Posts Tagged ‘ObamaCare’

Electronic medical records cut costs … oops, make that raise costs.

October 17, 2012

Interesting expose In the NY Times of all places.

Punch line:

When the federal government began providing billions of dollars in incentives to push hospitals and physicians to use electronic medical and billing records, the goal was not only to improve efficiency and patient safety, but also to reduce health care costs.

But, in reality, the move to electronic health records may be contributing to billions of dollars in higher costs for Medicare, private insurers and patients by making it easier for hospitals and physicians to bill more for their services.

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How can this be?

Simple, Watson.

First, a system can provide docs with a checklist of separately billable procedures that they might perform … ensuring a complete check-up and making sure that no billing stone is left unturned.

Second, an e-system can make it easier for doctors to “upcode” a procedure in a way to maximize reimbursement rates.

For example, when a doctor enters a billing code, the system can present him with alternative codes for very similar procedures that get higher reimbursement payments … and tell the doctor what addition work needs to be done to qualify for the higher paying code.

So, maybe just asking the patient a couple of more specific questions  may upgrade an examination from ‘simple’ to ‘ complex.  The doc can then ask the questions (or not) and check the higher paying box.

Third, an e-system makes it easy for docs to “clone” common ‘boiierplate’ findings from one patients chart to another patient’s chart … saving time and, perhaps, implying a more detailed examination.

The Times says:

As software vendors race to sell their systems to physician groups and hospitals, many are straightforward in extolling the benefits  of those systems in helping doctors increase their revenue.

In an online demonstration, one vendor promises that it “plays the level-of-service game on your behalf and beats them at their own game using their own rules.”

An expert says “What’s happening is just the problem we feared” … unintended consequences.

For the record, I think that cutting healthcare costs by reducing doctors’ pay is nuts … there is lots of waste, fraud and unnecessary expense in a grossly inefficient system.

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After losing Big Bird, Obama loses old birds … AARP tells Team O to cease and desist.

October 10, 2012

One of the few shots that Romney missed during the debate was when Pres. Obama gave the AARP a shout-out for supporting ObamaCare.

Why?

Do you think that the  AARP supported ObamaCare because it cares deeply about seniors?

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Nope.  It’s because the elimination of Medicare Advantage programs was a windfall for the AARP insurance business:

Thanks to its cuts to Medicare Advantage, ObamaCare is expected to expand the number of seniors buying “medigap” supplemental insurance plans,”

AARP controls 34 percent of the market for such plans.

According to a 2011 House Ways and Means Committee report, AARP stands to make between $55 million and $166 million from ObamaCare in 2014 alone
Source: Washington Examiner

Apparently the AARP is feeling guilty about their ObamCare pay-off

According to the Washington Examiner

AARP released a statement telling Obama not to do that again.

“While we respect the rights of each campaign to make its case to voters, AARP has never consented to the use of its name by any candidate or political campaign. AARP is a nonpartisan organization and we do not endorse political candidates nor coordinate with any candidate or political party.”

Losing Big Bird and Old Birds in the same week can’t be a good sign.

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Give me a large pepperoni pizza … with a touch of ObamaCare

September 18, 2012

Punch line: Papa Johns CEO has taken a stand against Obamacare, and announced that the popular pizza delivery chain will pass the increased cost of doing business on to its customers, in order to protect its shareholders.

* * * * *

Excerpted from latimes.com’s, “Papa John’s to raise pizza prices if ‘Obamacare’ survives”

la-fi-mo-papa-johns-pizza-obamacare-20120808-001

Get ready to pay more for your Papa John’s pizza if “Obamacare” goes into full effect …  15 to 20 cents more.

John Schnatter, chief executive of the pizza chain, is bashing President Obama’s healthcare reform law as a policy that will force the company to choose between its customers and its investors.  And if the Patient Protection and Affordable Care Act rolls out as planned in 2014, Schnatter’s strategy is “of course … to pass that cost on the consumer in order to protect our shareholders’ best interest,” he said in a recent conference call.

Schnatter estimates that the legislation will cost Papa John’s about 11 cents to 14 cents per pizza, which equates to 15 cents to 20 cents per order.

“We’re not supportive of Obamacare like most businesses in our industry but our business model and unit economics are about as ideal as you can get for a food company to absorb Obamacare,” Schnatter said. “Ergo, we have a high ticket average with extremely high frequency of order counts, millions of pizzas per year.”

On Twitter, reactions were mostly negative.  “*switches to Pizza Hut*,” wrote one user. “*calls Dominoes*,” wrote another.  “I really wish businesses would stay out of politics,” tweeted user mikedavis824.

The National Restaurant Assn. has criticized the healthcare legislation for having a chilling effect on expansion and hiring in the industry, which tends to be labor-intensive and burdened with thin margins.  Chains such as White Castle and Burger King have predicted surging costs due to the new regulations, which require businesses with 50 or more full-time employees to offer healthcare to such workers and their dependents.

Unsurprisingly, Papa John’s chief is a big fan of Mitt Romney. Schnatter recently even hosted a private fundraiser for the Republican presidential candidate at his mansion in Anchorage, Ky.  Romney was dazzled by the grounds, declaring to guests: “Who would’ve imagined pizza could build this. This is really something. Don’t you love this country? What a home this is, what grounds these are, the pool, the golf course…. This is a real tribute to America, to entrepreneurship.”

Edit by BJP

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The incremental cost of that 51st employee …

August 30, 2012

Of course, I’ve been thinking about entrepreneurs and small businesses recently.

And, the obvious suddenly became evident to me: Under ObamaCare, the incremental cost of a small company’s 51st employee is ENORMOUS.

Think restaurants … paying a bunch of workers minimum wage with few or no benefits.

Today, employee #51 costs the business about $20,000 annually (2,000 hours @ $10 per hour).

Under ObamaCare, that added bus boy costs $122,000 … his $20,000 plus the $2,000 per employee tax penalty on the business for not giving employees health insurance.

That’s a lot money for a bus boy.

Guess employees #1 to #50 are just going to have to work harder.

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Trick question: To patients, what’s the price of free healthcare?

August 22, 2012

OK, everybody knows that ObamaCare largely wipes out co-pays and deductibles for preventive medicine.

In other words, patients don’t have to shell out any money … the definition of “free’”, right?

Not so fast.

I always assert to my students that people always, always, always under value their time

See archive post “Time is Money”

Think of the bargain entertainment center you can buy at IKEA for $299.

The purchase price is a steal compared to the fully assembled entertainment center at a furniture store.

But, it takes you two days to assemble it.

At, say $20 per hour, the implicit economic cost of your time is over $200.

Suddenly, it’s no bargain at all.

If you value your time higher than $20 per hour then then economics get even worse.

The principle: “price” is more than the money expended to acquire a product … it also includes the economic cost or searching, acquiring and putting a product into use …  and any on-going costs to keep the product maintained and operating.

What does that have to do with preventive medicine?

Simple connection.

According to an article last week in the WSJ: “To meet the promise of free preventive care nationwide, every family doctor in America would have to work full-time delivering it”.

In other words, demand is twice the capacity to supply.

“When demand exceeds supply in a normal market, the price rises until it reaches a market-clearing level.”

That’s Econ 101.

When a price is fixed below the natural “clearing price” then either the product has to be rationed or other economic costs kick in … like the implicit cost of of the time required to acquire the service.

Think about the time involved to get to see a doctor.

First is the scheduling call.

Ever been put on hold or forced to call back?

I have.

Ever been disappointed when told that the first available appointment slot is weeks off?

I have.

Note: For patients in need of services covered by Medicare, the typical wait to see a doctor was two or three weeks

Ever waited for an hour or two or more waiting to see the doctor?

I have.

Note: Studies report that 20% of the patients who come to an emergency room leave without ever seeing a doctor, because they get tired of waiting.

When demand exceeds supply, doctors have a great deal of flexibility about who they see and when they see them.

In marketing economics, it’s called “demand management”.

Demand management has a couple of underlying principles.

One is “Whenever demand exceeds supply take care of loyal customers first, then take care of the other customers willing to pay the most”.

So, if you’re a doctor facing demand that far exceeds your capacity, what do you do?

First, take care of longstanding patients … then service the patients that pay the most – those who pay out-of-pocket or have private insurance.

Who’s last on the list?  Government insured patients: MediCare and Medicaid.

How can they possibly do that?

Simple. They can simply act like airlines, restaurants, credit card companies  and banks.

For example, once a Medicaid patient’s phone number is in the system, their phone calls can be queued behind any calls from higher paying patients.

Financial service companies have been doing that for years.  Whales’ calls get priority routing and faster answers.

Similarly, appointment slots can be capacity constrained by payment type … with relatively few slots per day allocated to low price patients.

Airlines have capacity controlled low priced “leisure” seats for decades.

Once at the office, doctors can keep advancing high pay patients in the waiting queue.

What’s the worse that can happen? A patient that you’re going to lose money serving ups and leaves.  Oh well.

The bottom line: free isn’t really free … when you factor in your time … and the possibility of not being served at all.

It’s basic demand management economics.

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A good day for Team R&R …

August 16, 2012

On Monday, I laid out the Brer Rabbit strategy that I thought Team Romney was implementing.

Note: Pundits are now calling it “Political Jujitsu”

The essence: name Ryan and lure Team Obama into the Medicare trap … get them to repeat their claim that Ryan wants to throw granny off a cliff … and then bang …  counter attack and put ObamaCare on the table.

Team Romney probably didn’t expect help from others , it got some.

First, a video of Erskine Bowles – you know, of Simpson-Bowles fame – went viral.

The video shows Bowles (a Democrat) praising Ryan and his budget.

“Have any of you all met Paul Ryan? We should get him to come to the university. I’m telling you this guy is amazing. … He is honest, he is straightforward, he is sincere. And the budget that he came forward with is just like Paul Ryan. It is a sensible, straightforward, serious budget and it cut the budget deficit just like we did, by $4 trillion. … The president as you remember, came out with a budget and I don’t think anybody took that budget very seriously. The Senate voted against it 97 to nothing.”

click to view vid
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* * * * *
On cue, the Dem talkers started ripping on Ryan.

As soon as they did, Team Romney launched the counter-attack …  reminding folks that Medicare funds were being raided to pay for ObamaCare … taking Medicare funds away from seniors and sprinkling them to others.

click to view vid

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* * * * *

On cue, the Dem talkers denied that Obama would ever consider raiding Medicare.

Oops.

Tape on file shows Pres. Obama telling Jake Tapper of ABC that he would, he did, and he’d make it stick.”

TAPPER: One of the concerns about health care and how you pay for it — one third of the funding comes from cuts to Medicare.
PRESIDENT BARACK OBAMA: “Right.”

TAPPER: Are you willing to pledge that whatever cuts in Medicare are being made to fund health insurance, one third of it, that you will veto anything that tries to undo that?
OBAMA: Yes.

click to view vid

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* * * * *
That’s called “hoisting yourself by your own petards.”

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An adult choice … just might work.

August 13, 2012

First, the disclaimers: (1) I’m rooting for Romney and (2) I was hoping for Marco Rubio.

Why Marco.

Simple.

As H.L. Menchken is oft-quoted:

“No one ever went broke or lost office underestimating the intelligence of the American public.”

I think the majority of people who vote are poorly informed – accepting politicians’ focus group tested  talking points — and cast their votes based on habit, group association or superficial candidate characteristics.

So, I figured that Rubio – a cool, good looking, young, articulate Latin guy – could deliver Florida, sway some Hispanics and make some single women swoon.

In other words, strictly a vote-getting maneuver.

Morning after, I like the Ryan pick.

Why?

He’s squeaky clean.  The Team Obama muckrakers will go crazy trying to find dirt on the guy.

He’s very smart … knows the details, not just the storylines … won’t get Palinized

He’s very articulate … he’ll shred Biden in the VP debate … in fact, I’d love to see him go up against Obama with a neutral moderator (think back to Ryan’s performance in the infamous healthcare summit).

He’s all-Midwest … an area the GOP has to win … puts Wisconsin in play.

He’s Catholic … maybe the bishops will stand behind him on freedom of religion

Fiscal conservatives love him … remember 2010?

What’s the downside?

Yeah, Medicare.

Dust off the “throw Granny over the cliff ad”.

Here’s my take: Medicare is the GOP’s equivalent of Brer Rabbit’s briar patch.

I think they want it on the table.

But, you say, they’ll lose seniors.

Not so fast.

I think that bomb will be easy to diffuse … and as a bonus, it puts ObamaCare back in play:

If you are on Medicare, your benefits will not be cut. Period

In fact, Romney & I will do our best to repeal ObamaCare and restore the $500 billion of Medicare cuts that are in the law.

Think about it.

What good is Medicare if doctors stop accepting Medicare patients?

What good is Medicare if some Washington bureaucrat decides that you’re too old to get your bad hip replaced?

Romney & I won’t let that happen. Period.

I think that this is going to get interesting …

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The ObamaCare advantage in battleground states …

August 9, 2012

Goes to Romney !

According to last week’s NPR poll , likely voters in the battleground states oppose ObamaCare 52% to 39%.

Hmmm.

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Your doctor will see you … in a couple of months.

August 2, 2012

Fairly balanced piece in the NY Times last Sunday re: the impacts of ObamaCare

Punch line: In 2015 the country will have 62,900 fewer doctors than needed … that number will more than double by 2025, as the expansion of insurance coverage and the aging of baby boomers drive up demand for care.

The problem, in a nutshell …

  • There is a shortage of every kind of doctor, except for plastic surgeons and dermatologists
  • Primary care doctors make about $200,000 a year. Specialists often make twice as much.
  • ObamaCare adds about 30,000 people to insurance rolls … the majority via Medicaid
  • Fewer than half of primary care clinicians are accepting new Medicaid patients
  • Medicare will surge to 73.2 million in 2025, up 44 percent from 50.7 million this year.
  • “Older Americans require significantly more health care,”
  • And about a third of the country’s doctors are 55 or older, and nearing retirement.
  • Younger doctors are on average working fewer hours than their predecessors.
  • It typically takes a decade to train a doctor.
  • Medical schools are at capacity and Federal training subsidies have been cut.

 

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While ObamaCare mandates broader insurance coverage, it does little to fundamentally restructure the healthcare delivery … save for government administered rationing.

Part of real answer: more doctors (new and retained), more walk-in clinics (public & private), and more authority to RNs and PAs.

Note: the Times failed to mention that the CBO’s current estimate for ObamaCare’s costs has tripled since the law was passed. 

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Seeds of a revolt: Legal tax avoidance is gaining momentum …

July 12, 2012

A hot topic at BBQs this summer is the impact of Obama’s tax increases … the elimination of the so-called Bush tax rates and, now, the increased likelihood of the ObamaCare hits.

Back in the 70s — before Reagan — tax shelters were the rage … finding ways to transform ordinary income into lesser taxed capital gains and generate paper losses from generous depletion & depreciation allowances.

I’m sensing a return to the 70s mindset.

In the past couple of weeks, I’ve heard of  or seen …

  • A Maryland family plan to relocate to Northern Virginia to dodge Maryland’s increased sales, income and estate taxes.
  • Five Maryland exec-families establishing primary residencies in Florida … to take advantage of Florida’s income and estate tax rates … according to CNBC, they’re a microcosm of rich fleeing MAryland
  • Savvy investors talking about buying municipal bonds as a way of avoiding higher Fed income taxes … especially if dividends start getting whacked at ordinary income tax rates.
  • People going across state lines and ramping up internet purchases …  to minimize sales taxes
  • Merchants and contractors encouraging payment in cash … sometimes with accompanying discounts … to get income “off-the-books”

Most of the tactics are completely legal.

My point: tax avoidance is becoming a popular sport … fed-up tax payers are starting to revolt.

Tax & spend politicos should take heed … their rosy tax hike projections might not materialize as planned.

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The 3.8% solution … here comes the tax pile-on.

July 10, 2012

Taxes will be going up … thanks to  ObamaCare and Justice Roberts.

Flashback: ObamaCare’s initial $1 trillion cost projections (which have already doubled) … were funded (on paper, that is) roughly half by cuts to Medicare and half by tax increases.

One of the tax increases is a 3.8% tax on investment income … essentially slapping payroll taxes on so-called “unearned income”.

“Unearned income” is more than dividends and capital gains.

According to the WSJ

The tax applies to:

  • dividends;
  • rents;
  • royalties;
  • interest, except municipal-bond interest;
  • short- and long-term capital gains;
  • the taxable portion of annuity payments;
  • income from the sale of a principal home;
  • a net gain from the sale of a second home;
  • passive income from real estate and investments, such as limited partnerships.

The tax does not apply to:

  • payouts from a regular or Roth IRA, 401(k) plan or pension;
  • Social Security income; or annuities that are part of a retirement plan.
  • life-insurance proceeds;
  • municipal-bond interest;
  • veterans’ benefits; Schedule C income from businesses

Also, the tax does not apply to  non-resident aliens.

Couple of mega-takeaways:

1) Municipal bonds benefit … not subject to the ObamaCare surcharge … and don’t count towards the $250k AGI trigger.

2) Renters lose … landlords are likely to pass along the surcharge to higher rents

3) Housing prices pressured … double-whammy … higher cap gains taxes make houses less attractive as investments … rents tax decreases motivation for investors to buy and rent homes.

4) Seniors lose … if they shifted their retirement portfolios to fixed incomes … since interest and dividends get hit … dividends especially since they’ll also get hit with an increase in income tax rates — from 15% to as high as 39.5%

At least our health insurance premiums are going down … NOT !Could be worse … our health insurance premiums could be going up … oops, they are.

Oh well …

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“Unintended consequences” … say, what?

May 8, 2012

There was a report released last week by the House Ways and Means Committee.

It didn’t get much mass media coverage, perhaps, because of its title: “Why ObamaCare Will Force Americans to Lose the Health Care Coverage They Have and Like

The essence of the report: many Fortune 100 companies expected to drop their health insurance plans and, instead, pay the $2,000 per employee ObamaCare “penalty”.

First, the facts:

The House Ways and Means Committee asked for and received, on a confidential basis, information on the cost and coverage of the health insurance plans for the Fortune 100 companies.

In total, the Committee received information from 71 Fortune 100 companies.

In total, the 71 Fortune 100 companies that responded to this inquiry could save an estimated $28.6 billion in 2014 alone by eliminating health insurance coverage for their more than 5.9 million U.S. employees (impacting more than 10.2 million employees and dependents covered by those plans) and instead paying the $2,000 per full-time employee fine created in the Democrats’ health care law.

From 2014 through 2023, these employers could save an astounding $422.4 billion if they took this action.

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Most (all ?) of the cable and radio pundits were calling big company plans to be an unintended consequence of ObamaCare.

I beg to differ.  I think it’s completely intended.

Thank about it: Team Obama often said that they wanted a “single payer system”.

English translation: everybody gets covered by government administered  health insurance.  Everybody.

So, they put a lowball number on the penalty.

Companies usually pay more than $5,000 per employee … often more … sometimes way more.

It’s a no-brainer for companies to ditch their plans, pay the penalty, and force their employees onto the government program.

But, that’ll make ObamaCare more costly.

How will it get paid for?

Easy, just jack up the ‘per employee’ penalties.

The penalties are already programmed to go to $10,000 in 2024.

What’s to keep them from going even higher?

Answer; nothing.

Now ponder that for a moment

Many (most?) companies will be paying an escalating “headcount tax”.

The more employees they hire, the higher the tax bill.

How do you think that’ll impact the sluggish job growth?

I’m betting it won’t help …

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Remember the docs in the white lab coats standing behind Obama?

April 20, 2012

According to Forbes

Doctors, no fans of health insurance, are openly rooting that Obamacare will be struck down by SCOTUS, as appears to be the direction of things after last month’s oral arguments.

A recent poll by sermo.com, a physican’s website, revealed that 75 percent of doctors are against the health care law.

A survey by Deloitte, a major health consulting firm, found that 69 percent of physicians are “pessimistic about the future of medicine” because of the law.

My, oh my, how times have changed.

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3 pages, single-spaced … due Thursday noon.

April 5, 2012

On Monday, former Constitutional law prof and now President Obama, laid into the Supreme Court for even thinking about declaring ObamaCare unconstitutional — either in part or in total — saying he was “confident” the Court would not “take what would be an unprecedented, extraordinary step of overturning a law that was passed by a strong majority of a democratically elected Congress.”

CBS News reports:

Overturning a law of course would not be unprecedented — since the Supreme Court since 1803 has asserted the power to strike down laws it interprets as unconstitutional.

And, in the escalating battle between the administration and the judiciary, a federal appeals court apparently is calling the president’s bluff — ordering the Justice Department to answer by Thursday whether the Obama Administration believes that the courts have the right to strike down a federal law, according to a lawyer who was in the courtroom.

An Appeals Court Judge asked a DOJ lawyer if she agreed that the judiciary could strike down an unconstitutional law.

The DOJ lawyer answered yes — and mentioned Marbury v. Madison, the landmark case that firmly established the principle of judicial review more than 200 years ago.

Now the part that I like.

The panel ordered the Justice Department to submit a three-page, single-spaced letter by noon Thursday addressing whether the Executive Branch believes courts have such power.

That’s a big difference between academia and the courts …  I always ask my students to double-space their homework.

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Get out your wallet: CBO says ObamaCare to cost twice the original estimates.

March 14, 2012

According to a new projection released by the Congressional Budget Office, ObamaCare will cost $1.76 trillion over a decade,  rather than the $940 billion forecast when it was signed into law.

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The CBO now projects  that more people will be obtaining insurance through Medicaid than it estimated a year ago at a greater cost to the government, but fewer people will be getting insurance through their employers or the health care law’s new subsidized insurance exchanges.

According to the Washington Examiner:

Democrats employed many accounting tricks when they were pushing through the national health care legislation.

The most egregious of the accounting tactics was to delay full implementation of the law until 2014, so it would appear cheaper under the CBO’s standard ten-year budget window and, at least on paper, meet Obama’s pledge that the legislation would cost “around $900 billion over 10 years.”

When the final CBO score came out before passage, critics noted that the true 10 year cost would be far higher than advertised once projections accounted for full implementation.

The projection for 2022, the last year available, indicate that the cost is likely to exceed $2 trillion over the first decade, or more than double what Team Obama advertised.

Surprise, surprise, surprise.

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How about a referendum on the 10 Commandments ?

February 16, 2012

OK, the Catholic bishops are still pushing back on the ObamaCare mandate that church-affiliated organizations must “violate their consciences” and ante up for contraceptives.

Many pundits are counter-punching the bishops … arguing that they are woefully out-of-touch … that an overwhelming majority of Catholics support contraception.  So, the bishops should get off their soap boxes and ditch the rule.

Interesting angle: subject religious doctrine re: right and wrong  to a popular vote.  If it doesn’t get a majority, chuck it.

Hmmm.

I think the idea has merit.

In fact, I say: why not hold a referendum on the 10 commandments?

Maybe #10 and #7 would fail to get enough votes and it would become legit for me to jack my neighbors big screen TV.

The idea has potential, right?

Think about it.

Which of the 10 would you like to see voted out?

            10 Commandments

  1. You shall not have other gods.
  2. You shall not take the name of the Lord God in vain
  3. Remember to keep holy the Lord’s Day
  4. Honor your father and your mother
  5. You shall not kill
  6. You shall not commit adultery
  7. You shall not steal
  8. You shall not bear false witness
  9. You shall not covet your neighbor’s wife
  10. You shall not covet your neighbor’s goods

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Obama’s favorite book … guaranteed.

February 13, 2012

Gotta admit, I like the tussle between Team O and the Catholic Church.  It’s like watching a Wrestlemania main event.

But, theological and and health issues aside, I’m shocked by Administration’s naiveté re: business and economics.

And, I think I broke the code. 

I’m betting that the only business book Obama and his advisers carry around is Chris Anderson’s 2009 best-seller: Free – The Future of a Radical Price.

Note that I said “carry around” … not “read” … because the book does a nice job of explaining the uses and mis-uses of “free”,

Why do I think so?

Easy, because the cover blurb was written by Google’s Eric Schmidt — the recently canned Google CEO and close buddy of Obama’s … and because of Obama’s penchant for declaring stuff to be “free” whether it is or isn’t.

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Obviously, Team O doesn’t really get the concept.

Let’s start with the basics: nothing is free

When something (like pills) is produced, delivered and consumed, there are associated  costs.

Yes, pills may be given to the consumer without charge, but somebody has to pick-up the tab.

Since the government has no money of its own, if it nobly declares that it’ll pay for it, it’s really saying that all taxpayers will pay for it — whether they want to or not.

Note that, for obvious reasons,  I said taxpayer, and not citizens. 

Let’s take another variation: consumers don’t have to pay for pills — their insurance companies will be mandated to give them away for free.

Oh really.

One member of the administration said that the money will come straight from the insurance companies reserves — the money set aside to pay claims.

Well, then either other types of claims become unfunded (i.e. can’t be paid), or the insurance  company just rolls over and sacrifices some profits, or premiums go up.

There aren’t any other options, and I’m betting on the last one — raising premiums.

That’s ok — in the mind of the Feds — because employers, not employees have to eat the premium increase.

Well, economists would say that the higher premiums come indirectly out of employees pockets since they will just constrain other parts of workers’ compensation packages.

You can buy into that argument or not … your choice.

Let’s pretend that the insurance company just has to eat the added costs.

Oops.

Team O walked into a logic trap.

Many large organizations self-insure.  That means that insurance companies are just processing agents — the companies pay claims out of their own coffers. 

It was like that at GE and Black & Decker.

And guess what, many large Catholic organizations are self-insured.

So, saying that the Catholic organizations won’t have to pay for pills, etc., — that their insurance companies will have to pay — is complete nonsense.

You see, self-insured organizations are their own insurance companies.

That’s what self-insured means!

So, even the Catholic bishops figured out that Team O’s grand accommodation is not really an accommodation at all.

It’s either the reflection of business ignorance or an intentional ruse.

Hmmm.  Hard to pick.

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Pro-life, pro choice … the nums explain the politics.

February 10, 2012

Since the “A”  issue has been front and center the past couple of days – given the flaps between Komen and Planned Parenthood, and Team O and the Catholic Church – I got curious about the numbers.

Results of the  the most recent Gallup survey …

  • 2011 results: 49% pro-choice, 45% pro-life
  • Prior year was reversed: 47% pro-life, 45% pro-choice
  • Call it a “push”, but recent trend favoring pro-choice

Last point probably explains why Team O dropped the gloves for a fight with the Catholic bishops …

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Why isn’t toothpaste mandated on my health insurance?

February 9, 2012

That question and a few others that cut to the chase on the flap between ObamaCare and the Catholic Church are central to a WSJ op-ed by Univ. of Chicago prof John Cochrane.

Well worth reading in its entirety.

The answer:

Insurance is a bad idea for small, regular and predictable expenses.

There are good reasons that your car insurance company doesn’t add $100 per year to your premium and then cover oil changes, and that your health insurance doesn’t charge $50 more per year and cover toothpaste.

You’d have to fill out mountains of paperwork, the oil-change and toothpaste markets would become much less competitive, and you’d end up spending more.

Every increase in coverage means an increase in premiums.

Another question: What’s the difference between “access” and “cost.”

I have “access” to toothpaste because I have two bucks in my pocket and a competitive supplier.

Anyone who can afford a cell phone can afford toothpaste or pills or condoms.

Poor women who can’t afford birth control are a red herring in this debate.

The very poor typically don’t have employer-provided health insurance in the first place.

But, Americans, when paying even modest co-payments, choose to spend their money on other things.

They prefer a new iPod to a “wellness visit” to the doctor.

Cochrane’s overall conclusion:

It all leads back to the elephant in the room: the tax deductibility of employer-provided group insurance.

If your employer pays you $100 less in salary and buys $100 of group insurance for you, you don’t pay taxes on that amount.

Hence, the more insurance costs and covers, the less in taxes you seem to pay. (Even that savings is an illusion: The government still needs money and raises overall tax rates to make up the difference.)

To add insult to injury, this tax deduction does not apply to portable, guaranteed-renewable individual insurance.

You don’t get the tax break if your employer gives you the $100 and you buy a policy — a policy that will stay with you if you get sick, leave employment or get divorced.

The pre-existing conditions crisis is largely a creature of tax law.

You don’t lose your car insurance when you change jobs.

Again, well worth reading in its entirety ,,,

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Reprise: Move over Charlie Brown, (former) Congressman Stupak wants to kick the football …

February 8, 2012

OK, I can’t resist.

Remember gullible old Joe Stupak — former Congressman from Michigan?

President Obama got old Joe to sell out his convictions and cast one of the votes that carried ObamaCare. 

How?

By giving Stupak $750k for airport construction in his district and by promising an executive order that would insure that Catholic facilities wouldn’t have to fund or provide abortions, contraceptives, etc.

Here’s our post on the subject from March 2010.

This was an easy one to predict.

Hope Stupak feels like a complete idiot.

* * * * *
Move over Charlie Brown, Congressman Stupak wants to kick the football …

Fool me once, shame on you.

Fool me twice, shame on me.

What about the 3rd, 4th, 5th times ?

Doesn’t Bart Stupak learn ?

To refresh your memory:

  • Back in November, pro-life Rep. Bart Stupak scored what he thought was a victory and the House passed an amendment to its ObamaCare bill limiting the use of tax-payer funds for abortions.
  • But, immediately after the vote, pro-choice Dems expressed confidence that “controversial language on abortion would be stripped from a final healthcare bill” via legislative maneuvering.
  • Then , House Dem leadership told Stupak and his pro-life buddies to take a hike … because liberal Dems want the government to fund abortions.  Details

Sunday, to get Stupak to vote yes on ObamaCare, the President promised to issue an Executive Order that, in effect, restores the Stupak Amendment to the final bill — after the fact.

Well, a couple of potential bumps in Bart’s road:

  1. The President has to do what he promised … hmmm.
  2. Some legal pundits are saying that the Executive Order has little or no force — the passed law will prevail in high courts
  3. A President can rescind an Executive Order at any time

This time when Lucy pulls the football away, Stupak will have no one but himself to blame.

He’ll deserve to feel more ‘stupid’ than ‘Stupak’.

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Whatever the SCOTUS rules on ObamaCare, Obama wins.

November 16, 2011

I think the pundits are missing this one.

Most are saying that Obama wins if the court rules the individual mandate (and assorted ObamaCare junk) is constitutional  ….  and, he loses if the court rules that it’s unconstitutional.

I don’t see it that way.

Sure, it’s a win if the law gets a pass.  Obama can crow about how it’s time to move on.

Here’s the twist.

If it’s ruled unconstitutional, the GOP loses one of its major campaign issues.  They can’t go around beating a dead horse, right?

But, Obama can rail about the conservative justices  legislating from the bench … and, he can argue that he needs to be re-elected – with a large majority – in order to craft a cleaner replacement for ObamaCare and, more important, to control appointments to the SCOTUS to make it more reasonable and objective.

Obama can also reap the economic benefits the laws demise. For sure, hiring will pick up a bit when the bill is buried.

See, heads he wind, tails he wins, too.

Nuts.

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Prediction: Obama’s midnight pardons will rock the world.

October 27, 2011

On his current campaign swing, President Obama is throwing around tax payer money to rebuild his base.

Earlier this week it was the Federal refinancing of underwater home loans.  Taxpayers will own any defaults.

Yesterday it was the announcement of an executive order to restructure, cap, and eventually forgive student loans after 20 years of payments.

That one troubles me.

Even CNN acknowledges:

The president’s focus on college loan assistance could also help him with younger voters — generally a core Democratic constituency. In 2008, Obama carried two-thirds of all voters ages 18 to 24, according to national exit polls.

Did you know that a provision of the ObamaCare law was to nationalize student loan programs?  Amazing what you can sneak into a 2,000 page unread law.

Now, the Executive branch (i.e. the Obama administration) has wide, unprecedented latitude to grant, structure and forgive student loans.

Presidents have often issued pardons and waivers during their last hours in office.  Think Bill Clinton pardoning uber-tax evader Marc Rich.

I predict that if Obama gets beat in 2012 – a 50 / 50 bet as things now stand – he will issue the mother of all pardons: forgiveness of all Federally held student loans and maybe, while he’s at it, the forgiveness of all Federally held home loans.

Far-fetched?

I don’t think so, and now, I’m on the record.

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Tanning salon update: tax collections 64% below ObamaCare projections

October 14, 2011

Well, well, well.

It appears that tanning salons either don’t know about their targeted ObamaCare tax or they aren’t complying with it or the added tax has dampened demand … and the IRS is having trouble tracking the  salons down to figure out what’s going on.

So, the new federal tax on indoor tanning services isn’t bringing in as much revenue as promised.

The Treasury Inspector General for Tax Administration says the new federal tax on indoor tanning services isn’t bringing in as much revenue as hoped.

Tanning tax receipts for that nine-month period ending March 31, 2011  totaled $54.4 million, the report found.

That was below projections by the Congressional Joint Committee on Taxation, which had estimated the tax would raise $50 million per quarter.

The IRS had difficulty determining the actual number of tanning salons and the contact info for businesses required to collect the new tax from customers.

Using an April 2010 Indoor Tanning Association estimate, the IRS initially projected the tax would be due quarterly from roughly 25,000 stand-alone tanning salons, plus spas, health clubs and beauty parlors.

But the inspector general report found that actual tax returns filed for the first three quarters through March 31 averaged just above 10,300.

Source: USA Today

It’s a shocker, isn’t it ?

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