Obamacare plan ignores what’s broken and breaks what works
Bloomberg News (TNS)
There’s good reason for Congress to remodel some aspects of Obamacare. More than half of people who get health coverage through the insurance exchanges have high out-of-pocket costs, for example; 1 in 10 say they’ve gone without medical care because of the expense.
Unfortunately, the congressional proposal getting attention at the moment — from Rep. Tom Price, R-Ga. — wouldn’t fix these problems. And it would do away with parts of the law that are working well.
The truth is, people are surprisingly happy with the coverage they’re buying on the exchanges, according to a recent survey from the Kaiser Family Foundation.
Price’s plan would undermine much of this success. It would close the state insurance exchanges and end income-adjusted subsidies. Policy buyers would still get help with the cost of their insurance, but it would come in the form of refundable tax credits, which would vary not by income but by age.
The expressed goal is simplicity. Under Obamacare, if you underestimate your income and thus receive an excessive subsidy, you have to return some portion of it.
But Price’s solution is to make the subsidies income-neutral. The reason Obamacare subsidies are complicated is so people can get affordable coverage, whatever their age, at the lowest government cost.
At the same time, Price’s plan would remove requirements that health plans cover hospital visits, emergency care, mental health and other essential services. The aim is to make insurance cheaper, but the effect would be to shift the full cost of those services onto those who need them.
Price’s bill would also end the most basic protection: That insurers provide coverage to people with preexisting conditions, without charging higher premiums. And it would do away with any limits on out-of-pocket payments.
By no means should Obamacare be considered a finished product. Any attempts to improve it, however, need to be careful to address real weaknesses, not imagined ones.
Executive compensation, ever higher, ever less justifiable
St. Louis Post-Dispatch (TNS)
By almost any measure, one of the least-successful movements of the past decade has been the effort to rein in executive pay. “Say on pay” laws haven’t worked. Tax reforms haven’t worked. Shame hasn’t worked.
The latest evidence can be found in studies of 2014 pay packages of executives of publicly traded firms done by Equilar, an executive compensation research firm, for the New York Times and the Associated Press. The Times reported that median pay for the 200 top-paid CEOs was $17.6 million, a growth of 21 percent in one year.
Pay raises fall off considerably below the top 200, though the CEOs will not have to apply for food stamps. The AP reported that the median for the heads of 338 firms in the Standard & Poor 500 that had filed 2014 proxy statements before April 30 was $10.6 million, up just $100,000 over the previous year.
Median gains are driven upward by extraordinary pay packages at the very top. No. 1 was David Zaslav of Discovery Communications, who took home $156.1 million in total compensation in 2014.
Indeed, 2014 was a good year to be in the entertainment business. Six of the top-paid CEOs ran TV, movie and cable companies. America’s Top Moguls used to make cars and steel and employ millions of people. Now they make reality shows that the unemployed can watch to kill time.
If there’s any good news, it’s that the CEOs in the Equilar-AP study earned a mere 205 times the average worker’s wage. Average wages have risen slightly, so the number is down from 257 in 2013, the AP calculated.
American workers have less because the bosses, and the shareholders they slavishly serve (the wealthiest 5 percent of Americans own 70 percent of stocks), have more.
All of this has been enabled by the takeover of American government by corporate America, made possible by campaign finance laws. When democracy becomes a plutocracy, this is what you get.
As the economy teetered toward collapse in 2008, there were calls to do something about this. Clinton-era tax reform already had failed, as firms learned to pay executives less in cash (which couldn’t be written off) and more in “performance pay” (stock options and grants) that remained deductible.
The Dodd-Frank Reform Act of 2010 contained provisions giving shareholders a “say on pay.” At least once every three years, shareholders get to vote on financial compensation packages for executives. For the most part shareholders have blithely endorsed the pay hikes.
And why not! What’s tens of millions of dollars in siphoned-off earnings among friends? Unless an executive drives the company into a ditch, they’re going to give him a raise.
Studies have shown that most executives’ talents are not irreplaceable. Very few of them can transfer their skills to another company. Like Major League Baseball slugger Albert Pujols, when a star’s price gets too high, it’s not a bad idea to let him walk.