Wednesday, February 15, 2017

Health Insurance "101"

Before we go any farther into the meat of this little posting, let me start with three hard-and-fast, solid-as-a-rock, true-blue, immutable, all-day, every-day factoids that you'll need to inculcate in order to fully comprehend and appreciate the wisdom it contains. Ready?  Here goes...

1 ...When you purchase insurance of any kind, you are betting the insurance company you purchase coverage from that what you are insuring yourself against WILL happen, and they're betting you that it WON'T!

2 ...Insurance companies employ what are known as "actuaries."  They are the math whiz, green eye shade, stuck away in the basement in a little room, unable to get a date on Friday night-types, to determine the level of risk an insurance company takes on when it chooses to offer a certain kind of policy.  Whether car, or boat, or plane, or health, or life, or, or, the degree of risk must be determined before a price or fee can be established at which it is to be sold. Or, in proper parlance, what "premium" should be charged. Without that up-front knowledge, it would be impossible to determine with certainty whether or not a particular insurance plan would be profitable.  And without a profit, whether the company is a for-profit, or a mutual, non-profit company that must produce "excess revenues" in order to sustain itself, the company goes down like a rock, leaving its policy holders in the lurch.  

3 ...Soooooooooo, to tidy it all up, all forms of available data are gathered to make that determination.  And then "actuarial tables," as they are known, are created to advise the Big Shots in the silk suits on the 13th floor of the green glass headquarters building how to price out the policies. In other words, they need to know from those actuarial tables how many out of an "insurance pool" of, say, 100,000 people, will have their cars stolen, or their condos catch fire, or acquire cancer, or heart disease, or Alzheimers, and thus how to charge the other, presumably healthy insureds in the latter example in order to cover the losses from the sick insureds. 

Buuuuuuuut, if required to issue policies to those who already have cancer, or heart disease or Alzheimers, as Obamacare mandated, you should now be able to see that those who have it would be able to buy coverage for less, and the remaining, say 999,600 out of our theoretical population of 100k would have to pay more to subsidize the others. Get it?  I hoped that you would.

So, now on with our little essay.

You've no doubt been hearing a lot lately about the new Administration's plan to repeal and replace Obamacare.  

Actually, as you may know, the Republicans have been trying to put a figurative bullet in the head of this gargantuan boondoggle of a health care plan since it was rammed through Congress in the dark of night back in 2009 without a single Republican vote.

And since it has proven to do everything it wasn't supposed to do, including raising costs, raising rates, raising deductibles, and raising hell with what used to be the very finest health care system on the planet, it's about time it should be put out of its (our) misery. 

In short, Obamacare (the derisive term for the "Patient Protection and Affordable Care Act of 2009") is a health insurance plan.  But it is not a health care plan.  That's because it costs so much and the deductible is so high and so few physicians actually take it in payment for the services they're expected to render.  In other words, it's a policy you simply must buy, because your Gummint says so and will fine you Big Time is you don't, but one physicians do not have to accept.  And, being one of the very few to have actually read this enormous mess, yes, I did, I don't blame them a bit.  

For purposes of background, consider these little Obamacare factoids:

  -  O'care was voted into effect by 51 Senators at 11:30 p.m. on Christmas eve of 2009 using a parliamentary trick unused since the formation of our Country.  The actual bill, all 2,700 pages of it, didn't arrive on the Congressweenies' doorsteps until 8:30 a.m. the next morning.  It was then voted on in the House of Representatives by the then Democrat majority at 9:30 a.m. that same morning. Sooooo... 

...not a single Congressman, or woman, or these days, "other," actually read it before voting on it!  

But, as Representative Nancy Pelosi, then Majority Leader, of the House, and author of big chunks of it said, 

"you have to pass it before you can know what's in it, away from the fog of the controversy." 

Ummm, what?

  -  O'care is not a single health care bill.  It is a series of little two or three-page Liberal wet dreams that were all stapled together into this Brontosaurean load of crap once the Democrats realized that they had taken full and complete control of the House, the Senate and the Presidency.  In short, they had all the power they needed to do anything they wanted, in any way they wanted, at any time they wanted. And what they did with all that power is tantamount to giving a heroin junkie an AMEX Saphire card and turning him loose on the seedier side of town with a high-priced hooker as his tour guide.

  -  O'care is a one-size-fits-all plan.  That means if you're a man you get mammograms and birth control pills, no choice. And if you're a woman you get prostate exams, no choice. Why?  Because Democrats are all for inclusiveness and sameness.  Sort of an updated "what's good for the goose is good for the gander" type of thinking.  Yeah, I know, that's stupid, but, then again, so are they.

  -  O'care presumes to force insurance companies who choose to participate to cover young adults on their parents' policies until the age of 26 (as an aside, maybe it's because in this economy they probably can't find a job!), and also cover pre-existing medical conditions.  Think about that. That's sort of like buying a six year-old Cadillac, and then going straight out and wrapping it around a tree.  And then, trying to buy comprehensive insurance against wrecking your now destroyed Cadillac, at the same exact rates you would have expected to pay had you not put a big old owwwie on that Cadillac, and also expecting your insurance company to replace your now wrecked Caddy with a brand-new one. Hey all you Liberals! That makes so sense to anyone except to you!

  -  O'care establishes 153 new boards and commissions, to be populated by thousands of highly-paid bureaucrats, all appointed by some other highly-paid bureaucrats, but none of them - none of them - need be physicians!  And, by the way, one of those boards is the "Independent Payment Advisory Board."  That would be the one Sarah Palin called the "Death Panel."  That would be the one that decides which ailments get covered, and for whom, and at what payment to those who deliver the treatment.  No discussion, no negotiation, no compromise.  Example:  If you are 59 and one-half, and come down with kidney failure, you get dialysis and a chance to live.  If you are 59 and one-half, and just one-day, and get kidney failure, you die.  Sounds pretty "death panel-ish" to me.  How about you?

 -  And, for the very first time in the history of our Great Country, O'care presumes to require us, demand of us, force us against our will, to purchase something, anything, and presume also to levy a very big fine against us if we don't. 

Yes, my friends, and you are my friends, by virtue of a Supreme Court decision, however poorly reached (thanks Chief Justice John Roberts for turning into a Democrat when we most needed you to be a Republican!), your pocket book is directly within the reach of the Gummint and the IRS if they want you to buy something.  Don't cogitate on that too long. It will make you sick to your tummy. 

There's much more that this bunch of crap does, but what it doesn't do is keep the promise of the guy who sold it to us. Remember?  

"If you like your doctor, you can keep your doctor.  If you like your health insurance, you can keep your health insurance." 

Both lies.  Bald-faced lies, repeated dozens of times, over a period of months and months, by none other than B. Hussein Obama, ex-President and now full-time golfer.

Yes, I know.  That not only sucks, it makes no sense.  The Powers-That-Be have decided what you need, and they're going to make you buy it for your own good.  As I've said so many times before, somewhat snarkily, "The elite Liberals just want to be left alone to live our lives."

So, before we summarize the length, breadth and depth of this problem, let's summarize what we've learned.  Ready?

"Obamacare took health insurance from those who had it so it could give health insurance to the 30 million who didn't. And then it offered those from whom it had forcibly extracted their health insurance the opportunity to buy back a pale imitation of what they used to have, but not nearly as good, for two or three times what they had been paying in premiums, plus deductibles of three or four times as much. And those who wound up receiving health insurance, some 20 million, they say, got help from the Taxpayers, that would be you and me, to pay their monthly premiums.  And how many now still have no health insurance?  Approximately 30 million.  I kid you not...

So here's the Bottom Line, as they say.  The Republicans now find themselves in the same position as their Democrat counterparts were back when they shanked the Taxpayer in an effort to gather up more voters from the Less Than Successful Class. They now have the Big Lebowski...the House, the Senate and the Presidency.  And they're all about trying to put Humpty back into his egg shell.  They're trying ultra-hard to make some sort of sense out of unwinding Obamacare and replacing it with something sort of like what if was intended to do in the first place: offer health insurance to the less well-heeled by increasing competition between insurance companies, offering choice to the purchaser and reducing regulatory quagmires. 

I expect you'll see insurance companies marketing policies across state lines, just like they do car insurance.  I expect you'll see a simpler, more bare-bones form of "catastrophic" coverage, designed for the younger, healthier policy holder. I expect you'll see some sort of health savings accounts, which we'll be able to use to pay our own health care costs with before-tax dollars.  I expect you'll see "portability" in health insurance whereby each of us owns our policies and can take them with us from job-to-job throughout our lives. And I expect you'll see dramatically reduced rules and regulations from the Feds to de-complicate the oversight process.  All these changes should increase competition, lower premiums dramatically and enable the sorts of changes necessary to make "universal healthcare" finally work.

Epilogue:  To those who think I may have puked forth some less than salient factoids with this little posting, here's some info to serve as a foundation for my opinions:  I am a graduate economist, an inveterate entrepreneur with more than 40 years in the health care bizz, experience as a licensed insurance agent for many years, and I'm probably alone in having read all of Obamacare.  If you can match any part or all of my bona fides, write back and let me know where you think I've gone off the rails. Otherwise, wise up and embrace the fact that Democrats are straight-up nuts for causing all this upheaval to our economy and our health care system, and agree that each and every one of them should be voted out of office at the earliest occasion and never welcomed back...  

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