House Charges Rangel in Ethics Probe

It’s been almost a year when we advocated in this space that Congressman Rangel should step down after the lengthy list of allegations against him.  In March, a week after the ethics committee found him guilty of violating House rules for not disclosing a trip to the Caribbean that was paid for with corporate money, Mr. Rangel stepped down as chairman of the House Ways and Means Committee. Today, the House of Representatives working at a glacial pace finally got around to finishing  its investigation and charged Congressman Rangel with breaking Congressional rules.

The allegations against Mr. Rangel include:

** Keeping four rent stabilized apartments including one as an office when these apartments are meant for low and middle income residents.

** Intentionally failing to report assets which are speculated to be more than $500,000.

** Not reporting income from his Punta Cana residence and subsequently having to pay back taxes.

** Preserving a tax break for an oil company who donated to the Charles B. Rangel Center for Public Service at City College of New York.

It is time for Congressman Rangel to resign. It is ironic that the Democrats are eager to raise taxes but seem to have such an aversion to paying them. So much for Nancy Pelosi’s “draining the swamp.”

Congressman Rangel – It’s Time to Pay Your Taxes

Monday’s Wall Street Journal editorial section did an interesting piece on Charlie Rangel and his purportedly questionable understanding of the tax code. After reading the editorial, it became clear to me that he must be suffering from “taxation myopia.” Myopia is defined as an eyesight abnormality resulting from the eye’s faulty refractive ability; distant objects appear blurred. Clearly all the money the congressman has been making from the rental of his Dominican Republic villa must be hard to see. While I do not believe that “taxation myopia” is an official diagnosis supported by the American Medical Association or covered by insurance, especially a government funded plan, I am hopeful that the congressman will seek treatment for his ailment. I can recommend an excellent ophthalmologist if he is interested.

There are a number of politicians who routinely can be called hypocritical but, after reading this editorial, it is clear that Congressman Rangel is qualified to wear this moniker. His unbelievable chutzpah knows no bounds. The Chairman of the House Ways and Means Committee, as part of the House of Representatives, health care reform bill has come out and supported imposing a surtax on individuals with adjusted gross income of more than $280,000 a year. When asked about this surtax, Rangel said “it is the moral thing to do.” How are we supposed to take Rangel seriously and accept the pain of higher taxes when he  keeps four rent stabilized apartments in Manhattan for himself and his family (in addition to the one he kept an office in, which is in direct violation of rent control laws)? Does the congressman not realize there is an acute shortage of middle income housing in Manhattan and that he is hogging up apartments that could go to his more worthy constituents?

It has been reported that the House Ethics Committee is currently investigating Rangel on no fewer than six separate issues.  It is time for Chairman Rangel to recuse himself until a thorough investigation into his financial affairs is completed. Chairman Rangel has no standing to tell the American public and small business owners it is the moral thing to pay more taxes when it is alleged he has spent the last thirty years fudging his. It is impossible for any hard working taxpayer to take the congressman seriously when he can’t get his own tax returns in order.  So much for “a new kind of politics.”

Health Care Part 3 Tort Reform

Tort Reform

I would be remiss in this blueprint not to mention one surefire way to help reduce medical costs.  It is clear if we are going to reign in the cost of health care that we must implement nationwide tort reform. If President Obama is going to credible about reigning in health care costs, then we need to implement comprehensive tort reform and reduction of medical malpractice insurance. It is difficult for the President to argue that health care is inefficient in one breath and then argue that tort reform is not necessary. If the President is going to be credible on reigning in health care costs then he must show the country that he is willing to stand up to the trial lawyers for the greater good of the country. An example of rare government pragmatism on this issue is the GM bankruptcy case, where despite heavy lobbying the government did not carve out personal injury suits from the bankruptcy estate and left all suits to be paid from “Old GM” bankruptcy estate. Thirty states, including California and Texas, currently have some form of tort reform. According to the Wall Street Journal, although economists disagree about the exact burden of legal risk, some argue that it exceeds $100 billion a year.

Doctors are forced to practice defensive medicine and order additional tests in order to insulate themselves from the constant threat of lawsuit jackpots sought by patients. Malpractice lawsuits are exacerbating our health care issues by forcing doctors out of high risk professions and raising the costs for the provision of care. We suffer shortages of obstetricians and gynecologists because some doctors have to pay over $200,000 a year in malpractice insurance.  Even though trial lawyers are some of Obama’s biggest supporters, if he is serious about revamping health care, then he needs to implement tort reform. Although arguments have been made that tort reform, including caps on pain and suffering awards, severely impact the ability of poor and moderate income people to obtain counsel in malpractice cases, this is just not accurate. As the laws in California and Texas illustrate, it is possible to have a cap on pain and suffering and still have a mechanism for plaintiffs to have redress in the event of an injury. If the administration is asking all Americans to make sacrifices in order to provide universal health care, then individuals will need to live with a cap on pain and suffering awards to allow us as a country to reduce our health care costs.

I feel strongly that it is un-American to stifle the free market and impose government-run health insurance for its citizens. While I do believe that dealing with uninsured Americans is an important issue, it should not be addressed at the cost of rationing care, long waits to see a doctor and government bureaucrats deciding what treatments are appropriate. The problems of socialized medicine in Canada are well documented. Ironically, one of the fastest growing business in Canada is the establishment of private medical clinics. It is well known that in certain areas of Canada, local governments expect that its citizens will come to the United States to have procedures done.  While our American health care system may not be perfect, it is certainly far better than the other options out there and one that has served the American public well.

Healthcare Reform Plan Part 2

Catastrophic Care Insurance

Individuals who cannot or chose not to purchase a robust insurance plan could instead choose catastrophic care insurance. This insurance would cover required medical procedures performed in hospitals. It is precisely these major events that have caused uninsured individuals to file for bankruptcy. While policyholders would have to pay for their doctors’ visits, any major surgeries or illnesses that require hospitalization, would be covered by insurance. This option, which would be less than the statewide insurance pool plan, would enable those who cannot afford a full insurance plan to have protection against catastrophic events. It is my belief that multiple private insurance companies will be able and willing to provide this type of plan and thus enable individuals to purchase insurance on a pooled basis regardless of whether they are employed. Additionally, this can be an option provided by employers to their workers.

The one scenario when a public plan may be appropriate is in the event private insurers are unwilling to provide statewide catastrophic insurance, which I do not believe would be the case in light of the fact that this type of insurance currently exists in the market. While I am loath to see a government-run plan for a variety of reasons, including inefficiencies, wide-scale bureaucracy and challenges of implementation, I believe the following scenario could work if we do have a government-funded public option. Under my proposed government-funded plan, payments to doctors would be provided at the Medicare-approved rate. In the event that there are not enough physicians willing to participate or accept Medicare rates for this group of catastrophic care insureds, I propose the following.

The government should create a program to provide free medical education to doctors similar to what is currently offered to armed forces recruits. In return, doctors would have to work 4-6 years in hospitals or clinics that treat insureds that are members of a government run catastrophic plan or Medicaid. This program would serve multiple goals. One, it would ensure that there are enough trained medical professionals available to treat the government insured plan members and provide a greater pool of doctors to treat Medicaid patients. The costs of providing this care should be sharply reduced, because salaries for doctors during this four to six years of service would be commensurate with what doctors are paid during their required time in the armed forces after they graduate. This should dramatically reduce the amount of the cost of care as well as create a reliable source of practitioners to treat this patient base. By implementing this plan, the government would be able to ensure that there would be enough doctors to service a growing patient populace and control the cost of medical care provided to this group of patients.

The implementation of these two proposals should lead to more insurance options being available to individuals, small and large employers, and people with pre-existing conditions.  The benefit of this plan is that the costs of implementation are spread across the populace equally. Employers (both large and small), individuals and private health insurers will all contribute in a more equal fashion to help reduce costs. Small businesses gain by being able to provide insurance to their employees at a price in line with larger employers, individuals and freelancers will be able to purchase insurance not contingent on employment status and private insurers gain by not having to compete with a government funded entity.

Tomorrow:  Part 3 Tort Reform

How I solved the Healthcare Crisis at the Yankees-Mets Game Part 1

While my friend Darin and I were sitting out a rain delay at the new Yankee Stadium we got to talking about how the economy was much worse than most people thought (this was before Joe Biden made his “we misread how bad the economy was” comment). That led us to the crisis in health care. Darin, a lifelong Democrat (and worse, a Cowboys fan) wants health care solved now, now, now. I, on the other hand, think we should wait. We’ve got a serious recession, a trillion dollar deficit, and unemployment near 10 percent. Plus, the plan President Obama seems to favor is one that eventually will lead to a U.K.-style system rationing care (see WSJ editorial http://online.wsj.com/article/SB124692973435303415.html). There are numerous examples (Canada, Great Britain, Sweden and Massachusetts to name of a few) of long waits to see doctors and 6-12 month (or longer) waiting periods to have major procedures performed. I’m not willing to accept being denied care because some government bureaucrat thinks the cost of a certain drug or procedure is too high. I doubt you are, either.

But it looks like some version of health care ‘reform’ is going to come soon. So if the President and Congress are determined to do something (even if according to the Congressional Budget Office the latest House of Representatives plan would fail to contain costs and could rapidly accelerate health care spending), at least it should be something that has a chance of working. Here are my three proposals.

Statewide Private Insurance Pools

Small businesses and individuals have had well-chronicled difficulties  obtaining affordable medical insurance. Individuals and small business premiums can be 2-4 times the amount of premiums paid by larger companies. Some individuals, including those who have pre-existing conditions, have extremely limited options for obtaining insurance. My first proposal is to create statewide private insurance pools. In order for an insurer to provide medical policies in a state, the insurer would be required to provide a flat rate premium for any state resident that wants to purchase insurance. The fees may vary from city to city within a state, but the rate in a particular city must be available to all residents of that city. Pooling people statewide allows insurers to spread the risk amongst a broader populace and provides employers of various sizes access to medical coverage at a fixed price. The plan is analogous to looking at a state as one big employer and enables individuals and companies of various sizes to pool together to get one blended rate. The benefits are clear. This proposal would enable businesses of various sizes to provide their employees with insurance and would eliminate the challenges that small businesses have with obtaining insurance. Additionally, freelancers and self-employed individuals will no longer have to worry about paying exorbitant prices for individual insurance policies because they would pooled with other individuals from their state. People will no longer be constrained to an employer or have to worry about what to do for insurance when COBRA runs out. Insurance companies would continue to have a large pool of insureds to help offset those individuals who have pre-existing conditions. Multiple private insurers providing health insurance within each state would continue to compete against each other for customers.  Private insurers would be able to utilize actuarial tables and other pricing analysis to determine what rates to charge. Some might argue that private insurers may resist these changes. However, in light of the potential for a government funded plan as a competitor, it is a reasonable sacrifice for private insurers to make.

Tomorrow: Part 2 Catastrophic Care Insurance