As an insurance agent who works in the field of health insurance, among other things, I get asked quite frequently what I think of the current health reform proposals being bandied about by Congress, and the general public. I don't generally give an answer; after all, as an agent, I do have my responsibilities to the companies I represent, as well as needing the job, and not really anxious to lose my license.
However, speaking only for myself, on a personal level, I have found the new arena for the health care debate, the US Senate, to have an interesting language all it's own. [Disclaimer here - I am speaking ONLY on behalf of myself. My views do not represent those of my boss, any of the insurance companies I currently represent, or probably a fair number of my clients. I am speaking as a private citizen with a constitutional right to my own opinion, with no special inside information or insight. I know exactly what every other citizen does; what is on the news.]
$127 billion dollar savings: Over ten years, they are saying that their plan will save $127 billion dollars to the US economy. I could be wrong here, but my understanding is that this is new spending by the government, not a shift from current expenditures. Leaving out the fact that, last I heard, they have included no cost increases in any goods or services rendered during that ten year period for their own plan, while estimating those costs as worst case scenario for the existing situation, I have never been able to wrap my mind around the government contention that spending money somehow equates to savings, as long as they didn't spend as much as they could have.
I find that sort of accounting fascinating, especially given my own recent IRS audit, in which, if everything didn't work out to the penny, I was on the hook for whatever they said I should have claimed as income. I should have tried out the argument that I was amortizing over ten years, just like the US Congress. On the other hand, had I done that, I might be writing this from jail, so perhaps it's just as well I didn't try.
31 million new insureds: Doing some oversimplified math, it seems we are spending $837 billion to insure 31 million current uninsureds. That works out to roughly $27,387 per uninsured person. I'm wondering whether or not this is a good use of our tax dollars. I think it's a question worth asking, at least.
Taxing so called Cadillac plans to raise money to pay for this: Hm, presumably those currently enjoying the Cadillac plans have developed some type of intelligence to put themselves in a position where they can afford such plans. I'm thinking that as soon as they are penalized for providing them, they will be smart enough to stop providing them, and will ensure that their new plan falls just under the guideline. And poof, the whole however many billion dollars that they are counting on to fund this plan from this source will be gone. Then what? I wonder who they will tax to make up the difference?
Of course, that is not to even mention that most of those high cost plans are a result of medical rating on a group, and if they are no longer taking medical conditions into account, those rates will no longer exist. But perhaps I shouldn't have noticed that, either, since the insurance companies have been cast as the villian of the piece.
Penalizing employers for not providing insurance: The most recent figures I saw were that employers would be penalized to the tune of about $750 per employee for not providing a minimal insurance plan. Have they ever talked to any employer, insurance agent, or insurer? Because that is still going to be less than the cost of providing an insurance plan for their employees, especially if they remove the tax deduction at the same time, which is an idea I have seen floating around out there.
The other brilliant scheme I have seen is allowing the employer to keep the tax deduction, but then taxing the employee for the cost of the benefit provided. Brilliant way to ensure that even less people will be insured, since employees will then have to pay out of pocket for something that is already provided tax free, and they already have a hard time affording it. All I have to say is, huh?
Penalizing people for not carrying insurance: The penalty I have seen was $350. If you are a family, that is probably one month's worth of premium. Do the math. Again, huh? And as to the argument that it works for auto insurance (which, in fact, it doesn't, there are still a fair number of people who take their chances and go without, but I digress,) you have a choice about whether or not you want to own and or drive a car. You don't really have a choice about being alive, and if you are ill, you need health care. I don't really care to have my health care needs compared to an auto, thanks anyway.
Insurance exchanges: Um, speaking for independent agents everywhere, that is what I already do for my clients, every single time. I look at what is available from all the companies we represent, and I give them the advantages of each plan, thereby giving them the information they need to make the best decision for themselves. The assumption that cheapest is always best is flawed, to put it nicely. Race to the bottom, anyone?
High risk pools: The federal government is currently touting the creation of high risk pools for the uninsured. Would this be sort of like the high risk pools that already exist in every state for the uninsurable under regular individual plans (those covered under group plans already cannot be denied for health reasons)? Perhaps, if we just subsidize what already exists, we could get what we are after for less money? Just thinking out loud, but do we really think the federal government can reinvent the wheel better than the states?
One other tidbit, just in case you weren't aware of this, [the people in Congress certainly don't seem to be,] the current system requires the insurance companies that do business in the state to pay a premium based on their profits in the state into the pool to help defray the costs, so they are already bearing at least part of the costs of helping to insure those they don't accept under a regular plan. So evidently now the fed is going to take on the entire cost? I have never been good at math, but once I again, I don't get how this puts us ahead.
Health care as a right, as opposed to a privilege: As an insurance agent, it is fascinating to me how quickly people change their mind on this when they lose their own insurance, and suddenly cannot get it on the private market for one reason or another. Do I believe everyone should have it? Yes. Do I believe you can force it upon people? No, especially at such a high cost. Does the system require overhaul? Absolutely, because it is unsustainable as is.
Do I want the federal government in charge? Not really, because the moment that a new administration is in power, the whole focus will shift, and then where will we be? Guaranteed we will drop to the lowest common denominator, which is pretty low. For example, pre-existing conditions are currently excluded from new coverage under Kansas law for 90 days, in Texas, that maximum is 24 months. I'll stay in Kansas, thank you. Not to mention the fact that I don't trust the fed to get much of anything right, much less something this important. I don't think health care should be a political football, it should be a human right.
Tax now, spend later: I love how the government works. They are going to start making us pay now, so that we can have what they have promised us two election cycles from now. How do you like the chances that what you think you are paying for now will still look the same in 2013 and 2014?
Cutting waste to pay for the programs: If there is so much waste, why are we not cutting immediately, instead of tying it to some future program? If it is unnecessary, then stop spending our hard earned money on it. Period.
I have openly admitted I can't even run my own life effectively, so I certainly don't have the answers on solving a problem as enormous as the health care crisis in the US. But I don't like our chances with the federal government in charge, because from my observation, call me a cynic, but I don't think they do much well.
While some people have said you can't compare the post office to the health care situation, I think it's a pretty apropos comparison. The cost of a stamp is only 44 cents, genuinely a ridiculous bargain, even with all the confusing rules and regulations. But they have lost billions of dollars, and the bleeding shows no signs of stopping any time soon. Meanwhile, UPS and Fed Ex continue to run as successful businesses.
Why is that? The USPS cannot figure out what the real cost is to mail a letter, thus continuing to undercharge, until the whole system will eventually fail. Fed Ex and UPS have figured out what it actually costs, and with a modest profit, they are charging that amount. The results speak for themselves.
In a very familiar pattern, the current government run program, Medicare, underpays their vendors on a legendary basis, thus resulting in physicians who limit the number of Medicare patients, because they cannot sustain their business with too many of those patients underpaying them. (Current reimbursement rates are so far below actual costs, that any physician that tried to serve Medicare patients only would rapidly be out of business.) Private insurers are currently subsidizing the Medicare underpayments, along with the uninsured, who are subsidizing everyone with the highest rates of all.
So, let's review. The federal government sets rates that are below sustainable payments, thus requiring subsidization of private companies and the uninsured. When the private companies and uninsured are no longer available to subsidize the underpayments, then what?
Cutting Medicare to pay for this: If they cut out subsidies to private insurers to pay for the Advantage plans, the private insurers will simply stop providing them. Then the elderly will have to pick up the cost of their own supplemental policies. If anyone wants my opinion, this looks more like cost shifting, than cost savings, as the elderly will be paying, instead of the government, but it is still getting paid.
And here's another interesting question. If Medicare is such a great system, how come the elderly need supplemental plans? If you didn't know that, you should, because it's a huge business for the private insurers, who cover everything that Medicare doesn't. Some of those "frill" coverages include, but are not limited to, elements of annual exams such as mammograms, pap smears and PSA testing, drug coverage that covers where the Medicare plans drop out, leaving the elderly seriously exposed when they can least afford it, hospital coverage, nursing home care, and home health coverage, as well as some end of life services.
All I can say is, if the government is in charge of our health care, then we can kiss our privacy goodbye. We can assume that our coverage will be stripped down to the lowest common denominator. And we can count on that coverage costing us more than they ever predicted it would, until, by the time all is said and done, we will be spending more than ever to have pretty much what we have now - an inadequate system that has a lot of holes.
Personally, I'm tired of the Republican versus Democratic debate, because again, I will reiterate, it's not a political hot potato, it's the health and well being of our citizens. I am not a Democrat or a Republican, I am an American, and I want affordable health care for all by right of being an American. I am not too hopeful we will have that any time soon.
So, making the short story long, as I usually do, that's how I really feel. Stay healthy!
