Saturday, August 29, 2009
On the one hand we have avowed statists like the President, Speaker Pelosi, Majority Leader Harry Reid and many congressional democrats who favor what I call the Field of Dreams approach. The essence of this approach is if you build it they will come. Components include an entirely new Federal Bureacracy including a healhcare exchange to sell you the coverage you are required to buy from the public plan which was designed by a federal committee largely appointed by the President. Proponents of this approach know they cannot come right out and take a stand for single payer for many reasons;
1. The blue dogs would be savaged in future elections by seniors who lost the Medicare Advantage coverage they loved when the reimbursement was cut to fund the coverage for the uninsured.
2. The vanguard of the proletariat that is our present near supermajority does not believe the American people are smart enough to understand the intricate issues involved in health care reform like rationing. No matter they will act for all us little people. It is why we elected them in their minds.
3. Demonizing the insurance companies, the HMO's ( a federal creation by the way) and the rich doctors is a proven tactic which tosses red meat to their base while diverting attention from the fact the government accounts for 60% of the health care spend today.
4. Incrementalism works and Medicare remains the sacred cow.
5. Polls show many Americans are satisfied with their own coverage and their own doctors and will resist overt change as congress is learning at the townhalls.
6. Someone might point out that universal coverage mandated by the states and controlled has not stopped medical inflation in workers compensation.
On the other hand we have voices speaking out for market solutions that are being shouted down as obstructionists, mere drones who articulate platitudes from Fox News or talk radio. No one is focused on what unites us as American's. We have only the extremes and no statesman. No one is looking at the root cause of the current crisis but is rather seeking to exploit the crisis for their own self interest.
One of the insurance companies I worked for years ago developed a fully integrated product to cover health care, workers compensation, short term disability, long term disability. If we build it they will come said the visionaries in marketing. Very few employers bought the product because they wanted the flexibility to replace vendors by product. They resisted also resisted having all their products with one vendor as a problem in one area would require them to move all products. Nothing was unbundled you see. An infamous story circulated at the company where an executive stood before senior management pleading for more money time until the market recognized the value and was chastised by the CFO; "You keep coming in hereselling the same dog food and the dog just won't eat that crap". He built it but they did not come. Obamacare reminds me of that dog food. And the dog still won't eat that crap.
Monday, August 24, 2009
In January I blogged about the impact on COBRA the ARRA spendulous package would have. Evidence is emerging that COBRA elections have doubled on average and in savaged areas of the economy like manufacturing COBRA elections are up 800% according to a Hewitt survey.
Health Care reform is all over the news yet according to the Hewitt survey COBRA elections saw the smallest increase of any segment increasing from 10% to 12%. Why is that you might ask? It is due to the fact that employment remains strong in this economic segment and those who lose their job can find another.
I find it ironic that amidst the highest unemployment figures in the U.S. since the great depresssion and facing a recovery which the only economist who predicted the subprime meltdown predicts will be anaemic and below trend in advanced economies with a big risk of a double dip recession one who questions the wisdom of enacting central planning in the healthcare sector is dismissed as bearing false witness by the leader of the free world.
Friday, August 21, 2009
Of the 21 top Democratic House leadership members and chairmen, five come
from districts carried by John McCain, but the average vote in the other 16
districts was 71 percent to 27 percent for Obama. Like Los Angeles’ Maxine
Waters and New York’s Anthony Weiner, they are ideologically and geographically
insulated from the skepticism generating from the great middle of the
It’s a mistake that the architect of Medicaid and Medicare, Lyndon Johnson, never made. A Southern Democrat—sometimes derided by liberals as an “Eisenhower Democrat” when he was Majority Leader of the Senate—understood the need for bipartisan support for any major social reforms: His Medicare bill received the support of 70 House Republicans and 16 Senate Republicans. Even Newt Gingrich got it—his Welfare reforms gained the support of 101 Democrats at the high-water mark of the second Republican Revolution.
Liberals are in deep denial about the source of the president’s falling poll numbers during this summer’s health-care debate. They think the problem—perceptions of arrogant over-reaching liberalism—is the cure. It’s the same self-serving mistake that the extremes always make.
President Obama needs to depolarize the health-care debate. He got off-message because he got off-center. Embracing a bipartisan bill that replaces the public option with a nonprofit co-op will not “muddy” the debate but help clarify it. It will not
be a retreat but a way forward.
Lyndon Johnson once joked that “the difference between liberals and cannibals is that cannibals don’t eat their friends and family members.” In half-century-long history of failed health-care reforms from Harry Truman on down, liberal cannibalism has been as much to blame for defeats as fear-mongering from the far right.
The perfect cannot be the enemy of the good. The goal is to decrease costs and increase coverage. If today’s liberals don’t understand the lesson of their own political history and insist on attacking their president, they will have the failure of
this health-care reform on their hands.
Thursday, August 20, 2009
- Fact #1 Health Care reform will include coverage for illegal aliens. What Obama is not stating is that he favors immigration reform in 2010 that places illegal immigrants on a glide path to citizenship. In the insurance industry we would call that an error of omission--the failure to mention a material fact.
- Fact#2 Americans already pay taxes to cover the uninsured in Federal Taxes and Local Taxes. Further expanding Medicaid will only add to the unfunded mandates imposed on Americans by Washington as we have all noticed by the emergence of tea parties on the news each evening. To quote the bi-partisan CBO ;
"The tables included in the report summarize our preliminary assessment of the coverage provisions’ budgetary effects and their likely impact on rates and sources of insurance coverage for the nonelderly population. According to that assessment, enacting those provisions by themselves would result in a net increase in federal budget deficits of $1,042 billion over the 2010–2019 period. By 2019, CBO and the JCT staff estimate, the number of nonelderly people who are uninsured would be reduced by about 37 million, leaving about 17 million nonelderly residents uninsured (nearly half of whom would be unauthorized immigrants)."
So lets just say fact #2 is essentially that Americans already know they pay for illegal immigrants today and are mad as hell the supermajority is seeking to increase what they pay by a $trillion while the President and congressional democrats tell us we are uninformed and that any health care reform cannot add to our debt. In America we call that **&%#^%!!! Is it any wonder today's Rassussen Poll shows that 54% of all Americans who fear government will do too much is up ten points from 44% in January... BTW see all my uninsured posts here. Illegal aliens know how to access free health care and thus lack an incentive as well as the income frequently to purchase their own.
- Fact #3 You can keep your coverage and no one will be forced into government run healthcare. Lets once again see what the CBO has to say on this whopper of a lie.
Under the proposal, nearly 90 percent of workers would be employed by firms that
would either have to offer qualified coverage and contribute a significant share
toward the premium or pay a tax equal to 8 percent of their total payroll. That “playor-
pay” penalty would constitute a substantial portion of the average cost of providing
insurance coverage, which has been estimated at about 12 percent of payroll currently
(but which would rise over time). In dollar terms, the penalty would obviously vary
depending on a firm’s payroll; for example, a firm with average wages of $40,000 per
year that did not offer qualified coverage would have to pay a penalty of $3,200 per
worker. Moreover, that penalty would make no direct contribution to those workers’
insurance costs; they would then need to obtain coverage from another source in
order to fulfill the individual mandate.
Workers who get insurance through their employer receive a significant subsidy
because the cost of that insurance is not treated as taxable earnings for the worker and
thus avoids both income and payroll taxes. In most cases, that exclusion applies to the
portion of the premium that workers pay as well as the amount the employer
contributes. On average, that tax exclusion gives workers a subsidy of roughly
30 percent for purchasing insurance through their employer—a subsidy that would be forgone if the employer chose not to offer coverage and the workers instead obtained coverage in the new insurance exchanges.
Bottom line is that the lie that you can keep your present coverage is patently false on multiple levels.
- It does not account for the behavior rational employers will display faced with a tax or mandate to offer health coverage. Unintended consequences abound in politics.
- It does not account for the tax impact on workers who not only get to purchase their own heath care when their employer drops coverage but also lose the tax advantage CBO cites at 30% of the value of employer provided health care. I thought it was John McCain who wanted to tax American's on the value of their health care?
- Access to private insurers for individuals whose employers drop group coverage will be through an exchange created by the federal government which will be up running and ready to guide you in your coverage selection. Really? Sort of like Medicare.Gov does so well now?
- Self-funded plans will face mandates to cover items which they do not today and employers who have spent years investing in wellness and behavioral incentives to achieve a competitive advantage in their industry and have actually bent their own health care cost curve down will now face audits by the government who has no experience or expertise in achieving the same.
Fact #4 It is the Democratic Majority not Radical Republicans, Insurance companies, Doctors, pharmaceutical Companies and Fringe Elements Bearing False Witness who are obstructing Passage of Health Reform.
Rather than share my own thoughts on this matter let me quote Camille Paglia writing in Salon who very succinctly captures the state of our nation.
But who would have thought that the sober, deliberative Barack Obama would have nothing to propose but vague and slippery promises -- or that he would so easily cede the leadership clout of the executive branch to a chaotic, rapacious, solipsistic Congress? House Speaker Nancy Pelosi, whom I used to admire for her smooth aplomb under pressure, has clearly gone off the deep end with her bizarre rants about legitimate town-hall protests by American citizens. She is doing grievous damage to the party and should immediately step down.
There is plenty of blame to go around. Obama's aggressive endorsement of a healthcare plan that does not even exist yet, except in five competing, fluctuating drafts, makes Washington seem like Cloud Cuckoo Land. The president is promoting the most colossal, brazen bait-and-switch operation since the Bush administration snookered the country into invading Iraq with apocalyptic visions of mushroom clouds over American cities.
You can keep your doctor; you can keep your insurance, if you're happy with it, Obama keeps assuring us in soothing, lullaby tones. Oh, really? And what if my doctor is not the one appointed by the new government medical boards for ruling on my access to tests and specialists? And what if my insurance company goes belly up because of undercutting by its government-bankrolled competitor? Face it: Virtually all nationalized health systems, neither nourished nor updated by profit-driven private investment, eventually lead to rationing.
I just don't get it. Why the insane rush to pass a bill, any bill, in three weeks? And why such an abject failure by the Obama administration to present the issues to the public in a rational, detailed, informational way? The U.S. is gigantic; many of our states are bigger than whole European nations. The bureaucracy required to institute and manage a nationalized health system here would be Byzantine beyond belief and would vampirically absorb whatever savings Obama thinks could be made. And the transition period would be a nightmare of red tape and mammoth screw-ups, which we can ill afford with a faltering economy.
As with the massive boondoggle of the stimulus package, which Obama foolishly let Congress turn into a pork rut, too much has been attempted all at once; focused, targeted initiatives would, instead, have won wide public support. How is it possible that Democrats, through their own clumsiness and arrogance, have sabotaged healthcare reform yet again? Blaming obstructionist Republicans is nonsensical, because Democrats control the White House and both Houses of Congress. It isn't conservative rumors or lies that are stopping healthcare legislation; it's the justifiable alarm of an electorate that has been cut out of the loop and is watching its representatives construct a tangled labyrinth for others but not for themselves. No, the airheads of Congress will keep their own plush healthcare plan -- it's the rest of us guinea pigs who will be thrown to the wolves.
Fact # 5 Health Reform Will Raise Not Lower The Cost of Health Care For The Average American It Will raise Costs
Under the proposed exchanges being considered the government will mandate all benefits which must be offered by either public or private plans and will audit self funded plans. Larger employers who self fund have frequently achieved lower health care costs than insured plans. Thats what happens when you invest in wellness since as I have posted here about 70% of health care costs are attributable to behaviors that we control namely not exercising, smoking, drinking, not eating correctly and all the other things your Mom warned you about. Where I ask in the health reform proposals are the sections which specify the wellness incentives necessary to change the behaviors which drive 70% of the cost? They do not exist today but wait for the regualtions to show up by bureaucratic edict in 5 years along with the junk food taxes,soda taxes, higher alcohol taxes, couch potato tax and BMI tax.
There is an excellent summary here of why health insurance costs so much.
Recently I was listening to a radio program in which the host explained that in a few states health insurance policies issued by Blue Cross/Blue Shield were available at extremely reasonable prices, about $100 a month. The very first caller into the program demanded to know exactly what the annual deductible was in plans like this. When the host said $3,000 to $5,000 the caller responded, that isn't health insurance but catastrophic insurance. It's too expensive and that's why we need health care reform from Washington, he continued.
And there lies one of the problems with the health insurance reform debate. State government mandates and favorable tax treatment in Washington have so distorted the market for health insurance that a generation of Americans now look on medical coverage as something very different from other kinds of insurance that we buy. While we will pay several hundred bucks out of our own pockets to have a plumber come repair a leaky pipe, we'll balk at deductibles and a $50 co-pay for a doctor's visit. We've been schooled in this attitude by politicians who have mandated that health insurance do things that we'd never expect from other kinds of insurance, and by consumer advocates who will demand our legislators do something about a health insurance company that doesn't cover some optional procedure that has nothing to do with life and death.
What effect do you think imposing congresses vision of an appropriate health benefit package including every special interest mandate imaginable on America's largest self-funded employers would have on America's ability to compete in a global economy?
About 20% of the cost of health care for working Americans can be attributed to Prescription Drugs. While the average American does not go to the doctor or hospital each month they do use their health plan for presciption drugs each month on average. The White house proudly announced they had secured $8B in cost reductions annually from the pharmaceutical industry for the next 10 years. In contrast, Medicare spends $800B annually on prescription drugs but the white house deal leaves intact an agreement with pharmaceutical companies and the PBM's that handle Medicare not to negotiate prescription drug prices. This is madness. This is insane. It is incompetence. And one might reasonably question the ethics and judgement of an administration which cuts a deal on pharmaceuticals with parties that are now funding tv ads in support of health reform through an ad agency formerly owned by a current advisor to the president David Axlerod. But I digress, he point not negotiating over drug prices raises costs for Medicare and Senior citizens and makes American companies less competitive
One Big Truth
So why is health reform so urgent now? It's simply a matter of convenience. There is the fiscal crisis followed by the bailouts and the stimulus that all require new taxation. Obama's agenda is Education, Energy and Health Care. On the health care front reform was supposed to bend the cost of Medicare/Medicaid and reduce the deficit but since he cannot overtly mention his intention to tax the hell out of the middle class along with the rich he is going to do so under the guise of cap and trade and health care reform. You see the way health insurance works is that young healthy people subsidize generally older and sicker people. Medicare has a $38T deficit and Part D is just getting rolling. By requiring all Ameicans to purchase insurance through a government exchange including mandated benefits you do not want or need you eliminate the private insurance markets while simultaneously generating all the excess revenue you need to continue the enormous ponzi scheme we all know Medicare to be at its core. Once the insurer's are gone Uncle Sugar can dictate terms while using exploding costs to achieve the holy grail of single payer when the rationing can begin.Madoff gets prosecuted and Obama gets re-elected and the Democrats get to run in 2010 having delivered health insurance reform. Yet Obama and congressional leaders are discovering American's are on to the scam and we are sick of the lies and fingerpointing.
Wednesday, August 19, 2009
Tuesday, August 18, 2009
This whole debate gets back to the simple question I have not heard any of
the co-op proponents answer: Just how will a co-op turn out to be any different
than North Dakota Blue Cross with its profit percentage of less than 1% and its
board a cross section of the provider, business, and consumer community?
Monday, August 17, 2009
Thursday, August 13, 2009
Wednesday, August 12, 2009
Public support for the health care reform plan proposed by President Obama and congressional Democrats has fallen to a new low as just 42% of U.S. voters now favor the plan. That’s down five points from two weeks ago and down eight points from six weeks ago.
A new Rasmussen Reports national telephone survey shows that opposition to the plan has increased to 53%, up nine points since late June.
More significantly, 44% of voters strongly oppose the health care reform effort versus 26% who strongly favor it. Intensity has been stronger among opponents of the plan since the debate began.
Sixty-seven percent (67%) of those under 30 favor the plan while 56% of those over 65 are opposed. Among senior citizens, 46% are strongly opposed.
Obama seems to be surrounded by juvenile tinhorns, bumbling mediocrities
and crass bully boys.
Case in point: the administration's grotesque
mishandling of healthcare reform, one of the most vital issues facing the
nation. Ever since Hillary Clinton's megalomaniacal annihilation of our last
best chance at reform in 1993 (all of which was suppressed by the mainstream
media when she was running for president), Democrats have been longing for that
happy day when this issue would once again be front and center.
would have thought that the sober, deliberative Barack Obama would have nothing
to propose but vague and slippery promises -- or that he would so easily cede
the leadership clout of the executive branch to a chaotic, rapacious,
solipsistic Congress? House Speaker Nancy Pelosi, whom I used to admire for her
smooth aplomb under pressure, has clearly gone off the deep end with her bizarre
rants about legitimate town-hall protests by American citizens. She is doing
grievous damage to the party and should immediately step down.
The president is promoting the most colossal, brazen bait-and-switch
operation since the Bush administration snookered the country into invading Iraq
with apocalyptic visions of mushroom clouds over American cities.
You can keep your doctor; you can keep your insurance, if you're happy
with it, Obama keeps assuring us in soothing, lullaby tones. Oh, really? And
what if my doctor is not the one appointed by the new government medical boards
for ruling on my access to tests and specialists? And what if my insurance
company goes belly up because of undercutting by its government-bankrolled
competitor? Face it: Virtually all nationalized health systems, neither
nourished nor updated by profit-driven private investment, eventually lead to
I just don't get it. Why the insane rush to pass a bill, any bill, in
three weeks? And why such an abject failure by the Obama administration to
present the issues to the public in a rational, detailed, informational way? The
U.S. is gigantic; many of our states are bigger than whole European nations. The
bureaucracy required to institute and manage a nationalized health system here
would be Byzantine beyond belief and would vampirically absorb whatever savings
Obama thinks could be made. And the transition period would be a nightmare of
red tape and mammoth screw-ups, which we can ill afford with a faltering
As with the massive boondoggle of the stimulus package, which Obama
foolishly let Congress turn into a pork rut, too much has been attempted all at
once; focused, targeted initiatives would, instead, have won wide public
support. How is it possible that Democrats, through their own clumsiness and
arrogance, have sabotaged healthcare reform yet again? Blaming obstructionist
Republicans is nonsensical because Democrats control all three branches of
government. It isn't conservative rumors or lies that are stopping healthcare
legislation; it's the justifiable alarm of an electorate that has been cut out
of the loop and is watching its representatives construct a tangled labyrinth
for others but not for themselves. No, the airheads of Congress will keep their
own plush healthcare plan -- it's the rest of us guinea pigs who will be thrown
to the wolves.
Wednesday, August 5, 2009
Insurance is designed to protect against an unforeseen future loss. Forcing an insurer to cover a loss which has already taken place is welfare as John Stossell points out in this article. We have a very imperfect health insurance market today. Alas the world is still flawed. In the nirvana that many on the left imagine when everyone is covered by health insurance Pre-existing conditions would all be covered and indeed the insurance industry has agreed with this reform. Theoretically, the problem would be solved. Realistically, costs will increase as the risk pool absorbs individuals with chronic health problems that for many reasons, some within and some out of their control, today lack coverage. Realistically there will be individuals who ignore mandates to buy health coverage as there are today in Massachusetts.
So when insurers are demonized by Nancy Pelosi and other left wing fringe elements just remember no matter how hot the August heat gets no one likes to swim in a pool someones just peed in, or worse.
Tuesday, August 4, 2009
Monday, August 3, 2009
Sunday, August 2, 2009
Freespending Congressmen and President Obama need only look at Governor Scwarzeneggar's popularity and California's current budget deficit to get a vision of what their future holds.
Saturday, August 1, 2009
In today's headlines we learn the cash for clunkers program has no money left. We spent $1B, it worked and $1B more has been allocated but who knows how long that will last so its going to be stopped. Moreover know one bothered to work out the details on how the program would be administered. Welcome to the train wreck. We bailout GM and they send $1Billion to Brazil while laying off 10,000 American citizens and this happens while we have a car czar
If the government cannot handle a few $billion for cash for clunkers what makes you think there is any hope for smooth sailing for a $trillion healthcare reform? No complexity there, right?
The history of federal intervention in Health Care whether its Medicare, Medicaid, Medicare Part D shows a pathetic track record at predicting costs which have been underestimated at an appalling rate.
Its time to visit your congress mans town hall and be heard on health care reform.