New Jersey Healthcare Exchange is Born and Crawls for Governor’s Desk

The healthcare exchange, a mandate of the U.S. Affordable Care Act (ACA)  would primarily affect the approximately 1.3 million New Jersians without health insurance, among then many employees of small businesses. For those unable to afford the premiums, there would be federal subsidies. ACA mandates that all individuals must posses health insurance or pay a tax penalty. The latter portion is one of the issues whose constitutionality is being reviewed at the U.S. Supreme Court. The USSC will rule on the subject around June this year.

Here is the bill as it moves toward Christie’s office:.S1319 1R.

At first glance, I see two major problems with the bill:

The first is the composition of the Board. By creating a board populated with political appointees, no matter how we dice it and regardless of the conflict-of-interest provisions, there will be influences exerted on the members and their decisions.

How? Insurance companies, insurance brokers, corporate healthcare providers bankroll elections of politicians. Politicians appoint board members, Board members support those who supported the politicians who appointed them. That is the Bermuda Triangle where public dollars disappear  every day. Board members should be Civil Service Classified Service professionals, insulated from any political influences, and possibly as part of the New Jersey Health Department.

If I am elected governor and there is already a Board in place and it is working well, I would consider grandfathering the current members into the CSCS.

The issue above is a major flaw in design but this is New Jersey and it is how our Legislature is used to function. They create an apparently good bill but there is always a poison pill in it somewhere.

The second problem is how the Board will operate: It is apparent that it will exclude health plans that do not meet a certain criteria of value. This is what is called an active plan which sounds good – at first it was my favorite but after some reading and reflection, I dropped it. The active exchange will inevitably lead to a tangle of lawsuits, a very good thing for New Jersey trial lawyers but not necessarily good for New Jersey. Instead, I would have the board accept all plans but establish a rating: It could be AAA, AA, AB, etc., according to value, quality, access to care, etc. This system would be much less likely to generate legal challenges and insurers would strive to upgrade their offerings.

As I have stated elsewhere, at some point I would introduce a powerful public option in the exchange but it is a bit early for that now.

Governor Christie has said that he would prefer to wait for the USSC to rule on the constitutionality of ACA. Either way, this bill – or law if he signs it – needs work.


U.S. Lost 25% of Its High-Tech Manufacturing to Asia During Last Decade

U.S. losing high-tech manufacturing jobs to Asia – The Washington Post.

Thus is not only the old industries that have fled. We are losing the high-tech sector too. It was once considered the core of our post-industrial  economy; not any longer: 50% of the projected job creation in the U.S will be health related by 2018. That is an scary prospect.

Asian governments, notably but not only China, are providing all kinds of incentives for American capital to migrate. Add to that lower labor costs and a well educated work force. The Obama administration, to its credit, is trying too but it is falling short in almost every element. Above all, the administration is not even attempting to correct the tax laws to make capital flight less profitable.

Federal taxation policy encourages capital migration and that is not going to change any time soon because those benefiting from the current capital flight also control the government. Our corporate and even popular culture tends to be permissive in that regard as well. Steve Jobs was and still is considered a hero by many but he moved every single manufacturing facility of Apple Inc. to Asia, leaving a trail of unemployed Americans behind him. He is just one case.

Recognizing that New Jersey has limited capabilities to stop that tide when the federal government is pushing on the other side in opposite direction, I am confident that we can do a great deal to improve the situation here.

1. In education: Beginning with longer school periods, days, and years, more ambitious state-wide curriculum and creating or expanding polytechnic schools for those kids that are not bound for the typical college education. In the case of those students who deliberately and consistently sabotage the classroom, expulsion from the conventional public school system must be the ultimate option – but that option must be available. The issue of having a competent, well educated work force is vital.

2. In Taxation: I have already presented this issue in my economic program: We must reward investors who put their money in New Jersey while the normal tax rate for dividends will be much higher. We are not punishing those who invest overseas; we are rewarding those that invest at home.

3. Either we make all corporate tax zero  state-wide, or we have at zero in some portions of the state preferred for industrial activity and slightly above zero elsewhere. But we must understand that money is the only talk that corporations listen to and that we can not force them to relocate here. We must persuade them. When we think of a corporation we must remember that description of the Terminator in the first movie of the same title:  “They feel no pain or fear or pity or remorse.”

4. We must look long-term in infrastructure and renewable energy because those two factors will be decisive well after I am gone. New Jersey must excel in both to attract capital.

There is much more to be added to this topic but I will stop here today. I am pleased the the number of new unemployment claims fell to 352,000 nationwide this week – the lowest since 2008. Let’s hope that is a trend.

New Jersey Could Follow Germany’s Drive for Renewable Energy on this Side of the Atlantic

All Eyes On German Renewable Energy Efforts.

After the Fukushima meltdown in March 2011, German Chancellor Angela Merkel announced that Germany would decommission all its nuclear power plants and aim to rely primarily on renewable sources of energy. Germany has lots of coal but no oil.

The eyes of the world are on Germany today; and mine too. Because New Jersey, with it long coastline and relatively shallow  depths offshore could be an ideal setting to build an entire new industry of energy for the future. For a relatively long term, the green energy industry of New Jersey would have to be partnership of both public and private concerns because, as of today, at least nominally, green energy can be a bit more expensive to generate than electricity generated with conventional fossil fuels or nuclear.

But of course we are not counting the nuclear waste, the CO2 and other emissions, their effect on healthcare costs, and that green energy higher price tag is mostly caused by being high-maintenance. That means jobs with very good wages for New Jersey. Most industry analysis are skewed in favor of the nuclear and fossil fuels plants. But a comprehensive view of energy generation and its by-products would show that, in both mid and long term, renewable forms of energy generation are more economical. And they are sustainable.

Germany has already created 370,000 good paying jobs and that is just the beginning.

As we pursue the revitalization of the industrial sector in New Jersey, I foresee an important niche for renewable energy.

EPA Finalizes Tough New Rules on Emissions by Power Plants

EPA finalizes tough new rules on emissions by power plants – The Washington Post.

Although the rules have been under construction for two decades, the Obama administration gets the credit for finalizing them. Let’s hope now that they are implemented as proposed by the EPA. The writing is on the wall: We must go green in energy generation here in New Jersey even if the start-up cost is higher. We must look ahead into the future.

There is another piece of news which I consider noteworthy:`

As New Jersey set up its health exchange, with a public option if I get elected, the state will be able to set its own healthcare baseline.

Year 1: New Jersey Saves Little After Christie’s Reform of Public Health Plans

N.J. saves little on reform of health benefits –

First evidence that surfaces which shows that a much more comprehensive reform of healthcare in New Jersey is a must. And it can not be on the backs of the workers alone again.

Healthcare costs are like an albatross not only for the public sector but for the private one as well.

As I have said before, I claim no expertise in the field (never trust anybody who knows everything) and if elected governor of New Jersey in 2013 I will assemble the best team possible to come up with the best healthcare system possible. However, I have one or two ethical/moral pillars from which I can build knowledge.

Elements that I can predict are tort reform, that the state government will be thoroughly involved, and the New Jersey’s Healthcare Exchange (to be created) will have a public option.

Regarding the public pension reform, although it will reap significant savings for the state during the next 30 years, the compounding void created by the state not-contributing will bring New Jersey back to the fiscal hole it was in prior to the reform. I calculate that such a deficit – around $60 billion – will be reached in about 8 years. The bottom line is that the state must contribute its share.

In other words, without the reform – which I supported as a painful but necessary step – New Jersey would be in an even deeper hole but by not contributing, New Jersey will be buried in as much red ink in 2020 as it was in 2010. This is a very serious matter: Christie just kicked the can down the road for a few years.

New Jersey: Should We Deem Healthcare a Right or a Service?

NJ Spotlight | Revitalizing NJ’s Healthcare Industry, One Hospital at a Time.

To answer this question, or rather give my opinion of what the answer should be, I must dwell a bit on my past. Please be patient.

There were, generally speaking, two types of opponents against Castro in Cuba: Those who wanted to topple Communism and those who wanted to topple Tyranny. I belonged to the latter group and at 20 I did not realize that the two were hand in hand and that all political systems, regardless of ideology,  resort to tyranny in order to maintain control as they reach their extremes. Say that such is the human condition.

In any event, to jump to the point here, I always gave credit to the Cuban regime – and still do – on two counts: The universality of a free and effective public education and the availability of good healthcare to all at no visible cost – of course everyone was paying for it but indirectly, in the gigantic pool of a super-centralized economy.

When I saw this article this morning, I decided to explore the issue in the context of our society – profit-oriented, capitalist, and where health care is for the most part a business. The article addresses two bills currently in the New Jersey Legislature which attempt to rescue hospitals which are no longer profitably or in operation. Symptomatically of the way we look at healthcare, the article cites in its first paragraph what could be the fundamental concerns of the writer, or society?, jobs, revenue (a nice word for earnings), and taxes.

Nothing wrong with having those concerns but the fundamental question is whether the hospitals are necessary for their communities.We must determine case by case. That is what the Legislature is attempting to do in a way by enticing the private sector to rescue those institutions. If the institution is not needed, a quasi Darwinian selection may happen.

Government is the voice and arm of society and it has some core functions. Public health is amid that core. Is healthcare at the heart of public health or not? From my perspective, healthcare and public health are interchangeable.They are one and a social issue as well; one of the core roles of government.

Healthcare and its price will exert a very powerful force on the economy of New Jersey for years to come. Most of the growth in the state is attributable to healthcare jobs. At the same time, the price-tag of healthcare is choking off other industries which could be growing were it not for healthcare. Can the economy of New Jersey run on healthcare alone? Certainly not, like we can not drive a car running on one piston only.

Now I must end by saying that at this point I do not have a healthcare reform plan of my own. I have outlined some steps in my program but I do not pretend that there is a plan. I do not know enough to draw a plan. But what I can unambiguously affirm is that I see a significant role in healthcare for the state government, if I am elected governor of New Jersey in 2013.

Health Insurer Suit Challenges Maine Regulators

Insurer profits at issue in Anthem Health Plans of Maine suit – The Washington Post.

The ruling, when it comes, although in a state court could set a precedent for other states. If the insurer prevails, we could see higher insurance premiums for everyone in New Jersey.