Posted by MataHarley on 18 July, 2009 at 2:34 pm. 31 comments already!


There’s several articles that don’t seem to be gaining traction in the media in this health care debate that is all the rage of late. In the span of three approximate years of the Romney universal health care plan he deposited on the state prior to playing “conservative” in the GOP primaries, they’ve already begun to ration the health care due to exploding and unsustainable costs.

First to be cut? 30,000 *legal* immigrants. Well now, don’t that bode well for the liberal/progressive mantra.

The new state budget in Massachusetts eliminates health care coverage for some 30,000 legal immigrants to help close a growing deficit, reversing progress toward universal coverage just as Congress looks to the state as a model for overhauling the nation’s health care system.

The affected immigrants, permanent residents who have had green cards for less than five years, are now covered under Commonwealth Care, a subsidized insurance program for low-income residents that is central to the groundbreaking health care law enacted here in 2006.

Critics of the cut, which would save an estimated $130 million, say it unfairly targets taxpaying residents and threatens the state’s health care experiment at a critical time.

“It either sends the message that health care reform cannot be done, period,” said Eva Millona, executive director of the Massachusetts Immigrant and Refugee Advocacy Coalition, “or it opens the door to doing it halfway and excluding immigrants from the process.”

Gov. Deval Patrick has proposed restoring $70 million to the program, which would partly restore the immigrants’ coverage. But legislative leaders have balked, saying vital programs for other groups would have to be cut as a result. The cut, which would affect only nondisabled adults from 18 to 65 years old, would take effect in August unless the legislature approves Mr. Patrick’s proposal.

“The governor has made a very good and compelling case relative to providing for legal immigrants,” Robert A. DeLeo, the speaker of the State House of Representatives, said Monday. “On the other hand, there is only so much money that we have.”

The Romney health care law did “succeed” in one way. Since it’s implementation, MA has the lowest uninsured population, with only 2.6% uninsured, compared with a national average of 15%….

…. for a while, that is. And at rapidly increasing premiums to the insured. Instead, the true legacy of the Romney health plan is it’s proof that “reform” relying on government subsidized health care is simply impossible with today’s population trends, declining economy and guaranteed lower earning capacity with Obama’s Congressional spending.

And the legal immigrants cut? They have a double whammy because they do not qualify for other federal aid, including Medicaid.

Is this what Congress has in mind? It must be, because the Kennedy/Dodd health plan was modeled after the MA universal health plan, despite it’s proof that government costs for health care have increased 42% in it’s short life span thus far, and sits at 33% above the national average.

Advocates promised that the Massachusetts plan would make health insurance more affordable, but according to a Cato study, insurance premiums have been increasing at nearly double the national average: 7.4 percent in 2007, 8 percent to 12 percent in 2008, and an expected 9 percent increase this year. Health insurance in Massachusetts costs an average of $16,897 for a family of four, compared to a national average of $12,700.

In fact, Michael D. Tanner at Cato predicted the rationing of health care as inevitable in a blog post back in March of this year.

Massachusetts has significantly reduced the number of people in the state who lack health insurance. However, it has not achieved, nor does it expect to reach, universal coverage. (The best estimates suggest that more than 200,000 state residents remain uninsured). And, significantly, roughly 60 percent of newly insured state residents are receiving subsidized coverage, suggesting that the increase in insurance coverage has more to do with increased subsidies (the state now provides subsidies for those earning up to 300 percent of the poverty level or $66,150 for a family of four) than with the mandate.

The cost of those subsidies in the face of predictably rising health care costs has led to program costs far higher than originally predicted. Spending for the Commonwealth Care subsidized program has doubled, from $630 million in 2007 to an estimated $1.3 billion for 2009.

Now the state is turning to a variety of gimmicks to try to hold down costs, including possibly cutting payments to physicians and hospitals by 3-5 percent. However, the Times quotes health reform experts who have studied the Massachusetts system as warning “the state and federal governments may need to place actual limits on health spending, which could lead to rationing of care.”

Not only are those legal immigrants… precisely those the good intents of idiot legislators are trying to protect… being the first busted out of the program, the very hospitals that have served them are also now endangered. One such hospital, Boston Medical Center, filed a lawsuit against the State of Massachusetts.

BOSTON — A hospital that serves thousands of indigent Massachusetts residents sued the state on Wednesday, charging that its costly universal health care law is forcing the hospital to cover too much of the expense of caring for the poor.

The hospital, Boston Medical Center, faces a $38 million deficit for the fiscal year ending in September, its first loss in five years. The suit says the hospital will lose more than $100 million next year because the state has lowered Medicaid reimbursement rates and stopped paying Boston Medical “reasonable costs” for treating other poor patients.

“We filed this suit more in sorrow than in anger,” said Elaine Ullian, the hospital’s chief executive. “We believe in health care reform to the bottom of our toes, but it was never, ever supposed to be financed on the backs of the poor, and that’s what has happened in Massachusetts.”

The central charge in the suit is that the state has siphoned money away from Boston Medical to help pay the considerable cost of insuring all but a small percentage of residents. Three years after the law’s passage, Massachusetts has the country’s lowest percentage of uninsured residents: 2.6 percent, compared with a national average of 15 percent.

Low-income residents, who have benefited most from expanded access to health care, receive state-subsidized insurance, one of the most expensive aspects of the state plan. But rapidly rising costs and the battered economy have caused more problems than the state and supporters of the 2006 law — including Boston Medical — anticipated.


The suit comes as Congress looks to Massachusetts as a potential model for overhauling the nation’s health care system. Even before the suit, the state’s fiscal crisis had cast doubts on the law’s sustainability.

To help close a growing deficit, the Democratic-controlled Legislature eliminated coverage for some 30,000 legal immigrants in the new state budget. Gov. Deval Patrick, a Democrat, is seeking to restore about half of the $130 million cut, but lawmakers have expressed reluctance, saying that doing so would require cuts to other important programs.

State officials expressed surprise at the lawsuit, saying that Boston Medical received $1.5 billion in state funds in the past year and should not be seeking more in the midst of a fiscal crisis.

“At a time when everyone funded and served by state government is being asked to do more with less, B.M.C. has been treated no differently,” said Dr. JudyAnn Bigby, the state secretary of health and human services, in a prepared statement. “We are confident that the administration’s actions in this area comply with all applicable law and will be upheld.”


If there is one thing that Congress and Obama have right, it is the rising costs of health care. They are not, however, entirely honest in why those costs are rising. And truth be told, the GOP alternative… depending more on reforming Medicare/Medicaid fraud, medical litigation, and allowing private insurers to form more pools of packages that could offer lower costs to the public… has it’s price tag that may (or may not) be less since it can’t get to the forefront to be compared in detail to the lone proposal the Dems offer.

What they don’t mention is how much is affected by fraud, frivolous litigation, extraneous administrative costs, medical care built around litigation prevention as opposed to needed procedures, etc. Before any plan by any party goes into effect, these arenas need reform, and middle man waste of HMOs needs to be kicked to the curb. Then let’s see how much shortfall is left.

But even with those savings, there is a guarantee of a shortfall. Both party plans address legitimate issues about the inevitable increase in health care on the horizon. As a Feb 2003 report by the CDC pointed out in their synopsis, Public Health and Aging: Trends in Aging — United States and Worldwide, the advance of the Baby Boomer and aging population overwhelms the declined fertility birth rates of the past decades, increasing the demands on public health systems, and medical and social services.

Also what both plans address is the move to preventative methods for the most costly “chronic” afflictions:

In 2002, the five most expensive health conditions were heart disease, cancer, trauma, mental disorders, and pulmonary conditions.

5 top health expenditures JPG

Heart disease and trauma ranked first and second as the two most expensive conditions in terms of total health care spending; however, with respect to per-person costs, cancer was the most expensive and heart disease the second most expensive.

Taken together, these five conditions accounted for a substantial proportion of total health expenditures in 2002. The 15 most costly medical conditions in the United States accounted for 44 percent of total U.S. health care spending in 1996.

Twenty-five percent of the U.S. community population were reported to have one or more of five major chronic conditions:

· Mood disorders.
· Diabetes.
· Heart disease.
· Asthma.
· Hypertension

Spending to treat these five conditions alone amounted to $62.3 billion in 1996. Moreover, people with chronic conditions tend to have other conditions and illnesses.

When the other illnesses are added in, total expenses for people with these five major chronic conditions rise to $270 billion, or 49 percent of total health care costs, according to 1996 MEPS data. On an individual level, treatment for the average patient with asthma was $663 per year in 1996, but when the full cost of care for asthma and other coexistent illnesses is taken into account, the average cost was $2,779.

Expenses for people with one chronic condition were twice as great as for those without any chronic conditions. Spending for those with five or more chronic conditions was about 14 times greater than spending for those without any chronic conditions. Persons with five or more conditions also have high hospital expenditures. In New York State during 2002, of the 1.3 million different persons admitted to the hospital, the 27 percent with five or more chronic conditions accounted for 47 percent of all inpatient costs.

Obviously, as the ageing population overtakes the younger population, these costs will be skyrocketing at a more intense rate of speed. All with the reality that there is less working population to support the top pyramid of retirees, combined with longer life expectancy in the US.

Why the current solutions are
a prescription for failure

I ran across a very interesting Internet Q&A with Ron Lee, a progressive thinking professor at UC Berkeley, on the Population Reference Bureau site when discussing the quandary of ageing and it’s effect on not only the health programs targeting the elderly, but all government social welfare programs. The major flaw in the ointment for both Romney’s MA universal health care, and Obama/Congressional proposals, is they all depend upon funding from the taxpayers.

But there are two major flaws not addressed in these pie-in-the-sky reforms from both parties…

First, there will be less taxpayers to support the young unemployed, and the elderly retirees.

Second, the current scale of spending is severly cutting into the American taxpayers’ capacity to earn… fueled not only by an economic decline, but the increased taxes that will have to be mandated to support the government welfare programs and unprecedented spending. (i.e. cap and trade, stimulus, burgeoning Congressional federal programs associated with all… with employees *also* supported by the taxpayers).

The “big picture” view of combining the repercussions for all Obama and Congressional plans was the very reason that I composed the post, EXPOSE’… Obama’s “cartoon horror movie” to destroy US economy revealed in “single cell” trailers just two days ago. When the media and Congress present how their “remaking of Obama’s America” will have minimal affect on the taxpayers’ wallets, they tend to do so in “single cel” mode. ala this single program will cost you “x” amount…. but “look at the benefits and savings”, they say.

However when you take the enormous scope of the Congressional/Obama agenda en toto, then pile on the effect of inflation and the devaluation of the dollar with that amount of national debt…. not to mention the increased daily costs that will be incurred with all this “clean energy” we’ll be paying thru the nose for at both ends- creation and useage… the effects on our wallets translate to one reality. Our earning capacity is not only regressive, but may just bite the dust big time.

Even John Kerry’s gospel source on cap and trade, the PERI Report, suggests all these “good paying” jobs Obama promises to create don’t result in incomes more than $51K annually… *with* college/bachelor degrees. It will take a long time to pay off those student loans at that rate. (oh wait… Obama wants the taxpayer to pay for that too….)

Working from that study, we provide evidence on this type of job breakdown in Table 10, where we sort the total number of jobs generated by $1 million in spending according to three job credential categories:

High-credentialed jobs requiring at least a bachelor’s degree and paying on average • $24.50 an hour.

Mid-credentialed jobs requiring some college but not a B.A. and paying on average • $14.60 per hour.

Low-credentialed jobs requiring a high school degree or less and paying on average • $12.00 per hour.

It doesn’t take an Einstein to figure that “some college” translates to about $600 a week, before taxes. Assuming a 33% tax structure (in our dreams with this spending…), that’s $1752 take home monthly. Under Obama’s HASP mortgage restructuring of 31% of disposable income, that “some college” person can afford a mortgage of $540 monthly which… at 5.8% rates… is a $92,000 home. And that’s NOT including property taxes and insurance.


If this is Obama’s idea of good paying jobs and a future, we can be assured he will have few “wealthy” people making over $250K to rob for taxes.

Since any potential of success for health care, or any other programs, is vital to taxpayers’ earning capacity (which Congress can then abscond), how is it they believe their plans are in any way realistic, let alone sustainable?

According to the Berkeley professor’s response (mentioned above) to a question, they aren’t without further redistribution of wealth measures.

Barbara Haley: Even though the ratio of elderly to the working-age population in the United States will roughly double over the next few decades, the dependency ratio is going down. What alternative to the regressive payroll tax (that currently funds old age) should the US adopt, to take full advantage of this?

Ron Lee: Barbara — The Total Dependency Ratio is the ratio of the youth population plus the elderly population to the working age population. A more refined measure is the Support Ratio based on empirical age profiles of consumption and labor income, used to form the ratio of equivalent workers to equivalent consumers. This ratio declines at .2% per year from now through 2050 (analogous to a rise in the dependency ratio).

This rate of decline is, I think, very slow, particularly in comparison to the much bigger changes in the finances of the Social Security system or Medicare. But by construction, it is considering not only these govt programs targeted to the elderly, but rather all govt programs and also the age patterns of private consumption.

You raise a good point about the payroll tax being regressive. I agree. The original idea was that the progressivity of the benefit schedule would out-weigh the regressivity of the payroll tax, but because poor people die younger than rich people, it is not clear whether actual benefits are progressive.

One could, of course, fund old age benefits out of the income tax, but I think most people would rather see a tighter relation between what benefits you receive and what contributions (payroll taxes) you pay. One way to do this is the so-called National Defined Contribution systems that are common in Europe, but these do nothing to make the system more progressive. That then requires a separate redistributive component, which some plans like the Swedish one have.

First of all, I’d like to note to Mr. Lee that the US already has it’s own form of “national defined contribution” system… it’s called Social Security, and is also another massive failure about to happen. And all for the same reasons that these social welfare reforms proposed by Obama and buds are nothing but a prescription for failure. They all depend upon an adequate earning capacity to support both the top and lower tiers of the population. In short, Ponzi schemes don’t work when there are less people participating.

Another point about the NDC systems… as a 2003 Cato report by William Shipley pointed out, Europe is experiencing the same problems there with their PAYGO pension programs in tandem with their own population pyramid inversion and economic woes.

The last bit about Sweden’s “separate redistributive component”? This one genuinely makes me laugh out loud. From this analysis of Sweden’s “partially defined contribution plan” by the School of Business from Stockholm University.

Due to changes in the age structure in many industrialized countries, we are currently experiencing a trend where countries tend to shift pension systems from a defined benefit system to a [partially] defined contribution plan. These shifts may have far-reaching consequences for retirees. The key issue in moving from a defined benefit type of pension system to a defined contribution plan is to make individuals more responsible for their own pension investments, and to a larger extent than before, let them bear the actual investment risk.

Anyone remember the Dem’s outcry to “the George W. Bush proposal” to reform Social Security? I believe it was described as “privatization” along with the prerequisite sneer and spit.

The Stockholm professors, after a three part analysis, came to the conclusion that a pensioner invested in the world market has a higher “Pension at Risk” measure than via the old, traditional method similar to our social security structure. That would be, of course, take funds from every penny you earn to dole back to you as retirement checks monthly.

Then again, this report was done back in 2000… when the economy was suffering normal swings in ups and downs. It’s now 2009, and the Stockhom professors do not address this base reality…. what about if these these social security programs are bankrupt (as they are)?

These are the choices for the working stiff… let the government take your cash and pocket it for your retirement fund (and piss it away). Or have the option of pissing it away yourself in the world market. Considering today’s economic reality and population trends, “Pension at Risk” measure is less about risk than it is about who bears responsibility for that risk… the individual earner, or the government.

I’ll take that responsibility myself. Were I to be able to have back all that money they’ve withheld from me since I was 16 years old, I suspect I could have handled it better. And if I didn’t, at least that responsibility was mine alone to assume.

BTW, for some interesting reading on Obama’s regressive payroll taxes and Social Security, visit a June 2008 post by The Provocateur, a Chicago mortgage broker.

And what about those health prevention proposals?

No one denies the old adage, “an ounce of prevention is worth a pound of cures”. But short of mandating “an apple a day to keep the doctor away”, the devil in the details is what anyone’s plan costs, and what they expect as results for taxpayer money spent.

According to TITLE III of Kennedy’s Senate version, we get ourselves yet another government council and federal employees… the National Prevention, Health Promotion, and Public Health Council. It’s a Presidential appointee for the big kahuna/chairperson, of course. This council will be consist of Secretaries from HHS, Agriculture, Education, FTC, FCC, Transportation, Defense Dept, VA, Interior, Labor, Homeland Security, HUD, the EPA, Director of the Domestic Policy Council, the US Patent & Tradmark Office, Office of Personnel Management, Chairman for Corporation of National and Community Service…. AND any other person the “chair” feels they want to add.


This conglomeration of federal appointees from virtually every government department hunker down to “recommend” to the President and Congress how to achieve “national wellness”. Considering where the recommendations are headed, this means only one thing…. legislative mandates on “wellness”. Not only that, *specifically named” are the usual sin habits we nasty common folk engage in… smoking, poor nutrition, and “sedentary” behavior… or lack of exercise. Nutrition, in itself, covers a vast and vague territory. Presumably fast foods to alcohol will be the first and primary targets, but unlikely to be the last or only targets.

The Senate plan gives these brain trusts no more than one year to come up with a “strategy” to present “federally supported prevention, health promotion and public health programs”…. all of which will require hidden and unforecast spending that is not included in the current CBO analysis.

The chairperson of this new “council” must report back annually and may, of course, use all the personal data collected by enrollees on their race, gender, education, communities, income etal…. as mandated in Sec. 204, 205 and 332. This data, per “da plan” can be shared with any and all federal agencies… and perhaps Craigslist if they deem it beneficial.

All that money, and where’s the prevention???

Answer… there is none…. yet. What we have is the “promise” of prevention programs: decided by a panel of appointees, then mandated by legislation. All costs are as of yet, unknown, and to be determined down line . And of course, conveniently *not* included in today’s cost projections. That’s next year’s spending surprise… and the year after and year after.

Maybe I’m just old fashioned, but I prefer the method that insurance premiums are reduced when you voluntarily participate in programs, or earn because of behavior: aka a discount.

For example in the auto insurance world, there are safe driver discounts, safe car discounts, bundling of insurance discounts, good student and senior discounts… all bent on rewarding good behavior.

Would it not make more sense for continuing with health insurance providers who give you discounts for voluntary health prevention? And, in fact, this is one arena where… on the surface… the GOP plan has it right.

• Promotes prevention and wellness by giving employers and insurers greater flexibility to financially reward employees who seek to achieve or maintain a healthy weight, quit smoking, and manage chronic illnesses like diabetes.

• Rewards high-quality care, instead of encouraging health care providers to order more and unnecessary services.

I say “on the surface” since we can see nothing but an abstract that the majority Congress and media does not allow to be pursued. But without spending a bit of the taxpayers’ dimes, without enacting nanny laws on what we can eat, drink or how much body fat is legal, the private plan can open new jobs for programs and facilities that would satisfy insurers discounts for reduced risk. It’s a free market job creator, and not a cash cow drain as we are looking at now.


There is so much more in the details… but what we have before us is an Obama/Congress Frankenstein monster, created in the image of Romney’s Frankenstein in Massachussetts… a creation already coming apart at the seams stitching the potpourri of govenment bodies used, and unsustainable because of declining incomes/taxes and government structure needlessly increasing the costs.

And Obama? This is already turning into such a mess that the new talking point is being spread around to distance himself from the damage…. “this is Congresses’ plan, not Obama’s”. He solemnly vows spins, “…I won’t sign any health-care bill that adds to the deficit..” knowing full well that any government option adds to the deficit.

I would like to remind the Community Organizer/Delegator in Chief that “… only dead fish go with the flow”. I might also add they land on the same beach as the rest of the debris.

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