Wednesday, June 27, 2012

The Height of Ineptitude

On the eve of the Obamacare decision from the Supreme Court, it is both interesting and disturbing, to read some of the chatter both from the health care and health insurance industry and from the outside. What is remarkable to me is how many people that SHOULD understand the ramifications of Obamacare clearly illustrate how inept they are at their own game.

This just in from Life Health Pro where state insurance regulators offered their view at a press conference.
how states can muscle past a possible rejection by the Supreme Court of the individual mandate under health care reform, yet still have state health exchanges remain viable. What no one at the event could figure out was how to contain health insurance costs without more Congressional fixes if the exchange ever came to be.
You would think by now they would have figured out there really is no way for anyone to control health care costs short of nationalizing the industry and setting the value of health care by fiat.

Price controls don't work. We don't have to look too far back in our history to see what happened when the federal government imposed controls on gasoline. The long lines and rationing of gasoline didn't go over very well.

The same will be true with the government controlling the cost of health care, or health insurance for that matter.

So how about a voucher system, where the government issues chits that can be used (by some) to purchase health insurance?

All you need do is look at the food stamp program where 44 million people use taxpayer dollars to pay for their food, and in some cases, alcohol, tobacco, lottery tickets . . .

Health care costs rise primarily because of excessive demand and little financial pain to those with insurance. Something on the order of 88% of health care bills are paid for by third parties (health insurance, Medicare, Medicaid) leaving only a very small portion to be paid by the consumer.

If consumers paid more for the direct cost of health care they might assume healthier lifestyles rather than seeking a drug to alleviate the symptoms of an illness.

The insurance exchanges, a kind of Amazon for health insurance, is one of the precepts of Obamacare. States are required to establish their own exchange, and if they don't, the feds will do it for them.

Oh, and here is a clue.

Although Amazon has grown to be much more than just a book store you need to be reminded that there are still some folks that like to stroll through Barnes and Noble and leisurely read a book while sipping a latte and really don't care for buying online.

Health insurance isn't any different.
If the federal government takes over the exchanges, which must be self-sustaining after a period of time, other questions remain. Among them: Where will the money will come from? Who will collect the funds? And by what method?
Obamacare was a law that was not only pieced together like sausage with parts from head to tail of the pig, but was conceived and sold to the public on the promise that it would not only make health care (and health insurance) more affordable but would actually reign in the federal deficit.

Whatever those folks were smoking, I want some of it.

Obamacare is built on a foundation of fantasy and lies.
Adam Hamm, vice present of the National Association of Insurance Commissioners (NAIC), told reporters at the press conference that while NAIC Health Insurance (B) Committee Chairperson Sandy Praeger took a glass half-full approach to a mandate-less health reform law, there were a “number of us with grave concerns” related to enormous pressure to increase rates starting as soon as 2013.

Hamm, the Republican North Dakota insurance commissioner (who is up for re-election this year) compared a striking down of the mandate, to pulling a pin on a hand grenade and putting the grenade in the lap of the American people. Hamm also echoed the Administration’s argument that the mandate and requiring insurers to take all comers are interconnected. He noted also that a dangling guaranteed issue, unmoored from the individual mandate, would not work due to skyrocketing costs.
I've got news for you. Even WITH the mandate in place the cost of health insurance will skyrocket. It will only get worse when you can wait until you are really sick to purchase health insurance.
Actuaries will be crunching the numbers as soon as the High Court delivers its opinion—expected Thursday—and rate insurance requests will pour in, Hamm said. He added he is seeing rate increases in the individual market spike by 75% to 100% from one provider, and by 15% to 20% in the group market, both spikes on top of normal rate increases under current law. These numbers are going to be “much more if the individual mandate goes,” Hamm said.
Beyond what happens tomorrow, and the ensuing impact on health insurance, there are other things tied to Obamacare that impact most of us.

As the economy has struggled to recover (in spite of the meddling by DC rocket surgeons) there is one common thread that is perplexing to those who do not understand commerce.

While some businesses have failed, and others have downsized, most every business that has survived has remained profitable. Some are even investing in new equipment . . . . but few are hiring. When they do hire, the jobs go to part time employees, independent contractors or workers outside of the country.

The combination of excessive government oversight, possibility of higher taxes and the unknown costs associated with Obamacare have caused the job market to languish.

Will employers start to hire if Obamacare is de-fanged or gutted and hung on a tree to die?

Some will, some won't.

No doubt the total elimination of Obamacare will be a shot in the arm for employment and the economy, but to return to REAL growth there needs to be a new mindset in Washington with regard to private industry.
As scary as that is, I think 75% is a very conservative number.
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