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1:41 PM

Medicare for All

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The first rule of business that I learned in a thirty year career was that if something seems too good to be true, it probably is.

The Democrat party did a masterful job this past mid-term election of reshaping the electoral dialogue around healthcare, a strong issue for them and a weak point for their Republican adversaries. 

On this issue, some key Democrat politicians have been beating the drum for “Medicare for All” attempting to capitalize politically on the fact that in the five years since the party passed the Affordable Care Act, health insurance premiums have doubled for individuals and increased 140 percent for families. At the same time deductibles have also risen.

As care providers continue to escape the Affordable Care  Act (aka Obamacare), 3/4 of insurance plans are now highly restrictive. Many of those providers who have yet to flee Obamacare have consolidated their practices, as conservatives predicted they would, further restricting access to healthcare and raising consumer costs as fewer providers compete for the same customers.

To clean up the mess they have created, some Democrats believe the solution may be to enroll every man, woman and child in America in Medicare. By most estimates the cost of this free healthcare will be north of 30 trillion dollars. The tab in one state alone, California, is estimated at 400 billion dollars.

Beyond the cost issue, Americans will confront the same quality of care issues that have faced citizens of other countries that thought they could nationalize healthcare without any adverse effects including long waits for service.

What remains to be seen is how Americans, not a people known for their patience or willingness to take the long view on policy issues, will react to long lines and waits for service. 

To clean up the mess they have created, some Democrats believe the solution may be to enroll every man, woman and child in America in Medicare. By most estimates the cost of this free healthcare will be north of 30 trillion dollars. The tab in one state alone, California is estimated at 400 billion dollars.

For a dispassionate view of what is also called single payer healthcare, I commend to you “The False Promise of ‘Medicare for All’”, an opinion piece by Scott W. Atlas, that ran in the November 13 issue of the Wall Street Journal

12:17 PM


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At last month’s  EBT-The Next Generation conference, sponsored by the Electronic Government Payments Council, I was honored along with my colleague, John Pfeuffer of Conduent State and Local Solutions to present the Council’s 2018 Leadership Award to Art Burger, the President and CEO of Burger Carroll and Associates. ( What follows is a summary of our comments while making the award to Art.

BCA is a national public sector information technology consultancy based in Santa Fe, New Mexico. Some 100 Federal, State, Territorial and Tribal government agencies have consulted with BCA.

BCA is a charter member of the Council. Art has served as the Council’s chairman as well as chairing a number of its work groups and committees.

Perhaps more than any other EBT professional, Art has been responsible for the successful adoption of EBT technology by state- managed Woman, Infants and Children nutrition programs.

In addition to advising WIC state agencies on EBT technology he was instrumental in explaining to the EBT industry what a WIC EBT transaction would look like.

He also brought WIC-facing organizations into the Council to help speed the migration of EBT technology to the WIC program, one of the most efficient federal programs, in terms of outcomes.

In addition to helping birth the technology of WIC EBT, Art is a master at understanding the public policy and funding issues of WIC and EBT.

Perhaps his crowning achievement came when he met with a team of Congressional aides and explained the many benefits of WIC EBT. More than anyone else Art Burger was responsible for Congress agreeing to fund the conversion of state WIC programs to EBT.  This culminated in a Congress mandating that all state must adopt EBT technology for their WIC programs by 2020.

An accomplished and trained debater, he demonstrated for Congress the absurdity of the paper-based system that WIC programs used prior to EBT by showing the congressional representatives a fistful of more that 30 paper vouchers that a typical WIC shopper would have to negotiate each time she shopped with WIC benefits.

This time-consuming process in the grocery store or supermarket slowed throughput at the cash register lines and contributed to higher food costs.

Today, because of Art’s effort, WIC EBT enjoys widespread support within Congress and the food retailing communities

12:18 PM

The War on Poverty

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The War on Poverty

An opinion piece in the October 11 Wall Street Journal entitled “Government Can’t Rescue the Poor” authored by Phil Gramm and John F. Early traced the effectiveness of the so-called War on Poverty from its inception in the mid-1960s to the current day.

Messrs Gramm and Early state that in the 20 years prior to 1966, without the massive spending that was soon to follow the poverty rate dropped from more than 32 percent to less than 15.

The authors point out that since 1966, the first year with a significant increase in anti-poverty spending, the rate of poverty has been virtually unchanged, according to the Census Bureau.

The Census Bureau classifies as poor everyone in families whose incomes are lower than the
the established thresholds for their respective family size and composition.

The Census Bureau has said that in 2016 nearly 13 percent of Americans lived in poverty.

Gramm and Early also note that it is not possible to reconcile this rate, which has remained virtually unchanged over the last 50 years, with the fact that government-transfer payments to lower income families have risen steadily.

According to the authors’ research, from 1965 to 2016 the value of transfer payments in real dollars targeted to low-income families has increased from about 3,000 to 34,000 dollars.

Gramm and Early conclude that even given the magnitude of this increase, the numbers fail to reflect the true growth in transfer payments to low-income families since they exclude Medicare and Social Security which help subsidize low-Income retirees in the bottom quintile of earners.

They postulate that the lowest quintile of earners can receive as much as 10 times the lifetime benefits received by the top fifth of earners.

The stasis in the poverty rate according to the authors is due to the fact that since the start of the War on Poverty the Census Bureau has not counted transfer payments as income. The Bureau measures poverty using what it refers to as “money income”

Money income includes earned income and payments like Social Security and unemployment insurance which a person receives as a result of having been employed. Excluded in the calculation are transfer payments like SNAP (formerly known as food stamps), Medicaid, CHIP (The Children’s Health Insurance Program) and nearly 90 other means-tested federal payments and most state means-tested assistance programs.

Gramm and Early opine that these uncounted transfer-payments amount to some 1.5 trillion. And that  if the government were to count them as income, the true poverty rate today would be below 3 percent.

The 3 percent rate would drop even further if the Census Bureau included as income the estimated 500 billion in private charitable donations given to the poorest Americans.

Gramm and Early write that system of transfer-payments has failed to accomplish the goal of the War on Poverty as stated by the president who launched the War, Lyndon Johnson. President Johnson’s goal was to allow America’s poorest citizens “to develop and use their capacities”

It is impossible to say that this goal has been realized when 85 percent of the disposable income of the poorest Americans comes from transfer-payments, according to the authors.

12:57 PM

Disrupting EBT

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Disrupting EBT

The world of technology is undergoing unprecedented disruption across multiple industries and has not only changed the ways we have traditionally conducted business, but how we look at business as well.  From Airbnb to Amazon, from Uber to Zelle, technology and creative thinking have disrupted the status quo and created market efficiencies.

There is a great meme on the Internet with a picture of Amazon founder Jeff Bezos in 1998 looking more than slightly nerdy and computer geeky, with his receding hairline and goofy smile, wearing an ill-fitting brown sweater and saying “I am Jeff Bezos and I sell books”; to a pic in 2017 where the same Jeff Bezos, nearly unrecognizable from the 1998 pic, with a shaved head, cool sunglasses, the requisite down vest and golf shirt showing off his biceps, seemingly channeling Vin Diesel and saying  “I am Jeff Bezos and I sell whatever I want.”

 Getting there required not only technology but vision, guts and a willingness to look at something completely differently.  The question The Lobster is exploring here is whether we can we bring these factors together to bring about a needed disruption in EBT?

Do EBT professionals have that Bezos vision, guts and willingness to disrupt established methodologies or would we rather rest on our laurels having invented a new payment system some 35 years ago.

Prior to WIC EBT, the last significant disruption in EBT was the Congressional mandate that all state EBT systems be interoperable with each other. Congress issued this directive in 1999, 16 years after the dawn of EBT technology.

The use of electronic benefits transfer for the distribution of government benefits dates back to 1983. EBT has been one of the most successful public-private partnerships in American government history. But it is clearly an industry that at times focuses on what a good job we have done at the expense of looking objectively at how we can do better.

It seems that an opportunity to look forward is before us.  Mobile payments, smart phones, big data and blockchain all seem to have elements that could be brought to bear in EBT.

 Can we challenge our assumptions?  The prevailing assumption underlying EBT has been that we measure success by the number of people on our EBT systems.  But a growing counter assumption holds that we can quantify success by a decline in those numbers as program benefits relieve economic pressure on beneficiaries and allows them to seek employment and no longer need the benefits that EBT delivers.

Along these lines, the Trump Administration has proposed plans to convert a portion of each eligible household’s monthly benefit to what it dubbed “America’s Harvest Box.” The box would contain shelf-stable food products.

Whether it is good or bad, the Harvest Box concept is a disruption in our thinking about food delivery.  Opposition to the plan was swift and strong and failed to appreciate the new and creative thinking that went into the proposal or the fact that after 35 years technology has passed us by and that EBT is a market more than ready for disruption.  The question becomes what might that disruption look like?  And, do we need to change fundamental assumptions in order to make it happen?