Category Archives: Amity Shlaes

Obama Denies Waiver for Innovative Cost Saving Indiana Medicaid Program

I mean, we cant have incentives that are deigned to help people make smart health care choices and actually save money, not when we are trying to bankrupt the country…

I first reported on this story on my old college blog when our friend Amity Shleas wrote an article about Obama moving to kill the popular and budget saving program called HIP. Why? Well Mitch Daniels is our governor and the Obama Administration did not want such a successful program written by a popular Republican governor to get any publicity.

Indiana once again tried to save HIP by asking for a waiver and Obama once again is determined to kill the program.

Forbes:

 

Obama Administration Denies Waiver for Indiana’s Popular Medicaid Program

In 2007, under Gov. Mitch Daniels (R.), Indiana enacted the Healthy Indiana Plan, an expansion of Medicaid that used consumer-driven health plans to encourage low-income beneficiaries to take a more active role in their own care. Today, Healthy Indiana is the most innovative and successful reform of Medicaid in the history of the program. Today, we learn that the Obama Administration has rejected the state’s request to extend its federal waiver, which means that over 45,000 Indianans who get their insurance through the program are out of luck.

Medicaid, of course, is the nation’s government-run health insurance program for the poor. In theory, it’s jointly run by the federal government and the states, but in reality, any time a state wants to make the tiniest changes in its Medicaid program, it has to go hat-in-hand to the U.S. Department of Health and Human Services with a formal request for a waiver, and these waivers are usually denied.

Indiana succeeded in gaining a waiver in 2007 because it was seeking to expand Medicaid to a group of people who weren’t then eligible for the program, and because the state’s effort required no additional outlays from the federal government (the Medicaid expansion was paid for with a 44-cent increase in the state’s cigarette tax.)

Structure of Indiana’s consumer-driven Medicaid plan

Beneficiaries get a high-deductible health plan and a health savings account, called a POWER account, to which individuals must make a mandatory monthly contribution between 2 to 5 percent of income, up to $92 per month. Participants lose their coverage if they don’t make their contributions within 60 days of their due date. After making this contribution, beneficiaries have no other cost-sharing requirements (co-pays, deductibles, etc.) except for non-urgent use of emergency rooms. The state chips in $1,100, which corresponds to the size of the would-be deductible.

Those who have money remaining in their POWER accounts at the end of the year can apply the balance to the following year’s contribution requirements, if they have obtained a specified amount of preventive care: annual physical exams, pap smears and mammograms for women, cholesterol tests, flu shots, blood glucose screens, and tetanus-diphtheria screens.

“We did a lot of reading on criticism of health savings accounts,” says Seema Verma, who was the architect of the Indiana program. “One of the criticisms was that people didn’t have enough money to pay for preventive care. So we took preventive care out, made that first-dollar coverage. Also, people said that people didn’t have enough for the deductible, so we fully funded it. Then, you have to make your contribution every month, with a 60-day grace period. If you don’t make the contribution, you’re out of the program for 12 months. It’s a strong personal responsibility mechanism.”

Indiana’s Medicaid successes

The program has been, by many measures, a smashing success. “What we’re finding out is that, first of all, low-income people are just as capable as anybody else of making wise decisions when it’s their own money that they’re spending,” Mitch Daniels explains in a Heritage Foundation video. “And they’re also acting more like good consumers. They’re visiting emergency rooms less, they’re using more generic drugs, they’re asking for second opinions. And some real money is starting to accumulate in their [health savings] accounts.”

The program has been overwhelmingly popular in Indiana. There’s a large waiting list—in the tens of thousands—to enroll in Healthy Indiana; enrollment was capped in order to ensure that the program’s costs remain predictable. 90 percent of enrollees are making their required monthly contributions. “The program’s level of satisfaction is at an unheard-of 98 percent approval rating,” Verma told Kenneth Artz. Employers didn’t dump their workers onto the program, crowding others out, because you needed to be uninsured for six months in order to be eligible for it.

A 2010 study by Mathematica Policy Research found that the program dramatically increased the percentage of beneficiaries who obtained preventive care, from 39 percent in the first six months of enrollment to 59 percent after one year. Of the members who had money left in the POWER accounts at the end of the year, 71 percent met the preventive care requirement and were able to roll the balances over to the following year. (The remaining 29 percent could roll over their personal contributions, but not the state contributions to their POWER accounts.)

This is an astounding achievement, given that the biggest problem with Medicaid is the way that it ghettoizes its participants, preventing them from gaining access to routine medical and dental care. This lack of physician access is the biggest reason why health outcomes for Medicaid patients lag far behind those of individuals with private insurance, and even behind those with no insurance at all. Healthy Indiana has completely reversed this trend, achieving preventive care participation rates that are higher than the privately-insured population.

The CBO Downgrades Obama’s $825 Bil Stimulus Bill

Just when you thought it couldn’t get much worse. Remember what Newt Gingrich and Amity Schleas said about the CBO.

Investors Business Daily:

Recovery: After nearly all the stimulus money has been spent, the Congressional Budget Office now admits it cost more than advertised, did less to boost growth and will hurt the economy in the long run.

In its latest quarterly report on the economic effects of the Obama stimulus, the CBO sharply lowered its “worst case” scenario while trimming many of its upper-bound estimates for stimulus-fueled growth and employment.

The new report finds, for example, that the stimulus may have added as little as 0.7% to GDP growth in 2010 — when spending was at its peak — and created as few as 700,000 new jobs.

Both are down significantly from the CBO’s previous worst-case scenario.

The report also lowered the best-case estimate for added growth in 2010 to 4.1% from 4.2%.

In addition, the CBO says the extra infrastructure money didn’t boost growth as much as it previously claimed, because states reacted by spending less out of their own budgets on highways.

So in other words, the CBO now says it’s possible that the stimulus had virtually no meaningful effect on growth and employment despite its massive price tag.

All this comes after the CBO increased that price tag to $825 billion from its initial $787 billion — a 5% hike.

Adding insult to injury, the new report also says the stimulus will hurt economic growth in the long run because of “the resulting increase in government debt.” Each dollar of additional debt, it reports, “crowds out about a third of a dollar’s worth of private domestic capital.”

In our view, even the CBO’s downgraded estimates are too high, because they’re still based entirely on Keynesian economic models that simply assume extra government spending results in added economic growth.

You don’t have to look very hard to see this isn’t what happened.

While Obama promised the massive stimulus would “ignite spending by businesses and consumers,” unleash “a new wave of innovation, activity and construction,” and keep unemployment under 8%, what we actually got was the worst recovery since the Great Depression.

[All emphasis ours – Political Arena Editor]

Of course we cannot forget how the government likes to define “Jobs”. It can include one day jobs and short term temps as jobs created as well. Littering can creates a “job” because someone has to pick it up.

Amity Schlaes: How the CBO Works & How it is Easily Manipulated

[Originally posted on my old college blog in April 2010, Newt Gingrich says that the CBO is next to useless and needs to go. It would seem that he is correct – Editor]

Amity Schlaes is perhaps the greatest living economic historian.

I like how Schlaes describes how the CBO works, they are asked to score what is placed in their box and that includes the assumptions they are asked to make in the request.

For example Ann Coulter once made the following analogy. If Congress proposed a new “green energy bill” that assumed that there was a car that ran on grass and got 1000 miles per gallon of grass the CBO would tell us that our dependency on foreign oil would drop significantly.

Bloomberg News Amity Schlaes:

The question is how can lawmakers get away with their misrepresentation? One answer lies in the structure of the Congressional Budget Office, the government’s official accountant. Its job is to establish an honest price: to tell legislators and voters what a policy will cost in the short, medium and long terms. That CBO work is important because Americans rightly sense that the politicians’ math is rigged.

Amity Shlaes
Amity Shlaes

“Nobody told me you were cheating.

Aww, it’s just a feeling I had.”

Flawed Assumptions

The CBO’s rules make it hard for the group to fulfill its own mandate. You’d think, for example, that the CBO would use its own parameters when it crunches numbers. Instead, the CBO must use the same mathematical assumptions supplied by the very lawmakers who wrote the bill the group is evaluating. No matter how improbable those formulas are.

Former CBO director Douglas Holtz-Eakin, writing in the New York Times, described the group’s process as “fantasy in, fantasy out.”

CBO rules often preclude common sense. Its forecasters can’t take into account any other legislation when studying the price tag of a proposed bill. That enabled the forecasters costing out House Speaker Nancy Pelosi’s bill to overlook this fact: Medicare spending increases will force tax increases, which in turn will hurt growth.

Political Salesmen

This dynamic is permitted because the answers the CBO supplies make it easier for politicians to sell their bills. They’re happy. And so, for the moment, are voters who are painfully aware that the U.S. federal budget can’t cover new entitlements, yet accept such legislation as a balm for that pain.

“So if I’m right, you got to lie to me

Then I won’t feel so bad.”

The CBO’s structural failure benefits the Democrats this week. Indeed, Pelosi is teaching Republicans something: the bigger the misrepresentation, the greater the credibility with voters. Croon to them a tune about entitlement, and they forget that you’re clearing a path for a tripling of the tax on dividends.

The CBO’s rules are bipartisan — they hold for whatever legislation lands in its in box. Congressman Paul Ryan, a Republican from Wisconsin, recently put forward a new blueprint for the federal budget. Ryan’s plan is less questionable than Pelosi’s because it’s relatively honest about costs. Ryan points out that the current unfunded part of the Medicare liability is in the trillions.

“The Forgotten Depression” and How Presidents Coolidge & Harding Turned America Around.

With Glenn Beck, Reagan Budget Advisor Art Laffer, and Chris Edwards from the CATO Institute.

This is very interesting. Why is it that the second biggest domestic economic depression on record is scrubbed from our history books, including many economic texts? What made the Roaring 20’s Roar? And what President’s enacted policy saw an even faster economic turn around than Reagan’s?

UPDATEHERE

In Honor of Calvin Coolidge, A Great President Few Remember.

The accomplishments of Calvin Coolidge are many and he was one of our greatest presidents. He helped lead the united states out of a depression caused in large part by the progressive policies of Woodrow Wilson, he helped to restore liberty and was the man largely responsible for making the “Roaring Twenties” roar. We featured him BEFORE. Coolidge’s accomplishments have been largely scrubbed from textbooks and he was the Reagan of his time.

Dr. Alan Snyder is professor of American history and chair of the Department of Historical, Legal, and Leadership Studies at Southeastern University in Lakeland, Florida.

Dr. Snyder:

Ronald Reagan admired him  a lot. In fact, when Reagan was looking over his new house—the White House—shortly after his inaugural in 1981, he entered into the Cabinet Room.

On the wall were portraits of Truman, Jefferson, and Lincoln. The White House curator commented at the time, “If you don’t like Mr. Truman, you can move Mr. Truman out.” Even though Reagan, a former Democrat, had voted for Truman back in 1948, he made his decision: Truman’s portrait was removed and one of Calvin Coolidge was dusted off and put in its place.

Nowadays, in all the “right” circles [to be found primarily among the academic elite], the person of Coolidge is a source of amusement, if not outright derision. Why, he was a do-nothing president, someone who didn’t use the power of the office as he should have. Probably his most grievous sin, in their view, was the way he put the brakes on destiny: he was a foe of the progressive movement that was intended to reshape American government and culture.

Coolidge, whose administration spanned a good part of the 1920s, was a throwback to an earlier time. He was not a Woodrow Wilson; rather, he believed in the vision of the Founding Fathers and their concept of limited government. He remained true to the principles of self-government and the sanctity of private property. The rule of law was paramount in his political philosophy. No one was above the law, a belief that, if followed, would keep the people safe from the power of an overextended government.

During the 1920s, the continent of Europe experimented with socialism. What might larger government be able to accomplish? What vistas await us once we unleash the full power of government intervention? Coolidge stood opposed to this false vision of the future.

Historians also like to make fun of his approach to speechmaking. Coolidge preferred to say as little as possible. As he once noted, he never got in trouble for things he didn’t say. Yet when he did speak, he made some very significant pronouncements. His words conveyed key ideas for American success. Meditate on this paragraph, for instance:

Calvin Coolidge

In a free republic a great government is the product of a great people. They will look to themselves rather than government for success. The destiny, the greatness of America lies around the hearthstone. If thrift and industry are taught there, and the example of self-sacrifice oft appears, if honor abide there, and high ideals, if there the building of fortune be subordinate to the building of character, America will live in security, rejoicing in an abundant prosperity and good government at home and in peace, respect, and confidence abroad. If these virtues be absent there is no power that can supply these blessings. Look well then to the hearthstone, therein all hope for America lies.

Notice Coolidge’s stress on what he called the “hearthstone,” which is a designation for the family. He saw the family as the cornerstone of  society, the place where character should be developed. Note also his subordination of financial fortune to the building of character. Fortune may come, but only if character comes first: thrift, industry, and honor—qualities in short supply at the moment.

America was prosperous during the Coolidge years. The Great Depression was just around the corner, but it didn’t occur as a result of Coolidge’s policies of tax cuts and economic liberty. The Depression was more a result of misdirection from the Federal Reserve [low cash reserves in banks; easy credit]; its continuation throughout the 1930s was due to government actions of the New Deal.

If there’s one thing most historians can agree on with Coolidge, it’s that he easily would have won reelection in 1928 had he chosen to run again. Yet he voluntarily stood down. Why? What prompted that decision? He tells us what led him to do so in his autobiography.

It is difficult for men in high office to avoid the malady of self-delusion. They are always surrounded by worshipers. They are constantly, and for the most part sincerely, assured of their greatness. They live in an artificial atmosphere of adulation and exultation which sooner or later impairs their judgment. They are in grave danger of becoming careless and arrogant.

Coolidge saw the problems associated with elected office. He knew that men often developed what might be called the “swelled-head syndrome.” He wanted nothing to do with that. If for no other reason, Coolidge should be honored for his willingness to set aside power and maintain his good character. Where are the politicians willing to do that today?

Coolidge’s thoughts on self-delusion mirror’s our critique of leftist academia and the political class that I stated my old college blog, “they pat each other on the back and tell each other how brilliant they are….and after all it MUST be true because all of these PhD. types tell them so. Invariably this environment brings you to a point where you start to believe it. You internalize it and eventually you stop challenging your own assumptions. The end result is an atrophied thinking process”. The result as I have been telling people who are willing to listen for several years is self-delusion.

Amity Shlaes: FDR, The Great Depression and the Record

You think you know what happened? Odds are you don’t. Amity Schleas is likely the greatest living economic historian. She is brilliant, funny, and also happens to be just darn adorable. I had a short conversion with her once  and she is very pleasant.

You will not regret watching this interview as you will come away far better informed.

More Schleas –

Book TV: After Words with Amity Shlaes: