Your Tax Dollars Not at Work

Trump Maladministration

A couple of stories that explain different parts of the same phenomenon: First, we read at the New York Times that companies are not spending the Trump tax cuts in ways that will help their employees, or the economy.

President Trump promised that his tax cut would encourage companies to invest in factories, workers and wages, setting off a spending spree that would reinvigorate the American economy.

Companies have announced plans for some of those investments. But so far, companies are using much of the money for something with a more narrow benefit: buying their own shares.

Those so-called buybacks are good for shareholders, including the senior executives who tend to be big owners of their companies’ stock. A company purchasing its own shares is a time-tested way to bolster its stock price.

But the purchases can come at the expense of investments in things like hiring, research and development and building new plants — the sort of investments that directly help the overall economy. The buybacks are also most likely to worsen economic inequality because the benefits of stocks purchases flow disproportionately to the richest Americans.

Like nobody saw that coming, huh? The other story, at the Los Angeles Times, is about how Trump’s “reforms” to the Affordable Care Act are costing us more in tax dollars while insuring fewer people. Michael Hiltzik writes,

Those fiscal geniuses in the White House and Republican-controlled Congress have managed to do the impossible: Their sabotage of the Affordable Care Act will lead to 6.4 million fewer Americans with health insurance, while the federal bill for coverage rises by some $33 billion per year.

Also, by the way, premiums in the individual market will rise by an average of more than 18%.

Heck of a job.

 I’ve said it before, and I’ll say it again — to Republicans, the purpose of a health care system is to maintain a profitable health care industry. If the Free Market (blessed be It) can’t accomplish that alone, then government will prop it up so that industry CEOs can continue to make more money than God. If, along the way, some people actually receive health care, that’s considered acceptable if it doesn’t eat too much into profits. Perhaps they can write it off as public relations, or something.

One of the Trump “reforms” driving up cost are short-term policies.

 Expansion of short-term non-compliant policies: 2.5 million more Americans without minimum essential coverage. Short-term policies, which were limited under the Obama administration to three months maximum and no renewals, would be expanded under Trump to last up to a year. Under the law, short-term policies don’t count as real Obamacare insurance.

But that’s okay, because the individual mandate has been de-fanged. There’s no penalty for not having pliant insurance any more.

The mechanism by which the GOP policies will crater the individual insurance market isn’t hard to understand. Both major initiatives — eliminating the individual mandate and offering bare-bones policies — siphon younger, healthier consumers out of the individual market. …

…The economically rational response for the healthy in that segment would be to pay $100 or less a month in premiums and barely use any services over the course of the year. The danger, of course, is that anyone can get hit by a bus or find themselves holding an unexpected cancer diagnoses. Then they’re screwed.

Catherine Rampell writes more about this at WaPo:

…next year there will be about 9 million fewer Americans with real health insurance coverage than would have been the case had pre-Trump policies stayed in place, according to a report released Monday by the Urban Institute.

By “real health insurance,” I mean plans that actually cover things — as opposed to plans that just take your money and then, legally, pay few if any claims. (These are sometimes nicknamed “buffalo plans,” because they pay out pretty much only if you get run over by a herd of buffalo.) …

…They don’t, for example, have to be issued to people with preexisting conditions. There also are no federal requirements for what kinds of care they have to cover, or how much of it. If these plans want to take your premium money and then never pay out a dime on prescription drugs or cancer treatments, under federal law, they don’t have to.

And the data show they often don’t, which is why this is such a lucrative business to be in.

If, as expected, younger and healthier people drop “real health insurance” for these scam plans, that would leave a higher concentration of older and sicker people in the regular insurance pool, which of course is expected to drive up premiums a whole lot more. And when premiums go up, taxpayer subsidies have to go up as well. So, fewer people covered, higher government cost.

Of course, the next step will be to get rid of the subsidies. That’s right after they “privatize” Medicare.

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6 Comments

6 Comments

  1. grannyeagle  •  Feb 27, 2018 @2:43 pm

    I realize I'm old and my wishes to go back to the good ol' days are unrealistic.  However, what we have today isn't working. I am fortunate in that I have Medicare and it is sufficient for me.  It is not an entitlement as some people think as I do pay a premium each month.  Other  countries seem to have worked out a system that works well for them and is not as expensive as ours.  What is wrong?  I can only conclude it is greed on the part of big pharma, insurance companies and who knows who else.  I am depressed but I'm told my doctor has a pill for that.

  2. csm  •  Feb 27, 2018 @4:35 pm

    What the republicans ended up accomplishing is actually a feature and not a bug.  It generates more revenue for the health care industry, opens up "business opportunities" for scammers with those short term plans, it raises cost to the government but then that gives an excuse to take more from programs that helps the poors.  It's perfect!

  3. Doug  •  Feb 27, 2018 @6:32 pm

    There is the risk of the "death spiral" as medical insurance becomes more and more expensive driving out of the market those who would buy insurance as a precaution leaving only the most desperately ill left to pay premiums before the system completely collapses.  Even the medical insurance industry recognizes this model. The insurance companies bought into Obamacare despite some limits because broad participation, even with pre-existing conditions, stabilized the insurance market long-term. 

    I'm not predicting the end of the world in the next year or even three years, but the more power we give the free-market fairy in insurance, the sooner the end will come.

  4. c u n d gulag  •  Feb 27, 2018 @11:07 pm

    Every day under Republican "leadership" can be summarized by the following acronym:

    SS/DD – BWEDWTTL

    (Same Shit/Different Day – But With Every Day Worse Than The Last!).

      

  5. grannyeagle  •  Feb 27, 2018 @11:18 pm

    I think Gulag has got it summarized pretty well.

  6. Bill  •  Feb 28, 2018 @1:18 pm

    My once beloved big city clinic turned to the dark side, with their current medical business model being one of pure money extraction.  First visits now frequently require second visits with their own specialists, then more visits for treating issues which back in more honest capitalistic times, were successfully diagnosed and treated the very first time.  My neighbor paid $12K for basically, morphine and 5 hours in a fancy high tech room, with no diagnosis.  Later, he visited a small town clinic in a different region and got full diagnosis and resolution for the very same issue, for $900.  Later, that big city clinic underwent a scandal related to price gouging surgeons. 

    I might have minded less, if it was easy public knowledge that the big city clinic was suffering from a major systemic illness of the corruption kind, and that patients needed to go to the small town clinic instead for real and honest treatment.  I thought that was how our capitalistic system was supposed to work, that money flowing to value benefits us all.  People need to speak out.