Is anyone else sick of hearing about Governor Sanford's love life?

        

One of the nice things about democracy is that there is a kind of long run, collective sanity constraint. As Lincoln said: You can't fool all of the people all of the time.

Unfortunately when you have super majority requirements, as we have here in California, you don't have to.

You see not all Californians believe that you can get government services for free or live off the land in a state of rural idiocy. Its just that about a third of our fellow citizens here in the Golden State do and that is enough to make the rest of us suffer.

Kevin Fagan reports on one of these enclaves of Republicanism in today's SF Comical. That would be Modoc county:

Modoc has the highest Republican registration of any county in California, it unfailingly elects anti-tax Republicans to office, and the vote here against last month's ballot measure that would have raised a variety of taxes was one of the most lopsided in the state. And yet, per capita, Modoc County gets more state taxpayer dollars than all but one of California's 58 counties.

. . .

Most folks up here will tell you that no matter who is in office or what the big-city politicians do, the dearest wish of anyone living in Modoc is to be left alone - except for a little help for core needs like hospitals and schools.

Which little help would take the form of a net inflow of tax dollars in excess of $2,000 per person from the rest of the state. But the good people of Modoc county are sure that the state can balance its budget without cutting vital services which, they all acknowledge, would be a disaster:

In Modoc, the way it works is that if the cuts being proposed go through, near-catastrophe will reign, said County Administrative Officer Mark Charlton.

He said the entire road maintenance service would be closed except for snowplowing on a few main roads, the welfare-to-work CalWORKS program would be cut in half, many mental health patients would no longer be monitored and would relapse and wind up behind bars, and there would be fewer police patrols.

"You'll be able to translate these cuts into more accidents on the road, more people in jail, more people getting sick," Charlton said.

Their elected representative who is co chair of our budget committee wouldn't want that:

Assemblyman Jim Nielsen, R-Gerber (Tehama County), vice chairman of the Assembly budget committee, represents Modoc County. He said cutting social services is not what he has in mind when he talks about deficit reduction - it's chopping other things, such as regulatory oversight committees and government employees.

Although he and his fellow republicans have yet to come up with a budget that finds actual savings in these places. Maybe government employees should work for free?

Besides his country needs more money because it has so many handicaps to overcome:

He said health and road services cost more per capita in rural places like Modoc because they're remote and expensive to reach. So don't blame the sticks for consuming more funding per person, he said.

But sending our tax dollars - about $4,000 per person net contribution from the folks in the Bay Area - makes sense because our money buys so much out there in the sticks.

"There's no way you're going to have a booming county up there, so every penny we send counts," Nielsen said. "The funding there wouldn't buy (much) in San Francisco, but it goes a long way in Modoc."

Folk up in the northern wilds of California look back with nostalgia to the 1930's when people of the northern counties of California and the southern counties of Oregon started an independence movement. They called themselves The State of Jefferson and Wonks Anonymous imagines that there were a great many animated barroom discussions.

Really they just want to be left alone and Wonks Anonymous for one is prepared to let them alone. Please secede.

        

In a comment the charming and clever Kimberly asks how the new health plans will price basic health care out of the reach of most of us. It is a good question that requires some explanation.

In a discussion of the right size for health care co payments Wonks Anonymous recalls a doctor saying that a reasonable co pay would be about equal to the amount that the consumer usually spent to go out to dinner. Depending on the family this would start at $10 for some burgers and Happy Meals at McDonald's and might go up to $50 for a visit to sizzler of some such.

Doctors office visits for predeductible consumers range from $75 to $100, depending on the doctor, the area and the plan. Although executives and legislatures may find this hard to believe, this is equivalent to a seriously luxurious meal for two ordinary people. Either that or a night of really heavy drinking at a good bar.

So the individual consumer with a high deductible plan, who is already spending $5,000 to $6,000 per year on premiums, pays an additional $100 to see a doctor for any illness. This goes on until the consumer has spent $5,000. Median annual income is currently about $35,000. so the $11,000 spent for a high deductible health plan is serious money.

The idea of these plans is to prevent people from seeking medical care except when their symptoms become too serious to ignore. We are pricing ordinary medical care out of the reach of most people.

        

So could you please explain this:

Millionaires pay no tax on the interest payments that they make on the mortgages on their second homes. Movie stars get to deduct the interest on their condos in Aspen and Congresscritters can deduct the interest payments on their DC condos.

No one considers this a threat to free markets or lists the distortions in incentives it created as a possible cause of our recent bubble and crash.

But now everyone is getting really worked up by the problems supposedly caused by not taxing health benefits for janitors and nurses aides.

        

When we understand that the ultimate goal of the health insurance industry is to collect a substantial payment from every resident of the US without ever having to do anything for this money many other things become clear.

We should first note that great progress has already been made toward this goal. The most recent major breakthrough came with the increasing market share of catastrophic health plans. These plans are designed to pay only in the event of a catastrophe - a serious accident or illness - so all medical expenses up to a substantial deductible, $5,000 is standard, are paid by the consumer. Because less than 80% of all consumers have medical expenses greater than $5,000 per year, these plans pay nothing for the vast majority of the insured.

Unfortunately mandatory payments for insurance that provides most citizens with no benefits will be a tough sell, no matter how much it may contribute to the greater good.

We need a spoonful of sugar which would be the preventative benefit. While the new health insurance will price ordinary medical care out of the reach of most of us - and lower our disposable incomes by $6,000 or $7,000 per year - we will get something from it. That something would be free preventative care: free mammograms, free annual checkups, free blood tests and, if we are older than 50, free PSA tests for guys and free colonoscopies for all!

Wonks Anonymous hates to burst your bubble but he needs to point something out: The preventative benefit will only be available if you and your doctor have no reason to believe that you might actually have any of the conditions that you are being tested for. He knows this for a fact because we works in medical administration and administers these plans.

If, for example, a woman feels a lump in her breast, sees a doctor and has a mammogram, the visit and the mammogram are considered treatment for the lump, not prevention of breast cancer. If a person has no family history of colon cancer and no possible symptoms of colon cancer, free colonoscopies. If a person has a family history or some possible indication of colon cancer, full charge.

If you have diabetes then consultations and visits to help you to maintain your health and prevent you from getting sicker will not be covered by the preventative benefit. The same with checkups to see if your cancer is still in remission.

The preventative benefit gives healthy people with no signs of disease a certain number highly limited and restricted medical consultations each year. Because the last thing we want to do is pay for medical care for people who are sick.

        

Conflict makes many people feel uncomfortable and Wonks Anonymous feels a certain sympathy for these people. His sympathy does not, however, extend to the nonsensical non solutions that they frequently offer as a means to avoid conflict. For example in a letter - Marriage solution - in today's SF Comical Daniel G. Lester of Corte Madera wants the state to offer two types of marriage:

The marriage table needs to be turned 90 degrees. Instead of the focus on sexual orientation, there needs to be a minimal legal distinction between religious marriage (legal equivalent of domestic partnership) and fully state-sanctioned marriage (religious or not).

Wonks Anonymous presumes that the first type of marriage would not be open to same sex couples.

Daniel G. Lester really needs to get out more. The problem is not that gays cannot get religious sanctions for their marriages and the marriage rights movement is not about forcing churches to bless unions that they consider unholy. There are many congregations and whole denominations that accept and bless Gay Marriage.

Will these religious marriages, between people of the same sex, be recognized in Mr Lester's new law? Or will the state establish a restrictive list of "genuine" religious denominations and congregations that have to power to grant "religious" marriages?

        

As a public service to the rest of the country, who may well be disgusted with their own state governments, Wonks Anonymous would like to provide an update on the California budget crisis. Which crisis has gotten to the point where we may well be issuing IOUs as payment to our creditors.

And having vetoed partial measures, a set of major cuts that would have prevented this, our fearless Governator has called the Democratic leadership into his office to tell them his new demands for budget cuts and cuts in state employee pensions plus a 5% levy - not a tax because it does not have any impact on the rich - on Hospitals that provide care to people who have government health coverage.

All ideas that Schwarzenegger and his Republican friends have been trying to put into effect since he was first elected governor.

Meanwhile Carla Marinucci of the SF Comical provides us with this penetrating analysis of the reason for our budget crisis:

— Partisanship: California's gerrymanderedlegislative districts tend to protect incumbents and encourage morepolitical extremes - Republicans on the right and Democrats on the leftwith less incentive to reach out to the political middle, much lesscompromise at the Capitol.

Which would be right except that the California Democratic party is all about compromise. It has repeatedly proposed budgets with major cuts in all state services and payments, shown itself willing to borrow education funds to take us through the current crisis and so on and so forth.

The California Democratic party even added tax cuts for Hollywood and international corporations to the budget package this spring to please the Governor and Republicans.

Meanwhile the Republicans, who control slightly more than one third of the legislator, have simply refused to allow any more increases in taxes or fees. That would include a fee on oil extracted in the state similar to the fees that make Alaska such an example of good government. Instead they are just going through their wish list of government cuts or, even better, asserting that their are some cuts out there somewhere.

It is the experience of Wonks Anonymous that California Democrats have no incentive to please their constituents because they know they can be re-elected simply by being the lesser of two evils.

        

So Wonks Anonymous beloved mother-in-law has spent the past week at a Unitarian-Universalist convention in, of all places. Salt Lake City.

Inquiring minds would like to know if they dressed up in tie-dye and went from door to door preaching moral relativism and secular humanism to the Mormons?

        

The greatest blow we could strike against the rulers of Iran and Russia would be to bring down world oil prices. We cannot really do this by producing more oil in the US. We don't have the reserves. We really need to consume less oil.

The quickest way that we could do this as individuals is to drive less, drive smaller cars and maybe get hybrids.

So if the Republicans hate the governments of Iran and Russia why are they also against fuel economy standards and gas taxes and stuff like that? And why do they mock Prius driving liberals?

What part of supply and demand do they not understand? Who is paying them not to understand?

        

David Riemer and Alain Enthoven opining in today's NY Times would set us straight about what we will need to fix our health care system.

We do not need a public plan. We need 50 new government agencies:

Congress is already looking to create federal or state “exchanges” through which individuals could comparison shop for health insurance. Exchanges pool large numbers of people and give them access to various health care plans — so that individuals can enroll in the plan of their choice, and so that risks and administrative costs can be spread widely.

Which could have a significant advantage over our current broken system. If exchanges were able to force insurers to cover all at the same rate, regardless of their health status, people who need health insurance might actually be able to afford it and might not be refused coverage.

Of course the agencies will have no power to directly dictate the terms that insurers offer. That would be intrusive regulation of private enterprise. The agencies will need to bargain to get good deals. In order to do this they will need to have bargaining power. Which means that we might have to force employees and employers to participate:

First, the exchange would need to act on behalf of a critical mass of people — at least 20 percent of the insured population that does not already receive Medicaid or Medicare. Only a pool of this size could attract serious bids from insurers. To amass such a large purchasing pool, Congress might need to require that all government employees, or all employers with fewer than 100 employees, join the pool.

Now some of us might be a bit worried about being forced to buy our health insurance through a state insurance exchange or Health Help Agency as they are called in some legislation. We might reason with Professor Krugman that the bargaining power of such an agency would be limited if, as is the case in Arkansas, one company controlled 75% of the insurance market. We might even worry in here in California where there are really only four major players in the health insurance market.

We might also wonder about the influence of campaign contributions from the insurance industry on the staffing and decisions of the Health Help Agencies.

Not to worry. You see the insurance industry is not really the problem. We are. Health care and health insurance are expensive because consumers demand more health care and more health insurance than is really good for them. They have rebelled against care management by highly qualified insurance company actuaries. Now they balk at plans that take their premiums and only pay for care in the most extreme circumstances - only for one out of five consumers.

But, while the Health Help Agencies will be fairly weak in their dealings with the insurance industry, they will have real power to force consumers to change:

Second, the exchange would need to ensure that no subsidies for health insurance, whether provided by employers or the government (through the tax system), exceed the price submitted by the lowest-bidding qualified insurer and benefit package. All individuals in the pool would be free to join any insurer that submits a bid. But enrollees would have to pay out of pocket — and preferably with after-tax dollars — any amount above the price of the lowest-bidding plan.

No tax deduction or tax exemption, no collective bargaining to get a better plan, no help from the government at all. And if that does not work then I suppose that we will have to place a luxury tax on more costly health insurance.

So what will the lowest bidding health plan look like? Long ago in this space Wonks Anonymous ran series on how health Insurers compete to make profits. He concluded that modern health insurers use two mechanisms to lower their prices:

They lower plan quality by reducing the amount of actual medical care that a plan pays for. They refuse or limit certain treatments - the HMO dodge. They raise the co payment for services or, and this is most popular of late, they require consumers to pay a substantial deductible, say $5,000 for an individual, before they make any payments for services.

They avoid sick people, either by refusing them coverage or by discouraging them from applying for coverage. Healthy individuals are attracted to low quality, high out of pocket plans. They are insuring against a motorcycle accident, not trying to find a reasonable way to finance health care that they believe they will need. The rest of us hate plans like this.

We will note here that health insurers are staffed by actuaries accountants and various MBAs. They are absolutely unqualified to determine necessary care or to evaluate the quality of care.

This will insure that the lowest bidder is a high out of pocket, low service plan. This plan will present high barriers to early care for illnesses and serve to promote the full maturation of minor problems into full blown, life threatening conditions. And, since the amount of the deductible will often exceed the financial resources of a family, we can expect to see more health related bankruptcies.

But again no worries. The the major legislative vehicle for this glorious reform, the Wyden-Bennett Healthy Americans Act, insures that consumer payments for health insurance will be withheld from wages and that "personal responsibility payments" - which seem to include co payments and deductibles - will not be discharged in the event of bankruptcy.