Lessons from Massachusetts on health care

James Capretta writes about the Massachusetts state healthcare program and its implications for US healthcare under the bill passed by Congress:

When Massachusetts rolled out its coverage program in 2007, many more people signed up for the new heavily subsidized insurance than was originally predicted by budget officials.  Almost immediately, costs far exceeded what had been budgeted, forcing state officials to scramble to find cuts elsewhere in government and other sources of revenue.

After three years, no real progress has been made on rising costs.  The program remains well over budget, with no end in sight.  Further, state residents who now must buy state-sanctioned coverage are bristling at their rising premiums and the inability to find coverage which covers less and thus costs less.

State politicians are responding to the cost crisis the only way they know how: by promising to impose arbitrary caps on premiums and price controls for medical services.  The governor and state regulators have disallowed 90 percent of the premium increases insurers — all of whom are not-for-profit — submitted for their enrollees for the upcoming plan year.  The state says premium increases above eight percent are too high and unacceptable, though they themselves don’t have a plan to make health care more efficient in Massachusetts.  They just want lower premiums.  The insurers have responded by refusing to sell any coverage at the rates the state wants to impose.

Capretta points out that the demographic targeted for subsidized medical coverage under the healthcare bill — basically, those making less than four times the Federal poverty level — contains roughly 130 million people, more than a third of the US population.  However, the numbers estimated by the CBO for the cost of the program assume that state-based exchanges will have only 17 million subscribers by 2016.

The potential implications are not good.

ACTA revealed at last

Last month, the European Parliament voted by 633-13 to demand release of the text of ACTA, the "Anti-Counterfeiting Trade Agreement", which both the current and previous US Presidential administrations have tried to keep secret "lest the public oppose its passage".  Last year, the Obama administration went so far as to declare, via Presidential executive order, the ludicrous claim that allowing the text of the proposed agreement to become public would "do damage to the national security".

Well, apparently our "historically open" administration finally caved at the eighth round of treaty negotiations in Wellington, New Zealand last week. A current draft version of the Anti-Counterfeiting Trade Agreement was posted on the main EU web site today (PDF document).  As C|Net puts it, "In general, ACTA's proposals seek to export controversial chunks of U.S. copyright law to the rest of the world."

Naturally, I'm sure that not one of us can possibly guess which US commercial interests are behind this.

In related reading, Molly Wood reports that the GAO released a report last week on counterfeiting and piracy in the US.  While the report concluded that consumers and businesses do suffer adverse effects from counterfeit goods, it also concluded that most estimates of the economic impact of counterfeiting and piracy "are either totally made up or are simply wild assumptions".  In particular, the FBI was unable to produce "any proof, methodology, or source data" to back up a report claiming $250 billion lost by American corporations to piracy in 2002, nor could the Business Software Alliance produce any evidence to substantiate an allegation of $9 billion lost to piracy in 2008.  These seem in keeping with the manner in which it has been widely alleged that the RIAA and MPAA calculate their piracy losses:  They make a (probably wildly optimistic) marketing prediction before the fact of how many copies of a particular product they expect to sell, subtract actual sales once it hits the market, and then declare that the difference between the two simply must be due to piracy — because after all, they know that they're all creative geniuses, and it simply isn't possible that hardly anybody bought the product because it sucks.

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Update:

randwolf kindly pointed me at this analysis of the ACTA text from University of Ottawa law professor Michael Geist.  The analysis makes it much clearer than the legalese of the treaty itself that, just as previously believed, ACTA is really very specifically targeted at digital media that can be copied and downloaded, to the detriment of any fair-use rights with regard to any such material.  It would not be too great an exaggeration to say that this is about extending the reach of the MPAA, RIAA and Business Software Alliance world-wide (at least partly via an end-run around the World Intellectual Property Organization).

GM repays bailout money

Well, well.  Turns out GM repaid $8.1 billion in bailout loans today, five years ahead of schedule.  This is the final installment of its $61.5bn bailout — $52bn from the US and $9.5bn from Canada — because $53.4bn of the bailout loan was effectively repaid in stock, giving the US Government a 61% holding in GM.

This doesn't mean GM is out of the woods; after wiping out roughly $83bn of its $95bn debt in its June 2009 bankruptcy, it lost a further $3.4 billion in 4Q2009 alone, ending the year $15.8bn in debt.  (Here's an interesting question:  If the government is the majority shareholder, who gets to deduct the business loss?  I don't want to fill out that 1040.¹)

GM says it has "developed a cost structure that allows us to be competitive", but time will tell whether it can operate at a profit again, and whether it can build cars — at a profit — that people want to buy.

[1]  Yes, I know corporations don't file 1040s, they use a different set of forms.  Work with me a little here.  :)