Wednesday, May 29, 2013

Milton Friedman explains role of gold in Great Depression.

Obamacare: 18,000 diagnostic codes to 140,000 diagnostic codes? No way! Way.

“In a little-noticed speech to the Iowa Republican Party this month, Kentucky Republican Senator Rand Paul mocked President Obama's signature health care overhaul, noting the 122,000 new medical diagnostic codes doctors will have to use in order to inform the government about injuries sustained by Americans.

Those codes, said Sen. Paul, a medical doctor himself, include line-items for 'injuries sustained from a turtle,' 'walking into a lamppost' and 'injuries sustained from burning water skis.' “ - UK Daily Mail, 05/27/2013

Entire UK Daily Mail article appears in the link below:

Sunday, May 26, 2013

The Demand Side of ACA: “overutilization”, insurance deployment and the risk management matrix

In the book Obamacare Survival Guide, Nick Tate makes the point that the architects of the Affordable Care Act (ACA) were determined to tax “Cadillac” health insurance plans as the plans lead to overutilization of health-care. That the architects believe the prime driver of health-care price is overutilization. How can the master schemers of ACA argue, in any convincing fashion, that Cadillac plans be “taxed” based upon overutilization then in turn create a maintenance policy design within Obamacare, that indeed promotes overutilization? (1)

Somehow one is to believe it is a perfect and airtight argument to vilify one overutilization design meanwhile creating another overutilization design -and- tax one overutilization design in order to cross subsidize the other overutilization design? Huh? How can one put forward an aggregate argument that overutilization of health-care is a prime driver of health-insurance price yet create the very plan one argues against? That is a new zenith in the realm of nitwitery!

John Cochrane of the University of Chicago Booth School of Business has stated on numerous occasions that insurance is being promoted and deployed within the ACA for the wrong reasons. That is, that insurance should be for catastrophic events. True. However, the argument of catastrophic events and the insurance match might be better illustrated/supported/delineated by a basic insurance tenet: the risk management matrix. (2)

Within the risk management matrix low frequency/high severity is the only efficient deployment of insurance given the known-known of the matrix of frequency and severity. All other deployments of insurance within the matrix are inefficient uses of insurance and should be avoided. Hence inefficient deployment of insurance is very much related to movements, within the matrix, away from low frequency/high severity. Stated alternatively, moving away from low frequency/high severity toward high frequency/high severity, high frequency low severity and/or low frequency/low severity means one has knowingly elected to deploy insurance in an inefficient manner.

Hence the argument that insurance should be for catastrophic events might be better and more fully framed as: insurance should be for catastrophic events as any other deployment of insurance, given the known-known of the risk management matrix, is a movement in the direction of inefficiency.

The basic and valid point of “insurance should be for catastrophic events” may not resonate, to the degree one would hope, with James and Jane Goodfellow. That knowledge and decisions need enhanced, for as much as James and Jane pay for a variety of insurance on a daily basis, James and Jane simultaneously suffer from unfamiliarity with insurance. Hence the argument needs that second step of: how the knowledge and decisions set forth in the risk management matrix allows James and Jane to identify and avoid an inefficient allocation of their scarce resources. That is, the “why” behind the oft quoted “insurance should be for catastrophic events”.




(1) ObamaCare Survival Guide, Nick J. Tate, 2012, pgs 195 -197.

(2) After the ACA: Freeing the market for health care, John Cochrane, 10/18/2012.


Wednesday, May 22, 2013

The ACA and the “Unbankable” -or- Steve Miller and “your cash ain’t nothin’ but trash”

"When movie stars become unbankable, they’re no longer a slam dunk at the box office. When investments become unbankable, they’re relegated to the junk pile. For ordinary Americans deemed unbankable, those who don’t have a traditional checking or savings account, it can be hard to simply pay bills. And that is about to become a big problem for those who also lack health coverage -- and for the health insurance companies trying to sell them coverage. After all, how do you sell a product to a customer who has no way to pay you?

One in five households in the United States, or about 51 million adults have only a tenuous relationship with a traditional bank, relying instead on check-cashing stores and money lenders, according to the Federal Deposit Insurance Corporation.

The new federal health law which requires most Americans to carry health insurance starting in January presents a particular problem for those households, since most health plans accept a credit card for the first month’s premium payment and then require customers to pay monthly with a check or an electronic funds transfer from a checking account." - How Will The ‘Unbanked’ Buy Insurance On The Exchanges?, Sarah Varney, Kaiser Health News, 05/20/2013


The entire article appears in the link below:





Friday, May 17, 2013

IRS’ Affordable Care Act Office: Take a Wild Guess on the Official in Charge? Hint: Mad Hatter Tea Party.

"The Internal Revenue Service official in charge of the tax-exempt organizations at the time when the unit targeted tea party groups now runs the IRS office responsible for the health care legislation.

Sarah Hall Ingram served as commissioner of the office responsible for tax-exempt organizations between 2009 and 2012. But Ingram has since left that part of the IRS and is now the director of the IRS’ Affordable Care Act office, the IRS confirmed to ABC News today.

Her successor, Joseph Grant, is taking the fall for misdeeds at the scandal-plagued unit between 2010 and 2012. During at least part of that time, Grant served as deputy commissioner of the tax-exempt unit.

Grant announced today that he would retire June 3, despite being appointed as commissioner of the tax-exempt office May 8, a week ago.” - IRS Official in Charge During Tea Party Targeting Now Runs Health Care Office, John Parkinson, ABC News, 05/16/2013

Link to the entire ABC article appears below:

Tuesday, May 14, 2013

Associated Press Phone Records Seized

Phone Records of Journalists Seized by U.S. - NYT Digest, 05/14/2013

“Federal investigators secretly seized two months of phone records for reporters and editors of The Associated Press in what the news organization said Monday was a “serious interference with A.P.’s constitutional rights to gather and report the news.”

The A.P. said that the Justice Department informed it on Friday that law enforcement officials obtained the records for more than 20 telephone lines of its offices and journalists, including their home phones and cell phones. It said the records were seized without advance notice sometime earlier this year.

The organization was not told the reason for the seizure. But the timing and the targets of the seizure strongly suggested they are related to an ongoing government investigation into the leaking of information in May 2012 about the Central Intelligence Agency’s disruption of a Yemen-based terrorist plot to bomb an airliner. The disclosures began with an A.P. article on May 7, 2012, breaking the news of the foiled plot; the organization had held off publishing it for several days at the White House’s request because the intelligence operations were still unfolding.

In a letter to Attorney General Eric H. Holder Jr. on Monday, Gary Pruitt, the president and chief executive of The A.P., called the seizure a “massive and unprecedented intrusion” into its news gathering activities.” - New York Times Digest, 05/14/2013, Charlie Savage and Leslie Kaufman 


Thursday, May 9, 2013

What does 10,962,532 represent? The number of current social security disability recipients as of 04/2013


April was the 195th straight month that the number of American workers collecting federal disability payments increased. The last time the number of Americans collecting disability decreased was in January 1997. That month the number of workers taking disability dropped by 249 people—from 4,385,623 in December 1996 to 4,385,374 in January 1997. - 10,962,532: U.S. Disability Beneficiaries Exceed Population of Greece,, 05/07/2013

Link to the CNS news article appears below:

Chauffeured to school in Lincoln towncars at taxpayer expense? No way. Way!

Thursday, May 2, 2013

How Nations Succeed: What's the Secret to Ending Poverty?

HT: Kids Prefer Cheese

Obama on Obamacare: when a train wreck is not a train wreck yet it’s a train wreck

“Health Care: At his press conference this week, President Obama tried to reassure Americans about ObamaCare. Instead, he displayed either an incredible lack of understanding about his own law, or something far worse.

Asked about increasing Democratic concern over what Sen. Max Baucus called a looming ObamaCare "train wreck," Obama claimed that it's all much ado about very little.

But almost nothing he said in defense of ObamaCare was accurate. Among his statements: "A huge chunk of it's already been implemented."

In fact, all that's been implemented so far are a few PR-friendly changes like a mandate to cover children up to age 26 and a more generous Medicare drug benefit.

Democrats put off the bulk of the law — the massive market regulations, the government-run exchanges, mandates to buy coverage, and various taxes and fees—until 2014, both to hide its true costs and to avoid any unpleasantness before the 2012 elections.

"For the 85% to 90% of Americans who already have health insurance ... they don't have to worry about anything else."

Really? The Congressional Budget Office expects 7 million workers — and possibly as many as 20 million — will lose their employer coverage because of ObamaCare. That's plenty to worry about.

The Centers for Medicare and Medicaid Services said millions of seniors will get dumped from their private Medicare Advantage plans by 2017 thanks to sharp payment cuts required by the law.

And small businesses now providing coverage face huge rate hikes thanks to ObamaCare's many market regulations and benefit mandates. Maryland's biggest insurer, nonprofit CareFirst BlueCross BlueShield, said ObamaCare will force rates up by 15% next year.

"The other stuff's been implemented and it's working fine."

That's only true if you ignore the fact that ObamaCare's high-risk pools have been a disaster, attracting a third as many people as predicted while costing far more than the administration budgeted.

Or the fact that Obama had to issue more than 1,200 waivers to companies who said the law's initial insurance market rules would have forced them to cancel coverage for millions of workers.

The overly complicated small-business tax credit has also been a bust, with only about 5% of eligible firms taking advantage of it. And so on.” - Just How Ignorant Is Obama About ObamaCare? 05/01/2013, Investors Business Daily

The entire IBD article appears in the link below:


Update: Reid: More funding needed to prevent ObamaCare from becoming 'train wreck' -, 05/01/2013