Sunday, August 23, 2009

National Pull the Plug (on ObamaCare) Day

I wrote an article a couple of weeks ago that looked at the performance of the Massachusetts Health Insurance Connector and how it is a predictor of what would come of a national plan based on the same principles. I won’t go back over any of that ground, but I want to address an aspect of the health insurance debate that has me crawling out of my skin.

The White House apparently has adopted a strategy of saying whatever they think will satisfy the objector of the week. Just this last week, President Obama pronounced the “public option” to be only a “sliver” of the entire health care proposal and not really necessary to be successful.

What?

His foot soldiers, including Chuck Schumer, Barney Frank, Russ Feingold and Jan Schakowsky have stated unequivocally that the public option is a critical component of health care reform and that reform without it would be hardly worth the effort.

We also know that Mr. Obama feels the same way when, in March of 2007, he said this:

“My commitment is to make sure that we’ve got universal health care for all Americans by the end of my first term as president. I would hope that we set up a system that allows those who can go through their employer to access a federal system or a state pool [aka a public option] of some sort, but I don’t think we’re going to be able to eliminate employer coverage immediately [and move to a single-payer system, aka the public option]. There’s going to be potentially some transition process. I can envision a decade out, or fifteen years out, or twenty years out.”

How does this square up with what he has said over the past week? It doesn’t, of course. And that’s the aspect of this health care debate that has me so upset. I can’t stand people who lie and deceive to achieve an end. Okay, you say, “Isn’t that what politicians do?” Yes, admittedly, they often do, but what is being pushed onto us now is Round One of a series of legislative changes that will achieve the ultimate goal of converting to a European-style single payer health care system.

The only one of the lot who’ll tell it like it is, is Barney Frank. You may love him or hate him, but he said on camera that the only way to get to a single payer health care system is to do it incrementally. He is correct about this and will do everything he can to keep the Democrats focused on this step-by-step plan.

The president, on the other hand, will deny that that is what’s going on to the general public, while telling target audiences, like the AFL-CIO, that the end game is a single payer system. I’d much rather have the proponents stick with their message and plans rather than have them claim positions today that are 180 degrees out of sync with what they claimed just a few months ago. Don’t like the deviousness in that.

Out of this frustration and because of our views against conversion to a socialistic system for health care delivery, a half dozen of us pitched in and started promoting National Pull the Plug (on ObamaCare) Day. See a number of truth-revealing videos and how to participate in National Pull the Plug Day at www.PullThePlugOnObamaCare.org.

Copyright 2009 Randy Hunt

Friday, August 14, 2009

Update: My open letter to state senator Murray

Back in May (2009), I sent the following open email to Massachusetts State Senator Therese Murray, my fellow selectmen, and a few reporters. The letter appeared in The Sandwich Enterprise, a weekly local newspaper.

From: Randy Hunt
Sent: Tuesday, May 05, 2009 7:14 AM
Subject: 9-C (Local Aid) Cuts

I’ve been predicting since mid-March that the MA capital gains and income taxes collected in April would probably fall a billion short this year. Yesterday, the announcement was made that April’s tax collection were a billion under last year’s April collections. This is primarily fueled by capital gains which, for the 2007 tax year, were extraordinarily high (market peaked in October 2007) and for the 2008 tax year were extraordinarily low (market crashed in 2008). No rocket science here. The real problem, looking forward, is that many people now have capital losses that will offset future capital gains as well as non-MA bank interest and dividends. Don’t be surprised if the legislature proposes to change the capital loss carryforward rules, putting a cap of the offsettable amount, or eliminating the ability to offset non-MA bank interest (or both).

I am very encouraged, however, that Therese Murray’s website http://www.theresemurray.com/) continues to lead with this headline: Reform Before Revenue: Senate Passes Bill To Dramatically Restructure And Simplify State Transportation System. “This is an important piece of legislation for the Commonwealth,” Senate President Therese Murray (D-Plymouth) said. “We need to consolidate and restructure first so we don’t throw money into a broken system that no one has confidence in anymore. I’m proud of all the work here in the Senate, especially by Senator Steven Baddour and his staff, to deliver on the sound principle of Reform before Revenue.”

She has embraced the concept of correcting some of the hugely expensive structural, hierarchical and systemic aspects of state government before succumbing to the urge to crank up taxes. This is leadership we need at this difficult time. I’m confident that she will lead the senate in overturning the house of representatives’ brazen and regressive 25% sales tax hike and deliver on her promise of Reform Before Revenue. Thank you, Senator Murray.

Back to the big surprise: Today, according to the news reports, the governor will assemble a gaggle of economists to create a new revenue forecast in the aftermath of the billion dollar shocker. Dear Governor: The big surprise is having the economy kick you in the butt while your head is firmly buried in the sand.

Needless to say, more 9C cuts affecting FY09 are likely on the way, leaving us practically zero time to adjust [town and city] budgets to accommodate for them. Keep your antenna out and let our legislators know how tenuous our situation has become.

Randy Hunt, CPA and Town of Sandwich Selectman

When the state senate voted for the 25% increase in sales tax and expanded it to the already heavily excise-taxed beer, wine and liquor, I followed up with the next open email:

From: Randy Hunt
Sent: Wednesday, May 20, 2009 6:55 AM
Subject: Reform Before Revenue? (The Two R’s)

Remember that email I sent out on May 5th about the “Reform Before Revenue” thingy?

Never mind.

Apparently, the order of the two R’s got reversed.

I’m shocked.

Shocked, I tell you.

By the way, does it bother anyone that our state senate district isn’t represented in most of the senate votes? Senator Murray usually votes PRV (president rarely votes). Is that why the sales tax vote was 29 to 10?

Randy

Today, I received a nice letter from Senator Murray explaining the trials and tribulations of establishing the state’s fiscal year 2010 budget. Read it here.

I feel better.

Copyright 2009 Randy Hunt

Tuesday, August 11, 2009

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Sunday, August 9, 2009

America's consolidation of healthcare by outlawing options

A perspective from Massachusetts, where we're already on the operating table

Massachusetts stepped into unknown territory on April 12, 2006, when then Governor Mitt Romney signed into law the Commonwealth Health Connector. It’s a mandate requiring people and businesses to purchase health insurance or face monetary penalties for not doing so.

Now, the U.S. Congress and White House are pushing a bill (H.R. 3200) that copies many of the essential concepts from the Massachusetts plan. Acknowledged to be an intermediate step on the way to adopting a single-payer system, H.R. 3200 is intent on foisting Massachusetts’ failing experiment upon the rest of the nation.

Here’s what the Connector says about its own CommCare plan (from http://www.mahealthconnector.org/):

COMMONWEALTH CARE PROGRAM COST

The Commonwealth Care program is funded by both the state and federal governments.

For FY08, the original budget was $472 million while final spending came to $628 million. Additional funding was required because Commonwealth Care had enrolled considerably more residents than anticipated in FY08 (which suggests that the number of uninsured at the outset was closer to the federal estimate of over 650,000 than to the state’s original estimate of fewer than 400,000). The cost per covered life is actually just below budget.

For FY09, which began July 1, 2008, the budget is $869 million. Current projections indicate the cost will actually be about $800 million. When the legislative conferees who crafted the healthcare reform legislation in 2006 looked at future spending, they estimated it would cost $725 million in FY09. Again, the difference is due to the number of eligible enrollees in Commonwealth Care. Government payments toward premiums for the program increased by an average of 9.4% for the fiscal year that began July 1, 2008.

For FY10, which began July 1, 2009, the budget is $723 million. In addition, the governor has requested an additional $70 million to restore subsidized coverage to approximately 30,000 aliens with special status (legal immigrants), whose funding was eliminated since this population does not qualify for matching federal funds. [As a side note, the governor’s request to fund $70 million for legal aliens was trimmed to $40 million, putting the fiscal year 2010 budget for CommCare at $763 million.]

Without reducing benefits or increasing cost-sharing for members, base enrollee contributions remain flat in FY10. Most of those in higher-priced plans are seeing a decrease. Since the inception of the program in 2006, the average annual rate of increase in premiums per covered person has been held under 4.7 percent.

Let’s examine a few of these self-admitted facts:

1) The fiscal year 2008 expenditures for the CommCare exceeded its budget by $156 million, a full one-third higher than expected. Or should I say “budgeted” rather than “expected” because the two can be very different from each other.

2) The legislature voted for this plan in 2006 using data that underestimated the number of uninsured people in this state by at least 60% in spite of having the more accurate figure available at the time.

3) The fiscal year 2009 budget was 38% higher than fiscal year 2008’s actual spending.

4) CommCare boasts of holding the annual rate of increase on premiums to less than 5%, but at what cost to the state? (By the state, I mean you and me, as taxpayers.)

For the $2.2 billion the state spent and expects to spend for the first three years on CommCare, the Connector reports that 430,000 new people are insured compared with the number of insured at the outset of the program. At 97.4% of the population insured, we’re now in the range of diminishing returns. That is, most of the remaining people are exempted from purchasing insurance for religious reasons (which doesn’t, by the way, keep them from accessing free healthcare via an emergency room) or are in an interesting No Man’s Land of making too much money to qualify for a subsidized plan but proving, by the Connector’s own formula, that they make too little to be fined for not having a plan.

For those people: “Too bad. Hope you don’t get sick. Have a nice day.”

Assuming that the uninsured ranks will stabilize, how much are we going to spend on the 430,000 newly insured people in Massachusetts? According to the Connector, those 430,000 break down as follows:

149,000 are now insured by employer-subsidized plans and, therefore, should consume little or no state resources.

41,000 have individual policies for which they are paying the premiums. Again, little or no cost to the state.

76,000 are now enrolled with MassHealth, which has its own budget separate from CommCare’s. MassHealth estimates its caseload in fiscal year 2010 will be about 1.2 million cases at a cost of nearly $9 billion (9,000 million dollars).

164,000 are enrolled in CommCare and are paying subsidized or no premiums. CommCare is budgeted to spend about $763 million in the current fiscal year (July 1, 2009 to June 30, 2010), or about $5,000 per person.

On top of all this, we learn from a Boston Herald article that the employee roster at the Connector has ballooned to four times its original size in the last 18 months, with 17 of the agency’s staff of 89 earning more than $100,000 per year. The Connector’s executive director, Jon Kingsdale, commands a $239,000 salary and the agency’s total budget for fiscal year 2010 is $33 million, a full 9% higher than the 2009 budget. Good times must be rolling on Beacon Hill.

With close to $10 billion, or 37%, of our $27 billion FY10 state budget going to healthcare (compared with 34% of our FY07 budget), we’re now apparently satisfied with the results of the Massachusetts Experiment and are ready to spring it on the nation as a whole. And, just as Massachusetts failed to deal with the single largest contributor to increasing health care costs—the cost of litigation which inflates malpractice premiums and is passed on to patients in the form of higher fees, hospital costs, and unnecessary defensive medical procedures—H.R. 3200 also does nothing to reform this fundamental cost driver.

Another significant contributor to the cost of health insurance in Massachusetts is the minimum coverage standard, referred to in the Health Connector law as “creditable coverage.” Just about any plan was okay during the first year the Connector was in effect, but starting January 1, 2009, the rules changed and will change again as of January 1, 2010. Next year, creditable coverage means a qualifying plan must include all of the following:

1) Preventive and primary care

2) Emergency services

3) Hospitalization

4) Ambulatory patient services (i.e., all outpatient services regardless of the setting)

5) Prescription drugs

6) Mental health and substance abuse services

7) Diagnostic imaging and screening procedures, including x-rays

8) Maternity and newborn care

9) Radiation therapy and chemotherapy

10) Medical care deductibles not exceeding $2,000 annually for an individual and $4,000 for a family

11) Prescription drug deductibles not exceeding $250 for an individual and $500 for a family

12) No annual maximum capping the dollar amount or utilization of core services

In short, our health insurance plans must come with all of the bells and whistles to qualify for creditable coverage. For a 25-year-old single male or 60-year-old woman, is maternity and newborn care really necessary? How can this state expect everyone to be able to afford a gold-plated insurance plan?

As you can see, our ability to control health insurance premiums by selecting a policy we can afford has been eliminated. Fewer choices, more government control. And the federal proposal does exactly the same thing, sure to crank up costs while you hear our president promise the opposite.

Remember, however, that the America’s Affordable Health Choices Act of 2009 is simply an intermediate step on the road to a single-payer system. Based on the Massachusetts incubator, there is no doubt that the national version of our state's failing experiment will similarly fail. And that, my unsuspecting friends, is the point.

When we “discover” that costs are still going through the roof, the only “logical” alternative will be to move to a single-payer plan. After all, we obviously won’t be able to go back to the old system. You’ll be deemed an idiot if you propose that. And the on-switch will be an easy one to flip. Just eliminate the private coverage provision of H.R. 3200 and, voilà, instant single-payer system.

That bill should be named America’s Consolidation of Healthcare by Outlawing Options (ACHOO).

Copyright 2009 Randy Hunt