TRUMPCARE VS OBAMACARE

Well, we finally have Donald Trump’s long-awaited plan for dealing with Obamacare, and it is, as the pundits and the children might say, pretty much a nothingburger.

The plan was announced on the candidate’s website a few days ago: https://www.donaldjtrump.com/positions/healthcare-reform

The plan is long on promised outcomes (the country will be a better place, etc.) and short on the proposed steps for achieving those outcomes. The specifics are these seven proposals:
• Repeal Obamacare. OK, fine, a good start.
• Modify existing law that inhibits the sale of health insurance across state lines. Also OK, though one would have preferred “eliminate” rather than “modify,” which is vague.
• Allow individuals to fully deduct health insurance premium payments from their tax returns. OK, very good.
• Allow individuals to use Health Savings Accounts. OK, a good idea, but not enough. Seniors should able to use the federal funds that are used under present law to fund Medicare, to be deposited into HSAs and used to pay their medical bills directly, which would be essential in restoring free-market shopping and pricing for healthcare for seniors.
• Require price transparency from all healthcare providers, to allow individuals to shop for the best prices. OK, a good idea, but futile if the prices for healthcare are still being set by the government, via its regulation of healthcare insurance and Medicare. Until you break up that model, and destroy the system whereby the government controls healthcare-pricing by controlling healthcare insurance and Medicare, price-transparency is of little value. Shop all you want, you would still have to go where the insurance carrier or Medicare permits, and you would still pay whatever they dictate.
• Block-grant Medicaid to the states. OK, a good idea.
• Remove barriers to entry into free markets for drug providers. OK, another good idea, though vague and, like the rest of the program, not directed to the heart of the healthcare problem.

So, there you have it. A proposal that contains several items that sound good/feel good but do not seriously tackle the essential problems of the U.S. healthcare and healthcare-insurance system. Worse, it is a proposal that implies that everything about Obamacare that is not addressed in the proposal, is to be retained in Trumpcare. Here is a summary of the more-important things that Mr. Trump does not address:
• Tort reform. A surprise that he does mention it, as most commentators (other than the tort lawyers) consider it to be one of the biggest contributors to runaway healthcare expenses in the U.S. Is there a reason why Mr. Trump has failed to take on the tort bar?
• Health savings accounts – great idea, but is there a reason why Mr. Trump does not make such accounts available to seniors on Medicare, who could use them to buy healthcare directly instead of having to obtain their healthcare through Medicare? This is very important, because seniors are the biggest healthcare users of all.
• Pre-existing conditions – is there a reason why Mr. Trump has failed to address this topic, thereby implying that he will do nothing to address it? He must know that a great many people are choosing to stay out of Obamacare until they have a major medical problem, and then jumping in on an emergency basis. This issue, a huge problem, could be solved, simply by subsidizing those who already have PECs (grandfathering them), but for everyone else, making it very costly to defer the purchase of insurance until they are hit by a major illness or injury. Sounds like Mr. Trump is playing to the crowd, dodging a much-needed reform.
• The big one: healthcare pricing and insurance pricing, the two topics that should be the essence of any serious reform plan and that are the essence of the program presented by House Speaker Paul Ryan and generally endorsed within the Republican Party. This topic is so crucial, it requires a fuller explanation.

The primary problem with U.S. healthcare and with healthcare insurance programs (including Medicare) is that they do not operate in a free market where patient and provider can negotiate the prices of healthcare services (doctors’ bills, hospital bills, bills for lab tests, etc.). Instead, they operate in a system where the government replaces the market. The government determines which providers can be used and what prices can be charged for their services – for all practical purposes, it is a “single payer” system that eliminates the free-market element and is tightly controlled by the government. You sense that you are paying too much – as is always the case with price-fixing – but, by how much?

The second major problem with the U.S. healthcare and healthcare-insurance programs is that they are burdened with a maze of regulatory controls that obscure the real costs of healthcare. The critical feature of the system is that it embodies an almost infinite number of hidden, built-in subsidies and cross-subsidies for various favored categories (most prominently, for those in financial need). There is no way for you to have any idea of how much of your medical bill, or your health insurance policy, represents a payment to support social policies rather than a payment for health care and risk-based insurance, because the subsidies are baked into the ultimate pricing and never disclosed. You sense that you are paying too much, but you have no idea how much of the cost is subsidies.

The conservative/Ryan approach, unlike the Trump approach, confronts and solves these problems. The Ryan approach un-bundles the healthcare and insurance factor from the subsidization factor, exposes the healthcare and insurance factor to a freed-up market, and then separately provides governmental subsidies or vouchers directly to those who need it (“premium support”). Healthcare insurance reverts to being true insurance, based solely upon actuarially-based calculations of risk. Without these types of reform, there is no basis for hope that healthcare and insurance costs will ever be reduced.

It would have been helpful had Trumpcare also addressed some of the other problems in the current system that are addressed and solved by the Ryan approach, such as the imbalances and cross-subsidies that occur within group insurance policies, which should have no role in a system in which healthcare insurance is truly based upon actuarial calculations of risk and embodies no subsidies or cross-subsidies.

In sum, the Trump proposal contains a few feel-good features and promises and appears to address the common criticism that Mr. Trump tends to provide few specifics on his plans, but in fact, the proposal is not likely to have any substantial effect upon the runaway costs of healthcare and insurance. Is Trumpcare better than Obamacare? Well, yes, but only a little. It is a band-aid, not a cure.

THE RUBIO PLAN IS NOT AMNESTY

Here is Merriam Webster’s definition of “amnesty:” “the act of an authority (as a government) by which pardon is granted to a large group of individuals.” Here is MW’s simplified version: “a decision that a group of people will not be punished or that a group of prisoners will be allowed to go free.” Here is another version, from Law.com: “a blanket abolition of an offense by the government, with the legal result that those charged or convicted have the charge or conviction wiped out.”

Now let’s look at a different (though somewhat similar) term: “plea bargain.” Here is Wikipedia on the definition of plea bargain: “A plea bargain (also plea agreement, plea deal, copping a plea, or plea in mitigation) is any agreement in a criminal case between the prosecutor and defendant whereby the defendant agrees to plead guilty to a particular charge in return for some concession from the prosecutor.” (emphasis added) Yet another take, from Merriam Webster: “a process in which a person who is accused of a crime is allowed to say that he or she is guilty of a less serious crime in order to be given a less severe punishment.” (emphasis added).

So, what is the difference between amnesty and plea bargain? The obvious difference is that, while each term involves a form of forgiveness or pardon for misconduct, only a plea bargain involves a tradeoff, with the perpetrator required to do something (“some concession,” such as a guilty plea) in return for the favor.

The Immigration Reform and Control Act of 1986 (IRCA) has come to be known as the “Reagan Amnesty” law. But IRCA never met the definition of amnesty, it was just a massive plea bargain, because it did not pardon the crime of illegal entry, it merely allowed the illegals to remain in the U.S. in return for certain actions and conditions. IRCA only presented a settlement offer to the illegals: they could remain, but only if they paid some money and did some other things. It was a trade-off: you do some important things for us, and we will do something important for you. The reason IRCA came to be viewed as “amnesty,” rather than a trade-off, was that the illegals were rarely held to their side of the bargain – illegals who failed to comply with the conditions were almost never punished or deported. Federal enforcement of the trade-off terms was so negligent that the public eventually came to treat the terms as meaningless, meaning IRCA became the practical equivalent of amnesty rather than a plea bargain.

(The conditions under IRCA were that you had to show that you entered the United States before January 1, 1982 and had resided here continuously thereafter, and that you paid a fine, paid all back taxes due, admitted guilt regarding the illegal entry into the U.S., committed no other crimes while here, and possessed at least minimal knowledge about U.S. history, government, and the English language. The conditions were thus quite substantial, and had they been properly enforced, we would have no reason to describe the IRCA as “amnesty.”)

Now, let’s compare the conditions in the IRCA with the campaign platform of Senator Marco Rubio, which is set forth on his website –

https://marcorubio.com/issues-2/marco-rubio-immigration-plan-border-security-legal/

The Rubio plan states that Illegal immigrants will be granted the opportunity to remain in the U.S. only if they do the following:

“First, those here illegally must come forward and be registered. If they have committed serious crimes or have not been here long enough, they will have to leave. With the new E-Verify system in place, they are going to find it difficult to find a job in any case.

“Second, those who qualify would be allowed to apply for a temporary nonimmigrant visa. To obtain it they will have to pay an application fee and a fine, undergo a background check and learn English. Once they receive this work permit, they would be allowed to work legally and travel. To keep it, they will have to pay taxes. They would not qualify for government programs like Obamacare, welfare or food stamps. And if they commit a crime while in this status, they would lose their permit.

“Third and finally, those who qualify for a nonimmigrant visa will have to remain in this status for at least a decade. After that, they would be allowed to apply for permanent residency if they so choose. Many who qualify for this status will choose to remain in it indefinitely. But those who choose to seek permanent residency would have to do it the way anyone else would, not through any special pathway.”

Thus there is a substantial set of “trade-offs” involved in the Rubio plan. You cannot even stay here (much less qualify for citizenship) unless you fulfill a lengthy list of conditions. You face deportation if at any time you fail on any one of the conditions. That is not a forgiveness, it is an offer to settle a criminal case, with the criminal giving up something very substantial in return. While the Rubio plan also includes a pathway to actual citizenship, it is an extremely long pathway: all of the conditions must continue to be met by the immigrant for at least 10 years from the date when he or she first fulfills all of the indicated conditions, before the immigrant can even get to the back of the line of legal applicants for citizenship.

Yet a substantial portion of the voting population has been led to believe that Sen. Rubio favors “amnesty” for illegals, even though that is clearly not the case. Yes, it is theoretically possible that a Rubio White House might ignore the new Rubio policy, just as all presidents before him have ignored the terms and intentions of the IRCA, but that could be said of any candidate. Can anyone doubt that even a Ted Cruz or a Donald Trump might eventually discover the same thing that his predecessors discovered, which is that immigration reform is more easily enacted than enforced.

To suggest that Sen. Rubio is in favor of “amnesty” because you are not sure he would diligently enforce the provisions of his own immigration reform plan, is unfair and incorrect. Why should we assume that Trump and Cruz would enforce our laws any more rigorously than Rubio – or more rigorously than Reagan, Bush, Clinton, Bush II, or Obama did? How can you call the Rubio position “amnesty” based on a prediction that he would not enforce his own law?

If you are skeptical about this analysis, if you consider it the work of an establishment Republican who is bending the truth in order to support the Rubio camp, consider this extract from a news article in the January 27, 2014 edition of the Chicago Tribune, regarding Edward Snowden: “On Thursday, U.S. Attorney General Eric Holder rejected amnesty but did not rule out the possibility of plea negotiations, if Snowden returned to plead guilty. ‘If Mr. Snowden wanted to come back to the United States and enter a plea, we would engage with his lawyers,’ Holder said.” Clearly, Mr. Holder understood that amnesty and plea bargains are two quite different things.

The other explanation of the representation of the Rubio plan as “amnesty” is that Mr. Rubio at one point reversed his priorities – he switched to putting border security first, before implementation of the pathway to legal status and citizenship begins. That may be politically interesting, but factually it has nothing to do with whether the Rubio plan should be considered amnesty.

CHRISTIE DOES IT AGAIN

As the sun sets on the American Empire and you lose your chance to make serious money by placing a bet on Donald Trump to win the Republican nomination, let us examine the role of Governor Chris Christie in getting us to our lowly station.

Governor Christie verges on permanent notoriety for making huge contributions to the election of two consecutive presidents who do not represent the political party in which he claims membership. Exhibit A for this thesis was “the hug,” his verbal and physical embrace of Democratic candidate Barack Obama just before the 2012 election, actions believed by many to have swung the momentum in the campaign from Governor Romney to Mr. Obama. Exhibit B was his kamikaze attack on Marco Rubio in the February 6, 2016 debate in New Hampshire, the one that all but eliminated Senator Rubio from the race and thereby all but ensured the nomination of Donald Trump, a candidate whose switch from the Democratic Party to the Republican Party was too late – and too shallow – to persuade many voters or commentators that the conversion was based on belief rather than ambition.

Many of us have always viewed Mr. Christie as a Republican only by necessity, one who figured there was no way to the top via the New Jersey Democratic Party. But any remaining doubts as to Mr. Christie’s motives were dispelled when, having dispatched Mr. Rubio’s candidacy, Mr. Christie immediately withdrew from the race – indicating that he had not been in it to win it, that he had been in it only to eliminate the one contender with a realistic chance of denying the nomination to Mr. Trump. And that view was reinforced by his subsequent endorsement of Mr. Trump and his continuing assaults on Mr. Rubio’s candidacy. It now appears likely that there was but one inspiration for Mr. Christie’s behavior: venality. Yes, he is a power groupie, but mainly he appears to be trying to buy a place on a Trump ticket or a prominent appointment by a Trump administration, perhaps to Supreme Court justice, Attorney General, or some kind of sinecure.

Let’s return to the topic of Mr. Trump’s miraculous conversion from Democrat to Republican. Consider the markers: (i) the conditions he attached to his pledge to run only as a Republican, conditions of which he regularly reminds us whenever his candidacy runs into meaningful opposition; (ii) his positions on ObamaCare, where he has demonstrated both a preference for a single-payer system and an endorsement of only one element (interstate offerings of insurance) of the full Paul Ryan reform package, which contains extensive, sweeping reforms; (iii) his repeated threats of retaliatory trade policies – “trade wars” – that are directly contrary to conservative economic policy; (iv) his demonstrated preference for an activist federal-government rather than a restrained one, suggesting that his administration would offer an Obamaesque array of non-stop executive orders and federal regulations; (v) his recent revelation of opposition to a free press, in his desire to change the libel laws in ways that could only stifle journalistic independence and freedom; (vii) oh, what the heck, why bother, the list is endless and it is completely transparent to all but the participants in this collective tantrum.

It is easy to imagine that Mr. Trump’s first Supreme Court appointment, to fill the Scalia vacancy, would be one to which Mr. Obama would not have seriously objected; there is zero evidence to suggest that Mr. Trump actually endorses, or even understands, the notion of “original meaning” of the Constitution. By the end of a Trump regime, the Supreme Court could be locked into a non-conservative course for decades. That, for certain, would spell the end of the America we know.

It is theoretically possible that Mr. Trump would negotiate better deals, restore America’s greatness, etc., but that is hardly the same as a conservative presidency. This is not a man who would strive to emulate Ronald Reagan, this is not a man who would even be familiar with the work of Milton Friedman, much less a fan of the great conservative economist. Watch out below.

RUBIO OR BUST?

Well, there you have it. Trump’s Nevadan-acolytes have dropped the fate of the country into the hands of Ted Cruz.

Even if both Kasich and Carson dropped out of the Republican race, the margin between Trump and the rest of the field might be too big for anyone to close. But if either Rubio or Cruz dropped out (ideally, after the TX primary, in which their joint presence would suppress the Trump vote), the other would be a good bet to become the nominee and could lick his chops over the prospect of running against whichever Democrat was not yet in prison. If the nominee is Rubio, it appears that the outcome is a slam dunk for the Republicans; if the nominee is Cruz, all bets are off, because his general appeal is almost as limited as Trump’s.

So, here is the question for Senator Cruz: would you rather the country be led by Rubio or by Bernie Sanders? Are you all in for your country, or are you all in for Cruz?

THE ONLY WAY TO STOP TRUMP

It would be hard to improve upon the National Review’s recent set of essays on why a nomination of Donald Trump by the Republican Party would be a very bad thing for the country. Two reasons stand out. The first is that it would be a concession of the general election to Hillary Clinton, who has pledged, in so many words and barks, to complete the transformation of this country into a centrally-planned socialist state – to put the cherry on top of the Obama cake. The second is that the country, if it found it easier to hold its nose and elect Mr. Trump than to hold its nose and elect Mrs. Clinton, would be empowering a man who has built a campaign on promising to restore America to greatness, but whose plans and policies for doing so remain largely a secret – forcing one to deep-search his past record for clues as to his likely future behavior. That record suggests that he is, at heart, a progressive Democrat with autocratic tendencies.

How has it come to this? Why, after so many outrageous statements, insults, pettiness, acts of self-love, and other mistakes that would have ended anyone else’s campaign, is this man still in the running, indeed holding the lead?

Rush Limbaugh, though not widely regarded as a penetrating analyst, has provided the answer: Trump makes people feel good. His supporters do not care about his views regarding economic growth, negative interest-rates, free markets, tax policy, free trade, foreign policy, national defense, China, Iran, executive orders, ObamaCare, abortion, gay marriage, gun control, environmental issues – in short, with the single exception of immigration policy, they do not give a hoot about the stuff people usually spend an election year arguing about. What they care about is that, despite all the bragging, pouting, and other forms of childish behavior, the essence of Mr. Trump’s appeal is his non-stop promises to make America as strong and respected as it used to be, to kick sand in the faces of our enemies – foreign and domestic. He makes his acolytes feel good. He gives them hope that he will make their lives better. He is a snake oil salesman, and he is leading a cult. The best precedent in American politics for the Trump campaign might be the campaigns of the “Kingfish,” Huey Long, who was elected governor of Louisiana in the 1920s on a populist platform (“every man a king”) that was no more substantive than what Mr. Trump is putting forward.

It would be futile for Mr. Trump’s opponents to try to debate the issues with him, because his followers do not care about the issues – and he is smart enough to recognize this and to generally stay away from the issues. Calling him a liar, a hypocrite, a closet Democrat, a bankrupt, an eminent domain-abuser, etc., is equally futile, as he has provided the proof that over 30% of Republican voters would probably vote for an ax murderer who makes them feel good. Short of a competitive alternative, 30% will be enough.

The only way to beat Mr. Trump is for the Republicans to settle on a single alternative candidate who can attract a big enough chunk of the other 70% to snatch the nomination away from Mr. Trump. Most of these guys need to step up and take one for the team, promptly, before they and their country go down in infamy.

Short of that act of statesmanship, nothing can be done. The Trumpies, the 30%, cannot be deprogrammed or given exit counseling. The Trump movement cannot be stopped by rhetoric, debate performances, “ground game,” marketing and media management, etc., no matter how much better than Trump’s. Only Rubio can stop him, and even he cannot do it unless Cruz withdraws (fat chance) or both Kasich and Carson withdraw. Practically speaking, time is short – is it already too late?