Category: Mike Razar

Whom Do You Trust?


Back in the late fifties and early sixties, Jack Paar ruled late night TV on NBC and his successor, the great Johnny Carson, had a quiz show at the time which went by a few names: “Who Do You Trust?”, “Do You Trust Your Wife?”, and third time the charm, “Whom Do You Trust?”. Johnny Carson became the alpha dog on TV for thirty years after replacing Jack Paar on the Tonight Show. But back then, who knew?

The only point of that nostalgic trip down memory lane for baby boomers is to introduce the really important question: “Whom do you trust?” and by inference, the related question: “Whom do you distrust?”

I trust President Trump.  I trust most of his advisors. I trust his family. I trust the instincts of his base. I have not caught President Trump in a willful lie, despite the claims of the media. I do not trust anyone at the NY Times, Washington Post, ABC, NBC, CBS, CNN. They are willful, serial liars.  I do not trust most climate scientists. I do not trust Barack Obama, Nancy Pelosi, or Chuck Schumer. I especially distrust Hillary Clinton. I distrust Loretta Lynch, Susan Rice, and Jim Comey. I distrust pretty much every Democrat politician and many Republicans, but I do trust Ted Cruz, Mike Lee, and Rand Paul. I may not always agree with their specific proposals, but they don’t lie and I generally trust their judgment. Those were easy. Another easy one is John Bolton. I trust him not to lie. But even these trustworthy individuals can be misled with false information from sources they trust.

We live in an era where loyalty to ideology on the left has superseded loyalty to America. Think about the implications of that observation. It does not mean that every Democrat is untrustworthy. But it does mean that everything such people say needs to be scrutinized.  It is so bad that, if I were on a jury, I would consider all testimony by known Democrats or liberals, and most RINOs against the defendant, to create instant reasonable doubt.

Naturally, those on the left distrust the people I trust and trust the ones I distrust. This is the great divide in America today.

Two of the top intelligence figures in the Obama administration, namely John Brennan (CIA Director) and James Clapper (Director of National Intelligence) are loyal Democrats. Clapper has already perjured himself in testimony before a Congressional committee. These men are not trustworthy. Anything they say based on their opinions derived from classified information, not available to the rest of us, is suspect.

Yes, those were easy. But in many cases, it is hard to know whom to trust nowadays on any question. Sometimes it is even hard to make comparisons. But I will try. This is largely based on impressions I have developed over the years. Trust can be quite subjective.

Here is the sad, nasty truth as I see it. I do not trust the leaders of the U.S. intelligence community to tell the truth to the American people or to the President. I do not trust senior career officials at the Justice Department or the FBI or federal prosecutors to be objective and impartial. I do not trust half of the federal judiciary to uphold the Constitution.

Consider the investigation by Special Counsel Mueller. Why should I trust him? I don’t know him. I had barely heard of him until recently. But he is a close friend of Jim Comey. He has been appointing Hillary Clinton donors to his staff. Not a single Trump supporter. Is he merely tone deaf or actually corrupt? Who suggested that the President should name Rod Rosenstein as Deputy Attorney General? Lots of questions but no answers. I see no reason to trust Mueller. He may end up being fair or he may not. But he is not entitled to the benefit of the doubt. Once again, the situation is sad and dangerous. No trust. Trust requires a lot of work to establish. It can be destroyed in an instant of perception.

We are asked to decide whom to believe on the question of whether or to what extent agents of the Russian government “meddled” in the recent election.  We are never given a clear definition of “meddle.”  The only concrete action alleged is that Russian agents gained access to some emails belonging to the Democratic National committee and/or Hillary Clinton. And further that they revealed these emails to the public.  There is no doubt that somebody revealed them. The direct revealers seem to be Julian Assange and Wikileaks, perhaps in conjunction with an unknown hacker called Guccifer. They have made a career of doing such things. The question is whether they received the information from the Russian government or from some non-Russian hacker source or even an inside leak rather than a hacker. Julian Assange says he did not receive the information from the Russians. Putin denies any involvement. Putin is not trustworthy. But Assange? I know of no example of Assange releasing false information. I trust him. I trust him more than I trust Mueller, more than every Democrat, more than every mainstream media outlet. Nobody lies about everything. Could Putin be telling the truth in this case?

It is worth emphasizing at this point that we have not seen any evidence of actual hacking by anybody. There is credible evidence that the information was copied by an insider and passed on to Assange. The most likely leaker was a young DNC employee named Seth Rich, who was murdered. People who cross the Clintons seem to have lower-than-average life expectancies.

Then there is the question of “collusion,” another conveniently undefined term. Not even Trump’s enemies in the media and in politics have offered a concrete accusation of some quid pro quo from the Trump campaign in return for the truth about Hillary and the Democratic Party.  How about “obstruction of justice”?  The DNC has refused to turn over its computers to the FBI. Sounds like obstruction to me. Hillary has yet to reveal all her e-mails. Sounds like obstruction to me.  What has anyone in the Trump organization done that in any way impedes an investigation? The answer is nothing. Imagine if Ivanka had smashed her iPhone (Blackberry, actually) like Hillary did!  The lynch mobs would be out in the streets. Uh oh, if any liberals are reading this (highly unlikely) they are thinking “gotcha” now. After all, didn’t the President fire Big Jim Comey? Well, yes, but do they think that the head of the FBI takes an active role in the hard investigative work necessary to look into possible wrongdoing? Even if he did, removing one person out of dozens hardly interferes with getting at the truth.

We were told by the New York Times that 17 U.S. intelligence agencies are certain “it” was the Russians. They give no hint how they know or why they are certain.  I know a bit about computers and can’t figure out how you can be certain when dealing with a sophisticated adversary like Russian intelligence. Then it turns out that it was not 17, but 4. One of those 4 was the DNI (director of national intelligence), who made no independent investigation but simply aggregated reports from the other 3. Those 3 are the FBI, CIA, and NSA. Pretty impressive group, right?  The lie about the 17 agencies was repeated by dozens of Senators and Representatives on both sides of the aisle. It was repeated by so–called journalists and respected pundits.  Well, maybe or maybe not. I have no reliable source myself, but I do have the impression that it was only one or two agents from each of them.  Think about it. A single unattributed story in an unreliable newspaper. Details are classified, of course. Why? To protect undercover agents or to help senior officials advance their own agendas? That is where trust comes in. I trust none of those people. I don’t necessarily actively distrust all of them, but I have no reason to trust any of them.

Let that sink in. Congressmen who supposedly examined classified evidence repeated the NYT lie about 17 agencies. Yet now the NYT has retracted it. What does that tell you about the reliability of those Congress critters?  Did any of them complain that the NYT threw them under the bus? I have no verifiable facts to help me choose between believing Assange and Putin over Clapper, Brennan, and other U.S. officials.

I have recently heard John Bolton say that he has heard from people familiar with undescribed classified material that confirms Russian “meddling” or “interference.”  Had he said that he had seen the classified intelligence himself, it would give me pause. Bolton would be a hard guy to fool, yet there is enormous pressure on everyone — even him — to confirm any accusation against Putin.

What Bolton actually said was that “Everyone who has looked at the classified information says there’s no doubt the Russians tried to affect the election.”

Maybe I am being too hard on Bolton, but without knowing who looked at it, and any sense of what evidence they found, I have to treat it as unreliable hearsay. No serious unclassified evidence has been put forward. No classified information has been made public. Perhaps some has been made available to select members of Congress. I hope it is obvious that they do not have the technical expertise to judge the validity of technical computer evidence as to who was behind any hacking.

It is the job of one man to fix this. It may be as important and difficult as anything else President Trump does. I trust him to try but the forces arrayed against him are formidable. We seem to have a set of incompatible goals here. One is to carefully protect classified information from public display. Another is to see the actual evidence proffered in support of charges of meddling. There’s that word again: “meddling.”  Hacking a computer is only the first step in meddling.  Changing the vote count electronically would certainly be meddling. Nobody has charged that.  

Secrets are the enemy of the truth. Yet privacy requires some secrecy. My bottom line is that if Putin was behind the release of some of Hillary’s emails, then he did us a favor. That doesn’t make him good. It doesn’t make his motives pure. But it doesn’t turn truth into lies. And, yes, we need more cyber-security, no matter who did the hacking, if any.  In libel and slander cases, truth is an absolute defense. So, too, it ought to be in cases where meddling is asserted. Can simply telling the truth ever be called improper meddling? Can desiring to know the truth ever be considered collusion?

Let us imagine that there is an interesting piece of factual information held by a hostile foreign power. Someone comes to you, offering to give it to you for free or for a price. If you work for the CIA, or for a newspaper you take the information, maybe even pay for it, and earn a commendation or a Pulitzer. But if you work for a political campaign should you refuse even to discuss it? According to the left, it borders on treason to even have a conversation about it. These pontificating clowns claim they would take it right to the FBI. Take what to the FBI? An unknown offer of unknown information from an unknown source claimed by an unreliable casual acquaintance.

Very sad. Very dangerous. I have no reason to trust James Clapper more than Vladimir Putin. That does not make me an apologist for Putin. But we have no choice but to deal with the man who controls thousands of nuclear warheads. We do have a choice not to allow partisan hacks to control our intelligence agencies. Some of you may find that to be disloyal, but it is not. I am loyal to the truth and I have no way to choose. President Reagan famously quoted a Russian proverb to Gorbachev “trust but verify.” My take-away is that absent verification, the safe path is to distrust. Reagan never provided a playbook on how to verify, but he relied on onsite inspections. Do we need onsite inspections in our own intelligence community?

How can we cut this Gordian knot? I think we classify way too much. Actual military secrets should be protected. The reasoning of intelligence officials, not so much. This is controversial, but we must weigh the secrecy craved by the intelligence community against the fact that all this information is ultimately the property of the American People. The current crisis of confidence can only be resolved by full release of all relevant facts to the alleged Russia hacking.  Much of it gets selectively leaked anyway.  Too many people know it to keep it secret. Our enemies know it already. President Trump should immediately declassify all of it, publish it online, and let the proverbial chips fall where they may.  Even if the only source for important facts is a hostile source, it is better that the American people know the truth than that they remain in the dark.

Back in the late fifties and early sixties, Jack Paar ruled late night TV on NBC and his successor, the great Johnny Carson, had a quiz show at the time which went by a few names: “Who Do You Trust?”, “Do You Trust Your Wife?”, and third time the charm, “Whom Do You Trust?”. Johnny Carson became the alpha dog on TV for thirty years after replacing Jack Paar on the Tonight Show. But back then, who knew?

The only point of that nostalgic trip down memory lane for baby boomers is to introduce the really important question: “Whom do you trust?” and by inference, the related question: “Whom do you distrust?”

I trust President Trump.  I trust most of his advisors. I trust his family. I trust the instincts of his base. I have not caught President Trump in a willful lie, despite the claims of the media. I do not trust anyone at the NY Times, Washington Post, ABC, NBC, CBS, CNN. They are willful, serial liars.  I do not trust most climate scientists. I do not trust Barack Obama, Nancy Pelosi, or Chuck Schumer. I especially distrust Hillary Clinton. I distrust Loretta Lynch, Susan Rice, and Jim Comey. I distrust pretty much every Democrat politician and many Republicans, but I do trust Ted Cruz, Mike Lee, and Rand Paul. I may not always agree with their specific proposals, but they don’t lie and I generally trust their judgment. Those were easy. Another easy one is John Bolton. I trust him not to lie. But even these trustworthy individuals can be misled with false information from sources they trust.

We live in an era where loyalty to ideology on the left has superseded loyalty to America. Think about the implications of that observation. It does not mean that every Democrat is untrustworthy. But it does mean that everything such people say needs to be scrutinized.  It is so bad that, if I were on a jury, I would consider all testimony by known Democrats or liberals, and most RINOs against the defendant, to create instant reasonable doubt.

Naturally, those on the left distrust the people I trust and trust the ones I distrust. This is the great divide in America today.

Two of the top intelligence figures in the Obama administration, namely John Brennan (CIA Director) and James Clapper (Director of National Intelligence) are loyal Democrats. Clapper has already perjured himself in testimony before a Congressional committee. These men are not trustworthy. Anything they say based on their opinions derived from classified information, not available to the rest of us, is suspect.

Yes, those were easy. But in many cases, it is hard to know whom to trust nowadays on any question. Sometimes it is even hard to make comparisons. But I will try. This is largely based on impressions I have developed over the years. Trust can be quite subjective.

Here is the sad, nasty truth as I see it. I do not trust the leaders of the U.S. intelligence community to tell the truth to the American people or to the President. I do not trust senior career officials at the Justice Department or the FBI or federal prosecutors to be objective and impartial. I do not trust half of the federal judiciary to uphold the Constitution.

Consider the investigation by Special Counsel Mueller. Why should I trust him? I don’t know him. I had barely heard of him until recently. But he is a close friend of Jim Comey. He has been appointing Hillary Clinton donors to his staff. Not a single Trump supporter. Is he merely tone deaf or actually corrupt? Who suggested that the President should name Rod Rosenstein as Deputy Attorney General? Lots of questions but no answers. I see no reason to trust Mueller. He may end up being fair or he may not. But he is not entitled to the benefit of the doubt. Once again, the situation is sad and dangerous. No trust. Trust requires a lot of work to establish. It can be destroyed in an instant of perception.

We are asked to decide whom to believe on the question of whether or to what extent agents of the Russian government “meddled” in the recent election.  We are never given a clear definition of “meddle.”  The only concrete action alleged is that Russian agents gained access to some emails belonging to the Democratic National committee and/or Hillary Clinton. And further that they revealed these emails to the public.  There is no doubt that somebody revealed them. The direct revealers seem to be Julian Assange and Wikileaks, perhaps in conjunction with an unknown hacker called Guccifer. They have made a career of doing such things. The question is whether they received the information from the Russian government or from some non-Russian hacker source or even an inside leak rather than a hacker. Julian Assange says he did not receive the information from the Russians. Putin denies any involvement. Putin is not trustworthy. But Assange? I know of no example of Assange releasing false information. I trust him. I trust him more than I trust Mueller, more than every Democrat, more than every mainstream media outlet. Nobody lies about everything. Could Putin be telling the truth in this case?

It is worth emphasizing at this point that we have not seen any evidence of actual hacking by anybody. There is credible evidence that the information was copied by an insider and passed on to Assange. The most likely leaker was a young DNC employee named Seth Rich, who was murdered. People who cross the Clintons seem to have lower-than-average life expectancies.

Then there is the question of “collusion,” another conveniently undefined term. Not even Trump’s enemies in the media and in politics have offered a concrete accusation of some quid pro quo from the Trump campaign in return for the truth about Hillary and the Democratic Party.  How about “obstruction of justice”?  The DNC has refused to turn over its computers to the FBI. Sounds like obstruction to me. Hillary has yet to reveal all her e-mails. Sounds like obstruction to me.  What has anyone in the Trump organization done that in any way impedes an investigation? The answer is nothing. Imagine if Ivanka had smashed her iPhone (Blackberry, actually) like Hillary did!  The lynch mobs would be out in the streets. Uh oh, if any liberals are reading this (highly unlikely) they are thinking “gotcha” now. After all, didn’t the President fire Big Jim Comey? Well, yes, but do they think that the head of the FBI takes an active role in the hard investigative work necessary to look into possible wrongdoing? Even if he did, removing one person out of dozens hardly interferes with getting at the truth.

We were told by the New York Times that 17 U.S. intelligence agencies are certain “it” was the Russians. They give no hint how they know or why they are certain.  I know a bit about computers and can’t figure out how you can be certain when dealing with a sophisticated adversary like Russian intelligence. Then it turns out that it was not 17, but 4. One of those 4 was the DNI (director of national intelligence), who made no independent investigation but simply aggregated reports from the other 3. Those 3 are the FBI, CIA, and NSA. Pretty impressive group, right?  The lie about the 17 agencies was repeated by dozens of Senators and Representatives on both sides of the aisle. It was repeated by so–called journalists and respected pundits.  Well, maybe or maybe not. I have no reliable source myself, but I do have the impression that it was only one or two agents from each of them.  Think about it. A single unattributed story in an unreliable newspaper. Details are classified, of course. Why? To protect undercover agents or to help senior officials advance their own agendas? That is where trust comes in. I trust none of those people. I don’t necessarily actively distrust all of them, but I have no reason to trust any of them.

Let that sink in. Congressmen who supposedly examined classified evidence repeated the NYT lie about 17 agencies. Yet now the NYT has retracted it. What does that tell you about the reliability of those Congress critters?  Did any of them complain that the NYT threw them under the bus? I have no verifiable facts to help me choose between believing Assange and Putin over Clapper, Brennan, and other U.S. officials.

I have recently heard John Bolton say that he has heard from people familiar with undescribed classified material that confirms Russian “meddling” or “interference.”  Had he said that he had seen the classified intelligence himself, it would give me pause. Bolton would be a hard guy to fool, yet there is enormous pressure on everyone — even him — to confirm any accusation against Putin.

What Bolton actually said was that “Everyone who has looked at the classified information says there’s no doubt the Russians tried to affect the election.”

Maybe I am being too hard on Bolton, but without knowing who looked at it, and any sense of what evidence they found, I have to treat it as unreliable hearsay. No serious unclassified evidence has been put forward. No classified information has been made public. Perhaps some has been made available to select members of Congress. I hope it is obvious that they do not have the technical expertise to judge the validity of technical computer evidence as to who was behind any hacking.

It is the job of one man to fix this. It may be as important and difficult as anything else President Trump does. I trust him to try but the forces arrayed against him are formidable. We seem to have a set of incompatible goals here. One is to carefully protect classified information from public display. Another is to see the actual evidence proffered in support of charges of meddling. There’s that word again: “meddling.”  Hacking a computer is only the first step in meddling.  Changing the vote count electronically would certainly be meddling. Nobody has charged that.  

Secrets are the enemy of the truth. Yet privacy requires some secrecy. My bottom line is that if Putin was behind the release of some of Hillary’s emails, then he did us a favor. That doesn’t make him good. It doesn’t make his motives pure. But it doesn’t turn truth into lies. And, yes, we need more cyber-security, no matter who did the hacking, if any.  In libel and slander cases, truth is an absolute defense. So, too, it ought to be in cases where meddling is asserted. Can simply telling the truth ever be called improper meddling? Can desiring to know the truth ever be considered collusion?

Let us imagine that there is an interesting piece of factual information held by a hostile foreign power. Someone comes to you, offering to give it to you for free or for a price. If you work for the CIA, or for a newspaper you take the information, maybe even pay for it, and earn a commendation or a Pulitzer. But if you work for a political campaign should you refuse even to discuss it? According to the left, it borders on treason to even have a conversation about it. These pontificating clowns claim they would take it right to the FBI. Take what to the FBI? An unknown offer of unknown information from an unknown source claimed by an unreliable casual acquaintance.

Very sad. Very dangerous. I have no reason to trust James Clapper more than Vladimir Putin. That does not make me an apologist for Putin. But we have no choice but to deal with the man who controls thousands of nuclear warheads. We do have a choice not to allow partisan hacks to control our intelligence agencies. Some of you may find that to be disloyal, but it is not. I am loyal to the truth and I have no way to choose. President Reagan famously quoted a Russian proverb to Gorbachev “trust but verify.” My take-away is that absent verification, the safe path is to distrust. Reagan never provided a playbook on how to verify, but he relied on onsite inspections. Do we need onsite inspections in our own intelligence community?

How can we cut this Gordian knot? I think we classify way too much. Actual military secrets should be protected. The reasoning of intelligence officials, not so much. This is controversial, but we must weigh the secrecy craved by the intelligence community against the fact that all this information is ultimately the property of the American People. The current crisis of confidence can only be resolved by full release of all relevant facts to the alleged Russia hacking.  Much of it gets selectively leaked anyway.  Too many people know it to keep it secret. Our enemies know it already. President Trump should immediately declassify all of it, publish it online, and let the proverbial chips fall where they may.  Even if the only source for important facts is a hostile source, it is better that the American people know the truth than that they remain in the dark.



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Breaking the Health Care Logjam


If you can believe their public statements, there is agreement among Republican Senators that certain parts of the ACA should be repealed. Yet they allow their disagreements over new features to get in the way of the consensus that supposedly does exist.

Here are some suggestions on how to break the logjam so that all Republican Senators can support a bill that partially fulfills the promise to repeal Obamacare without adding features which some of them can’t accept. There are at least six major components to the ACA:

  1. A bunch of really foolish taxes, such as a tax on tanning and a tax on medical devices.
  2. Mandates for employers and individuals to purchase health insurance.
  3. Rules governing various mandates for insurance policies to cover.
  4. Tax credits to subsidize insurance purchases for individuals.
  5. More than 100 agencies to help regulate the health care of free citizens in a free society. The worst is IPAB (”the death panel”).
  6. Medicaid rules and subsidies to states.

Reading proposed bills, especially ones which repeal or modify existing laws, is always an adventure. Let me cite a clause in the proposed Senate health care bill being debated now: 

“by striking subparagraph (B) and re-designating subparagraphs (C) and (D) as subparagraphs (B) and (C), respectively.”

There are dozens of such references to the current ACA or to other statutes, so that reading the new bill becomes a daunting task.  That aside, it seems to me that Republicans should be able to agree on certain changes to the six categories.

  1. All or most of the ACA taxes should be repealed. If new taxes must be instituted (say, for reconciliation,) I suggest a payroll tax designated as the AHCA tax. A level of around 0.25% each to employees and employers should be adequate to replace all current ACA taxes. The idea is to simplify and to spread the cost among all taxpayers so they are constantly aware of how much it costs. The current ACA taxes can vary a lot from year to year, whereas a payroll tax would be more stable.  That is, or should be, the conservative way to tax.
  2. Eliminate the mandates to purchase insurance. If generous subsidies are not enough to coax people to buy insurance, they should do without it. If employer mandates must remain in some form, replace the hard thresholds of numbers of employees with sliding scales, so that no business is hit with an enormous financial penalty for hiring one more employee.  Surely, even liberals can see the wisdom of that change.
  3. Eliminate as many mandatory coverage features as Republican legislators can agree on.
  4. For now, leave the tax credits alone unless 50 Senators can agree on changes.
  5. Get rid of IPAB for good. Eliminate as many other of the ACA agencies as possible.
  6. For now, leave the Medicaid subsidies to the states alone, unless 50 Senators can agree on changes. The irony is that with no action, they will expire soon anyway. This seems to be one of the hardest issues to deal with. But, in the next year or two,  the Democrats will have no choice but to make a deal or else see the subsidies go away. The leverage resides with the GOP. This issue need not stand in the way of the other reforms and passing a bill now.
  7. There is an issue not expressly part of the ACA which should be dealt with here. Medicare (not Medicaid) should be enhanced to include appropriate custodial care (in home, if possible) for the elderly. Today, that is covered somehow by Medicaid with onerous conditions requiring forfeiture of assets. Cut the crap and make that part of Medicare. If it must be paid for with a new tax, increase the Medicare payroll tax to cover the actuarial cost of this benefit. It should be no more than 0.5% each to employees and employers. Much political hay has been made trying to scare Medicare recipients about this issue with regard to Medicaid funding. Let’s take away that threat. It would be extremely popular and a huge political victory for the administration with little downside.
  8. If it is possible to include a ban on funding for the criminal enterprise known as Planned Parenthood, do so. But do not let the whole bill fall on that issue. There are probably a few other features which could be included, but again, they should not be allowed to sink the bill.

Subsidies and Politics:

Clearly, any reduction of subsidies in the ACA to any group of recipients will lead to cries of murder by the left. Of course that is ridiculous, but it is reality that they will say so. Even President Trump has called for kindness. It was with a heavy heart, that I suggested we accept that reality and for now, leave the subsidies alone.

There is no easy solution to the question of how much help to give various groups to acquire health insurance. With any rationally designed pricing, there will still be many who cannot afford health insurance. The cost will have to be subsidized by taxpayers, not because it is the right thing to do, but because it has become expected in our democracy. No amount of tears and protests by libertarians or other free market advocates is going to change that. These principled opponents can only decide if they want the determination of those subsidies in the hands of Pelosi and Schumer or Ryan and McConnell.

Leveraging Medicare and Medicaid:

Here is one more idea I have which I throw into the mix. I have not studied its implications, but something like it might be worth considering. It is not a recommendation but an idea to debate.

  1. Leverage Medicare and Medicaid (M&M) without going to “Medicare for all,” which would be single-payer. There are a few goals:

    1. Use M&M as a backstop to the risk that catastrophic insurance poses to insurance companies.
    2. Use M&M as a backstop to the risk that insurance companies take by guaranteeing continuous membership in risk pools, regardless of adverse changes in health and removing lifetime caps on coverage.
  2. Medicare is already available to younger citizens if they become sufficiently disabled. It could satisfy the above goals by setting suitable eligibility criteria and premiums:
    1. Compute an actuarially sound premium for a moderately healthy 60 year old (say) to enroll in Medicare or Medicaid.  Add 10% to that and call it X.
    2. Private insurance should cost substantially less than X for most people. Let insurance companies price the impact of pre-existing conditions, catastrophes, and continuous lifetime coverage into their own premium models.
    3. If no private company is willing to insure someone for less than X, allow them to buy the Medicare or Medicaid policy for X.
    4. All these private policies would include continuous lifetime coverage, so anyone who is insured at age 30, still gets to stay in that age-adjusted risk pool for 35 years for well under X. So this is not an excuse for insurance companies to game the system.
    5. Belaboring the obvious, a healthy 50 year old would never have an incentive to buy into M&M for a premium of X.
  3. In this way, M&M would provide a baseline for adequate coverage. Private companies can offer more or less coverage in their policies and let the marketplace dictate the correct policy for any individual to buy.
  4. Likewise, businesses which provide insurance will still be able to negotiate better deals with insurance companies than individuals and thereby enhance employee true compensation at a discount.

If you can believe their public statements, there is agreement among Republican Senators that certain parts of the ACA should be repealed. Yet they allow their disagreements over new features to get in the way of the consensus that supposedly does exist.

Here are some suggestions on how to break the logjam so that all Republican Senators can support a bill that partially fulfills the promise to repeal Obamacare without adding features which some of them can’t accept. There are at least six major components to the ACA:

  1. A bunch of really foolish taxes, such as a tax on tanning and a tax on medical devices.
  2. Mandates for employers and individuals to purchase health insurance.
  3. Rules governing various mandates for insurance policies to cover.
  4. Tax credits to subsidize insurance purchases for individuals.
  5. More than 100 agencies to help regulate the health care of free citizens in a free society. The worst is IPAB (”the death panel”).
  6. Medicaid rules and subsidies to states.

Reading proposed bills, especially ones which repeal or modify existing laws, is always an adventure. Let me cite a clause in the proposed Senate health care bill being debated now: 

“by striking subparagraph (B) and re-designating subparagraphs (C) and (D) as subparagraphs (B) and (C), respectively.”

There are dozens of such references to the current ACA or to other statutes, so that reading the new bill becomes a daunting task.  That aside, it seems to me that Republicans should be able to agree on certain changes to the six categories.

  1. All or most of the ACA taxes should be repealed. If new taxes must be instituted (say, for reconciliation,) I suggest a payroll tax designated as the AHCA tax. A level of around 0.25% each to employees and employers should be adequate to replace all current ACA taxes. The idea is to simplify and to spread the cost among all taxpayers so they are constantly aware of how much it costs. The current ACA taxes can vary a lot from year to year, whereas a payroll tax would be more stable.  That is, or should be, the conservative way to tax.
  2. Eliminate the mandates to purchase insurance. If generous subsidies are not enough to coax people to buy insurance, they should do without it. If employer mandates must remain in some form, replace the hard thresholds of numbers of employees with sliding scales, so that no business is hit with an enormous financial penalty for hiring one more employee.  Surely, even liberals can see the wisdom of that change.
  3. Eliminate as many mandatory coverage features as Republican legislators can agree on.
  4. For now, leave the tax credits alone unless 50 Senators can agree on changes.
  5. Get rid of IPAB for good. Eliminate as many other of the ACA agencies as possible.
  6. For now, leave the Medicaid subsidies to the states alone, unless 50 Senators can agree on changes. The irony is that with no action, they will expire soon anyway. This seems to be one of the hardest issues to deal with. But, in the next year or two,  the Democrats will have no choice but to make a deal or else see the subsidies go away. The leverage resides with the GOP. This issue need not stand in the way of the other reforms and passing a bill now.
  7. There is an issue not expressly part of the ACA which should be dealt with here. Medicare (not Medicaid) should be enhanced to include appropriate custodial care (in home, if possible) for the elderly. Today, that is covered somehow by Medicaid with onerous conditions requiring forfeiture of assets. Cut the crap and make that part of Medicare. If it must be paid for with a new tax, increase the Medicare payroll tax to cover the actuarial cost of this benefit. It should be no more than 0.5% each to employees and employers. Much political hay has been made trying to scare Medicare recipients about this issue with regard to Medicaid funding. Let’s take away that threat. It would be extremely popular and a huge political victory for the administration with little downside.
  8. If it is possible to include a ban on funding for the criminal enterprise known as Planned Parenthood, do so. But do not let the whole bill fall on that issue. There are probably a few other features which could be included, but again, they should not be allowed to sink the bill.

Subsidies and Politics:

Clearly, any reduction of subsidies in the ACA to any group of recipients will lead to cries of murder by the left. Of course that is ridiculous, but it is reality that they will say so. Even President Trump has called for kindness. It was with a heavy heart, that I suggested we accept that reality and for now, leave the subsidies alone.

There is no easy solution to the question of how much help to give various groups to acquire health insurance. With any rationally designed pricing, there will still be many who cannot afford health insurance. The cost will have to be subsidized by taxpayers, not because it is the right thing to do, but because it has become expected in our democracy. No amount of tears and protests by libertarians or other free market advocates is going to change that. These principled opponents can only decide if they want the determination of those subsidies in the hands of Pelosi and Schumer or Ryan and McConnell.

Leveraging Medicare and Medicaid:

Here is one more idea I have which I throw into the mix. I have not studied its implications, but something like it might be worth considering. It is not a recommendation but an idea to debate.

  1. Leverage Medicare and Medicaid (M&M) without going to “Medicare for all,” which would be single-payer. There are a few goals:

    1. Use M&M as a backstop to the risk that catastrophic insurance poses to insurance companies.
    2. Use M&M as a backstop to the risk that insurance companies take by guaranteeing continuous membership in risk pools, regardless of adverse changes in health and removing lifetime caps on coverage.
  2. Medicare is already available to younger citizens if they become sufficiently disabled. It could satisfy the above goals by setting suitable eligibility criteria and premiums:
    1. Compute an actuarially sound premium for a moderately healthy 60 year old (say) to enroll in Medicare or Medicaid.  Add 10% to that and call it X.
    2. Private insurance should cost substantially less than X for most people. Let insurance companies price the impact of pre-existing conditions, catastrophes, and continuous lifetime coverage into their own premium models.
    3. If no private company is willing to insure someone for less than X, allow them to buy the Medicare or Medicaid policy for X.
    4. All these private policies would include continuous lifetime coverage, so anyone who is insured at age 30, still gets to stay in that age-adjusted risk pool for 35 years for well under X. So this is not an excuse for insurance companies to game the system.
    5. Belaboring the obvious, a healthy 50 year old would never have an incentive to buy into M&M for a premium of X.
  3. In this way, M&M would provide a baseline for adequate coverage. Private companies can offer more or less coverage in their policies and let the marketplace dictate the correct policy for any individual to buy.
  4. Likewise, businesses which provide insurance will still be able to negotiate better deals with insurance companies than individuals and thereby enhance employee true compensation at a discount.



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Good Enough Heath Care Legislation for 2017


There is a lot of hand wringing and concern over the correct order and the details of repeal and replace for the Affordable Care Act (ACA) and various related budget issues.  Even now, the GOP House Plan for repeal and replace is being derided as Obamacare Lite.  The base wonders if the Congressional leaders are wavering in their commitment to repeal the entire ACA.  When they knew Obama would veto it, the Congressional Republicans  had no trouble voting unanimously for repeal.  When they were running for election, they had no problem promising to repeal every word of it.

Now, suddenly they have cold feet.  They want to replace it as soon as they repeal it.  We do not yet know the details of that replacement – promised in phases two and three — but I am betting it will be long, intricate, and hard to understand.  They don’t want anyone to think they are being cruel or unsympathetic to anyone benefiting from the ACA subsidies.  But this is the wrong approach.

I suggest that it is actually fairly easy to handle this problem in a conservative way while minimizing political risk and maximizing political gain for the Trump administration and the Republican Party.  As suggested by the title, it is useful to separate the functional issues from the budgetary ones.  So much has been written about the ACA that I will take it for granted that the reader is reasonably familiar with its main features and the arguments surrounding them.  I will not try to provide a systematic discussion of these features.

Even so, there are troubling hints that Congressional Republicans are wavering.  They fear that any adverse consequences of repeal will be blamed on them.  They want the comfort of a full replacement in place before they vote to repeal.  There is even talk of repair instead of repeal.  This would be an error.  They have been promising full repeal for years now.  It would be a betrayal of their core constituency to do otherwise.  There is a safe path to do so.

I start with a brief analysis of the current law.  I am one of the crazy people who actually read the law before it passed.  That was not the final version.  It got longer and more complicated, but I read the penultimate version or maybe it was the antepenultimate version.  You get the idea.  There are many terrible features.  The worst one is the Independent Payment Advisory Board (IPAB, aka death panel).  The many rules and codicils are so intertwined with each other and with older laws that the only way to make a clean break is to repeal the entire Affordable Care Act as of a date certain, say in 2018 or 2019.  With that in mind, the first step is straightforward.

Step 1: Repeal the ACA — Every word of it.

Remember we are replacing a multi-million word monstrosity of legislation and regulation.  Let’s be sure the replacement avoids the attempt to micromanage everything with rules that no human being could fully comprehend.  To simplify the discussion break up the replacement into two broad categories:

  • Insurance Rules
  • Government Subsidies and Taxes. 

Three big features never should be replaced, namely the IPAB, the individual mandate to buy insurance, and the employer mandate to provide insurance.  These are incompatible with a free society.

Step 2: Insurance Rules

States should retain the right to regulate insurance policies sold only within their borders.  Create a new category of medical insurance that can be sold nationwide without regard to individual state requirements.  There would be some requirements on such policies.  For easy reference, call eligible policies “conforming policies.”  There are numbers of very popular and not so popular features in the ACA that various interest groups would like to see retained.  The biggest one is coverage of pre-existing conditions on newly issued policies. 

I propose that at or near the time of repeal of the ACA, just a few provisions be required to qualify as a conforming policy.  Whenever a provision is placed on allowable policies, a complex set of rules is needed to even define the implementation of risk pools and premiums to describe compliance.  These rules should be made as simple as possible, but must be dealt with by whoever writes the legislation.  Once a policy is conforming, additional features may be offered as optional add-ons.  With that in mind, here are a few suggestions for the list of conformance rules:

  1. Once Insured, Always Insured (OIAI): As long as premiums are paid, the policy cannot be cancelled due to illness or financial hardship nor can any cap on coverage be imposed.  Functionally, this amounts to unlimited catastrophic coverage.  Renewal from year to year is guaranteed at the same premium as members of the original risk pool.  If that risk pool is based on employment, and if the insured leaves that pool, then enrollment in a substantially similar pool is guaranteed with no increase of premiums.
  2. Family Policy Coverage (FPC): Family policies must cover all immediate family members who have not yet reached their 27th birthday. 
  3. Pre-Existing Conditions (PEC): Premium categories may not depend on pre-existing conditions.  Now OIAI and FPC are the core of PEC.  The adverse selection problem remains to be dealt with.  There should be no formal mandate to purchase insurance, but the option to buy insurance with no penalty for pre-existing conditions should probably expire at some age, say 30, a bit like a call option on stocks.
  4. National Marketplace (NM): As long as a policy conforms to the national standards set out here, it may be sold anywhere in the country.  States may not block such sales.
  5. Equal Tax Treatment (ETT): Employers do not have to offer subsidized health insurance, but if they do, the tax deductibility to the employer must be the same as to an individual policy purchaser.
  6. Financial Hardship Insurance (FHI): To be conforming, a policy must include a provision for paying premiums and/or deductibles in extenuating circumstances.  Details need to be worked out and a federal subsidy may have to be part of the final rules.

It should be left open for Congress to impose additional requirements on conforming policies.  There might be certain procedures or treatments that are mandated be included with or without an allowable deductible fee.  The point is that this is not meant to be a complete health care bill, but only enough to calm fears of a coverage vacuum while more final features are hammered out.

Step 3: Government Subsidies and Taxes

The ACA is loaded with complicated rules and formulas to give nearly everyone without a six-figure income a subsidy to buy health insurance.  It also gives subsidies to states for Medicaid.  Ignore CBO and OMB projections.  Nobody really knows just how much these add up to or how much they distort the pricing mechanism of the free market.  Nevertheless, there is overwhelming public support for some level of subsidy.  In that sense, the left’s call for single-payer is seductive.  However, history has taught that free markets lead to better outcomes.  Since premiums will have to get some government subsidy, Congress should strive for a simple voucher or tax credit to accomplish this.  For now, the details of the middle class subsidies and Medicaid expansion should be left open.  The beauty of this approach is that with repeal of the ACA and implementation of the rules for conforming policies, there will be a new status quo.

A robust debate should ensue.  Since the new status quo after repeal of the ACA will be no subsidies, it will behoove the Democrats to cooperate in designing a mutually acceptable solution.  There are some middle class subsidies built in the ACA and these should largely be preserved, not because it is sound policy, but alas, it is hard to take away a benefit from your core constituency, namely working people.  That is a crass political fact, but a fact nonetheless

If liberals want any input into the final rules, they will have to bargain in good faith (to steal a popular labor meme).  This is a good general strategy which can be used to set new norms in government for years to come.

Of course others may have priorities different from the ones I have listed.  This is not an attempt to design a take-it-or-leave-it solution — just an example of how Congress could proceed with very simple, transparent rules.

There is a lot of hand wringing and concern over the correct order and the details of repeal and replace for the Affordable Care Act (ACA) and various related budget issues.  Even now, the GOP House Plan for repeal and replace is being derided as Obamacare Lite.  The base wonders if the Congressional leaders are wavering in their commitment to repeal the entire ACA.  When they knew Obama would veto it, the Congressional Republicans  had no trouble voting unanimously for repeal.  When they were running for election, they had no problem promising to repeal every word of it.

Now, suddenly they have cold feet.  They want to replace it as soon as they repeal it.  We do not yet know the details of that replacement – promised in phases two and three — but I am betting it will be long, intricate, and hard to understand.  They don’t want anyone to think they are being cruel or unsympathetic to anyone benefiting from the ACA subsidies.  But this is the wrong approach.

I suggest that it is actually fairly easy to handle this problem in a conservative way while minimizing political risk and maximizing political gain for the Trump administration and the Republican Party.  As suggested by the title, it is useful to separate the functional issues from the budgetary ones.  So much has been written about the ACA that I will take it for granted that the reader is reasonably familiar with its main features and the arguments surrounding them.  I will not try to provide a systematic discussion of these features.

Even so, there are troubling hints that Congressional Republicans are wavering.  They fear that any adverse consequences of repeal will be blamed on them.  They want the comfort of a full replacement in place before they vote to repeal.  There is even talk of repair instead of repeal.  This would be an error.  They have been promising full repeal for years now.  It would be a betrayal of their core constituency to do otherwise.  There is a safe path to do so.

I start with a brief analysis of the current law.  I am one of the crazy people who actually read the law before it passed.  That was not the final version.  It got longer and more complicated, but I read the penultimate version or maybe it was the antepenultimate version.  You get the idea.  There are many terrible features.  The worst one is the Independent Payment Advisory Board (IPAB, aka death panel).  The many rules and codicils are so intertwined with each other and with older laws that the only way to make a clean break is to repeal the entire Affordable Care Act as of a date certain, say in 2018 or 2019.  With that in mind, the first step is straightforward.

Step 1: Repeal the ACA — Every word of it.

Remember we are replacing a multi-million word monstrosity of legislation and regulation.  Let’s be sure the replacement avoids the attempt to micromanage everything with rules that no human being could fully comprehend.  To simplify the discussion break up the replacement into two broad categories:

  • Insurance Rules
  • Government Subsidies and Taxes. 

Three big features never should be replaced, namely the IPAB, the individual mandate to buy insurance, and the employer mandate to provide insurance.  These are incompatible with a free society.

Step 2: Insurance Rules

States should retain the right to regulate insurance policies sold only within their borders.  Create a new category of medical insurance that can be sold nationwide without regard to individual state requirements.  There would be some requirements on such policies.  For easy reference, call eligible policies “conforming policies.”  There are numbers of very popular and not so popular features in the ACA that various interest groups would like to see retained.  The biggest one is coverage of pre-existing conditions on newly issued policies. 

I propose that at or near the time of repeal of the ACA, just a few provisions be required to qualify as a conforming policy.  Whenever a provision is placed on allowable policies, a complex set of rules is needed to even define the implementation of risk pools and premiums to describe compliance.  These rules should be made as simple as possible, but must be dealt with by whoever writes the legislation.  Once a policy is conforming, additional features may be offered as optional add-ons.  With that in mind, here are a few suggestions for the list of conformance rules:

  1. Once Insured, Always Insured (OIAI): As long as premiums are paid, the policy cannot be cancelled due to illness or financial hardship nor can any cap on coverage be imposed.  Functionally, this amounts to unlimited catastrophic coverage.  Renewal from year to year is guaranteed at the same premium as members of the original risk pool.  If that risk pool is based on employment, and if the insured leaves that pool, then enrollment in a substantially similar pool is guaranteed with no increase of premiums.
  2. Family Policy Coverage (FPC): Family policies must cover all immediate family members who have not yet reached their 27th birthday. 
  3. Pre-Existing Conditions (PEC): Premium categories may not depend on pre-existing conditions.  Now OIAI and FPC are the core of PEC.  The adverse selection problem remains to be dealt with.  There should be no formal mandate to purchase insurance, but the option to buy insurance with no penalty for pre-existing conditions should probably expire at some age, say 30, a bit like a call option on stocks.
  4. National Marketplace (NM): As long as a policy conforms to the national standards set out here, it may be sold anywhere in the country.  States may not block such sales.
  5. Equal Tax Treatment (ETT): Employers do not have to offer subsidized health insurance, but if they do, the tax deductibility to the employer must be the same as to an individual policy purchaser.
  6. Financial Hardship Insurance (FHI): To be conforming, a policy must include a provision for paying premiums and/or deductibles in extenuating circumstances.  Details need to be worked out and a federal subsidy may have to be part of the final rules.

It should be left open for Congress to impose additional requirements on conforming policies.  There might be certain procedures or treatments that are mandated be included with or without an allowable deductible fee.  The point is that this is not meant to be a complete health care bill, but only enough to calm fears of a coverage vacuum while more final features are hammered out.

Step 3: Government Subsidies and Taxes

The ACA is loaded with complicated rules and formulas to give nearly everyone without a six-figure income a subsidy to buy health insurance.  It also gives subsidies to states for Medicaid.  Ignore CBO and OMB projections.  Nobody really knows just how much these add up to or how much they distort the pricing mechanism of the free market.  Nevertheless, there is overwhelming public support for some level of subsidy.  In that sense, the left’s call for single-payer is seductive.  However, history has taught that free markets lead to better outcomes.  Since premiums will have to get some government subsidy, Congress should strive for a simple voucher or tax credit to accomplish this.  For now, the details of the middle class subsidies and Medicaid expansion should be left open.  The beauty of this approach is that with repeal of the ACA and implementation of the rules for conforming policies, there will be a new status quo.

A robust debate should ensue.  Since the new status quo after repeal of the ACA will be no subsidies, it will behoove the Democrats to cooperate in designing a mutually acceptable solution.  There are some middle class subsidies built in the ACA and these should largely be preserved, not because it is sound policy, but alas, it is hard to take away a benefit from your core constituency, namely working people.  That is a crass political fact, but a fact nonetheless

If liberals want any input into the final rules, they will have to bargain in good faith (to steal a popular labor meme).  This is a good general strategy which can be used to set new norms in government for years to come.

Of course others may have priorities different from the ones I have listed.  This is not an attempt to design a take-it-or-leave-it solution — just an example of how Congress could proceed with very simple, transparent rules.



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