Sunday, September 29, 2013

Government Based Upon Natural Law - (Part 14) - Health Care


What is the current state of health care in the U.S. 

Currently our government is subsidizing health care in many ways, such as with the programs of Medicare (for those of retirement age) and Medicaid (for the poor), as well and other health-care laws passed by Congress. In addition most people still get heath insurance from their employer.  And anyone who walks into a county hospital can get medical care. 

Medicaid is not a very well-run program.  The amount it reimburses doctors is so low that many doctors do not take Medicaid patients.  My doctor takes Medicaid patients but only if they pay up front for the services provided.  The patient can then send the paperwork to the government to get reimbursed.

There are a number of unworkable and undesirable other things about the way the health care is handled.  One is that these programs are underfunded by over $40 trillion.  This means that the government has made health care promises but eventually not enough income to meet them, so some changes will have to be made.  Even so, not everyone is covered.  And we spend about 16% of our Gross Domestic Product (GDP) on health care, higher than almost all other countries in the world.

Most people receive health-insurance subsidies from their employer, which creates its own sets of problems.  For instance, if a person quits their job or is fired, they must find another company to work for, or they must soon find their own health insurance. And if they have any pre-existing health conditions, this insurance could be prohibitively expensive.  The only reason employers got involved with providing health insurance for its employees was that during World War II, the government made it a tax write off, as an encouragement to employers.  It no longer makes any sense to have employers involved with health insurance, and creates many inefficiencies and problems.

On the other hand, most Americans are happy with the quality of health care that they receive. Therefore, we want to maintain at least the same quality, while providing good health care to all, and at an affordable price to the taxpayers.


(Eventually, likely many decades from now, we will be prosperous enough so that almost all people would be able to provide their own health care.  The few remaining individuals who cannot do so could easily be provided for through charity.  At that point the government would have no role, except for the important role of having laws that protect consumers from fraud, etc. While it may be ideal for most of us to be prosperous enough to provide our own health care, it is something that will have to come about only when prosperity for most ensues).

Therefore, for the foreseeable future, I think that health care, like education, should be subsidized for all Americans (and permanent residents).  And Americans should be able to choose their own doctors, chiropractors, osteopaths, ophthalmologists, dentists, etc., that they believe best meets their needs. 

What is the best way we can provide pretty good health care for all? 

My proposal will 1) Provide health care for all Americans, 2) Do so affordably using taxes, 3) Remove the pre-existing condition problem, and 4) Be fully funded, so that we don't pass on more debt to our children.  

The essence of the proposal is to provide and fund a Health-Care Account (HCA) for each American adult, paid for through taxes.  Half of this amount would be used to purchase a high-deductible health insurance policy, and the other half would be used to pay for medical services until the deductible is met. For most people, in most years, the deductible won't be met.  Keep in mind that money for the deductible is part of the HCA and would be paid for using a patient's HCA card. 

Specifically, the government would take 10% of GDP, and provide an equal amount of this to every adult (age 18 or older).  With a GDP in 2013 of about $17 trillion, this comes out to over $12,000 per year per adult.  Thus each adult would use their HCA card buy a $6,000 per year (in 2013 dollars) high-deductible health-insurance policy, and would have $6,000 per year to spend as cash (using their HCA card) for their deductible. This very high deductible greatly helps to keep the insurance premium down.  Also, the health-insurance companies that wish to be involved in this would also be required to provide insurance for any children the adult may have. 

Here's an example as to how this would work. We'll assume that all Americans and permanent residents already have been given their HCA card.  You have the flu and go to the doctor of your choice.  Say the doctor charges $150 for a visit.  You would provide your HCA card and $150 would be deducted from your $6,000 deductible.  And that's it. It costs you nothing, and your doctor gets paid immediately.  

Now suppose that something catastrophic occurs, such as a fall resulting in two broken legs and a concussion.  The hospital costs would likely be more than the $6,000 deductible.  The hospital would first use whatever deductible was left on you HCA card, and then your insurance company would pay the remainder of the costs at 100%.  

This would provide very good coverage for all, and would save money at the same time, since we would be spending 10% of GDP on health care instead of 16%.  And it would still keep the advantages of a free-market in health care, because patients could choose their own doctors, hospitals, etc.  This is what would make it better than the "single-payer" plans that most developed countries have, because they dictate the cost of doctor's visits, as well as the costs of various procedures, and lead to many delays in obtaining health care. 

What would health-insurance companies need to do to qualify to be part of this program?  

The United States Congress would certify participating insurance companies who would have to agree to accept the amounts given above and would have to agree to accept any person, regardless of any pre-existing conditions.  They would also have to agree to insure any children of the covered adult. As is true now, they would also have to be fiscally sound. 

Also, once a person has met the deductible, their insurance company would have to agree cover 100% of covered medical costs.  There would be no more co-payments for the year.

Would health insurance companies want to participate in this program? 

Yes.  Keep in mind that these payments start at age 18.  Usually, people up to the age of 40 or 50 would not meet their deductible, but the health-insurance companies would be getting premiums during this time.  People who are older or are frequently ill would be using the insurance most years, and so essentially insurance companies would be making money on most young or healthy people, and losing money on older or less healthy people.  The difference should provide a reasonable profit for an insurance company, so that many would want to be a participant in this program.  This cushion of starting to get premiums at age 18 should also provide enough money to be able to handle the costs of pre-existing conditionsThe specifics as to what is covered and what isn't would need to be worked out so as to insure that insurance companies would want to participate. 

Q and A's

Since this would be a new government program, would it require a tax increase?

All things being equal, it would require a tax increase.  But the overall cost to individuals would decrease.  This is because they would no longer be paying their part of the health insurance provided by their employer.  Also, companies would be saving money because they would no longer be providing health insurance, and they would no longer have to have large human resource departments to deal with this.  Thus, they could afford to give raises to their employees.

Would eye care and dental care be covered?

Yes, this would be required of all participating insurance companies. 

Would all medical conditions and procedures be covered, and would coverage be unlimited? 

No. Just as now, certain conditions are not covered by Medicare, certain conditions would not be covered by this plan.  For example, a heart transplant would likely not be covered.  Similarly, cosmetic surgery would not be covered, although one could use the cash portion to pay for it. Also, a person could accumulated cash in their account which they would be able to use this for such procedures. 

Probably a lifetime maximum of around $2 million would be in place.  It's important to get good coverage for all, so some limitations must apply for this to occur.  

Would this program replace all other government health-care programs?  

Yes, and that is one way the government will save money on health-care programs.  No programs such as Medicare and Medicaid would be needed.  Taxpayers would also save money because they would no longer have to pay for county hospitals because everyone would be covered.  (A possible exception is that veterans who are injured in the line of duty would not have the limitations mentioned above.  They would have the same essential plan but any injuries they sustained would be covered, and the lifetime maximum would be increased.  There would be no more need for Veteran's Hospitals, since veterans could get their health care at any hospital). 

Studies have shown that people who take care of themselves physically spend less on health care.  Would there be incentives in place to encourage this?  

The government would not directly apply such incentives, but insurance companies would be allowed to.  For instance, an insurance company could say, "If you keep your weight in the ideal range for your age and sex, and if you keep yourself reasonably fit, and if you get regular physical, eye-care and dental checkups, we'll refund a portion of your monthly payment, and you can use that money anyway you wish."

This would be a valuable incentive to keep ourselves physically healthy.  And of course there would be the additional benefit that healthier individuals are happier and more productive. 

Are you sure it would be a good idea to sever the relationship between employment and health care? 

Very much so.  Economist Albert Brenner has said this about health care: “ Industry and commerce are not well-served by a labor force unwilling to change jobs for fear of losing health-insurance benefits.  I have seen little discussion of this issue in connection with health care reform, but health-insurance benefits are a major reason for individuals to accept employment and to continue their employment even if they are not satisfied, challenged, or motivated by their job.  The current system thereby promotes an inefficient utilization of labor by restricting labor mobility.  This inefficiency reduces productivity, profits, and economic growth and output.  Since labor costs are by far the single largest resource cost in the production of goods and services, a reform that promises to make labor utilization more efficient promises to improve productivity and to increase economic output.” 

Would health-insurance co-operatives be allowed to participate? 

Yes, as long as they meet the same regulatory standards that for-profit health-insurance companies must meet.
(Health insurance co-operatives are owned by those who purchase health-insurance policies through them.  Any profits made can be returned to the policy owners, or can be used to reduce premiums.  Thus, they may wish to provide additional incentives for its members to be physically fit). 

What could a person do with money that accumulates in their HCA? 

They could do a number of things.  A person could choose to get a refund each year for any deductible money they did not use. This would provide an incentive to find good, yet cost-effective doctors and hospitals. 

Also, they would be allowed to transfer their money to another's account.  This could be useful if, for example, a family member needed a heart transplant, or something that wasn't covered by the insurance policy.

And they could stipulate in their will that any excess money be given to another person(s).  This would add more incentive to take care of oneself physically. 

Could a person use their own money to get additional benefits by increasing their health-insurance premiums?

Certainly.  This must be the case in a free country. 

Can the well-off do something to lessen the cost of this program? 

Yes.  There should be an easy way for someone to opt out of this program, and those that are well-to-do would be encouraged to do so.  For instance, the government might ask those families who earn over $150,000 to opt out of the program and pay for their own medical care.  As our country becomes more prosperous, more people would be able to opt out, saving the government money.  The government could send a nice thank-you letter each year to individuals who opted out, to show their appreciation. 

Would this program be constitutional?

Although the Supreme Court would likely rule it to be, I don't think it would be constitutional.  There is nothing in the Constitution about the government providing health-care subsidies.  Therefore, I would want a Constitutional Amendment passed to allow for this program. The amendment would specify that up to 10% of GDP could be used for the subsidy, and that sufficient taxes should be levied so that no debt would arise as a result of it. 

It would also state that this subsidy is not a right. This is because I don't believe one can have a right that requires someone else to pay for that right. 

As an aside, are there other subsidies that you’d like the government to provide? 

Yes.  Until our civilization advances enough, I believe that government should subsidize both education and health care for all.

Additionally, I’ve previously described a Natural-Resource Dividend.  This is an amount of money that would be given each month to every American adult, to compensate for others’ use of our common natural resources. 

For example, a  family would be getting about $2000 per month from the Natural-Resource Dividend, plus government-subsidized health care and education.  These should provide a reasonable economic base for families, and would also allow most mothers of young children to not have to work for money.

Between these subsidies and the Natural-Resource Dividend, we can eliminate all other subsidies that the government provides, both to businesses and individuals.  This would save a large sum of money by eliminating all of the bureaucracy involved in these programs. 

Note also a very important point: every American would be given the same amount of money for each of these subsidies.  This will save money by reducing the bureaucracy involved, and will satisfy the “general welfare” clause of the Constitution as well as the 14th Amendment, which are both meant to have laws that apply equally to all citizens. 

Conclusion 

Having a health-care subsidy that a) provides good health care to all Americans without going into debt; b) that saves money as well; c) that encourages us to take care of our physical health; and d) that still allows individuals free choices as to how to obtain their health care, is a plan that we should adopt as soon as possible.

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Tim Farage is a Senior Lecturer in the Computer Science Department at The University of Texas at Dallas. You are welcome to comment upon this blog entry and/or to contact him at tfarage@hotmail.com.

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Thursday, September 19, 2013

Government Based Upon Natural Law - (Part 6) - Military Policy

“The great rule of conduct for us in regard to foreign nations is in extending our commercial relations, and to have with them as little political connection as possible.” 


George Washington

“Peace, commerce, and honest friendship with all nations but entangling alliances with none.” 


Thomas Jefferson
 
Introduction

We should have cordial relations with all countries who act peacefully.  No peaceful country ought to be afraid that the United States will ever attempt to conquer it or forcibly take away its natural resources.

To countries or groups that have ill intentions toward us, our firm message should be: It would be a grave mistake to attack us, because you will end up suffering more than we will.  “Speak softly and carry a big stick” was not bad advice from Teddy Roosevelt.

We ought not to preach to other countries about how they should behave, or what their economic or political systems should be.  This has frequently led to them resenting us, rather than appreciating our good intentions.  The World Bank and the International Monetary Fund attempt to do this, and we should have nothing to do with them.

Rather, we should be humble and set a good example for other countries to follow.  What this means politically is that our government should protect our right to be free to live our lives as we deem best, as long as we don’t interfere with the right of others to do the same.

And what this means individually is that each of us ought to love our Creator and love others, by treating others as children of our Creator, and by using our talents to help make the world a better place. 

US Military Policy 

Purpose 

The purpose of the United States military should be to defend the USA if it is attacked, and to prevent an attack if a country or group has said that it intends to attack us.  This also includes eliminating in some fashion those who have already attacked us.

A possible addition to this is that if a close ally of ours is attacked, and if they request our assistance, and if we are able to help, we should carefully consider whether to use our military to aid the ally. 

Having the Best Military in the World 

Of course, the best outcome of having the best military in the world is that no rational country would attack us or even threaten to attack us. And indeed, since we developed nuclear weapons, not a single country has attacked us.

The quality of our troops, their training, and the quality of our leadership are the reasons why we have the best military.  And along with this is that we have thousands of nuclear weapons. (We used to have over 30,000 but it seems like having 1,000 would be enough of a deterrent, and much less expensive to maintain).

Some people have a desire to have a 'nuclear free' world, meaning that all nuclear weapons should be dismantled.  This is a terrible idea.  Our enemies would be ecstatic if we got rid of our nuclear weapons.  And, of course, there is no way to be sure that all other countries do not have or will not develop nuclear weapons.  Furthermore, our nuclear weapons are the greatest deterrent to those who would consider attacking us. As mentioned above, not a single country has attacked us since we developed nuclear weapons.

And because the United States is not imperialistic and does not steal natural resources from other countries, I suspect that if you privately asked most people around the world which country should have the best military, they would choose the USA. 

We should not be the Policeman of the World 

One implication of the purpose of the military given above is that we should not be the policemen of the world.  People and countries have fought each other since the beginning of recorded history, and it is not the business or purpose of the United States to intervene in such fights, unless, of course, we are attacked or threatened with an attack.  The last war that we should have fought was World War II.  Our wars in Vietnam, Iraq and Afghanistan have been misguided, although they were likely well intentioned.

Another implication of this is that we should not have our military stationed in any other countries, unless we are at war.  Currently, we have troops stationed in over 100 countries.  How many countries have troops stationed in the United States? None. This has created enmity and dependency, as well costing taxpayers a great deal of money.  It may help to create temporary stability in a given region, but is this truly our business? 

The Department of Defense has stated that we even need fewer military bases in the USA, but Congress has been loathe to remove bases in the states that they represent, for fear of losing jobs. 

How Different Would our Military be given the above Purpose of the Military 

If we eliminated foreign bases, wouldn't our ability to defend ourselves be degraded?  I think the opposite would be the case.  Countries would no longer be telling us to mind our own business, and terrorists would not be telling us to get out of their countries, and would have fewer reasons to attack us.

Here's a brief summary of what I believe would be the best way to protect our country:

1) Remove our troops from all foreign countries (over time).

2) We would not even need a standing army, because we are not going to get involved with policing the world, or overturning governments.

3) We could use the National Guard in this country to strictly guard our borders and ports.  Their main purpose would be to see that no WMDs, especially nuclear bombs are smuggled into this country.  And the secondary purpose would be to see that those who come into our country are legally allowed to be here.

4) As far as threats from other countries, we can use our intelligence agencies (which can of course operate overseas), our intelligence-gathering space satellites, and our Aircraft Carrier Groups, which operate in international waters, and that dominate the oceans.  No sneak attacks from other countries are at all likely to occur.

5) As far as threats from terrorist groups or other such groups who wish to harm us, again our intelligence agencies are the main line of defense, along with the border and port controls.  If an overseas threat is found, we would send in our Special Operations groups to eliminate those threats. 

Note that if all countries had this same military philosophy, there would be no war! 

Conclusion 

Following these military policies will, in the long run, bring the world close to peace, because we would not be interfering with other countries, and we would be setting a good example for other countries to follow.

A very nice side benefit is that this could almost cut in half the military budget, and make us safer at the same time.

One other way to reduce the likelihood of war will be discussed in a future post.  It deals with free trade.
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Tim Farage is a Senior Lecturer in the Computer Science Department at The University of Texas at Dallas. You are welcome to comment upon this blog entry and/or to contact him at tfarage@hotmail.com.
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