200712

December 15, 2007 8:41AM

Bush Expands Government Health Insurance, Again

The Bush administration just approved Indiana’s plan to expand its Medicaid and SCHIP programs. According to the administration’s press release:

[The Healthy Indiana Plan] was approved as a Medicaid Section 1115 demonstration project and will extend health insurance to low‐​income parents of children now covered by Medicaid and the State Children’s Health Insurance Program (SCHIP), as well as childless adults. To be eligible for coverage, enrollees’ incomes must not exceed 200 percent of the federal poverty level (FPL), or $20,420 for an individual and $41,300 for a family of four.


Enrollment in the plan will give participants access to a high‐​deductible health plan that includes an account patterned on the model of a health savings account. To assist with out‐​of‐​pocket costs incurred prior to the coverage threshold, both the individual and the state will make contributions to a Personal Wellness and Responsibility (POWER) account. Participant contributions to the POWER account will be set on a sliding scale based on ability to pay, but at no more than five percent of gross family income. Any funds remaining in the account at the end of the year can be rolled‐​over to offset the following year’s contributions if age‐​appropriate preventative services are obtained.

Think of it as government‐​run health care, with a little welfare check thrown in.


And what ever happened to the administration’s protests about SCHIP funds going to adults rather than children?

December 14, 2007 4:28PM

Talk About a Friday News Dump

The Senate passed the Farm Bill this afternoon by a margin of 79 to a brave 14 (roll call vote here). Readers of this blog will be sufficiently familiar with our views on U.S. farm policy so I won’t reiterate them here. Suffice it to say that it will be interesting to see if President Bush makes good with his veto threat.


Happy Holidays to the American taxpayer/​consumer/​trade partner from the U.S. Senate!

December 14, 2007 3:08PM

One of the Better Statements of the Current Health Care Debate

From today’s Los Angeles Times:

Though many Americans may not realize it, government is already the dominant player in healthcare, with federal and state expenditures accounting for 47% of the projected $2.3 trillion the nation will spend this year. Indeed, many private insurers follow the lead of the biggest government program, Medicare, in setting coverage policies.


Even if nothing changes, government will pick up more than half the nation’s healthcare tab by 2017. Universal coverage proposals from the leading Democratic presidential candidates would advance that tipping point to 2011, according to a recent analysis by the consulting firm PricewaterhouseCoopers.


Leading Republican healthcare experts acknowledge the trend toward a greater role for government — indeed, Bush himself accelerated it when he signed the Medicare prescription drug benefit.…


“The debacle is not a partisan war between Democrats and Republicans over how to cover children, it’s a civil war within the Republican Party over the role of government and health policy in general,” said economist Len Nichols, director of the healthcare program at the New America Foundation.

Gotta hand it to Nichols on that one. In fact, Nichols is so sharp that maybe he can explain to Sen. Ron Wyden that universal coverage would not “rein in costs.”

December 14, 2007 2:31PM

California Speaker Confuses Taxation with Wealth Creation

California is facing a budget shortfall, and one of its most powerful lawmakers thinks the state legislature can meet that shortfall by creating wealth. According to the Los Angeles Times:

Assembly Speaker Fabian Nuñez (D‑Los Angeles) said lawmakers would have to consider raising a host of taxes, including those on Internet purchases and on foreign companies that do business in California.


“We’ve got to close those tax loopholes,” Nuñez told reporters at a news conference. “We can generate billions by doing that.”

According to Dic​tio​nary​.com, the first three definitions of “generate” are:

  1. to bring into existence; cause to be; produce.
  2. to create by a vital or natural process.
  3. to create and distribute vitally and profusely.

No doubt the speaker wants to distribute those billions vitally and profusely. But raising taxes won’t create billions of dollars. 


Taxes find wealth that others have already created and take it. As in pilfer. Lift. Ransack. Plunder. Loot. Steal. Jack. Nab. Grab. Purloin. Swipe. Snag. Extract. Nick. Confiscate. Seize. Pinch. Usurp. Arrogate. Dispossess. Expropriate. (Yoink.)

December 14, 2007 1:49PM

Medical Guild Busts Doc for Attempted Quality Competition

According to The Austin‐​American Statesman:

[A]n Austin doctor [is] among the 64 doctors the Texas Medical Board recently disciplined.…


Dr. Marci Roy, an Austin neurologist, must pay a $1,000 fine because of Web site advertising that suggests she has a superior ability to treat carpal tunnel syndrome at her clinic than other doctors who provide similar services, according to the board.


When confronted about the wording, Roy said that it was not a violation of the board’s advertising rules but that she changed the language after a complaint was filed, the order says.


Roy said Friday that the problem was “a typographical error that was corrected immediately.”


“It was certainly inadvertent on my part,” she said.

And we wonder why patients can’t judge physician quality.


Hat tip: MKS.

December 14, 2007 1:39PM

This Post Won’t Treat Bob Frank Like a Piñata

The New York Times' Sunday column "Economic View" is a must-read for anyone

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who cares about economic issues. Four academics (one of whom is Cato adjunct scholar Tyler Cowen) take turns writing the column, and they often use the academic literature to shed light on current issues.

But readers of this blog probably won't like last weekend's column, penned by Cornell economist Robert Frank. Frank argues that "realistic proposals for solving our budget problems must include higher revenue," i.e., new taxes or tax increases. Those proposals, he says, are being blocked by "powerful anti-tax rhetoric [that] has made legislators at every level of government afraid to talk publicly about a need to raise taxes." 

(I'm not sure how big that phobia is, given the numerous tax increases on the state level in recent years.  But let's put that aside.)

Frank has spent much of his academic career arguing for raising taxes on wealthier people so as to create greater income equality (some of his work can be found here, here, and here). It would thus be expected that a Cato analyst would bash Frank's column like a piñata. But I believe there's merit to what he writes.

Whatever the political power of anti-tax rhetoric, it's clear from the last seven years that it doesn't have much effect on government spending. Despite the tax cuts of 2001–2003, Congress and the White House have found all sorts of hyper-expensive programs and actions on which to spend money, from the Iraq War and expanded overall defense spending to the new Medicare Part D, the proposed farm bill, the latest round of energy subsidies, more and more corporate welfareNo Child Left Behind, and a whole new, giant federal agency — (forget the relative spare change of all those wacky transportation earmarks). Whatever criticisms can be lobbed against the 2001–2003 tax cuts (and lower taxes in general), it can't be said that they've hamstrung the government's ability to spend

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December 14, 2007 10:33AM

Fareed Zakaria Is Making Sense (Again)

Another bang‐​up column from Fareed Zakaria in Newsweek:

To recover its place in the world, the United States should first recover its confidence. It remains the world’s only superpower, the only big country with a total portfolio of military, economic and political dominance. Most major states are either well disposed toward it or, at worst, neutral. The challenges America confronts come from small, faceless terrorist organizations and a few rogue nations. This is not to minimize the challenges. Today’s asymmetries of power mean that small groups can do big damage. But it is to put things in perspective. When President Bush speaks of Iran’s nuclear program as the road to World War III, one wonders if he has noticed that Iran’s total GDP is just one sixty‐​eighth that of the United States, or that its military spending is less than 1 percent of the Pentagon’s.


The real challenges that the United States faces come not from globalization’s losers but from its winners, not from yesterday’s bombs but from tomorrow’s factories. The crucial project for the next president will be to change the basic focus of U.S. foreign policy, away from the Middle East and toward the Far East. When the history of these times is written, surely the great trend that will dominate the accounts, far larger than the war in Lebanon or the tensions over Iran, will be the rise of China and India and how they reshaped the world.