Donald Trump and the Health Care Casino

           

Now I understand why Donald Trump had to place his four golden Atlantic City Hotels into bankruptcy.  If he’s like the rest of the Republican party, he probably just doesn’t know how a casino works.

            As a last ditch attempt to win conservative Republican votes in the House of Representatives for a repeal and replacement of the Affordable Care Act, Trump’s White House agreed to gut the law’s requirement that all health insurance policies that qualify for federal subsidies include ten essential benefits.

            The theory is that people who are not likely to need particular benefits shouldn’t have to pay for them.  Sean Spicer, the President’s Press Secretary, for example, noted  that “if you’re an older man, you can generally say that you’re not going to need maternity care.”  According to Spicer, “it’s about a series of benefits being mandated for everybody, so what has happened is the cost of health care fore every individual has gone up and the choice has gone down.”

            If this is the way Republicans see the problem, then it makes a lot of sense to allow the market to tailor health insurance policies to the particular needs of particular individuals.  Men and women past their childbearing years could be able to buy cheaper insurance policies that don’t include coverage for pregnancies.  Younger people could buy cheaper policies that cover injuries but don’t cover things like dementia. 

            Problem solved.

            Not.

            Despite all of its business trapping—the agents and brokers, the incomprehensible and endless paperwork, the monthly premiums—the health care insurance market is a casino, just like all other insurance markets.  People and insurance companies make wagers with each other all the time, and one pays the other if particular events beyond their control occur.

            People who buy insurance are making a bet with an insurer that they are going to become sick or injured during the year in which the insurance policy is in effect.  It’s fundamentally the same thing that happens in a game of blackjack.  In a standard game of blackjack, the gambler bets that the total value of his cards will be closer to 21 than those of the dealer.  If the gambler’s cards exceed 21 or if the dealer's cards are closer to 21, the gambler loses and the dealer keeps all of the money wagered.

            Though you can have some fun with one friend playing blackjack, you can’t make a business of it.  When you’re only playing with one friend, the odds are that over time, you’ll both lose as much as you win because the odds of winning for both players are the same.  To make a business of it, a casino has to win more than it loses.

            And that’s why Republican efforts to come up with a replacement policy for a repealed Affordable Care Act using private insurance almost never make any business sense.  They always fail to create products with odds that result in reasonable wagers for buyers that can also turn a profit for the insurance companies.

            Let’s take Sean Spicer’s thoughts on maternity benefits as an example.  Imagine two insurance policies, one for men and one for women.  I’m purposely leaving out prepubescent children and women who can no longer bear children for the sake of argument (presumably, under the Republican insurance regime they’d also have customized policies).  The male policy covers prostate cancer, but it doesn’t cover pregnancy; the female policy covers pregnancy, but it doesn’t cover prostate cancer.  Otherwise, the policies for women are identical to the policies for men.

            To entice a person to wager that he or she will suffer some loss by buying an insurance policy, you have to price the policy low enough so that the anticipated return for making the bet is sufficient to justify the risk of making the bet.  Nobody is going to buy an insurance policy if the cost of the premium is higher than the cost of treatment multiplied by the risk.  On the other hand, no insurance company is going to issue an insurance policy if it expects to pay out more in claims than it collects in premiums.

            The cost of the female policy will have to be relatively high.  Assuming that women of childbearing years have the Republican “freedom” to decide whether they want to buy a policy that covers pregnancy, it’s completely irrational for any woman who is not planning to try to become pregnant to bet against accidental pregnancy by buying an expensive insurance policy that includes maternity benefits.  Effective birth control (or even abstinence) is a cheaper.

            Aggregating risk solves the problem.  True, men, prepubescent children, and women who aren’t capable of bearing children aren’t going to need the maternity benefit and so their insurance premiums do subsidize the pregnancy risk of others.  But the premiums paid by young women who don’t get pregnant will subsidize insurance company payouts for prostate cancer treatments, dementia treatments, and juvenile diabetes treatments.  With enough people in the risk pool, just like a well-planned casino, the insurance companies will “win” most of the time, enabling them to make the payouts required and still earn a profit when the relatively few unfortunate policy holders hit the jackpot.

            None of the schemes put forward by Republicans seem to take any of this into account.  Tailoring policies to particular risks makes those policies extremely expensive because they’re likely to interest only people who deem themselves likely to suffer from the particular health risks covered by the policies.  Sensible people are likely to avoid policies that cover only catastrophic losses because the premiums they would pay far exceed the expected loss multiplied by the risk. 

            You’d think the “party of business” would understand all this.  You’d think that a president whose main credential is that he has been a successful businessman would have had more than a passing exposure to the insurance industry.  But they don’t. 

            And that’s why I’ll never bet on Republicans when it comes to fixing the health insurance market.

Eat or Be Eaten

Is it better for a leader to be loved or feared? 

Nicolo Machiavelli, the 16th century courtier and political philosopher whose name has come to mean allowing the ends to justify the means, advised that “because it is difficult to unite them in one person, it is much safer [for a leader] to be feared than loved when, of the two, either must be dispensed with.”  Leaders who expect people to do their bidding out of love, said Machiavelli, are likely to be disappointed, while “fear preserves you by a dread of punishment which never fails.” 

At inauguration, presidents are at the height of their ability to inspire fear in the hearts of other ambitious politicians.  New presidents often bring new Senators and Members of Congress to Washington with them on their coattails, and they often benefit from the magnanimity and willingness of the voters who voted against him or her to give the new president a chance. 

Sometimes a new president’s win is so impressive (think Ronald Reagan in 1980), that not only is it that co-partisans are more than happy to defer to the new president, but members of the other party who survived the election think twice about putting up serious opposition to the new president’s agenda.  

Mr. Trump cannot expect Congress to give him what he wants out of love.  Despite his inaugural claim that he arrived in Washington on the crest of “a movement the likes of which the world has never seen before,” the fact are that he received almost 3 million fewer votes than his opponent, that his party lost seats in the Senate and in the House of Representatives, and that in most cases, the Republican Senators returned to the Senate on November 8 received more votes in their respective states than he did.  

Fear isn’t likely to help him much either.  Despite all of Mr. Trump’s bluster and despite the handwringing of Democrats about the policies the new administration is going to try to push through Congress, it’s unlikely that anyone in Congress is worried about getting on Donald Trump’s bad side. 

President Trump’s current net approval rating—the difference between the percentage of people who rate him favorably and those who rate him unfavorably—is currently hovering at a frosty -8.1.  By comparison, Former President George W. Bush had a net approval rating on February 21, 2001 (the earliest date for which Real Clear Politics had data) of a balmy 38.1.  And despite the partisan warfare that affected his two term as President, Barack Obama left office on Friday with a comparatively warm net approval rating of 17.9.   Anything is possible, but it is more likely that Trump’s approval ratings will go down as his administration begins to grapple with the realities of governing. 

Low approval numbers will make it harder for the president to get his programs through Congress because they cast doubt on any claim that the president has any mandate for change. 

But that's not all.  Low approval ratings and the likely absence of any “honeymoon” period will trigger all kinds of strategic calculations among the ambitious politicians Trump manhandled during his romp to the White House. 

Politicians have all kinds of goals, but first among those goals is either getting re-elected or advancing to higher offices.  Donald Trump is probably not any different.  Setting aside the fact that the longer a president serves, the greater his impact on public policy—and history--is likely to be, one of the key measures of presidential success is his or her ability to win a second term.  Regardless of the fact that Donald Trump will be 74 when he can stand for re-election, it’s all but certain he’d like to see his name added to the exalted list of America’s two-termers. 

Ordinarily, a sitting president has a lock on his or her party’s nomination in the next presidential cycle.  This doesn’t hold for presidents who haven’t elicited sufficient fear.  That’s why Lyndon Johnson, Gerald Ford, and Jimmy Carter faced ultimately fatal intraparty challenges in their bids to become two term presidents. 

With Trump’s current approval numbers, it’s unlikely that, as David Brooks suggested, any politician is going to have any interest in “containing” the chaos likely to arise out of the Trump administration.  In fact, it’s in everybody’s interest to let the new President twist in the wind if he gets into trouble. 

Democrats, as Senate Minority Leader Chuck Schumer has already warned, aren’t going to help Trump out of the mess he is likely to create in his effort to repeal and replace the Affordable Care Act.  Schumer’s ambition is to become Senate Majority leader, and to do that, he’s likely to take a page from current Majority Leader Mitch McConnell’s playbook and prevent Republicans from winning any legislative victories. 

Ambitious Republicans such as Senators Ted Cruz (R-TX), Marco Rubio (R-FL), and Ben Sasse (R-NE) certainly understand that weakening Donald Trump is the only way they’ll have a chance to seek the Presidency before 2024.  A charismatic Donald Trump, complete with celebrity and gaudy trappings of financial success blindsided everyone in the 2016 Republican primaries.  He won’t be the same shiny new object in 2020, particularly if he has only meager accomplishments to boast about by then. 

Even seemingly loyal Vice President Mike Pence doesn’t necessarily have an interest in Trump’s success.  If Trump succeeds, Pence gets another term as Vice President in 2020, and then, at age 65, he’s the obvious frontrunner for the Republican nomination in 2024 if Trump is popular.  But it may make more sense for Pence to find a way to gently nudge Trump out the door if Trump’s numbers are soft, particularly if he can distance himself from the president without seeming disloyal. 

This says nothing about more senior Republicans Trump can’t touch.  John McCain (R-AZ), who is almost certainly serving his last 6 years in elective office, has plenty of reason to humiliate the President if he can.  Donald Trump and Sen. Lindsey Graham (R-S.C.) have been sniping at each other for the last year, and in any event, Graham can’t afford to become entangled with an unpopular president.   

And Senators Susan Collins (R-ME), Jeff Flake (R-AZ), Cory Gardner (R-CO), Dean Heller (R-NV) and Mike Lee (R-UT) have already shown that they aren’t afraid of Donald Trump by publicly refusing to support him when he was the Republican nominee.  

Public approval arms a politician with the weapons he or she needs to keep his or her rivals at bay. With his low approval rating, Trump is already bleeding enough to interest the Republican sharks who could benefit from his demise.  Without an ability to instill fear into the hearts of his rivals, Trump is likely to get a lesson on the law of the political jungle.

Wishing Ivanka Trump a Merry Christmas

            Ivanka Trump was born a Christian and raised as a Presbyterian, but she fell in love with an Orthodox Jew.  As do many gentiles who want to marry Jews, Ivanka Trump converted to Judaism.

            Converting to Judaism is no easy thing.  You really have to want it; Rabbis are loath to perform a conversion if the only reason for it is to facilitate a marriage.  In accordance with Jewish tradition, Rabbis are supposed to do whatever they can to discourage conversions.  To become a Jew, particularly under the auspices of an Orthodox Rabbi as Ivanka Trump’s is, often takes years of study.  It also involves a commitment to live in accordance with Jewish laws—including Sabbath and dietary observances--and a commitment to raise one’s children as Jews.  People who want to convert have to do all these things well before an Orthodox Rabbi will permit a conversion to be finalized.

            Ivanka Trump has done all of these things.  As is the case with most converts, she probably knows more about Jewish law, observance, and custom than most natural born Jews do.  During the Sabbath, which runs from Friday night at sunset until three stars appear in the sky on Saturday, she is absolutely unavailable for any business or business related purpose—including politics.  She cannot drive, ride, fly, handle money, watch television, listen to the radio, or even talk on the phone during the Sabbath.  She has adopted “Yael” as her Jewish name.  She sends her daughter to a Jewish Day School. And it is doubtful that she will be able to eat at her father’s new digs at 1600 Pennsylvania Avenue because the White House does not have a kosher kitchen, a Rabbi on staff who supervises food preparation, or any assurance that the food, the plates and the silverware that comes out of the White House kitchen conform to Jewish dietary laws.

            While on his “Thank You Tour” in Michigan, Trump wished the crowd a hearty “Merry Christmas.”  And then he added:

We’re going to start saying Merry Christmas again. . . How about all those department stores?  They have the bells, and they have the red walls, and they have the snow, but they don’t have “Merry Christmas.”  I think they’re going to start putting up “Merry Christmas.”

            Do you suppose that Donald Trump wants people to wish his daughter, her husband, and her children “Merry Christmas?”  Is that the way the President-elect will greet them on Christmas, which, this year, coincides with Hannukah?

            I understand how important Christmas is to some of my Christian friends, and I have great respect for them and the way they celebrate their holiday.  Christmas spirit simply fills them with joy, and they want to share that joy with everyone else by extending to everyone with whom they come into contact a traditional Christmas greeting.  I understand that the spirit and good will behind the words they use is the real greeting.  I’m all for peace on earth and good will toward all.  But still, as an American Jew, the greeting is hard to accept.

            Part of the reason we extend a greeting to someone is simply to show respect for them; we consider inappropriate greetings to be insulting.   We’d likely call for the punishment of a child who addresses his or her teacher—or almost any other adult--by his or her first name.  Failing to stand when a judge enters his courtroom can subject a person to a fine or even jail time.  You’d never call a man “boy,” and I pity the fool who calls a grown woman “baby.”  We always call a physician “Doctor” to acknowledge his or her education and specialized training, and if you are looking for a job, the last thing you want to do is address the hiring manager by his or her first name, unless you have been invited to do so.

           A person who addresses another person in a way the greeter knows is inappropriate is simply being rude and disrespectful.  Thus, a Christian who knows that Ivanka Trump is Jewish but wishes her Merry Christmas anyway is being disrespectful.  Christmas is a Christian holiday that Ivanka Trump is not going to celebrate.  A wish for her to have a Merry Christmas is really a wish for nothing.  It’s like congratulating a person on his or her wedding despite the fact that the person isn’t married or getting married any time soon.

            But I would go a step further.  The only time a “Merry Christmas” is appropriate is when the greeter knows that the person he or she is greeting is a Christian who celebrates Christmas.  That kind of a greeting acknowledges the individuality of the person being greeted by recognizing something personal about that person.  That’s why “Happy Holidays” or even “Seasons Greetings” is a much more appropriate greeting to extend to strangers.

            I suppose I could let some of this go by just chalking mindless “Merry Christmas” greetings up to as simple boorishness, except for one other thing.  This particular greeting is also about power and privilege.

            When American Christians insist that Merry Christmas is the correct late December greeting in the United States, what they’re actually saying is that there are simply too few other people in this country who aren’t Christians to worry too much about what that small minority thinks or feels.  It says that the greeter didn’t care or couldn’t be bothered to remember that every American is not a Christian.  It says to non-Christians that the U.S. is a Christian country, and that those of us who aren’t Christians ought to either ignore who we are and get with the program or simply get out of the way.  It shows no respect for us.

            And that is why those department stores President-elect Trump was railing against don’t say “Merry Christmas.”  The last thing a business person wants to do is to show disrespect for a potential customer.  Inclusiveness facilitates the making of money.

            So, to all of my Christian friends, I wish you the merriest Christmas ever.  And to everyone else, may these last days of December be filled with light, family, good friends and, if you are so inclined, a fulfilling holiday observance.