Cash for Health Insurance

[Welcome Kaiser Network readers!]

Obamacare hit the wall today due to lack of funding. The Obamington administration announced today the wildly popular Cash for Health Insurance program is being suspended due to overwhelming demand. The program allowed insureds to trade in their old health insurance plan for a new, government issued plan and receive cash rebates up to $4500.

In less than a week the program ran out of money as people rushed to trade in their old clunker policies for the newer government approved plans with higher benefits and taxpayer subsidized premiums.

This is eerily similar to the Cash for Clunkers program that also fell apart after a week when the Obamington administration ran out of money.

Congressional officials say the government plans to suspend the popular "cash for clunkers" program amid concerns it could quickly use up the $1 billion in rebates for new car purchases.

The Transportation Department called congressional offices late Thursday to alert them to the decision to halt the program, which offered owners of old cars and trucks $3,500 or $4,500 toward a new, more fuel-efficient vehicle.

In less than 4 days 22,782 cars were traded in generating expected rebates of up to $96 million.

Cash for Health Insurance allowed people who had their own private health insurance to trade in those policies for newer ones approved by the government. These new policies included benefits such as free door to door shuttle services to the doctor or valet parking if you chose to drive your own government provided car. Pregnant women covered by Obamacare policies would be allowed to spend their last trimester in the resort spa of their choice at no charge to them. Babies born under Obamacare not only received free health and dental care for life but a full ride college scholarship.

One provision of Obamacare backfired. Psychiatric providers had lobbied hard for mental health parity provisions and won the right for patients to receive full, no limit mental health care for life. In an effort to make health insurance affordable for everyone, Obamacare policies were free to anyone earning less than 4x the FPL (Federal Poverty Level), about $88,000 for a family of four. The rich benefits of Obamacare coupled with free coverage relieved so much stress that psychiatric workers reported mass cancellations of scheduled appointments. Sales of anti-depressant and anxiety medication dropped overnight.

Clearly, no one wanted the older plans any more when they could get $0 deductible, $0 copay plans and best of all, $0 premiums.

Already protesters are gathering outside Capitol Hill and the Obama House. The National Guard had to be called in to quell the torch and pitchfork crowd carrying signs and shouting "tax the rich, tax the rich" in hopes of encouraging legislators in Obamington to reinstate the Cash for Health Insurance plan.

Meanwhile, the rich were watching all this from their private yachts and secluded islands. By voluntarily deferring income and liquidating assets on an as needed basis they avoided the surcharge on income in excess of $250,000 imposed by Congress as a way to fund bigger government programs. Members of Congress and the Obamington administration were baffled by this turn of events and they grossly miscalculated the response of the wealthy to punitive tax rates.

PresBO said Congress had acted stupidly by profiling the rich as easy targets for tax increases.

In an effort to make this into a learning experience, President Obama invited the wealthy to join him in the Obama House for a beer.

Smaller cars, bigger health insurance, Poppa Washington.

All About Gallbladders and Lobster

What do gallbladder surgery (cholecystectomy) and lobster have in common?

According to Bob Wachter, quite a bit. Especially if you are trying to understand why health insurance costs so much.

Nothing in any of the proposals for health care reform do anything to really lower the cost of health care. There is a lot of shifting around of dollars.

Shifting to the consumer, shifting to the states.

But if you really want to make health insurance affordable you need to address what is really driving up the cost of health care.

Like lobster lunches . . .

You’ve just moved to a new town and stroll into a restaurant on the main drag for lunch. None of the large tables are empty, so you sit down at a table nearly filled with other customers. The menu is nice and varied. The waiter approaches you and asks for your order. You’re not that hungry, so you ask for a Caesar salad. You catch the waiter looking at you sideways, but you don’t think too much of it. He moves on to take the order of the person sitting to your right.

“And what can I get for you today, sir?”

“Oh, the lobster sounds great. I’ll have that.”

You’re taken aback, since the restaurant doesn’t seem very fancy, and your tablemate is dressed rather shabbily. The waiter proceeds to the next customer.

“And you, ma’am?”

“The lobster sounds good,” she says. “And I'll take a small filet mignon on the side.”

Now you’re completely befuddled. You tap your neighbor on the shoulder and ask him what’s going on.

“Oh, I guess nobody told you,” he whispers. “This is a lunch club. We add up the bill at the end of the meal, and divide it by the number of people at the table. That’s how your portion is determined.”

You frantically call back the waiter and change your order to the lobster.

“If the waiter makes a 15% tip on the total bill and you ask him to recommend a dish,” Enthoven asked our health econ class, a glint in his eye, “do you think he’ll recommend the salad or the lobster?”

“And if most of the lunch business in town is in the form of these lunch clubs, do you think you’ll find more restaurants specializing in lobster or in salad?”

If you want to know what this has to do with gallbladder surgery you will need to read Bob's article (linked above) to get the rest of the story.

Swine Flu - Stupid Government Tricks Edition [UPDATED]

The CDC met today and voted on who will get the swine flu vaccine and who won't. Here is the list of those that made the cut.

-- Pregnant women, for two reasons. First, because the evidence suggests they're more likely than other adults to develop serious complications or die when infected with swine flu (or seasonal flu). And second, because they pass their immunity on to the fetus, which health officials hope will also help protect the infants after birth.

-- Household contacts and caregivers of children under six months. Infants that young can't be vaccinated, so immunizing their family members and others who care for them is the best way to keep the babies under six-months-old safe.

-- The 14 million health care and emergency service workers in the United States. That's because they could spread the illness to vulnerable populations, and also because high absenteeism among health care workers could bring down the health care system.

-- All children, adolescents, and young adults age six months to 24 years. A number of reasons for this. Epidemiological data gathered so far suggest that the youngest in this group have a higher-than-average risk of getting so sick with the new H1N1 flu that they need hospitalization. And older kids, teens and young adults tend to quickly spread flu through schools. Plus, there's a domino effect through the economy when parents have to stay home to care for sick kids.

-- Adults age 25 through 64 who have underlying medical conditions, such as heart or respiratory illness, diabetes, or other conditions that suppress their immune systems. Swine flu is likely to hit them harder than healthy adults.

So who is missing?

Those over age 65.

Last on the list are people 65 and older, said the members of the CDC's Advisory Committee on Immunization Practices. This sounds cold-hearted, but the committee says its reasoning is based on the science of the pandemic so far. There have been far fewer cases of swine flu in this elderly group. Researchers think that's because older people have higher levels of immunity to this strain of flu.

Sounds like rationing to me.

Wonder what AARP has to say about that?

UPDATED: Perhaps we need to send them to Mexico

Americans looking for health insurance coverage might want to try Mexico City, where the local government announced a plan to lure tourists by offering what is billed as free medical care in case of accidents or disease. Designed to win back tourists scared of contracting swine flu in the Mexican capital, the insurance coverage will cover everything from emergency dental care to flu treatment, officials said.

Smaller cars, bigger health insurance, Poppa Washington.

The CBO Director's Blog

Did you know the the Director of the Congressional Budget Office has a blog? It's always interesting to read first-hand what's been said...and then see how it appears in the media. Here's a link to the section dealing with Healthcare issues.

Off-Topic, But Incredibly Cool

[Welcome Industry Radar readers!]

In case you haven't seen this, a Beluga whale turned Lassie, saving a struggling diver from drowning in sub-zero temperatures:

"Terrified Yang Yun thought she was going to die when her legs were paralyzed by crippling cramps in arctic temperatures ... I thought that was it for me - I was dead. Until I felt this incredible force under me driving me to the surface."

Just for that, I'm giving up cavier this week.

Ennie Time is a Good Time [BUMPED & UPDATED]

For the third straight year, our good FoIB Fat Dragon Games has been nominated for its industry's most prestigious award, The Ennie. This is all but unprecedented, especially when one considers that FDG is run by one (rather talented) person. Tom's up against some major industry Titans (including Hasbro!), and he's once again asking for our readers' help.

Please take a moment and click here, then scroll down to Best Miniature Product (the 12th category) and select '#1' next to "E-Z Terrain: Cliffs and Mountains." Then, scroll to the bottom and click on "Submit my votes."

Thank You, and we'll let you know how the vote turns out.

UPDATE: Voting ends this Friday (7/31/09), so if you haven't already voted, please do so. Thanks!

Cavalcade of Risk #83 now online

Nancy Germond has this week's Cavalcade of Risk. Do stop by for thought-provoking posts on all things risk-related.

Deficit Neutral Healthcare? In a word, No.

[Welcome LGF readers!]

Much discussion has ensued regarding the impact that ObamaCare will have on the deficit. Unfortunately, the truth is much darker than the Party in Power© would have us believe.

This graph, prepared by the nonpartisan Congressional Budget Office, charts the path that we'll be running down if the PiP© gets its way:

[Hat Tip: Hugh Hewitt]

Do You Know Me?

Rationing Health Care, Dr. Betsy McCaughey

Isn't That "Special"

No comment:

"The proposed health-insurance bill from the House of Representatives refers to mentally disabled people as "retarded"

Okay, maybe one: how dare these people presume to lecture us about how much more they care about those less privileged?

No Questions Asked

The press and those in Obamington are making a big deal about health care reform, especially as it applies to what we term "guaranteed issue".

If Mr. Fixit and his posse get their way, no longer will a health insurance carrier be able to deny coverage due to pre-existing conditions. That sounds well and good, but at what price?

The idea of a "no questions asked" health insurance plan and affordable health insurance are on opposite ends of the spectrum.

Currently there are 6 states in the nation that prohibit carriers from denying coverage based on pre-existing conditions. Those states are ME, MA, NJ, NY, VT and WA.

So how much does health insurance cost in those states compared to Georgia (where I live)? Using eHealthinsurance, I made up a family of 4 with mom & dad age 40 and two kids ages 19 & 20. Plans in Boston (02110) range in price from $1082 per month for a $2000 deductible Premium Saver plan with $25 office visit copay's to $1570 for a $0 deductible Premium Saver plan.

Only folks that spend money by the billions would ever think that is affordable. And the carrier that picked the name Premium Saver should be shot.

I would note that only 1 carrier and only 8 plans appeared. It seems that there is not much competition in Boston. Experience tells me it is due to excessive regulation, or as we like to call it, interference with market forces.

I would also point out that Massachusetts REQUIRES everyone to have health insurance or pay a fine.

What happens if you move our family across the country to Olympia, Washington 98501?

The first thing you notice is plans become more reasonable in price ($242 - $2018) but you also get more choices. More carriers (6), more plans (58) to pick from.

Residents of Washington are also allowed to pick catastrophic coverage plans . . . something that is prohibited in Massachusetts. One of the more expensive plans seemed to match up fairly close in benefit to a "low priced" plan in MA but still rang up at $1066 per month.

Ca-ching!

That is still a lot of money and perhaps our family would like to move further south in hopes of finding affordable health insurance in Atlanta.

Here they have 7 carriers and over 150 plans to make their selection and that is just getting warmed up. There are a few more quality carriers and over 3,000 plans to consider. Premiums range from $195 to $1082. If they are looking for the "low priced" plan they had in MA, or one similar in WA they would find a still somewhat hefty, but more affordable plan for $722 per month.

Most of my clients would end up with a plan in the $300 - $400 per month range and enjoy the savings.

I recognize if you need health insurance and have health issues finding a plan at some price (even if it is not affordable) is better than no coverage at all. The only thing that comes in to question is this.

Why should everyone have to pay a higher rate to support the relatively small percentage (less than 10%) that cannot qualify medically for coverage? This idea that health insurance should cover everyone for everything is diametrically opposed to the concept of affordable.

Instead of scrapping what we have and starting over, why not plug into systems that are already in place? That can be done for a lot less than the understated numbers floating around Obamington.

Those with significant health issues already have options including employer coverage, COBRA, and HIPAA conversion. In addition to the 6 states with guaranteed issue, 32 states have risk pools, 5 have carriers of last resort and 6 have other provisions to cover high risk individuals.

Medicare is also available to those who qualify for SSDI and have been disabled for 24 months.

If the government thinks it is a grand idea to cover high risk individuals, why won't they put them in Medicare without the 24+ month wait? It would be simple enough to offer Medicare for those with serious health issues rather than trying to mess up something that works for 85% of the population.

Smaller cars, bigger health insurance, Poppa Washington.

Stupid Carrier Rant: Pre-Screens

[Welcome Industry Radar readers!]

Sometimes, carriers seem like they're begging for ObamaCare. Case in point: pre-screening small group plans. When I'm asked to quote a small group, I ask for a "census:" a list of employees' names (usually only first or last), sex, age or date of birth, family status (single, married, etc) and any known medical conditions. I'm always careful not to link an given employee to any condition; generally, it's really only important that we know what the condition (and any treatment or med's) is.

The point of that last bit is that, without knowing what problems may exist in the group, the carrier's going to just provide me with "street rates," which are rather like MPG on cars: useful for comparative purposes, but not particularly realistic. If I provide medical info, the carrier has an opportunity to provide a rate that's likely to be pretty close to the actual premium if/when we write the case.

This levels the playing field somewhat: you can get a feel for how certain carriers treat, for example, asthmatics vs diabetics. Comparing a screened rate to a street rate gives the latter carrier an unfair (and unrealistic) advantage. So it's really in all carriers' interests to make that process as easy and useful as possible.

But of course, we can't let common sense stand in the way of insurers' stupidity.

For small group, I use the services of a General Agency (think: wholesaler) which means that I can send in one Request for Quote (RFQ) and get multiple proposals. Typically, these include Anthem, UHC, Aetna, Humana and Medical Mutual (although others are also available). For a little while now, Humana and Aetna wouldn't provide pre-screened rates for any case, and now UHC has gone a step further: unless I provide the employees' and dependents' full names, heights and weights, no pre-screen.

This is stupid.

It's unlikely that an employer would know all of his employees' - let alone any of their dependents' - heights and weights. To get that, you really need an application from everyone. But that's already at the enrollment stage, which you can't get to without first getting quotes and choosing a carrier. Talk about the cart drawing the horse!

Which means that, for all intents and purposes, these carriers have determined that they don't need to provide more accurate quotes. This means that I really can't show any pre-screened quotes, because there's no way to know what the other carriers will ultimately do. Yes, I can (and will) explain to prospects that these numbers are for comparative purposes only, and will likely bear no resemblance to final, actual rates. But if you're an employer, especially one who's seen another premium increase on the current plan, wouldn't you want to know if it's even worth the bother of having all your employees' complete an application for a plan that's potentially even more expensive?

Sheesh.

Ch-Ch-Changes (and Your Health Coverage)

Until ObamaCare (or some variation thereof) actually passes, we live in a HIPAA-oriented health insurance world. As part of an ongoing series of informative vidclips, Humana explains how changing insurance plans (at least on the group level) works:

By necessity, of course, the information in the vid's pretty limited. So, a friendly challenge to our readers: how many items could you add to that clip to present an even broader picture of Life Under HIPAA©?

Nip/Tuck/Tax

Thinking about a tummy tuck? How about a facelift or "augmentation" surgery? Better think again:

"Face-lifts, tummy tucks and hair transplants could be hit with a new tax to help finance the trillion-dollar healthcare overhaul plan, according to sources familiar with the Senate talks."

One has to wonder, though, how an effort lauded as "deficit neutral" could give rise to so many proposed tax increases. Oh, that's right, by raising taxes, we can keep the deficit low. I'm no economist, but something about that equation strikes me as, um...unlikely.

Now, regular readers know that I'm very much taken with the concept of "medical necessity;"still, it never occurred to me that penalizing folks for those choices was a grand idea. But that's just what Congress is mulling:

"It would target procedures prohibited under Section 213 of the tax code, which deals with itemized deductions for medical expenses not covered by health insurance."

So, it's a hat-trick: not covered by insurance, hence not eligible for in-network pricing (discounts) and a hefty tax penalty to boot(y)? Is that part of that whole "soak the rich" mentality that's going to lower medical costs for the rest of us?

I didn't think so: a similar tax scheme in the Garden State yielded only about "25 percent of anticipated revenue since it was enacted in 2004 and imposes "another bureaucratic layer," including questions of how to determine what procedures are eligible."

Yep, just what we need: another "bureaucratic layer" is just the ticket to reining in health costs.

Sounds like a classic case of cranial-rectal inversion to me.

On Your Mark, Get Set, Grand Rounds!

Captain Atopic hosts this week's Tour de France-themed Grand Rounds. Accompanied by beautiful photographs, there's plenty of great info to be found.

Those 47 Million . . .

Did He Really Say That?

John Conyers on why it is not necessary to read legislation before voting.

From the Mailbag: Life Insurance Times 2

A reader asks:

Can I have more than 1 life insurance policy? What "gotcha's" should I be aware of?

Yes, you can certainly have more than one life insurance policy. For example, lots of folks have one through work (usually as part of their group medical plan), and another they bought on their own. The advantage to the former is that the rates are usually low (since the face amount is usually only $10 or $15 thousand). The advantage to the latter is that it isn't tied to your job, so you don't give it up if you change employers.

Also, many people have more than one kind of policy: for example, a term plan to cover the mortgage, and a permanent one for longer term needs (income replacement, final expenses, etc). Some folks also find variable policies (which have sub-accounts that mimic mutual finds) to be useful in retirement planning.

If there's any "gotcha" (and I'm not saying there is), it's that carriers generally try to avoid over-insuring folks. That is, having so much insurance - in total - that one is "worth more dead than alive." So they'll ask about other plans already in place, and whether the new policy replaces or supplements those.

It's also a good idea to review your policies on a regular basis. One's needs, goals and desires change over time, and one's insurance policies should reflect these. And that's also a good time to make sure that beneficiary designations are appropriate and up-to-date.

Tax the Poor to Fund Health Care Reform

How will we pay for health care reform when we can't even cover the cost of Medicaid? Conservative estimates put the cost of health care reform at $1 trillion. Mr. Fixit has said he will not sign legislation expanding government intervention in health care unless it is deficit neutral.

Well then explain this.

A key provision of health care reform is expanding the roles of Medicaid. Providing free health care for the poor sounds great until you realize that Medicaid at the federal level is on life support. States aren't any better off and some projections put Medicaid deficits at the state level in the $200 billion range over the next 3 years.

According to the AARP, Between 1988 and 1993 Medicaid spending grew from $26 billion to an estimated $139.8 billion. Between 1995 and 2002, Medicaid spending is projected to grow by $150.8 billion; this translates into an average annual growth rate of 10.1 percent. In order to reduce government spending, the federal government is now requiring states to try to recover some of the money they spend on Medicaid beneficiaries.

That is spending at the federal level. According to the Kaiser Foundation total Medicaid spending (federal and state) was $319 billion in 2007. Of that total, $110 billion came from state taxes.

Direct federal funds for Medicaid ballooned to $209 billion from 2002 to 2007.

Congress saw the problem in Medicaid deficits as far back as 1993 and decided to do something about it by taxing the poor.

Since passage of the Omnibus Budget Reconciliation Act of 1993 (OBRA '93), Congress has required states to try to recover the cost of Medicaid benefits from the estates of certain nursing home residents and older persons receiving home- and community-based services. This law applies to individuals who were age 55 or older when they received Medicaid.

OBRA only addresses estate recovery for those who receive nursing home and home based care but why stop there?

The estate recovery provision was voluntary and many states ignored it until the federal government threatened to withhold matching Medicaid funds unless the states started enforcing estate recovery. All 50 states have now enacted their own provisions for estate recovery.

If your nursing care was paid for by Medicaid when you die the state files a lien against your estates and becomes a first line creditor by filing a claim in probate court. Any money recovered by the state is to be returned to the federal government, so the state is just a bill collector.

If the federal government and states can't afford Medicaid now, how will they afford it when health care reform expands the roll of Medicaid? Why isn't anyone asking this question?

Smaller cars, bigger health insurance, Poppa Washington.

Health Care Reform - Boyfriend with Benefits

ObamaCare: Clueless or Brilliant?

From the Why Didn't WE Think of This Department:

"(R)ather than relying only on the Medicare actuaries for such verification, along with other suggestions, such as including an across-the-board reduction in payments as a fallback mechanism if the council did not produce proposals that generated adequate savings." [ed: emphasis added]

This, from the administration's Budget Director, Peter Orszag, commenting on the latest CBO projections showing that ObamaCare proposals will "actually save almost no money over 10 years."

Well, reducing payments for services is certainly one way to cut costs; one wonders, though, how the actual health care providers might feel about that. As Bob has repeatedly pointed out, less than "half of all doctors do not accept Medicare assignment."

Another pay cut for doc's? At what point do they start "Going Galt?"

Sheesh.

What Are They Smoking in Obamington?

[Welcome Industry Radar readers!]

Mr. Fixit's latest pitch for bigger health insurance relies on false assumptions.

A new study by the White House Council of Economic Advisers said small businesses pay up to 18 percent more to provide health insurance for their employees.

This begs the question, 18% more than what?

Small companies pay proportionately more than big ones because they lack bargaining power and face higher administrative costs, the study found. It said that effectively levied a "heavy tax" on small businesses and their employees.

Small companies may pay more as a percent of total revenues in much the same way as a $20,000 wage earner uses more (expressed as a percent of income) to pay for food than does a $200,000 wage earner.

Small businesses have no less bargaining power than a big business and the marginal cost of administering a small group plan vs a large group plan is minimal. A business with 5 employees enjoys the same discounts on medical services via the PPO network as a larger business.

The "heavy tax" a small business pays is nothing compared to what they will pay when Washington reforms health care and gives us bigger health insurance.

A proposal in the House calls for employers with a total payroll above $250,000 to offer health insurance to their workers or face a surtax of as much as 8 percent. A Senate committee version would require all businesses, except those with fewer than 25 employees, to provide health coverage or pay a $750 fine per year for each worker.

Right now the "heavy tax" is voluntary. Either the employer CHOOSES to offer health insurance or not.

With Obamacare that is no longer an option.

All businesses will pay in one way or another and that additional cost will be passed on as a hidden tax in the form of higher prices paid by their customers.

Among the provisions in draft legislation viewed favorably by the administration are: an "insurance exchange" allowing small businesses that meet certain criteria to be able to purchase health insurance from a multitude of plans; and tax credits to help small businesses pay for the coverage.

The idea of an insurance exchange lowering costs is pure BS. Policies offered by the exchange, at least as proposed in the House bills, are considerably more expensive than policies offered in today's open market.

Exchange policies will have mandatory guaranteed issue, community rating, coverage for children from birth to age 21 (including immunizations and hearing), mental health parity, maternity and will provide payment to mid-wives at the same reimbursement level as an OB. Will someone explain how all of these NEW benefits can be provided at a lower cost than policies that do not currently include these provisions?

Further, the idea that the exchange will have lower admin costs and save the small employer from the 18% "heavy tax" is pure fantasy.

I have a great deal of experience in developing and managing association health plans and PEO's. While it is true some economies will result from administering a handful of plans (usually 3 or less) over a large number of covered participants there is no real savings on the whole.

If rates in the exchange are lower than for similar coverage outside the exchange, and if a truly free market exists, groups will gravitate to the lower priced exchange. But not all small employers will realize a savings by moving to an exchange policy.

Some will want benefits that are not as rich as the exchange policy and will opt out. Others may move into the exchange but as soon as they can find a lower priced policy outside the exchange they will leave.

This assumes they have the freedom to move and freedom to select their own benefits.

Of course the House version of health care reform eliminates these possibilities.

Christina Romer, head of the Council of Economic Advisers, said such provisions would enable small businesses to be "more able to compete with the big boys" in selling their goods and services and "able to compete fairly on a level playing field with big businesses to attract the best workers,"

"The vast majority of small businesses, they'll see their burdens absolutely lessened by the expansion of coverage," Romer said in a conference call with reporters. "So they are absolutely going to be more competitive."

What is Christina Romer smoking? Nothing could be further from the truth.

If this Obamanation of a health care plan passes the economy will worsen and more people will find themselves out of work, and unable to afford health insurance than ever.

Smaller cars, bigger health insurance, Poppa Washington.

Once Again: The "Hidden Chart"

It seems that the current Party in Power© doesn't much like the light of day shining on their misguided attempt to "transform" American health care. A group of Republican lawmakers attempted to mail copies of the chart to their constituents, which effort has been thwarted by the PiP©:

"Rep. John Carter (R-Texas), the secretary of the House Republican Conference and a former District Court Judge, is having his messages to constituents censored by Democrats on the Franking Commission. Republicans are no longer allowed to use the words “government run health care” in the communications to their constituents."

We don't need no stinkin' Frankings:

Freedom Isn't Free

Lot's of talk about what you will gain under health care reform, but what about what you will lose?

CNNMoney explores five freedom's you will lose if the current proposals become law.

The bills in both houses require that Americans purchase insurance through "qualified" plans offered by health-care "exchanges" that would be set up in each state. The rub is that the plans can't really compete based on what they offer. The reason: The federal government will impose a minimum list of benefits that each plan is required to offer.

This isn't Burger King. You can't have it your way. It is their way or nothing.

the Obama plan enshrines into federal law one of the worst features of state legislation: community rating. Eleven states, ranging from New York to Oregon, have some form of community rating. In its purest form, community rating requires that all patients pay the same rates for their level of coverage regardless of their age or medical condition.

Americans with pre-existing conditions need subsidies under any plan, but community rating is a dubious way to bring fairness to health care. The reason is twofold: First, it forces young people, who typically have lower incomes than older workers, to pay far more than their actual cost, and gives older workers, who can afford to pay more, a big discount. The state laws gouging the young are a major reason so many of them have joined the ranks of uninsured.

Community rating is a stupid idea that doesn't work. Yet many states still require it.

Hundreds of companies now offer Health Savings Accounts to about 5 million employees. Those workers deposit tax-free money in the accounts and get a matching contribution from their employer. They can use the funds to buy a high-deductible plan -- say for major medical costs over $12,000. Preventive care is reimbursed, but patients pay all other routine doctor visits and tests with their own money from the HSA account. As a result, HSA users are far more cost-conscious than customers who are reimbursed for the majority of their care.

The bills seriously endanger the trend toward consumer-driven care in general. By requiring minimum packages, they would prevent patients from choosing stripped-down plans that cover only major medical expenses. "The government could set extremely low deductibles that would eliminate HSAs,"

Some argue HSA's are favored by the healthy and wealthy. We certainly don't want those kind of people to have special treatment, now do we?

The House bill states that employees covered by ERISA plans are "grandfathered." Under ERISA, the plans can do pretty much what they want -- they're exempt from standard packages and community rating and can reward employees for healthy lifestyles even in restrictive states.

But read on.

The bill gives ERISA employers a five-year grace period when they can keep offering plans free from the restrictions of the "qualified" policies offered on the exchanges. But after five years, they would have to offer only approved plans, with the myriad rules we've already discussed. So for Americans in large corporations, "keeping your own plan" has a strict deadline. In five years, like it or not, you'll get dumped into the exchange.

The Exchange.

For some reason it reminds me of the Borg Collective.

Probably with good reason.

The Senate bill requires that Americans buying through the exchanges -- and as we've seen, that will soon be most Americans -- must get their care through something called "medical home." Medical home is similar to an HMO. You're assigned a primary care doctor, and the doctor controls your access to specialists. The primary care physicians will decide which services, like MRIs and other diagnostic scans, are best for you, and will decide when you really need to see a cardiologists or orthopedists.

Nothing wrong with cost effective treatment. Unless of course it is end of life treatment.

Eliminating end of life care would trim about $100 billion per year from health care costs.

That is change you can believe in.

Smaller cars, bigger health insurance, Poppa Washington.

Hidden Health Care Taxes

[Welcome Insurance Forums readers!]

Don't you just love it when politicians tell you there will be no new taxes to fund a new program? It's as if they can make money magically appear out of thin air (and to an extent they do).

But why is it no one is really asking the tough questions. You know, such as "how will WE pay for it?"

A new hidden tax went into effect today. Not related to health care but supposedly designed to stimulate the economy. The hidden tax comes in the form of a $0.75 per hour increase in the minimum wage.

The DOL says the increase will lead to new spending which will help the economy.

Right . . .

What if the employer lay's off workers, or fails to hire new workers, or cut's back on hours worked by minimum wage employees? How does this help the economy?

Or maybe the employer doesn't do any of that but instead raises prices to compensate for the higher wage?

Since most of the folks in Washington have never owned a business, much less held a real job, they would not understand this basic fact.

There are also hidden taxes in health care reform. Things they are not telling you about.

Consider this tidbit from Greg Johnson of the Knoxville News Sentinel.

A key component to the Obama plan is the expansion of Medicaid. Since the federal government funds part of Medicaid and the states pay a portion, any increase would necessarily mean more costs at the state level. “Medicaid is a poor vehicle for expanding coverage,” Bredesen told the Times. “It’s not health care reform to dump more money into Medicaid.”

With a $1 trillion federal price tag, how much might Obama’s health care reform cost at the state level? Sen. Lamar Alexander, R-Tenn., offered an estimate last month. “This bill is so expensive, it will literally bankrupt states,” Alexander said. “Just the expansion of Medicaid in the bill could cost Tennessee $1.2 billion a year by 2015, according to the state Medicaid director.”

$1.2 billion is a lot to ask from 6.2 million residents of Tennessee, and 2015 isn't that far off.

If Obama strong-arms enough of his reckless, feckless colleagues in Congress to pass this bill, how might Tennessee come up with $1.2 billion? “This is about the amount of money,” Alexander said, “a new 10 percent state income tax would raise.”

10% is hefty as well.

Guess the goal would be to earn no income and avoid paying the tax. Of course if you did that you would qualify for Medicaid.

Smaller cars, bigger health insurance, Poppa Washington.

Congress & Econ 101: Fail

[Welcome Industry Radar readers!]

What is it about Congresscritters that completely blinds them to simple economics? Take the current "health care debate:" one of the arguments against the Public Option is that it will encourage employers to drop their current group plans, leaving their employees to fend for themselves via the PO. The counterargument is that, by doing so, these employers will face a large fine - an additional 8% payroll tax.

The counter-counter-argument is that employers will gladly pay this fine, if it means they can successfully rein in their total expenses by dropping their current coverage.

Both of these schools of thought flunk:

No employer will ever pay the fine.

That's so important that it bears repeating:

No employer will ever pay that fine.

But Henry, you may argue, of course they'll pay it if they drop their group policy. It'll be the law!

To which I'd reply: So what?

Employers won't pay that fine any more than they pay for the group coverage in the first place. It is a cost of doing business that comes out of the employee's gross wages. Employers don't pay any of those costs, either. They are simply deducted from the employees' wages when calculating the total cost of employment.

Likewise, these "fines" will be passed along to employees (in the form of lower wages) and consumers (in the form of higher costs).

Why is that so difficult to understand?

Cavalcade of Risk #83: Call for Submissions

Nancy Germond hosts the next Cavalcade of Risk, online next Wednesday. Submissions are due by Monday (the 27th).

Nancy reminds you to include:

■ Your blog's url

■ Your post's url

■ The post's trackback URL (if available)

■ A (brief) summary of the post

And PLEASE remember: ONLY posts that relate to risk (not personal finance tips and the like).

You can submit your post via Blog Carnival or email.

Obamacare

From my father's blog...

In an effort to revive public approval of his Health Care Plan, and to reassure the American people that they would continue to receive prompt, quality health care, President Obama announced that he was recruiting senior executives from inside government departments. Their experience, he announced, should silence all criticism of the way Obamacare would be managed and should reassure the American people that he had their best interests at heart.

He announced a nine (9) person Management Committee with complete oversight of America’s entire health programs including medical personnel (doctors, nurses and technicians), medical and nursing schools, medications (legal and illegal), hospitals, nursing homes and cemeteries, medical devices and medical manuals and books.

The nine (9) person Committee would be appointed by him - three (3) from the Board of Directors of Amtrack, three (3) from the Management of the Postal Service, and three (3) from FEMA, all of whom will have had experience with the Katrina rescue mission. "I hope to have a racially diverse group and a gender neutral group (although, unless we use a transgender cross-dresser, it may be difficult to divide two sexes into a nine member Board.) If I have trouble on selecting these members, ACORN has promised to help and their reputation is unblemished, almost."

"The outstanding way these departments have performed over the years should give rest to any rumors that I will not appoint experienced executives to run 1/6th of the American economy. Their background cannot be matched by any Board of Directors of any corporation or labor union in the country, no matter what the industry."

Yes, he made that up. I hope.

Dr Price Goes to Washington

This video, of Rep Tom Price (R-GA), takes "Dr" Nancy and Co to the woodshed. Rep Price, a real physician, diagnoses the problem, and explains why the Democrats' "cure" is worse than the disease:



[Hat Tip: Reader Fred W]

Health Wonk Review is up

Paul Testa hosts this week's collection of wonky posts. Paul's 'Review pays tribute to State Fairs and Carnivals, so bring your appetite for fun and knowledge.

So, Doc's Aren't Stupid After All... [UPDATED]

[Updated - please scroll down]

They're just greedy and short-sighted.

Say you didn't want to take a pay cut, and you could convince someone else to help you hike your fees, all the while passing on those increased costs to an unsuspecting - and captive - clientele. How, exactly, would that work?

Well, here's one way:

"Democrats and the Obama administration argue that the $245 billion included for doctors -- the approximate 10-year cost of adjusting Medicare reimbursement rates so physicians don't face big annual pay cuts -- does not have to be counted in the overall cost of the health care bill."

It's beautiful in its simplicity, really: you just pass on the increases, but you don't call them increases. And why would you put the interests of one small group over a much larger one? That's easy: you'd get the coveted endorsement of the AMA. It reminds me of the punchline to an old joke: "we already know what you are, we're just haggling over the price."

In return for salvaging some semblance of decent reimbursement rates, the medical establishment has cast its lot with those whose first goal is to rid itself of those pesky (and expensive!) seasoned citizens. But hey, I'm young, this won't hurt me.

Right?

Right?!

Well, that depends on how you define "hurt:" since they're taking these increased costs "off line," they can tout their solution as "revenue neutral," or (even better!) "cost saving." Of course, these savings come with a price tag themselves: reduced quality of health care for everyone.

And of course, we're all "everyone."

UPDATE: Apparently, some doc's still have a little common sense (not to mention, decency); there seems to be a bit of a revolt in the ranks of the AMA:

"Some doctors charge the bill will lead to inferior patient care as physician offices around the country triple their patient lists and become forced to ration care.

"This is war," Dr. George Watson, a Kansas physician and president-elect of the American Association of Physicians and Surgeons, told FOXNews.com Thursday. "This is a bureaucratic boondoggle to grab control of health care. Everything that has been proposed in the 1,018 page bill will contribute to the ruination of medicine." [ed: emphasis added]

Couldn't have said it better myself.

Would You Buy Health Insurance From This Man?

An unscripted moment caught Mr. Fixit flat footed when he had no idea about details of the Pelosi Health Care Plan.

With the public’s trust in his handling of health care tanking (50%-44% of Americans disapprove), the White House has launched a new phase of its strategy designed to pass Obamacare: all Obama, all the time. As part of that effort, Obama hosted a conference call with leftist bloggers urging them to pressure Congress to pass his health plan as soon as possible.

During the call, a blogger from Maine said he kept running into an Investors Business Daily article that claimed Section 102 of the House health legislation would outlaw private insurance. He asked: “Is this true? Will people be able to keep their insurance and will insurers be able to write new policies even though H.R. 3200 is passed?” President Obama replied: “You know, I have to say that I am not familiar with the provision you are talking about.”

Not familiar.

Is he bluffing, or is he really that out of touch?

Either way, it's pretty scary.

This is a truly disturbing admission by the President, especially considering that later in the call, Obama promises yet again: “If you have health insurance, and you like it, and you have a doctor that you like, then you can keep it. Period.” How can Obama keep making this promise if he is not familiar with the health legislation that is being written in Congress? Details matter.

This is kind of like saying he didn't know the Pope was Catholic.

Maybe someone needs to slip information about the details of the Pelosi Plan to TOTUS.

The House bill does allow private insurance to be sold, but only “Exchange-participating health benefits plans.” In order to qualify as an ?Exchange-participating health benefits plan,? all health insurance plans must conform to a slew of new regulations, including community rating and guaranteed issue. These will all send the cost of private individual health insurance skyrocketing. Furthermore, all these new regulations would not apply just to individual insurance plans, but to all insurance plans. So the House bill will also drive up the cost of your existing employer coverage as well. Until, of course, it becomes so expensive that your company makes the perfectly economical decision to dump you into the government plan.

Yep, the cost of health insurance will INCREASE, not decrease. Skyrocket is putting it mildly.

President Obama may not care to study how many people will lose their current health insurance if his plan becomes law, but like most Americans, we do. That is why we partnered with the Lewin Group to study how many Americans would be forced into the government “option” under the House health plan. Here is what we found:

Approximately 103 million people would be covered under the new public plan and, as a consequence, about 83.4 million people would lose their private insurance. This would represent a 48.4 percent reduction in the number of people with private coverage.

About 88.1 million workers would see their current private, employer-sponsored health plan go away and would be shifted to the public plan.

Yearly premiums for the typical American with private coverage could go up by as much as $460 per privately-insured person, as a result of increased cost-shifting stemming from a public plan modeled on Medicare.

Smaller cars, bigger health insurance, Poppa Washington.

(Despite) Good Insurance News: Women, Minorities Hit Hardest

The left-leaning Robert J Woods Foundation can't seem to help itself. Here are the facts (as reported by the RWJF itself):

"(T)he Robert Wood Johnson Foundation Health Care Consumer Confidence Index (RWJF Index) found that Americans’ confidence in their health insurance coverage and access to health care rose slightly in June. The RWJF Index rose 3.6 points last month to 102.3, up from the May confidence level of 98.7."

That's a pretty decent bounce, especially coming after months and months of "it's a crisis!" The index is based on monthly surveys of some 500 households (it's not clear how the demographics break down - useful information to have). But this is how that surprisingly good news is portrayed at the top of the email I received from Bob J and company:

"Minorities and individuals with lower incomes report significantly lower confidence in health care."

But of course.

The spin gets even more interesting when one drills down a bit further. According to The Index, over 80% of those surveyed "believe health reform is an important part of addressing the nation’s economic crisis." Of course, the only "economic crisis" lately is the one that's been self-inflicted by our Betters in Washington©. The next item reports that:

"Less than half of all Americans are still worried that they will not be able to pay for their future health care needs in the event of a serious illness."

Okay, you caught me: it doesn't say that.

Instead, the spin goes:

"More than four in 10 of all Americans (43.3%) are worried that they will not be able to pay for their future health care needs in the event of a serious illness."

Nice little sleight of hand there, Bob!

Here's an attention grabber:

"Americans are afraid of losing their insurance in the coming year."

Now, that sure sounds like a lot of folks are losing sleep over this one. But the study actually says that less than one in four of our fellow citizens is worried about such an eventuality.

So why, if there truly is a crisis, must these "advocates" deliberately mislead us about it?

Well, here's one good reason:

"Key House Panel Cancels Health Care Session as Moderate Democrats Voice Concerns"

Despite a filibuster-proof Senate and an overwhelming House majority, these folks can't even sell themselves on "the cure."

Throwing Grandma Under the Train

At some point, the "debate" about health care ceased to be political, and instead grew into something diabolical:

Subject to paragraphs (3) and (4), the term ‘advance care planning consultation’ means a consultation between the individual and a practitioner described in paragraph (2) [ed: one's physician] regarding advance care planning, if, subject to paragraph (3), the individual involved has not had such a consultation within the last 5 years. Such consultation shall include the following:

(A) An explanation by the practitioner of advance care planning, including key questions and considerations, important steps, and suggested people to talk to.

(B) An explanation by the practitioner of advance directives, including living wills and durable 9 powers of attorney, and their uses.

(C) An explanation by the practitioner of the role and responsibilities of a health care proxy.

[snip]

(E) An explanation by the practitioner of the continuum of end-of-life services and supports available, including palliative care and hospice, and benefits for such services and supports that are available under this title.

[ed: from Section 1233 of the bill]

Let's cut through the Congress-speak, and translate two key elements:

Section (A) means that discussions regarding important legal issues involving end-of-life decisions are to be held with a doctor, not a lawyer. Whatever one may think of the legal profession as a whole, certainly one's attorney is is a far better position to advise one on such potentially critical documents.

But it certainly paves the way for Section (E), which seems to clear the way for folks like Dr Kevorkian to practice their craft. Really, does our political class think so little of our intellect that they don't believe we'd see through this? Class warfare is, of course, nothing new, but pitting one generation of Americans against another is beyond the pale.

Or should be.

[Hat Tip: Red State]

POTUS vs. Susan Boyle

In an effort to peddle his health care plan, Obamaman is facing stiff competition from Susan Boyle.

PresBO wanted to do his snake oil pitch at 9 PM Wednesday but the networks, except for the Katie Couric channel, were reluctant to give up the ad revenue to carry Barry and TOTUS.

CBS, which airs only repeats that evening, agreed early Monday to cover the conference.

But for NBC, Fox and ABC, the decision was tougher. During a summer that's otherwise strewn with repeats, Wednesday includes all of their top-rated reality programs.

Fox declined outright to air the news conference.

The stakes were particularly high for NBC, which airs the most-watched show of the summer, "America's Got Talent," at 9 p.m. This week, the reality hit includes a heavily promoted interview with "Britain's Got Talent" singing sensation Susan Boyle.

So there you have it.

America's Got Talent with Susan Boyle, or POTUS and TOTUS.

No contest.

Smaller cars, bigger health insurance, Poppa Washington.

A Mysterious Grand Rounds

Detective Doc Gurley solves the puzzle of an enigmatic Grand Rounds, but it's no mystery that the good doctor's deduced how to present a myriad of clues to enlighten us all.

Counterpoint: Revenue-Neutral Health care "Reform"

In the comments, longtime reader and frequent commenter Rick takes me to task for my use of Congressional Budget Office estimates of the estimated costs of the administration's pet health care proposal. Rick has demonstrated his credibility on this issue before, so in the interests of fairness, here's what he has to say:

The least we could do at IB is get the stenography right.

The CBO said the total SPENDING of the health plan would be $1 trillion over 10 years. The actual DEFICIT over 10 years would be $239 billion, or $23.9 billion a year, give or take. There have already been almost $800 billion found in various offsets and revenue sources to pay for the legislation -- which, we will all note, does nothing about cost containment.

Now, $239 billion is not nothing over 10 years. But at least it's accurate.

And it's a helluva lot less than we spent off-the-books on the War on Terror (until this year, when the President insisted that all the war costs actually be budgeted).

Here's the CBO quote from California Healthline:

"The estimate -- released late last week -- puts the gross cost of the bill at $1.04 trillion between 2010 and 2019.

Spending provisions in Medicare and Medicaid would reduce spending by $219 billion over that period, while a surtax on individuals and families with high incomes would increase federal revenues by about $583 billion, totaling $802 billion of the cost of the $1.04 trillion package, leaving the plan $239 billion short.

CBO said the biggest savings would come from a proposal to make permanent reductions to the annual updates to Medicare's payment rates for nearly all services in the fee-for-service program besides physicians' services.

That would reduce spending by $196 billion over 10 years, the CBO estimated."

See for yourself here.

So, all that being said, $239 billion over 10 years is highly "find-able" savings, if the Congress-critters can actually strap on a pair and call for some real cost containment.

Sounds like we're on the path to a revenue-neutral bill. Can the promised land of declining medical cost trends be far beyond?

P.S. I don't know if the $219 billion in cost savings from Medicare and Medicaid includes the $155 billion hospitals pledged to cut in the name of healthcare reform, or the $80 billion the pharmaceutical manufacturers promised to the effort. If the CBO scoring does NOT include these, then we may already have a revenue-neutral bill. How cool is that?"

Abortions? No One is Saying . . .

The latest fly in the ointment of health care reform is whether the new plan(s) will cover abortions.

No one want's to handle that hot potato.

An Obama administration official refused Sunday to rule out the possibility that federal tax money might be used to pay for abortions under proposed health care legislation.

Peter R. Orszag, the White House budget director, asked whether he was prepared to say that “no taxpayer money will go to pay for abortions,” answered: “I am not prepared to say explicitly that right now. It’s obviously a controversial issue, and it’s one of the questions that is playing out in this debate.”

Why all the secrecy?

Or is it just ignorance?

Either way, we have a right to know how our tax dollars will be spent.

In an analysis of the House bill, the National Right to Life Committee said that ordinary principles of administrative law could allow the Obama administration to determine what would be included in the benefits package. “There is no doubt,” the group said, “that coverage of abortion will be mandated, unless Congress explicitly excludes abortion from the scope of federal authority to define ‘essential benefits.’ ”

"No doubt" may be an accurate assessment or just inflammatory rhetoric. I can't say one way or the other.

What I don't like is Washington telling me what kind of policy I must buy and what kind of benefits it must cover.

Susan M. Pisano, a spokeswoman for America’s Health Insurance Plans, a trade group, said that most insurance companies offered benefit packages that included abortion coverage but that many employers decided not to buy such packages.

That may no longer be an option under the change you can believe in health insurance plan.

Since 1976, Congress has imposed sweeping restrictions on the use of federal money for abortions. The Hyde Amendment, for instance, prohibits the Medicaid program from spending federal money on most abortions.

If abortions have been debated for 33 years you would think the folks in Congress would be able to answer a direct question.

Apparently not.

Smaller cars, bigger health insurance, Poppa Washington.

Carnival of Personal Finance: Presidential Edition

Stephanie at Poorer Than You hosts this week's Carnival of Personal Finance, and presents an absolutely fascinating edition. Each post relates to a U S President, and she really does a great job of tying the post to the Prez.

My Damn Speaker on Health Care

The LA Times posed questions to Madame Speaker concerning health care. We think they did not go far enough.

Question: Americans consistently say they are most concerned about the cost of their healthcare. What kind of guarantee can you give that insurance companies or doctors or hospitals won’t charge Americans more if this legislation becomes law?

Pelosi: The purpose of the legislation is to lower costs for individuals ... for businesses so they can be competitive ... and for the federal government.... Putting ... more people in the mix, as well as improving the insurance coverage for many more people, we believe that will lower the cost.... Right now an insurance company can take the premiums it gets and spend whatever percentage on benefits. Under this bill, 85% of those premiums must be spent on benefits....

IB - Madame Speaker, do you even have a clue what percent of premiums are currently spent on benefits? Do you really believe you can increase benefits and produce lower premiums at the same time? What planet are you from?

What would you say if Congress was limited by law to spending no more than 85% of tax collections for the fiscal year? Why does Congress get a free pass when it comes to setting the rules of operation?

The increased number of people who are in the [insurance] pool who are healthier and younger who have not had access to health insurance — that volume will contribute to lowering costs, as well.... And prevention saves billions and billions and billions of dollars.

IB - Mandated coverage may well bring more young, healthy folks into the mix but it will also bring folks in who currently are not insured due to health issues. Do you really believe adding a young healthy individual will offset an obese smoker with COPD? How will you enforce prevention and healthier lifestyle?

Question: Wealthy Americans already pay the most taxes. They may be best able to help lift the economy out of recession. Yet the House bill contains a large tax hike on the wealthy. Is that wise right now?

What we are saying is, let’s leapfrog over the middle class to the wealthiest people in our country. They’ve had it pretty good the last eight years in terms of tax policy under President Bush. And we think that’s a place you can go.

IB - Do you have a clue as to what percent of income tax collections come from the wealthy?

"In 2005, the top 5 percent of income earners, those having an adjusted gross income of $145,000 and higher, paid 60 percent of all federal taxes; in 1999, it was 55 percent. The top 10 percent, earning income over $103,000, paid 70 percent. The top 25 percent, with income of over $62,000, paid 86 percent, and the top 50 percent, earning $31,000 and higher, paid 97 percent of all federal taxes."

The wealthy are already paying 60% of tax collections. What is a reasonable amount? 90%?

Question: President Obama still seems to be playing the role of cheerleader rather than insisting on specific proposals. Should he be clearer about what he will and will not support?

We are very receptive to what he wants. Now we just received a letter that said he is interested in [a new independent commission to take over Congress’ control of how Medicare pays providers]. Some in our caucus have been for that, some against.... Since it is something he wants, we are trying to figure out a way to accommodate that.

IB - Are you his lap dog? Do you seriously think the people who elected you and the other 534 members of Congress want to be saddled with trillions of dollars in debt that will be passed on for generations? Are you capable of independent thought or do you just like to come across like a person who has had a frontal lobotomy? Are you able to say no? Were you always "easy"?

To Dream the Impossible Dream...

Thus spake Obamaman:

“I want to be very clear ... I will not sign on to any health plan that adds to our deficits over the next decade."

And thus spake the Congressional Budget Office:

"According to our preliminary assessment, enacting the proposal would result in a net increase in federal budget deficits..." specifically, "$1 trillion over 10 years."

And thus concluded Captain, Road Prison 36:

"What we have here is a failure to communicate."

Fannie Med Revisited

A few months ago we penned our review of a blogpost by Richard Scott on what he termed "Fannie Med". In Mr. Scott's post he drew parallels between the mortgage meltdown and health care reform.

A scant 3 months later we are caught up in a full court press debate over health care reform that seems to be moving forward in blitzkrieg fashion. Issues surrounding health care which have been a concern for some for at least 40 years have suddenly become a crisis.

For some reason, spending more than you take in is not a crisis but solving a "problem" that has existed for years is a crisis.

Go figure.

What would happen if Fannie Med became a reality? What if some of the lending practices of the last 10 years were applied to the health care crisis?

It is well known that anyone who wanted a mortgage could get one through what were referred to as "liar loans". These stated income, no documentation loans were offered to nearly anyone regardless of their ability to pay back the loan.

Proof of citizenship was not required, neither did you need to prove your income . . . or if you even had an income. You could apply for a loan with nothing more than the shirt on your back and get approved.

The good part (for the borrower at least) was you never had to worry about paying it back. If you missed your mortgage payment, no big deal. After a few months the lender foreclosed and you were out on the street.

What if the same criteria is used to solve the health care crisis?

Anyone can get health insurance regardless of citizenship or ability to pay for the coverage. Just like everyone needs a place to sleep at night, everyone needs health care.

So Fannie Med comes to the rescue and gives health insurance to everyone, regardless of their ability to pay and without regard to their medical conditions.

This grand scheme certainly has a nice ring to it. The wealthiest nation in the world, the one that once tried to give housing to anyone who wanted it will now give health insurance to anyone who asks.

But what if you can't pay your premiums, or for the health care that is not covered by insurance? What happens then?

But first consider this.

National unemployment is currently 9.7% and the foreclosure rate is "only" 4%. That means 1 out of 10 are unemployed and looking for work.

1 out of 25 have lost their homes to foreclosure but this number is rising quickly.

The federal government is on track to spend $1 trillion more than it takes in this fiscal year which is a record deficit. That means Congress is spending roughly $2.7 million more each day than they take in.

This can't continue.

But what happens if the government takes over health care and then realizes they can no longer afford to fund it? What if there are no bailout funds available for those who are having their health care paid for by the federal government?

Does Obamaman tell them, like he did Rick Wagoner, I'm sorry, but you are no longer on the health plan? Will Barney Frank chastise those who dared use the health plan like he did the employees of AIG who received compensation that was promised them? Will he then demand that they return the money they took from the taxpayer to pay for their health care?

Something to consider.

Stupid Government Tricks - Medicare Edition

In an effort to seize more power, Mr. Fixit has asked Congress to relinquish control of price setting for Medicare reimbursement to the White House. According to Breitbart,

The proposal would allow an independent advisory board to recommend changes in Medicare reimbursement rates for doctors, hospitals and other providers. If the president approved the recommendations, Congress could still vote to reject them altogether. But Congress could not approve some recommendations and reject others.

Currently, Medicare reimbursement rates vary from region to region. Key lawmakers often get involved in setting local rates, a practice the Obama administration plan would end.

The current Medicare reimbursement rate is the least of any "insured" plan other than Medicaid. Many doctors limit the number of Medicare patients they will treat or refuse to accept any Medicare patients at all.

In most areas, about half of all doctors do not accept Medicare assignment.

Currently, Medicare reimbursements are scheduled to be reduced by 21% in January, 2010. This means doc's who currently accept Medicare assignment would receive a 21% pay cut starting in January of next year if the scheduled cuts are put in place. The most likely result would be even fewer doctor's willing to treat Medicare patients.

If the White House is given supreme power over Medicare reimbursement one has to wonder how deep the cuts will be and how few doctor's and hospitals would be willing to accept Medicare patients.

Almost one out of three American's is covered by Medicare or Medicaid. (If Medicare reimbursement is cut so would Medicaid. Reimbursement rates for Medicaid is 10 - 14% less than Medicare levels).

The good news is, any reduction in reimbursement for M/M reduces the tax bill for those who pay Medicare taxes.

The bad news is, reductions in M/M reimbursement means fewer medical providers willing to treat those patients and more out of pocket for people on M/M.

Back to the Future, Part 2: Introducing the Health Administration Bureau

From the folks who brought you the fantastic and enlightening video on health care rationing, here's a site dedicated to upholding all of the important, patriotic sacrifices we're about to be told to make.

Agents vs Carriers

[Welcome Industry Radar readers!]

As an insurance agent, one of the most frustrating parts of the whole health care reform "debate" is that no one is asking for our opinion. Yet ours is a unique and valuable perspective: we represent consumers and insurers, and access providers. We help clients (consumers) navigate the various pathways toward deciding on a plan, and are there as an advocate come claims time.

But no one invites us to the table.

Some will claim - incorrectly - that we already have a seat there because (some) carriers and their advocacy group (AHIP) are represented. They will be wrong.

Let's take the latest from Anthem (a Blue Cross/Blue Shield company). In an email I received today, they reported on the latest in the debate, and claimed to be "deeply disappointed with the legislation progressing in Congress. Both the bill proposed by House Democrats and the bill passed by the Senate HELP Committee miss the opportunity to address the underlying cost drivers in our health care system."

And they're correct, as far as it goes. Moving health care financing decisions from carriers to the gummint does nothing to address the fundamental disconnect between consumers and providers.

They also objected to the employer mandate and revisions to Medicare reimbursement schedules. There followed a laundry list of other issues, but there was not a single mention of how the agents who represent Anthem will be outlawed under the new plan. This makes sense, of course, since the carriers aren't prohibited from offering plans through the as-yet-to-be-defined Exchange system. But consumers will lose counselors and advocates: have a claims problem? Call the gummint hotline. As anyone who's stood in line at the DMV or called the IRS can attest, this is a recipe for disaster and disappointment.

But there's no reason for the carriers to care what happens to agents. After all, the government will become the agent, and there's no pesky commissions to be paid or questions to be answered. The problem is that, once you've sold your (corporate) soul to the government, you may not like the results.