AR-House 46: More On Meeks And His “Solutions”

I debated with myself whether to continue talking about David Meeks and his lack of understanding of, inter alia, the health care reform bill.  I finally decided that I was not going to respond to any more of his Tweets, at least on this issue.  To my surprise, however, he actually posted something on his blog in reply to my original post, and it was simply screaming for further dissection.

So that I might avoid being accused of taking anything out of context, I’ll post Dave’s entire response first.

Here is a post from BlueHogReport [sic] about something I tweeted:
http://www.bluehogreport.com/2010/06/21/state-hou-r-46-when-ignorance-attacks/

Here is my short response:

According to the Kaiser Family Foundation report, the increased Medicaid cost to the state from 2014-2019 will be anywhere from $455 MILLION to $761 MILLION[,] depending on the participation rate.

That is anywhere from $91 million to 152.2 million per year.

While it is a low percentage increase (4.7%-7.9%) AND the federal government is kicking in a significant amount to cover the remaining costs, it does not dismiss [sic; “diminish,” perhaps?] the amount of money the Arkansas taxpayers will have to cover each year. Since [sic; “Because”] we have a balanced budget, it will mean either cuts to state spending or increased taxes.

Another point to remember is where the federal government gets it [sic] money. Either way you look at it, we are fitting [sic; “footing”]  alot [sic] [of] the bill whether thru [sic] the state or thru [sic] the federal government kicking in there [sic; quick primer on their/there/they’re] “matching” dollars.

Increased government is not the answer to our current healthcare “crisis”. There are free market solutions that fall within the bounds of the Constitution that will help solve the problem of the uninsured. (You can go to my July 19th, 2009 post for some of the solutions.)

http://www.kff.org/healthreform/upload/Medicaid-Coverage-and-Spending-in-Health-Reform-National-and-State-By-State-Results-for-Adults-at-or-Below-133-FPL.pdf

See Table 8 and Table 12 for percentages and dollar figures.

After the jump, we’ll do that thing we do.

Dave’s first counter-point seems to be that, while the marginal increase in spending is small, it is still a lot of money that we will have to come up with.  I give him credit for trying to address the marginal-cost issue, but he leaves out half of the equation.  Not only is the marginal spending increase small, but the corresponding marginal increase in the number of Arkansans who will have health insurance is much, much higher (27.9% and 39.9%, respectively).  You cannot look at the cost in a vacuum here or else no amount of spending makes sense; the question is not “what does it cost” but “what does it cost relative to the benefits it provides?”  Stated differently, is it worth increasing state spending by roughly 5% (or 8%) to cover roughly 28% (or 40%) more people than would be covered without the bill?  That is the part Dave still has not addressed, but I am guessing that his answer is no.  After all, he points out that “it will mean either cuts to state spending or increased taxes” regardless of how many lives it improves.

That brings up two somewhat-related points, however.  First, if we could cut state spending in other areas — this is a hypothetical only, as I am just responding to Dave and not suggesting specific cuts — and defray some or all of the cost, why would that be a bad thing?  The only way that is bad is if the spending that is cut was funding something more important to the overall well-being of Arkansans than the access to affordable healthcare.  I struggle to think of too many areas of state spending that would meet that threshold.  (Recall, in addition to providing coverage to more Arkansans, the bill is also designed to ease other burdens on the healthcare system by making it more difficult for insurers to deny coverage, as well as myriad other benefits, all of which, in the long run, benefit the state by improving the entire system.)

Second, Dave’s response makes it sound as if we are going to have to come up with this money immediately (or at least in the very near future).  We are talking about spending that will not happen until 2014, giving us over three years to plan for the increases, so that, under competent leadership, a bump of 5% (or 8%) should hardly be noticeable (and should certainly not be detrimental).  The only way such a small increase (relative to benefits received) is the horribly troubling spectre that Dave makes it out to be is if we assume that this state and its elected leaders, the ranks of whom Dave seeks to join, cannot possibly plan for the future budget needs of the bill in three years’ time.  If that’s the case, the problem is not with the increased cost or the healthcare reform bill, but with the elected leaders.

Dave’s second point in rebuttal is that the money the federal government will use to cover their end of the bill is actually our money in the first place (i.e. taxes).  This is true, but it is a flawed argument inasmuch as a state with as small of a population as Arkansas stands to benefit relative to other states in this scenario, as states with higher populations and (more to the point) better economies contribute more tax dollars than does Arkansas.  Yet Arkansas is not limited to the funds it pays into that pot when the federal government starts covering costs of the new bill.  In this way, Arkansans’ healthcare under Medicaid is being subsidized by the dollars from other states.  While this might trouble the more fiscal conservative Republicans from a big picture perspective, it’s not relevant to Dave’s argument as a candidate for the STATE legislature about why WE (i.e. Arkansas) cannot afford the bill.

Additionally, Dave’s reference to the money spent by the federal government is silly in two respects.  Foremost among these is the fact that the healthcare reform bill, in addition to providing health coverage to millions of Americans who do not currently have it, is projected to reduce the federal deficit over the next two decades.

Estimates vary as to the precise amount of deficit reduction that we can expect from health care reform. On the low end is the estimate from the Congressional Budget Office, which does not take into account any efficiency improvements stemming from the legislation. CBO’s “score” (budget lingo for an evaluation of the budgetary costs of a piece of legislation), which only includes direct changes in spending and revenues, has health care reform reducing the deficit by between $920 billion and $1.7 trillion over the next two decades.

Harvard University health economist David Cutler suggests, however, that the savings are likely to be much larger than that once the efficiency and modernization improvements contained in the bill take hold. He estimates that the total budgetary savings from now until 2030 will total around $6.5 trillion.

The scope of our budget problems is such that even $6.5 trillion in deficit reduction over 20 years is not enough to fully solve them. There is no question that passing health care reform right now is only the first step in addressing the long-term budget gap. But the fact remains that the [bill] is the largest deficit reduction measure Congress has seen in more than a decade. (emphases added)

So, to the extent Dave is saying that we can’t afford it because it will increase our federal deficit and hurt out future, we’ve hit on another area where he is woefully uninformed and incorrect.

Secondarily, Dave’s reference to federal spending is laughable because Republicans have zero credibility when it comes to decrying deficit spending.  Somehow the GOP manages to convince its base — much of which is made up of the elderly, the military, and corporate America, which collectively represent the three largest beneficiaries of government spending — that it is the Republican party who will reduce the deficit.  They just ask that you pay no mind to the man behind the curtain, because he is most likely President Reagan, President G.H.W. Bush, or President G.W. Bush, all of whom increased deficit spending by massive amounts.

Dave’s final point in response to my post is that “[t]here are free market solutions that fall within the bounds of the Constitution that will help solve the problem of the uninsured.”

Now, last things first, Dave doesn’t explain how the health care bill, which is well-within the federal government’s power to regulate something that has an effect on interstate commerce, is not within the bounds of the Constitution.  We’ll discuss the silliness of Dave’s constitutional argument shortly, however.

Beyond that, though, Dave’s argument here again displays his lack of understanding of basic economics.  To put it bluntly, there is no such thing as a free market for healthcare.  It simply does not exist, and no amount of Republican chanting of the magic words “free market” changes this.

This is probably better addressed in a separate post, so as to not get too far astray here, but here’s the Reader’s Digest condensed version: Most markets for health insurance in the U.S. are dominated by one or two companies, who collude to increase their income, decrease their payouts, and protect themselves from competition.  This oligopoly colludes to keep prices high, choices low, payouts at a minimum, and new competitors from entering.  The same goes for the pharmaceutical industry, where patents make some drugs available only from one company, where a few gigantic firms dominate almost all of the market, and where — thanks to President G.W. Bush — U.S. law forbids our government from securing lower prices (destroying the idea of economies of scale) for bulk government purchases for use by VA hospitals and the like.  Access to hospitals is similarly limited so as to preclude any sort of real competition, which is essential for a free market.

Dave ends his misguided attempt at rebuttal by pointing readers to his post from last July in which he says he laid out some possible “free market solutions that fall within the bounds of the Constitution.” (I’ll take “Meaningless Platitudes” for $1000, Alex!) While I probably run the risk of having Dave think I took him out of context and/or that I was “spinning” what he said, I am nevertheless going to address this post in my more-favored approach: fisking.

“The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” Tenth Amendment to the US Constitution.

I wish there was a place in Vegas where I could bet on things like “some conservative who has less than zero clue what he’s talking about will try to invoke the 10th Amendment as a reason why some law he doesn’t like is illegal/improper.” If I can’t have that, then I wish people would review the jurisprudence surrounding the 10th Amendment before they start throwing it around. A good starting point for Dave, et al., would be U.S. v. Sprague, 282 U.S. 716 (1931), in which the Court noted in dicta that the 10th Amendment “added nothing to the [Constitution of the United States] as originally ratified.”

From there, I would suggest that 10th-Amendment-happy conservatives look at U.S. v. Darby, 312 U.S. 100, 124 (1941), wherein the Supreme Court held that the Fair Labor Standards Act applied to businesses that were entirely local such as a lumber company that operated only within the state of Georgia. Addressing the lumber company’s argument that the 10th Amendment prohibited Congress, even under the Commerce Clause, from regulating intrastate businesses, the Court said:

Lastly, at least vis-a-vis the interplay between the 10th Amendment and the Commerce Clause, Dave might consider reading Garcia v. San Antonio Metropolitan Transit Authority, 469 U.S. 528 (1985). Considered the seminal case on the matter, Garcia held that Congress had the authority, under the Commerce Clause, to impose FLSA requirements on a mass-transit system operated by a governmental entity. Writing for the majority, the great Harry Blackmun wrote:

Now that we are all fully informed on the status of the 10th Amendment in the current discussion, let’s agree to never speak of it again, ok? Back to Dave’s July 2009 post:

The answer to real healthcare reform lies within the US Constitution.

Yup, it’s right there in the Commerce Clause.

Don’t be fooled by the talk up in Washington DC. ANY sort of government run health care is not the solution. This kind of thinking is bad for America.

Interesting. I mean, our veterans get government-run healthcare. Is that bad for America? You did say “ANY sort,” so I assume that you think veterans’ health insurance and VA hospitals and whatnot are a bad idea. That’s a very strange position for a former soldier to take, Dave. And what of older Americans and Medicare? Is that also a bad idea? I’ll be honest; I worry that you are letting your desire to sound forceful and enlightened get in the way of your ability to actually think about what you’re typing.

Once the government gets its foot in the door, it will use the other foot to kick the door down and then it will walk in and take over. We must not compromise. We must not let our guard down.

OK, (a) why would it need to kick the door down if it already had one foot in the door? Wouldn’t it be easier (and make more sense in your hyperbolic metaphor) for the government to use its other foot to kick the door open? (b) Are you going to offer anything substantive, or will you continue writing meaningless drivel like this?

We must continue to fight for real healthcare reform.

How, pray tell, will we do that without governmental involvement, given that the government is the only entity that can break up the health industry’s oligopolies? OOOOH, is this where we’ll get to see your “solutions?!”

Here are some possible ideas for solutions.

Awesome!

As always, I would be open to other solutions that are based on the values and principles of the Constitution.

I have one! How about we let Congress use its authority under the Commerce Clause to provide access to health insurance to millions of Americans and prevent giant insurance companies from being able to run roughshod over their customers? I know it sounds crazy, but it just might work, and it is 100% in keeping with the “values and principles of the Constitution.”

1) Health Savings Accounts (HSA)- Allow every person to set up a Health Savings Account and contribute to it pre-tax. Allow people to use these accounts to purchase a health care plan that fits their needs.

First, as a friend of mine said when we were discussing Dave’s “solutions,” pre-tax HSAs are worthless when people lack income in the first place. It’s like giving a break on capital gains taxes to the working poor; it’s meaningless. In case you haven’t noticed, Dave, the economy is awful at the moment, and unemployment is through the roof. Throw in that salaries in Arkansas are ridiculously low for most workers even when the economy is in better shape, and I think you’ll see why this is not feasible.

Oh, but there’s more. HSAs encourage healthier and/or wealthier people to eschew low-deductible policies from their employer and buy high-deductible policies on their own, thereby getting the investment and tax-savings benefits from the HSA. Except this removes those people from the risk-pooling that employer policies’ prices are based upon. What do you think happens to the price of those plans if a bunch of the healthier people bail out on them? Insurance rates for the rest — the people who can’t afford to start an HSA, either because they don’t make enough money in the first place or because their individual health history would price any individual policy well beyond their means — climb dramatically.

Also, get this, Dave: HSAs, because they disproportionately favor the wealthy by encouraging them to put pre-tax money in the account, would cost the federal government billions of dollars in lost tax revenues, thereby increasing the deficit (as the government will have to make up some or all of that money somehow). Yet you were against the HCR bill because you though — incorrectly, I might add — that it would add huge amounts to the U.S. deficit.

2) Medical Vouchers- This is along the lines of an HSA and could be used in conjunction with an HSA. Employers give you so much per pay period to purchase a health care plan.

Wait…are you serious? Conservatives have whined about the HCR bill because of an alleged impact on small-business owners, yet you expect those same small business owners to pay directly to the employees in the form of vouchers? Is there some kind of Voucher Fairy that I don’t know about? Because, otherwise, I fail to see how it makes more sense for employers to give vouchers so that employees can buy individual plans (which, for most, will be more expensive than their insurance would have been under an employer plan).

You know what would have obviated any small-business concerns? A public option. But I digress.

3) Groups- Allow people to form their own group for health insurance purposes to get a group rate. Some examples of this could be your workplace, your church, a civic group, a town, or a college.

Hmmm. A few questions, Dave-o. First, how do you account for risk in these groups? That’s a pretty important piece of the puzzle, as risk pooling is why group plans are theoretically cheaper than individual plans. Second, who administrates the plans for these groups? Does one of the members have to quit his or her job to act as a plan administrator? Is there an Administration Fairy who will magically do the work? After all, if the group were small enough that it did not need an administrator, then it is probably too small to really get the benefit of an economy of scale; grouping the 16 people who meet in a weekly bridge club isn’t going to net an appreciable discount.

4) Physicians- Allow physicians to offer their own health insurance coverage.

Let me be blunt: THIS IS THE STUPIDEST IDEA I HAVE EVER HEARD FOR HEALTH INSURANCE REFORM, AND IT IS AMONG THE STUPIDEST IDEAS I HAVE EVER HEARD FOR DEALING WITH ANYTHING.

Do you not see a gigantic problem with having the person who is treating you and making decisions as to what procedures you might need also be in charge of your insurance? Do the words “conflict of interest” mean anything to you?

Or what if you live in a small town and only have access to a general practitioner, but you need to be seen by a specialist? Would the GP’s insurance cross over? Would you have to re-apply for insurance from the specialist? Why would the specialist, especially if he were, say, an oncologist, insure you when it is likely that you have a very serious pre-existing condition?

I am amazed that someone running for office would not have the common sense to see how horrible this suggestion is.

5) Medical Malpractice- This is a pretty sensitive issue, but one that must be dealt with. There has to be a balance that can be achieved to help protect both doctor and patient.

Limiting med mal claims has not lowered health care costs appreciably once applied to real life situations (see, e.g., Texas). The reason? Because med mal is not a major factor in the increasing cost of healthcare. It’s a talking point for Republicans and nothing more. To quote from the linked article:

Of course this is just an overview of possible solutions and I am sure not the only ones that are out there. The main point is that there are solutions without the need for government to run things.

Of your proposals, one is absolutely horrendous, two are worthless (HSAs and limiting med mal), and two are counter-productive (vouchers and group purchasing). These are “solutions” to the problem in the same way that going to work naked is a solution to not having any clean underwear.

You’ve fully demonstrated your lack of understanding on nearly every economic and logistical issue surrounding healthcare reform. All that remains to be seen, I suppose, is how you will claim that I took you out of context.