Deflation?

This is interesting. For the first time in three decades, Social Security payments are not going up. The "cost of living allowance" is negative because we have had deflation in the past year. Also, according to the article, at least one state (Colorado) is lowering the minimum wage, citing deflation. (Social Security payments are not allowed to decrease, hence no increase.) The minimum wage in Colorado is decreasing from $7.28 an hour to $7.24 an hour, but the Federal minimum wage of $7.25 will super-cede the state rate. I've never heard of a minimum wage going down, even if it is only 3 cents an hour.

Update: Obama proposes a one-time payment of $250 to every Social Security recipient to help them "weather the recession" since their payments are staying the same this year. You have to get to the bottom of the article for the quote from the former deputy of Social Security: "There is essentially no substantive case for this on policy grounds. . . . This is a case of both Democrats and Republicans bending over backward to do the politically popular thing for seniors." That sounds about right...

Expect more stories like this in the future

This story from the Wall Street Journal is why I oppose the ideas currently being floated by the Democrats for health insurance reform. If I were that couple I would probably move away out of state.

Under all the plans being considered the government is in charge of determining what is acceptable insurance. It doesn't matter if that is more insurance than you want to purchase. It doesn't matter if you currently have an insurance policy you like. If it's not on the approved list (which can change with the whims of the legislature) you must pay a penalty.

I wish supporters of the proposed reforms would look closely at what's happened in Massachusetts. Citizens of Massachusetts were told that costs would go down when in fact health insurance in Massachusetts is among the highest in the nation and prices continue to rise. My own experiences with trying to buy insurance in Massachusetts were not positive. Reform is definitely needed, but I'm not a fan of what's currently being proposed.

Obama vs Clinton on Health Care

Via the New York Times Economix blog are wordle representations of both Clinton's 1993 health care speech and Obama's speech last night. Words mentioned more often are larger. Click through to see them.

What's interesting to me is that it shows the switch in the focus of the debate. Currently, health care reform is centered around insurance, which as I've mentioned before is not exactly the same thing as health care. I wish the focus was more on how to provide health care to more people at more reasonable prices.

Obama's Health Care Speech

So, I listened to Obama's special address to Congress and the nation about Health Care last night. As much as I want to be a believer, he did not convince me. His proposals just don't add up. I certainly want everything he mentioned, but wishing for things and having them be true are very different.

His plan would force upon insurance companies the following: they couldn't deny coverage to anyone (guaranteed issue), the only determinate of price would be age (community rating), no cap on lifetime coverage, and policies must cover preventative care. His plan would force everyone to buy insurance. All of this will be paid for without adding a dime to the deficit (he said this twice, in case we didn't hear it the first time) and will be financed by finding waste and cost savings in the existing system. If you already have insurance, none of this will not impact you, in fact it will make your coverage more secure. And, if there ends up being a "public option" insurance plan (not a deal-breaker according to Obama) it will be financed entirely by its own premiums and will not receive tax-payer subsidies, just like public state colleges, which also don't receive any tax-payer money...?

That is a lot of promises, without any mention of potential trade-offs or drawbacks. What he's proposing sounds a lot like the Massachusetts plan, which if my experience with it is any indication actually raised the cost of getting insurance and increased the prices of health care. I wish Obama would be more truthful about health care reform. I wish he would actually talk about the trade-offs associated with the different reform proposals, instead of acting like imposing a litany of new restrictions on insurance companies won't actually increase costs and reduce choice, the opposite of his goals. The restrictions no doubt have their merit, but he's pretending like they will come without cost.

He said last night about his plan, "It will provide more security and stability to those who have health care. It will provide insurance to those who don't. And it will slow the growth of costs for our families, our businesses, and our government." Sounds great, but I don't see how he's going to get all three.

As an article in the Washington Post written before the speech put it:

What makes reform such a difficult puzzle is that the fundamental policy goals of universal coverage and cost containment are inconsistent with the political instincts to assure Americans who already have health insurance that they will be able to keep everything they already have, to assure that nobody will get a tax or cost increase and to assure those in the health-care industry that there will be no reduction in their income.

The WP article is a good one, and it urges Obama to stand up for truth in health care reform. To really say that there are trade-offs in changing the current system and to really convince people that the costs are worth the benefits. Telling people they can have everything they want might be good politics, but it's just empty rhetoric. I want reform. But so far, I'm not convinced that Obama's plan is everything he says it is.

I was at a baseball game the other night and two older guys sitting behind me were chatting with each other about politics during the game and they were essentially saying what the Washington Post article said. They wanted Obama to stand up for true reform. That's what I wish Obama would sell in a speech, not a bunch of promises that I don't think he'll be able to deliver on.

Good Health Care Article

I won't be posting too often on this blog, given my circumstances right now, but this a recent article from the Atlantic was too good not post. Entitled, provocatively, "How American Health Care Killed My Father" it outlines many things that are wrong with the American health care system and some ideas for reform. Unfortunately, the ideas, like John Mackey's ideas (of Whole Foods fame) are the opposite of where current "reform" is headed.

Namely, that our current debate is centered around insurance when it really should be centered around access to health care. Also, health insurance as currently defined by most people today is not really insurance. Insurance covers large, unpredictable, rare and costly events. Think, car insurance: it covers accidents, theft, major damage. Certainly it doesn't subsidize gas, oil changes, brake work, etc. Same with house insurance. It covers major disasters to your house. It doesn't cover heating oil, improvements to your roof, new windows, etc. Only with "health insurance" do we expect it to cover routine check-ups and planned events. Because of this, and the distortion of tax-deductibility of employer-provided health insurance, premiums are expensive and rising fast.

More commentary about the article can be found here. And for more readings along these lines, read these blog posts.