When is a Fine Excessive?

CNN has an interesting story about a Christian organization that is seeking to avoid fines for not providing coverage for the “Day After” pill or (I think) RU-486.  Let us not argue about birth control  or abortion.  My issue here is the amount of the fine, which is $100 per day per employee for whom the employer refuses coverage.  Why isn’t that fine excessive?  To begin with, let’s look at the cost of such services.  The cost of the drugs are relatively low.  According the Planned Parenthood, the cost for the pharmaceuticals are between $10 and $70. For an insurance company this is really a non-issue, and that leaves the moral issue, because it’s not an ongoing expense.  In fact, it may even be lower than some people’s co-payments or deductibles.  Now we need to add this to an insurance risk pool cost, and the price for insurance probably drops to well less that $0.10 per year .  After all, how often does anyone need such services?  Maybe once in their lives?  Maybe never.

If we break this down, then, to compensatory versus punitive damages, let’s postulate an  government program that allows doctors and pharmacies to be reimbursed for the cost of the procedure.  Let’s call the program, oh…. Medicaid.  Let’s say that costs, from a risk perspective, $1.00 per year.  The Supreme Court has already said that punitive damages in civil cases should not exceed a factor of 10.  Why then, should the fine for this behavior not by $10 per employee per year instead of $100 per employee per day?

In fact, why not let employers opt out on conscience grounds and let them pay a slightly higher premium of $2.00 per employee?  In this sense, the government would stand to profit from an employer who REALLY has qualms.  Of course, one would also have to ask why that company would feel so comfortable paying the government twice what it would pay the insurance company, when at the end of the day the same service would be performed?

Put simply: what is the societal interest in penalizing a company 100,000 times the cost of a service in this case?  Is this such an egregious omission?  Are employees unsafe?  Would the service otherwise be unavailable?  What is the issue?

 

[del.icio.us] [Digg] [Facebook] [Reddit] [Twitter]

Our Supposed Healthcare System

Let’s do a brief comparison of the U.S. to the civilized world, when it comes to healthcare insurance and what actually happens when a child is born.  In Switzerland, when a child is born, both the mother and the child may stay up to five days in the hospital.  For even the slightest complication that time gets extended for both.

In the U.S., an insured mother and her child are entitled two days.  If there is a problem with one, as was the case with my new niece (she was jaundiced and required an extra day), she is separated from the mother, who in this case herself spent the night in the hospital lobby so that she could nurse her newborn daughter, three days after having given birth.

Which would you want for your wife, sister, or daughter?  U.S. or civilized?  If you answered “civilized”, then you get to answer another question: who are the people who should supervise our profit-oriented health insurance industry, and where are they?  I personally would like to know.  By the way, here in Switzerland my family and I pay less than most Americans our ages for healthcare, and we’ve not been turned down for anything we needed (in fact we’ve never even had an argument about it).  Now- does that change your answer?

[del.icio.us] [Digg] [Facebook] [Reddit] [Twitter]

Healthcare: 51 million people in U.S. now without health insurance!

NPR’s Morning Edition reports today that the numbers are the worst since the Census Bureau started keeping statistics in 1987.  Take the poll: how are you insured?

How do you receive health insurance?

View Results

Loading ... Loading ...
[del.icio.us] [Digg] [Facebook] [Reddit] [Twitter]

On States Suing over a National Healthcare Plan

I had a guest here this weekend who told me of one theory of why states might sue the federal government over portions of the Obama Healthcare Plan that requires individuals to buy insurance.  The theory goes that the federal government is not authorized by any clause in the Constitution to force individuals to pay for healthcare.  A plain and superficial reading of the Constitution would seem to support that. This leads to three questions:

  1. Is ObamaCare constitutional?
  2. If not, can it be made constitutional?
  3. Who is doing the suing and why?

First, a caveat: I am not a lawyer.  All lawyers: please chime in.

Is ObamaCare Constitutional?

Next, some Constitutional basics.  The way our form of government works, each and every law that Congress passes must find some authorizing basis from within the Constitution, because the 10th Amendment of the Constitution clearly states:

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

In other words, Congress has to find a basis for the law from within the Constitution.  For the better part of three centuries, however, Congress has largely been able to get around this restriction through what has become known as the Interstate Commerce Clause (Article I, §8 Cl. 3):

[The Congress shall have power] To regulate Commerce with foreign Nations, and among the several States, and with the Indian tribes;

“Commerce among the several states” has been interpreted to mean, for instance, the ability of someone in New York to charge for access to its waterways.  That was what Gibbons v. Ogden (22 US 1) in 1824.  It’s largely the basis of how drug laws are authorized today by the federal government.  Some people might say that this is a stretch of the clause, and that in fact requiring expenditures from individuals on health insurance would be even more of a stretch.

So what’s the logic in favor of the law?  That has its basis in the theory of insurance.  Here I will say that I am not an insurance expert, by the way.  This much I know: a risk pool requires that everyone not make a claim at the same time, and the lower the likely percentage of claims over some period of time, the need for less money by the insurance companies to satisfy claims.

In the context of health care, if only old and sick people buy insurance, because they make up for the bulk of claims, the money required to pay out claims would require very high premiums, thus reducing any benefit to having insurance.  On the other hand, if only healthy people bought into the system, since there would be very few claims, there would be no need for high premiums.  Indeed, healthy people might not buy insurance at all, or very limited policies.  In short, insurers can only sell health insurance to sick and old people if they have a group of otherwise healthy and young to reduce costs.

Does the decision of someone to not buy insurance in one state impact consumers in and companies in other states?  If there exist risk pools that cross state boundaries, then the answer would appear to be yes.  Otherwise it would seem the answer is no.

If ObamaCare is not constitutional, can it be made so?

Supposing the Supreme Court found mandatory premiums unconstitutional, what could the Congress and administration do to get around it?  The tax system offers us one possibility.  The 16th Amendment authorized Congress to tax us:

The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

One way the Congress could get around this would be to impose a tax that is the amount of a minimum premium, and then allow for a credit based on the costs expended on that premium.  Loophole?  Perhaps.  But not the first.

Coming back to the Commerce Clause, the Congress probably could not have imposed a national speed limit without relying on highway funding.  They probably could not themselves have prosecuted individuals for traveling over 55 or 65 mph.  Instead they required the states to pass laws or face losing highway funding.

Who is doing the suing and why?

Ultimately if we look at the states that have filed suit, I’m sure we’ll see a distinctly Republican red tinge to them.  For one thing, the strategy of Republicans has been to obstruct any Democrat initiative, no matter the harm that obstruction causes to individuals.  Here, what possible benefit could individuals who are uninsured gain from not having health insurance?  Today 45 million Americans don’t have a choice because they cannot take part in a well balanced risk pool, and hence cannot afford any coverage.  Tomorrow even if they don’t have a choice on insurance, at least they’ll have some coverage.

Summary

In short, while considering the constitutional elements is interesting at an academic level, the officials doing the suing are harming the very people they are supposed to be serving.  Perhaps voters should remember that.

[del.icio.us] [Digg] [Facebook] [Reddit] [Twitter]

More lies from the lying liars who tell them

Some time ago, now Senator Al Franken wrote a book called Lies and the Lying Liars Who Tell Them.  I read the book, and found it to be a lousy read as petty, spiteful, and true.  You may not agree with his politics or his style, but the one thing you can say about Senator Franken is that he has always valued the truth.  On the other hand, I don’t know why anyone actually believes Fox News at all.  Because they and their chief liar Bill O’Reilly are at it again!  This time, it’s a railroad job against Senator Coburn, who had the audacity to call my Congresswoman, Nancy Pelosi, a nice lady, and who said, when talking abut the insane notion of putting people in prison for buying insurance, that “The intention is not to put anybody in jail. That makes for good TV news on FOX but that isn’t the intention.”

Bill O’Reilly can’t have that, so he claimed, “We researched on Fox News if anybody had ever said you’re going to jail if you don’t buy health insurance. Nobody’s ever said it.”  Guess what?  The New York Times did some investigating and found at least six instances where someone on Fox News  did say it.

When reporter at the New York Times was caught some months ago for plagiarizing, he was forced to resign and the entire newspaper was shamed.  Not so for Fox when they just make stuff up, as apparently they have no shame!  And so I think they deserve a new name: The Republican Liars Network (RCN).  Not all Republicans are liars, and not all liars are Republicans, but those who choose to believe what they know to be lies, aren’t much better than the liars themselves, especially when they act on that information in the voting booth.

All I can ask is please, Senator Franken, don’t update your book.  There’s just too much material.

[del.icio.us] [Digg] [Facebook] [Reddit] [Twitter]