Wednesday, October 21, 2009

A Solution to the Health Care Dilemma

Last week I wrote briefly about the current legislation snaking its way through Congress. Both the House and the Senate bills are 1,000 page cluster FUBARs. Both are likely unconstitutional as they impose specific burdens on some individuals and but not others. Neither solves the health care dilemma completely.

That dilemma is the conflict between our desire for freedom to live our lives as we choose and the de facto acceptance by all that we don’t want to see or let people die in the streets or suffer from untreated illnesses or injuries from poor choices or unlucky events in their personal health and finances. One can characterize that modern emotion as a combination of empathy and fraternity. Libertarians might rant against it, but it’s inarguably there.

The current system is a mess with multiple prices for the same treatment depending on who pays, huge administrative costs, and incredible complexity. Pre-existing condition restrictions on coverage cause massive employment immobility. Random costs are borne unfairly by those simply unlucky. Employers impose proto-fascist, “brave new world” style behavior restrictions. The US health care system is both inefficient and immoral.

What to do ?

Establish a simple (relatively) National Shared Health Benefit that would cover everyone in the United States. Concurrently, it will replace Medicare, Medicaid and all other Federal health plans (except service related Veterans benefits, which would remain separate).

Expressly covered would be: preventative care (physical exams, cancer screenings, etc.); all child bearing costs (pre- and post delivery for the mother’s health and well-being), vaccinations, illnesses, wounds, injuries and defined mental illnesses; all prescription drugs; cancer screening for early detection and the treatments; hospitalization, etc. Coverage will be determined by starting with Medicare coverage and adding those treatments and procedures and services necessary for all persons less than 65 years of age. A Medical Senate composed of one medical professional and one public member (non-medical) from every State shall determine coverage and payments for new treatments by majority vote under the National Shared Benefit Plan.

A per-visit co-pay of $20 will be required as well as similar, reasonable co-payment for drug prescriptions. This is very necessary to deter hypochondriacs, etc. This would be waived for the truly indigent.

Competitive Structure

National Shared Health Benefit would be priced and administered by competitive private enterprise. The Federal government would conduct Dutch auctions for the program. Insurance companies, doctor & hospital groups, corporations, non-profits, coops or even States would submit one or more bids to provide the Specified Coverage for any person in their designated region at a fixed price for each year up to a specific number of persons. The Dutch auction would act similar to the auction of US Treasury issues. The cut-off price necessary to insure all persons in that region would be awarded to all the winning bidders who submitted prices at or below the cutoff price. Out of territory claims (due to travel, etc.) would be handled by simple cross-remittances.

Last, every winning bidder – and only winning bidders - would be authorized to offer “gap” policies and premium care policies at any price in any package. That fine business opportunity would encourage quality operations to participate in the National Shared Benefit Program.

Person in the region would choose coverage from the winners; if not choice is made, the coverage is assigned randomly. If a winning bidder has too many persons selecting that program, the prior persons covered by the bidder get priority with random selection thereafter.

Fairness & Free Enterprise

This plan disallows both the cherry picking of low risk persons and refusal to cover pre-existing conditions. ALL persons are covered, pooling ALL the risks; ALL share these costs in the spirit of national fraternity. Anti-freedom corporate lifestyle restrictions would be prohibited. Genetic screening would be prohibited as a determinant of coverage, but importantly, not for treatment or preventative care. This plan brings clear benefits to the working man and woman; it promotes families and children. This system would bring the spirit of competition and initiative to the medical system that is not in the existing program.

Price discrimination would be prohibited from any service provider participating in the program. This means the existing system of charging one person covered by plan X a different price than a different person covered by plan Y would be ended. Prices for all services would be required to be posted publicly on the Internet. Persons willing to pay for some extra tests, examinations, home visits or screenings would thus be offered fair price for such services.

How to Pay ?

The existing Medicare tax will be broaden to be a simple one rate tax on Gross Total Income, defined as the sum of (a) the current “Total Income” [line 22 in the 2008 Form 1040] plus municipal bond interest income [line 8a of Form 1040], plus any untaxed Social Security benefit [i. e., amounts not included in line 20b]. The existing Medicare tax and Medicare payments by current beneficiaries will be eliminated. Any other income now not reported shall also be taxed. This principle here is that this is a shared benefit for all and absolutely no free riders will be permitted.

One tax rate is set based on the plan’s “average cost” to raise the necessary amount. The rate will be adjusted automatically for cover the “average cost” computed on a five year moving average basis taking into account the trends of prices. The revenues from this tax pays for the insurance coverage for ALL priced by the competitive Dutch Auction bid process.

Employees will receive a credit against this tax based on the per person cost of the “net benefit” of any plan of their employer up to the cost of the National Benefit. This credit amount will be reported in the W-2 form. The Health Care Tax will be withheld from employee pay in the event the employer does not provide any health care plan. No double taxation.

That’s it. Simple and Fair.

Secondary Benefit: This is a model for true tax reform. Combine the existing income tax (personal and corporate), Social Security tax and Medicare tax into a single tax structured like the Alternative Minimum Tax.

Market Actions

I took profits early yesterday in the 1-2-3 Fund on the calls on PG, UTX and ITW. Profits were around 80% on each. Remaining call options are on MMM, BA and MT. Why did I sell ? Easy. UTX and ITW reported good earnings yesterday. The strategy behind the option plan was to capture gains from good earnings due, in my thinking to their overseas operations. Once the numbers were in, why keep holding ? Both stocks had ramped up be fore earnings and were up a bit on the news. For PG, it was ramping up, too, in anticipation of good earnings. Hence I sold all three.

I'm not a hog ... Je ne suis pas un goinfre.

Word of the Day

"Maieutic" - adjective [$10]
Maieutic means (I) of or relating to the dialectical method used by Socrates in order to elicit or clarify the views of others; (II) (of the Socratic mode of enquiry) serving to bring a person's latent ideas into clear consciousness.
Example from "The Pragmatic Theory of Fallacies", page 221, by Walton:
Use of a Straw Man fallacy can "prevent proper maieutic insight into one's own point of view from developing."
Application: The debate on that national health care plans suffers from the lack of maieutic insight that critical discussion using proper and fair argumentation techniques could bring out; thus a national consensus is not fostered.

57 comments:

Bunkerman said...

hmmm Yanks win 10-1 ...kudos to Bud for another call on the Yankee game.

"can that kid ever lose a bet ?"

Still, this should be whispered ->

"Non es deus"

Bud said...

Bman are you a relatively new trader ......uhhhh......i mean invesor in options ??


cuz in the years of this blog this is the first time you have gone public with call buys




PS......are you lookin at any puts ??

Bud said...

Bman do you think the Euro has the qualifications to become the world's reserve currency??


what are the chances the dollar is no longer the world's currency in 2 years ??

Bud said...

Euro on a tear these days


at $1.50


dollar gettin destroyed



PS...............and my purchasin power ain't goin down ?? huh ??????

Spin-em said...

AOL headline

Can the Dow hit 14000 by next May??

Bunkerman said...

I started trading options in 1981.

I remember posting some option plays in antoher forum a few years ago.

I had cut back on them for awhile, which I learned was a mistake last year.

I'm not looking at puts now. For my style, I need a sector that's quite overvalued in MY opinion.

Bunkerman said...

The euro WILL become one of several reserve currencies within ten years.

It will share that role, initially in a minor role, with the dollar.

The eurozone has proven itself stable enough to survive its first crisis.


IFF the Lisbon treaty works out over a decade, I think more nations will hold some significant portion of reserves in euros.

BUT lots depends on how the world evolves over that decades.

To become more dominant, the eurozone will have to prove itself in both political crises and military crises.

In the end, remember, a reserve currency is voted on every day in the markets by what central banks CHOOSE to hold. No one makes them hold dollars.

Bunkerman said...

uh oh spin.

Not even I predict that.

Bunkerman said...

in 2003 the euro was about 1.3; now its 1.5. It was up to 1.6 in recent years.

What's the big deal ?

Bunkerman said...

no one "invests" in options. They are for speculations.

Bud said...

that's right Bman..............you are a trader...........pure and simple................enough with the'long term long only investing' crap indeed



PS..............where the next watering hole ?? oil stox ??

Bud said...

what's the big deal ???? huh ????


reminds me of the priceline commercial with william shatner

Bud said...

Bman does MS also 'gutt it's own beefer' ??



PS....GS goin to 200???

Bud said...

What confidence should dollar investors have that America will really cut entitlement spending? Very little. Instead, we are more likely to see huge tax increases that could cripple productivity, or further dollar neglect, or a central bank that turns dovish on inflation. Or perhaps all three.

If Washington doesn’t care to support the dollar, why should investors?





http://blogs.reuters.com/james-pethokoukis/2009/10/20/americas-banana-republic-economy/

Bunkerman said...

I used to be a trader, but am now a speculator.

I no longer file a Schedule C for a "trading" business.

Bunkerman said...

no, MS cut way back on "principal" trades - that's where GS guts itw own customers.

Bunkerman said...

dollar purcahsing power in the US is fine.

If people overseas are unhappy, they should just buy cheap stuff here. Support the dollar themselves.

Bunkerman said...

China, for example.

If they want to bitch about dollar falling for their purchases of stuff from Europe, they should buy here.

Frosty said...

Bunky...why nono sugar BA? think it trades to mid-40's where a 5% yeild could make holding the pig worth it...know Sal all about full disclosure, dark here and looking to add today, next week, next month.

Bunkerman said...

I didn't have a lot of BA sugar. Need it to go to 55.

Frosty said...

so your holding calls for 55...perhaps a side bet...add to my helmet collection.

Bunkerman said...

no, I'll have a big profit at 55.

My calls at 45 strikes; have small gain now.

Bunkerman said...

once they schedule a dreamliner flight, the stock will start to trade on much higher estiamtes for 2010, 2011.

I might have to roll out to a later expiration.

mfl59 said...

Bud god forbid you offer to buy the bunkerboys a keg and a six foot sub with some of your winnings....sheesh


"10 timers indeed"

Spin-em said...

Loooooooooooooooooooooool

Bud said...

LONDON -- The euro's rally may well pause under $1.50 for a bit longer but that doesn't mean the single currency has peaked.

Far from it, the euro could well be headed back up towards the highs it saw last year around $1.60.



http://online.wsj.com/article/SB125611468077398583.html?mod=article-outset-box

mfl59 said...

are you a currency trader now?

if I recall "jim" berated mern when mern used to talk about the dollar...."Mern it doesnt matter...its irrelevant"

pfftttt

Bud said...

currency trader now


lmaoooooooooooooooooooooooooo ace

Bud said...

lemme tell you somethin ace



have a beer with you guys ? not a chance.........i tell you why


cuz i feel like you guys are constantly rooting against me .........not once....and i mean once.........have any of you said.....'great day ' or 'great trade' or.'way to go'..........etc.......when i posted i had a good day or good trade..........and i have given you guys plenty of chances to

whenever the Bman talks about some of his good trades.........what do i do?.........i congratulate him.........and i am genuinely very very happy for his success...........and i am like that with every trader i know..........i luv hearing about traders succeess stories..........it pumps me up




what's the first thing you guys did when i posted 'mern is up 100%'.........you guys started makin fun of it.........didn't believe it.......pooh-poohed it..........not me...........i loved it..........great job mern!!!.........keep it up




it doesn't matter..........i don't need any phony kudos or encouragement..........i keep workin hard and try to become a better trader everyday


it's just sad that you guys are like that.......what a bunch of losers..........have a beer ??? gimme a break




PS............of course Bman none of this applies to you..........i know you want me to succeed.......thanks..........appreciate all your help

Bud said...

hey frosty



still wanna be friends ???????

mfl59 said...

Bud those are harsh words...I feel like I just got punched in the gut...

Bud said...

Bman are you long any foreign currencies ?? oh wait..............isn't that illegal..........maybe you shouldn't answer


how are you protecting yourself from the cratering dollar ?? if i buy FXA or FXE..........i will be protected....correct??

mfl59 said...

no...if you buy FXE....it will be the top...

Spin-em said...

why keep postin then..you have bmans email....noooo....you want us to be your pal...lemme see here(lookin at my 4 sq ft library....therea book here somewhere....(flippin pages)ahhh yes.....Act III Scene II

The lady doth protest too much, methinks.



Son, we live in a world that has walls and those walls need to be guarded by men with trading $$. Who's gonna do it? You? You, Lieutenant rev? WE have a greater responsibility than you can possibly fathom. You weep for yourself and curse the bunkerboyz you have that luxury. You have the luxury of not knowing what WE know: that mern's death, while tragic, probably saved lives and that our existence, while grotesque and incomprehensible to you,makes money. You don't want the truth because deep down were in places you don't talk about at parties you want me on that wall, you need me on that wall. We use words like honor, code, loyalty. We use then as the backbone of a life trying to defend something. You use them as a punchline. I have neither the time nor the inclination to explain myself to a man who rises and sleeps under the blanket of the very freedom we provide and then questions the manner in which I provide it. we'd would rather you just said "thank you," and went on your way. Otherwise, I suggest that you pick up a weapon and stand a post. Either way, WE don't give a damn what you think you are entitled to.



spierdalańá pally

Bud said...

yes i am fascinated....or obbssessed .......or whatever you wanna call it with the collapse of the greenback


i believe this could have potentially disastrous consequences ................and i am amazed at how aloof or lethargic or unperturbed the Bman is with it's collapse



'whistlin by the graveyard'

Frosty said...

"Hey Mike & Bob, Tom here...want to envite Bud to trade with us"...yada yada yada...spit acid in the teams face..."don't clog my fing personal mail"...well played Sal, well played indeed.

Bud said...

clog my email


lmaoooooooooooooooooooooooooooooooooo




i remember..............that was good one...........did i hurt you guys feelings ??? good............that was my intention

Frosty said...

CTDC



nailed it !!!!.........looks like 2 bux in 2 days...100% less than a week........ Ace's stockofthe week on a tear.........wonder how i got into that stock


danke vielmals Mike !!!!!!!!!!!!

Bunkerman said...

it's not illegal to be long or own foreign currencies.

I don't own any.

Bud said...

lmaooooooooooooooooooo frosty



hmmmmmmmmmmmmm................looks like i touched a nerve............the truth hurts ........doesn't it


'punched in the gut'

Bunkerman said...

lolololol

Bunkerman said...

hmmm I have a M1919 to clean ...

belts to load .....

Spin-em said...

Bud those are harsh words...I feel like I just got punched in the gut...


roflllllllllllllllllllllllllllllll

ace

mfl59 said...

way to go Bob...what a great trader you are!!! I am so happy for you!!! Thats terrific news....If I were in Alaska right now I would hug you.....really great stuff...

Bud said...

lmaoooooooooooooooooo ace


stealin my lines.............yeah............i bet you wud like to him a hug..........f'ng queer

Spin-em said...

better than "touchin a nerve"..."pervo the dandy boy"


loooooooooooooooool

Frosty said...

Bunky have you read hulk hogan's new book?

Bunkerman said...

the Hunkster wrote a book ?

mfl59 said...

Bud how does it feel to root for the Yankees? all that nonsense calling me Benedict Arnold...a traitor...a fag...yadda yadda yadda...

another punch in the gut...

Bud said...

i will never ...........and have never..........rooted for the child molester ( jeter) and coscksucking fags ( A-fraud and texeira)


yankees are scum of the earth...........yankee fans are all fags............and their wives/mothers/daughters/sisters are all gonorrhea infected whores



nuthin has changed

Bud said...

don corleone......vito corleone...sonny corleone.......michael corleone........fredo corleone.........connie corleone.......mama corleone...........

Bud said...

shall i go on.....ok



jerry corleone.......george corleone.....elaine corleone........kramer corleone



i am a f'ng businessman

mfl59 said...

Bud it appears you topped the euro...way to go!!!

Frosty said...

Sal is you private mail still:

yankluvingdouche@teabagmerevy.com

Bud said...

got some good news for you guys...............i got wacked pretty good in the e-mins at the close............oh well


'8th grade pitcher'

Bud said...

BAC well done frosty...........you are short aren't you??


it's so f'ng hard to understand your posts..............why can't you write like normal person????

Bud said...

teabagemerevy


LMAOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO


you f'ng douchebag