Random Thoughts about Health Care

Rhetoric on the Affordable Heath Care Act

The rhetoric coming from both sides in their “talking points” is getting tiresome. Any question asked by a reporter is answered by the talking points. The talking points on both side are hyperbolic and not all that helpful. It’s not really worth being fired up about it all until the senate takes action.

Winners and Losers

A lot of the posturing and reporting about health care seems to involve who is winning – the Democrats or the Republicans. My take is that some people who never had much of a chance to get health insurance will be the winners. If that was the intention of Democrats when they passed the Affordable Care Act then they might be considered the winners. Although Democrats lost in the political sense, they have forced Republicans to do more about health care than Republicans ever imagined. Since it’s impossible to get healthcare right, short of making it free to everyone (lots of detractors for that too), Republicans will probably pay a political price for whatever they do. But in the end, more people will have more access to health care than they did before ACA. Isn’t that kind of good?

The Costs

Having said it's kind of good I don't think anyone is really addressing the cost (not of an insurance policy but the cost of subsidies) to the nation. Hard to imagine having the coverage both sides are promising without significant costs. 

Strange is strange

I have issues with Luther Strange. Strange is Alabama’s recent Attorney General who was appointed by our disgraced governor to replace Jeff Sessions in the US Senate.

Our new, grandmotherly governor (who I suspect is tough as nails) has decided it all looked a little fishy and has scheduled a special election rather than letting Strange solidify his position for the next 2 years. As you will see, I am not enthusiastic about Mr. Strange.

The first issue is the well documented strange relationship between Strange and the deposed governor. The state house of representatives was hot to impeach now ex-governor Bentley. But Strange, as AG, told them to hold off there might be an investigation going on. A year later, there was still no action from the AG and the AG was mum on his maybe, maybe not, investigation.  Mean time Senator Jeff had moved on to be the US Attorney General and Alabama needed a senator. Lots of qualified people “applied” but isn’t it strange that Bentley, under fire, selected Luther Strange? Almost immediately after Strange moves on to the senate, the AG’s office provides evidence against Bentley.

The second issue is the strange settlement with BP in the oil spill law suit. AG Strange was instrumental in those negotiations. I should point out that many environmentalists were relatively happy with the settlement. They were happy to “get what we could’ rather than risk the uncertainty of continuing with the trial. Here are some facts and opinions that suggest AG Strange traded the environment for the Alabama general fund

The state of Alabama was involved in two law suits with BP. One was  the well-publicized Clean Water penalties being pursued by all the affected states. In the other suit Alabama was suing for lost tax revenues. These loses were almost exclusively from the 2 coastal counties (Alabama has 65 non-coastal counties). 

Alabama’s claim was $167 million.

Under the separate Clean Water lawsuit, Alabama’s share could have been as much as $1.6 billion if the judge imposed the maximum fine available.  No one could be sure, but the judge seemed to be leaning towards a high settlement rather than a low settlement.

Now the fun begins. Under AG Strange, Alabama accepts BP’s offer in the lost tax revenue case for $1 billion or about 6 times what Alabama claims. Seem strange doesn’t it? Why would BP do that? Easy. In return, Alabama (along with other states) agrees to accept a settlement in the Clean Water suit. Alabama’s share turns out to be $599 million not the potential $1.6 billion. Why would Alabama do that? It’s simple. If Alabama got $1.6 billion from the Clean Water suit then it would have been mostly spent on environmental projects in the two coastal counties and the spending would be overseen by a committee structure not controlled by the Alabama legislature. Under the settlement, as accepted, $1 billion goes to the general fund where the legislature controls every penny and the other 65 counties get some of the action. And in fact the two coastal counties have had a hard time getting much of the $1 billion despite being the center of the damage.

Why does BP care since the total to Alabama is about the same in either case?  It’s all about tax deductions. BP cannot deduct penalties paid for Clean Water violations but can deduct payments to states.

Isn’t it Strange how these things work out?  

The coal miners dilemma

The coal miner dilemma

COAL MINER'S HEALTH CARE: more waste and more socialize the costs.

Like most Americans I did not realize I was subsidizing health care for coal miners – not commercial fishermen (the most dangerous occupation), not farmers and not most other occupations. “ It is the only time that Congress had intervened to provide retiree health benefits that had been promised by a private party. Congress intervened again in 2006 after a series of bankruptcies in the coal industry”.  The Atlantic.

This all came out as part of the negotiations to extend the US Budget. It turns out we have been have been paying quite a bit to provide health care to 22,000 miners no longer covered by their bankrupt companies. According to Fox News  we paid nearly a billion dollars to the United Mine Workers (UMW) between 2011 and 2015 for health care. The estimated cost to continue under a bill in congress is 2.2 billion for the next 10 years.

If you Google coal miner’s health care you can find a lot more background part of which is an “obligation” of the government to take care of miners dating back to 1946.

People of good will can argue about moral obligations on one side and budget responsibility on the other side or even the fairness of favoring one occupation over others but there are three other aspects that are troublesome.

That same Fox News report is mostly about an audit of the agency that makes the payments to the miners. The payments are made directly to the UMW with almost no oversight from the agency. The union makes the decisions about who gets the money, doesn’t seem to follow standard insurance procedures and appears to charge 48% overhead. So we have a program that may have merits but is grossly inefficient.

Besides the 1946 “obligation” to support coal miners, why are we involved so directly in their health care? As members of a powerful union and with help from the government back in 1946, miners bargained for good, employer-provided health care. But as coal profits have fallen due to competition from natural gas, several big mining corporations have gone bankrupt. It’s doubtful the owners suffered much as they likely socked away their profits in good investments (not coal). But of course they were excused from any serious obligation to fund health care for out of work miners. So here we are again – privatize the profits and socialize the costs.

Is coal really worth the cost?

And finally, miner’s pensions are also at risk.  A bill in congress proposes to use the Abandoned Mine Reclamation Land fund to shore up pensions. As you might expect the fund was meant primarily to fix the environmental damage left by abandoned coal mining operations. It's easy to argue that helping people is more important than restoring mining sites. But why are miners getting a special social safety net? There are a host of safety net programs already in place for workers in every other occupation who lose their jobs and whose pensions are threatened.

Is the cost of coal really worth it?

Not Climate Change