Monday, July 23, 2012

Two Cents on Gun Control

I favor gun control, primarily executed through rigorous licensing.  I think that if you want to own guns that you should actually be trained in their use and care to the point that you are a skilled marksmen and are capable of maintaining them.  Such licensing should be provided by the state and the possession of a valid license should be necessary for a sale.  That said, it seems like pandora's box has been opened long ago.  There are almost as many guns as there are people and tracking them down is sure to be nearly impossible. 

Tuesday, July 17, 2012

Paying to Keep the Insurer and Providers Lights On

Austin Frakt had a very intersting blog post several months ago where he tried to argue why it is sensible to have insurance cover routine predictable expenses.  He cites two principle reasons: 1. the tax subsidy, 2. Insurer's bargaining power.  I am less interested in the first reason but more with the second.  I think it is obvious that insurers through their bulk purchases can obtain discounts that individuals cannot.  That said, what I find amusing is this ignores the fact that much of what you are paying for when you go to a provider is the overhead associated with chasing a reimbursable.  If everybody paid cash (or a near substitute like the medical equivalent of a food stamp) I would imagine much of the direct and indirect costs a doctor incurs (and then passes along to you the consumer) would disappear.  The question then becomes do these cost savings outweigh the bargaining discounts the insurer is able to obtain.

Monday, July 16, 2012

Thoughts on Possible VP Picks

Typically VPs are sought for electoral reasons.  Sometimes the VP is picked becasue he might put a state into play or keep a borderline state out of play.  Sometimes the VP is picked to compensate for deficiencies of the president.  Cheney brought experience to the the ticket.  Biden is a white male.  There are a lot of areas where Romney needs "balance".  Romney is a mormon which presents an unfortunate ick factor for most Americans regardless of party or religiosity.  Romney is also a bit aloof and out of touch with the every man (I suppose this is an organic result of being worth a quarter billion).  These two factors have many suggesting Tim Pawlenty as a running mate.  Pawlenty is certainly the "right" religion to reassure the base and he is a natural born retail politician.  That said, there are a couple of areas where Pawlenty concerns me as a potential veep.  I am no expert on Minnesota affairs but it is not clear that Pawlenty excelled in any particular area as a govenor and one can argue that he was not a very good govenor.  But, more troubling is something that is beyond his control and is ultimately unfair.  Pawlenty is a white male.  The Republican party is just now beginning to cultivate political talent from a broader demographic spectrum (I might add, this I think was the only clear positive of Palin's presence on the ticket in 08, an overwhelming positive given the fact that McCain didn't have a chance in hell).  Pawlenty is not going to put Minnesota in play.  Portman probably won't move the needle on Ohio.  Romney is going to win or lose because the economy is perceived to be getting worse or better.  With that in mind, Romney can afford to take a long view and to continue the process of cultivating political talent outside of white males within the Republican party and to truly make it a big tent party*.

*Obviously things like not gay bashing and talking about rounding up immigrants and deporting them would help too, but...baby steps.

Friday, July 06, 2012

Thoughts on Obamacare Ruling

Conservatives may well be bummed that the Court didn't bail them out on Obamacare but this was ultimately a good ruling.  The Court respected the political process and did actually put some constraints on how the commerce clause is used.  This goes back to the political process though, and this is where conservatives failed back when Obamacare was passed.  There was one argument that was risible on its face and this is the one Conservatives hung their hat on: nothing needs to be done, everything is ok. 

Obamacare is bad law (though, I think in 10-20 years might be acceptable do to the impact of the cadillac tax finally taking hold) but not unredeemable.  There needs to be a risk pool and a mandate is the simplest and most elegant way of pooling risk.  Where the mandate is troublesome is that the level of coverage mandated is onerous for middle class families.  There are two manners in which this can be remediated (and both should be done)-

1. Equalize the tax treatment for those receiving their health care through their employer and those paying for it themselves (preferably by capping and phasing out the tax exlusion).  There will be a decent subset of the population who makes enough money to not qualify for meaningful subsidies but not so much that paying 15k for a family plan is a realistic option.

2. Which brings us to our second action item.  Reorganize Obamacare and the subsidies around catastrophic plans.  If your insurer has to pay for the first dollar the coverage will be that much more expensive. It is stupid to add parties to routine (or non-routine) predictable expenses.  When purchase something through a third party as opposed to the provider directly you have to pay enough so that both parties can keep their lights on.  That is the principle reason why premiums are so high.  If you have a high deductible your premiums will be a fraction of the cost and the premium savings will be sufficient to cover the deductible*.  The net result will be the subsidies will be less and the mandate will be much less onerous as it will be much easier to avoid.

Republicans have a decent shot of winning the Presidency, the Senate, and the House. Everybody needs real insurance and a decent society provides for this. 

*Most folks would rarely come close to reaching their deductible limit and thus would be paying for most of their care out of pocket.  Again, the premium savings make this eminently doable.  Where this approach is more difficult from a cash flow perspective is for the chronically ill.  While the numbers may not be different if you are reaching the full deductible (they may in fact be less), first dollar coverage functions almost like a forced savings program.