Catching Up on Politics & Health Care

Politics:

It’s been really hard to comment on the Trump administration. Whatever you thought Trump stood for yesterday is the opposite today.  Put a thought on paper about a Trump policy, turn on the TV and  find he’s now 180 degrees from where he was when you started writing. Not that we find this surprising. We warned everyone last November in our Election Recap post, if Trump adopted  the Republican establishment program he ran the risk of losing his clout.  His first act, the Travel Ban, was a disaster but at least kept faith with his most ardent followers.  However, health care was another thing entirely. Trump had promised “Repeal & Replace” Obama’s Affordable Care Act (ACA) and then outsourced the legislation to Paul Ryan and the Republican House leadership.  Six years in the making and their bill was so poorly conceived it garnered only 17% approval. Trump not only wasn’t aware of  the legislation’s multitude of failings but ordered his chief strategist, Steve Bannon, to demand the most conservative members of Congress, the Freedom Caucus, to fall in line and support the bill or else.  The Caucus at least realized the bill as written was unacceptable to everybody.  In fact, the Bill’s only saving grace for Republicans was it cut Medicaid enough to facilitate their Tax Cut Bill.  The Trump pressure expressed through Bannon,was horribly misplaced.  The only special power Trump has over some Republicans is the threat to primary opponents. This can only be done by running candidate further to the right against the offending incumbent. How do you get to the right of the freedom caucus?  With no running room on the right, the Administration could only belatedly give ground to the Freedom Caucus, but this lost moderate votes.  By not knowing where his power emanated from and how to use it, Trump saw the bill pulled with egg on everyone’s face. Bannon was blamed and now the Troika of Ivanka Trump, Jared Kushner and Gary Cohn appear to giving direction to the administration. All three are Democrats.

By showing it was weak and inept on Health Care, the administration and the house leadership lost control of the domestic agenda. Senate  Republicans could only confirm Neil Gorsuch to the Supreme Court by dumping the 60 vote filibuster rule. This will probably cost Republicans big in the future. Without the savings from their Health Care Bill, Tax Reform is in Never-land.  In any case, Republicans showed they can be just as imaginative alchemists as the Democrats with the Border-Adjustment Tax, further dimming their tax reform chances. Predicting exchange rates in the future with precision, really? Indeed.With nothing much to show for its domestic efforts, the Administration may have gone “wag the dog” by reversing themselves and dropping explosives on suddenly perceived enemies. Trump admonished Obama not to take action in Syria when they used Poison Gas  in chemical attack in 2013, only to let the missiles fly for a lesser attack now.  Trump acolytes say he “is a man with a plan.” Maybe, but for a man who ran as the anti-establishment candidate, with the Troika, the generals and big business moderates such as Secretary of State Rex Tillerson how does this administration differ from a Hillary Clinton one?  Chaos Theory in action? The administration can only hope their  executive orders on energy and regulations, can produce enough growth to keep it afloat. This is an administration uniquely dependent on the economic fates. We’ve been in a long albeit weak expansion. A correction may be overdue and if it happens before Nov. ’18, Trump and the Republicans would be exposed and  decimated. Ronald Reagan actually got his tax reforms passed, but because of the delayed implementation still suffered a recession and congressional losses. Imagine if the “Business Genius” fails to deliver. Maybe it would’ve helped if the congressional Republicans  had used the last eight years to come up well thought out legislation for healthcare and tax reform and if Trump actually gave these any  real thought.

Health Care:

We’ve seen some  intelligent movement on health care lately.  First  Republican congressman David Schweikert with some Freedom Caucus allies, has moved  to amend the Republican House Bill to remove those with preexisting condition from the general insurance policies and put them in state-run high risk pools with federal subsidies.  This would allow  policies to reflect real risk and cost. In short a return to real insurance. Then the Heartland Institute’s Justin Haskins and Michael Hamilton wrote in the April 12th Wall Street Journal “Give Medicaid Dollars directly to Patients.” They proposed using the money spent on the Medicaid and the Children’s Health Insurance Program differently,

Instead lawmakers could take $511 billion of that total, divide it equally among enrollees, and give each one a health savings account with $7,000 a year. This would be real money for the poor, stored in real private accounts.Recipients could use the deposit to buy health insurance and cover the cost of prescriptions, copays, deductibles and other related expenses. Unspent money would carry over to the following year. Enrollees could share that $7,000 with a sick spouse, sibling, parent or child.

Of course, a Health Savings account (HSA) consist of a Catastrophic Insurance Policy and a savings account to pay other medical costs. What isn’t spent is saved. This recognition of the across the board movement towards this combination is evidenced by the growing popularity of HSAs with employers. Even ACA policies with their large deductibles resemble HSAs. The authors are right to point out that Medicaid isn’t much use if Doctors refuse to take it and “30% of physicians don’t.” This situation continues to grow and must be dealt with.

Dealing with preexisting conditions separately and directly funding Medicaid recipients HSAs are moves in the right direction and we applaud them. But in truth these are baby steps.  Dave’s Plan basically proposed these actions on this Blog starting in 2014. (Look under Dave’s Plan to Replace the ACA for the complete series) Where under Schweikert’s proposal the risk pools and subsidies would go on forever,  under Dave’s Plan they in time would simply disappear. Because premiums are paid directly and first there can never be a break in insurance coverage thereby eliminating lapse costs making possible even lower premiums.  Dave’s Plan pays not only Medicaid but all subsidies directly to an account. Because it combines all savings plans (401K, Ira,HSA, etc) into one Personal  Savings Account (PSA) it allows for the critical mass needed  for an associated account medical credit card. This makes possible not only medicaid recipients to be served by any medical provider, but everyone to form a mass market without credit risk and eliminates most expensive 3rd party payments. This should lead to much lower costs. If you agree with us that Schwekiert and the Heartland Duo are on he right track, why not entertain Dave’s Plan that does everything they propose and so much more?

Late Notes:

Wouldn’t you know it. Just as we’re wrapping this up, we hear the Administration finds Iran keeping up the terms of the nuclear deal Obama concluded. No need to tear up that treaty. There was a White House meeting on the Paris Climate Accords. Remember the ones Trump pledged to walk away from. Now the Troika,Tillerson and others are saying not so fast. Also it appears the President lost track of his “Armada.” Just 3,500 miles from where he lead people to belit was. The Day is only half over. What next? The only thing that makes all this somewhat palatable is witnessing the pretzel people (Talk Radio on the right and Fox) trying to justify every Trump twist and turn. It’s gotten so confused, the next thing they’ll us is that Trump favored talker, Alex Jones, is a “performance artist.”

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