–Ted Cruz’s alternative to Obamacare

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●The more federal budgets are cut and taxes increased, the weaker an economy becomes.
●Austerity is the government’s method for widening the gap between rich and poor, which ultimately leads to civil disorder.
●Until the 99% understand the need for federal deficits, the upper 1% will rule.
●To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
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At last, a right-wing alternative to Obamacare.

Let’s begin with fundamentals: Why is the federal government involved in health care insurance? Why do we have Medicare? Why do we have Medicaid? Why do we have Obamacare?

Answers:

1. Health care is vital to America’s survival and growth as a leader in the 21st century.
2. The costs of even ordinary health care are beyond affordability for most Americans.
3. The costs of extreme sicknesses would bankrupt most Americans.

Only because Obamacare is a product of Democrats, Republicans have gone all in to eliminate Romneycare — (oops!) — I mean eliminate Obamacare.

So angry are they at Romneycare, i.e. Obamacare, that they want to shut down the entire U.S. government if they don’t get their way. In short, to protect Americans, Republicans threaten to destroy America.

The costs of health care insurance are unaffordable for the vast majority of families. So, what is Republican Senator Ted Cruz’s solution? Make people pay for their own health care insurance. Understand?

Washington Times
Ted Cruz doubles down on threat to defund Obamacare, proposes alternatives
By Tom Howell, Jr., Sunday, August 25, 2013

He said that Americans should be allowed to build up health savings accounts in a tax-advantaged way, that health coverage should be “personal and portable” and divorced from employment and that consumers should be allowed to purchase health insurance across state lines instead of isolating policy options within individual states.

Let’s examine the genius of these suggestions:

1. Build up health savings accounts in a tax-advantaged way: The poorest among us, i.e. those in most need of government funded health care insurance, don’t pay much or anything in federal taxes.

And even a “tax-advantaged” plan would be unaffordable to those just scraping by, financially, although the rich would love such a program.

Finally, because the Republicans are dead set against any increases in federal deficit spending, whom do they suggest should pay for the “tax advantaged” plan? Certainly not the rich.

2. “Health coverage should be ‘personal and portable’ and divorced from employment:“ Divorcing health insurance coverage from employment is a good idea except, how does that solve the unaffordability problem for the middle- and lower-income groups?

All it means it that businesses no long would have to pay for health care insurance.

3. “Consumers should be allowed to purchase health insurance across state lines:“ In Sen. Cruz’s imagination, this would increase competition, and thus, reduce insurance premiums.

Essentially, it also would eliminate effective regulation of the insurance industry, since it would be physically impossible for any state regulator to examine every policy from every state.

It also would be impossible for any consumer to evaluate thousands of insurance companies. Because the right-wingers oppose regulation, this would be a boon to every crooked insurance seller, and so be a boon to rich crooks. And that is the point, isn’t it?

And, I dare you to try making a claim for damages or benefits from an Alaskan company, when you live in Florida. But of course, that also is the point. Rich insurance executives don’t like claims.

Bottom line: The right-wing “solutions” benefit the rich, screw the middle and widen the wealth gap.

Did you think it could be any other way?

Not that Obamacare (Romneycare) is so wonderful. It isn’t. In fact it’s terrible. It’s a complex, convoluted mess, that will make lawyers rich and sick people confused.

But on balance, it is a tiny step forward for America, as it provides more coverage to many people who now don’t have coverage.

What would be a big step forward? Medicare for every man, woman and child in America.

Medicare works. Americans on Medicare like it. It’s simple enough to understand and it’s a Godsend for the middle- and lower-income groups

We know how to do it. We have almost 50 years experience implementing the program.

And the federal government can afford it.

Yes, Obamacare (Romneycare) is a lousy plan. Way too complex, and filled with exceptions, making it universally unfair. But it’s far, far superior to the right-wing’s “reward-the-rich, screw-everyone-else” proposals.

In a sense Obamacare reflects our democratic from of government — really bad, but still better than other forms of government.

Rodger Malcolm Mitchell
Monetary Sovereignty

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Nine Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Send every American citizen an annual check for $5,000 or give every state $5,000 per capita (Click here)
4. Free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually
8. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)
9. Federal ownership of all banks (Click here)

10 Steps to Economic Misery: (Click here:)
1. Maintain or increase the FICA tax..
2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.
3. Cut federal employment in the military, post office, other federal agencies.
4. Broaden the income tax base so more lower income people will pay.
5. Cut financial assistance to the states.
6. Spread the myth federal taxes pay for federal spending.
7. Allow banks to trade for their own accounts; save them when their investments go sour.
8. Never prosecute any banker for criminal activity.
9. Nominate arch conservatives to the Supreme Court.
10. Reduce the federal deficit and debt

No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia.
Two key equations in economics:
1. Federal Deficits – Net Imports = Net Private Savings
2. Gross Domestic Product = Federal Spending + Private Investment and Consumption – Net Imports

THE RECESSION CLOCK
Monetary Sovereignty Monetary Sovereignty

As the lines drop, we approach recession, which will be cured only when the lines rise.

#MONETARY SOVEREIGNTY

Published by Rodger Malcolm Mitchell

MBA Northwestern, business turnaround expert, economist

Published

20 thoughts on “–Ted Cruz’s alternative to Obamacare”

  1. Last I heard, Massachusetts is not monetarily sovereign. In Romneycare, the citizens of Massachusetts are paying the full tab for their health insurance, either in premiums or in taxes or in higher costs for the products they buy from businesses that subsidize their employees’ insurance (like the rest of us). How can this be if insurance is unaffordable for them?

    The poorest among us already get health care from government at no charge. It’s Medicaid. They don’t buy insurance, and will not have to buy insurance under Cruzcare either.

    I doubt there are thousands of health insurance companies. If there are some that operate only in one state, they probably won’t be very popular in other states, even if they were required to offer policies everywhere. Floridians are probably not going to want a PPO network of Alaskan doctors.

    I think there might be only a few dozen, if that many, health insurance companies and most of them offer policies in nearly all states. The competition issue is that the Aetna policy offered to residents of Kansas is not available to residents of Nebraska. Yes, Aetna offers a policy in Nebraska, but Nebraskans are prohibited from buying the Kansas policy, which they might prefer and might cost less. State regulators are part of the problem. If regulations were standardized, all the policies would meet all the regulators’ standards, and consumers everywhere would be able to buy the Aetna policy that fits their needs.

    If Cruz didn’t mention putting the ambulance-chasers out of business, he should have. That is part of the Republican plan, too.

    Shifting most of the cost of care to the Federal government might be a good thing if MMT were adopted, and the extra spending were not accommodated by extra taxes or reduced spending elsewhere. Without MMT, we are collectively paying the cost of our own health care, just like the people of Massachusetts, just like Obamacare, and just like employer-subsidized plans. The idea is to get the same or better service for less cost. Competition among providers and payment by the consumer rather than third parties is how that gets done.

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  2. Not sure what point you are making. Are you saying Medicare does not protect Americans from health cost destitution?

    Your comment, “putting the ambulance-chasers out of business” — is that another way of saying, “Don’t allow victims of malpractice doctors to have legal representation, and be compensated for their injuries’?

    Or do you accept a right-wing claim that a high percentage of malpractice cases are fraudulent?

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    1. Any insurance protects the insured from financial disaster. That’s what it’s for. But the insurance company doesn’t absorb the cost. It just spreads the cost among all its customers.

      Medicare transfers costs from retirees to workers. Yes, the government doesn’t need their taxes, but it thinks it does so it takes them anyway. We, all of us as a whole, pay for nearly all our medical care, be it by medicare taxes, income taxes, medicare premiums, private insurance premiums, or premiums filtered through an employer. A small part is paid by government running a deficit. If it were “unaffordable”, we wouldn’t be able to do that.

      Republicans want to limit non-economic damages. All costs of treatment, loss of income, etc. can be recovered, but other damages would be capped. The usual number is $250,000. So if the doctor makes a mistake that costs you $1, you can only sue for $250,001 not $250,000,001.

      I would separate the legal fees and let them be determined by the court, so that the successful plaintiff gets the full amount of the damage award, including all of the $250,000. Maybe there should even be an automatic non-economic award if the plaintiff prevails, just to compensate for the trouble of having to sue.

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  3. Now, we’re into the typical, slippery “That’s not what I really meant” phase of the discussion.

    You didn’t really mean “putting ambulance chasers our of business.” You really mean something else: A cap on damages.

    Is $250,000 sufficient compensation for the permanent crippling or death of your child or spouse? For your enduring, unrelenting pain? For your permanent disfigurement? For your becoming a paraplegic? Would you accept $250,000 to have someone cut off your arm?

    What data exists to show that judgments above $250,000 for non-economic damages are common or excessive? Policy based on popular myth is bad policy.

    As for “the government thinks it does,” the solution is not to base policy on a false belief, but to correct the false belief. Free Medicare for all is the solution.

    Medicare transfers nothing. Neither does Social Security, road building, bridge repair or the military. The government collects taxes from millions of people and spends billions on initiatives. There is no relationship between the taxes and the spending.

    How does Cruzcare solve any problems of the middle- or lower-income classes, or of Obamacare?

    Let’s be honest. Cruz and the entire Republican party have no plan other than pro-rich and anti-Obama.

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    1. I wouldn’t cut off an arm for any amount of money. Money doesn’t bring dead children and spouses back to life. Money doesn’t relieve pain. Money doesn’t make up for non-economic losses. That’s why they’re called non-economic.

      Money for non-economic losses enriches lawyers at the expense of everyone who pays insurance premiums or doctor bills.

      I don’t know where to find data offhand, but I know there was a shortage of obstetricians in Florida because of high malpractice insurance costs, due to the high awards in lawsuits there. I don’t know if that’s been fixed. It could be an instructive test case.

      Yes, fix the false belief. Until then, taxpayers are still losing the amount of the tax, whether it pays for anything or not. And Medicare recipients still get insurance in roughly the same amount as the tax. If it’s not a transfer, it operates exactly the way a transfer would operate.

      Neither Obamacare or Cruzcare help the poor. They were not designed to. The poor already have free Medicaid. Obamacare has hurt the middle class with higher insurance costs and taxes. Cruzcare would lower insurance costs and abolish the taxes contained in Obamacare.

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      1. This is what I find hilarious about right-wingers.

        There is no “Cruzcare.” There is no plan. There are no details. Just a couple of vague comments in a short paragraph, from a rabid ultra-conservative, pandering to his anti-Obama base.

        Yet, you’re defending “Cruzcare” — something that doesn’t exist. Why? Because it opposes something from the Democrats

        And that is exactly why such luminaries as Herman Cain, Michele Bachmann, Rick Santorum, Newt Gingrich, Rick Perry and Mitt Romney, at various times, actually led the Republican polls.

        Think about it. Herman Cain?? Michele Bachmann?? And let’s not even get into Sarah Palin, the ultimate no-plan phony. Right wingers will vote for anyone anti-Democrat, no matter how obviously inferior.

        There is no right wing plan for anything, other than to win power and screw the middle- and lower-classes on behalf of the rich.

        Sadly, the Democrats, tipping right-wing themselves, are better only by modest increments, just as Obamacare is better that what we had, but only by modest increments.

        Obamacare (aka Romneycare) has pluses and minuses. The Dems focus on the pluses. The GOP focuses on the minuses. History will show who was right. But simply voting to defund the plan, without offering a better plan, is silly by any measure.

        Anyway, it’s difficult for me to fight too hard for Obamacare.. I prefer Medicare for All. So, meanwhile, I opt for those modest increments, pending enactment of the “Nine Steps to Prosperity” (above)..

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        1. Well, they voted on Obamacare before reading the bill, so I don’t see why you demand more from Republicans than Democrats. I like the vague comments better than what I have now, and better than what I had before Obamacare. All Obamacare has done for me is raise the price. It’s not better than what I had, it’s worse. If we only go back to the status quo ante, that would be an improvement.

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  4. the so-called “right-wing… it’s amazing how nutty they’ve become. i vaguely recall that during the clinton administration, that clinton held hearings on health care that he somehow managed to get his wife, then first lady, hillary to chair.

    she ended up submitting a proposal to set up universal health care. the republicans said basically, “no way, we’re not having that!” so clinton asked them, “well, what kinda health plan have you got?”

    and they came up with the plan which later on became romneycare, then obamacare.

    so, it’s hilarious (well, it would be were it not so tragic) to see them vehemently rejecting a health care plan that they, themselves, created back in the 90s, during the clinton administration, as if it were some sinister democratic plot to destroy the country!

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    1. My employer increased my portion of the cost, and blamed it on Obamacare. They didn’t specify what provision.

      Lots of employers and unions were granted exemptions, so that they or their employees or members would not have to bear the higher costs. They “kept their insurance”, as they were promised they could do. But only as a special favor.

      I’m not sure low-income people get “plenty of help” from government. Government should not be throttling the economy, causing them to be unemployed. But they do get Medicaid. Raising the income eligibility for Medicaid is not the essence of Obamacare. Nor is the option to cover children up to 26. Or that pre-existing conditions remain covered when you change providers. All those reforms are favored by Republicans as well as Democrats, and would have been done long ago except it is not the way of Congress to do small common-sense things.

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        1. Interesting. There’s a calculator out, too, although it is just estimates because the premiums aren’t finalized yet (!!!) http://kff.org/interactive/subsidy-calculator/

          I’m paying my own way now, and according to the calculator I will get a subsidy, but the exchange will cost me about $500 more than I’m paying now, if I go with the bronze plan. Apparently I won’t be able to keep my current insurance.

          If they had done what they said they would do, not change anything for people who already have insurance, I would not have a problem with it. They lie.

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        3. I don’t think Cruz is interested in going into the insurance business. Whatever reforms he might make, beyond just undoing the mandates and taxes of Obamacare, would be aimed at reducing private insurance premiums, by reducing the costs of the providers and the insurers. I would hope to just keep the policy I have now. I’m quite happy with it.

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        4. “. . .not interested in going into the insurance business.” ???

          Cruz is not suggesting that you keep your current insurance policy. He is suggesting:

          1. That you build up a health savings account in a tax-advantaged way (No comment from Cruz on what taxes he intends to increase, to offset the decreased income tax.).

          2. That your health coverage should be ‘personal and portable’ and divorced from employment (i.e., employers stop paying for health insurance for their employees. No comment from Cruz on how people will manage to pay for their own insurance.)

          3. That you should be allowed to purchase health insurance across state lines (No comment from Cruz on how, for instance, a Florida policyholder would collect damages from an Alaskan company.)

          Remind me again. What is it about those three points that you feel would benefit America?

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        5. 1. That’s what I have been doing for several years now. Employer insurance payments are “tax-advantaged” too, as are personal insurance payments and medical expenses. Since most corporations’ marginal tax rate is 35% and most people’s marginal tax rate is far less, the shift would increase tax receipts, not decrease them.
          2. Employees receive health benefits in lieu of pay today. They would get money instead, and that would pay for their insurance. But, they, not the employer, would get to choose the insurance.
          3. I’ve explained this before. Most large insurance companies do business in most states. But they sell similar policies with different prices in different states, and we’re restricted today to buy only the one for the state we live in. My policy has a nationwide network of doctors and hospitals, and the company sells similar policies for access to the same network in multiple states with different prices. I’d like to choose.

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        6. So:

          1. You already do what Cruz suggests, meaning his suggestion is not a suggestion, but a description of what already exists.

          2. You would pay for an individual policy rather than receiving the benefits of a group policy.

          3. You might or might not pay less for your insurance. Rather than comparing perhaps 100 policies, each having different benefits and premiums, you would have the “right” to compare perhaps 5000 different policies (i.e. 100 from each state), each having different benefits and premiums.

          Then we would do the same thing with homeowners’ insurance, liability insurance, car insurance, title insurance and every other form of insurance.

          At least you wouldn’t have to worry about having too much time on your hands.

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    1. So, you’re in favor of Obamacare which (like the Republican plan) includes “keeping the tax increases and the Medicare cuts that pays for that health insurance”.

      From whose pocket is the money taken? The people, not the government.

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      1. 1. There is no Republican plan. Never has been other than “Say ‘No,’ to everything Obama.”

        2. I do not favor Obamacare, though I do favor the purported intent of Obamacare, i.e. to provide insurance to people who otherwise couldn’t afford it.

        Sadly, Obamacare is far too complex and far too incomplete, because it is based on the false assumption that taxes pay for federal spending.

        I favor free Medicare, Parts A, B and D, for every man, woman and child in America, along with the elimination of FICA.

        What do you favor?

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