Finally, a Senator Thinks in a Madisonian Way

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Senator Michael F. Bennet of Colorado recently introduced legislation (and gave a floor speech) to reform the Senate. Among the things most latched onto by some is the way he wants to reform the fillibuster rule. I would actually make the point that the fillibuster rule, as well as lowering the cloture threshold to 60 from 67, has increased the partisan ship and made it too easy for the extremes of both parties to get things they want but to stick to the point let us move on.

The parts that should be highlighted for making annoyingly too much sense, are his Earmark and Lobbying reforms. They are:

Lobbying Reform

• Put a lifetime ban on Members of Congress becoming lobbyists
• Ban congressional staff from lobbying their former boss for 6 years
• Ban former committee staff from lobbying their former boss or any member of the committee who was active during their time on staff for 6 years.
• Ban lobbyists from joining congressional staff or committee staff for 6 years.
• Create stricter rules for lobbyist registration.
• Institute penalties for failing to register as a lobbyist

Earmark Reform

• Ban earmarks to private, for-profit companies and institutions.
• Make earmarks transparent
• - Members of Congress must report all earmark requests they receive and all earmarks requests made
• - Earmarks.gov should list all earmarks requests, sortable by member of Congress
•  Hold Members of Congress accountable on earmark requests
• - All earmark requests above $1 million should go before the Appropriations Committee
•  Hold earmarks recipients accountable
• - Each year, a certain percent of all earmarks will be audited to ensure that taxpayer money is being spent wisely. These reports should be made public on earmkarks.gov

On almost all of these he has the right idea but in some cases, he doesn't go far enough. For instance, no former staffer (either kind, committee or congressional) should be allowed to be a lobbyist to anyone, for anything. No lobbyist can ever work in any manner in Congress and their should be a lifetime ban for failing to register with Congress as a lobbyist.

On earmarks, their should simply be a ban on all earmark requests for non-state wide projects. One small town should not be getting millions of federal money. Turn non-state wide projects into a waiver program. If a town wants money from the federal government for a highway expansion or a new overcrossing, etc they can apply for a federal waiver in tax payments up to the dollar amount needed for said project. A couple examples of a state wide project would be a state wide highway or state wide energy infrastructure overhaul, etc.

His fillibuster changes and spending etc are just make up on a donkey but Sen. Bennett deserves credit for thinking in a constitutional manner rather than a political one.

Ezra Klien of the Washington Post apparently got a follow up interview with Sen. Bennett that can be read here.

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Let's Be More Honest

After reading this piece by a lady named Ann Althouse (via realclearpolitics.com) I browsed the comment section and came across this:

When are these yutzes going to understand that it's not government that is responsible for America's greatness, it's its people? People have come here to live out their dreams and fulfill their fullest potential and that is what has been responsible for America's greatness. Our country has been great because, unlike many other countries, government got out of the way and let people do their thing.
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Why, oh why, are so many lefties infected with this ridiculous, and dare I say anti-American concept, that we work for the government and the only good possible in society comes through top-down government directives?

I've been hearing this more and more lately from the TV "news" channels to the blogosphere and it just strikes me as a completely illogical point to make. America tried as little government as they thought they could get away with and were so frustrated and so fed up with the stillness of a powerless government that they called a Constitutional Convention in order to overhaul, grow, and to use the rhetoric from back then as well as today "take over". The thing that the Founders understood best was that Government by its very nature is a self growing body. As new markets become available, new industries come into existence, as the population grows, so too does Government. What the Founders set out to do, after witnessing Europe and being extensive historians of the Roman Empire, was guarantee individual liberties without impeding the ability of successive Governments to form new branches of government or write new regulations for new industries or new laws for expanding legal issues.

The other counter point I'd make is that a Government can and should always be what the people make of it. The problem that conservatives, libertarians, liberals, progressives, moderates all have is that they all, at their core, have fundamental differences of opinions on the role of Government. This is why when one party is in power, you hear the other one use phrases like "ram down our throat" or "government is abandoning the poor and little people" or "government is taking over the country".

For better or worse, what all voters need to do, is recognize that the American voter voted for this Congress. The American people chose President Barack Obama. Maybe keeping that in mind we can stop talking about "when is D.C. going to listen to the American people?” It strikes me as about time the American people take a look in the mirror and ask themselves what as opposed to who they've been voting for all of these years and start accepting some of the blame for our hugely ineffective Federal Government.

P.S. ~ I know what the partisans are going to say so save it: "I didn't vote for Obama and these Democrats, this isn't my fault" or "I never voted for a Republican or President Bush, not my fault". Well, the country as a whole did.

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Follow Up on my National Debt Post

The current recession had nothing to do with not only the size of our government but it also had nothing to do with tax levels. Business and individual have not faced a tax increase since 1993. We've had two recessions since then. In fact, one of the biggest economic booms this country has ever witnessed happened after the tax increases of 1993 and in the middle of various tax credits -mainly aimed at people with children, Per Child Tax credit and IRA accounts- in 1997. (For a fact sheet of the U.S. tax system, I highly recommend this site of the U.S. Treasury Department.) Yes tax revenue goes up when you lower taxes but their is a point where this becomes counter productive and their is a simple truth which is this: lower taxes, leave taxes alone, or raise taxes tax revenue still goes up because of population and business, therefore job growth.

Now everytime this country has cut taxes the national debt and deficit spending has grown. Maybe the happy medium is the tax levels of the mid-late 90's or maybe it isn't. This country however needs to fundamentally decide whether it cares about tax rates or deficits and our debt. Clearly this country is never going to have a party willing to make the hard cuts in order eliminate our debt. The worst part is that when either party puts forth a plan to eventually end our dept, say for instance Rep-R Paul Pyan's Roadmap 2.0 plan recently introduced, and as Ezra Klien of the Washington Post even noted that it is a plan put forth that offers a solution relative to the problem. The problem with the plan of course is that it's doubtful it is a solution the vast majority of American voters are willing to accept. As much as they may decry government spending and our country's debt, they decry less services even more.

This New Yorker article by James Surowiecki highlights the contradictions in the current anti-government populism.

... The electorate, we hear, wants Barack Obama to be more of an economic populist but less of an ambitious reformer. He has to aggressively create jobs but also be less spendthrift. This advice may be contradictory, but then so are the economic opinions of the many angry voters who are animating what’s being called the new populism. Whereas the economic populism of the eighteen-nineties and the right-wing cultural populism of recent years represented reasonably coherent ideologies, this new populism has stitched together incompatible concerns and goals into one “I’m mad as hell” quilt. The people may have spoken. It’s just not clear that they’re making any sense.
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Similarly, the failure of free markets during the financial crisis might have led people to think that the government should be more involved in the economy. Instead, the percentage of Americans who think government is trying to do too much is higher than it’s been since the late nineties. ...a survey of voters who supported Obama in 2008 but voted for Scott Brown in the recent Massachusetts Senate race found that forty-one per cent of those who opposed health-care reform weren’t sure whether reform went too far or not far enough.

The problem is that you fundamentally have two extremely different philosophies mixed in with pragmatists. On the one hand you have those that want nothing but defense program spending and a little of this or that. On the other you have those that want a single payer health care system, a social security that pays more, essentially everything done at the federal level. Meanwhile you have pragmatists that just want reasonable programs that are only as big as necassary and that don't run up deficit spending and our debt. They're less concerned with big or small government and more concerned with "is that a reasonable function of government that fixes a problem and is it worth the cost?". How a President and Congress is supposed to govern with this very volitile mix is impossible to say -except of course by ideologues. Which would you choose? Politically killing tax increases to curb the deficit and debt or massive cuts to very popular programs that have very loud constituents? Both will have political costs.

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National Debt and Year to Year Deficit Spending

Reading this Ezra Klien blog post where he makes this point:

... Well, they weren't very worried about the economy. But now they're terrified about the economy. And deficits -- which signify irresponsible money management to voters who think of things in terms of household finances rather than Keynesian counter-cyclical spending -- are evidence, to them, that the government isn't handling the economy correctly. The fact that deficits rise sharply during recessions simply confirms to voters that there's a connection. ...

Now I'll leave the Keynesian economic debate to others that care but isn't the larger point about citizens -and the political parties- worrying about year to year deficit spending and national debt only in times of crisis part of the massive problem with how this country -again, its voters and politicians- functions? Sure Republican's claim to be the party of fiscal conservatism even if the only time they've been responsible was the 90's under Newt Gingrich and the Clinton Administration; not to mention they just helped kill the bi-partisan deficit commission bill in the Senate. Sure Democrats support pay-go and even just passed it out of congress but do they think everyone missed the excessive exceptions? This WaPo article runs down a few key ones:

... For example, the rules allow Obama to extend tax breaks for the middle class enacted during the George W. Bush administration without covering the cost. ... The rules also permit lawmakers to protect taxpayers from the expansion of the alternative minimum tax for two years, lower the estate tax for two years and protect doctors who serve Medicare patients from a scheduled pay cut through 2014.

Now I'm not a high tax person and do feel taxes are too high as they are but this country must ask itself a few things:
1) Were the 90's really that bad of a time for people financially?
2) Do we care about lower taxes or national debt? People MUST start understanding that neither party is ever, ever going to cut spending to meet current tax rates and if one thing is clear, among all the "government away from my Medicare" signs etc, it's that people hate big government until a party starts trying to make cuts to government programs. Or maybe no one honestly saw the countless news reports or read the countless articles that mentioned the fact that we all saw two tax cuts while growing government by 40% at the same time?

Maybe growing government without raising taxes under Obama will work though? His administration is only going to tax those over $200,000 a year (individual). That'll certainly close the 40% growth rate plus the amount of growth under his administration.

The size of government had nothing to do with this recession. The size of government had nothing to do with the recession President Bush started his administration in the middle of. Economic bubbles burst with or without government all the time. Now this last recession certainly happened in large part due to wrongheaded government regulation combined with the lack of enforcement of regulation but the American people and their banks played an equal part in it. (Isn't it amazing that after all of this, still no one talks about the need for better societal education of mortgages, debt, and housing?)

This country needs to have a candid and honest discussion on what it feels most comfortable with. Either non-existent tax relative to the rest of the world (like America currently has for individuals but not business), somewhere in the middle (around the rates in the 90's), or high like Europe. Government isn't a free lunch. Defending the country, overseeing interstate commerce, international trade, health care, retirement, either this country wants these things and is willing to pay for them or it isn't. Continually offering more Government while asking for less money doesn't work.

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High Speed Rail

Although some high speed rail projects wont always make sense, this country does desperately need high speed rail. It needs high speed rail for both traveling and freight movement. My only critism of this high speed rail map is that it doesn't project far enough into the future nor does it have enough money invested into. The other thing I find peculiar is that the high speed rail going from San Diego to San Francisco that California voters voted approval of, to sell bonds in order to pay for it, is now going to be funded by federal money. As a California tax payer maybe this means less money my state ends up spending that it doesn't have but on the flip side, it's money my federal government spending money it doesn't have. Does this mean the bonds would now go to the longer term goal of having high speed rail from going through Sacramento, San Francisco, San Diego, and Los Angeles. The map showing a train from LA to Las Vegas would be nice if it also had a train going from Las Vegas to Reno and Reno back to Sacramento and/or the Bay Area. In the end, essentially, the one thing I wish America would get off its hands and become more like Europe is in regards to high speed rail.

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Localize Health Care

The federal corporate tax rate is 35%. For all health care related companies, I would lower it to 20%. I would then assess a 7-10% tax that would go directly into funding local clincis for the poor for everything from emergency psych needs to someone without insurance that gets TB. (I'm not talking about planned parenthood here.) Now, all hospitals would have their money go directly to the local clinics within the city/county they operate in. Health supply companies, health insurance companies, etc would go into a state level pool.

This would lower costs by 5-8% and take away revenue from the federal government in order to affect where it is needed, in cities and towns where local governments can make the right decisions about what is needed for there local community.

The California state legislator recently (post-the much over analyzed Scott Brown election) passed out of a Senate committee a single-payer insurance bill. Now while I don't support a single-payer system, I was happy to see this because the best way forward in fixing health care is at the state level. Various regions have similar state health related issues, similar population majorites and minorities. Nationally though, it is drastically different. California for instance has far more Mexican's, Asians, and black people then Colorado which in itself, due to genetics, entails an entirely different host of health concerns -thereby an entirely different need of health supplies, medications, specialized doctor's, etc.

One prime example of local health care reform is that of San Francisco. Mayor Gavim Newsom focused on access -not insurance. He worked with labor, businesses, and city leaders. If you are a San Francisco resident and seek care in San Francisco, you will have access -including its university care hospitals. You do have to pay for it and it is income based but they found a way to have universal access that pays for the health care needs of its city.

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The Senate

The Senate has done its job. It has shown to be the restrictive body it was intended to be. It has angered the base of both parties the entire health care debate. Not progressive enough, way too progressive. Let the crumbs fall where they may.

As some reporters have pointed out, amidst all the decrying of the fillibuster and needing to get to 60 votes and this should be a simple majority rules, etc, etc, etc...we've all heard the malarky. As some have pointed out, it used to take 67 votes to over come a fillibuster. Under these rules countless landmark -for good and bad- legislation passed through Congress. Everything from Alexander Hamilton's legislation for a centralized bank to FDR's various attempts at recovery acts, civil rights legislation, and so on. The reason it was required to take 2/3 to over come a fillibuster was simply that, due to the understanding of history and the perils majority politics can sometimes take a country down, 2/3 of the more senior body would ensure that the majoirty couldn't over reach on major issues. The Senate needs to go back to the 2/3 rule and we'd start seeing more bi-partisan politics out of the Senate at the very least.

If we were talking about a bill in Congress that had 51% approval nationally, even say 48% nationally, then demanding every avenue be taken and demanding that the simple majority should be enough would at least make sense and understood. However, when you're demanding the removal the fillibuster rule, when you're decrying the need for 60 rather than 51 being enough, when you're doing all of this under the umbrella of a consistent sub-40/35% approval, you're nothing better than an ideologue stuck on your own moral belief of what is acceptable and what isn't.

When you allow a simple majority to rule, when you take away the voice of the minority, you are stripping the very fabric of democracy -of a represnetitive republic. Now I would already argue that America has become too much of a true democracy as it is, I don't believe one need look any further than todays politics. The only thing good that has changed in terms of voting is that it isn't solely white men anymore.

As an aside, ironic that the one part of Washington that always rushes everything and rams overflowing agenda filled bills is the body that failed to pass the Democrats golden child.

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Health Ramblings: Revised

Reading this article at the LA Times outlining the attacks on the personal mandate to buy health insurance leaves one asking: why are the Democrats solely focused on health insurance reform? Never mind that there isn't a single way in which it could be found constitutional, but on the most basic of levels insurance never has complete control on costs. No insurance company forces down costs on anything in this country. Not fire insurance, auto insurance, flood insurance, renters insurance, none of it. The only thing an insurance company does do is lesson the amount of out of pocket expense at the time of service to the customer. It is far more likely that the vast majority of people will pay more in insurance premiums than they will ever receive in coverage except in health insurance.

If someone has Kaiser insurance from age 20 to age 40, then changes insurance for some reason to say, Blue Cross, Kaiser still has all of those premiums the customer paid them. Blue Cross has none of that money. Now only 4 years into the Blue Cross coverage the patient needs a by-pass surgery. In 4 years did the customer pay that kind of money in premiums? Of course not but in 24 the person most likely would have. This is why there must be a way to create portability in the health insurance industry and that doesn't mean personalized health care accounts as some talk about ad nausea. Pre-tax flexible health care spending accounts already exist and although that should be a standardized government provided "account" where the money rolls over year to year unlike the current private run accounts, that isn't the same as somehow having health insurance portability.

Let’s say you have someone that gets cancer. In order to fight to stay alive, the health bills run up over $100,000. Now with a very good insurance plan, said person could probably pay only $10,000 of her own money post-insurance premium payments. Now unless this person is 60 and been paying the insurance company premiums since they were in their 20's or so, it is highly, highly unlikely that the person has paid the insurance company $90,000 in insurance premiums. So where does the insurance company come up with the difference between what the customer has paid and what they have to pay for all of the treatment? From the massive pull of every customer premiums. If you look closely enough, you may see the inherent socialism in such a way of doing business.

Hospitals, in large part due to government (federal and state) health plans, have had to shift more and more away from itemized bills and instead take the average daily cost of a patient being in house, add that amount to the daily bed/room charge, and get rid of the itemizing. A patient that maybe stays a night or two, never ends up on an IV or SCD, maybe needs only a dressing or two is now paying the same daily rate as the patient next to them getting IV fluids, on O2, and maybe even on a food pump plus going through tons of supplies. Welcome to universal coverage via Hospitals.

Both of these examples, among countless others, are why attacks of socialism and the need for universal coverage don't hold up. It is also why the attacks on health insurance companies, no matter how immoral it is to deny someone due to a preexisting condition, are comical.

Insurance Mirage's
People claim two things as key to health care reform as the best way to push down costs. They claim 1) A non-profit government program is essential and 2) It must be a national program so that it can have strong bargaining power. Fundamentally wrong is the first point while the second points is the greatest argument for why in theory state barriers, as Republican’s claim, should be stripped but let’s follow the path as to why in practice, under current law, it doesn't work but describe a way in which it could:

1) All over the country there are non-profit insurance companies and sometimes they're the cheapest and sometimes they're the most expensive and sometimes they're right in the middle. See Kaiser as one example.

2) Health insurance companies can already compete in any state in the country. Kaiser, formerly based in California only, has recently set up shop in North Carolina. They decided it was worth going through the state level red tape to do so. (They're struggling in NC while doing quite well in CA. Analysts aren't entirely sure why.)

3) It shows a fundamental lack of knowledge as to how health insurance works in this country, let alone the differences from one state to the next, to claim that a citizen in New York should be able to purchase an insurance policy from a company based in Oklahoma. The reason this works for car insurance is because State Farm, Gieco, All-State, and Progressive all have local operations in every state that operate under different state regulations. Their already are health insurance companies operating in multiple states but it doesn't make their bargaining power any stronger in Oregon simply because they have customers in Florida. The biggest reason for this is that each state tends to have very different state regulations, different hospital networks, Doctor Groups, nurses unions, etc. As the saying goes, "all politics is local" and as Alan Katz pointed out, so to, is health care.
 
4) How it could is if you held a state convention where all of the states agreed on an absolute minimum allowing for each state to strengthen, but not weaken the minimum legal requirement level of coverage. Another huge sticking point that would help would be to standardize approval processes for Doctors accepting health insurance so that no one has to be denied a specific Doctor just because he doesn't take the insurance the patient has. In other words, the administration headaches each insurance company gives Doctor Offices shouldn't vary as widely as they do from one company to the next.

If politicians really wanted to make a difference in the field of health care they'd fix things locally -at the county level ideally. Think of how many times you've heard an argument for what is wrong in the health care system (or any other aspect of society) and thought "that doesn't sound right to me, I don't have that problem" or "my city doesn't have that problem". If we nationalize the solutions to regional or local issues, unintended consequences will be rampant for only one universal truth exists in the American health care system: Every region has varying health issues that get dealt with in various ways.

Take the idea of taxing sugar drinks (soda, etc) as a way to fight obesity. What happens if you live in a small town with less than 5% of the population overweight yet now 100% of the town is paying more for soda?

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Constitutional Solutions to Political Problems

One of the endlessly disappointing things in todays politics is the over reliance on political answers to political problems. Arguably the most underappreciated brilliance of the men who wrote the U.S. Constitution is their drive for constitutional answers to political issues of the day. (Note too, the absence of worrying about societal issues -excluding the sharp divide over slavery of course).

Today the United States is stuck with two parties that continually try to offer political solutions to structural ineffiences of todays various levels of government. I'd like to propose a few contitutional solutions to todays political problems:

1) The Executive branch can only nominate Secretary of State, Secretary of Defense, and Secretary of Treasury. The Senate would nominate all other Secretary's and the Attorney General for a term of 10 years requiring 70(75?) votes with no term limit. At any point after four years in office the Attorney General or a Secretary appointed by the Senate can face a vote of no confidence requiring 66 votes. The House of Representatives can submit a request to the Senate by a vote of 300 to ask for a no confidence investigation.

2) No Federal budget can contain non-Federal spending. All money in a Federal budget must be spent on a Federal agency or on Federal services.

3) All budgets not pertaining to State, Defense, and Treasury shall be three year budgets and not contain any earmarks. State Senate's are to be given a 9 month time frame with which to submit spending requests preceeding a 6 month review process before the 3 year budget is submitted to Congress for approval.

Now obviously every department would still be politicized because that is the very nature of every government agency that has ever existed. However these changes would go a long way to lessoning the political back and forth these departments consistently deal with. One could argue that two years is lost with every change of an administration, even when the same party wins.

These changes would also force a more long term strategic aspect upon the departments so that the country doesn't go from a massive push on some short term agenda based objective only to face an attitude of lame duckness from Congress simply because the sitting president may not win re-election; meanwhile the department head has just hit her or his stride after finally figuring out the inner department politics and how the department functions -the various laws and regulations the department operates under.

The reason for Federal budgets to strictly contain Federal level spending is based on the belief that the reason for a federal tax is to fund a national interest, not a local one. City's have their own taxes for local priorities and State's have their own taxes for state level interests. The argument that an earmark helps make sure money goes back to where it is taken from is respected but doesn't follow the logic of having a Federal tax in the first place.

Regarding change number 3 and what determination in the review process should be used is if the spending request is in the national interest. Does it advance national security? Does it address the national dependency on fossil fuel's? Does it help national travel? Does it advance international trade?

One could even make a case that a national level department of education or health and human services or housing and urban development, etc in and of themselves don't even make sense considering their has never been a case of one size fits all in any nation, let alone a nation the size of the U.S. In fact one could also argue that if you shifted that revenue (taxes) to the state and city level you'd see a marked improvement across the entire country as they're far better equiped to know what there local communities need.

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Health Insurance Reform and Why It’s Misguided

The argument over the role of government aside, the current health care reform being discussed by those writing it is bad policy. In regards to the recent Congressional Budget Office report saying that the House bill would save $108 Billion over 10 years to the Federal Government, it does not address the added costs to individuals.

 

There are two objectives in health care reform: 1) Lower premiums so everyone can afford health insurance and 2) Curb the costs (debt) incurred to both the Federal and State Governments. It is impossible to succeed in the latter while trying to achieve the former by adding responsibility on the back of Government. There is not, nor has there ever been, in the U.S., a government health plan that succeeds in both. Focusing on premiums as the best way to lower health care costs is also misguided, they merely reflect the cost of services.

 

The reason that one must understand the difference between a CBO analysis saying that a bill will save the Federal Budget money verse saving the health care industry money is simple. The way in which the health care reform is being paid for is through more taxes specifically aimed at nearly every level of the health care industry. For example: In order to make a cat scan cost less there will now be higher taxes paid for by the company that makes the cat scan which means the Hospital will be paying more to buy said cat scan while the Hospital will also now be paying higher prices for all similar equipment which cuts into not merely the profit margin but more importantly the operating costs. In the end the cat scan now costs more money to the insurance company that is now paying higher reimbursement rates and rather than just increase the co-pay the individual would pay "at the door" for the cat scan, now all of the insurance companies customers are paying higher premiums in order to meet the new reimbursement levels. There will even now be caps on out of pocket costs for the individuals meanwhile the insurance company still has to just keep paying and paying. Well if they can't expect the customer to now pay their fair share of the medical costs because of a cap, they again have to raise premiums to cover the difference.

 

Now most that understand what was just broken down into rather simplistic terms would say "that's crazy; that isn't sustainable". It isn't. At least not without sky rocketing costs. How does one fix this problem as more and more people find private insurance less and less affordable? Not to worry, the government has a public option for you that will allow negotiation rights over reimbursement rates which means they can force the health care industry to not charge so much to them therefore the public option can afford to keep its premiums low. (To those that believe the public option will eventually, as claimed, become self sustainable by setting premium rates high enough to fully fund it while still being competitive, just think about that new cap law.) On the other hand, in exact opposite to such claims being made by public option proponents, the CBO reports that despite being a national plan, only 6 million or so will be on the plan and the majority of them will be those that are sickest in the country and currently can't find an affordable insurance policy due to pre-existing conditions. So here again, by focusing on the cost of insurance the real cost of health care goes ignored.

 

The cuts to Medicare are large enough to lower the amount Medicare –which already reimburses well under private insurance rates-, reimburses hospitals and Doctor's for. Now anyone with the smallest semblance of knowledge of how health insurance works in this country already understands that because Medicare reimbursements are so far behind health inflation costs, those with private insurance get charged more to make up the difference. In extreme essence: Hospital's take a loss on Medicare patients while making a profit on private insurance.

 

Attacking Health Insurers

 

Many today enjoy attacking the health insurance companies. This is and will always be politically helpful but also entirely nothing more than a smoke screen. Insurance companies, essentially, are the messenger and everyone knows the old saying. Insurance companies (of all kinds) merely reimburse for goods and services. The reality of the situation is that health insurance costs are merely a magnifying glass of the costs of medical care. The premiums they must charge in order to meet the required reimbursement rates are directly dictated by the costs of medical supplies, equipment, operating costs of medical facilities and medical transportation companies as well as the cost of becoming a doctor or nurse (or other health care professionals) because the higher the cost of the education necessary the higher the needed salaries.

 

Many attack not only the profits of health insurance companies (on average all of 2.2%) but there overhead costs. The administration costs include: disease management, marketing, customer service, technology investments, taxes, regulatory compliance costs and, yes, profits, among other expenses. Now all of those things sound exactly like almost every form of business that operates in the world. Needless to say, no one is clamoring for a government run computer company. Addressing the non-claim costs as a whole as opposed to merely the profit aspect of them (or a broad "overhead" talking point) would have a much bigger effect on health insurance costs.

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