Saturday, October 10, 2009

What Obama's Healthcare Plan DOESN'T Address

Have you read the various healthcare plans put forth by the Democrats? If you're like most of the Democrats voting on these things, you haven't.

In the House, there's H.R. 3200 "America's Affordable Health Choices Act of 2009" (text) (pdf)

In the Senate, there's the Baucus Health Reform Plan (link) Now, this one is interesting, in that Senator Baucus claims that it's too difficult to post the full text of the bill. He claims it would take his staff two weeks to put it on the web. Baucus himself states that
“This probably sounds a little crazy to some people that we are voting on something before we have seen legislative language.”
No, Senator... it doesn't sound a little crazy. If you're not willing for the Senator's staff to get their competence up, you can look at the plan language version of the Bill on Keep in mind that the 223 page "plain language" version is only used in committee. This is not legally binding language, and it is not what gets voted on in the Senate.

The House bill includes a "public option"... that is, a government-run healthcare plan. The Baucus bill in the Senate doesn't, but includes some poorly-defined "co-ops" that would fill roughly the same role. Either option requires significant start-up capital. And it makes no difference to the consumer that Baucus doesn't choose to call his a public option. The biggest difference is that the Senator gets to avoid the messy part of defining the organization. Either way it's government-controlled healthcare.

The Competition Lie.

Now, one of the more laughable things that I've heard about the "public option" is that it is intended to provide competition. Paul Krugman of the New York Times makes this ludicrous statement, as does Obama himself. What makes the statement ludicrous is that these people pretend -- yes, they pretend, because they do know better -- that there is currently no competition. The way they do this is they lump ALL insurance companies together and treat them as one entity, and then they claim that we need the public option to compete with "private insurance companies". As if Aetna and Travelers and Blue Cross/Blue Shield, etc. do not compete against one another already. This "need for competition" is pure make-believe on the part of Liberals.

In reality, the government plan is purely anti-competitive. How so? Well, look at it. Suppose you've gone the extra mile and paid a lot extra to buy a really good insurance plan for you and your family. Good for you, right? Wrong. You've got a "Cadillac insurance plan," which means that in addition to paying the hefty premiums (which you're stretching your budget to afford anyway), the government hits you with a hefty tax. Apparently it's not fair for you to purchase a better plan. The Baucus plan, in retaliation for this unfairness, does its best to make sure you can't afford that plan. Due to the high taxation you then drop the "Cadillac plan" in favor of one you can afford. I.e., the government plan. On the other hand, let's say you've bought a cheaper plan. Because the Baucus plan is to be funded in part by taxing people who don't even take part in the plan itself, as described above, while private insurance must price their benefits and rates based on their membership, the government plan can be priced relatively lower. This artificially lowered premium means that it would be silly to purchase a similarly priced private plan, as it couldn't provide similar benefits. So again, you buy the government plan. A private company that engaged in that kind of artificial price-fixing would be hit with sanctions for anti-competitive behavior.

H.R. 3200 simply levies an unapologetic surtax on everyone who makes more than $350,000.

And hey! You're not some fat cat, but you're a blue-collar union worker with a negotiated healthcare plan? Don't worry, you get taxed, too, you Cadillac-driver, you.

Again, the people who have read and understood the Democrats' plans, know for a fact that these are purely anti-competitive proposals. Nevertheless, they tell you that black is white and up is down so they can socialize health-care. Never mind that this sort of scheme is not in the slightest bit sustainable: as the "Cadillac plans" dry up there will be nothing to tax, and prices will rise in long run, or else benefits will be limited (same thing, really).

Your Choice: Pay or Pay.

President Obama has stated repeatedly that no one would be forced to participate in the public option. Au contraire. If you choose not to buy insurance, you will be fined. Mr. President's objections notwithstanding, this is the very definition of being forced, and that alone puts the lie to the President's statement.

But isn't this for their own good? Shouldn't everyone have insurance? Well... no, not if you really think about it. Health insurance actually doesn't make economic sense for everyone. Suppose for a moment that you're young and in good health. You see the dentist twice a year at $100/visit, and visit your doctor once a year for a checkup. Other than that, you've basically an occasional flu or minor injury. Now, you could spend $250/month on health-care insurance OR you could bank the money and simply pay the doctor. If you buy health-care insurance you'll wind up spending $3,000/year in premiums + your co-pay (typically $20). If you don't buy insurance you spend $300. That's right. Insurance could cost you personally up to ten times as much as no insurance. You can bank $2,700/year into a high-yield savings account and simply pay outright for health costs, or you could use the money later in life for retirement, etc. if you never wound up with a major problem.

Even when you do buy insurance, it makes the most economic sense to keep the premiums low by buying a catastrophic plan, whereby you simply pay as you go for typical visits and use the plan only for major procedures and hospitalization.

But Obama and his liberal friends do not want you to do what makes economic sense for you. They have a plan to pay for, and in order to do it they need your money. So, if you choose to simply pay as you go, you will be fined. The "choice" you are given in this case is to participate or to participate, damn it. And that's no choice.

Self-insurance isn't addressed in the House plan. The Baucus plan only mentions it in passing due to existing non-discrimination requirements, but includes no assurance that such plans would continue to exist at all.

It's Not Insurance.

I had an interesting conversation with a medical admin recently. Last month my wife had a stroke. She spent some time in the hospital, and we do have a plan that covers catastrophic contingencies. When she was released there were a number of follow-up appointments to make, which we're still going through. One of them was a sleep study. When I called to make the appointment I was told that I should call the insurance company first to determine whether the sleep-study would be covered. Of course I asked what difference that could possibly make... if it's covered, fine, but if not, my wife still needs the appointment, the only difference being that I would have to pay for it. The admin acted as if it had never occurred to her that I might actually just pay for something. I drive an 18-year-old car rather than make payments on a new car, and in the last 20 years I haven't bought anything but my house on credit. But that's not how the healthcare/insurance symbiosis has evolved.

What they're looking for is pre-payment, not insurance. The insurance companies want you to pay, and pay, and pay premiums on the assumption that you will, in fact, use them as the method of paying for everything whatsoever to do with healthcare. The government wants to do the same exact thing (and that is their idea of "change"... do the exact same thing you're doing now, only give us the money instead of giving it to someone else).

That's not how insurance works. Take a look at your auto insurance. A lot of things are covered, sure... but probably not oil changes and regular maintenance. Imagine filing an auto insurance claim every time you take your car in to Jiffy Lube. Imagine Jiffy Lube then having to comply with privacy regulations. And imagine that you have to file an insurance claim every time you went to Autozone to buy additives to keep your car in good working condition. Well, that's exactly what you're doing with healthcare, and it's stupid.

Insurance is a hedge against loss. It should be there to pay you when something goes wrong, not to pre-pay regular maintenance. Health-care insurance stands alone in this regard... it's not insurance, it's a pre-payment plan. Why is that? It has everything to do with the fact that healthcare isn't very affordable. So if you want to change something, change that.

Missing in Action: Tort Reform

And why is healthcare unaffordable? Because it's bloody expensive to be a doctor. Once upon a time in the early 1990s a doctor friend and I started a company to market computer software to general practitioners. We re-sold Pacific Medsoft software, and I wrote a bit of software called Medical Office Manager as well as departmental procedural tracking software for Radiology and Laboratory procedures. The point here is that my business partner was a G.P., and malpractice insurance was damned expensive. It was the single highest expense in the practice. Why is that? Because people can sue for anything and get a judgement for any amount.

FoxNews reports that many doctors pay $100,000 to $250,000 a year in malpractice insurance even if they've never had a judgment against them. I'd say that's just about right. Neurologists and obstetricians are hardest hit. Now, tell me... what does it matter that you have health insurance if your doctor has been forced out of the practice of medicine because of outrageous malpractice insurance expenses? When "you-can't-afford-to-pay-more" meets "they-can't-afford-to-charge-less" that's exactly what does in fact happen. And no bill before either house of Congress addresses with any specificity what should be done to solve this problem. "Tort reform" simply means adding some common sense to the bringing of lawsuits and the awards that can be handed out by such lawsuits.

According to the Congressional Budget Office (CBO), Malpractice insurance reform would save the government $54 Billion dollars over the next 10 years (pdf). That's as things stand. And it's only the savings to the government itself. This reflects a direct savings of $41 Billion + $13 Billion in increased revenue due to additional taxable income. It does not estimate or enumerate the savings to private industry, which would likely be many times that.

Obviously, tort reform is the #1 place to start if you want to make healthcare affordable. But why wasn't it introduced in the very first drafts of either house's proposal? Well, the Democrats are in charge, and they're the ones introducing these bills. Does the fact that trial lawyers donate to Democrats' campaigns over Republicans by a ratio of 8:1 have anything to do with it? Actually, I've heard the 8:1 ratio in general, but the Washington Examiner comes up with these hard numbers regarding the American Association for Justice, just one of the many legal PACs.
...employees of the top 15 plaintiffs' law firms contributed $636,000, 99 percent of it to Democrats. AAJ's PAC gave Democrats 96 percent of its additional $627,000 in contributions.
Yeah. Trial lawyers love Democrats. Democrats love trial lawyers. And coincidentally, tort reform remains largely off the table, and as a result no healthcare reform bill has been introduced that does anything more effective than re-arrange the deck chairs. "Change", indeed.

It seems to me that in many cases what is sought is not compensation, but enrichment. To pursue a case a person must have a lawyer, and regardless of the outcome of the case, lawyers are out for enrichment. They then convince their clients of the irreplaceable value of their loss. Faced with the big payday, plaintiffs forget about their grief quickly enough and focus on their greed.

(BTW, lest you think I "just don't understand"... my wife's stroke was brought on in part by smoking, which she's had to quit cold turkey. She's got nobody to blame but herself for that, and neither she nor I are stupid enough to blame "Big Tobacco" for her behavior. If you have that kind of blame in you, then you don't understand and you'd better wake up. You and you alone are responsible for what you put in your body.)

Part of the problem with this "healthcare" debate is that it's not about healthcare, it's about healthcare insurance... it's all about the Benjamins. If you want change... if you want more people to afford healthcare... you have to change your thinking. Stop thinking of the big payday, limit damages to reasonable amounts, reduce malpractice insurance premiums, keep your doctors in business, and make healthcare affordable... not to the insurance companies, but to you and me, the only people who actually pay.

Critics of tort reform say that it's unfair to limit punitive damages, no matter how outrageous. President Obama has grudgingly agreed to fund a study next year to look into the issue, but denies that it should be part of the current healthcare debate. Instead, we should plunge headlong into an $800 Billion program without stopping to post it to the web first in its entirety or read it though.


Missing in Action: Careful Consideration.

Look, there's a lot that can be done to improve healthcare. The right answers don't necessarily involve socialization or even "insurance" for all. Affordability, common sense tort reform and personal responsibility all have to be considered. And sacrificing for the public good doesn't mean everybody but the trial lawyers. It's time that Democrats stopped talking "Big-this" and "Big-that" and got off their own big butts, and shut their ears to their own cash cows.

Don't just take what you hear at face value, not even this. Read the proposals (though I'm telling you now, avoid the summaries, they're all slanted). Read Hold your Congressmen accountable for taking the time to read and understand what he's voting on, and to refuse to allow legislation through unless and until that time is granted.

I'll leave you with this:
The Dope-ler Effect: (n.) The tendency of stupid ideas to seem smarter when they come at you rapidly. See Healthcare Reform.

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