Tuesday, July 21, 2009

Socialized Healthcare? No Thanks

Is anybody "ok" with the socialized healthcare plan now in congress? Well I spent 20 years in the health insurance business and I'd like to give you a few things to think about.

Most other risks we insure are somewhat finite. Collision coverage on a motor vehicle becomes less expensive as the amount at risk or the value depreciates. Liability risk remains relatively constant unless a change in "behavior" such as repeated accidents, speeding tickets or DWI increases that risk. Hopefully the amount at risk stated in our homeowners policy increases gradually as again hopefully the property appreciates in value. Due to tremendous advances in medical care over the last 2 or 3 decades which has dramatically increased life expectancy, life insurance rates have never been lower than they are today.

Conversely, medical risk is constantly increasing. As we get older and live longer we require more medical care. Private medical plans are issued by policy forms approved for sale in a given state. Inevitably, the claims loss ratio surpasses 100% in only a few years requiring an increase in premium volume. The rates go up. The younger, healthier insureds can re-qualify for a new policy form with lower rates while those being treated for illnesses endure exponential increases as that risk pool gets smaller.

The same is true for government plans with the exception the government can just print more money. Medicare was never intended to be solvent but rather an entitlement that will always require increased revenue (taxpayer dollars) to fund. State Medicaid programs are no better. Requiring millions more Americans to enroll in programs like these is NOT the answer. Any government run healthcare plan would have to include: (1) ever increasing taxes (2) some form of rationing such as waiting lists for or outright denial of certain procedures for individuals deemed at high risk of mortality (3) controlling certain "behaviors" such as smoking, motorcycle riding, eating fast food, etc. Legislation banning smoking, trans-fat and even fast food restaurants already exists in states and municipalities. Texas currently has a law requiring you to have your own health insurance to ride legally without a helmet. It will be too easy for the officials to say the increased risk posed by your diet, habit or avocation is not "fair" to the other taxpayers who are footing the bill.

By the way, the bill crafted by the house also contains verbiage that compels ALL Americans to join the "qualified" plan within a maximum of 5 years. Employer plans will be required to roll into the single payer socialized plan at renewal or at any scheduled change in benefits. Uninsured taxpayers (like me) must prove participation in the "qualified" plan on their tax return or face a tax penalty equal the cost of said "qualified" plan and be automatically enrolled. The statement that you can keep your private insurer if you wish is a lie. Small business owners (like me) will be required to furnish the "quakified" plan to employees or face a fine of 8% of gross sales. I barely bring home 8% of my gross sales. I and thousands of small employers will have to raise prices, lay off employees or close up altogether.

We must understand this problem IS short on answers but what this congress and this administration proposes is wrong and dangerous and irreversible. If they are allowed to enroll millions in a social plan no matter how unsustainable it is, no group of lawmakers will dare try to take it away.

A major expense to care providers is mal-practice insurance. Hey, why don't we let the government take over mal-practice coverage! Socialized mal-practice insurance! They do alright with flood insurance, right? Then the government can award victims what it deems appropriate damages and make the trial lawyers work for what they're expecting the doctors to work for! Yeah, that's it! Sorry guys, everyone has an opportunity to make a living but 40% of millions of dollars in insurance settlements is a bit rich. Frivolous mal-practice litigation drives up health insurance costs and tort reform is never going to be addressed by a democrat congress. If they really wanted to fix healthcare and not just control it, the bill would include a measure to limit doctor's and hospital's professional liability exposure.

The United States has the best most advanced medical care on the planet bar none. People come from around the world to be treated here, not the other way around. Sure it would be nice if we could get it for free but we can't. Tell your senator to leave well enough alone.

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About Me

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Salesman/insurance agent more than 20 years turned baker. Go figure. My wife Julana and I bought a little bakery ten years ago and now she is the premier cake designer in this part of the state. In the past few years I have developed a love for motorcycling. Can you tell?