Blog Search on 4C Media

Saturday, December 26, 2009

An Impossible Situation: Reid's Unhealthy Care

An Impossible Situation: Reid’s Unhealthy Care

Several leading legal scholars and professors of law have made the strong case that the US Senate’s version of “unhealthy care” legislation is not likely pass Constitutional challenges.     In essence, the legal argument is made that the proposed Health Care insurance mandates and excessive regulation coupled with “defacto price controls” on health insurance create a scheme in which the health insurance business is regulated like a public utility.    Given that perspective, in light of case law in the United States at the US Supreme Court level, it is likely that significant legal challenges will result based on the regulatory framework of Reid’s unhealthy care legislation. 

The combined impact of these interconnected provisions is clear: there is no feasible way that an insurance carrier can respond to the increased costs of servicing of its book of business either by declining coverage or by reducing services. With all escape hatches closed; the critical question is whether the health insurance issuer is in a position to raise rates in order to offset the risks in question. On this question, section 2794 introduces a complex system of de facto price controls that depends on the close cooperation of state and federal officials. The initial process that goes into effect in 2010 requires the Secretary and the states to develop a plan to look for “unreasonable increases” in charges for insurance coverage. At this point, all health-insurance issuers must submit to the state insurance commission authority “a justification for an unreasonable premium increase prior to the implementation of the increase.” (It is not stated as to how one justifies increases that are, by definition, unreasonable.) Thereafter, once the information has been submitted and evaluated, it appears that the state insurance commissioner shall make appropriate recommendations “to the State Exchange about whether particular health insurance issuers should be excluded from participation in the Exchange based on a pattern or practice of excessive or unjustified premium increases.” In effect, it appears that the State Exchanges can exclude health-insurance issuers from offering their plans through the Exchanges, at which point the subsidies to insurers will be lost.     Richard A. Epstein

Given the preceding argument by Mr. Epstein, he goes on to state why this conundrum for the health insurers combined with case law on the regulation of public utilities will set the stage for numerous legal challenges, of both the legislation and the administration by state and Federal agencies.     Simply, the complex scheme of “defacto price controls”, heavy regulation, government mandates and bureaucratic red tap found in the Reid bill that came out of the US Senate is likely not to pass the “reasonable person” or US Constitutional test.

There is, moreover, no quick fix that will eliminate the Reid Bill’s major constitutional defects. It would, of course, be a catastrophe if the Congress sought to put this program into place before its constitutionality was tested. Most ratemaking challenges are done on the strength of the record, and I see no reason why a court would let a health-insurance company be driven into bankruptcy before it could present its case that the mixture of regulations and subsidies makes it impossible to earn a reasonable return on its capital. At the very least, therefore, there are massive problems of delayed implementation that will plague any health- care legislation from the date of its passage. I should add that the many broad delegations to key administrative officials will themselves give rise to major delays and additional challenges on statutory or constitutional grounds.   Richard A. Epstein

Excerpt from Article: Impermissible Ratemaking in Health-Insurance Reform: Why the Reid Bill is Unconstitutional   By Richard A. Epstein  Manhattan Institute, NY

Richard A. Epstein is the James Parker Hall Distinguished Service Professor of Law at the University of Chicago, the Peter and Kirstin Bedford Senior Fellow at the Hoover Institution, a visiting professor at the NYU Law School, and a visiting scholar at the Manhattan Institute.

Tuesday, December 22, 2009

Health Care Bill a New Low

Health Care Bill an Historic Low for Public Policy in US
The leader of the Democrats in the Senate, Harry Reid is up against former president James Madison.  The Founding Fathers purposely designed government to be responsive to the people (for the people, by the people and of the people).  So when the liberal elite in Congress thought that had a mandate, and threw bipartisanship and GOP involvement out the window, they decided to go “all in with their leader” on health care legislation.   Now the wheels are about to come off, as the unwieldy Senate bill is simply a lousy bill, which lacks public support and confidence.     
Here is Rich Lowry’s take, from National Review Online:
It's astonishing that with 60 votes in the Senate and an 81-vote majority in the House, Democrats have still managed to push the health bill to the point of failure. When significant headwinds developed in August, the prudent play was obvious - scale the bill back, pick off a few Republicans, and settle for three-fourths or less of a loaf. They couldn't bring themselves to do it, preferring to work with duct tape and baling wire to try to hold together an unwieldy bill that isn't paid for and doesn't reduce costs as advertised.
Reid's struggle getting to 60 makes some liberals fear for their country. They lament that America has become "ungovernable." In other words, it isn't putty in their grasping little hands. Unfortunately for them, the founders created a balky system resistant to precipitate change. It is designed to frustrate ideologically drunken (and perhaps temporary) majorities insistent on passing sweeping, unpopular legislation. Reid's difficulty is exactly the way James Madison would have wanted it.
If the health-care bill is necessary and wise, it will withstand a temporary defeat. Democrats could campaign on it around the country next year. They could rebuild public support, turning around the polls. They could enhance their majority in the House and the Senate, bringing more Democrats to Washington determined to pass it. That's how you usually pass historic legislation in a system naturally inclined to the status quo.
But Reid knows long-term persuasion isn't an option. As his approval rating sags below 40 percent back in Nevada, even he might not be returning to Washington after 2010. Every day, every hour matters in the now-or-never calculus of Democrats who already feel their moment slipping agonizingly away.
Rich Lowry is the editor of National Review. 

In a recent Detroit News Opinion piece , Republican Senate Leader Mitch McConnell lays out the Democrat ‘cram it down the throats’ approach like this: 

Many Americans are just as frustrated with the process as they are with the substance of this debate. In January, the president outlined a path to reform that would involve "not negotiating behind closed doors, but bringing all parties together, and broadcasting those negotiations on C-SPAN ..." Yet that particular pledge seems almost quaint after weeks of closed-door negotiations and a flurry of back-room deals by Democrats aimed at pushing their bill through by Christmas.
Throughout this debate, Republicans have pushed for common sense reforms that would lower costs without raising taxes, premiums, or increasing the federal debt. After all, reform should alleviate existing problems, not spread them. That's the message Americans have been sending all year. Democrats either haven't been listening, or they didn't think people would notice if they took the debate in a different direction. Whatever the reason, a growing number of Americans are demanding that we stop this bill, start over, and get it right. The bill we have simply can't be fixed.
Faced with a bill that does none of the things they said it would, the White House is left with nothing but an empty call for senators to "make history." Americans have a different message for wavering Democrats: Passing this bill would be an historic mistake.
Sen. Mitch McConnell, R-Ky., is the U.S. Senate Republican leader.

So we hear that US Senator Ben Nelson, D-Nebraska, is the 60th vote for a controversial health care bill, that Americans oppose 2 to 1 in recent polling.   Why is there lack of support by the Amercian people?   The legislative process was not open, despite Democrat promises to the contrary.   The health care bill is simply too complex, too costly to taxpayers, too much like socialized medicine that the American people do not support.   

Now the US Senate votes on health care legislation depend on whether the Democrats Senators show up, are able to vote (US Senator Byrd’s health issues may preclude him from voting) and if they’ll keep their individual deals with the Democrat Leader Reid (such as Nelson, and other wavering Senators).  Meanwhile the Republicans are simple not supporting a bill the American people are opposed to by a 2 to 1 margin.  A Christmas gift?   No bill and a chance for the American people to get what they are wishing for:  That is true health care that works, is affordable, is responsible and honors the doctor & patient relationship.   And maybe even a bill that is truly bipartisan, rather that dictated by one party rule.

© 2009, Jasper Welch, Four Corners Media,  

Monday, December 7, 2009

Real Jobs or Real Wishes?

Real Jobs or Real Wishes?
Recently the White House sponsored a PR Summit (officially known as the Jobs Summit).  Other than talking heads, who were there to defend old economy jobs and look good, not much happened other that PR photo ops for those in attendance.    Micheal Malone of Edgelings (a Silicon Valley business writer, and ABC News contributor) summed up the meeting in the following copy:
The White House Jobs Summit is underway.  And in case you have any hope for it actually helping produce real jobs, keep in mind two things.
First, it is billed as a “listening” event by the Administration – and everybody knows what that word really means:  We’ll pretend to listen in order to shut everybody up, then we’ll do exactly what we planned all along.
Second, the invite list is mostly representatives from academia and think tanks, Big Labor and Big Business . . . in other words, three groups of people who know almost nothing about how to actually create, rather than merely preserve, jobs.
In other words, if you’re on line at the employment office right now, and you’re hoping that the Jobs Summit is actually going to help you get, you know, a job, you’d better keep filling out that form in front of you.
Some of the recommendations to create jobs (from Michael Malone’s “Edgelings”, contained in the article:  “PR Summit”, a pithy article to describe the high profile, limited results “Jobs Summit” held on Thursday December 3, 2009 at the White House):
1)    No More Stimulus (a waste of the taxpayers money)
2)    Stop Favoring Unions (20th Century hold over, that needs to compete, not have union favoring rules in a new economy)
3)    De-regulate & cut taxes  (Over regulation & higher taxes saps productivity, discourages business start-ups, impedes creativity and job creation)
4)    Invest in the future, not the past  (best strategy is job creation, not company preservation)
5)    Embrace the revolution (The world is changing. The last practices of big labor, big government, too big to fail, make-work jobs to boost economy aren’t working.  Move on to company creating, job creating & pro-business policies)
For one thing, companies are going to be faster moving and will, thanks to the Web, increasingly compete on a global stage.  And, in part because of this, jobs are going to become more fluid, less-often permanent, and workers themselves will become more like freelancers, contractors and entrepreneurs.  They will need access to vast stores of on-line training and education, portable health insurance, access to business and career support, new sources of capital, and most of all, not be punished (by law or taxes) for their growing independence.

For a decade's worth of Edgelings' editor-in-chief Michael S. Malone's columns on technology, society and culture, please visit is a news and features website founded by a team of prominent Silicon Valley media and technology executives.  Providing constantly updated news, reviews and commentary from technology regions around the globe, Edgelings provides easily accessible views on high tech culture, lifestyles and celebrities, including bleeding-edge profiles of new companies, gadgets and business trends.  

Thursday, December 3, 2009

Climate Research Change

Climate Research Change

The biggest news in the climate change world is the ongoing drop in public support for shoddy “climate change research” and rise in temperature for the climate researchers as their work is placed under the bright lights of the media, global warming critics and on-line bloggers. Based on media reports (see WSJ article below), British researcher Phil Jones is stepping down from his post as director of the Climate Research Unit (CRU) at East Anglia University (UK).

As reported in the Wall Street Journal on December 2, 2009
On Tuesday, Dr. Jones said the East Anglia institute couldn't continue to do its work with him as its director amid the controversy. "What is most important is that CRU continues its world leading research with as little interruption and diversion as possible," he said in the statement. "After a good deal of consideration," he wrote, he decided to step down from the director's job pending the investigation.

The East Anglia institute that Dr. Jones headed has become a key player in building evidence for the U.N.'s argument that humans are behind global warming. In statements released by the institute in recent days, Dr. Jones has defended the integrity of the institute's scientific work, while saying that he and his colleagues "accept that some of the published emails do not read well."

Longtime critics of the premise that humans are responsible for climate change cheered word of the move by Dr. Jones and the inquiry into Dr. Mann. "I think we're making headway," said Oklahoma's James Inhofe, the senior Republican on the Senate Environment and Public Works Committee. Sen. James Inhofe, a critic of the belief that global warming is man-made.

On Tuesday, Mr. Inhofe sent a letter to the chairwoman of the Senate Environment and Public Works Committee, Barbara Boxer (D., Calif.) that called for hearings on whether any U.S. laws were broken by the scientists or "any taxpayer-funded research deliberately obscured or manipulated." A spokesman for Ms. Boxer didn't immediately respond to a request for comment.
In the meantime, Democratic Senator Barbara Boxer, in response to Republican Senator James Inhofe’s call for US Senate hearings into Climategate, and what role US researcher may have played in the debate and implications of the hacked/leaked e-mails. How much of the proposed public policy is based on “junk science”? Where does the global warming advocacy ignore the scientific record? Or is global cooling really the issue?

You call it ‘Climategate’; I call it ‘E-mail-theft-gate,’” she said during a US Senate committee meeting. “Whatever it is, the main issue is, Are we facing global warming or are we not? I’m looking at these e-mails that, even though they were stolen, are now out in the public.” Senator Barbara Boxer, D-California

So the climate change research is changing, perhaps warming, perhaps cooling, but certainly getting more global attention as scientific evidence and methods have come into question. Why does this matter? Later in December 2009, the international meeting on climate will be held in Copenhagen. And the US Senate is poised to debate a US energy policy, along with “Cap & Trade” legislation. At best, there are honest differences of opinion on whether we are experiencing global warming or global cooling (one of many factors in this debate)? At worst, we are being duped by mad scientists from the CRU and other “research institutes” whose political agenda has overwhelmed their scientific methods. And politicians in the US, Europe and Asia are debating climate change policy against a backdrop of “junk science” and “on demand science”, that may or may not support the public policy that is being discussed. Maybe it is time to pull the plug on various schemes, step back, take a breath, and refocus on good science and economically sustainable climate polices? But that is much too logical!

© 2009, Jasper Welch, Four Corners Media,