Jerry's ramblings on health care reform...
There sure has been a lot of craziness going around in the health care debate. I'm not an "angry mob", I'm not being paid by the insurance companies, I'm not a "deather" and I don't consider myself a republican. But, I have some hopefully non-crazy observations that will perhaps stimulate thought. I'm not suggesting we don't need health care reform. We should think carefully about the reforms to make sure they won't create more problems than they solve. The first step is to examine the problem. These are some of the problems I keep hearing about concerning our current health care/insurance system:
| The insurance companies are bastards |
| 47,000,000 uninsured in this country |
| Insurance companies won't cover pre-existing conditions |
| Insurance companies (bastards) raise the rates on sick people. |
| If I lose my job I may lose my coverage. |
| Those bastards at the insurance company won't give grandma a new hip |
There are many parties who could be blamed in our current health care system...
| Doctors who make a ton of money. (I thought rich=evil nowadays.) |
| Drug companies who charge rip-off prices for their drugs, and sell them in other countries at a lower cost. The drug companies are spending $150 million to support the new health care plan. Hmmm. They must be thankful they're not in the crosshairs. |
| Trial lawyers who get millions of dollars for themselves and their clients by blaming doctors and hospitals for deaths which, in many cases, were natural and unavoidable. |
| Hospitals who take in millions of dollars and charge exorbitant prices. |
| Insurance companies who are making millions of dollars in profits. (Actually, most are non-profit associations.) |
But we are currently singling out the insurance companies. Wonder why? I believe one reason is that the insurance companies are the sector that the federal government can replace. The government cannot act as doctors, they can't invent new drugs like the drug companies, they wouldn't dare touch the lawyers, and they wouldn't run a hospital.... that would involve bedpans. Bedpans and bureaucrats don't mix. The insurance companies have money and power. Ripe for federal takeover.
Of the 47,000,000 uninsured, about 12,000,000 are illegal aliens. Are we going to give them insurance? I'm not suggesting we should or shouldn't, but we should be honest about the numbers. If the Obama administration is going to provide insurance to the illegal's, they should say so and take the heat. If not, they should not point to their uninsured status as somehow a reason for a government insurance plan. Another large segment of the uninsured, consists of individuals who could afford insurance, but choose not to be covered because they are healthy and will "take the risk". Are we going to force them to buy insurance? If not, they should not be counted as reason for a federal plan. Also among the uninsured are people who can't afford insurance. Many of those really can't afford it, and many could afford it if they wanted to. In Illinois, you can get state assisted coverage for your children if you can't afford private coverage. In Illinois you can make up to $61,000 per year and say that you "can't" afford insurance on your kids. And the state plan is a Cadillac plan, with low deductibles and comprehensive coverage. Much better than the private plan bought by the "suckers" who were trying to be responsible and pay their own way. While the 47,000,000 don't have insurance, they can still show up at the hospital and get treated free, complements of the aforementioned "suckers". A disproportionately large number of health care dollars are spent for those without insurance, who show up at the emergency room with a stuffy nose. If you really want to reduce the number of uninsured, you need to make them buy insurance. If they're poor, give them the money to do it with. But make them buy insurance.
There's one reason why an insurance company wouldn't cover pre-existing
conditions: If they did, everyone with a terminal illness would
immediately buy a policy from that company, and the company would go broke
paying all the claims. While no individual insurance company would
unilaterally cover pre-existing conditions, the companies would
cover pre-existing conditions if they were all told they must do so by state
regulators. For some reason, the insurance regulators in Illinois
(controlled by the democratic party) don't have a problem with the companies not
covering pre-existing conditions. If the Illinois democrats wanted
to, they could pass a law mandating coverage for pre-existing conditions.
But they haven't.
There's one other consideration when forcing the insurance companies to cover
pre-existing conditions. If they did, millions of people (myself included)
would immediately cancel their insurance policies, saving thousands of dollars,
knowing that if they got sick, they could then buy a policy and be covered.
How many policies would State Farm sell if you could buy a policy that covered
yesterday's accident? If having 47,000,000 uninsured is a problem now,
wait 'till it's 147,000,000. The only way pre-existing coverage
works, is if insurance coverage is mandatory for everyone.
Blue Cross/Blue
Shield of Illinois actually favors coverage of pre-existing conditions,
but only if insurance coverage is mandatory for everyone. If they can't
afford it, give them the money to buy insurance... but make insurance required
for everyone. (Hillary Clinton wanted mandatory insurance for all, but
Obama mocked her for forcing everyone to buy insurance.)
Companies typically charge different rates depending on the insured's age, sex, health, etc. A free-marketer would say this makes sense because the cost is consistent with the risk. I think that the current rate structure might make some employers think twice before hiring someone with a health problem since it could affect the rates for the whole company. Young women cost more than twice as much to insure than young men. In Illinois, if one or more employees in a small group has a serious health problem, the insurance company can raise the rates for the whole group up to 60%. Why the current insurance company practice? We have the same situation as the pre-existing condition problem. No single company would charge a flat rate for all policyholders. If they did, the healthy young males would quit, and only older sick people would stay as customers. If we want the insurance companies to charge the same rates for everyone, the state regulators should simply say so. The Illinois democrats running the insurance industry in Springfield could say to the insurance companies, "If you want to business in Illinois, you must cover pre-existing conditions, and you must charge everyone the same price." But they haven't. It's the state insurance regulators who have determined that pre-existing conditions don't need to be covered, and that the companies can charge 60% more to sick groups. The 60% number comes from the politicians, not the "bastards" at the insurance companies.
COBRA plans ensure that those who lose their jobs can maintain coverage. Most states will fund COBRA plans for the unemployed who need help. Maybe COBRA should be extended for a longer period or even indefinitely. The problem is that most ex-employees refuse to pay for the COBRA plan because "it's a rip off". Apparently it wasn't a rip-off when the employer was paying it. The problem isn't an insurance problem, it's a "who will pay to take care of me?" problem. I don't want to get into that one. The federal government's prohibition on buying insurance across state lines is causing people to lose coverage if they move to a different state. Nobody seems to have a problem with that.
Anytime you have "managed care" you are going to be limiting coverage for certain procedures in certain circumstances. We are hearing a litany of sob stories (no doubt some legitimate and some not) of people who were refused coverage for a specific treatment. Everyone thinks that they're grandma should get the new hip. No doubt sometimes the insurance folks do act like bastards. But sometimes they just play one on TV. In a Grey's Anatomy show this year, they turned back the operating room clock so a surgery would be performed before midnight (when the insurance coverage would run out because the guy didn't pay his bill). The doctors were portrayed as heroes. I guess insurance fraud is ok because the insurance companies are bastards.
If you think the "federal option" won't screw people, think again. Just two blocks from where I'm sitting, there's an entire office building dedicated to hearing social security disability appeals. Hundreds of people stream through the building daily. They've all been denied coverage by the federal government. Imagine the horror and anger if it was the insurance companies doing the denying.
The managed care thing is a touchy subject. I don't think the Obama administration is planning "death panels" to decide who gets to live. But I also don't believe the democrats who insist that there will be no limits on coverage... Anyone will be able to get any procedure they want, without regard to cost or likelihood of improved quality of life. I would hope that there would be some kind of managed care. Otherwise, costs will spiral. But who would you want making the managed care decisions? I'm not sure that non-elected, political appointees are the best to make those judgments. For those of you who are comfortable with Obama appointees making the decisions, would you be comfortable with McCain/Palin appointees in the same role? Probably not. I wouldn't be comfortable with any political appointee making my health care decisions.
There are a few things I keep hearing over and over that are driving me crazy...
Bullshit. At our company, we have a plan that I like, and I think our employees like. It's a high deductible plan, coupled with an employer paid tax free Health Savings Account. Each employee gets $1,000 on a prepaid MasterCard they can use for any health related expense. Even dental, contact lenses, any kind of medical expense. No paperwork, no hassle. And it's income tax free. Our plan will be "banned" by the Obama administration. It doesn't matter that the employer and employees like the plan. The president doesn't like it, and we'll have a period of time to change our plan to be "in compliance" with the federal plans, or we'll be fined. So my employees and I will not be able to keep the plan we like. I would imagine that many plans will not be "in compliance". What Obama should be saying is "If you have an insurance plan you like, you won't be able to keep it if the government doesn't like it." Why would the government ban plans that are low cost, provide good care and give flexibility to the policyholder? Maybe they give too much competition to the "federal option"? It seems like three or four times a day I hear the quote, "You can keep your plan." So three or four times a day I think to myself, "Bullshit." Being "in compliance" with the federal "option" seems paradoxical.
As a small business owner, I was happy to hear this one. Finally small businesses get a break. Then I read the provision. To get the full 50% tax credit, the business must have fewer than 10 employees with an average pay of less than $20,000 per year. I guess I have a big business as I miss on both counts. This provision would help very small mom & pop businesses to provide coverage to their employees but will be little or no help to the majority of small businesses. In fact it may hurt employees. Employers with 11 employees might get rid of a couple to qualify for the 50% tax credit. Or they may disallow raises because they would go over the $20,000. Why in the world, given current employment conditions, would you punish businesses for hiring more people or giving them raises. Why would they say they're giving a 50% tax credit to small businesses when most wouldn't qualify?
Competition is good. But isn't there already competition in the insurance industry? No company has a monopoly. There could be more competition if the government allowed buying health insurance across state lines. For some reason, the same government that wants to compete with the "federal option" is preventing competition from others. Being in a dot.com business, I've always been afraid of competitors who are willing to lose money. I would be even more afraid if they were setting the rules. In Obamacare, the "federal option" would set the rules of the competition, and they would be willing to lose money. There's speculation that since the federal plan would reimburse providers at Medicare rates, the private insurance companies would bear a greater cost forcing them to raise rates or go out of business. If the federal plan could offer lower prices, everyone would migrate from private to public plans. The only thing the insurance companies would have going for them is the incredible inefficiency of the federal health care bureaucracy. Does anyone (liberal or conservative) actually think that the same government that pays $400 for a hammer is going run more efficiently than the private sector? The President pointed out that FedEx and UPS have been able to compete successfully with the US Post Office. As someone who spends $300,000 a year with FedEx, I had to chuckle. While FedEx and UPS deliver quite a few packages, nobody can compete with the federal monopoly when it comes to mail delivery. FedEx delivers about 7,000,000 items each day. UPS delivers about 14,000,000 each day. The Post Office? Over 600,000,000 items are delivered each day. Nobody can compete with the Post Office in rural areas, where it cost much more than 44 cents to deliver a letter. The Post Office loses millions in rural areas. And in city and suburban areas, where private carriers could deliver bulk and first class mail at a profit, the post office shuts out competition by making all mailboxes "federal property". You can only put something in a mailbox if it has a federal stamp on it. The one-two punch... set the rules and be willing to lose money.