Friday, September 18, 2009

Solve the Health Care Problem

There are problems with the health care in this country. No surprise there. We all know it. Even with all of those problems, we still have the best health care in the world.

I've been reading different proposals and listening to Obama who says he has a plan, but nobody has seen it yet. We've seen HR3200 and now we've seen parts of Senator Max Baucus' proposal that came out of his committee this week. Never mind that it didn't include anyone else out of the gang of six committee. He's still put forth his plan which we now know includes alot of tax increases both hidden and out in plain sight.

The first problem with health care is that many can't afford it. It's not the 46 million, 47 million or 50 million (depending on which number they choose to use on any given day). We've been told there are 20 million illegal aliens in this country. Let's lower it to 12 million because the past couple of days they've been using that number again. We know that there are approximately 12 million that are children just starting out in their lives after college or high school that don't have and don't want to pay for coverage. We also know that there are people that choose to pay cash for their everyday care and only maintain catastrophic care in their insurance. That number is put at somewhere around 10 million. That's 34 million people, using lowered numbers. That leaves approximately 13 million that just can't afford to pay for health care for them and their families or can't get it due to pre-existing conditions.

The problem with the current health care proposals are that everyone will be required to take it, if not immediately, in the near future. It also includes penalities if you don't get the health care that they require. That's not freedom. That's a dictator saying 'do it or else'.

We don't need a health exchange. That's just more government. We don't need to hear that the government is saying we can do this for $900 billion or $850 billion. We all know that the government has never been right on their projections for costs for any plan they've ever come up with (War on poverty, medicare social security, etc). We also know that when we put money in the governments hands, they misuse it (Social Security).

Rather than force an overhaul to a system that is leaving out approximately 13 million and creating a government plan for the other 85% of the people, why not leave freedom in the health care plan? It's your responsibility to get coverage for yourself. It's not the responsibility to tell someone what they need, or should have.

If you don't have health care by choice, it is YOUR choice. If people say that you're irresponsible, that's just them meddling where they don't belong.

So I've come up with some possible solutions from all of the reading that I've done on what people want, and what people propose.

Keeping your Insurance when you leave your job.

First, there is the problem of your insurance covering disappearing if you change jobs. Why not allow the employee to own his policy? You are hired by a company. The company bands it's employees together in a group. This gets their insurance cheaper for them than if they tried to buy it themselves. (there is another option but I'll deal with that later). If your employer contributes to your health plan premiums, that's great for you. Employer pays some, you pay some. You benefit because you're not paying the full price for your coverage, and your employer benefits because he's contributing to your insurance which is likely to alleviate the problem of turnover in employees.

If you pay your own premiums and your employer pays none, that's fine too. He takes your cost out of your paycheck and sends it on to the insurance company for you. You're still benefitting by having a lower cost insurance because you're part of a group.

If you quit your job, or are fired or laid off, then your option is to go with Cobra. You pay a much higher premium for that coverage for a limited time and hopefully you'll get another job to replace the Cobra and get coverage at the new job.

Suppose instead, when you leave your first job, you take your insurance with you? Naturally, you'll have to pay the premiums, but that will only be what you were paying before, unless your former employer picked up part of your costs. Then naturally, you'll have to pay the employers portion as well. But, you still have it as part of the group. When you get your new job, you just turn your insurance information over to your new employer and if he's going to pay a portion of it or not, he can begin paying your premiums from your paycheck immediately. You've lost nothing.

That is currently not allowed under current laws. Why? If you have a 401k at work and you change jobs, you can roll that money into an IRA that you may have or into your new 401k plan with the new employer. So why not health insurance? It keeps you covered and keeps your family covered.

The ONLY problem then is that the employer would be sending out premium payments to various companies for different employees. That problem seems less of a problem than paying a fine for not carrying coverage on employees or for employees for having to pay a fine for choosing not to have coverage.

The cost would come down because you'd always be in a group plan which is less expensive than buying your own individual policy not as part of a group.

Another option for those employers that pay for coverage for the employees is to give the employees a raise by the amount that they pay for each employees coverage and let the employee go out and buy his own coverage. If they go with a Health Savings Account, they can save even more money than what the employer was paying and likely get tax benefits from it as well.

Create more groups.

Another way to make health insurance more affordable is to allow more groups. Currently, this is not permitted. This would mainly be for those self employed, but could also be applied to others. First example; Self Employed. The self employed pay their own social security as well as the employer portion of the social security. That's a bite out of their income. Then add health care to that. If they choose to be part of a group, right now, they can't. The solution: Allow groups to band together and get group plans to save them on their premium costs. Imagine if you're in a city with 50 other self employed people. The self employed could create their own group and sign up for health care under that group getting the lower rates.

Second example: People living in poor areas where they can't afford health care and don't receive it from their employers. Let community groups (yes, I said community groups) band together and create their own group to get lower cost health care.

This could also apply to people that don't want to get it through their employer. Maybe they've chosen coverage from another company that is less expensive than that offered through their employer. So you get people on Elm Street together and create a group for the purpose of buying health care on each family.

Free up companies to offer coverage across state lines

Currently, insurance companies are not permitted in some states. They can't move from state to state. Each state has a choice of maybe five or six companies that are permitted to offer health care in each state. Imagine if all 1,300 companies could now compete in all 50 states (or 57 states in Obama's world). This would naturally drive rates down because of competition.

Pre-Existing Conditions

This is the most difficult part of any insurance plan. I'm going to give an example using life insurance. It's not going to be completely accurate so bear with me while I create figures here, but understand that the concept is correct.

A Life Insurance company looks at mortality tables. These tables show how long a person will live. It's not accurate when applied to one person, but it's really close when talking about a group of people. We know that the average life span for a male is 75.2 (2004 study by CDC). Women live on average 5 years longer.

So a life insurance company will look at a 20 year old male and know that he's going to live for another 55 years. So they figure out what it would take to pay off $1,000 of coverage during that 55 years and charge accordingly. So a 20 year old male will pay approximately 10 cents for each thousand dollars of insurance. A male smoker might pay 12 cents for each thousand dollars. But, if that 20 year old male is a diabetic, his life span decreases, do they have to charge more to cover the costs of paying off at death.

They also know that some will die prematurely regardless of how healthy they are at that time. Car accident, heavy drinker, their weight, if they have asthma or other maladies. All of these and more contribute to premature death. So they will charge accordingly. To the males advantage, if he's getting proper health care for his particular ailment, that counts in his favor and he may not be charged more, or his added charge may be less than it would be if he didn't get the proper care.

Health insurance works basically the same way. They must charge more for those with conditions that are there prior to the application for insurance. If they don't, they can't afford to pay out when it's needed.

So just eliminating pre-existing conditions, or making it illegal to take those conditions into account, will not solve the problem. It only takes the problem of not being able to get insurance to new heights because now, those that are healthy have to pay alot more to cover the cost of those that aren't healthy. You should not be penalized for your neighbor who's had three heart attacks and still eats the fat off his steaks, and smoking a cigarette while jogging in circles around the pool backward while the deck around the pool is wet. That's a guy that's got the coroner waiting at the door tapping his foot wondering how much longer you're going to be before you get there. He's either going to die of a massive coronary, or of a broken neck.

Adding the uninsured to the insurance rolls will decrease costs. Adding insurance companies to the list of choices you have in each state will decrease costs. But you cannot avoid the problem of pre-existing conditions. They are going to be there and they must be paid for if you're going to cover them. Is it entirely fair to someone that was born with a condition? No. Is it fair to the guy that didn't take care of himself when younger? No. But, if you're going to cover everyone, you must have the ability to charge for the ones with problems. If the insurance companies can come up with a way to do that with more people insured, then let them do it.

But whether it's an insurance company or a government, the cost is going to be there and it must be paid for. Would you prefer to have insurance professionals figuring out how to get more customers or would you prefer some elected government official with no idea nor experience in the insurance business doing it? Unless you're just bound and determined to get government health insurance, I think the answer is pretty obvious. Let the pros do it.

Dropping coverage after insured

Obama likes to tell stories about someone that is in the midst of chemotherapy and his insurance company dropping him when he needs it the most. I have no idea if it's true or not. I know that coverage being dropped due to non-disclosure does exist, but his examples always go to the extreme.

Again, in life insurance, there is a provision that doesn't allow the insurance company to drop your coverage after two years. Suicide for instance. If you take a out a life insurance policy and commit suicide within two years, the insurance company will only pay back the premiums paid in. However, if you commit suicide one day after that two year period has expired, the insurance company is required to pay off. It's called the Contestability Period.

I'd suggest making the same sort of Contestability period included in health policies. If it's found within two years that you hid a condition when you took out the policy, your coverage will be dropped. However, an insurance company can look at your health records when you apply for coverage with them. The onus should be on them to do their proper investigation before giving you the coverage and the rates that they'll charge. If they don't do a proper job gathering the information and you did have something unbeknownst to you, they can't drop you. If it's discovered though that you went to your buddy next door who is a doctor and he tells you that the bump on your backside is cancer and you immediately go out and get coverage then go to your regular doctor and he discovers it so that you can get the coverage, you and your neighborhood doctor-friend will be subject to insurance fraud.

This is not the end all be all to solve the health care problems, but if we don't have these things in there to protect us and to protect insurance companies, we're going to put the debt on the government. The government does not earn money. They confiscate money. If you think you're going to get "free" health care through the government, you're sorely mistaken. You're going to pay for it in the form of much higher taxes and you'll be pushing those costs on to your children and grandchildren and probably beyond because government will only add problems, add costs and have the problem of mismanagement.

For you liberals that trust the government or trust Obama, here's something for you to think about. Obama is not going to be the last President of this country. There will be another Republican President, probably in 4 years and more likely if not in four, there will be in eight years. We rarely keep the same party in power in the White House for more than two terms. Do you want to trust your health care to a Republican? I certainly don't want to trust my health care to Obama or his czars or his cronies or any health exchange they set up and staff with their partisans.

Every few years they will tinker with it and say "it's only cost...." This will continue as long as there is government health care.

If it's profit's you're worried about, do you realize that the profit margin for insurance companies is only 3%? That's not the massive profits that Pelosi, Reid and the rest of the liberals and their pundits say it is.

The private sector is always preferable to another government bureacracy. Government screws up everything they touch. They screwed up cash for clunkers. They created a stimulus plan that has not been stimulating unless the checks that went to dead people caused them to get out of their graves to cash the checks. They sent checks to prisoners. Those prisoners didn't all of a sudden become model citizens because some government official sent them $250 of our money. Unemployment continues to rise. The economy is still dismal.

If you're a doctor and your appendix bursts, do you operate on yourself? If you're smart, the answer is no. Yet, you're asking government officials to create a health care plan putting them in charge of it. I'd rather have the insurance professionals in the private sector create a plan or a set of plans that would address the problems, get the uninsured the ability to get insured and lower costs and still have the insurance companies profitable. I want the insurance companies profitable, because if I ever need them I don't want a letter saying "Sorry, Brett, we ran out of money, so we can't pay for your doctors bills."

You're welcome to comment.


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