What the Affordable Care Act Gets Wrong

Poor form to be contrarian following a week liberals can’t stop celebrating, but count your blessings I’m done writing about golf. For now at least. I always reserve my right to tap my inner Alan Shipnuck.

Thursday night near the end of another spirited training ride. Soft spinning on North Street, two friends and I head for home. One is a well-to-do 59 year old who just retired. His very nice lake home is paid for and he and his wife just returned from another trip to Europe. Euro vacations aside, as his threadbare cycling gloves illustrate, he’s actually on the frugal side. He says he can afford the vacations because of the gloves. Decades of having made very good money no doubt help too.

“You’ll never guess what medical plan I’ve signed up for,” he says. “No clue,” I replied. “Medicaid!” “Wait, you’re 65?!” “No, I’m 59, that’s Medicare. I was surprised to learn I qualify for Medicaid because I have no income now.”

Quick google search. Medicaid is “a U.S. government program, financed by federal, state, and local funds, of hospitalization and medical insurance for persons of all ages within certain income limits.”

I was stunned. He told me a person can make about $20k/year and still qualify for Medicaid. He hardly has any capital gains because he hasn’t sold any assets for a long time. Apart from his international vacations, I’m guessing his expenses are minimal and he’s living off of savings that he previously set aside. I’m not sure how he’s sheltered his wife’s income.

Then he tells me the adult son of a mutual cycling friend is also getting “free” Medicaid despite the fact that he has a very large trust fund that must consist of tax-free municipal bonds.

Undoubtedly, if my friends are doing this, so are other high wealth/low income people. Especially those whose income stems largely from tax-free municipal bonds. Why isn’t anyone writing about this gigantic loophole and what we should do to close it?

More generally, why does the Affordable Care Act (ACA) use income as it’s sole reference point instead of some combination of income and wealth? The same can be asked about the IRS and college financial aid offices. When it comes to health care premiums, college financial aid, and taxes more generally, it’s far better to be wealthy than to have lots of income. Just ask Mitt Romney. My guess is, and I’d love a more tax savvy reader to enlighten us on this, IRS agents, ACA bureaucrats, and college financial aid officials are unable to determine people’s total wealth with any certainty.

Why not ballpark it though I wonder. If the government knew my friend owned his home outright, would it compromise his Second Amendment rights to privacy? How do we balance well-to-do people’s right to privacy with public policies that, through subsidies, take from those of modest wealth and give to those with considerably more?

Self Sabotage

It’s 9:30a.m. Here are some of the decisions I’ve made today, January 2, 2013:

  • I decided to wake up at 5:22 a.m.
  • I decided to put on running pants and two thin, long-sleeve running shirts since Weatherbug was reporting -1 degrees C at the nearby elementary school (0 C and higher=shorts). Plus medium gloves, hat, reflective vest, headlamp.
  • At 5:44 a.m. I decided to walk outside into the pitch black fog.
  • At 5:45 a.m. I decided to run 6+ miles with the Right Wing Nutter and Dan, Dan, the Transportation Man (inexplicably, the PrinciPAL is still in Hawaii). I decided to take the posse around Safeway via North and Eskridge.
  • After some curbside chitchat, at 6:42 a.m., I decided to remove my sweaty running clothes and walked almost naked (still had my socks on) the length of the house to my bedroom where I put on dry running shorts and a dry t-shirt.
  • Upon returning to the kitchen, I decided to eat a banana with peanut butter after which I filled up a water bottle—half orange juice, half water.
  • At 6:58 a.m. I decided to spin 26k (213 watts, 1:01:25) while watching a combination of the Dan Patrick Show, CNN, MSNBC, and ESPN.
  • At 8:05 a.m. I decided to do 60 push ups broken up with some foam roller goodness, planking, and stretching.
  • At 8:30 a.m. I decided to have a large bowl of oatmeal with raisons, brown sugar, butter, and molasses.
  • I decided to skim the Wall Street Journal while eating.
  • For desert, I decided to have one of those new-fangled smallish oranges that darn near unpeel themselves.
  • Shortly before 9 a.m., I decided to shower.
  • Shortly after 9 a.m., I decided to put on long underwear, thus outsmarting Old Man Winter; plus wool socks (important to do that before the long underwear), pants; a t-shirt; and my ace, moth eaten, expedition weight thermal top.
  • Around 9:10 a.m., I decided to go upstairs to my desk where I checked on the stock market rally and chuckled at the Lakers’ boxscore.
  • After aimlessly surfing the internet for fifteen minutes, I decided to reply to a few emails and start Thursday’s blog post, tentatively titled “Self Sabotage”.

A friend of mine has high blood pressure, but that doesn’t stop him from obsessing about things over which he has very little control. A conservative Republican who is sympathetic to the Tea Party, he went darn near silent after the election, depressed by what he sees as a “serious loss of freedom”.

Determining the most appropriate size of the government is an important and legitimate debate, and I understand that 48% or so of U.S. citizens wants to reduce it, but my friend, who has no international frame of reference, lets things like Obamacare, gun control proposals, Bloomberg’s proposed soda regulation, helmet laws, and the unemployment benefits extension get him seriously down. Oddly, he takes each of those proposals and policies personally.

As a result, he completely slights the freedom he does have to make hundreds of decisions every day—ones that directly influence his health and well being—like how much sleep to get, when and how to exercise, and what to eat and drink. That all important trifecta—sleep, exercise, and diet—probably account for at least half of a person’s health and happiness.

But I’m losing the argument. He seems determined to let distant politicians get him down. Ironically, in losing, I’m illustrating another daily freedom he routinely overlooks—the freedom to tune others out.

How to Reign in Health Costs—Build Sidewalks and Bike Lanes

If I promised to give you two dollars five years from today, for one dollar right now, would you give me the dollar? What if I promised to give you twice as much of a much larger sum right now? Could you scrape together the funds and muster up the self-discipline to wait for your return? What about your family and friends?

Great article by Mike Maciag in “Governing the State’s and Localities”. Thanks to “Dan Dan the Transpo Man” for forwarding the link.

In short, cities with more walkers and cyclists are less obese. Key excerpts:

• An estimated 35 percent of U.S. adults are obese, and another third still maintain weights exceeding those deemed healthy. This doesn’t bode well for governments and individuals paying insurance premiums, especially with the country’s aging population.

• Historically, studies have linked trails, sidewalks and bike lanes with an increase in walking or cycling. As medical costs continue to rise and evidence mounts that such infrastructure also improves well-being, more officials might look to give health consideration greater standing in transportation planning.

• While only a fraction of workers in an area may opt to bike or walk to work, having the necessary infrastructure in place compels others to use it more regularly.

• . . . the correlation between commuting and residents not considered obese nor overweight was strong–16 percent greater than the relationship with median household income.

• When cutting expenses, health costs are an easy target. A recent study by two Lehigh University researchers reported obesity-related costs accounted for $190 billion annually in U.S. health expenditures, nearly 21 percent of the country’s total bill.

• Those looking to move can use the popular walkscore.com website to measure how accessible an apartment or home’s various neighborhood amenities are on foot.

The problem is we’re not financially savvy enough to tax ourselves—say in terms of raising the federal gas tax by a $1/gallon—in the short-term to fund the necessary walking and cycling infrastructure in the medium-term that would lead to health cost savings in the long-term. Collectively, we’re unwilling to pay a little more for a hybrid when the “buy back” is somewhere down the road.

In our Southeast Olympia corner of the world, the Byrnes family’s walkabililty score is a pathetic 18 out of 100. On the other hand, we’re blessed with wonderful sidewalks and bike lanes almost everywhere. Maybe I should start using them. Maybe I should walk more. Or run. Or cycle.

Just one of many nice bike lanes in the State capitol.

Despite the blue, cars still pass cyclists then turn right. Too often, out of sight, out of mind. Ride defensively my friends (said the most interesting man in the world).