The Loud Talker

I was recently asked by a co-worker for my opinion on the health care plan. This person is probably like many Americans: working every day, dealing with the responsibilities of being a spouse and parent, etc. Our reality today is that most Americans are simply not interested in politics, nor do they have the time needed to become knowledgeable on the many issues of the day. Those of us that are interested often spend an inordinate amount of time staying informed, and a subset of this group spends additional time keeping their collective eyes on Congress. Being informed is hard work!

Therefore, when asked for my opinion on the topic of health care I decided to take some time and formulate what I hope is a rational explanation of the situation from both political sides, followed by my ideas on how to solve the health care problems we face.

By giving all Americans some form of health insurance, the thought is that no one will die for lack of medical access. This is a noble and good cause. There are millions of people in America that avoid going to the doctor because they don’t have insurance to pay for the visits, treatments, lab work, medication, etc. However, there are also millions that *choose* not to have insurance.

Until recently the Obama administration and liberals have referred to the number of 47 million uninsured Americans. This number has been proven wrong time and time again, but that doesn’t stop the press from continuing to use it, and television talk show guests are the most frequent offenders. So what is the real number? During his recent health care speech, Obama for the first time used the number 30 million instead of 47 million. But again, even this number is incorrect, or at the very least, misleading. Why the change? Approximately 15 million illegal aliens were removed from the total, plus some other groups.  If possible I will include the actual numbers in this article, but a more accurate count ranges from 9-15 million truly uninsured.

What is the Obama plan? There are several facets to the current legislation, the most popular are “universal coverage,” “single payer,” and a “public option.”

A public option is a plan that allows any citizen to sign up for affordable health insurance whether or not he or she is employed. I think this is a good thing, after all we provide public education for all citizens, why not a basic health plan? If this can be done at a reasonable cost, I think it is a good thing.

Universal coverage refers to giving every American access to health insurance coverage. Keep in mind that everyone in America currently has access to hospital emergency rooms for *emergencies* and cannot be denied treatment. This applies to foreign visitors as well as illegal aliens. However, for those without insurance, hospitals are only required to stabilize patients, they do not have to treat them until they are cured or 100% healthy.

Single Payer is what President Obama and many leading Democrats want to see.  A single payer system is one in which the government handles all medical transactions. Patients pay the government, the government pays doctors and hospitals. It removes insurance companies from the process, the government becomes your insurance company.

“But what about those of us that like our current insurance plans?” “What happens to the insurance companies?” These are two obvious questions. LIberals openly express that they want insurance companies to fail. They want them to go away. Conservatives want the free market to be free, insurance companies exist for a reason. Liberals say that insurance companies “do nothing” to justify their “massive profits” and they have repeatedly denied coverage for patients in need. While this is true, there are many cases of coverage being limited or denied, but there is NO reason to believe that a government plan would operate any differently.

Coverages are limited for a reason: cost. Health care costs are out of control, and for insurance companies to remain profitable they have to set limits. This is true for all businesses, it’s about controlling costs. However, since insurance companies control costs that directly impact our health and well being, these decisions are far more personal. It should also be noted that the average health insurance profit margin is less between 3-5%. Software companies, beer distillers and credit card companies enjoy far bigger profit margins (from 10-20% or mre), yet we don’t hear any complaints about them do we?

One of the biggest mantras from the Obama administration is the desire to provide health care “choice” for Americans. They have often cited regions in America where a single insurance company is the only option for 70% of the local population. In my opinion this cannot be avoided. Not all of America is a large city with dozens of business options. Remote parts of America, the “country” parts, have limited choices for virtually every aspect of their lives (grocery stores, cable/satellite television providers, internet access, gas stations, etc.).

The truth about choice is that most Americans get health insurance through their employers. I think the number is 85% of those with insurance, the rest buy their own insurance for themselves or their own businesses. As an employee I can’t choose which insurance company I use, but I can choose between three or four different coverage plans with a wide range of options. However, my *employer* can choose from a wide variety of insurance companies and does so based on the needs of our employees each year. As we grow larger we have more options to choose from. In other words, Americans already HAVE choice.

So what is wrong with letting the government enter the insurance business and provide yet another option? Isn’t it fair to give consumers yet another choice? On the surface the answer is yes. But, and it’s a big but, for this to work you have to assume that the government will play under the same rules as insurance companies with regard to price, coverage, contract terms, etc. We have absolutely NO reason to think that this will be the case. What will happen is that the government will offer coverage at much lower rates, lowball rates that will make it extremely beneficial for employers to change over from their current private insurance coverage.

For example, if it costs $1200 a month to cover an employee and family ($400/mo. paid by the employee, $800 paid by the company), and the government offers a plan for half that price, doesn’t a company looking to control costs have to seriously consider switching over? My company has 2600 employees, therefore $600 per person equates to $1.5M a month in savings. That’s a lot. Once companies start switching, insurance companies will have to lower the costs, decrease their coverage, fire employees, or go out of business.

Remember, the president has stated that he WANTS a single payer system and thinks it is best for America. Not the free market, a government run plan. As an aside, consider the fact that the government has never run a profitable businesses. Amtrak has been in the red since the government took it over in the 1970s; the US Postal Service is drowning in debt, and our current Medicare/Medicaid unfunded liabilities — the amount we are currently obligated to pay out — is nearly $74 TRILLION. What confidence do you have that our government can control such a vital, personal business as health care?

When you read the bill (something that politicians have actually mocked) you will see the details and then realize that the president’s words about his plan are misleading at best, outright lies at worst. For example, he says that you will not have to change providers under the current plan. This is true if your employer or plan does not change. Why? The government is going to “certify” private insurance plans so that citizens have a choice. They will make sure that only plans that have certain provisions and coverages are government approved. For those not approved, they change or go out of business. Also, if your employer-provided plan changes in any way, it automatically needs to be re-certified or else it loses certification, meaning that you are no longer covered and need to switch to the government plan.

Another component of the health plan is the taxing individuals that choose not to have coverage. I went for several years in my 20s without insurance. Was it a risk? Yes, but I was very healthy, never got sick, and like many young folks out of college I couldn’t afford a plan yet. I was self-employed and sometimes worked temp jobs. There are millions of people in America in this very same situation. But under the proposed plan, they will be taxed around $4000 to help fund the government plan. In other words, not only is the government trying to provide coverage for everyone, it is trying to get everyone to pay for it whether they use it or not. Businesses also face steep fines if they do not meet government-defined coverages.

Also, once a national health care plan is defined there will be a massive lobbying effort to get various procedures and benefits added to the national mandatory plan. These may include elective surgeries such as lap bands or cosmetic surgery (bottom, breast augmentation, et al), vision line items, hearing aids, smoking cessation and more. The merits of these various procedures are debatable and every situation is unique, but the fact that tons of cafeteria plan line items will be added to the national plan will certainly increase the cost. Today, I choose my coverage based on my family needs: We have vision, dental, etc., but we don’t need smoking cessation, psychiatric services or other benefits. This in turn lowers my plan cost. If we have a national plan we will be paying for services for others that we might not pay for given the choice. When you bloat a product with extra features it costs the end-user more. For insurance this means higher prices thanks to a one-size-fits-all methodology.

In addition to the idea that the government will hamper, not help competition, the most obvious point of contention is the cost of the plan and who will actually pay for it. There have been many estimates, the most reputable has come from the non-partisan Congressional Budget Office (CBO). There are others as well, but all have stated that the plan will cost trillions and will increase the national defect. Trillions. Not until this administration have we used that term so often. Premiums will go up for many of the currently insured, the government will subsidize (pay for) parts of the plan for lower income earners and will pay the entire cost of the plan for the poor. Again, this is a noble thing to try to do, but the best of intentions need to have a strong foundation. Ultimately a government plan will reduce, if not totally eliminate competition. You can change health insurance companies, but you can’t change governments.

A very important point to consider is that 95% of Americans are currently insured. Americans are not guaranteed a right to health care, remember, the Declaration of Independence provides for the right to Life, Liberty, and the PURSUIT of Happiness. Not happiness. Some argue that to “promote the general welfare” includes health insurance. This could be debated, but I think if medical care was a right it would have been included in the Constitution. So, all of this legislation, effort, press and cost is to cover 5% of our population. Interestingly enough, recent studies have shown that millions of Americans will actually be forced off of their coverage due to plan changes and cost increases to employers.

America was recovering from the debt situation created by 9/11 and the war. The bank and housing bailouts demanded by Henry Paulson and approved by President Bush and the Democratic-controlled Congress reversed that positive trend. When you factor in the massive spending proposals of the new administration you see that the budget deficits will get far worse over time, not better. THIS is one of the reasons that conservatives are so angry about the deaf ear Congress has turned to the public, plus the mocking of smaller-government supporters like myself and the many tea party attendees around America. At some point this bill needs to be paid.

Some argue that a certain amount of national debt is acceptable, if not ideal. I tend to agree and use our mortgage as an example of this. Most people are paying off their house, a car or two and perhaps their student loans. This is normal. But when your earnings no longer meet your debt obligations, you have a problem and need to make adjustments. What has happened to America is that not only are we paying off our mortgage, cars and loans, but we have loaded up with credit cards and maxed out the limits. We can’t afford our current bills, and the interest alone is ruining our global credit rating.

What’s worse is that Congress doesn’t care. Instead of paying off credit cards and then cutting them up, Congress is applying for as many credit cards it can get with the highest limits possible. Then, another shopping spree takes place, the new cards are maxed out, and Congress repeats this pattern over and over again. However, Congress — a group made up mainly of very affluent lawyers — will not pay this bill. The American tax payer pays this bill. And since our debt is increasing at such an astonishing pace, there is not enough revenue in America to pay off these debts. Taxes will go up for everyone, and the way Congress writes its bills, it defers larger expenses until election years or after election years to keep the bad news out of the public eye. Given our current national debt, workers of today will pay just a part of this bill and our children and THEIR children will bear the responsibility of paying the taxes needed to reduce our debts.

Democrats also claim that Republicans are “blocking” progress and that they want the “status quo” (in other words, no change). This is an odd claim since the Democrats have a 60:40 majority in the Senate and a 71-vote majority in the House, plus a Democratic president. They should be able to pass any legislation that they want. However, Republicans are usually known for fiscal control (despite the fact that George Bush ignored this concept, creating one of the reasons that Democrats are now in control). Republicans are aware of the costs of the bill and feel that the financial stability of America trumps universal health care as currently defined.

Democrats, led by Nancy Pelosi, are writing the health care bill without including Republicans. Despite her repeated public statements about the need for bi-partisan support of the bill, Republicans are being literally locked out of discussions, When debate on the various components is requested, Democrats deny it.  And, even with the 60:40 majority, some Democrats have actually listened to their constituents back home and are against the current bill. But, the bill may still pass the Senate thanks to something called the “nuclear option.” This process allows a bill to be passed by a 51:49 vote and then get amended “in committee” and ultimately passed. The committee will not be bipartisan, and what happens behind closed doors will not necessarily be made public. No debate, no transparency, just total control from one side of Congress. Obviously, this option is another of the reasons conservatives are so upset.

If a plan is passed:

• our national debt will increase
• taxes will increase, breaking Obama’s promise not to raise taxes on a certain population of Americans
• millions may actually lose their coverage
• millions of businesses will have to deal with higher expenses.
• And once a government plan or program is created it is very hard to reverse it or eliminate it.

It is also important to understand why Democrats want to push this plan through, In my opinion there are two reasons. The first is the overall desire of liberals to provide for the less fortunate and the poor. Interestingly enough Conservatives actually provide far more for the poor than liberals through charitable donations and religious institutions, but that is besides the point. Liberals want to take care of the needy. Fine. Conversely, conservatives want to empower the needy.

The second reason I think Democrats want to push this plan through is purely for votes. By giving more to the poor, they virtually guarantee that they will be reelected. When people get something from the government, they tend to vote for those that gave it to them. All politics is local, and when it comes time for the next election you can bet your bottom dollar that local politicians will be reminding their constituents who gave them that “free” health care. Sadly there is a popular mindset among the poor that they are victims and that their welfare check is a privilege and that they’ve earned” it. Until this mindset changes those that receive government handouts will largely vote Democratic. Health care is just another way to keep the populace in control.

The bottom line:

1. Heath care for all is a noble goal.
2. Health care for all is extremely expensive.
3. The current plan is full of potential problems that will help some and hurt others.
4. The financial impact of the plan and its effect on businesses will hurt all Americans.
5. There are alternatives, but both parties need to work together to make them work.

“So Mr. Smartypants, what is your solution?” I’ve got three suggestions.

• Let Americans shop for health insurance across state borders. WE can buy car insurance, electricity and virtually everything else from anywhere at any time. But not health insurance. This is why some remote regions have fewer choices for their health care provider (among other things). By opening up state lines Americans can shop for the best plan and best prices to meet their needs. Instant competition, and as any econ101 student knows, competition is good for consumers.
• Tort reform: Doctors today are forced to practice defensive medicine. This means doing whatever it takes to not get sued by your patient. Malpractice insurance can cost doctors tens of thousands of dollars a month. If the laws were changed to cap medical malpractice suits, doctors could focus on patient care instead of defensive protectionist medicine. Lawsuits are one of the reasons doctors fees are higher and why medicine and supplies are so expensive.
• Motivate health insurance companies to offer coverage to the poor by offering tax breaks to the companies. If a certain number or percentage of plan members fall under a certain income level, give the company a tax break. This could help or even eliminate the need for a public option.

Bonus: So many of the problems in our government are caused by power hungry politicians. They campaign with good intentions and once in Washington get drunk on the massive benefits, perks and fame that comes with the job. How do we fix this? TERM LIMITS. The founding fathers intended for public officials to serve for short terms and then return to their constituency. This is NOT the case today. Elections are not the same as term limits because of so many external influences and a significant disinterest in learning the truth about politicians or the issues they vote on. To make the problem even worse, today’s media outlets are concerned more about ratings than the truth. It was obvious during the last election that all but one television network supported Obama. Journalism used to be about finding out the truth. But today it is about finding the dirt, promoting the sensational and selling as many ads as possible. It is up to us to get educated and then educate our peers. If we don’t we have no one to blame but ourselves for the misery we receive.