Big Government

Alternatives to Obamacare

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As Obamacare looks more and more as though it will collapse, there are some alternatives beginning to appear. Several years ago, I suggested using the French system as a model. At the time, the French system was funded by payroll deduction, a source affected by high unemployment, and used a national negotiated fee schedule which was optional for doctors and patients. The charges had to be disclosed prior to treatment and the patient had the option of paying more for his/her choice of physician. Privately owned hospitals competed with government hospitals and patient satisfaction was the highest in Europe.

Recently the French system has run into trouble.

French taxpayers fund a state health insurer, “Assurance Maladie,” proportionally to their income, and patients get treatment even if they can’t pay for it. France spends 11% of national output on health services, compared with 17% in the U.S., and routinely outranks the U.S. in infant mortality and some other health measures.

The problem is that Assurance Maladie has been in the red since 1989. This year the annual shortfall is expected to reach €9.4 billion ($13.5 billion), and €15 billion in 2010, or roughly 10% of its budget.

This may be due to several factors. The French economy is in terrible shape with high unemployment. More of the funding for the health plan is coming from general revenues. This was not how it was supposed to work. It was payroll funded, much as the German system is, with a wider source than individual employers. This allows mobility for employees and allows employers to distribute risk among a larger pool. Germany allows other funding sources such as towns and states. I think it is still a good model for us but, with the passage of Obamacare, it will take a generation before another large reform would be viable. Obamacare must stand or fall first and I think it will fall but, as in most government programs, it takes years before the sponsors will admit defeat.

Another proposal has been made by a serious study group.

1. The government should offer every individual the same, uniform, fixed-dollar subsidy, whether used for employer-provided or individual insurance. For everyone with private health insurance, the subsidy would be realized in the form of lower taxes by way of a tax credit. The credit would be refundable, so that it would be available to individuals with no tax liability.

2. Where would the federal government get the money to fund this proposal?

We could begin with the $300 billion in tax subsidies the government already “spends” to subsidize private insurance. Add to that the money federal, state and local governments are spending on indigent care. For the remainder, the federal government could make certain tax benefits conditional on proof of insurance. For example, the $1,000 child tax credit could be made conditional on proof of insurance for a child.10 For middle-income families, a portion of the standard deduction could be made conditional on proof of insurance for adults. For lower-income families, part of the Earned Income Tax Credit could be conditioned on obtaining health coverage.

3. If the individual chose to be uninsured, the unclaimed tax relief would be sent to a safety net agency providing health care to the indigent in the community where the person lives, so that it would be available there in case he generates medical bills he cannot pay from his own resources. The result would be a system under which the uninsured as a group effectively pay for their own care, without any individual or employer mandate. By the very act of turning down the tax credit for health insurance in choosing not to insure, uninsured individuals would pay extra taxes equal to the average amount of the free care given annually to the uninsured. The subsidies for the insurance purchased by the insured would then effectively be funded by the reduction in expected free care the insured would have consumed if uninsured. [See Figures II and III.]

The paper goes on to explain the proposal The trouble is that this is another major reform and I see no chance for it in the foreseeable future.

What then is the most likely development ?

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When Law Yields to Absolute Power

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Three years ago, I reviewed the important and well-written memoirs of Sebastian Haffner, who grew up in Germany between the wars. I think the state of affairs in America today makes it appropriate to re-post some excerpts from the review and from the book.

In 1933, when Hitler became Chancellor, Haffner was working as a junior lawyer (refendar) in the Prussian High Court, the Kammergericht. He was comforted by the continuity of the legal process:

The newspapers might report that the constitution was in ruins. Here every paragraph of the Civil Code was still valid and was mulled over and analyzed as carefully as ever…The Chancellor could daily utter the vilest abuse against the Jews; there was nonetheless still a Jewish Kammergerichtsrat (high court judge) and member of our senate who continued to give his astute and careful judgments, and these judgments had the full weight of the law and could set the entire apparatus of the state in motion for their enforcementeven if the highest office-holder of that state daily called their author a ‘parasite’, a ‘subhuman’ or a ‘plague’.

In spring of that year, Haffner attended Berlin’s Carnivalan event at which one would find a girlfriend or boyfriend for the night and exchange phone numbers in the morning…”By then you usually know whether it is the start of something that you would like to take further, or whether you have just earned yourself a hangover.” He had a hard time getting in the Carnival mood, however:

All at once I had a strange, dizzy feeling. I felt as though I was inescapably imprisoned with all these young people in a giant ship that was rolling and pitching. We were dancing on its lowest, narrowest deck, while on the bridge it was being decided to flood that deck and drown every last one of us.

…..

Though it was not really relevant to current events, my father’s immense experience of the period from 1870 to 1933 was deployed to calm me down and sober me up. He treated my heated emotions with gentle irony…It took me quite a while to realize that my youthful excitability was right and my father’s wealth of experience was wrong; that there are things that cannot be dealt with by calm skepticism.

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Appropriate Reading and Viewing for Obama’s Surveillance State

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McClatchy Newspapers has obtained information about an Obama administration initiative called the Insider Threat program, under which federal employees are required to report “suspicious” behavior by their co-workers. The program is aimed at stopping leaks and security violations. According to the article, the program is not limited to defense-related agencies, but includes a wide range of Federal departments including the Department of Education and the Peace Corps.  Federal employees and contractors are asked to pay particular attention to the lifestyles, attitudes and behaviors like financial troubles, odd working hours or unexplained travel of co-workers as a way to predict whether they might do “harm to the United States.”  The FBI’s insider threat guide  lists “a desire to help the ‘underdog’” as one of the alarming behaviors managers should watch out for in potential leakers. Those who fail to report such “high-risk” behaviors, according to the McClatchy article, could face penalties, including criminal charges. What the legal warrant for such criminal charges might be, I can’t imagine, but this administration does not appear to worry overmuch about legality when it wants to apply intimidation.

Writing in Forbes, James Poulos says:

For left-leaning writer David Sirota, training the attention of little brother on the intimate details of his fellow worker’s “lifestyles” and “attitudes” smacks of  McCarthyism. For me, I’m picking up Stalinist vibes. It’s not just the state’s effort to burrow into the spaces between humans that keep us human. It’s the effort to assert state control over all aspects of time in addition to space — not just the present, but the future, hoovering up the metaphorical breadcrumbs trailing back from what we will do and who we will be to what we’re doing and who we are.

I would urge everyone who has not already seen it to watch the movie The Lives of Others…set in East Germany during the era of Communist totalitarianism…to get an idea of what the fully-developed surveillance state looks and feels like from the inside and what it does to human beings. Also read Anna Funder’s excellent book Stasiland…I reviewed it here. For a science fiction view of the technologically-enabled surveillance state, see Poul Anderson’s short story My Name it is Sam Hall, which I reviewed here.

If Obama read Stasiland, he evidently thought it was an instruction manual. If he read Sam Hall, he probably thought it was an IT development plan. And if he saw The Lives of Others, he must have thought it was a training video.

It is increasingly clear that when Barack Obama spoke about “fundamentally transforming the United States of America,” one of the transformations he had in mind was the constraining of human liberty on almost every possible dimension.

The McClatchy link is via the excellent blog Common Sense & Wonder.

 

Citizen Intelligence curious fact of the day

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During the process of putting together Citizen Intelligence, I sometimes run into some things that are quite simple, but are worth remarking on. I’ve decided to put them up here as an irregular series.

Out of the ~89,000 governments in the United States, ~55,000 of them bond, or borrow money, about 61% of the total. That means 34,000 do not. Which of your governments live within their means and spend all their tax money on providing services and which of them have an invisible drain installed siphoning off unnecessary interest payments to Wall Street? How many of them could, with minimal inconvenience, add a few more percent in services or cut a few percent off their tax bills simply by not bonding or reducing their bonding to large capital items instead of borrowing for operations?

Note: Updated to make it clear that this is not about the classic large capital expenditure items that most would agree are legitimate projects for bond financing but rather borrowing that could be foregone and where, in some jurisdictions, they manage their cash flow well enough to do without the borrowing.

Free Introductory Webinar Today: Lean Government – An Introduction, by Steve Elliott

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Siera is devoted to teaching things that are steps along the way to America 3.0 (Bennett & Lotus). Delivery of efficient governmental services, in a way respectful of customers, is one of those steps.

On July 9, noon Denver time, we will offer, online, a free live introduction to a 10 webinar course on “Lean Government,” created by Steve Elliott, recently with the Boulder Country Treasurer’s Office (Colorado).

Steve is president of Constant Improvement Consulting, Inc. based in Longmont, Colorado. He has decades of experience in the public, private, and nonprofit sectors as a manager, business owner, trainer, and consultant.

He was instrumental in the creation and adoption of Colorado House Bill 11-1212, which officially made Colorado a Lean Government.

When Steve was at the Treasurer’s Office they returned tens of thousands of dollars to the County as a result of their lean management innovations.

Course description and information:

http://www.sieralearn.com/free-webinar-kicks-off-lean-government-webinar-series

Please go to the above link at least 30 minutes before the start of the presentation. The registration procedure will take only a minute or two, and you will be sent a link to the presentation.