 for a hamburger and you pay $50.00 for the same hamburger, wouldn’t you want, no, wouldn’t you demand something more in return? Maybe kickbacks like a free soda or french fries? Maybe part ownership or a seat on the board of directors? This how progressive taxes work, higher income groups pay a larger percentage of their income for their share of government than other groups. This being the case, shouldn’t they be entitled to more control? The easy answer to the liberal state of mind is no, they shouldn’t be given more control of our government. The hard part for them to swallow is the government shouldn’t be taking more either.