On Getting To Keep The Insurance You Like (or maybe not)

About this time last year I was visiting one of my accounts based in Toronto when one of my customers, who is a strong advocate of the Canadian health care system, asked what I thought of Obamacare. My answer: I thought there were far better ways of helping the 10 or 15% of Americans who didn’t have health insurance than forcing the other 85 – 90% to change what they had. She repeated what Obama and his minions have been saying: that we could keep our insurance (and doctor) if we liked it so what’s the big deal? Well, after the initial October roll out we’re learning that we could keep our insurance ONLY if it met the criteria laid out by Obamacare. The news media has been reporting that thousands of people have been receiving notices from their insurers that, oh, their plan doesn’t meet this minimum criteria and that the plans available on the exchanges are much more expensive and have higher deductibles.

Who could have seen that coming? Anybody with a basic understanding of Economics 101. By that I mean that the package of promises sold to us like a miracle balm (or snake oil) contained contradictory claims. We were going to save money, lower the national debt, reduce overall medical spending while covering people with pre-existing conditions and adding millions of folks who previously didn’t have insurance.

How did this happen? I think a constellation of factors made it possible for politicians to sell some people on Obamacare. (Notice I didn’t say most people because the polls have consistently shown a lack of strong public support for Obamacare. It is dropping like a rock since October 1.) One is the lack of understanding how a market works and particularly how distorted the healthcare market is. Second, the mammoth bill was too complex even for its supporters to fully understand. (Hence, Nancy Pelosi’s infamous comment about needing to pass the bill in order to find out what is in it.) Third, I think a lot of people harbor animosity for insurance companies precisely because (a) we don’t know how much medical services truly cost (see examples below) and (b) insurance companies delay or deny payments to protect their bottom line. And lastly, I’m sure there is a minority of people who think they were going to get something for almost nothing while tucking it to the big insurers. Several Obamacare supporters have voiced dismay that they didn’t think they would be the ones footing the bill only to find out, to their dismay, that the bill collector tolls for them too.

During the discussion with my customer I also mentioned that the health care system in the U.S. was far from a true free market system for a number of reasons (best covered at another time) and that having insurance cover most of normal medical expenses hides the true price from the user. I likened it to going into a grocery store and for a $20 co-pay you could fill your cart with anything you wanted, from cheap hamburger to caviar (if the store would carry it). Or it would be like going to the car dealership to get whatever work you wanted done on your car for the measly co-pay. So you could have an oil change or rebuild the engine for the same out-of-pocket cost. As a result of this arrangement there is no incentive for the customer to shop for the combination of best price and quality like we do for other goods and services. But that too is a topic for another post. For more information on this I highly recommend John Goodman’s Priceless: Curing the Healthcare Crisis.

For a much deeper analysis I recommend Robert Tracinski's article.

George Zimmerman and the Power of Bias by Megan McArdle

As readers of this blog should know by now I like to link to articles that I think exemplify objective thinking. In the aftermath of the Zimmerman trial I've read a lot of articles on both sides of the political fence. I think McArdle takes a balanced approach, recognizing that no one but Zimmerman knows exactly what happened between him and Martin that fateful evening. I believe at some point in their encounter someone was going to die, either Zimmerman or Martin. If Zimmerman hadn't been armed he probably would not have survived. Of course, some would claim that if Zimmerman was unarmed he would have been more likely to leave the scene rather than risk a face-to-face with Martin. Maybe.

In any case, I recommend reading McArdle's article.

And for some background on why Zimmerman might have decided not to leave the area after he called 911 this Reuters article provides information on what happened in the days and months before the shooting. http://www.reuters.com/article/2012/04/25/us-usa-florida-shooting-zimmerman-idUSBRE83O18H20120425 (Hat tip to neoneocon.)

Man of Steel: Brief Comments

This review by Ari Armstrong captures pretty much how I feel about Man of Steel (MoS), which I saw yesterday with my family as part of our Father's Day celebration. I liked MoS primarily because it had a villain truly worthy of Superman. I liked the mythic elements of the original Superman movie but felt it was undermined by the banality of its villain Lex Luthor. MoS plays it straight with no campiness or tongue-in-cheekiness (if there is such a word).

It's been interesting reading the various reviewers who have criticized for MoS not being light hearted like the original. It's almost as though they object to MoS for taking itself so darn seriously. On the other hand I agree that the epic fight scenes at the end were a bit long and repetitive. I mean, how many times can you plow each other through skyscrapers before the combatants conclude that this isn't working?

Bottom line: I loved MoS and it left me hoping there will be more to come as long as the sequels stay true to the mythology reaffirmed by this movie. It was fitting that I saw the movie on Father's Day because the scenes of the young Clark and his adopted father resonated with me.

Why the President Lost on Gun Control - The Daily Beast

Megan McArdle has an interesting take on why the campaign to strengthen gun control laws in the aftermath of Sandy Hook failed. She doesn't talk about whether this latest ploy was right or not in terms of individual rights. Her focus is on how Obama and his gang employed a wrong bargaining strategy. In doing so she make some good observations that we could apply in other negotiations, such as buying a car (an example she uses to make her point).

Why the President Lost on Gun Control - The Daily Beast

When facts and narratives collide. (When facts contradict beliefs, challenge the facts.)

The title is meant to catch your eye. I'm not saying that thinking objectively means we should deny facts that challenge our beliefs.

I generally don't start political discussions with people I know disagree with me. I don't enjoy getting into arguments partly because I know there is no true “winner” in these disagreements. As a libertarian in liberal Massachusetts that means I almost never start such discussions because few people share my point of view.

For instance, during the NFL football season my wife and I watch the games at a friend's house where the wife is as avid a fan of the Patriots as my wife. However, I knew that our host, let's call her Jane, is fairly liberal. During the election she had signs along her driveway for Elizabeth Warren. Need I say more? Sometime after the election Jane brought up politics even though she had a good hunch that I didn't agree with her. I said that I was neither a Republican nor a Democrat but a libertarian. Our talk was quite civil for a while until Jane said she didn't understand why the economy wasn't doing better despite the stimulus package. I told her that every one of my customers have said that they are sitting on tons of cash but don't want to hire people. (In my job I often meet with the treasurer or CFO of my accounts.) Why? Because they're afraid of what additional regulations will be coming and the effects of ObamaCare when it starts being implemented. Jane burst out with “Bullshit! I don't accept that!” She stood up, added that she also didn't think the wealthy or businesses were really responsible for job creation, then started to storm out of the room. I said, “It looks like this conversation is over.” (To give her credit Jane did apologize later for her outburst although she didn’t change her mind.)

This incident opened my eyes to an interesting facet, not just of liberalism but probably of all ideologies: the denial of facts that contradict cherished beliefs.

In this case pointing out that businesses were reluctant to hire people challenged the policies and politicians that Jane supports. It also violated the liberal narrative. This narrative says that the wealthy and business owners have infinite resources that can be taxed and regulated without negative consequences. I think there also is the belief that we have the right to tap these resources because the rich and business owners didn't earn their wealth. After all, they didn't build that, as Obama angrily asserted.

I recall seeing a skit on Bill Maher’s show in which a conservative is sitting inside a sound-proof bubble while Maher and another liberal shout “truths” at the conservative. Conservatives feel the same about the filter liberals have installed in their ears. Rather than get into all of this here I highly recommend Jonathan Haidt’s The Righteous Mind. Haidt explains how each side (including libertarians) focus on certain aspects of morality while filtering out others so that both sides in a debate talk past one another.

By the way the very next day I was at the airport when I heard a story on TV about the $1 trillion US companies are sitting on rather than using it to expand their business. The reasons given were the exactly same reasons I cited to Jane.

Dave Barry’s Year in Review - Dave Barry - MiamiHerald.com

I thought it would be good to end the year on a light note. Enjoy! Dave Barry’s Year in Review - Dave Barry - MiamiHerald.com

Further thoughts on Newtown

Since yesterday' post I came across two other interesting items. One is an article that originally appeared in the Harvard Journal of Law; Public Policy: WouldBanning Firearms Reduce Murder And Suicide? A Review of International and SomeDomestic Evidence by Don B. Kates and Gary Mauser. (The original link no longer works but thanks to a tip from a reader the link has been updated.) The authors conclude with:

The burden of proof rests on the proponents of the more guns equal more death and fewer guns equal less death mantra, especially since they argue public policy ought to be based on that mantra. To bear that burden would at the very least require showing that a large number of nations with more guns have more death and that nations that have imposed stringent gun controls have achieved substantial reductions in criminal violence (or suicide). But those correlations are not observed when a large number of nations are compared across the world.

And, lest we forget shortly before the Newton massacre another shooting occurred at a mall in Oregon where the shooter took his own life, just as the Newtown shooter did. However, there is an interesting twist that kept the Oregon incident from becoming as awful as the one in Newton: an armed citizen. According to The Examiner:

The shooter … was confronted with an armed citizen, at which time he ran away and shot himself. By the time police arrived on the scene, [the shooter] was already dead.

Interesting that this fact has managed to not surface in the media coverage, isn’t it? The paper above has the following in its last paragraph that touches on this tendency to bury inconvenient facts.

Over a decade ago, Professor Brandon Centerwall of the University of Washington undertook an extensive, statistically sophisticated study comparing areas in the United States and Canada to determine whether Canada’s more restrictive policies had better contained criminal violence. When he published his results it was with the admonition:

If you are surprised by [our] finding[s], so [are we]. [We] did not begin this research with any intent to “exonerate” handguns, but there it is—a negative finding, to be sure, but a negative finding is nevertheless a positive contribution. It directs us where not to aim public health resources.

Why do I bring this up in light of the Newtown tragedy? Am I committing the same error as those who immediately use the victims as fodder for a political cause? To be fair both sides of the gun control debate think they’re defending the best interests of everyone. I believe the “solution” proposed would not prevent other tragedies. We’re treating a symptom as opposed to trying to figure out the root cause and coming up with a solution (if there is one) that treats the source. To me banning guns is like removing mercury from a thermometer in hopes that it will make the fever go away. Banning guns will only make tragedies like Newtown more likely, as the evidence in the Kates-Mauser paper shows. And that in itself is a tragedy.