Tuesday, September 22, 2009

What more could we ask?

[Welcome Industry Radar readers!]

I think there are 5 major deficiencies in all the reform proposals now in the House and Senate:

(1) none addresses the underlying problem. The underlying problem is not the cost of insurance. It’s the cost of medical care. These proposals contain zilch to reduce the cost of medical care. Why is that? The public should be asking.

(2) all bite off more than they can chew. About 15% of the population is uninsured. Why does it follow that 100% of the present system must be radically changed to effect reform for the 15%? That's what this administration seeks to do. Why is that? The public should be asking.

(3) the cost of the proposals is unreasonable. After the enormous commitment of TARP funds and after another enormous commitment of funds to the so-called economic “stimulus” and considering the enormous looming expenditures in cap & trade bills, the the federal deficits have ballooned by 2X’s to 3X’s with no end in sight. The public rightly fears that these trillions of federal spending will be followed by high taxation and inflation. But the government pretends there’s no problem. Why is that? The public should be asking.

(4) the financing doesn’t add up. The administration has repeatedly stated its proposed reforms are necessary to save our economy. The president stated that “our health care problem IS our deficit problem; nothing else comes close.” Yet the administration is proposing insurance reforms that would cost the government a trillion dollars. That’s running through Hell in gasoline pants. Even after assuming massive tax increases and Medicare cuts, CBO projects that the proposals will increase the federal deficits – and the farther out it projects results, the worse the deficits become. The administration ignores the CBO scoring. The administration is also asking us to believe that its proposals will pay for themselves; will not increase the deficit by an additional dime; and will be funded largely thru elimination of the same Medicare "waste and fraud" that every president since Johnson has pledged to eliminate. Why should anyone believe that? The public should be asking.

(5) a "public option" won’t help. There is no evidence or other reason to believe that a public option will not end up like Medicare: skimpy benefits, massive bureaucracy, rampant fraud, special new taxes - and broke. And it will drive out private plans by “competing” thru legislative fiat rather than by innovation that creates pressure for all the players to become better. That's no solution. Yet powerful factions within the administration insist the public option is essential. Why is that? The public should be asking.

It has become quite obvious that if the Congress had passed any of the current proposals “by the first of August” - as they were told to do - it would have been a serious mistake. And the Baucus proposal is even worse than anything that preceded it. Are the only birds that fly out of this administration turkeys? The public should be asking that question, too.

So what to do instead? I think physicians should be taking the lead in regard to reform of the medical delivery system, but I’m not hopeful they will - based on their passivity over the past 40 years. And it must be recognized that without a solution to the high, and increasing, cost of medical care, there can be no solution to the high and increasing cost of insurance.

As to insurance access, I think that the problems (apart from the underlying cost of medical care) are largely caused by too much government in the first place. Unfortunately, the current proposals attempt to solve these problems with still more government. Another strategy for running thru Hell in gasoline pants.

It’s my belief that the two most helpful actions government could take to make medical insurance more accessible and less expensive are: (1) allow individuals to buy insurance across state lines and (2) equalize the taxes on insurance by reducing the taxes on individual medical policies. These actions would increase competition among insurers and reduce costs for individuals. The result would be many more people able to buy insurance.

And specifically for the uninsured, the remaining unspent economic stimulus funds - about $500 billion – could be used to finance insurance for the uninsured over the next 10 years.

This administration that claims to be open to possibilities is clearly ignoring these possibilities. Why is that? The public should be asking.
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