Inertia

My most surprising discovery:  the overwhelming importance in business of an unseen force that we might call "the institutional imperative.  In business school, I was given no hint of the imperative's existence and I did not intuitively understand it when I entered the business world.  I thought then that decent, intelligent, and experienced managers would automatically make rational business decisions.  But I learned over time that isn't so.  Instead, rationality frequently wilts when the institutional imperative comes into play. 

For example:  (1) As if governed by Newton's First Law of Motion, an institution will resist any change in its current direction; (2) Just as work expands to fill available time, corporate projects or acquisitions will materialize to soak up available funds; (3) Any business craving of the leader, however foolish, will be quickly supported by detailed rate-of-return and strategic studies prepared by his troops; and (4) The behavior of peer companies, whether they are expanding, acquiring, setting executive compensation or whatever, will be mindlessly imitated."

-- Warren Buffett, in the 1989 Berkshire Hathaway Chairman's Letter

Does this mean that corporations are hopeless?  I would say, instead, that it means we can't expect corporations, or any other group of people, to amend themselves from within purely as a result of rational thinking or pure motives.  It takes disruptive outside forces--the pain of failure--to make them change.  Private institutions can be stupid and harmful, but they don't hold a candle to stupid and harmful government institutions, because it's so much harder to apply the pain of failure to the latter.  Voter outrage is weak and delayed.  Private companies can lose their customers; monopolies can't.  Any government product that can outlaw its competition is almost guaranteed to become a monster.

Pesky talking points

Politico is not what you'd call a right-wing site.  At most, it's "centrist," whatever that means, and it's generally positive about Obamacare.  It's running a series of thumbnail PDFs to educate the pubic about this new law.  So what does the article "Beware of the Obamacare talking points" tell us?

• Obamacare is an entitlement, and you can never shut one of those down.  The Politico response is:  well, yeah, they're basically entitlements, though you can quibble about the details.  Obamacare is going to cost almost $2 trillion over ten years.  But Congress could still conceivably scale these entitlements back, unlike every other entitlement.


• Obamacare is already "helping to slow" the growth of healthcare spending.  Eh, not so much.


• Subsidies will fix the rate shock.  Eh, not so much, and to the rate shock you'll have to add the sharp increase in out-of-pocket costs.


• It'll be like shopping for a TV.  "It may get there, but it will take a while."  For people who've never tried to buy insurance before, it could conceivably be less confusing than it was before, but for everyone else it's a nightmare.


• You won't have as many doctors to choose from.  Yeah, but people who were uninsured didn't have any to choose from, so it's all good.


• Obamacare will reduce the deficit.  You're dreaming; see above.


• Obamacare will usher in death panels.  Oh, stop it, they won't be here for a little while yet.

Is Medicare "junk" coverage?

A commenter at Megan McArdle's place points out that, by White House standards, Medicare is junk coverage that should be outlawed like meat infested with e. coli.  Medicare is essentially catastrophic coverage strictly for expensive hospital stays.  Of course many seniors also want coverage for expensive, frequent office visits and prescriptions, and there is coverage for that.  Voluntary coverage.  Voluntary, private coverage for which they pay their own money to insurance carriers in the private market.

We can't just let people make up their own minds about whether to carry only catastrophic coverage, right?  That would be like letting them drive a Ford pinto.  And we can't expect them to pay for their own coverage beyond the catastrophic level, right?  And yet, as the commenter points out,  what Medicare makes optional for vulnerable seniors, Obamacare mandates for young invincibles.

In other news in bizarro-policy world, maternity care is now mandatory for the middle-aged but optional for women under 30 years of age, who are the only ones now legally permitted to buy bare-bones catastrophic coverage.

Weighing options again

It turns out the health insurance agent I talked to earlier this week probably was mistaken.  It seems that, as of January 1, 2015, no one will legally be able to sell me high-deductible affordable coverage, with or without medical underwriting, "on" or "off" the exchange.  It's all gone after this next year.

So to recap:   For over a decade we've had a high-deductible policy ($10K per person/$15K for the two) with Blue Cross.  It's very good PPO coverage, decent network, covers all the usual stuff, but a high deductible.  By law, it must be replaced with a deductible that's $3,750 lower per person ($2,500 for the two) but costs $4,800 more a year, and offers no new benefits of any conceivable use to us now or ever.  We have to decide whether to pay the extra $4,800 a year, or go without insurance for the first time in our lives.

We don't "insure" for medical costs that are reasonably likely in an ordinary year; we "budget" for those.  Insurance is for very unlikely harmful developments.  We rely on insurance in case (1) we have a medical problem that would make our lives unendurable or kill us, (2) that can be cured, and (3) that would cost enough to blow our live savings.  All three of conditions (1)-(3) have to happen before the insurance will make a difference to our life savings.  If the medical problem isn't that serious and we can't pay for it, we'll do without. If the medical problem is serious but can't be treated effectively, we'll do without.  If the medical problem is serious and can be treated and wouldn't obliterate our live savings, we'll pay for it ourselves.

The policies offered on the exchange on a subsidized basis (the only way to avoid the huge price hike) are all HMOs.  If my information is correct, they're the worst possible sort of "closed network" HMO; you're covered in the network, but outside the network, you don't just get a lower co-insurance rate, you get zero.  This is a sign of the deteriorating insurance climate, where squeezing down the network is the last option available for cost control.   In contrast, in our PPO, if we go out of network, we suffer only a partial loss of benefits, and there's still a cap on total out-of-pocket expense, though higher than the in-network cap.   If we stay in network, the doctors who have accepted Blue Cross are prohibited from charging us more than the Blue Cross rate, so the entire bill either counts against our deductible or is paid at the usual co-insurance rate.  If we go out of network, the doctor charges what he charges, not Blue Cross's fantasy of what he should charge; we're responsible for 100% of the "excess" price, and only the fictitious price counts against our deductible or is paid at our co-insurance rate.  But even then, we get a certain amount of help with catastrophic bills, and it is possible to put an upper limit on how much destruction can be visited on our life savings by a medical catastrophe.

A closed-network policy HMO would do us almost no good at all.  We want coverage only if there is a very serious problem, and that is the last time we'll be willing to settle for a Tier-4 doctor in the next county.  Our life savings would be nearly at as much risk with such a policy as if we were going bare.   So our decision, which we'll face in late 2014 when our current policy is destroyed by the ACA once and for all, is (1) go bare or (2) pay $4,800 a year more (minimum) for a PPO plan with a decent network of doctors and hospitals.  What makes the choice even more difficult is that Blue Cross reportedly is going to lose doctors and hospitals even from its PPO networks, though probably not as many as they'll lose from their HMO networks.

Going bare would mean saving about $11K every year.  That's enough to build up a pretty impressive warchest against the possibility of an expensive disease.  And we have to consider, now, that we're taking a gamble only on horrible medical bills for a maximum of one year, depending on what month the disaster lands in.   After that, we can just sign back up for insurance for the following year.  (And who knows?  Medicare may actually survive long enough to kick in in 7-9 years.)  The IRS penalty for going bare would be negligible and uncollectible anyway.  Crazy, but going bare seems like the rational choice.

This week on appeal

The D.C. Circuit Court of Appeals struck down the federal district court ruling requiring Catholic business-owners to offer health coverage that includes birth control.

The Fifth Circuit Court of Appeals struck down the federal district court ruling that recently had overturned certain aspects of the recent Texas state law banning late-term abortions and requiring abortionists to maintain privileges at nearby hospitals in case of emergency.  The Texas law is now back in effect.  (Link fixed!)

Provider shock

Awesome.  Who would have guessed that the insurance jammed down our throats by the compassionate new law would keep its costs down by eliminating doctors and hospitals from our networks?  There are all kinds of tasty treats hidden in this shiny new law.

And if you thought that the big problem this week was limited to about 5% of the market -- and who cares about such a tiny voting bloc, right? -- it seems that closer to 90 million people are at risk of losing the coverage they wanted to keep.  But no problem:  they can all just shop around in the new market, right?

I thought my expectations about this program were about as bad as possible, but these people are surprising even me.

This is a good one, too:  We had to take your insurance off the market, because we made a central planning decision that people probably weren't going to be willing to buy it any more once they saw our fabulous new product.  That's capitalism.

(Pictures of) Guns are Scary

But sometimes the Bill of Rights wins anyway.  If you're a public school that wants to ban a t-shirt message, don't pick one that celebrates the NRA, because they've got lawyers who will come and help the students.  Pretty good lawyers, too:

In the face of public ridicule and legal action the school district came to its senses and issued an apology.  In a statement published by Michael L. Christensen, Superintendent of Schools, Orange Unified School District, the school district said the shirt was okay to wear to school, and promised to provide training to staff aimed at preventing future incidents.  The matter now seems to be resolved, and the NRA has given Haley a carton of the banned t-shirts to give to her friends, to wear to school if they want to.

Voting with their feet

And may many more do so.  While there is still some freedom to make business decisions rather than comply with central diktats, it's good to see people move their businesses to states that don't treat them like milk-cows.

The Pro-Transparency Plank

This is the most complicated of the planks in my proposed platform, but that's because it's going to take a lot to reform the government. The first goal here is to make individuals in government more responsive to the needs of the citizenry by putting them on the same ground as the citizen, eliminating special privileges and immunities that allow them to callously destroy lives, careers, businesses, etc. An equally important goal is to restore public faith in the institutions of government.

Part 1: Let's begin with Rand Paul's proposed constitutional amendment that no law can be made "applicable to a citizen of the United States that is not equally applicable to Congress ... the executive branch of Government ... the judges of the Supreme Court ... and judges of such inferior courts as Congress may from time to time ordain and establish." Then let's expand it to do away with judicially created immunities, as proposed by the Sage of Knoxville.

Part 2: Require laws to be written in common language and require a review period of 1 business day for each 10 pages in a bill. Once introduced, no vote can be taken on a bill until its review period has passed. Any changes to the bill require a new review period based on the total number of pages in the bill. The review period could be circumvented in the case of local or national emergencies, but only for bills that deal solely with the emergency (i.e., if someone tacked on an amendment for building an amusement park, the bill would have to go through the normal review period).

Part 3: Work together with private transparency organizations to create better transparency laws. Work with privacy organizations to create safeguards for privacy from government snooping. Put teeth into transparency and privacy laws by making non-compliance or overly-long response times by government officials or employees crimes, potentially leading to prison sentences.

Part 4: Another pair of Instapundit suggestions:
A. Cut pay to Congress and cut presidential travel when they haven't passed a budget.
B. If a government official or employee takes a lobbying or other private, government-related job within five years of leaving office, they must pay a 50% tax on that income.

Why, yes . . . .

I am feeling a little angry lately.  Why do you ask?

The Pro-Cannabis Freedom Plank

As the next part of my series exploring a winning political platform for the next two elections, here is my Pro-Cannibis Freedom plank:

Return control over cannabis possession, growing, sales, and use to the states. Keep importation illegal, and continue to use the DEA to stop cannabis from coming in, but let each state decide how to handle this drug. In addition, immediately convert federal prison sentences for cannabis-related crimes other than importation to parole.

There are several goals here: Move back toward the original interpretation of the Commerce Clause, reduce prison expenses, refocus anti-drug activities to more serious drugs, and try not to enrich drug lords.

When you lose CNN . . .

Anderson Cooper, well-known right-wing extremist at CNN, reports on White House tactics to intimidate health insurance industry representatives:

Legacy

He's chosen the blunder for which he'll be remembered.

One of the comments I'm seeing most often now is "I guess Ted Cruz was right."

Still lying

They can't quit lying even now.  This is from Kathleen Sibelius's testimony before Congress this morning:

“Mr. Chairman, there was no change,” Sebelius said.  “The regulation involving grandfathered plans, which applied to both the employer market and the individual market, indicated that if a plan was in effect in March of 2010, stayed in effect without unduly burdening the consumer with reducing benefits and adding on huge costs, that plan would stay in effect and never have to comply with any regulations of the Affordable Care Act.”*  

“That’s what the grandfather clause said.  The individual market which affects about 12 million Americans, about 5 percent of the market.  People move in and out.  They often have coverage for less than a year.  A third of them have coverage for about six months. And if a plan was in place in March of 2010 and again did not impose additional burdens on the consumer, they still have it.  It’s grandfathered in.”

In what universe?   My policy dates back over a decade.  Blue Cross didn't reduce my benefits or add any "huge costs" to my old policy.  They just canceled it and offered a new and improved consumer-friendly policy that costs $4,800 a year more in return for a $3,750 reduction in deductible.

Ms. Sebelius announced that she was now shouldering the blame:  "I'm accountable."  Resign, lady, and forfeit your public pension benefits, then we'll talk.

Anyone who thinks this treatment isn't scheduled to land next on people with employer-provided insurance is a fool.  They're just coming for us in manageable chunks, hoping we won't stick together.

The Pro-Immigration Plank

In an earlier post, I proposed a new platform for whichever party wants to adopt it. Here's the Pro-Immigration plank:

Allow all of the legal immigrants US businesses need. Tempered by background checks, annual income minimums, and health insurance requirements, give work visas to pretty much any foreign national who can get an America-based company to hire them before they come to the US (they need to have a job waiting when they cross the border). Don't set maximum limits; let the market decide.

Things I'd like to add to this, but which may be a bridge too far:

1. Implement something like the DREAM Act; don't punish the kids of illegals.

2. Since the overwhelming majority of illegal immigrants appear to be from Mexico, cut a deal with the Mexican government. We'll give illegals here legal status, but Mexico has to pass reciprocal laws that give US citizens in Mexico all the rights Mexican citizens in the US have, and make immigration to Mexico easier for Americans.

3. Make immigration violations permanently bar someone from getting a visa to enter the US.

Ray of hope?

I'm awfully confused about what the ACA does and not permit in the way of escape.  I've just been on the phone with a very helpful health insurance broker, recommended by our State Farm agent, who says that there will be off-exchange policies available as well as exchange policies.   The prices quoted to me by Blue Cross so far, and all the price quotations that I've been able to find on the internet, apparently are for exchange policies:  Bronze, Silver, and so on.  They can be bought without going on the non-functional website, but their prices (not counting subsidies) are the same either way.  Off-exchange policies have to comply with some aspects of the ACA but perhaps not all; it may be possible, for instance, to get more flexibility about deductibles.  If we stay with Blue Cross, we can avoid the pre-existing condition problem.  Even better, it may be that we can avoid it even if we switch to a new company like United Healthcare, which the broker believes has a better network and a better claims-paying record.  He also claims that many doctors and hospitals (like the Memorial-Hermann networks and Baylor University here in South/Southeast Texas) are dropping Blue Cross at the end of this year.  United Healthcare, in contrast, is preserving its network.

Because all the insurance companies are scrambling to make sense of the new regulatory environment, he can't get us options and prices yet, but he believes he will be able to do so in a few weeks.  Possibly there's still some way out of this mess--some way for us to continue to buy the cheaper, higher-deductible catastrophic stop-loss coverage we prefer.

I enjoyed talking to the guy.  He hates the new law as much as I do, and enjoyed hearing about Chris Matthews's hilarious new outrage about Benghazi.

"Why wasn't I told about this?"

I guess this is what happens when you let the veil of denial slip.  First, 60 Minutes has the gall to do a piece on Benghazi.  Softball, and sadly late, but better than the nothing-burger than preceded it.  Next, Chris Matthews actually watches it, because I guess it's inside his bubble, and wakes up in a whole new world with some questions scratching irritably at his brain:

JAY NEWTON-SMALL:  Well, Hillary in her testimony before Congress said she was there, she was, you know, on the ground, in the State Department listening to the response in real time on the phone as it was happening, and so, she knew what was happening.  But again, they also testified that there were waves of attacks, so they thought that, you know, after the first wave that things were quieting down.  That’s when they said, well, maybe we don’t need to send help, and help was really far away.  It wasn’t like it was next door. It was several hours away in Italy, so – 

MATTHEWS:  But the fight went on for seven hours. 

NEWTON-SMALL:  Yeah, but then if you’re doing it in waves, you think the attack is over and sending somebody is not going to help anymore, right?  Then all of a sudden, they attack again. 

MATTHEWS:  I’m going to ask you something.  If that what your brother or father in there, would you say that’s an acceptable response?  ‘Oh, it’s probably over by now, it’s no good to send anybody.’  Or would you say, ‘I don’t care if it’s over or not, I’m going to collect the bodies if nothing else.  I’m going to get there and show I cared.’  That’s what I’d do.

Wakey, wakey.

A Winning Platform for 2014 & 2016

Over the next week, I would like to introduce a set of ideas I have for building a winning political platform for 2014 & 2016.

My proposed platform for either major party would go something like this:

The X Party: Pro-Immigration, Pro-Transparency, Pro-Opportunity, Pro-Conscience, Pro-Health Freedom, Pro-Cannabis Freedom

Certainly, I am not an expert in government, politics, policy, etc., and it's likely one or more of my ideas will be dumb, unworkable, etc. But I thought I'd take a swing at it anyway.

I'll post details on my ideas for each plank over the next week. Meanwhile, I'm interested in hearing your ideas for a 2014 / 2016 platform in the comments.

When you lose NBC

About six hours ago, NBC posted an article pointing out that President Obama had known all along that millions of Americans would lose their insurance coverage.  As of this posting, there were almost 3,400 comments, mostly of the mad-as-hornets variety.  No one seems much interested in listening to administration mouthpieces explain how we all really should have known this was coming, so it wasn't exactly the same thing as a lie.  (I actually did expect part of it; I always believed they'd find a way to kill my individual policy, and have said so often.  But I confess I didn't expect that it would be almost twice as expensive to buy a replacement with a somewhat lower deductible, or that others would see increases of 300% or 400%.)

A man quoted in the article is coming to the same conclusion Raven and I are mulling over:  shouldn't we withdraw from this crooked game?  I want to see civil disobedience on a scale so massive it changes how all Americans look at the progressive agenda for decades.

It's almost unbelievable, but Valerie Jarrett and other administration hacks have taken to Twitter to push this talking point:

Nothing in the ACA forces people out of their plans. No change is required unless ins. companies change their existing plan.

Right, so it's not the law that's destroying your insurance policy, it's just the insurance company's compliance with the law that could cause a little problem.  That's how much respect they have for us.  Well, it's slightly comforting to know they're desperate to pretend the law isn't destroying the insurance coverage of millions of Americans; up to now, they were trotting out the explanation that, yes, the coverage was being taken away, but it was for our own good.  Also, it should be easy to get bi-partisan support for that bill to allow us to keep our existing coverage, right?  Because the law's not destroying it in the first place, so we're all good here.  I know I can count on Democrats in Congress to step up.

A handful of them are starting to make a fuss about demanding a refund from CGI for its work on the website.  It's the wrong part to focus on, and it shouldn't keep them from getting hung upside-down from lampposts, but it's a slight movement in the right direction:  a cheering sign that there is a healthy panic building in Congress.  I'd like it to reach the quivering, heart-palpitation stage, so I was pleased to read this purported quotation from someone described as high up in Democratic party circles:  "The Democratic Party is f**ked."  I couldn't agree more, sir.  It should be discarded entirely, and we should start with something new.

But something tells me that, after a few days of this, many of them will decide that it's really only about 15 million people affected, and they can afford to ignore them.  It will be up to the rest of the voters to decide if they'll be allowed to get away with that.

Improving old stories

Or at least, finding a new hook.  We recently watched the 2004 movie "King Arthur," whose conceit was that it would be a more historically plausible approach to the traditional tale.  In this version, Arthur is the son of a Roman father and a Celtic mother.  He leads a band of mounted warriors commandeered from a conquered Sarmatian tribe somewhere in the Caucasus, who are promised that if they serve for 15 years they will earn their freedom.  Lancelot is one of the Sarmatians, conscripted as a teenager.  Guinevere is a young Woad woman rescued from the dungeon of a Roman aristocrat whom Arthur is sent to rescue from Injun territory north of Hadrian's wall, on the eve of Rome's abrupt withdrawal from Britain in "453 A.D."  Merlin is the mysterious leader of Guinevere's blue-painted people.  There's kind of a plot, in which Woads and Sarmatians resent their subjugation by both Romans and newly arrived Saxon invaders.  Arthur carries a grudge against the Saxons for having killed his Celtic mother in a raid some years earlier and, in any case, is disgruntled by his superiors in the Roman army and thinks Guinevere isn't too hard to look at.  There are some battles at Hadrian's wall involving cavalry attacks, zillions of flaming arrows, something in the nature of napalm, and trebuchets with flaming missiles.  The Romans leave, the Saxons lose, and the Celtic Woads take Arthur as their king while looking forward to a couple of years of security before the Saxons return and overrun their territory completely.

The timing is a bit odd, since Rome withdrew from Britain in 407 A.D., not 453 A.D.  Setting aside the minor chronological slippage, I suppose it's not hard to buy the retreating Romans, about to take the last helicopter out of Saigon, as privileged types with a somewhat nominal approach to their Christianity and an effete Italian accent; the fact remains that all the Christians are two-faced cowards.  The Sarmatians are real enough; the Romans did conscript some of them, possibly for use in pacifying Britain, among other tasks.  It doesn't seem likely, however, that they should have had such elaborate armor, or even stirrups, let alone "Greek fire," in 5th century Britain.  Someone involved in the screenplay should probably have dreamed up a plot device whereby ancient Asian knowledge came over with the Sarmatians, like Conan with his "secret of the steel."

For all this historical revision, did we at least get a creative re-imagination of the classic elements of the Arthurian legend, such as the extraordinary honor of a band of men beating back brutal chaos, or the famous love triangle?  Eh, not really.  When the story begins, Arthur has been leading his band of proudly pagan Sarmatians for 15 years and enjoys their loyalty and respect.  His callous Roman superiors force him to lead his men on a suicide mission on the eve of an honorable retirement that would have allowed their promised return to Sarmatia.  While rescuing the unappealing Roman V.I.P., Arthur frees some mistreated Woads, including Guinevere, and begins to lecture them about natural rights.  He becomes disillusioned with the decadent and faithless Romans, choosing instead to make common cause with the Woads in a forlorn-hope stand against the invading Saxons.  Guinevere joins the battle as a prenaturally effective archer and broadswordsman, all 105 bright blue pounds of her.  Lancelot and Guinevere share about two misty glances before Lancelot is killed in battle, after which Arthur defeats the Saxons with the Woads' help and marries Guinevere to unite their people.  There's barely an Excalibur and only a few lines for Merlin.

All in all, I preferred the 1981 "Excalibur."  If the story's going to be anachronistic anyway, it would have been nice to preserve the aura of fantasy and mystery along with a plot and characters that made more sense.  Although the cast included some of my favorite actors, they were mostly wasted.

It's been a while since I've seen a really satisfying historical drama with a real plot come out of Hollywood.  On the other hand, we watched a surprisingly engaging if silly Godzilla-eats-New-York flick the other night: an indie production purporting to have been filmed with a hand-held video camera operated by a small band of hip young urban dwellers.  If you grant them the Godzilla, much of the rest of the story was believable and even moving.