A Citizen's Guide to Indiana

Masson's Blog

Median Income Fails to Rise for a Decade

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David Leonhardt reports on a Census Bureau Report indicating that “the typical American household made less money last year than the typical household made a full decade ago.”

Median household fell to $50,303 last year, from $52,163 in 2007. In 1998, median income was $51,295. All these numbers are adjusted for inflation.

In the four decades that the Census Bureau has been tracking household income, there has never before been a full decade in which median income failed to rise.
. . .
It’s a combination of two trends. One, economic growth in the current decade has been slower than in any decade since before World War II. Two, inequality has risen sharply, so much of the bounty from our growth has gone to a relatively small slice of the population.

Paying for health care with savings from waste

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Campaign season traditionally has a lot of promises from candidates about the things government will do for you if only that candidate is elected. When asked how this will be paid for, often politicians will tell you that it can be paid for by squeezing waste out of current government operations. See, e.g., Indianapolis mayor Ballard’s campaign against Bart Peterson – when he got there, somehow he couldn’t find all that waste. I’m picking Ballard, but he’s far, far from the only one. I suspect finding challengers who promise to pay for stuff by squeezing out waste is easier than finding challengers who do not.

So, when President Obama claims that he can pay for health care reform by squeezing waste out of the system, people are understandably skeptical. But, in this case, there is reason for hope. Unlike, say, President Bush proposing to go to war in Iraq for next to nothing; health care is already something we’re paying for.

We spend about $7,290 per person per year on health care (or possibly $7,439 per person). Compare this to about $3,000 to $3,500 in other industrialized democracies such as Japan, the UK, Australia, Sweden, Germany, Canada, and France. Back of the napkin math suggests, therefore, that at 300 million people, if we’re spending about $3,700 more per person than we need to — unless we’re willing to concede that we’re simply less capable than these other nations — that means there is $1.1 trillion in potential savings. Perhaps there are reasons why we can’t get our expenses down to $3,500 per person like the rest of the world seems to be able to do. Even so, it sure looks like there is an awful lot of room to maneuver here using the money we’re already spending.

Illusory Insurance

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I watched the President’s speech last night, and so I have health care on my mind. One important issue he touched on was insurance security. I’ve heard statistics bandied about that 80% of people are happy with their own insurers. What I haven’t seen is a break down of what segment of those people have actually had to rely on their insurer for coverage of something serious.

The scam, when it’s perpetrated, works something like this: the insurer collects premiums from the “insured” for a good long time. Then, when it’s time to pay up on the policy, the insurer either looks for loopholes in its policy not to cover the particular service or it digs into health insurance applications to find a pre-existing condition — whether related to the current health problem or not — and deny coverage on that basis. In either case, the insurance you were paying for is illusory. Another ploy is to keep demanding more and different paperwork until something gets missed, run out the clock for the “proper” submission of a claim, and then deny coverage on that basis.

A market doesn’t work when the benefits being sold are illusory — the consumer doesn’t know up front, before he or she gets sick, that one insurer is charging $400 per month for insurance that won’t actually pay for any big ticket items while the other is charging $500 per month for insurance that does. The second one is obviously the better value, but the consumer won’t know that until he or she is already sick and it’s too late to bargain for insurance.

One approach, it seems to me, would help in this regard is to require insurers to offer a basket of basic health insurance for a flat price in such a way that potential consumers could make an apples-to-apples comparison where it’s clear what is covered and what is not. They would have to offer this product to all comers or, at the least, they would have – say – 90 days to terminate contracts based on pre-existing conditions. This would combat abuses related to rescinding contracts only after the insured gets sick.

Rokita spends $110,000 to do someone else’s job

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If I had recently held a press conference telling the General Assembly how to do its redistricting job, people would have ignored me — and rightly so. You see, it’s not my job. If I had spent $110,000 of my firm’s money to generate redistricting maps, my law partner would have been pissed. You see, it’s not my job.

But, I am — to my great misfortune, I’m sure — not Todd Rokita. Secretary of State Rokita spent $60,000 in state money to have redistricting maps created and $50,000 on a website. (I think he got taken on the web site design – the site itself didn’t seem to be worth much, let alone $50k and, for what it’s worth, the first link I clicked on, was broken. “Server Error in ‘/’ Application.”)

Mr. Rokita says that he wants to keep politics out of redistricting. An admirable goal, at least in the abstract, but again, “not his job.” IC 4-5 sets forth the general duties of the Secretary of State, though specific duties must be assigned to the office by the General Assembly elsewhere in the Indiana Code, because under the general provisions, the Secretary of State is little more than a notary public and record keeper. This highlights Mr. Rokita’s main difficulty – he is coming to the end of his term and his assigned duties don’t allow him to do a great deal of note that will help him get elected to his next position, whatever it is he plans on running for.

Leadership in the General Assembly seems to agree that Mr. Rokita is doing someone else’s job:

“I don’t think it’s his business,” said Senate President Pro Tempore David Long, R-Fort Wayne. “The secretary of state has overstepped his bounds.”

“Our constitution says this is clearly a legislative function,” said House Minority Leader Brian Bosma, R-Indianapolis, “and not a function of the secretary of state’s office or any other administrative office.”

I’d be interested to see how the appropriations worked on Mr. Rokita’s project. $110,000 isn’t nothing. Lots of local governments would certainly like to have that amount of money floating around for discretionary projects.

Abdul – 5 years on the air

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Because Abdul is so shy, retiring, and reticent about self-promotion, I thought I’d give him a little congratulations on his 5 years on the air at WXNT and link to an Indy Star article about his accomplishment.

Politically, I disagree with him as often as not, but I can’t disagree with this bit of philosophy (from the Indy Star article):

Shabazz is a self-described fiscal conservative and social libertarian. He said he speaks from a “thoughtful conservative” point of view, tending to not be so polarizing.

“I prefer you like me because you like me.”

“It’s OK to disagree as long as we are civil to each other,” he said. “Just have a sense of humor, do your homework, be humane, and people have got no place (else) to go.”

Recalling Objections to Medicare

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Thomas Langhorne has an interesting article in the Evansville Courier Press interviewing a long time Evansville doctor on his opinions about the creation of Medicare. He was opposed to the socialized medicine it represented. In fact, many of his objections to Medicare then sound similar to the objections to a public health insurance option now.

One thing the doctor thought back then was that the health program shouldn’t be based on age, rather it should be based on indigency.

“Medicare helps people who need it, but it also helps people who don’t need it,” said Nicholson, now Vanderburgh County health officer. “If you were a millionaire, you were just as eligible for Medicare as if you didn’t have a penny in your pocket. It didn’t seem fair to me. I felt anyone who became medically indigent should be covered.”
. . .
Throughout the 1950s and early 1960s, the American Medical Association repeatedly mobilized to defeat a succession of bills aimed at establishing federal Medicare programs.

While early advocates proposed to address the catastrophic effects of large hospital and surgical bills for all the aged participating in the Social Security system regardless of income, opponents wanted to target aid based on need. They proposed comprehensive benefits to people for whom savings, private insurance, medical charity, or state and local aid were inadequate to meet health expenses.

My sense is that if whatever reform comes out of the health care debate is limited to the poor, it is doomed to failure. Nobody wants another entitlement for the poor. The program will come to be resented pretty quickly if it doesn’t benefit a broad swath of the population. It will then be starved for resources and, when for lack of resources it performs poorly, will be held up as an example of government not working. Rather, in my mind, the new program should use the premium dollars already being paid by the middle class to rationalize health care prices and deliver health care without the need to route those premium dollars through an insurance bureaucracy committed to denying as many claims as possible and maximizing return to insurance company shareholders.

Happy Labor Day

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What to do while celebrating labor by not working?

Read up on the life & times of Eugene V. Debs, labor activist from the great state of Indiana.

Or maybe just listen to some rockin’ tunes by the Dropkick Murphys, Worker’s Song, in particular:

U.S. Health Care & Performance Compared to Other Countries

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I copied this table from a Wikipedia entry. Hopefully the formatting isn’t too awful. In any case, two things I have heard frequently in the health care debate are “the U.S. has the best health care in the world,” and “Universal health care is too expensive.” Both propositions appear to be demonstrably false. The table compares Australia, France, Germany, Japan, Sweden, the UK, and the U.S. Compared to these other six countries, the U.S. spends far more on health care and fares worse on key indicators of the effectiveness of a country’s health care: infant mortality rates and life expectancy.

Country Life expectancy Infant mortality rate Physicians per 1000 people Nurses per 1000 people Per capita expenditure on health (USD) Healthcare costs as a percent of GDP % of government revenue spent on health % of health costs paid by government
Australia 81.1 4.7 2.8 9.7 2,999 8.8 17.7 67.0
Canada 80.4 5.4 2.1 8.8 3,678 10.1 16.7 70.0
France 80.9 4.0 3.4 7.6 3,449 11.1 14.2 79.7
Germany 79.8 3.8 3.5 9.8 3,371 10.6 17.6 77.0
Japan 82.4 2.8 2.1 9.3 2,474 8.2 16.8 82.7
Sweden 80.8 2.8 3.5 10.7 3,202 9.2 13.6 81.7
UK 79.1 5.0 2.5 11.9 2,760 8.4 15.8 87.0
US 77.8 6.9 2.4 10.5 7,290 16.0 18.5 46.0

The U.S. spends at least 2x per capita what these other countries do on health care. We spend 16% of our considerable GDP on health care. And, despite spending considerably more, we have the highest infant mortality rate of these countries — 6.9 per thousand versus less than half that in Japan & Sweden. We also have the lowest life expectancy of these countries as well — 77.8 years versus 82.4 in Japan and 81.1 in Australia.

We’re Americans. We’re supposed to be the most practical people on earth — not getting too wrapped up in pure theory or ideology; always looking for a way to build a better mouse trap. There is clear evidence that the system we have doesn’t work and that other systems work better. Why are we so attached to ours?

Life Isn’t All Serious

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It’s always tough to know how people perceive you, but sometimes I get the sense that I come off as somewhat serious on this blog — at least compared to my natural inclinations. Work and parenting have made me more of a dull boy than maybe I was in the past. But, in a lot of ways, I’m still a kid at heart. Anyway, it’s a holiday weekend, and in that spirit, here is some random non-serious Stuff That I Like:

Jokes. I like all kinds, stupid, filthy, offensive, whatever, but sometimes the cornier the better sometimes: A string walks into a bar. Bartender says, “we don’t serve your kind here, get out.” Undeterred, the string goes to a second bar. Same result, “we don’t serve strings here, get out!” So, the string decides some ingenuity is called for. He finds himself a nice rough tree, rubs his head and his feet against the bark, then he contorts himself and twists himself round and round. He goes into the third bar. The bartender looks at him skeptically for a moment, and asks gruffly, “you a string?” To which the string replies, “Nope, frayed knot.”

Movies. Again, I like all kinds. But my friends have marveled at my tolerance for craptacular movies and TV – especially in the “nerd makes good” genre. But some favorites I’ve probably listed before: Starship Troopers, Repo Man, Dodgeball: A True Underdog Story; Office Space; Road House; Young Guns; UHF; The Essential Cusack Trilogy: Better Off Dead, The Sure Thing, & Say Anything; Flash Gordon . . . the list goes on and on, I’m sure I’ve left out some great cheese.

Beer. I’m a big fan. In college it looked like maybe I was headed for a life of problem drinking. But, once I got a job, consumption reduced. Kids further reduced the consumption. Now, I’m a pretty tame drinker. Usually one or two at a time – the very occasional big binge when I get together with old friends. I like upper end beers and swill, don’t have much use for intermediate beers, I guess. It’s either Natural Light or Old Milwaukee on one end or Guinness, Three Floyds, or a craft beer on the other. The mid-range beers, maybe Beck’s or Heineken, don’t seem worth the bother.

Other random things that come to mind: grilling, really processed popcorn, dogs, golf, hiking, sleeping, video games, Eastern Indiana Pizza King, Skyline, sword & sorcery fantasy books, road trips, driving through the night, home made chex mix, Weird Al, roller coasters, back scratches.

The serious stuff enables life, but the random fun stuff is what you’re living for. What about you guys, what are life’s simple pleasures? In any case, here is to an enjoyable Labor Day weekend.