Stop Doing Studies

The slow drip of unintended consequences of the new health care law keeps going. The only fix for the drip is repeal it would seem.

What's the latest? Another study showing that the promise that "if you like what you have you can keep it" isn't going to be true.

Employer Survey Sees Health Costs Rising points out what those of us who've spent our lives in the real world, not government or academia said during the debate. Costs are going to go up, and companies are going to cut something to keep the bottom line healthy. The cuts will come at the expense of employees.

How certain are the cuts? Well the survey looked at 661 companies with a median workforce of 5600 employees; these aren't "small businesses", they are the big guys. 74 percent said they were going to have to cut employee benefits, or raise their employees direct costs because of the fiscal impact of the law.

43 percent that provide retiree health care said they would be cutting or completely eliminating those benefits.

Now I'm pretty sure if someone in the media actually asked the White House about all the studies showing that most every promise made during the debate will be broken the White House response would be to quit doing studies.

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Health Care Reform Facts

The first big sticker shock of the new ObamaCare era will happen later this year, when the community rating guidelines become final and binding. Suddenly, a whole lot of people under age 62 are going to see higher healthcare premiums and wonder why that is.

They shouldn't worry though, they will be getting subsidies to help with those premiums; ooops, not until 2013 or 2014; sorry to make it looks like this thing saves money they will only collect taxes for four years, not give you the subsidy you were promised.

As for all of you folks that are cheering because pre-existing conditions are now covered, that doesn't happen until 2014. Until then you can (and will) still be rejected unless they are willing to pay big.

Hey, like your current plan, aren't you glad you get to keep it. Maybe... Well if it has a flexible spending account or an HSA as part of it, you don't really get to keep it. Those don't fit the new guildelines for proper insurance, so you'll have to find something else. Sorry if it costs more.

Do you work for a small business, that treats you really well with insurance. Sorry to say that you have about a 1 in 3 chance of having your policy cancelled and being told to buy from the "exchange". Why? Easy, the fine for most businesses to not cover you is much cheaper than buying you insurance. Sorry, you don't get to keep what you have either.

Sorry to piss on your parade, just thought a few facts might be good to have. But look on the bright side, at least McDonalds will be required to post the nutritional info on their drive through board. That's worth the trade-offs, right.

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Can Health Care Reform Be Saved?

If you regularly read my irregular blog posts, you are probably wondering about this one, considering the title. I've written a number of things critical of what's going on in Congress concerning health care reform, most of it unflattering to Congress.

The truth is, we do need some reform, which I've occasionally mentioned. What we didn't need was the House's wholesale take over, or the Senate's hodge-podge of payoffs and hush money to get anything passed. We need some common sense things done.

Now that political reality has set in for Nancy Pelosi, it might be possible. Tuesday night she was telling us that Scott Brown's election did nothing to change what was going to happen. Then she talked to her caucus and pronounced the Senate version of health care reform dead in the House. That was really the only way they were getting anything to the President's desk before his State of the Union address.

So, how do they save Health Care Reform? The best way would be to get 4 Senators and 4 Congressmen from each party together and work on ideas they can all agree on. Here's a few that shouldn't cause too much pain.

1. Portability. Decouple health care from the job, and to the person. Allow employers to pay for it if you wish, but have the insurance follow the person.

The "insurance exchange" idea would actually work for this. Employers buy from the exchange, in the employee's name. When they leave the company the insurance goes with them. The next employer can pick up the tab, if they wish, or the individual can do it on their own.

2. Taxes. Give employees the same break as employers when it comes to paying for health insurance. It's a crazy thing that if I get my own insurance unless I meet a threshold I get no tax break, but if my boss pays he gets a big one. Now if the person from example 1 decides to leave to start their own business, they aren't penalized for buying their own insurance.

3. National coverage standards. Right now we have 50 states with 50 different coverage standards. A minimum coverage policy in Kentucky is about 400% less than in New York. Set a national standard for coverage, so that insurance isn't locked into what state you are living in. We've become mobile, our insurance should be too.

4. Pre-existing conditions. They should be covered. The problem with both the House and Senate versions is that they want to exist in a fantasy world where your pre-existing condition shouldn't mean you pay more for coverage. It's funny that two bodies will one day lecture the banking industry about their fiscal irresponsibility for getting into hedge funds, and the next chastise insurers for charging more to people who it costs more to service.

5. Tort Reform. This gets the Democrats skin crawling, because trial lawyers are one of their biggest donor groups. The truth is that there needs to be some reform. A basic one that would be hard to vote against would be limiting the amount the lawyers in malpractice cases can be paid. Democrats would throw a hissy fit, but the truth is, if it's okay to limit bankers pay and bonuses, as they'd like to do, why not lawyers?

Mandatory arbitration in front of a panel of experts would also be a nice spot to start. Lawyers would be less likely to file frivolous malpractice suits if a group of doctors were going to hear the case first, instead of a jury of laymen. Make the results eligible for appeal to a judge and jury, but also make the panel's findings usable as evidence.

6. Uniformity of paperwork. Want to have fun, go to a doctors office with two different insurance policies. Watch the admin folks twitch as they try and figure out which is primary, which is secondary, and what form to use for each.
Want a headache? Have them get it wrong.

Insurance companies should be able to come up with an industry wide standard for claims forms, so that a doctor or clinic doesn't need two file cabinets and an extra person to chase paper. A standard system for policy numbers, similar to the VIN on your car would also be helpful. Then it would be pretty easy to develop software that works reliably for any companies claim.

None of this is really rocket science, and except the argument you'll get over tort reform, none of it is horribly controversial. However, it would all lower costs, make insurance easier to get and keep, and result in a happier, probably healthier public.

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Is it Much Ado About Nothing?

The AP has a story out today asking if the uproar over the "Public Option" in the current health care reform bills is much ado about nothing. If you read only the public option portion of the bill, you'd probably have a hard time disagreeing with that assessment.

The reason they give for believing it's a lot of hot air over a little thing is the CBO estimates of the number of people who will opt for the public insurance program. The CBO says only about two percent of the population would take the public option. In the current House bill you can't get into the public option if you are covered by a plan through your job. To be eligible you'd have to work for a small enough company that the rest of the bill doesn't compel it provide coverage, or already be buying insurance on your own.

I think the CBO has done a good job in point out costs associated with all of the health care legislation, but as always, they do it with static numbers. They assume that no individuals or businesses will change their habits based on the new law. That's where the problem lies with their current estimate. I also understand that it would be nearly impossible for the CBO to run dynamic computer models on behavior in the short amount of time Congress gives them to review legislation. I often wonder if that isn't by Congressional design.

History has already shown in Maine, Massachusetts, New York and New Jersey that the guaranteed issuance and group rating methods drive private insurance companies out of the markets after raising costs to the point they can't be profitable. Both the House and Senate bills contain each of these provisions in them, and I doubt that history will suddenly undo itself, and they'll work without raising costs.

The result will be (as it has been already) that as costs go up insurance companies will drop out of the exchange program, and choices will dwindle to a few not-for profit companies and the public option. Don't think so, go online and try and get a health insurance quote in Maine. There are about 5 companies left doing business there.

Another cost driver in the bill, which seems innocuous at first, is the rescission rules. We all get to hear the breathless stories on the news of the woman who had her insurance dropped right before she started treatment for cancer. "Oh those heartless insurance companies!" the anchor will opine. What the news doesn't tell you is that for every one person who is wrongfully dropped about two hundred and fifty are rightfully dropped for fraudulently obtaining insurance.

The House fix for this is to compel insurance companies to pay for care for anyone they want to drop until a mediator has decided if it's a case of fraud where the person should be dropped. That sounds fair enough, if you are the patient. However, if you are the insurance company, you now get legal bills and medical bills for the 99% of people you can legally drop for fraudulently obtaining insurance. How much of that money does anyone think will be recouped from the fraudster? Who do you think will make it up to the insurance company? Congress isn't going to pay them for it, which means the folks who are legit will get higher premiums to pay for both the care, and legal bills of someone else.

I also think this is going to end up one of the bigger legal entanglements of the bill. Guaranteed issuance says you can't be denied coverage due to a pre-existing condition, and community ratings say you can't be charged more because of it, but the proposed law also says if you don't reveal it you have obtained insurance fraudulently. I'm pretty sure this will end up in court about as fast as any other provision in the bill.

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Fact Checking Congress

The AP has a lot of faults. However, I give them credit for their FACTCHECK series of articles that they've been running. They've been pretty balanced, and gone against the grain of the MSM of late and been critical of President Obama and Congress.

The latest, a fact check on insurance profits shows something that Nance Pelosi, Harry Reid, and "The One"© don't want you to know, insurance company profits aren't that high.

WHAT!!! Wait, I was told they are making scads of money, and dead people are piling up so they can do it, how does that work?

It's actually pretty easy. If you only talk in dollars, and not percentages, it sounds like huge profits. When you actually look at the returns on investment and growth rates, the insurance industry is pretty far down on the list.

In fact, if you were writing a portfolio, most insurance companies would be in the sustainable growth category, an area you park money to keep up with inflation and mitigate risk, not to make a big profit.

Right now it might not even get into that category, with profits equalling only two percent of revenue. If you listen to the folks trying to demonize the industry, you'd think expenditures are only two percent of revenue, the rest going into some fat cat's pocket.

The other way the numbers are getting skewed is when someone wants to paint an insurance company as greedy they lump all profits, not just health insurance, into the equation. Companies that provide homeowners, health, life and auto insurance do have higher profit margins. Most of those profits come from the other products though. In fact, if you want to get mad, start looking up the profit to revenue margin on auto and life insurance, and ask why Congress isn't concerned about those.

So who makes more than insurance companies? Railroads, the folks who give you Tupperware, network and communications equipment makers (1ox insurance company profits), Coors brewing, Yahoo and others.

How come they aren't being demonized?

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Higher Insurance Rates, Coming Soon!

The Wall Street Journal once again points out the failure of a state (New York) to insure more people, give great choice in policies, and cut insurance costs through mandates and controls.

The insurance companies released their report saying that prices will go up about 20% if the Baucus Bill passes. But the WSJ article points out that New York's rates have doubled since the state decided that they should mandate coverage types, rates, etc.

So, since it's failed in New York the obvious thing to do is have the whole country try it, right?

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Advice to Insurance Companies

So I'm reading the news, and see Nancy Pelosi is pissed that insurance companies are telling the truth about the Senate health care reform bill. That truth, your premiums are going to go up, considerably.

This bothers the left because they (desperately) want you to believe that health care reform is going to be a free lunch. They want you to believe that because the truth, as it's played out everywhere that has used community rating, guaranteed issuance and zero waiting has been the opposite.

My advice to insurance companies isn't to shut up so that they'll stop adding ideas to their already bad plan. Just the opposite. Keep getting louder, so they add more.

Why, pray tell, would I suggest that? Easy, the worse the bill gets the easier it will be for insurance companies to exit the market before it takes effect. They will be going out of business once it does, anyway. So hasten your own death, and allow the feds to pick up the entire tab for their folly.

If things work out right, they'll make being an insurance company so onerous at implementation time that no on in the public (other than the "Obama Stash" crew) will blame you... But they will blame congress.

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McConnell Blasts Government Over Gag Order

McConnell Blasts Government Over 'Gag Order' on Private Health Care Provider - Political News - FOXNews.com

What's that about? Humana evidently sent a flyer out to it's Medicare Advantage customers telling them that HR 3200 and the Senate Finance bill by Max Baucus threatened their benefits. Baucus, in a hissy fit, order Medicare's oversight folks to investigate Humana for doing it, claiming they were misleading and confusing seniors.

AARP, who's spending millions advertising to support such legislation; with just as confusing language; and who runs a Medicare Advantage program, hasn't been asked to stop what they are doing.

Mitch McConnnell has hoisted the BS flag, and asked why the government is trying to gag companies from providing information about legislation, other than to protect themselves from being discovered as liars.

The CBO has come out and basically sided with Humana, saying millions of seniors will either lose Advantage coverage completely, or see a decline in benefits due to the cuts Baucus is proposing in the program in his bill, and the House in there version.

If you look at actual facts about Advantage, you'd have to wonder why it's the targets of so many cuts. It provides service for about 20% cheaper than standard Medicare, and the folks who use it rate it much higher for customer service than Medicare.

It seems if Congress were serious about cutting Medicare costs they'd expand enrollment in Advantage, not try and cut it. Except Advantage uses private health insurers to provide it's service, and we all know they are evil, just ask Nancy Pelosi and the President.


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Government to Mandate Auto Ownership!

The government has decided to mandate automobile ownership, one of my inside sources told me.

Why would they do such a thing? Well it seems that those who drive automobiles are getting stuck with an extra charge that drives the cost of a car up, they have to pay extra to subsidize public transportation.

Gas taxes, wheel taxes, registration fees and tolls are all funnelled into public transit funds, making those who drive pay for those to take the bus. Yes, bus and train riders do pay a fare, but it doesn't cover the actual cost of providing public transportation.

The way it is being put together, if you can't afford to buy a car, you'll get a government subsidy to help pay for it, through an approve government auto dealer (GM or Chrysler, since the government owns them). You won't be allowed to buy one from outside those approve dealers if you use the government money.

The feds will also determine what type of vehicle is available through the dealers. There will be no waivers, if the 4 passenger Cobalt won't work for your family, that's too bad.

If you do have a car, but it's blue book value exceeds a preset limit, you will be charged a tax on it, to help fund the subsidies to those who don't have cars.

If you can afford to buy one, but insist on using public transportation, at the end of the year the IRS will verify you don't have a car, and assess you a fine, from $800 to $3900 a year based on income, to punish you for not buying one.

Does this sound insane? Yes. And it's not happening. However, the part about drivers subsidizing public transit is true, just like insured people subsidize the uninsured (or those on Medicare).

So why would you consider this a reach, when the Senate and House are already considering legislation, using this same logic, in the name of health care reform?

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What's the Plan?

So, the President is now going to make a speech to a joint session of congress to try and get health care reform; or is it insurance reform this week; back on track.

According to the New York Times the idea is to simplify things so that folks will better understand what he wants.

Reading into the Times article it's clear that he really doesn't want to scale back as much as some claim. And the things that will lead to a government take over are still there, and items that could really lead to lower costs are missing.

For example, he'd like to keep the public option, as a form of "competition", but still rejects the idea of selling policies across state lines, which would be a market way of reducing prices.

He'd still like to force insurers to charge the same rate to anyone in an age group, regardless of health, fully knowing that rates then go up for the majority of healthy individuals to cover the added expense of those who aren't.

While he likes the idea of a coverage mandate for individuals, he really hasn't talked about an enforcement mechanism. The problem with this has been seen in Massachusetts, where people get insurance so they have a policy number when they file taxes (when it's checked). Then they dump the policy a month later. They don't pick coverage up again until they are either sick, or have to file again.

He'd like a "no wait, no restriction" guarantee on insurance policies. What does that mean, well, if you call 1-800-insure-me at 8 am to get a policy, at 9:00 you can deliver a baby by Cesarean, and be fully covered. Then, you can drop your policy a few week later when the bills are paid.

What does all this really do? It makes it nearly impossible for an insurance company that isn't underwritten by the federal treasury to break even, much less be profitable. This is an important thing to the President and the folks on the left. They know that the companies will stop writing insurance (ask New Yorkers, and folks in Maine) and then they can claim that "evil insurance companies" don't care about you, and you'd be better off with the public option.

Don't be fooled by the smooth talk next Thursday. The truth is the only goal of this reform idea is to make it impossible for anyone but the government to compete in the insurance business.

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Lack of Competion, or Rules?

A new study claims that lack of competition among insurance companies is one of the reasons for our high health care costs. As an example the article points to Maine, where one company has 71% of the market.

What they don't mention is that MaineCare, a "government option" plan, and Maine's guaranteed issuance laws, along with community ratings laws have driven health care providers from the state. The Wall Street Journal just published a nice article about the failure of MaineCare.

The markets these studies find the least competition in are the markets in places like Maine, New York, and New Jersey, where guaranteed issuance and community ratings have made premiums high, and choice low as insurers leave due to losing too much money.

Since the Urban Institute did the study, and is a proponent of public option, it's not surprising that they chose Maine as an example. What better state than one who's public option (and other rules) has destroyed the private market place to claim "lack of competition" without including the public plan as part of the equation.

If in fact we want competition in the insurance marketplace here's a novel idea. Make a level federal playing field for insurance companies, and get rid of the laws that prevent sales of policies across state lines. Then see what happens. My guess would that Maine would no longer have it's insurance problems.

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Good Reading on Insurance Reform

The Wall Street Journal does what most local papers and other national media outlet's haven't been concerning President Obama's newest phrase "Health Insurance Reform"; they point out the facts, in two different editorials.

The first "The Truth About Health Insurance" points out something I did a few days ago, the reforms wanted by the administration won't save you money, they'll just drive your insurer out of business and cost you MORE!

They point out that New York, New Jersey and Massachusetts all have both guaranteed issue insurance laws (you have to sell a policy to anyone, even with pre-existing conditions) and Community Based Ratings (can't use a pre-existing condition to set premiums). Not surprisingly, those are the three most expensive states to by individual health insurance in. In fact, rates are two to three times higher than the rest of the country.

Evidently "fairness" only works one way in those states. It's more fair to require no wait insurance for the folks who get sick and need it now. Unfortunately the rest of the insured end up paying for them to be covered.

The second piece you should read is by John Mackey, CEO and co-founder of Whole Foods. They've reformed their insurance program, and save both the company and employees money. "The Whole Foods Alternative to ObamaCare" lays out how they've done it, and why even their Canadian and British employees, with goverment provided health care want into the system.

The biggest reform they enacted? They turned employees into true consumers of health care. They actually shop around for services and treatments instead of just going to whatever doctor or clinic someone recommends.

They use a high deductible ($2500) policy paid for by the company and a Health Savings Acount, with another $1800 from company. The HSA rolls over each year, so if it's not spent, they don't lose the cash, and can save for a catastrophic event.

What they've found is the employees don't use the HSA money up every year to cover the deductibles, they instead do spend out of pocket for smaller expenses, and end up shopping and saving themselves money.

Mackey has some other great ideas on how to actually bend the curve down, as the President would like to do, but the CBO has pointed out, ObamaCare won't. Check out his ideas.

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Krauthammer's Idea

Charles Krauthammer has a couple of brilliant ideas for the start of health care reform. Neither have a snowballs chance in hell, which is too bad because they make sense.

The first is extreme tort reform, get rid of jury trials for malpractice suits and have them settled by a medical panel of experts. Why do this? Because doctors admit we waste $200 billion a year on "defensive medicine"; tests designed not to necessarily cure you, or find your ailment, but keep them out of court.

You can see this has no chance with Democrats in power. Trial lawyers are some of their biggest donors, and telling them that the jury jackpot system could go away isn't going to keep that cash flowing into election warchests.

The second is eliminating the tax benefit to employers for your insurance, and instead having the money go to YOU to purchase coverage yourself. That would immediately make your coverage portable, which is supposedly one of the things ObamaCare is supposed to bring us.

Unfortunately, as Charles points out, this won't happen either. Obama spent so much time berating John McCain for the idea of taxing that benefit that he can't do it. Just ask Max Baucus.

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The Guise of Consumer Protection

The AP has a story today about how the health care arguement is focusing too much on government control and reach, not enough on the consumer protections built into legislation in various parts of congress.

The protection that's talked about the most is the one most likely to drive your private insurer to drop health insurance, or jack up everyone's rates. That's the idea that you can't deny insurance based on pre-existing conditions, or charge higher rates based on them.

For those who don't realize it, and by listening to people argue about this for years, many don't, insurance is a risk pool. That means that the company's are trying to take in clients where the risk of paying more than they collect in premiums is low. The more risk factors you have, the higher your premium is, to hedge their bet. At a certain point you aren't worth insuring because the company won't be able to charge enough to not lose money.

The idea in HR 3200 (the big one in the House) and other bills is that the company would only be able to charge premiums based on age, not pre-existing conditions, which is insanity at it's finest. It basically requires companies to either raise all rates to a point where they don't lose their shirts, or quit offering health insurance. My guess is that point wasn't missed by Congress, in fact it's one they probably love especially with a "public option" plan out there.

If you look at insurance from a different angle, it's easier to see my point. Think of insurance companies as investment houses. Both are risk based businesses. Now, suppose your investment broker decided that instead of going with low to medium risk investments, he publicly said that the company was going to start putting large amounts of money into a group of investments that were sure to lose money, with no hope of ever returning your original investment, much less make a profit.

The SEC would investigate them for fraud, the Elliot Spitzers of the world would be filing suits, and the entire board of directors would most likely be fired by the shareholders.

Yet for some reason that same scenario sounds not only good, but somehow "fair" when it comes to health insurance companies. We now want to demand that they operate at a loss for a segment of their clients, when any other business would be investigated for it.

While Nancy Pelosi and others rail about the "obscene profits" of insurance companies, they really aren't that high. Aetna will make about $640 in profit from each of it's 19 million policies this year. That's in the area of one month's premiums for most folks, about an 8% profit.

Compare that to your mortgage. For the first twenty years of a 200,000 loan you'd pay more than that in interest PER MONTH! In fact, if the mortgage industry were to operate like Congress wants the health insurance one to work, our housing crisis would probably be even worse. I'm sorry, Barny Frank liked exactly that scenario, then held hearings when mortgage writers went belly up.

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Health (S)Care Stories

Here's the health care story I put up on barackobama.com today.

I'm pretty sure it won't be there long. Let me explain it. As a retired military veteran I can get coverage under Tricare. The great advantage is cost. I do pay less per year than most do per month for coverage. (Never mind that when I joined the military I was told it would be free for life, the back end payment for 20 years of substandard wages, crazy hours and long deployments.)

The downside is that unless you meet certain criteria, if you live within distance of a military treatment facility that becomes your primary care provider. Because there are also about 5,000 active military and their familie's in the area, Great Lakes has a hard time keeping up with demand for services.

So here's what I wrote to the folks on the web over at Health Care Stories for America:

I've been subjected to government managed health care for the last 27 years. To get treatment for a sore throat with lesions my wife has waited for over six weeks. Sorry, no chance to get a different doctor, we live to close to the treatment facility, and just get wait listed.

Why would I want to subject the rest of America to this kind of care?

I'm pretty sure it won't stay up there long. But I suggest everyone who want to gripe about health reform blast the "Health Care Stories for America" site.

Now, some of you I'm sure are questioning why I'd stay in that system when both of our employers offer insurance. The truth is we are both fairly healthy, and don't use the system that much. So the trade off in money saved is worth the inconvenience that we put up with.

When the wait for appointments begins to exceed our desire to save some money, we'll chose (if we still can) one of our employer based plans.

By the way, that's the same reason a lot of the 40 million or so without insurance don't have it. They figure they are healthy, and can deal with using acute care clinics and ER's and the associated bills. When they have a family, or start worrying about health issues, they start looking for insurance.

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Obama-Care Looks Like Hillary Care

For those who wondered, it seems that Obama Care will look much like HillaryCare. though not as many details will come out, so as to keep us from bitching this time around. Considering Barack ran his entire campaign by not releasing much info other than he "hoped for change" that shouldn't be a surprise.

The Wall St. Journal has a nice piece on what Obama Care will probably look like. They base it on what Obama has said, who he's probably picking to run Health and Human Services (Tom Daschle) and the policy blueprint making it's way around the staffers of the House Finance Committee.

Basically, the plan that appears to be coming together will be three pronged. The first, govenment regulation of the insurance industry to require all companies that sell health insurance to do it at a group rate. An expanded Medicare that competes against the private companies will also be part of that insurance pool. Everyone gets to chose their policy, but as many states do now, the Fed's will be telling the companies what they have to have in the policies.

Second, and employer mandate that a certain percentage of payroll must be spent on health care, or you'll get a tax penalty. As the Journal points out, that number has to be targeted correctly. If the penalty is too low, a lot of companies will just dump their coverage and pay the fine. Why not save some money if you can.

The reverse is also true, though. If the percentage is set too high companies will just shed jobs in the US and move them elsewhere. We already have the second highest corporate income tax of all industrialized countries, adding to that burden will cause some to leave.

The third the Journal devined from Max Baucus' policy blueprint. That is an individual mandate to buy insurance, or face a tax penalty for failing to. Obama campaigned against this, but if he wants the rest of the package, the guess of the Journal (and me) is that he'll cave to this demand.

For those who can't afford the insurance, a tax rebate will be given to help pay the cost. Who is considered to not be able to afford coverage? According to the Baucus blueprint, families making less than FOUR HUNDRED PERCENT of the federal poverty level, or about $85,000 a yearfor a family of four.

The reason for not getting to wonky on the details? Obama learned from Hillary. She brought in about 3 million "experts" from every possible interest group to help build her plan. Instead they ended up with a brawl in the White House and nothing getting done. Obama will limit the number of folks coming in to give ideas, and limit the amount of information that comes out, lest we get unruly about the details again.

There will be interst groups that do bitch. Unions will be the biggest. While they claim to love the idea of universal care, their members may balk at it; and then you'll have them asking for an exemption for collectively bargained benefits.

Obama say's he'll exempt small businesses from the mandate, but the level that equals "small" hasn't been set. Is it based on number of employees, gross income of the company? Who knows, and we probably won't until it gets to the floors Congress.

Baucus' plan gives no idea of what it will cost. "Conservative" estimates are about $150 billion a year. That's a joke folks, even if Katie Couric can say it with a straight face. Medicare, which only covers about 44 million people has a baseline budget number for 2009 of $420 BILLION. Somehow, for 1/3 that amount, we think we can double the number of people in the program, and more than likely triple it.

Tripling may actually be a conservative estimate, too. Consider that insurance companies will be asked to write group rate policies for everyone, and Obama has already said that he want's no pre-existing condition clauses. When you do the math on that, companies are going to walk from the business. Not being able to charge more to folks like me who are overweight, smoke, drink, and don't exercise means that they will have to jack up everyone's rates to cover us slobs. That means selling insurance suddenly becomes less profitable, if at all, and they'll start walking from the health coverage business.

If anyone doubts this, New Jersey provided a great example in the late 1980's and early 1990's with their auto coverage mandates. By the time the legislature there was done imposing restrictions on what could and couldn't be covered, and charged extra for, most of the big insurance companies just pulled out of the state.

That of course is the utopian vision of the left. Get rid of the private insurance companies, and just let the government handle health care all together. Seriously, considering how well they've done with Medicare and Medicaid why would anyone doubt their abilities to handle it for the rest of us, right?

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Health Care Everywhere

Health care is popping up everywhere, it seems. The UAW and GM's biggest issue in contract negotiations is getting the union to take over management of retiree health care. Hillary wants us all to buy insurance, and Wal-Mart is opening clinics in it's stores.

GM is the "lead company" in the UAW contract negotiations. One of GM, Ford and Chrysler's goals is to move retiree health care from the companies to the unions. Contrary to the belief of some in the UAW, this isn't "unprecedented". Most smaller unions have run their health care systems for retirees for years.

One only need look at the steel industry to see why the companies probably SHOULDN'T run the retiree health care system. When that industry collapsed tens of thousands of retirees too young for medi-care found themselves with no insurance. Considering the shape of Ford's balance sheet, retirees should be thinking this might not be a bad idea.

Hillary has announced her plan to get everyone insured, mandate it! That's right, a federal law that says you have to have insurance, but with a tax credit carrot to get you to buy it. The problem there is the tax credit doesn't show up until months after you have to pay your premiums, little solice to those who already forgo insurance because they can't afford it right now.

We already offer a number of tax incentives for health care, from credits to income offsets, her plan (like many republican one's) would expand on that for those who's employers don't offer insurance, or have it at a high cost.

Her plan, to her credit wouldn't create a new bureaucracy, instead it would expand existing one's, by making current federal government health care programs available to everyone. And of course, there are taxes. If you are an employer and don't offer insurance, you get taxed. If you got a tax cut in 2002, it'll be going away.

The cost of her plan? Supposedly $110 billion a year to cover 47 million. I say supposedly because as I pointed out when Barack Obama and John Edwards came out with similar numbers in the summer, we can't cover one third less than that number on Medicare for 3 times the cost. How are we now suddenly going to become so lean in government provided (mandated) health care that we cut the cost that much?

The UAW and Wal-Mart, of all folks, could end up as sort of strange bedfellows in the whole health care saga. Wal-Mart is opening quick care clinics in a number of it's stores, which have prices far lower than most doctors offices and hospitals (80-90% less than an ER visit).

They also offer low cost ($4) generic prescriptions, even if you aren't insured. If the UAW does end up as it's retiree's health care insurer, Wal-Mart may end up as one of their best options to keep their costs down.

The UAW would be smart to look into reimbursing retirees for generic prescriptions, and low cost office visits at something like the Redi-Care clinic's at Wal-Mart at a 100% rate. If you chose to use a higher cost alternative, you get less of it back.

As John Stossel pointed out on ABC's 20/20 last Friday, more insurance may actually be the worst solution to our health care system's rising prices. Areas of medicine that traditional insurance doesn't cover, lasik eye surgery, and cosmetic procedures have seen their prices come down relative to inflation, while insured proceedures keep going up. Why? Competition in those fields of medicine make it imperitive to keep costs down. ER's and regular doctors who take insurance don't have that incentive, because the patients aren't paying for (most of) the cost.

He also showed how HSA's (Health Saving's Accounts) at places like Whole Foods had reduced their costs, but not cut the quality of care that employees got. Instead of a huge cost major medical plan, Whole Foods offers a catastrophic care plan, and a $1500/yr HSA to employees. The workers suddenly started "shopping" for doctors when they needed something, instead of just going to the first one they found in the yellow pages. After grumbling by some employees about the loss of "traditional" insurance they held a vote, and 77% decided they liked the new plan better.

Technorati Tags: Health Care, Insurance, UAW, GM, Wal Mart, Hillary Clinton

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Obama Called Out

I've posted a number of times about the Democrat's plans for 'Universal Health Care', and specifically about Barack Obama touting it as a major campaign theme, though it's not on his web site anywhere.

Yesterday in Las Vegas an audience member at a candidates forum asked Obama what his plan was, since it's no where to be found on his website. The answer is he doesn't have one yet, the campaign is young; but it's really important to him, and he'll have universal care in place by the end of his first term.

John Edwards claims he can pay for a 90-120 billion dollar program by simply removing the 2002 tax cuts on incomes over 200,000 per year. However, if you do the math on that, those 3.01 million people will each get a tax increase of just under 40,000 per year to pay for his plan.
(the math can be done here by dividing cell B160 by the amount the plan will cost). If you look at the 2002 tax numbers you'll see that he'll have to raise extra revenue somewhere.

Now, if this is true universal coverage, I want to know how, at $400 per person, Mr. Edwards is going to make this happen. Other countries providing universal coverage are spending between 3 and 10 times that per year per person.

Bill Richardson claimed he'll do it for about the same price, without raising taxes. Instead, he'll end the war in Iraq and use all the money for health care. Again, not telling us how he's going to cover everyone for under $500 per person each year.

Hillary say's (link is to new WaPo story) she's going to adjust the current system of employer based health care, and expand it by going after insurance company profits to cover the uninsured. With 45 million uninsured she'd have to get about 45 billion from the insurance companies per year to take care of that. While they've had decent profits, I'm pretty sure they weren't that high.

Dennis Kucinich, to his credit, called out the rest of the field telling them their band-aid approach wasn't going to work, and would cost too much. He wants to scrape the current system entirely, and start from scratch.

The problem with his idea is convincing the 85% of us who are covered, and 60% who are happy with it, that we need to give up what we have for a new government run program. Whie it would be the most painful way of doing things for the majority of us, from a pure standpoint of getting the system right Kucinich's idea is the only one that makes sense.

Technorati Tags: Democrats, Health Care, Insurance, Obama, Clinton, Richardson, Edwards, Kucinich

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