Thursday, April 8, 2010

No Public Option? No problem!

No public option? No problem...Have we got a plan for you!

Blogs who oppose Gov't interference in our lives have gentle readers who repeatedly, earnestly insist that Obamacare is not socialized healthcare, because there is no 'public option.' Our readers are deluded enough to believe that simply stating a thing, wishing it were true would make it so.

I say poppycock! I say that Obamacare, though it has no overt 'public option,' is specifically designed to -in time- leave NO OTHER OPTION BUT the public option.

And here's why, directly from a dear CPA friend of ours who emailed with his grave concerns about this ghastly new law:

My wife's firm consults with an independent economic analyst out of state. Her firm met with these analysts to tease throught the new healthcare law. What they said is scary.

(Sus & Mr. Sus, this truly is an objective group of analysts - many times their analysis indicates democrat's proposals are indeed good for the economy. That ticks me off b/c the group has a solid history of prognosticating the effect of legislation on the economy. I never want to admit that the Dems could be right on something. Just trying to be honest...)

Anyway, based on their analysis, this law virtually ensures an eventual total government takeover of healthcare.

Don't believe it?

Consider any family who currently has private health insurance:

The employer pays $8,000/year of their insurance costs. The employee pays $6,000, for a total of $14,000 of "insurance."

#1 - Eventually, employers will figure they save $6,000/year by dropping employee health coverage & paying the $2,000/person Gov't fine. (The best argument against #1 is that status quo is 'slow to change,' but slow does not equal never. Another argument is that employers will continue offering good insurance to keep good employees. But honestly, where is the Wal-Mart employee going for better benefits? For professional firms, when the first big firm decides to drop insurance - and they will, b/c they profit $6,000/person per year- then the rest must follow to stay competitive.)

#2 - Next, employers will convince employees that dropping insurance is okay.


How, you ask, does the company sell it as o.k.? Ahem, allow me:

Employer: We're dropping health insurance, but it's really okay.
Employee: What the heck?? I'm going somewhere else to work!
Employer: Not so fast. Just listen. We pay $8000/yr for your benefits. What'dya say we drop those, pay $2000 Gov't fine.
Employee: Okay, so far you've saved yourself $6000 at my expense.
Employer: Hold on; I'm not finished. The company will take $4,000 of the savings & give you $2,000!
Employee: Wow! I just got a raise! Wait...$2000 won't cover the cost of privately purchased health insurance...
Employer: Okay, but remember, you were already paying $6,000 in premiums. So you can
a) add the $2000 & find insurance for $8,000 a year. Or - better yet -
b) Take $2,000 & pay the Govt. $695 penalty for lack of insurance. Then
c) Use the $6,000 that you were paying in premiums (plus what you paid in co-pays, etc.) to cover medical visits & Rx's.
Employee: Oh, I see. I still might come out ahead, huh?
Employer: You bet! In most years, you will come out ahead - way ahead! And in the years when someone gets sick, gee, let's see - you just go get insurance. Insurance companies have to take you now whenever you want to sign up!
Employee: You gotta deal, boss! I sure am glad we're not running an insurance company! We'd be in a heap 'a trouble!
Employer: You said it. I'm happy to be in the flower pot business!

#3 - Where does that leave the country? With all the insurance companies bankrupt, so everyone will HAVE to go to the
Government for insurance. Which is what the @#$%'s were after to begin with.

And you'll never convince me otherwise.

And don't EVEN get me started on the taxes.

So you see, when I make a statement like: 'Obamacare is specifically designed to - in time - leave no other option but the public option,' it's based on solid, reasoned, professional, objective financial analysis. Our dear readers who insist otherwise have only their own f00t stamping insistence & ignorance of facts that are as plain as the nose on their face.
~~
Row, row, row your boat, gently down the stream...
~~~

16 comments:

ExPatMatt said...

Hey Susannah,

Has this been shown to occur in other countries that have introduced a government-run insurance policy? (ie, that the private insurers eventually go out of business and companies cancel their policies to save money - leading to government take-over of healthcare)

Just wondering if there's a precedent for it happening elsewhere.


Cheers,

Jim said...

Good point, Ex. Also, for the past, I don't know, fifty or sixty years thousands of companies could have dropped their provision of health care contributions to their employees and saved gazillions of dollars. As this "analysis" states:

The employer pays $8,000/year of their insurance costs.

They could have given the money to employees as higher wages and salaries, but they didn't.

So why all of a sudden do you think they are going to develop some scheme and urge employees to game the system while risking assured medical care and coverage?

when the first big firm decides to drop insurance - and they will, b/c they profit $6,000/person per year- then the rest must follow to stay competitive.)

Since they haven't dropped insurance for the past half century or more to save $8,000/person, this argument falls apart before it even starts. Insurance companies know this and that's why AHIP helped write the bill and that's why insurance company stock prices are taking off.

What do you know that investors don't?

Purple Voter said...

I certainly don't know all the answers. Jim is right about the health insurance stocks so someone somewhere must like something about the bill. Could be a short term thing - theoretically, millions of new customers may enter the insurance market.

But... overall, the financial incentives/disincentives presented here don't make a lot of sense to me. Logically and mathematically the behavior in Susannah's post seems plausible to me - assuming that those are the true penalties (I admit, I have not read the bill).

I also think that Susannah already answered the question of why companies haven't dropped employer provided health insurance in the past - it was necessary to attract and retain the best employees. Employees couldn't afford to self insure or buy their own policies even with a bump in salary OR didn't want the risk of buying their own insurance and then getting dropped if they or their families got sick.

So some things in the bill are good - now insurance companies can't do this awful thing of dropping sick people. That should have been regulated long ago. (I'm obviously no libertarian). But the government has left employers a financial incentive to NOT offer health insurance while removing the big reasons that they haven't done so previously.

If that is not the intention, then when and if it starts to happen, the bill will be amended to incent behavior differently. But honestly, if they meant for private insurers to survive, then why in world would they force them to leave the doors open indefinitely for anyone who wants insurance? The government gets all the benefits of the penalties when people are well and the insurance companies take it on the chin when they are sick. Hmmm?

So I'm with Sus that the intent is to move toward a single payer system. Just my opinion but here's why. Actually, I have to give Obama credit for some logic here. He has made it clear that health care costs are bankrupting us. And he is right.

Who is the biggest de facto insurer already? USG. Who are the customers of this government insurance? The sickest, most expensive demographics (the elderly and the poor). And these are the demographic groups that are growing exponentially - check the stats. In a word, unsustainable. So if you believe that the government should keep providing health care to
THESE groups (which most people do I think), one obvious potential solution is to force the young and healthy into the government system to spread the cost - and the wealth - around.

I don't like it b/c the government is inefficient and fraudulent and I'm one of the net losers. I have good health insurance already, and I firmly believe that my quality of care will decrease while I pick up more of the tab. But what's a guy to do?

Jim said...

Purple, good post.

A point or two:

I also think that Susannah already answered the question of why companies haven't dropped employer provided health insurance in the past - it was necessary to attract and retain the best employees.

How has that changed? What about HCR changes that? Why would a company engage in this scheme to supposedly save $6,000/person when they've had just as much incentive to save $8,000/person up to now?

But the government has left employers a financial incentive to NOT offer health insurance while removing the big reasons that they haven't done so previously.

Again, what is the incentive to save less now than there was to save more before? Sorry, but i can't make any sense out of the above statement. Can you?

But honestly, if they meant for private insurers to survive, then why in world would they force them to leave the doors open indefinitely for anyone who wants insurance?

That's the whole point of having EVERYONE have insurance, so that premiums of the healthy offset costs of the not-so-healthy. I don't have any problems with some of my premiums going to provide care for a child with a severe and chronic health care issue.

Do you?

why in world would they force them to leave the doors open indefinitely for anyone who wants insurance?

In my state, all drivers must provide proof of insurance to operate a motor vehicle. It's the law and it's to protect the health and property of the people at large. Do some people "game" the system and go without insurance? Yes they do. There will always be scofflaws. But the vast majority comply because 1) they are NOT scofflaws and 2) because they know it's better for them in the end to carry the insurance for their own benefit even if not doing so MIGHT save them some money.

the government is inefficient and fraudulent

Maybe, but it isn't driven by profit. And inefficiency and fraud can be addressed and actually IS addressed in the HCR act. On the other hand, profit is being addressed by continuing to raise premiums.

Purple, I really urge to to watch this video. It's not about "Obamacare", but it really does level set the issue of health care in general.

Cheers!

Joe said...

ExPatMatt, Jim and Purple Voter: Nice of you to pat each other on the back, but you think like typical liberals: circularly. Six years from now you will be screaming and tearing your hair out over this and will hate it when we tell you, "We told you so." But it will be too late.

Jim said...

Six years from now I'll be on Medicare, the plan we should ALL be on.

Purple Voter said...

I watched the lecture (not the Q&A) and it was good. Very informative on the different types of healthcare systems.

The speaker (PBS' T.R. Reid) sums up by saying he thinks the health care issue is not a question of how but why. His opinion is that rich societies have a moral imperative to provide equal health care to all citizens. He talks about the Canadian belief that it's o.k. to wait for healthcare for non-life-threatening health issues so long as the rich and the poor wait the same amount of time.

That bothers me. That does not fit my concept of fairness. I think that the people who pay for their own needs (AND the needs of everyone else) OUGHT to go to the front of the line and get the best quality of care. That seems fair to me.


That is predicated by my belief that America offers boundless opportunity to everyone and the overwhelming majority of poor people are poor not because of some systemic unfairness but because of their own shortcomings and bad decisions.

So the video really does hit the nail on the head. Healthcare is so contentious because it IS a moral issue. The concept of fairness IS subjective. Most people have no problem with Medicare because it benefits the elderly who have paid their dues (and their taxes) during a lifetime of wage-earning. But "free" healthcare for everyone is not something that we all agree is fair - because it's only "free" for some and it will put a strain on a current system that right now is working quite nicely for others.

Economically though, we've got to do SOMETHING - whether it's fair or not.

Susannah said...

Matt~ Good question. Let's all do some research, shall we? "Just wondering if there's a precedent for it happening elsewhere."
In a phrase: human nature.

Jim~ See Purple's nicely done post.
And please, do NOT equate the forcing of health insurance to the requirement for auto insurance. Carrying auto insurance is a choice, as one clearly is not required by law to drive. But if one chooses to take on that responsibility, one must protect OTHERS in the event of an accident. Health insurance is NOT IN THE SAME LEAGUE.

"Maybe, but it isn't driven by profit."
Maybe, maybe not, but certainly driven by POWER.

Joe~ I'm telling saying it as much & as often as I can...

Purple~ "one obvious potential solution is to force the young and healthy into the government system to spread the cost - and the wealth - around."
Sounds like socialist theorizing to me...

I don't like it b/c we DO buy our own insurance (self-employeed), & it's virtually "unsustainable" already. NOW, premiums are going up (the pool will broaden to include sicker people, w/ NO way to control for who's on the insurance roles), AND we're going to have to pick up the tab for people who've never bothered to take care of themselves or their families. Where's the fairness in that?

Jim~ "Six years from now I'll be on Medicare, the plan we should ALL be on."
Yeah, just ask Congress. When they & the pres. & all their aides are on this plan, I'll be more willing to share your enthusiasm. Until then, it ain't hap'nin.

Purple~ "Economically though, we've got to do SOMETHING - whether it's fair or not."
You had me until this. It feeds into the sense of 'urgency' that Hussein, et. al. pushed in order to get this blasted law passed. Urgency leads to impulsive decisions, not thoughtful, reasoned, incremental ones...

Jim said...

Hussein was hanged in Iraq.

You missed the point about car insurance. Whether or not it's "forced" as you claim is not the point. The point is some people will try to game the system but most people will not because they know it's right, they know it's the law, and they know in the end it's best for them.

Maybe, maybe not, but certainly driven by POWER.

Really? You mean all those bureaucrat administrators are going to deny you coverage for a procedure because it's going to make them feel they have power over you? Bwahahahaha!

Susannah said...

Jim~ You missed the point about the GOVT having power...they'll deny care, procedures in a timely manner (called rationing in some circles) b/c they DO want power over people's lives, b/c they think we're to stupid to take care of ourselves. They want control over our $$, so that they can charge us for our own insurance, AND for the guy/gal who refuses to take care of him/herself. They want the power to be the fairy Robin Hood, as it were. This law is EXACTLY the power it affords the government over MY LIFE. And I don't like it at all.

btw, Hussein lives in the People's house, temporarily. Trying to deny it, ignore it, refuse to say it...doesn't mean it ain't so.

Jim said...

President Barack Hussein Obama lives in "the people's house" as he should having been duly elected by a majority of Americans.

Hussein was executed by the Iraqis.

This law is EXACTLY the power it affords the government over MY LIFE.

How exactly? You'll probably say you've already explained, but actually, you haven't.

ExPatMatt said...

Joe,

"ExPatMatt, Jim and Purple Voter: Nice of you to pat each other on the back, but you think like typical liberals: circularly."

I simply asked a question. One that hasn't been answered, as far as I can see. (I will do my own research on this)

And please don't broad-brush me like that; you don't know the first thing about me.

Cheers,

Susannah said...

Jim, for crying out loud...Must I? Really?

"YOU WILL BUY HEALTH INSURANCE. WE WILL monitor your BANK ACCOUNT to see whether you're financially able. IF you are $$ ABLE & DON'T, YOU WILL BE PUNISHED!!"

So says Hussein, et. al.

Matt~ "I simply asked a question. One that hasn't been answered... (I will do my own research on this)"

No, I haven't answered your question specifically, only metaphorically. Haven't had time to do it. But you can certainly be our guest & report back your findings.

Keep us posted! ;)

Jim said...

"YOU WILL BUY HEALTH INSURANCE. WE WILL monitor your BANK ACCOUNT to see whether you're financially able. IF you are $$ ABLE & DON'T, YOU WILL BE PUNISHED!!"

Don't know where you got this, but it isn't true.

Hussein was executed in Iraq.

Susannah said...

Jim, now you're just being ridiculous.

Jim said...

Which part is ridiculous?