How long will we persist in our belief that government can care for individuals from cradle to grave? We continue to prop up every failed government progam and deceive the public as to their long term sustainability.
Now we are on the verge of ushering into permanency unsustainable government health insurance for some unknown number of additional insured’s at the expense of all. The true costs of this program cannot be determined. (Congressional Budget Office (CBO)projections have proven themselves inaccurate. See initial Medicare cost estimates as one example and Obamacare projections as a second example of inaccuracies) Democrats argue that the system would be sustainable with just a little more income redistribution and single payor solution just like the unsustainable medicare program. (Perhaps the Democrats should campaign on a new more robust second coming of the VA Health system.) The solvency of the Medicare trust fund is only guaranteed at 100% to 2024.
It is argued that this is the best system available because it removes the profit motive of the private sector. Please consider this. There are already non profit options available in the insurance universe and when a government solution is adopted, it is seldom evaluated to determine its cost effectiveness or its sustainability. Only a crisis precipitates second look at a program, then the program is reinvigorated with additional taxpayer funds, but never seriously scrutinized for efficiency and effectiveness.
Never is there consideration given to the lost opportunity cost, when adopting such programs. What do I mean by this? Programs are adopted institutionalizing payment structures and distribution techniques available at the time of adoption, This means a fee for service structure will be perpetualized in any health insurance solution. Innovative cost and life saving measures will not be pursued, as long as a government subsidized consumer base is guaranteed to insurers and health care providers.
Insurance principles are supposedly built into the healthcare system except in instances, where the outcome is disliked by the citizenry or seen as “unfair” e.g. Insurance is about many paying a small amount (premium) for protection against unlikely risk. If the cost (risk)is guaranteed, it is no longer insurance. It is redistribution.
Life is not fair and we can not wish and make it so, nor can we design a human insurance system to handle all circumstances without creating staggering insurance premium increases. We refuse to allow those with chronic preexisting conditions to pay more in premium as required in the private insurance market,(even if the chronically ill potential insured’s have the ability to pay more) so we mandate acceptance at prescribed rate despite the built in additional cost of insuring these individuals. This guarantee increases premium for all and prices many out of the market or provides coverage with obscene deductibles.
We demonstrate our distaste for the economic facts by characterizing any, who oppose this type of (health insurance) socialism as discriminators or haters, who wish others to go away and die. Be honest! This is a small group of individuals. Most will be absorbed into a group plan through employment. Some have the ability to pay increased premium or will be self paying. Some will be treated in poverty programs and some may need charitable assistance. Finally as a last resort, some may need assistance from a non insurance health assistance fund. Why demand change to the entire health insurance industry to cover these relative few. Please be honest and admit some of these individuals simply are not insurable for the same rate as the general population. We may not like it, but it is not discrimination and it is an economic fact
We ignore the insurance principle of adverse selection, which states those most in need of benefits will flock to secure them especially, when available at an artificially low cost, while the young and healthy will simply assume the risk and move forward without coverage. We attempt to overcome this hurdle by an employer mandate and an individual non insurance penalty. The mandate so repulsive to many, so we push back compliance dates and minimize repugnant penalties in a dishonest effort to avoid electoral consequences. The penalty is so minor that many simply opt to pay it. Meanwhile many potential insureds wait and upon receiving a diagnosis of cancer, diabetes (insert your chronic ailment here), then secure coverage post diagnosis and guaranteed future costs are spread over a small individual state market unfit to absorb the these extensive costs. There is no urgency to sign up prior to need, when acceptance post diagnosis is guaranteed at the same cost. Cost is distributed to the individual state market place raising the cost for everyone in that subgroup of insureds.
Remember politics is who gets what, when and how. The market is the result of billions maybe trillions of choices made by individual consumers and families. Each consumer or group of consumers acting in what they believe to be their best interest. If a need arises, it is in the interest of someone or group to fill the need or the need maybe altruistically filled by voluntary giving. (that’s right voluntary as opposed to entitled receipt. Witness such charitable organizations as St. Jude’s Hospital, American Cancer Society and numerous other charitable non profit and individual healthcare benefactors.) The private company or group in the private market is rewarded for their risk taking by reaping a profit. (not evil in fact frequently is distributed to shareholders including workers, who invest their savings in companies and insurance products.) Government planning and action can not better decide allocation of resources. I would argue it never will be able to accumulate and weigh the number of variables necessary to replace the market.
Government muddles through! Merriam Webster’s Dictionary defines muddling through as to achieve a degree of success without much planning or effort. (Doubt me? Consider many in government service positions are career employees (carryover employees, not true believers), which means during any administration they may not agree with the agency activities or even the stated goals of any department or agency. How much effort and planning should you expect from this group. Then consider Congress, which seldom agrees on the means to accomplish any single objective and may not even agree as to the goal itself) The result of all this cognitive dissidence is government muddles through its tasks and inefficiently utilizes resources and seldom, if ever accomplishes its stated purpose. This is hardly an acceptable replacement model for any market, let alone something as important as the health insurance market.
So what is the answer?
1) Accept that life is not fair and government can not make it fair.
2) Accept that markets are efficient allocators of resources, which will reallocate human and capital resources to meet needs and allows for individual freedom and is not dependent on political power to meet those needs.
3) Accept that human systems are not perfect. There is a place for charity. Charity fills in the gaps or fills in during intervals between resource reallocations. Charity maybe individual,familial,or institutional. It is different from governmental programs because it is based upon a voluntary exercise of personal choice and not an exercise of majority power,
4) Accept that insurance companies are not the sole driver of cost. Health insurance is not and should not be equated to healthcare. Access to insurance does not equal good healthcare. Insurance companies are not inherently good nor are they inherently bad. Health insurance itself is not the sole answer to provision of adequate healthcare and it should not be treated as such.
5) Big government solutions are exercises of power and societal promises that even when outdated they are not rolled back and seldom evaluated in light of a changing environment.
Repeal of Obamacare is a necessary first step. We can always tinker at the edges of the system and provide means for those, who fall through the cracks in the system. (While writing this blog entry, I was watching a news reporter state that preexisting conditions handled in high risk pools totaled 115,000 policies. This is not an unmanageable number and gives credance to the idea that many with chronic health conditions are covered under the existing group plans or covered under existing poverty programs or medicare for seniors. If there is a requirement to immediately address an unfulfilled need i.e. preexisting conditions. There is more likely to be a better solution, if it is addressed as an individual issue. You can more easily identify the scope of the problem and limit the solution. The issue is not better addressed in all encompassing comprehensive legislation. (What about a deal?) Some Democrats maybe moved to lend support to gain this coverage, since the signature Obamacare legislation would be lost to them.
If there is no essential benefits package, perhaps there will be no need to keep children on their parents plan well into adulthood and if there is such a need perhaps a small adjustment in premium could produce the same result without a permanent unpaid governmental mandate. Some individuals could secure catastrophic coverage and choose to self insure by savings for some smaller medical expenses rather then pay into a massive one size fits all government mandate.
Educate the public that the majority of Obamacare’s insurance increase stems from the welfare healthcare expansion. That is medicaid. Is this how we want to cover these folks long term? Remember this expansion was accomplished by a massive federal assumption of the expansion cost. This can not be permanent. Medicaid expansion merely kicks the can down the road with no road map to permanently assist this group to get permanent healthcare. The need for help for this group should be realistically assessed. Perhaps funding could be sunsetted as innovative healthcare delivery models are advanced to provide more affordable care.
Demand your state governments remove impediments to healthcare delivery. Examine professional licensing requirements. Examine state medical curriculum. Make certain they address healthcare needs and are not merely justification for professional fee increases! Modify your tort laws to decrease malpractice insurance expenses.