Power to Choose Educators & Schools

Posted on February 20, 2018 by tesumner

New Structure for Public Education

In this proposed re-structuring of public education the current school district concept is divided into:

Public School Infrastructure (school district)
Public Education Provider Organizations

In this proposal the State underwrites education, but local boards run assets, meaning the infrastructure, the buildings and grounds and other capital assets. Local boards maintain those assets from provider funds.

Education is paid for by local users of education primarily, but assisted by the state, by local residents and businesses and by other interested parties who may want to fund special curricula.

Power To Choose

Like competition in electrical supply to consumers, where the electrical generation and transmission to consumers is separated from the poles and wires of the electric grid, and competition is among electrical providers for consumers over a common infrastructure, educational competition is among teaching (educational) providers in the delivery of education to the student. Education providers compete for students to learn using the provider’s curriculum at the exact same location as all other providers. The school is still the school (and owned by the school district), but educational providers offer their learning programs inside the same infrastructure of buildings. Visit www.PowerToChoose.org to see competition in action.

Learning may be targeted at any age group, including mature adults, retirees, working people, high school graduates, middle-school aged teenagers, children and so on, on a variety of subjects and curricula.

Some education providers may have a laptop, desktop or tablet computer for each child and various other sophisticated technology, while other providers may rely solely on written materials and teaching on the traditional blackboard. They compete right next to each other in adjacent classrooms owned by the school district. The better methods and teachers win.

Generation, Distribution, Consumption

In electric competition, generators supply electricity on a synchronized basis to the grid over transmission infrastructure to the distribution grids that take the electricity down to levels that consumers can accept the electricity into their homes for use. Final electricity providers also supply other services to consumers to enhance their product offering, like hourly readings, time-of-day rates and so on.

Competition for consumers is available over the common distribution grid (poles & wires) and allows a consumer to select a provider of electricity to generate power, deliver it over the distribution grid, measure usage at the smart meter at the drop from the distribution grid to the consumer’s premises.

Generators (providers) operate off natural gas, diesel, nuclear, wind, solar and other raw energy sources to make electricity by companies like TXU, Reliant, and so on.

Poles & Wires (the distribution grid) are owned by Oncor, for example, and regulated by law.

Consumers decide what energy source mix they want to use and what price looks best for them. The pricing includes a charge for pass-through by the distribution grid (Poles & Wires) owner(s).

Students: Consumers, Schools: Poles & Wires, Providers: Generators

Similarly, in education the State supplies core educational goals and materials for a large chunk of the educational curriculum, that can be used for that purpose in a state-wide transmission-shipping network. Providers bring their own or state materials for all optional, supplemental or enhanced education. School districts supply buildings and infrastructure, and supply utilities and common services on a shared basis to all education providers in its buildings.

De-regulated education is enabled by dividing regulated educational institutions, which are buildings and other facilities funded and paid for by taxpayers that do not offer education itself from de-regulated education providers, who can bring their own methodologies, equipment, materials and personnel to provide education to the public. Providers divide their offerings by age group and subject matter and must meet educational goals and other standards set by the state if any.

Taxpayers are guaranteed not to have to pay more than 20 years on any facility the regulated school district entity builds, and education providers fund the maintenance of those same facilities through their fees.

Educational providers collect fees from students, donations from local businesses and organizations, vouchers from parents supplied by state and district, if available, and other sources, like PTA’s and volunteer groups. Some education providers will have all-volunteer staff or some mixture of paid and volunteer. We should let the local market and culture decide.

ERCOT and Facilities Planning for Education

Electric Reliability Council of Texas (ERCOT) studies population movements, consumption, and economic trends to recommend changes to electrical suppliers and the Texas grid.

Any time the schools entity projects that capacity is insufficient to meet the needs of the community they can float a proposal to the taxpayers to modify or add on to existing facilities to provide a specified capacity that supports specified capabilities at a specified cost and estimated time to pay back the cost within 20 years. School planners can also propose multi-million dollar facilities to be shared across the whole district or wider, even.

The days of a handful of elected board members deciding to obligate taxpayers to tens of millions in future taxes to pay for a stadium that threatens to collapse a couple of years later needs to end, and end abruptly. No more indenturing future property owners with massive debt without an approval vote.

Using a ballot referendum revealing projected need, capacity and cost information, taxpayers can reject a proposal offered or can approve it to design and build additional facilities. When more than one option is available, the school district may present a choice of options to the voters or a straight up-or-down vote on the option it considers best. But we should be wary of take-it or leave-it and advisory votes.

Note that the buildings may need to accommodate a variety of body sizes in the toilets and other facilities, and that security may be a tricky subject to tackle. Age groups are often not mixed in traditional schools, although they may have been in the 19^th century. It is not clear why age groups were segregated, except that security of younger students may be an issue.

Any time the school district projects that excess capacity exists or will exist, it may conduct a referendum to dispose of a facility and return the proceeds to the taxpayers after all debt is paid off.

Incumbents and Capital Accounts

A regulated school district may also be an educational provider if it so desires through a separate provider entity. A school educational provider entity must compete fairly with other providers and cannot undercharge or overcharge for its students. All providers who qualify are afforded the opportunity to use the regulated school district facilities by paying the appropriate operating costs and maintenance proportionate to its use.

Who pays what is important in this re-structuring of education. Taxpayers have been on the hook for both paying for buildings (now to be owned by the district) and teaching (now done by a separate education provider).

Initially, nothing should change, because re-organizing staff and finances is traumatic. As when TXU split into Oncor and TXU Electric, school districts need to split into School District and Education Provider. Their finances must be kept separated. Local taxes fund the amortization of school district bonds. All taxpayers in effect become stockholders in the school district. CoServ divided its capital assets and created funding for the infrastructure side of its business that consumers effectively owned. As “profit” accumulated each year, CoServ paid its consumers in proportion to their accumulated billing payments.

The school district will be paying down its debt over time, amortizing the amount borrowed, resulting in equity building up in the value of the facilities. Buildings are maintained by provider funding, keeping them fungible at a stable or increasing value. If a “profit” or return of equity situation occurs, those that paid in will be paid back. Return of capital can occur if a building is sold, for example.

Reduced Payback Period for Bonds

It is important that all bonds and borrowings issued are not of terms exceeding 20 or so years and voters get to approve of all bonds. No taxpayer can be expected to pay for his whole life with no prospect of relief. A family may buy a new house in a subdivision that just voted to add a school in a bond election, and after it’s built send their children to that building. But after 14 years or so, the family no longer needs the school, unless they have more children in their home. So, the fairness of paying for a building that they can make little use of comes to the front. Bonds should never be used for short-term assets.

If a building is put up using bond money and the bond is paid off after 20 years, then what is the taxpayer sending money to the school district for? The portion of taxes for paying off the bonds should end after a reasonable time. A family may finish sending its children to school after 20-30 years. We can plan on reducing the taxpayer’s load significantly after they have paid for at least 20 years and finished sending their children through the educational system. Typically, this 20-30 years coincides with normal retirement age, although it may occur later or earlier than 65.

The difference in monthly payments of a 40-year bond and a 30 is about 14%, while a 30 vs a 20 is 27% or 19% for 22. Shorter payback periods result in slightly or somewhat higher payments but massive savings.

Taxpayers need to be relieved of taxes to pay back bonds eventually if they have no school-aged children in the system and have already paid for decades. Education is not provided by the buildings themselves.

As to the educational portion of schools, not the infrastructure, a transition from paying a single amount to the school district to splitting the payment into district infrastructure and education provider payments is needed. Right now the state sends funds for education, but it is at least partially used to pay off debt for infrastructure. That funding of debt needs to end.

The state should continue paying a portion of education, and as part of the transition, vouchers should be issued to every registered family with a school-aged child.

Voucher Eligibility and Issuance

To register to receive vouchers a family or a guardian must apply to the state via the district where resident. Only citizens may apply or other lawful residents, such as military personnel posted in the district or lawful immigrants. The state must establish who is eligible, including how long a person must reside in the district or lawful exceptions, such as transfers from other eligible districts. The definition of citizenship and resident must be spelled out in the law to prevent arguments and possible judicial cases.

Initially, the vouchers can be used only for any captive (incumbent) school district educational provider to get people accustomed to paying that way. Over time, new non-incumbent, challenger providers will appear and vouchers can be used to fund those providers in the same school district facilities or to fund the incumbent provider.

Of course, the old school district needs to release parents from the obligation to use the school district’s incumbent provider. Basically, a parent can choose to use the voucher at any educational provider that meets state standards, including home-based education. We can expect chartered non-profit, profit, incumbent government (non-profit) education providers, all meeting state standards.

At the same time, the local taxing authority also collects taxes that in part fund educational providers. So, a second voucher will be issued by the local taxing authority for the education portion. Parents will initially be able to use the second local voucher only at the incumbent provider. After a transitional period, the second voucher will also be usable with other providers, including home-based schooling.

Transition

It will take some time for educational providers to plan for the next academic year and can do so after knowing the estimates of voucher amounts, market demand for their planned services at anticipated price levels, costs of providing labor and materials for their offerings

Hopefully by the time both vouchers are usable with alternative providers there will actually be other educational providers. We should expect some degree of disruption in the whole process as providers come on-line, compete and some fail. Failure is just part of competition. Right now we have major failures in some school districts, and they need to change. Some school districts are currently successful, and they will more than just survive competition, primarily because parents will elect to remain with successful incumbents.

Home schooling, alternative, charter and remote learning are all options that will flourish under a competitive system. As education transitions out of brick-and-mortar based school districts to more 21^st century methodologies other learning approaches will become prevalent. Education will no longer be confined to K-12 and college. Costs are expected to drop significantly and choices grow exponentially.

Perhaps the state can enable the process of transition for every district, but allow parents to opt out of competition as a family decision initially. A transition period that lasts longer than the depreciation period of school-owned short-term assets would be unnecessarily long. Parents would, effectively, receive the state vouchers and district vouchers (and be notified), but they would be paid directly to the educational provider. Later, they should be able to join in competition, if they so desire, and actually receive the vouchers in hard form. Some districts will embrace competition readily and lead the way, while competition will effectively dismantle district schools that under-perform.

Security for vouchers would be a concern so as to prevent forgery and duplication. Electronic distribution should be enabled but secure. The Secretary of State can set up a Public Key Infrastructure (PKI) to facilitate secure delivery, receipt and accounting for vouchers, as well as other matters. Once signed over by the student’s guardian/parent, a voucher is redeemed by the provider from the issuing entity (state or district) and may be supplemented by the student’s guardian.

Splitting Short-term and Long-term Items

Currently, school districts have both short-term and long-term assets and liabilities. The objective is to separate the short-term items to the incumbent education provider and the long-term to the school district. As the short-term liabilities are paid off and assets, like books and computers, are depreciated off the books, the incumbents will be in the same position as competitive providers. The short-term debt is actually owed to the school district when separated. Competitive providers will owe their working capital or short-term debt to outside lenders. Of course, providers can negotiate sharing deals for short-term assets or buy and sell them. The school district should not be involved in these dealings.

Notably, some items in a school building are not short-term assets, but more correctly classified as fixtures in real property. Some examples in the school are toilets, drinking fountains, cafeteria fixtures, like stoves, ovens, counters and so on. In commercial real estate fixtures are the property of the renting tenants, not the property owner or landlord, but in some situations landlords provide Common Area Maintenance (CAM) for lobbies and property fixtures or common area utilities.

This concept can be carried forward into the new restructuring of school finance by allowing school districts to provide some common facilities to all or some providers and charge accordingly. This is not to be used as an excuse not to restructure assets and care must be taken by state authorities to review and approve all such proposed arrangements, especially if a competitive provider complains of unfairness in providing such facilities or the charges. The state by law should provide guidance as to what is appropriate to include in CAM and what not to, such as sanitary bathrooms or water fountains or even a library, a swimming pool, a weight room and the like, and to publish statewide statistics for comparison.

The Way Forward

The first step was accomplished long ago, separating I&S from M&O. Now to complete this step, all assets, charges and payments need to be reviewed to assure they are properly classified.

Freeze all bond issues, limiting issuance to compliant plans to sell bonds
Publish accounting standards and qualifying guidelines for districts and providers to use and rules for state audit of public educational entities, districts
Negotiate a timeline with cognizant agencies for transition, specifying goals for each step
Establish a PKI at the Secretary of State for state-wide use, set up officials
Receive and review each district’s plan for transition
Set timeline for beginning and ending transition, including elections if any
Set up procedures for student voucher applications and registration

State budgets per-voucher amounts by district prior to district budgeting
Districts budgets local voucher amount plus sets I&S amount for tax purposes
Incumbents budget student M&O amount for tax purposes
Qualified competitive educational entities publish pricing to attend by district
Families make choices, all providers finalize class sizes , curricula, etc
Vouchers tendered and paid periodically, specifying procedures for changes

Gerrymandering and The Right to be Represented

Posted on March 14, 2017 by tesumner

We want government representatives to cover all viewpoints of their constituents fairly.

Advocates for racial representation try to segregate those of a particular color or race so that they can have their own representation.

How asinine!

A recent Democratic judicial panel in the US District Court of Western Texas ruled that Congressional boundaries were drawn so as to minimize relative numbers of a particular ethnic group, by spreading their bloc among adjacent districts and, thus, dilute their ability to elect candidates of the same ethnic persuasion in any of those districts. As if the identified group all thought alike and would want the exact same things…

Is it truly better to have a district with boundaries drawn so that a majority race or majority color can be constructed from adjacent districts that otherwise would claim those minorities?

Which groups or divisions of people are acceptable to create such a minority district from, and must it also be relatively contiguous geographically? Is it solely color of skin, or should all physical, mental, ethnic and cultural differences be accounted for separately in representation from districts?

If Italians and Irish are commingled in two adjacent districts, is it better to divide the two national-origin groups by gerrymandering the boundaries so that there is a more exclusively Irish district and a more exclusively Italian district? Or, should we simply draw compact and contiguous districts regardless of the relative proportions of Italians and Irish?

If Jews and Christians, similarly, are intermixed geographically, should we re-draw boundaries so as to give a district with primarily Jewish constituents in one or more districts while drawing the boundaries to concentrate Christians in the remaining districts?

How far should we take this objective of drawing boundaries to create a majority constituent group?

Should we segregate constituents by gender identity issues?
Maybe women from men?
Maybe English- from Russian-speaking from Chinese-speaking?
Maybe rich from poor?
Maybe smart from dumb?
Where does this divisiveness stop?

To unite people, we divide them. That’s logical.

We don’t try to see past differences – we focus on them.

We don’t try to find common ground – we seek confrontational divisive politics.

Melting pot, shmelting pot.

Those district judges “know” that if you have the same skin color as someone else, you want the same things and you vote the same way. They’re not prejudiced at all. And their views unite us all.

End of Obamacare

Posted on November 14, 2016 by tesumner

1st and last pages of Texas Whole Healthcare Insurance article

click graphic to enlarge image of
Texas Whole Healthcare Insurance
(click this caption for PDF of the article)

In the article State-Based Healthcare Insurance we discussed what healthcare reform should have done instead of Obamacare. Federal over-reach of a national agency to manage all the healthcare and insurance companies is just another problem, as we have created under Dodd-Frank for financial and lending industry. But that should be an obvious consequence of allowing interstate insurance practice. Who would regulate insurance carriers who cross state lines? Of course! We need a Federal government regulator for all insurance because it’s now interstate under Obamacare.

Never mind the 10th Amendment’s prohibition of the Feds usurping power left to the States, like taking over state-based insurance (it’s not an enumerated power). But neither is making all insurance carriers eligible to compete across state lines likely to enable a better solution for insureds as a replacement for Obamacare (PP&ACA). First, if a carrier cheats an insured in another state, which one of the states steps up and enforces the law, or can only the Feds do that? It’s a regulatory nightmare.

Carriers themselves, moreover, won’t want to be subject to both California law and Minnesota law, unless they’re just masochistic. And, what carrier would want to buy into a market they know nothing about, expand or create a network of physicians, hospitals and providers in a location they’re unfamiliar with? It is absurd to think a carrier would jump into an out-of-state market – it would occur slowly, if at all – to prevent carriers from entering to compete only to exit when they fail.

Obamacare’s collapse is imminent. The millions who got discounted insurance and got covered for pre-existing conditions will be faced with either complete loss of insurance coverage or higher costs compared to those without pre-existing conditions. The 50 state laboratories will have to come up with solutions for the poor and those faced with higher premiums for those with pre-existing conditions.

Some possibilities are that a state offers healthcare, not insurance, to the impoverished. After all, public health departments have existed for decades, as well as free clinics. Maybe some charities would fund treatments for those with pre-existing condition conditions. Perhaps some states will offer state insurance for those unable to get commercial insurance, like FAIR for homeowners. States could even fund other methods of paying for those with pre-existing conditions, such as taxation of tort attorney fees – seems fair.

States need to prepare for when PP&ACA collapses

Soon, if things go as many Americans hope, we will no longer have to worry about PP&ACA (Obamacare) forcing us to buy unaffordable healthcare insurance with high deductibles and coverages that we don’t want or need. Obamacare is on the verge of financial and political collapse.

However, a sizable number of Americans, who were previously not covered by healthcare insurance, not necessarily by choice, will find themselves without insurance. While many of those uninsureds had pre-existing conditions that insurers did not want to add to existing standard risk pools of insureds, many other Americans either chose to go without insurance or neglected to sign up for it. All of those uninsureds were incorrectly classified by the advocates of mandatory healthcare insurance as “needing” insurance, when they actually needed healthcare.

This half-truth about “need” has driven the debate on healthcare: who will pay for people who can’t afford treatment, unless someone else subsidizes it?

Moral Questions

Besides the moral and legal question of how to subsidize some but not all Americans, which would be a violation of Equal Protection, other issues have simultaneously caused a lot of debate, like should medical treatments that some find immoral or morally offensive be subsidized by those who are offended? Should someone unfairly be forced to pay for services she or he will never need in order to subsidize those treatments for someone else?

A free market doesn’t have such quandaries. Only a market controlled by bureaucrats suffers from such dilemmas as who pays for what and how much.

Those who quickly signed up under the Obamacare plans were promised reductions in premiums of “up to $2,500 per year for a family” by Obama – this just didn’t happen, and simply cannot happen. Yes, many Americans were “Grubered” into believing in the tooth fairy. The included services mandated by PP&ACA are so extensive that reductions of premiums just cannot happen either. Moreover, adding in known-risk insureds (with pre-existing conditions) raises the expenses of the baseline pool enormously. A law predicated on lies must be revoked and put to a vote again.

States ‘Own’ Insurance – Except Interstate

Unless states prepare now for the coming chaos, Congress will override states and enact a patchwork of tax credits, insurance subsidies and tax rules to further complicate our lives and “ease” the change back to state-regulated insurance in a more free market. This is the wrong approach. Federal purview is only over interstate matters, not those things wholly contained within a state.

States need to step up now and plan for the post-Obamacare time. Insurance carriers need to work with state regulators and legislators to find solutions that will address the various aspects of healthcare insurance that most people viewed as broken. We need the states to do what they do best: explore different solutions independently without a top-down “solution” forced on us from Washington.

Broken things in healthcare insurance (that are still broken) are:

timely payment of claims – it is not unheard of for EOBs to take weeks and then
surprises of non-coverage that the insured now has to pay (usually without savings to do so)
surprises for care providers of what is “standard” or “covered” (who then must accept less)
credit report damage for insureds due to the surprises above
portability of employer-based plans

Some things that were “fixed” by ACA include

dropping insureds: now can’t be dropped
pre-existing conditions can’t be denied (but we bear a significant burden for this)
no-limit maximum on claims (but we bear this cost, too)

NOTE: costs borne by insurers are passed along to the risk pool in higher premiums and could result in a government bailout, if insurers don’t make the 20% margin guaranteed by ACA

That’s right. Obamacare “guaranteed” that insurers make 20% margin on premiums received. Until its passage insurers weren’t guaranteed a return or margin at all. Remember, besides statistics, accounting is a game of numbers that often obscures the truth.

Pre-Existing Conditions

It is laudable for regulations to prevent an insurer from refusing to accept an applicant to be insured because they have a pre-existing condition. But forcing insurers to accept insureds with known pre-existing conditions violates the underlying principles of insurance.

A risk pool assumes that perils faced by all members of the pool are random and known only as a statistic, not as a given. The distribution of risks is studied by actuaries and the costs of treatment at various stages are gathered by claims departments. Underwriters then decide the premium that must be collected to pay for the perils covered by estimating the cost of treatment for the covered peril for the group. The calculation of the cost of a covered peril is

= Cost of Treatment x Probability of Occurrence

The policy premium for a group is simply the number of insureds in the group multiplied times the sum of all costs of covered perils for the premium period. Of course an allowance for variance in treatment costs and for profit needs to be included.

Pre-existing conditions represent a 100% risk of claim for the cost of treatment of that condition. By mandating coverage of pre-existing conditions within the normal risk pool, the rates to cover the pool will rise automatically to account for the 100% as opposed to normal risks, such as 12 in 100,000 or 0.012% for example. Of course every risk has its own statistics in the population, but never 100%.

We do need input from insurance carriers on a fair way to deal with insureds who make excessive claims as opposed to those who don’t, because it may indicate the insured is in the wrong risk pool. .Dropping or canceling a policy simply because it had too many claims, unless fraud or deception was involved, isn’t the right answer. The issue may be the lifestyle or work environment of the insured.

Treatment Cost for Existing Conditions

Each risk has its own cost of treatment and efficacy of the treatments associated with it. If caught early enough through aggressive detection regimens, a treatment might be very cheap, but then the detection regimen costs more. If detected late, the treatment may be very expensive or even ineffective. Different treatments at different stages of the condition present different costs to the insurer.

If a preferred treatment costs a known amount on average, the insurer should be able to recoup that average cost from the insured, if the condition is known at the time of application. The insured with known pre-existing condition could then decide does the average cost of treatment for that insurer reduce their overall cost or should they risk paying more or follow a cheaper treatment regimen from another insurer with a different result profile. This choice should be the insured’s.

Actuaries study these trade-offs to determine the least cost for the insurer. Pre-ACA the least cost was simply to drop the insured’s coverage. If the insured was in a group plan, they had to weigh the bad publicity with the employer (group) against the cost of not dropping the insured. The group administrator could threaten to terminate the group policy for refusing a legitimate claim.

A policy rider for the known condition could then be added to the individual’s policy at a known premium add-on. Insurers can then compete with each other over the premium add-ons of treatment plans and costs for known conditions. Since insurers look only at costs and efficacies, doctors, hospitals and pharmacies need to come up with treatments that are effective and low cost, not insurers. Insurers that work with healthcare providers, like doctors and drug companies can compete over the most efficacious and least costly treatments and detection methods for a known condition.

An alternative to a rider for a specific condition could have been to move the insured from one risk pool to another with the 100% cost of treatment fully accounted for in the insured’s premium. But, firstly, insurers typically offer only standard and premium policy rates, although some offer sub-standard risk policies. All of these risk pools are based on random distributions of risks. Insurers should be allowed to set up both riders for known conditions and higher-risk (sub-standard risk) pools with appropriately higher premiums.

Fairness for Pre-Existing Conditions Costs

Unless the insured lied, he faced the exact same perils as other insureds and he should not be forced out of the risk pool he joined. To encourage insureds to apply and keep insurance it would be unfair to long-time insureds to be dropped or forced into a sub-standard pool with higher rates merely because the insured discovered he had a condition.

On the other hand it is unfair to the other pool members to allow a new member with pre-existing condition to join and raise their premium costs, especially if the newly insured had no insurance before but joined effectively only to get a discount from the average cost of treating his condition by lying about its existence. The whole concept of “open enrollment” is crazy.

If the insured had wanted to set aside some funds in case a condition was discovered later that he needed to pay for in full or via a higher premium, this was not possible, at least tax-free.

The issue of how often an insurer may re-rate an insured as to the correct risk pool needs proposals from insurers so that regulators and legislators can establish “fair” methods. For example, regulations might preclude re-rating for 2 years or dictate a 5-year phase-in to the new pool premiums, or some other method.

Besides setting aside money in case of a change in rating in the attached savings accounts is a good idea.

Josh Withrow and Logan Albright have penned an article on Freedom Works, which Pattie Curran features on her website entitled “Ten Principles for Replacing Obamacare” http://catholicteapartyhippie.blogspot.com/2015/03/ten-principles-for-replacing-obamacare.html . The article reviews some important points about healthcare insurance and the Patient Protection & Affordable Care Act.

Healthcare decisions should be between the doctor and patient/family, not IPAB
Improving access to healthcare is about lowering costs, not getting insurance
Tax policy should not favor a company over an individual
Insurance within a state should be controlled by the state, not DC bureaucrats
Medicare should have choices for seniors
Medicaid is best controlled locally, not from Washington
Patients should have incentives to save on and for healthcare
Tort reform for medical malpractice is still needed to reduce costs
States should work with local insurers on how to cover pre-existing conditions
Obamacare can’t be fixed – it needs to go

In addition to these principles, when states finally do step up and try to craft their own solutions in the grand “laboratory” of the united States, they’ll need to consider some additional points. Note that in the interest of “fairness” when insureds make lifestyle choices or employment choices that increase their likelihood of making claims, insurers should be allowed to counsel and eventually raise premiums for those insureds.

Free Marketplace

Freedom of Choice is crucial to the proper functioning of a Free Marketplace. Freedom requires removal of force or compulsion of any type to keep the playing field level. In addition, all forms of deception or fraud have to be rooted out in order to keep the marketplace fair.

However, a truly competitive healthcare marketplace and a competitive insurance market for healthcare won’t be possible until some other things are changed. Employers voluntarily created the connection between employment and healthcare benefits decades ago (WWII). There is an economic benefit to having a business bargaining on behalf of a group of customers or employees for lower prices. But forcing employers to provide healthcare insurance is irrational and wrong-headed.

It is especially troubling that small employers with only 50 employees are mandated to provide it, since it likely takes a new full-time employee just to manage a program. A new employee would add about 2% to labor costs, subtracting directly from the bottom line. This puts small employers at a distinct disadvantage to large ones. A much higher threshold should be chosen if a mandate is to be set by law. Any threshold for requiring an employer to do something should be set high enough so that its effect on the bottom line is negligible. A 50-employee threshold is not negligible. A 250- or 500-employee threshold seems more negligible.

Forcing employees to take up a particular set of coverages or only from a particular insurer is truly anti-competitive. If the employer subsidizes the insurance premium at all, that subsidy should be disclosed to the employee, and in the event employment terminates or otherwise changes the subsidy, the employee will know ahead of time the actual insurance premium. COBRA coverage has revealed this issue.

People like “shopping” as long as the choices make sense and no huge penalties accrue to making a mistake. So, if you’re locked into deducting a certain amount because you selected (for example) excluding pre-natal care, you would want to be able to change your mind later, if needed, by paying the difference down the road when you find out you do need it. This also applies to the maximum coverage amount, even if an infinite limit is not available. Give insureds the Mulligan rule for applying for insurance coverage.

Employee Individually Owned Insurance Policies

This knowledge of the premium in employer-based healthcare insurance plans is critical, because policies (even though negotiated through the employer) should belong to the employee and become portable in the event of layoff or termination. Insurance should “belong” to the employee, even though the employer helped negotiate a lower price for it. Let the employer negotiate on behalf of the employees and certify working environment/job descriptions for employee, but otherwise we need to remove employers from their mandatory role in healthcare insurance. Of course taking the negotiated rate to another job or lifestyle might result in re-rating the insured.

Employers typically also supply a benefit commonly called a Flex Savings Account. This money is made available each year and can be used for things like deductibles, eyewear, dental and the like. However, the Flex account is emptied every December 31. Many employees rush to spend their Flex dollars on things they don’t truly need only because the money will disappear at year-end. These dollars should never be lost to the employee.

But employers simply pocket the money to apply it to the cost of “administering” the Flex plan. PP&ACA lowered the tax-deductible contributions while extending by 75 days the spending deadline. Frankly, it makes no sense that insurers do not offer optometrist and optician coverage, nor orthodontic and dental coverage, if they wanted to. I guess your eyes and your teeth are not medically connected to your body. Imagine.

Regardless of what the employer wants covered, the employee should be able to get coverage for everything he wants, even massage therapy, psychologists, acupuncture, shaman prayers, midwives, or whatever. Freedom to choose is crucial to a free market.

Portable Whole Healthcare Insurance

Every insurance plan should have an associated “savings” plan attached to it, including employer-negotiated policies owned by each employee. Much like Whole Life Insurance policies that have a cash value, where a portion of the premiums go into a savings account, we need “Whole Healthcare” Insurance policies that is both insurance and a savings plan in one. States should enable Whole Healthcare policies within their regulatory framework. Policyholders would be allowed to

deposit their Flex account money from employers, and
make their own tax-free deposits into the savings part of the Whole Healthcare policy
allow others to make “gift” contributions.

Savings accounts should totally, completely be free of taxes, state, local, Federal, and all contributions should similarly be tax-free. In addition, growth (interest, dividends or returns) on the policy should remain tax-free and fee-free. If a nominal fee is allowed, every insurer will charge that. So, perhaps none should be allowed by regulators.

Like Whole Life policies, returns should be offered by the insurer and chosen by the insured. Today annuities offer fixed returns guaranteed with a ratchet mechanism in the stock market returns more, or simply fixed returns of various amounts, and so on. Let’s let the market decide what kind of return on the savings part is reasonable. Insurers can decide how to manage withdrawals for proper uses of the account.

The “Savings” Account

Primarily the savings account can be used for deductibles, un-covered items, electives, eyewear, dental, and so on, but it never disappears and is never taxed away. Later in life insureds may want to use it for hospice or assisted living costs or funeral costs or else just leave it as a legacy to their heirs under similar restrictions, like an IRA.

Note that unemployment should not leave an ex-employee without healthcare insurance, especially if money is available to pay premiums in the savings account.

Whole Life Insurance often has a conversion possible to make the savings fund the insurance (endowment). “Whole Healthcare” Insurance should also have that possibility.

Characteristics of Whole Healthcare Policies

Like Whole Life Insurance, Whole Healthcare policies should be flexible. But more importantly, they should reflect reality. If the cost of healthcare on average rises over a lifetime, then premium payments should, too. If a characteristic, like a pre-existing condition, differentiates one insured from other insureds, it is only logical to charge them only for their differences. Without knowledge we cannot improve. With knowledge we can improve and prepare for future needs. Hiding politically inconvenient truths is unacceptable. At least let us make a conscious decision about coverage.

The attached savings account for a “Whole Healthcare Insurance” policy grows with each premium and from returns on earnings. Other contributions can make the savings account grow, too, like FLEX dollars or voluntary contributions, but primarily the account increases by the difference between actual healthcare insurance costs and premiums paid. A typical insurance contract may return 5% per annum by contract. That growth is reflected in the upper portion of the image, reaching millions over a lifetime. Green line is the suggested premium, which lies above the insurer’s actual annual cost of providing healthcare insurance after setting up a network of providers and negotiating rates with them. Note that despite political correctness the actual median cost of providing healthcare for females (orange line) is different from that for males (blue), not just longevity.

The savings balance can become an endowment fund for future healthcare. If premiums are paid only up until about age 35, the savings account will last a lifetime, but of course the savings account in this case would be depleted over the remaining life of the insured.

But, end-of-life care may become a significant factor and need to be paid out of the “healthcare” savings account. So, the policy owners may want to have assisted living in later years covered by the policy, or at least by the savings account. Alternatively, the savings balance may be shared by a family and passed on as a legacy to children or other insureds on the common policy. It is conceivable that a savings account might be shared and passed down for several generations, and if large enough, become an endowment for family healthcare insurance.

Adding Beneficiaries to Employee-Owned Healthcare Policies

Someone owns an insurance policy. Today, employers own most healthcare policies as group policyholder. While employers, as mentioned, can and should help negotiate group rates for their employees, the policies belong to the individual employees. This means the coverage and terms are under the control of the employee.

For Whole Healthcare Insurance it does not seem fair to other risk pool members to add more insureds without collecting additional premiums. New children, a new spouse, even adding extended family members to a policy should not be simply a matter of listing them on a family coverage policy. Premiums should reflect costs. Keeping a child on a policy beyond the age of majority should not be prohibited, but the cost of continuing coverage should change. Insureds should be allowed to add anyone to a policy by paying the appropriate premium, family member or not.

While age is a factor, lifestyle and profession also matter. AEI studies show that the cost by age of healthcare falls to a minimum around age 26 and rises after that age (except for females).

The government’s denial of gender differences in healthcare costs is revealing. Making a political issue of a fact of life is insanity. If an insured wants coverage for gender identity issues, then they should be able to purchase an additional rider for that purpose. Cosmetic surgery and other treatments that generally fall outside typical policies should be available for add-ons.

Insurers should be free to differentiate or not as their marketing and sales data dictate.

Law should establish how costs among multiple insurers, each associated with a family member are to be allocated and shared.

Moral Issues

It is important to note that pregnancy, abortion, birth-control pills, gender changes and the like disappear when the insured chooses what coverages the insured wants, not the government.

In many cases charities have successfully managed healthcare services for impoverished people, and hospitals and public health departments have offered programs to reach out to the poor. In some cases families have made appeals to philanthropic individuals and organization to pay for healthcare procedures they could not afford. It is important that the legitimacy of such claims be verified to prevent abuse and fraud, preferably by attestation of the diagnosing doctors. Doctors themselves are a huge source healthcare treatments, often on a pro bono basis.

The state has an interest in keeping this work protected from financial liability as well as encouraging medical personnel to participate as caregivers. While some “Samaritan” laws do exist, these need expansion to provide coverage of the facility and personnel and other providers who so selflessly give of themselves. This includes teaching schools as well as free clinics.

The state should also consider contributing a portion of lottery revenues to a fund to support these charitable activities. A sizable portion of lottery revenue is actually derived from the indigent, who believe they can “win” their way out of poverty. In effect, they would be helping to fund their own care.

Note that tort reform to limit liability of care given in good faith is needed. Many have advocated for general tort reform to limit claims against all medical practitioners. The best guideline here is the self-selected maximum benefit an insured has for his own insurance policy should be the limit on liability.

Additional Innovations for Healthcare and Insurance

Besides changes to the state insurance regulations, more free-market forces need to be unleashed on the healthcare industry, too.

First, pharmacy laws are overly restrictive. FDA must “approve” a treatment, implying by law that it’s “safe and effective” but frequently drugs are recalled as unsafe, even after years of regulatory rigmarole to assure their safety, and drugs available in Europe are never released into the American market. This is insane.

If someone wants to take a risk with a drug, why is he not allowed to do so, provided he is actually made aware of the risks. A stamp of approval should be replaced by fairly simple labeling that conveys risks as probabilities plus sensitivities for identifiable groups. Once this re-labeling is completed according to state law, pharmacies could dispense any drug to any adult who signed the appropriate disclosure without fear that the dispensary could be sued.

If manufacturers or compounders lie, let them pay for their deception. Now no one pays, not even the FDA, when approved drugs turn out to be snake oil.

If pharmacies violate laws against dispensing to minors or without getting a risk disclosure signed, then let the pharmacist spend time thinking about it in jail.

Adults should also have their choice of treatment by board-certified doctor, licensed nurse, certified midwife, emergency medical technician, practitioner with some industry certification, holistic medicine guru, acupuncturist, massage therapist, soothsayer, or chiropractor. But of course, if insured, self-treatment or unauthorized treatments could result in loss of coverage by the insurer.

If only licensed hospitals and doctors can treat people medically, then competition is limited to whatever population of doctors there is. Supply limitations always drive up prices. Moreover, the common practice of not posting prices for drugs and treatments should be prohibited by law. Every pharmacy receipt should show the actual price of the prescription before insurance payment or other discount.

Every medical practitioner, including municipally-owned ambulances should similarly be required to post their prices and any discounts available and which insurance plans they accept as partial or full payment. We shouldn’t need a Federal law to require this, unless they’re interstate.

Knowledge is a powerful weapon in the fight against over-pricing and necessary for making rational choices in a free market.

Beliefs, Creeds, and Religion

Image

…on the basis or race, color, creed or national origin…

What is the difference among these “prohibited” bases and religion for discrimination?

Race, Color (skin color) and National origin are rather obvious in their meaning, but what about Creed and Religion?

“Beliefs” are hypotheses that are:

provably true,
possibly true or
not provable (or provably false),

but they are things that an individual holds to be true. These beliefs may coincide with the beliefs of others, or they may be completely at odds with others’, or they may be matters that others hold no opinion in conflict and so feel neutral about or ignore.

Some beliefs:

The Moon is Made of Cheese
Guns cause Murder
Women are Inferior
Large Soda Drinks cause Obesity
Men are Insensitive
Everything was Created in 7 Days
Embryos and Fetuses are just Meat
Carbon Emissions will Melt the Polar Icecaps
Killing non-Believers is Acceptable

Obviously, beliefs are part of any religion. But believing in something doesn’t make a person religious.

Creed

A group may subscribe to a set of beliefs without believing in the creation by or control of a superior being, such as a god. This set of beliefs is often described as the “creed” of the group.

A religion has a creed but also some beliefs concerning the creation of the universe or its control. Religions all have creeds plus a belief in God or gods.

Obviously, creeds are also part of any religion. They are, however, separate and distinct from beliefs about a supreme being or beings and beliefs in an afterlife.

While a creed can be a part of a religion, it is not necessarily the whole of it.

Should our laws prohibit religions?

Beliefs that do not revolve around a deity and require no action that conflicts with law are not a valid area to enact prohibitive legislation. The principle of tolerance is a good basis for all religions to be treated equally so long as the portion of the religion’s creed not dealing with actionable beliefs is benign, and the portion requiring or advocating actions would violate no law.

For example, if a creed or religion demanded that all children upon reaching age 9 be sexually assaulted by a neighbor, we would be justified in prohibiting the practice of that belief, since it so contravenes our sense of the moral and lawful way to bring up children. By extension we can categorically state that any belief that violates the law should be proscribed and followers of the creed must swear to abrogate that portion of their creed or religion.

Oath to Place Law above Creed

President Franklin Roosevelt issued Executive Order 8802, reaffirming that as a matter of democratic principle that no one should be denied participation in the War Department. From 1947 through 1949, Congress adopted a series of laws renaming and reorganizing the American national military establishment to a more politically correct set of nomenclature, including renaming the War Department as the Department of Defense.

This concept of non-denial on the basis of Race, Color, Creed, or National Origin has stuck in the vernacular of political correctness. Some states, like Wisconsin, have expanded the list of protected classes to include “race, color, national origin, ancestry, creed, age, sex, disability, arrest or conviction record, marital status, sexual orientation, military status and use or non-use of lawful products away from work” in the name of egalitarianism.

On the face of it this state’s prohibition against considering any aspect of a person that might reasonably be used to indicate whether a potential employee could present a later threat, based on this lengthy list, might be short-sighted. “Creed” (belief) that violating our laws is justified might be something we should check for, especially in employment and even admission into the United States.

One could also argue that an arrest record or conviction record might reasonably indicate a more than a fleeting possibility of repeating past transgressions. But egalitarianism, the belief that none of us is any better than anyone else, and we’re all completely interchangeable, is a prime example of Belief Perseverance, a common affliction of Socialists. Belief Perseverance occurs in the face of irrefutable evidence to the contrary and often precedes vociferous emotionally charged accusations of bias.

Countering Unwelcome Beliefs

Joining any group from a volunteer group to a much larger society of a nation should involve more critical examination of beliefs than the cognitive bias demonstrated in FDR’s executive order 8802. We pledge allegiance to the flag and swear to protect and defend the Constitution, but no one wants to inquire into the creed of foreigners applying to live among us, because to do so would deny the value of multi-culturalism and abridge the rights of Americans to practice their creed, no matter how diametrically opposed to the principles in the Declaration, and specifically to current law.

We should and do welcome anyone who adopts the American way of life. Work Hard, Be Honest, Succeed – all solely on your own efforts. It may be tempting to believe that no one is any different from anyone else, that “you didn’t build that” or all cultures are the same, but reality belies these beliefs. The Socialist credo stands discredited and should be discarded.

If a foreigner wants to immigrate to live and work here, then he must want to adopt our culture, abandoning any creed that violates our laws or would reasonably engender an environment that destroys our culture of hard working, law-abiding, successful America.

There is nothing at all incompatible with American principles to ask and to verify of applicants for admission if they hold beliefs (whether they’re from a holy book they subscribe to or from the mouth of an ideologue) that are in opposition to American principles. Some creeds believe it is acceptable to deceive other creeds about their true beliefs. (So interviewers should belong to the same creed.)

If their creed advocates violence against others creeds, they don’t belong here. If their creed celebrates the subjugation of a class of people, then they don’t belong here. There can be no egalitarian society when one gender must follow behind the other, or when one religious group has to pay another group some special tax, or when martyrdom is more important than anything else, especially when it occurs in the act of murdering innocent people.

We Don’t Need a Religious Test – We Need a “Creed” Test

Votes – the Currency of Democracy

Posted on October 9, 2015 by tesumner

In democratic government power is wielded by those voted into power. Changes in the law, like Constitutional amendments and plebiscites also are voted on. Voting is a crucial element of practicing democracy in a republic.

Plurality Rules vs Majority Rules

Decisions are bought into by the voters primarily by majority voting. Counting ballots usually reveals that only a small portion of citizens eligible to vote actually show up to vote. The fact that many voters disenfranchise themselves is appalling. It is also appalling that, although eligible to become voters, many citizens simply fail to register to vote. Between these two appalling facts of failing to register and failing to vote we find that only a small fraction of the voting-aged population actually exercises their right to vote.

Worse, decisions are almost always determined by the largest number of votes received on an issue. A plurality is a pitiful way to decide things, especially considering the appalling facts above.

With 3 choices available, if 40% favor choice A, 35% favor B and 25% favor C, A will win. Even though A has only a plurality, it will be the official outcome.

Voter Fraud & Low Turnout

To put this in perspective, typically only 60% of the voting-aged population bothers to register to vote. In a typical election only 20-40% of those registered show up to vote. This means that tiny fraction of voters (12-24%) can determine the outcome, perhaps only 40% of 20% of 60% of voting age people. In a close race only half of 12% wins, maybe less. How can only 5% or less determine an election?

Registration to Vote

Sometimes it’s just laziness: the voter moved and didn’t re-register in the new voting precinct. Sometimes it’s to avoid jury duty, since often jury pools are selected from voter registries. Often eligible citizens don’t know the process or the place to go to register, and then it takes a while to get around to it.

Low Information Voters

What do we imagine the 5% or less that vote for choice A B or C know about the 3 choices and how informed they are to choose? Are they party-line voters, do they recognize the name of a candidate, or did they see a political advertisement that swayed them?

Fraud Affects Outcome

It should be obvious that having a cadre of informed voters who show up is essential to having good election outcomes. When a few votes out of 5% are fraudulent, it can alter the election outcome to become fraudulent, too. We cannot allow votes to be bought, to be stolen or in any way to be fraudulently or forcibly cast. We simply cannot afford to waste even a single vote.

Theft, Loss, & Counterfeit Votes

Since the democratic process runs on votes, the notion that votes are the currency of democracy is correct. Counterfeit currency steals value from other currency-holders. Counterfeit votes steal outcome from real voters. A voter’s wishes are diluted by the presence of fake ballots in the ballot box. Fake ballots are those created by someone without counting them as coming from a legitimate voter. In the past this illegitimate practice was called ballot-stuffing.

Currency stolen from its proper owner, whether the owner is aware of it or not, is still theft. Stealing a vote is a matter of attributing a ballot to a particular voter (who didn’t vote). These stolen votes are based on fraudulent identity, and steal the power of the legitimate voter, even though the voter may not know about the theft. When ballots are accounted for and handed out only to registered voters, only fraudulent identification of a registered voter will result in theft of vote.

Integrity from Start to Finish

Theft and loss of votes can also occur later during the canvassing of ballots. Ballots could be miscounted, could be discarded unintentionally or intentionally, or could simply be misreported. Trusting officials to safeguard ballots and to count them all properly forces us to design voting systems that can be trusted, typically by re-counting by separate mechanisms and different people and cross-checking the result or allowing audit of votes afterwards.

In an ideal voting system ballots would be intact from casting to canvassing with the ability for audit by officials and for voters to verify their individual ballots were counted and no others recorded in their names.

Single Vote vs Authenticating a Voter

But all systems rely on authenticating a person claiming to be eligible as a voter. It’s one thing to force everyone issued a ballot to dip their hand in indelible ink so we know only one ballot was issued, but how do we know if they’re eligible at all?

We adhere to the principle “One Man, One Vote” meaning you can’t vote twice for Governor or twice for President and so on. But, we also mean that Green Party members can’t vote in the Socialist Party primary election, and citizens in one county can’t illegitimately vote for county issues in another county. Proving that a voter is actually eligible to vote is crucial.

We have these 2 important points:

You must be eligible to vote
You must not vote more than once

Eligibility to Vote

Today only citizens may vote and residence is used to determine where they vote. Registering to vote allows an agency of the government to vet the person for citizenship, record any identifying information, confirm their taxpayer status, and issue a voter card. In an ideal voting system every citizen eligible to vote would be able to register to vote nearly instantaneously. This would allow the ‘green’ eligible area to be equal to the ‘blue’ registered area show in the graphic above.

Double Voting

Voting more than once can be detected by tracking when a person votes and having all other places or methods to vote precluded by that detection. If I vote for President in precinct 123, as soon as I cast a ballot for President, all other precincts know about it and I cannot go to another precinct and vote for President again. My vote is tied to my identity. If I can be uniquely identified, then duplicate votes can be stopped for me (if my identity is confirmed every time I attempt to vote).

Of course not only must other precincts be allowed to see I have already voted but other methods, such as early voting and voting by mail, should be checked before issuing a ballot to me and they should also be allowed to see that I have voted. Those other locations must be allowed to see the issuance as quickly in real time as possible – if there is a delay, then before allowing the ballot(s) to be cast, the issuance and casting at other locations must be checked.

Poll Book of Registered Voters

Each voting location, including mail processing, must confirm identity of the applying voter. The voting system will be no more secure against fraudulent and duplicate votes than the methods used to confirm identity of voters and verify uniqueness of ballot issuance.

The polling location that has a book of only names and addresses of eligible voters is probably the least secure. Identity confirmation based on names and/or birthday and/or address are common methods. Any of these methods are actually not very secure. Internal processes at the polling station should preclude such a possibility of ballot theft or duplicate voting, but with collusion it is still very possible.

No ID Required

If no ID is required, any person can come up to a clerk and claim to a name in the open book without an indication that the voter already voted. In fact poll-workers can simply issue themselves or their confederates ballots in the names of any people that have not already voted.

Signatures

Part of the ballot issuance process, then, should include a method of leaving a trace by the voter that it was she and not someone simply claiming to be the voter that can be audited later. A signature of the voter might work. However, very few people are expert enough to recognize whether a signature is a forgery.

Photographs

No poll books have photos of voters – so comparing the person’s face to a photograph in the book would not work for identification. But taking a photo (as the trace) would be a change a substantial number of voters would object to. However, almost all voters have pictures on their driver licenses or other government-issued ID card. A poll-worker could take a photo of the ID card itself to act as trace that the voter appeared to get a ballot.

Fingerprints

Fingerprints, such as a thumbprint, are useful to establish a verifiable trace of the voter’s appearance at the polling station, but comparing fingerprints is probably a difficult job for ordinary poll-workers unless they’re aided by machinery. And where would the source print come from to compare to? Driver licenses are often issued by the state department of public safety or motor vehicles, who also take fingerprints as part of the licensing process. This government source of fingerprints would be a good one.

Capturing biometric data at the time of registration and making it easy to verify at the time of issuing a ballot (or casting it) will add to the security and integrity of the voting system, but will also add some labor and storage needs for the data and the checking. Machinery to assist poll-workers in verifying could also add to the equipment cost of elections.

Voting Systems We Can Bank On

To safeguard votes, the currency of democracy, we need a voting system that

Allows near-instant registration to vote
Utilizes existing government identity systems as appropriate
Captures needed biometric data on the registered voter
Securely stores and distributes registration data and ballot data
Assists poll-workers in verifying voter identity data and detecting duplicate ballots
Minimizes the possibility of collusion in credentialing and issuance of ballots
Securely accepts and transports ballots to a canvassing location for secure storage
Permits a voter to confirm her ballot was counted and not altered
Permits poll-watchers to confirm a total visual count of voters appearing against the number of ballots cast
Permits a non-voter to confirm that no ballot was accepted in his name
Permits any citizen to see a list of who voted in which election and confirm each was verified by an official before a ballot was issued
Permits the public to confirm that total issued ballots matches total votes
Enables auditing of each of the various stages of the voting process

Clearly, verification of voter identity requires an ID card that provides some biometric data, such as a photo or fingerprint, that poll-workers can verify a voter’s identity. Further, the process must include capturing the same data at the time of ballot issuance and casting.

Immigration is a State Power

Posted on May 19, 2015 by tesumner

[see the companion article on Federal power over Naturalization & Immigration]

Processing Time vs Waiting Time

I don’t think it should take more than 90 days to decide if a state is going to accept an immigrant-applicant. Why does it take years?

If an applicant to visit or immigrate has a clean background (which doesn’t take years to verify) and has a guarantee of support (aka Affidavit of Support) from a relative or perhaps a business, the applicant’s application should be granted immediately.

The Federal Government inserted itself in Immigration

Yes, the Feds have imposed limitations on how many people from each country can come in to work and live here and (if it were their responsibility) they should verify the identity of the applicant and confirm that someone will keep them from being a burden on the local economy where they’re going to live.

So, not all of the 7 years now required to approve an immigrant visa is from processing. Instead, the queues for some countries are actually that long. If only 4,000 immigrants from some obscure place are allowed each year to enter the US per Federal law and 100,000 are on a waiting list, we can pretty well know it will take around 20 years for a visa to be approved.

This delay is despite the fact that a family may be able and willing to support a brother, a mother, a sister, a father or a cousin with housing, money, and social support.

[see also the companion article on Federal power over Naturalization and Immigration]

The Local Community has an Impact

So, the state where the person is planning on immigrating to should also look at housing to see if sufficient housing is available in the local market, to see if employment is feasible in the local market, and to see what government services would suffer adverse impact by the immigrant’s arrival in his desired target community, such as education.

But other factors also play a role like availability of healthcare and commercial businesses to provide goods and services and infrastructure for communication and transportation. It is the government’s job to provide this information to prospective applicants, but it is not the government’s job to solve any problems, unless the government accepts the applying immigrant.

The State writes the laws, publishes the regulations and administers these for the benefit of its citizens. It is solely responsible for advising communities if an applicant has a driving record, a drinking record, an employment record and so on that might bear on his integration into the community.

On the other hand the local employer knows if he has positions open and what skill sets he needs, the schools know if they’re at capacity or could handle 2 more elementary or secondary students, and so on. So, the locals have the responsibility to advertise when local conditions are conducive to immigration or not. This information belongs in the hands of the applicant, too.

Federal Bureaucrats vs State & Local Bureaucrats

Of course, so many people believe that the Constitution grants Congress the power over Immigration – it doesn’t. The Constitution lists an enumerated power to make all State naturalization laws uniform.

This shows where Congress has that power but you won’t be able to find in the Constitution the word “Immigration” or “Immigrant” or any other variation of those or other terms for those who want to come to America to live, anywhere. That’s because Immigration has always been a State power.

Back in 1789 Washington didn’t have Border Patrol agents located all along the newly independent colonies to administer an Immigration code. States were expected to decide whom they would allow in, whether they were criminals, whether they would be a burden on the local society, and so on.

States Grant Citizenship under Uniform Federal Rules

So, while the Feds could force all States to have uniform rules for turning an immigrant into a citizen, they didn’t ever have the power to grant admission to the US.

Even the oft-cited 14th Amendment makes it clear US Citizenship is a consequence of State Citizenship.

” All persons born or naturalized in the [several] United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. “

Being a citizen of Arizona makes a person a citizen of the United States, no matter where they move to, for example. But note that being a resident does not make one a citizen. And “just visiting” isn’t being resident, either.

So, how long must a visitor be present to be considered “resident” and how long must he be resident to become a “citizen”? States decide the former and the Feds can write a law for the latter.

Road Trip through Alabama

For example, if someone drives through Alabama on their way to Florida, they’re just visiting Alabama (and maybe Florida, too). Visitors are accorded equal protection under the law, the local law, but they obviously can’t vote. Visitors may also have less access to things, like borrowing books from the library.

If these visitors want to work, can the state restrict their employment? Legally, yes, but usually states don’t interfere in right to work states, if someone shows up from out of town and wants to wield a broom, so be it. What if the visitor is not a US citizen but someone from another country? Are they afforded the equal opportunity of employment of citizens? A Federal Attorney General has claimed they do. But that’s absurd.

At some point a US citizen residing in Alabama will become resident, and in the process gain the right vote, perhaps gain borrowing rights at the library and so on, but normally he must claim that bundle of rights by turning into an Alabama citizen. He surrenders his other worldly license to drive, say, Montana, and gets a shiny new AL driver license.

He may also get a voter ID card or other government identity card, like concealed carry permit. There is a peripheral issue here that one state may grant a concealed carry permit, while the adjoining state won’t recognize it, despite Constitutional assurance that legal actions in one state will be honored by other states. Guns in particular are a sticky matter since they may fall under the purview of the 2nd Amendment, where the right to bear arms shall not be infringed.

Concealed Carry is a State Law

Some 45 states (maybe more now) provide for open carry of firearms by citizens, but concealed carry is usually more restricted. This may cause some problems carrying a weapon across state lines, especially if concealed.

Immigration vs Naturalization

This means States decide on Immigration issues and can later naturalize that resident according to uniform rules prescribed by Federal law.
Who, then, protects borders from unfettered immigration?

Can the Feds take a busload of border-crossers from El Paso, Texas, to San Diego, California, in the process crossing New Mexico and Arizona without getting permission from the 4 states involved to bring those “children” in?

NO.

This is a gross over-stepping of Federal power.

State Immigration Crossing Centers

States have the right and power to set up Immigration gateways anywhere they like inside their state to enforce state immigration laws, including inside the US Border Station to stop ICE buses carrying illegal immigrants and force them to alight and return to the border.

At International airports if a passenger arrives who is not welcome because his visa is invalid, expired or perhaps non-existent, the common carrier who brought the passenger to the terminal is financially responsible for returning the passenger to the point of origin. This is why gate agents may ask a passenger to show not only their passport but also the visa for entering the country where they’re headed.

For walkers deportation involves passing them from the state transit area back to the border crossing they walked across.

State Processing of Deported Individuals

Similar to current Federal processing border-crossers one flow will spin off rejected individuals into a transit area sequestered from free exit. It is possible while in transit for a border-crosser to communicate with the outside world and rehabilitate his situation, but more than likely those rejected will be deported.

Assured Identity through Biometric Data Storage

However, it is critical that each and every person crossing have biometric identification data gathered. Whether the crosser is admitted or deported, that data will be stored. If the crossing person is advised not to cross until some condition has been met and then attempts crossing again, the biometric data will provide proof of prior warning not to attempt crossing.

Biometric data can also be stored not only in the network for immigration enforcement but also on a secure card issued to visitors and immigrants. Whether such cards are issued upon first entry to the US or prior to departure by US State Department personnel on behalf of a state granting a visa to visit or immigrate, a high-security counterfeit-resistant technology should be used.

As most 8th graders know the 10th Amendment last of the Bill of Rights reserves all powers not specifically granted to Congress and the Federal government to the States individually and if they exercise no authority the power is retained by the people.

This catch-all retention of states’ power embedded in the 10th Amendment is crucial to understanding the limitations of our Federal government.

Of all people an Attorney-General should clearly grasp the meaning of the words written into our Constitution.

The Age of Intolerance

Posted on April 6, 2015 by tesumner

Welcome to a By-Gone Era

Quakers, Protestants and other religiously persecuted Europeans, mainly from Britain, escaped the government-run Anglican church and other intolerance hundreds of years ago. They came to America. They pledged to support each other’s beliefs, not by forcing everyone to conform, but by simple tolerance of each other.

Tolerance is not truly “support” but at least it’s not interference. The various groups having differing religious beliefs agreed not to interfere in the practices and beliefs of other groups. They agreed to tolerate the others’ views, respecting them.

Tolerance, Acceptance, Support, Adherence

Your beliefs in the After-Life or in a number of other things, like whether milk and meat can be cooked in the same pot, whether people are reincarnated into life after life until they ‘get it right,’ whether a man can marry 4 women, whether driving cars on Sunday is wrong, whether God exists at all, whether the King is the Son of God, and so on and so forth, are in fact your beliefs. No one else may believe the same thing you do, or maybe a billion other people have a lot of the same beliefs as you.

If someone else disagrees with your beliefs, do you want them to disagree violently with you, wielding the power to behead you? Probably not.

Would you want to be able to give your case for your beliefs to them and possibly convert them, or would you prefer to be rendered mute and unable to express even a single word about your own beliefs? Probably outlawing free speech seems too restrictive. Some people believe in allowing on speech that they consider acceptable. This love of political correctness chills the first Amendment right that some consider worthy of restrictions.

Support by Edict or Teaching Understanding

Would you want them to be able to force you to come to their synagogue, mosque, temple, church, or to be able to force you to donate your time, money or effort to support their beliefs? Maybe you should be able to force them to do the same? Not. Teaching the fundamental tenets of a religion may be possible for adults when studying comparative philosophies or religions, but care must be exercised with younger students not to cross the line between comparative study and advocating.

Would you want to have all commercial operations cease on your “holy day” – whatever day you choose, because that would be adhering to your beliefs? Or, would their day be “holy” too and commercial-free? Maybe forcing you to open your store on your holy day is just as unacceptable as forcing them to open on their holy day.

Which of the words best describes how you want other who don’t believe in your religion (or lack thereof) to behave:

Adherence – forced compliance with someone’s beliefs
Support – forced payment, participation, attendance or ‘training’
Acceptance – forced silence for all
Tolerance – live and let live, but freedom to act and speak according to beliefs

Freedom to Believe is Not License

If we agree that Tolerance of others’ beliefs is the correct approach, we need to recognize that some behavior is simply unacceptable, period. For example, it is never acceptable that someone is allowed to die or be killed as a direct consequence of a religious belief and in most cases as an indirect consequence either.

Equally, it is never acceptable for harm to be a consequence of religious belief. One may argue about social behavior, but violence or resultant harm is just wrong. It may be unkind or uncivil to deny someone when they ask for some voluntary action, but is it actually a crime?

A doctor, who has power of life and death, has sworn a duty to do no harm under the Hippocratic Oath, but does this oath obligate the doctor to accept the religion of the patient or embrace their religion? The sworn duty clearly obligates the doctor to accept and be silent in order to comply with the Oath. It does not obligate support or adherence of the religious beliefs of the patient, although some believe it does.

Religious Tolerance and the Law

A nurse who is ordered to administer a treatment that the nurse believes is against religious tenets may want to object, but does her duty override her beliefs? We have to go back to her medical Oath, if any, not to do harm. Absent a sworn duty to treat, a nurse has the right to obey his religious beliefs and not to render aid, legally, but it is not a license to commit an act adverse to the health of the person he is aware of.

Just because someone believes through their religious teachings that some act that the law has specifically proscribed is desirable, the law does not grant license to the believer to act contrary to the law and commit the proscribed act. Belief in doing some illegal act is not license to do the illegal act. If some men believe that their religion grants license to have sexual intercourse with underage children, the law takes precedence over those beliefs.

On the other hand, if someone believes through their religious teachings that some act is proscribed by their religion, the law cannot compel the believer to commit the act unless the life or limb of the person requesting the commission of the act. If some believe that water must not pass the lips of a believer during identifiable times, this prohibition cannot override medical necessity to drink liquids.

Some claim that the law may compel a doctor, for example, who has sworn a duty to protect life to perform an act that the doctor may believe is proscribed by his religion. We must look to the Hippocratic Oath for guidance and allow no harm whether through action or inaction.

Instead, with the PC police patrolling we find ourselves in an Age of Intolerance, completely lacking in traditional personal freedom.

Freedom – A Viewpoint

Imagine a scene in rural America not long after the Constitution. A family lives in a log cabin built by the husband and wife near a stream, far from any townspeople, with farm animals and planted crops for the family to survive off of. Freedom includes the family’s right to believe what they want about their Creator, if any, but also extends into how they live their lives on a day-to-day basis.

If they want to turn grape juice into wine and serve it to the whole family, including children, is that a part of their freedom?
Are they free to slaughter animals on their property for food or for any purpose, or must they answer to townspeople about what they do with the flesh or how they kill the animals?
Can the family dump its waste into the stream without regard to the neighboring farms or downstream property-owners who might be affected?
Can the family dig up and use the minerals and wealth of the land as they see fit or must they obey rules from the townspeople?
What will the family’s reaction be to townspeople claiming taxes on the family’s wealth that only the family worked so hard to create and maintain?

The notion that “it takes a village” is not part of the thinking of this family. They live on their own apart from the “village” and interface only as they see fit with the rest of the world. No one from town comes to the farm to plow the fields or tend the animals, but when the time comes for the bounty of their hard work to come to market, the villager want their pound of flesh. Like Shylock they care not if the farmer dies from their taxation. They want their pound and half of flesh. The farmer after all has eyes, and will suffer from the townspeople’s visiting their view of the world on him.

What, then, is the meaning of freedom as envisioned over two hundred years ago?

Does the village play any part? Are the views of townspeople important at all?
Or, does the farmer do as he wants up to the edge of his property, so long as nothing spills over onto a neighbor?
When dealing with his neighbors, does he negotiate as an equal and a neighbor or does he allow the townspeople to slant the table towards those they favor or feel need to be granted an upper hand?
Does he obey the townspeople’s rules solely when he’s in the village?
Does the farmer take on the role of “the Little Red Hen” and simply enjoy the product of his work, since no one stepped up to help him produce his farm output?
Does the farmer allow the townspeople to come onto his property, confiscate his grain and livestock, and re-distribute them to those the townspeople feel are needy?

Clearly to the farmer and his family “Freedom” means freedom from interference of those outsiders who appoint themselves to rule over him, and freedom to live as he sees fit, dealing with his neighbors honestly and only on an equal basis.

Government Should Be More Business-like

Posted on February 26, 2015 by tesumner

You Don’t Need an MBA

So many people are afraid to try to figure out their own spending habits and make a budget. Young people don’t want to be restricted and never had the practice handling money to understand what “budget” actually means.

Before turning to government budgeting, let’s look at family budgeting. Whether you’re a single person living in an apartment or a multi-generational family living in a huge house, in order to avoid problems like calls from collection agencies or being evicted for non-payment you have to plan your monthly and annual spending so that at least you don’t run out and maybe you actually save some money.

Income vs. Outgo

Usually people try to figure it out the hard way – run out of cash or max out their credit cards, and then plan what they should have done instead. Maybe they can dig out at that point, maybe not.

Look at your paystubs. You earn so much every pay period, but there are deductions before you even see the paycheck. Mostly they’re taxes, but also things you have some control over, like insurance and retirement contributions. You might also have some other income from a stock account your parents gave you or you created yourself.

Look at your bills. Food, housing, car, auto insurance, entertainment, cellphone, electricity – the list is long. Most of the bills are monthly but some are daily or annually, and some are one-off, like buying a stereo for your living room.

You know that over the course of a year that total paychecks must not exceed total bills, plus you’d like to save a little for your retirement fund, or an emergency fund. When you’re first starting out in life, that can be really hard to do, even to balance the paychecks with the expenses. The tiniest emergency expense can deplete your meager savings and send you into a cycle of paying late on every single bill.

You have to have a balanced budget for your family finances

Unless you can literally tighten your belt by not eating as much, it may take a while to recover. If by some magic you have a credit account, you can load it up and then suffer just a little belt-tightening each month to pay back the borrowing.

Expenses, Assets, etc.

It may make sense to borrow money to buy a car. The car is a long-term asset and so an installment payment plan can also make sense. If the car will last 5 years, a loan for 5 years seems acceptable, but a 10-year loan would not be sensible. Why be paying for some asset that is no longer useful? Pay it off over its life or earlier, if possible.

What is really irrational is borrowing money to pay for daily expenses. Getting a car loan may be rational, but paying for last week’s groceries over 18 months is not. You should reduce your food expense to match your funds available for food, or else you will build up a sizable debt just for eating every day.

Your available funds for spending will shrink as you take on more loans to be repaid. This is the real meaning of budgeting. Yes, you can borrow, but eventually you have to pay it back, and you should only borrow to purchase assets that have a useful life – not something perishable or quickly consumed.

Businesses are like Families

Income-Expense Cash Flow to Net Worth

Businesses (because they’re run by people who budget their own family finances) learn early on in their existence to bring in more money than they spend – the leftover is “margin” not mad money. Margin must be dedicated to retained earnings, rolled over and set aside to pay for growth, improvements in equipment and paying stockholders and, yes, taxes on business income (note other taxes are expenses before margin).

When a business plans their budget, they must include their expenses of production or for services on a daily or unit basis, plus include the monthly lease, annual business insurance and the like. This is just like what families do. They have accumulate money to pay annual or quarterly bills in addition to paying the invoices that come on a monthly basis.

Master of Business Administration (MBA)

In business school MBAs learn to plan Cash Flow, one of the basic 4 accounting statements. When cash runs out, bills can’t be paid – so running out of cash is a crucial aspect of budgeting. A Cash Flow statement attempts to predict how much cash will flow in from Sales and how much will be needed to pay all the Expenses, both of these are normally done on a monthly basis looking forward 1 to 3 years.

In MBA school we learn that when cash is negative for one or more months, a loan must be taken out to cover the shortfall. If an asset is to be acquired and that “caused” the shortfall, then a bond could be sold to cover the gap. The bond has quarterly payments that cover the interest and eventually the whole face value of the bond (principal) must be paid off.

The quarterly payments are tacked onto the monthly “expenses” to re-calculate Cash Flow. Maintenance on the asset is also added to the list of expenses for Cash Flow calculation. A non-cash expense is the depreciation of the asset. The term of the bond is never longer than the useful life asset purchased.

Basic Accounting Statements

Cash Flow analysis is crucial to balancing a business budget. In addition to Cash Flow, a business has a Balance Sheet, which tracks Assets, Liabilities and resulting Net Worth. Liabilities are forward-looking obligations that must be paid. In the Cash Flow statement we must enter the monthly repayments and payments, but the total borrowing or other amounts the business owes are liabilities on the Balance Sheet, like the face amount of the bonds issued to borrow money.

Borrowing to balance income with outgo

When we subtract the Liabilities from the Assets, we know what the business is worth. This is what the Balance Sheet shows owners and shareholders. All of the Margin from Sales less Expenses is shown in the Income Statement.

The Income Statement feeds the cash into the Cash Flow statement where Depreciation increases cash and the result flows back into the Balance Sheet.

A Budget is just the planned figures that managers plug into each of these statements, starting with the Income Statement: Sales & Expenses. If Cash Flow analysis indicates a shortfall, borrowing can be done, but this increases liabilities and lowers Shareholder Equity.

Government Accounting Statements

Have anyone ever seen a Balance Sheet for the United States Government? Maybe there’s one, probably not understandable, but certainly not discussed. What does the US own, what liabilities are there to be paid off in the future, and are the income and outgo flows balanced?

When the government borrows to meet shortfalls, eventually those liabilities need to be paid off. Future Cash Flow must not leave a deficit (shortfall), else Treasury must issue bonds and sell them for cash in the international market. They become liabilities on our National Balance Sheet that future generations have to pay off.

Businesses know that temporary shortfalls can be filled with Working Capital loans. Those are paid back quickly, not over 30 years. If the government operated on a biennial budget, a working capital loan would be repaid within those 2 years.

Long-term borrowing is done by business for long-term assets. The repayment terms of borrowing for a piece of equipment is always less than the useful life of the equipment. No business borrows for 20 years to pay for a luncheon. There is no such thing as “investing” in consumables or disposables. Government needs to follow the same repayment rule for loans to acquire durable assets: pay it back within the useful life of the asset.

Accounting & Budgeting

Before a budget can be constructed for the next year, last year’s figures have to be gathered. Then the changes can be compared. Changes in spending or revenues have to added to the analysis.

We first need the basic 4 statements for government before we can analyze our current situation. The Office of Management and Budget (OMB) and the Congressional Budget Office (CBO) do have figures but they are separate. You can find income tax figures, both estimated and actual, but not in an Income Statement form – they are disjoint to obscure how little income there is versus expenditures.

National Balance Sheet does not exist showing all the land Bureau of Land Management (BLM) manages or General Services Administration (GSA) owns are buildings, equipment, vehicles, furniture and so on. Never mind the assets the military possesses.

Biennial Budget with Borrowing for Assets

How can we manage a business as huge as the Federal Government when reports that Sarbanes-Oxley requires of all businesses aren’t even available? Worse, S-Ox requires CEOs to sign off on the veracity their financial reports, but no one swears even the Unemployment figures are accurate, much less the non-existent National Balance Sheet.

Making Big Data Understandable

No one can grasp the magnitude of the Federal government. It is, after all, $3,900,000 Million. A family household income of $50k is common – so a Million is 20 families’ households’ budgets. The Federal budget is 3.9M times 20 families’ budgets. It is nearly unfathomable.

In broad brush a normal person can understand a statement with up to about 50 or 100 items. A top-level budget would be better understood if it had items up to about $39B so that only 100 or so items appeared on it.

For management purposes those 100 entries should be further broken down in more detailed statements also consisting of around 100 items, or roughly $390M. And, in turn, those detailed breakdowns should be broken down further to chunks of $3.9M, making them less than the budget of 100 families’ household budgets.

If the most detailed breakdown had 1,000,000 line-items we would have sufficient detail to track down waste and fraud. But what about the income side?

Off-Budget vs. Budgeted Revenue

Seizures are a wonderful way to hide waste. If GSA can seize property and sell it at auction or IRS can seize assets and not have to go back to Congress to get permission to use those seized assets, how can Congress ever hope to control spending?

When TARP funds were repaid by bailed out companies, where did those funds go? Shouldn’t they have gone to reduce the deficit? They didn’t.

When the National Park Service or the Passport Agency in Immigration service collects funds, do those get deposited into the Treasury or are those funds held out as if they “belonged” to those respective departments? How can we manage a budget that doesn’t bring the revenue back to a single point, but allows independent autonomous funding or whatever self-funding the agency wants? The obvious single accounting point is the US Treasury. All funds must flow from or to Treasury – nothing hidden.

It is not necessary for all revenue to be a tax or a fee, the US Government can dispose of assets it owns or it can lease those assets out for additional revenue. A business would consider disposing of assets to fund its business plan.

Continuing Resolutions

It doesn’t make sense to plan one year and then not have a plan for 5 years. Circumstances continually change, each Congress was elected with an agenda in mind, and their budget should reflect that election. In limited situations it may take a while to resolve budget conflicts, but not the entire term of the Congress. If Congress cannot come to terms over the budget, then only a complete shutdown will apply enough pressure to reach a resolution.

At the beginning of each term of Congress, the President needs to propose a budget based on the current situation in the government and economically. If the President refuses to do his duty to propose, then it devolves to Congress to set a budget without his proposal. However, if the President continues to fail to propose a budget, then the Executive does not need to pay for his staff, who are not performing.

When sufficient time has passed and Congress must create a budget, with or without Presidential input, they also must do their duty to pass a budget law, establishing revenue and expenditure levels that the Executive must abide by. Should the Congress itself fail to perform its duty, then like for the Executive first Congressional staff should not be paid. If Congress continues to fail to resolve its differences then Senators and Representatives should lose their compensation.

The loss of compensation can simply be a delay in payment at first, then become a permanent loss of pay. Finally, once Congress has done its duty if the President fails to enact the law passed, the President himself (and his expense account) should permanently lose his compensation until a budget law is passed and signed.

If no budget law is ever passed as was the case under Senator Harry Reid, nothing should be paid out of Treasury at all, whatsoever. If a family could decide how to budget its money, they should just stop spending until they do decide. The same for government.

State-based Healthcare Insurance

Posted on July 30, 2014 by tesumner

Health Savings accounts that belong to employees to pay for healthcare insurance negotiated with employers is a better solution than one-size-fits-all Federally-forced insurance.

Healthcare costs are low when young, but a person should be able to save up while covered using a HSA they own and control. Insureds should be able to decide what coverage they want at what time in life. The graphic from nearlyscience.com illustrates the costs over a lifetime for men and women.

Of course insurance companies exist for profit, but terminating insurance because the company had to pay out is just wrong. Maybe they could re-rate an insured, but dropping people should be outlawed as a violation of the insurance contract. Naturally, we have to protect insurers from fraud and hiding the truth by insureds, but refusing to pay a claim is equally wrong.

Promised Reforms

When Obama ran for office we all thought his “reform” of healthcare insurance involved having insurance companies:

Pay claims in a timely fashion
Pay the whole claim and not pick & choose
Maintain coverage (no-drop, no-cancel policies)
Provide more choices of coverages, like including optical & dental

We didn’t get that. We got a massive Federal takeover of healthcare via massive regulation of healthcare insurance and new taxes. Small businesses with only 50 employees would be required to hire a non-producing insurance administrator (or contract out the work) to comply with new Federal regulations. This is an absurd burden on small business. How do you hide a 2% increase in labor costs?

Worse, the “new” insurance includes all sorts of ‘gimmes’ like free mammograms for both sexes, free pregnancy, free birth control and abortions, and so on. Free or included is irrelevant, since the insurer has to account for the included costs in their premiums, making them higher. And employees and employers right to choose was curtailed, especially painful was violation of matters of conscience and religion. The promised savings of $2,500 per family did not appear and have no chance of happening.

What’s Wrong

Fine, refusing to rate someone (accept them into the insurance system) is wrong. We need to accept all applicants, but it is only fair to charge them according to risk. This is especially true for matters that insureds have control over, like smoking and obesity or other choice of lifestyle and choice of risky behaviors.

Currently, “standard” versus “preferred” versus “substandard” are insufficient to classify risks of potential insureds. But this is an industry choice, not a government matter to regulate. “Poor” risk insureds should still be accepted with their own rating below substandard, but allowing someone to get protection once they have detected a medical condition and be accepted without paying extra is wrong.

Perhaps the contract should require a waiting period, which was common under old regulation, or perhaps the contract should require the insured to remain paying as a customer for a certain period of time in order to recoup its upfront losses.

Universal Life Insurance

A parallel policy called “Whole Life” insurance is instructive. Actuaries rate individuals and the company collects a monthly premium that will pay a certain amount in event of death of the insured, but the insured can actually add in extra money every month to accumulate at some specified rate. The rate can be fixed or variable according to some index, like stock market pricing. But over a period of decades the accumulated extra amount grows Federal tax-free.

If the insured does not die, then the accumulation is payable to the insured. Some contracts allow the accumulation to be set up as a source of payment for the insurance policy itself. Sometimes this is called a Modified Endowment Contract. But the upshot is that the insurance coverage with a specified death benefit is paid each year by the earnings from the accumulation in the savings account. The insured can also borrow against the policy value before the final payout.

“Whole Healthcare” Insurance

Why don’t insurance companies offer a “Whole Healthcare” insurance policy, similar in structure to the Whole Life policy but geared toward healthcare and with a similar accumulation account?

The accumulation can be Federal tax-free and grow over a lifetime until needed for hospice care, eldercare, or the expected massive costs at end of life. During other times the accumulation could be used to meet deductible, if the insured so chose, or to pay for non-covered medical expenses. While these uses would reduce the accumulation and could result in shortfall decades later, they should be allowed tax-free. Clearly, insureds should be advised to borrow the funds and pay them back and advise the insured of the potential consequences later in life.

Forced Compassion by Government

Almost all of us have compassion for people who cannot afford to pay for healthcare procedures, but government is so bad at doing anything involving money, we simply cannot afford government-run compassion. No subsidies for some people and not others. No special credits via income taxes. Let those of us who choose to help others with their expenses do so on a case-by-case basis, allowing us to judge how much we will give compassionately and who is worthy.

States need to unfetter the insurance industry to find solutions. Feds need to get out of the way.

Define Congress’ Power of Oversight

Posted on March 3, 2014 by tesumner

Power of Congress to Oversee Government Operations

The purpose of Congressional oversight is to verify that laws passed by Congress are being adhered to, being properly enforced, and whether any improvements to the legislation are needed. Note that this power is not specifically called out in the Constitution, although it should be.

The Supreme Court has ruled that Congress has this power, because the power to legislate includes the power to verify that legislation is actually implemented as intended by the Executive. It may be necessary to clarify the extent of this power and how it consummated.

Executive Over-reach

Complaints of Executive over-reach are really about the President or his administration twisting the intent or express provisions of law to do something other than what the law calls for. Regulations that implement a law are these days written by the Executive branch and then read into the Federal Register to publish them.

Of course, the President has the power to issue orders that clarify laws passed by Congress. Those Executive orders are not supposed to change the intention of a law, nor thwart the enforcement of law, because the President swears to uphold the laws of the United States and to defend the Constitution.

Amnesty via Executive Order

Recently, President Obama refused to enforce the Federal immigration laws by

Filing lawsuits against state and local police to prevent them from enforcing Federal statutes
Ordering border patrol officials not to detain certain persons arriving at the border without proper authorization to enter the US
Ordering the printing and distribution of forms for some of those unauthorized persons to apply for temporary authorization to stay and to work, despite existing laws prohibiting those actions
In addition, President Obama sent his Justice Department attorneys to threaten state officials with legal action if they refused to issue identification cards or driver licenses to those he “authorized” to stay without visas.

Drafting Federal Regulations for a Federal Law

Part A of 3 parts [see below]

Administration staffers and lawyers also have the task to write up instructions for Federal officials, designing and publishing any needed forms for gathering information or recording data, and written regulations for filling those forms, processing them and storing them. This regulatory authority is generally written into public laws. Some states specify the exact content of regulations as part of law, not the agency appointed to enforce the law.

Hearings Administrative and Civil

In addition to regulatory-drafting authority Federal agencies are also often authorized to conduct administrative hearings for those affected by the regulations. These hearings are intended to supplement individual judgment calls by officials to prevent misapplication of the regulations or the law in processing, basically to assure fairness and justice.

Often these administrative hearings can be appealed into the Federal civil court system (or possibly the criminal side of the courts). Generally, administrative hearings merely enforce the process as detailed in the regulations without referring to the actual written public law.

The civil court on appeal is then faced with trying to judge the intention of the law but as implemented via the regulations. The line between the words in the law and the provisions in the regulations often becomes blurred. The court can side with the more detailed regulatory process as documented, or it can try to read between the lines of actual law to determine what was intended.

The Need to Clarify Oversight into the Constitution

Part B [see Parts A, C]

Oversight is hampered when Congress doesn’t have the power to subpoena witnesses and evidence. Moreover, once subpoenaed witness need to be cooperative in order to get the testimony needed to evaluate the implementation of laws.

Congressional hearings are not criminal hearings, but a Supreme Court might hold that testimony given in a Congressional hearing could later be used in a criminal proceeding and therefore the 5th Amendment applies.

Constitutionally, an impeachment proceeding is not criminal, since the worst outcome of a successful impeachment hearing is removal from office. Of course, criminal charges might also be pursued later. But, if construction of oversight authorization limits outcome to the same as other impeachment proceedings and restricts the use of evidence gathered in Congressional oversight to at most impeachment, we may be able to compel appearance and to compel testimony under penalty of contempt of Congress.

Amendment XXXII

Part C [see Parts A, B]

Provide standing for members of Congress and States to challenge executive actions before the Supreme Court or other such inferior court as Congress may designate. While Amendment XXXII is somewhat lengthy, it does restore Constitutional checks of power against the Executive by the Legislative branch in

Granting the power to inquire into matters of conduct by the Executive with regard to the proper discharge of duties as prescribed by law or the Constitution
Granting subpoena power by any member of either House over all documents and information held by the Executive or its employees or agents and to enter upon any place over which Congress exercises legislative authority
Provide penalties for failure to appear or failure to produce, and to provide for removal from office and forfeiture of pay and pension, and disqualification to hold office as prescribed in Article I Section 3
Granting the power to review and to approve only by affirmative roll-call vote of at least 2/3 of those present in each House all actions, interpretations, orders and written regulations that implement laws passed by Congress