Archive for January, 2012

The American Automotive Industry

January 22, 2012

I watched a segment on “CBS Sunday Morning” today. It was on the recovery of the American automotive industry since their bottoming out in 2009. In short, GM has regained its leadership position in worldwide auto sales.

The turnaround in the automotive industry is, in part, due to normal capitalistic economic forces. Being in a stronger fiscal position, Ford managed its recovery without government help. A significant part of the credit for the recovery of the automotive industry, most notably for General Motors, is due to the government decision to inject capital into the failing industry.

Philosophically, I share concerns with the Republican party about the direct involvement of the government in private industry. I don’t know where Obama stands on that philosophy, but based on other policy decisions, I suspect his view is similar to mine. However, in times of crisis, leaders make pragmatic decisions that are targeted to ameliorate real, urgent problems.

It turns out that the policy decisions of the Obama Administration, like most other policy decisions of this administration, turned out to be the correct one – one based on analysis and not ideology.

The Republicans continue to espouse their fundamentalist policy, even in the face of the facts. They would have let the industry die. [1] Umm, “creative destruction”, I think Mitt calls it. According to conservatives, government can’t create jobs. It appears, however, targeted government action can save jobs…

… more than 1,140,000 of them in 2009 and another 314,000 jobs in 2010.[2]

According to the Wall Street Journal – you know, part of the liberal media – reported that more than a million jobs were saved by the action taken by the Obama Administration. That’s the same administration referenced by current GOP candidates on the campaign trail as the “job killing Obama Administration.”

Mitt Romney claims that America needs a CEO to lead it. With the Obama Administration’s proven track record of success – this just being one of them – I think I will stick with the community organizer.

 

[1] http://pa-magazine.com/industry-news/gop-presidential-candidates-criticize-auto-bailout/

[2] http://blogs.wsj.com/deals/2010/11/17/gm-ipo-auto-bailout-saved-more-than-1-million-jobs-study-says/

 

 

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Obamacare Gets Personal

January 15, 2012

There was a virulent debate levied against the Affordable Care Act that continues in the Republican primary debates to this day.

Let’s recap on some of the major provisions of the law:

  • There no longer lifetime limits on coverage. This doesn’t affect too many Americans, about 20,000, but for those it does, it can be the difference between medical bankruptcy and the heathcare they need. Annual limits are no longer allowed, either [1]
  • Honest mistakes on your application are no longer a sufficient reason for canceling your policy. [1]
  • Young adults can stay on their parent’s plan until age 26. [1]
  • Children with pre-existing conditions can not be denied coverage. [1] It’s rather astonishing that this was allowed in the first place, isn’t it?
  • Preventative services, such as mammograms, colonoscopies, immunizations, pre-natal and new baby care are covered without expense to the insured. [1]
  • Insurance companies are required to spend at least 85% of all insurance premium dollars from large employer plans on coverage and at least 80% of premium dollars from individuals and small group plans on actual healthcare. [2]

There are more changes in store, starting in 2014.

  • Private health insurance exchanges will allow Americans to pool together to purchase coverage. For individuals and small businesses, this allows us to spread the insurance cost and risk among a larger pool of individuals. [1]
  • Small businesses may be eligible for tax credits for providing coverage to their workers. [1]

It’s also important to recognize what the Affordable Care Act is not. It is not a takeover of healthcare by the government. Insurance companies are and will continue to be private, for-profit companies. Doctors and hospitals will continue to be private, for-profit, companies. In that, there is no substantive changes to the structure of pre-Obamacare healthcare in this country.

I challenge any conservative to explain how those above items above are bad for America.

Governmental policies are important in the abstract, but they become vastly more important when they affect your personally. I run a small business, so we are pretty much on our own when it comes to healthcare coverage. We decided to see if there was an alternative to our expensive individual healthcare plans, so we talked with an insurance agent and sent in the application.

We are very healthy, but one of my family members had a minor surgery in 2008 to resolve a lifelong issue. The risk of side-effects was low from the procedure and fortunately none of those were experienced. It resolved the problem and is not the type of condition that is recurring or has long-term risks – either it works or it doesn’t. However, that was sufficient for the insurance company to deny coverage for pre-existing conditions.

As a CEO, I fully respect the capitalistic endeavor. I want my insurance company to make a profit, so they can continue to be a viable service provider for me long into the future. However, the only explanation I can derive for this to be a cause for denial is unchecked greed by the insurance companies.

Again, I ask conservatives to justify how this behavior from insurance companies is justifiable and why is it not the role of government to ensure fair treatment from companies in the business of providing such fundamentally personal and life-affecting services as healthcare insurance. I challenge Republicans need to explain why they would vote for a Republican candidate who vows to repeal the Affordable Care Act.

Justify it. I dare you.

 

[1] http://www.whitehouse.gov/healthreform/healthcare-overview

[2] http://www.whitehouse.gov/healthreform/timeline