Wednesday, March 27, 2013

ObamaCare's Plan to Insure 30 Million More People Leads to 30 Million More People Being Insured

Here are a few of the headlines that caught my eye on the Yahoo! newsfeed this week:

The first article points out a glitch in the law that could affect two to four million people and whether or not they receive the proper tax credits to help pay for their insurance coverage. It's a legit hole that could easily be plugged if there was support in Congress to make government work better, rather than dismantle it.

The second article, however, seems to miss the overall point of the law. Let's face it, ObamaCare was a large bill, thousands of pages long, as Republicans were always eager to point out. Surely, you can pick out any one piece of the bill and say, this will hurt this business or that sector of the health care market. But when you take the bill in its entirety it's expected to be a net-good for almost everybody.

The bulk of the increase in claims costs will largely be passed on to the states who are implementing the expanded Medicaid coverage. And the Feds will be picking up 100% of those costs now and 90% in the future. The rest of the costs will effect those who get their insurance through the individual marketplace - self-employed people or very small businesses. Those who get insurance through their employer will not be affected by these changes.

With ObamaCare in general and on this issue specifically, my initial reaction usually is "compared to what?" If the baseline is millions of people have no health coverage and receive emergency room care for everything, then that currently is already driving up the costs of: health insurance, hospital reimbursements, tests and procedures, and the subsidies the government is providing for all of that. In the long term, after the initial increase in claims costs is absorbed, costs stabilize.

Focusing on something like increasing claims cost, which are due to more claims being filed because more people will have health coverage, while the costs of which are more than offset by reductions in costs elsewhere, misses the point. Covering more people is a feature of the law, not a bug. And if it was easy and inexpensive to extend coverage to the uninsured, it would have already been done years ago. The rise in claims costs was not unexpected and was already factored into the bill.

The key point here is that ObamaCare wasn't passed to ensure that the number of medical care claims were held steady. The main goals of ObamaCare were: 1)to help give thirty million-plus more people access to health coverage, 2)to end insurance company abuses by more tightly regulating the health insurance market, and 3)by doing those previous two things and by implementing hundreds more cost control mechanisms, to attempt to eventually bring down the growth in health care costs to a more manageable number going forward, so we can deal with our long-term debt problem. You can't accomplish those goals without some minor and somewhat major changes and reforms.

Update 03/28/13: Yahoo! News continues to troll ObamaCare.....

Tuesday, March 19, 2013

The Iraq War: Ten Years Later

 Flag-draped coffins in Dover, DE (New York Times)

Ten years ago this week, the war in Iraq was launched in spite of some of the largest worldwide protests in history. I don't really have any new insight into the still-baffling decision to go to war with such a high-risk/low-reward outcome. It was the wrong war in the wrong place at the wrong time. Period.

Combat operations finally ended (for realsies) in 2010, seven-plus years after President Bush declared major combat operations over ("Mission Accomplished!"). Looking back, it's still hard to believe it was ever allowed to happen. But thanks to an aggressive public campaign by the Bush Administration, along with the combination of a compliant, enabling media (and the cheerleading Conservative media complex driving the news coverage) and an apathetic populace far removed from the the consequences of decisions about war these days, it ultimately was sold and carried out much more easily than it should have been.

Anyway, here are some numbers to consider (all figures based on latest data as of 2011-2012):

Total costs of the was as of 2013: $2.2T

Total future costs of the war (including estimated post-war costs for veterans' health care, benefits, and interest on the debt): $3T to $4T.

Total casualties:
- at least 4,487 US combat casualties
- at least 32,223 US soldiers seriously wounded
- at least 318 coalition forces casualties
- at least 1,487 contractor casualties

And per the IBC (Iraq Body Count project):
- approximately 110,000-120,000 Iraqi civilian casualties
- approximately 70,000-100,000 Iraqi combatant casualties
- at least 42,500 Iraqi civilian injuries

Other features of the war:
- No WMD were ever found
- strengthened Iran's position in the region
- caused more instability in the region
- took attention and resources away from the war in Afghanistan and the Pakistan border
- harmed America's reputation in the world and strained relationships with European allies.

Friday, March 15, 2013

Would Ray Lewis Have a Job on ESPN If....?

Former Ravens great, Ray Lewis (Larry French/Getty Images)

It was officially announced this week that Ray Lewis will be joining ESPN next season. As a football fan, I'm not sure how much football analysis Ray Lewis will add to a network that's already pretty light on actual analysis and more heavy on personalities. Lewis is certainly a personality and that's probably why he was hired. Love him or hate him, and there's few people in between, enough people will watch either way.

I have a rather complicated view of Ray Lewis. On one hand, as a football fan, I think he and Lawrence Taylor are the two best linebackers I've ever seen. And Lewis may be the last of a dying breed of every-down, inside/middle linebackers in an increasingly pass-first league. I enjoyed watching Lewis play for many years. And when it comes to what happened on January 31, 2000 in Atlanta, I do feel the truth is probably closest to the story Ray Lewis has told over the years.

But here's another thought on Ray Lewis. Could you imagine Ray Lewis having any chance of getting a very high-profile TV job on the nation's #1 sports network had he been charged with another major crime against anyone of any nature except the murder/manslaughter of two young black males? In any other scenario wouldn't some interest group be protesting the hiring? Even if you accept the scenario where Lewis was just present at the scene of the crime, helped his friends cover up the crime, and then obstructed the investigation, that is still a lot of baggage for any major network to take on, unless....

If the victims were white, would he be on TV? Maybe. But if his victims were white, there's probably a good chance he and his two friends would be in jail right now, based on the much higher arrest, prosecution, and conviction rates of black on white crime vs. black on black crime.

If he was involved in any sort of domestic violence toward a female, child, or pet, there's very little chance he'd be on TV.  If he had been involved in a sexual assault or a DUI that killed someone, there's little chance he'd be on TV.

Young black males are the most invisible demographic group to the rest of mainstream America. That's why it was such a notable positive development last year when the Trayvon Martin case received so much attention. The unemployment rate among young black males is a national embarrassment for our country, yet it is almost never discussed, as if it doesn't exist. It's a problem no one in power really has an incentive to solve because this demographic group is practically invisible. And when the media does shine a light on this invisible group it is usually in the context of athletics, entertainment, or crime.

Lewis should get credit for the positive impact he's made on people's lives since that night and for turning his own life around, but ultimately his turnaround and career trajectory since then can be attributed more to the demographics of the victims in the incident than anything else.

So as ESPN Magazine might put it, what if the victims in the incident were white?

Tuesday, March 12, 2013

Our House Burned Down, So Let's Worry About Our Electric Bill

Pundits love framing discussion about the deficit in the same terms as household budgets. And while I don't find that framing very useful and at times purposefully obtuse, here's my stab at it.

About four-and-a-half years ago your family's house was on fire. Your neighborhood fire department took the necessary steps to contain and eventually put out the fire. But your house suffered severe damages that were in need of repair. So you borrowed some money to make minimal repairs and got the house back to the point that you could sort of live in it again.

But it still needs a lot of work, including repairing a leaky roof. You have some debt, but it's manageable debt. In fact, the bank at the corner is still willing to lend you a lot of money and will do so at practically 0% interest because you are such a sure bet to repay it. So would you borrow some more money to finish fixing up the house now?  Or...would you spend 2-3 years singularly focused on reducing your electric bill and food expenses, and cutting junior's weekend art and music expenses, in hopes of slightly improving your debt holdings over the next 20 years?

And you'd be doing this because you are worried about how much debt you will have 15-20 years from now, even though the biggest driver of your debt happens to be your mortgage and education costs - neither of which are addressed in any of your household budget plans.

That in a nutshell is what has happened with the financial crisis/Great Recession and the ensuing fiscal debate that has been taking place in Washington the past 3 years. Our house was on fire (financial meltdown, over-leveraged household debt) and the fire is out and we still have a lot of work to do (economic growth, high unemployment). But we're focusing on debt instead and ignoring the biggest drivers of debt (health care costs, particularly Medicare).

This week both Paul Ryan and Senate Democrats both plan to release balanced budget plans, as if balancing the budget is an end unto itself. If balancing the budget in 10-20 years would lead to huge economic growth and job creation, it'd make more sense. But almost every economist predicts that any attempt at drastic spending reductions now would hurt economic growth and probably send us back into recession.

Here was Ben Bernanke a few weeks ago explaining Economics 101 to everyone else in Washington:

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Thursday, March 7, 2013

The Power of Inequality

Below is a graph I've seen previously and it was re-aired on The Rachel Maddow Show (embedded below) this week showing the difference between actual, estimated, and ideal wealth distribution.

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The lower two estimated and ideal bars were derived based on polling the American people on what they perceived wealth distribution was and what they would like it to be. All these numbers were as of 2010 (so it's likely gotten slightly more lopsided since then).

As you can see, the difference between what was estimated and the ideal is still pretty far apart. But if that was the actual, the problem of income inequality would be greatly diminished. The problem is the top bar is reality. The top 20% owns about 85% of the wealth and the top 40% owns about 95% of the wealth. The bottom 40% basically has no wealth. And this disparity grows every year.

This also highlights the real class warfare that has been occurring right in front of our eyes. Every time additional tax revenues are asked of the richest 5% or the largest corporations, they claim class warfare. But yet much of our politics of the last 40 years can be understood through the prism of dividing the bottom 80% of the wage earners into fighting over the remaining scraps. The middle class is pitted against the poor when it comes to paying taxes or receiving government benefits, while the top 1-5% just glide along above the fray.

Perhaps if Americans were reminded daily of what the actual wealth distribution is, they'd be more supportive of policies that were rooted in redistribution or at least in higher taxation on the wealthy and more investment in the programs that could help provide more opportunities for the bottom 60% to ascend into the top 20%.

Deficit reduction is often framed in moral terms about living within our means and leaving behind a debt-free nation to our grandchildren. If the numbers above don't stir up a moral crisis within you, then the deficit never should.

Update: Here's a great post on Mother Jones from two years ago if you would like to see more graphs on this topic.