Tom and Jerry: Defenders of All Things Right and Good

Friday, August 28, 2009

Why ObamaCare Is Unjust

My wife and I have had a PPO private insurance plan that costs us somewhere in the ballpark of 5K a year for 2 years.  There are cheaper plans (that offer less coverage), and I'm sure there are more expensive plans that offer better coverage, but we like the one we have.  Now let's say that in 18 years (when we are 60 years old) I am diagnosed with something that will cost a bundle health care-wise, and the insurance company says they won't cover it.  As I do not possess a huge sense of entitlement, I understand that there is no injustice here:  We would have paid a premium (a cumulative 100K over 20 years) to cover a certain amount of coverage (in the last 3 years, we've combined for 4 surgeries and a baby, all covered), and this large new expense exceeds it.  Of course, I can appeal this decision in a timely manner, and since the insurance company has market factors such as public perception and competition, if I can make my case well enough, I've got a shot.  If this fails, the fact that we can't get the expensive health care treatment may suck for me, but I don’t have the "right" to have an insurance company pick up my health care tab regardless of cost.

Now, before anyone takes to their keyboard to dash off an email or comment to remind me that insurance companies have denied coverage that should be granted under their contracts, have hidden all kinds of exceptions and loopholes in the fine print of their policies, or have engaged in any of a long list of unjust practices, I will concede to any and all of it.  However, there is an appeal process, and if that does not work, there is legal action, and most effective of all, the forces of public perception and market competition that encourages companies to offer a fair policy for a fair price – or go out of business.  A company which is unreasonable or high-handed in its coverage decisions will find that its unhappy customers soon become its former customers.  Furthermore, just because a system is in need of reform or overhaul, it does not logically follow that a centralized, government-operated-and-taxpayer-funded system must be the solution.  There are options available - allowing people to purchase insurance across state lines, tort reform, any or all of the options discussed here, etc. – that may not be able to achieve "universal coverage" for every American, but are exponentially preferable to the HR3200 bill that President Obama is championing, as that plan is unjust at its core.

Obama and his supporters claim that I will be able to keep my coverage under his plan, and also claim that the premiums for private plans authorized by the new federal exchange will be lower than they are now for plans with similar benefits, and that no one who applies (regardless of pre-existing condition, age, etc.) for these new plans can be turned away....and then ridicule those who point out that such a mandate placed on private insurance companies places a severe financial strain on those companies, who can neither (via HR3200) adjust premiums or restrict benefits on these new plans.  Under this financial strain (there's a reason insurance companies turn away those with pre-existing conditions or who are seen as high-risk - having more than a few of them in the benefits pool will bankrupt the company) the only recourse for a private insurance company is to

a) raise the premiums on the grandfathered-in plans
b) cut benefits on the grandfathered-in plans, or
c) cut back on payouts across the board

If you're a private insurance company, do a) or b) and you gradually strangle to death any customer incentive to stay with your best source of revenue, the grandfathered-in plans, furthering your financial strain; do c) for any length of time and your company will get its behind kicked in the courtroom, the stock exchange, and in the marketplace.  For private insurers, HR3200 is an incredibly shitty business plan.

Over time, the inevitable effect of this is that private insurance companies will be driven out of business or (even worse) have to seek government subsidies.  As anyone with an ounce of common sense knows, with financial support comes the right of the supporter to tell the supportee what to do; ergo, with government subsidies comes government control (ask American farmers how the subsidy thing worked out for them in the late '70's and early '80's).  Either way, Viola! You've got a single payer health care system.  It's been marvelous entertainment watching supporters of the bill stating in print or on camera that a single-payer system is their ultimate goal and then turn around and attack those who warn that the bill is a huge step toward a single-payer system.

In the bill, as written, the proposed Health Benefits Advisory Committee's powers include a "comparative-effectiveness review process" to monitor, research, and determine the most cost-effective treatments for which health care dollars (both private and public) should be spent.  This Committee and this "process" should look awfully familiar to anyone who has worked in the health care industry, as every health insurance company in existence has such a board (with the same type of make-up of the HBAC) that performs this same process.  The bill states that HBAC will "advise" and "make recommendations" to private insurance companies, and says nothing about the HBAC making decisions as regards to payouts.  That sounds rather benign, and defenders of the bill are correct in saying that it does not amount to a "death panel" or "rationing board".  However, defenders of the bill would be well-advised to remember that the "stated purpose" of a group or action and the "logical effect or outcome" of that group or action are rarely identical, or even in the same ballpark.  So while the bill's defenders are correct in stating that stated purpose of the proposed Health Benefits Advisory Committee gives it only limited power in regards to private policy service decisions, they refuse to answer such questions as:

• Is it at all reasonable that a committee to be headed by the Surgeon General himself and made up of a broad range of highly credentialed medical experts, including minimum of 9 and as many as 17 Presidential appointees, will, as HR3200 sets forth, be long limited to making "recommendations", especially if those "recommendations" are ignored?

• Is it at all reasonable that, as private insurance companies are struggling to provide quality benefits under the incredibly shitty business plan that is HR3200, that liberals in government and in all kinds of "advocacy groups" will not call for such a Committee - whose makeup so closely resembles that of a private health insurance company's decision-making board in the first place - to be enabled with further powers, particularly when there are no limitations to the expansion of their powers written into HR3200?

• Are the bill's defenders going to continue to deny to their opponents that the "public option" is a stealthy path to a single-payer system, even as these same defenders continue to talk and write about its ultimate purpose openly when addressing their allies?

• Given that in any health care system, SOMEONE will have to make payout decisions based on SOME CRITERIA, once the nirvana of a single-payer system - which this mammoth bill clearly lays the groundwork for - is achieved, who will be deciding who gets payouts and by what criteria, keeping in mind that the only logical "criteria" left after you've jettisoned "the ability of the individual to pay" is the criteria of "cost vs. benefit of the individual to the government"?

• Lastly, how on earth can you look at this 1,000+ page massive expansion of government's role and authority in American health care and insist that this massive expansion of government's role and authority in health care will stop there when there are no limitations to the expansion of power for either the federal insurance exchange or the HBAC written into the bill?  The framers of the Constitution, a document those on the left love in the abstract but in almost every instance ignore in the particular, were wise enough to know that government will expand exponentially, in both size and power, unless limitations on its size and power are explicitly set forth.  The framers of HR3200, either by ignorance or design, have displayed no such wisdom.

The bottom line is that HR3200, or "ObamaCare", is a very large step toward single-payer system, in which the federal government is in charge of all health care payments.

Of course, it will take a while for the private insurers to be bled out of existence, so for the purposes of a comparative scenario, let's say that after HR3200 passes, Lynda and I go with a new private option, which gives us a bit more coverage than the public option in exchange for a premium of, oh, let's say $3K a year.  Of course, this is already on top of what we will pay in taxes to help fund ObamaCare.  Again, if you read the damn bill, you will see that ObamaCare will require $544 billion in new taxes.  Last year, Lynda and I (a CPA and a software engineer, respectively) had a gross income of about $185K, and paid $32K in taxes (we live in Texas, so there's no state income tax).  There is no way on earth that Obama, with $544 billion in new taxes - plus the taxes that will be required for all his other lavish spending - will be able to keep his promise that those making less than $250K will not have their taxes raised.  Given our joint income, we're due for a tax increase; though it will almost certainly be higher, for this scenario, let's say that our taxes increase to $39K, of which (given the portion of our taxes that had been allotted for Medicare and Medicaid but would now go to ObamaCare, due to the $500 billion in cuts to those programs outlined in HR3200), let's guess, $8K goes to fund ObamaCare.

So, in 18 years (when we are 60 years old) I am diagnosed with something that will cost a bundle health care-wise, and I am denied treatment.  This IS an injustice:

• Instead of me paying $90K for 18 years to a private company that denied my coverage, I will, for 18 years, have paid $198K in total health care expenditures, $144K of which went to help fund a public option that I did not use.  Our health care expenditures would have more than doubled what they would have been without ObamaCare, and we will have received no additional benefits.  The 83% of Americans polled that said they are happy with their current health insurance will no doubt share our frustration.

• Um, what happened to "no one who makes under $250K a year will get a tax increase"?  Kinda quaint now, isn't it?

• On top of that, the 40%-50% of Americans who pay no income tax (~70 million people) will pay nothing at all in the way of health care expenditures, while Lynda and I (as illustrated by the comparative scenario laid out in this piece) will have paid double what we pay now in health care expenditures for no additional benefit; even if we were to go for the public option from day one, we would still have seen a $50K increase in our health care expenditures over the 18 year period, and received significantly less benefit from those expenditures.

• The situation gets worse once the single-payer system is in place: with each passing year, taxpayers pay into the system, and therefore the money they've contributed to the system will steadily increase; however, with each passing year, both the chances that they will receive payouts, and the amounts of those payouts, will steadily decrease.

Over the last 15 years, I've witnessed Monk Malloy attempt to turn Notre Dame into Duke, and now Obama and his supporters try to turn America into Canada.  ObamaCare is the first chapter in an American Animal Farm in which the American taxpayers are cast as Boxer.


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