The Graham-Cassidy Scam
The Market Ticker - Commentary on The Capital Markets
2017-09-25 07:00 by Karl Denninger
in Health Reform , 274 references Ignore this thread
The Graham-Cassidy Scam
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It appears that Graham-Cassidy, the latest "repeal and replace" load of nonsense out of the Republican Party, is doomed.

The option to pass such "one party only" supported bills expires on September 30th in the Senate.  That's when the reconciliation option runs out, at which point standard rules in the Senate apply -- if there is a filibuster you need 60 votes to proceed, and obviously you won't get them without at least some people crossing the aisle.

Graham-Cassidy, in summary, would take Medicaid and turn it into a block grant -- in other words, a pile of cash to the states to allocate for health care however they wish.  It does a handful of other things as well, including getting rid of the individual mandate, but the 900lb gorilla in the china shop is the block grant change.

This will do several bad things, and leaves open one potential good thing, which is why the bill is doomed.

The "bad things" include institutionalizing ridiculous health care spending on Medicaid.  We currently blow crazy amounts of money on that program, and on health care generally. Turning it into a block grant simply moves the problem.

But it is in fact that moving of the problem that really scares people.

You see with block grants the money is the States' to do with pretty-much as they wish.  If they can provide a much better program for indigent people for less money then they get to pocket the rest of the cash, and it's not a small amount of cash either!

This, in the end, is why it will not be passed -- it would take just one state to decide to start enforcing anti-trust law or conditioning business licenses on posted prices and non-discriminatory billing and the entire house of cards that comprises the medical scam would come crashing down instantly.

Right now the states have little or no fiscal reason to do so when it comes to these two programs.  They do have a reason to do it when it comes to their pension costs, but they can (and are trying!) to evade that decision by instead screwing the pensioners.

But if you take the billions that a state gets for Medicaid, turn it into a block grant, and the state can keep whatever it doesn't need once it serves all its residents then there suddenly is a very powerful incentive to crash the cost of medical care in that state by 50-80%.

Simply conditioning business licenses and tax registrations at the state level on open, published and non-discriminatory pricing becomes an extremely powerful fiscal tool that would lead to billions of federal dollars that could be spent on whatever a state wanted once its Medicaid recipients are taken care of.

There's a non-zero chance one or more states would do exactly that -- which cannot be allowed to happen, because if it does happen with one state it will spread fast to all of them as the business incentive to locate a company in that state will become overwhelming and any state that does not go along will be economically eviscerated within just a few short years.

And that, my friends, is why this bill is doomed -- and so are you.

Your only defense is to not need "health care" at all and then to reduce your income to a level sufficient to become immune to the fines and Obamacare "forced payments" by using the maximum subsidy to buy whatever "policy" you can get for a near-zero cost.  In doing so you withdraw consent from the health care scam and it's perfectly legal to do so.  If you need actual care then get on a plane, bus, train or in a car and cross a border, accepting that if the option to do doesn't exist due to exigent circumstance you'll take the alternative (which might well be death) instead.  What you actually wind up "buying" (for free, incidentally; this costs me about 50 cents a month to do) is a catastrophic policy in that it has a very high deductible but if you get in a nasty car wreck or have some other immediate and horrible incident you can finance the deductible and it will cover the rest, and since it costs you personally an effective zero dollars it all works out.  The only trick in a non-Medicaid expansion state is that you have to "make" about $15 large to access this; if you are under that then you run "naked" with no insurance at all (since you can't get on Medicaid without under-18 children.)

I'm not making $100 large+ a year when the government demands I turn over 15% of it pre-tax so I can pay some drug addicted and/or ridiculously obese person's health care bill, then pay taxes on the rest on top of it.  That's simply not going to happen since I have to work 5x as hard as I do now but have an effective tax rate of more than 50% all-in, so I wind up with less than twice as much at the end of the day but work five times as hard to achieve it.  By taking this approach not only do I not pay for the worthless "insurance" I also pay a near-zero effective income tax rate as well.

In short if the government won't stop stealing and you don't have the stomach for an actual fight then **** 'em -- stop working to the extent you need to in order to not pay, fix your health through lifestyle and withdraw from their game, giving 'em all a big fat middle finger.

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