Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

Forget the website crashes: The real $1 trillion problem with Obamacare yet to emerge
Daily Caller ^ | November 3, 2013 | Grae Stafford

Posted on 11/03/2013 1:06:12 PM PST by Cincinatus' Wife

In an exclusive interview with The Daily Caller, Dr. Robert Nirschl — a practicing orthopedic surgeon, former faculty member of Georgetown and a former member of the legislative committee of the American Academy of Orthopedic surgery — dismissed the recent issues suffered by HealthCare.gov and the media feeding frenzy surrounding it, arguing that the systemic flaws within the law had not yet surfaced, and that when they do, it will be catastrophic.

Nirschl took apart the concept of “health insurance” arguing that it’s an inaccurate buzzword. What is being legislated is not insurance at all, Nirschl said. By its very nature, “insurance” is a way of protecting against an unforeseen, catastrophic incident. It works by having large groups of people paying premiums into a central fund with the understanding that if they were to suffer an unlikely incident, they will be compensated. The likelyhood of people claiming out of the central fund is a calculated through a risk assessment, and the riskier the “bet,” the higher the premium. Nirschl points out that since the 1950s’s true health “insurance” has not existed.

“The facts of the matter are that the product we have had has, since the UAW (United Auto Workers) negotiated with General Motors in 1959 to do first dollar coverage, we destroyed the concept of insurance,” Nirschl said. “The product we have had since 1959 has been a hybrid of a service maintenance contract plus insurance. If you’re going to buy true insurance, you want to buy it for a catastrophic event, example, auto insurance. If I go to my auto insurer, I don’t want to be covered for oil changes and lube jobs. I want to be covered for a car crash and so when we went to first dollar coverage thats when it [health insurance] became a service maintenance contract.”

Nirschl explained the consequences of including supplementary services on premiums using his auto insurance analogy: “One hundred percent of folks are going to use the service. One hundred percent of people who want cars are going to get oil changes and lube jobs, so it doesn’t lower the premium. It increases the premium, and at the same time it adds an enormous administrative cost… We squander 35 percent in administrative costs by this form of insurance… For maintenance services, oil changes and lube job, you want to pay out of your own pocket, and you want to basically have insurance for a car crash, for catastrophic things. So we have destroyed true insurance.”

Nirschl says that that destruction of ‘true insurance’ and the wide scale implementation of ‘service maintenance’ has come at a cost. By his calculations, it likely runs as high as $1 trillion dollars annually on “useless costs, administrative costs which deliver absolutely no service.”

When asked about the future of the law, and if it is now sacrosanct in American minds and unable to be repealed, Nirschl said no.

“As the law unfolds and as people are seeing the derogatory effects of it — I mean, the granddaddy of that situation was Prohibition. That was not sacrosanct and for that matter, all of the Jim Crow laws from way back when were the law of the land, so when ever I hear some of our politicians say: ‘Well, this is the law of the land, and so we can’t do anything about it.’ Well, as an example, Martin Luther King did a lot about it. I think that when the people really see what it’s all about it should go the way of Jim Crow laws. It should go the way of Prohibition.”


TOPICS: Business/Economy; Culture/Society; Extended News; Government
KEYWORDS: abortion; aca; deathpanels; obamacare; obamafail; obamalie; zerocare

1 posted on 11/03/2013 1:06:12 PM PST by Cincinatus' Wife
[ Post Reply | Private Reply | View Replies]

To: Cincinatus' Wife
“The facts of the matter are that the product we have had has, since the UAW (United Auto Workers) negotiated with General Motors in 1959 to do first dollar coverage, we destroyed the concept of insurance,” Nirschl said. “The product we have had since 1959 has been a hybrid of a service maintenance contract plus insurance.

Yes! I've been saying this for ages. As much as I like my doctor's visits covered it is akin to auto insurance that covers getting your oil changed. I am not sure the doctor's visits is the real problem though ... not when compared to the cost of an any operation. Some of my medical friends have told me a major reason for the high hospital costs is cost shifting to cover the gaps by medicare, medicaid and uninsured.

2 posted on 11/03/2013 1:29:44 PM PST by plain talk
[ Post Reply | Private Reply | To 1 | View Replies]

To: Cincinatus' Wife
The counterargument is that if you don't cover the little stuff (like check-ups) then people won't see their doctors until they have really advanced conditions that will end up costing more to cover.

However, I believe that we need to trust the American people to do the simple things like keep track of their blood pressure, have yearly check-ups, have their teeth cleaned twice a year, etc.

A better way to go would be to lower premiums for those people who can prove they have done the little stuff themselves, i.e. show receipts for having had their teeth cleaned, had a recent check-up, got a flu shot, etc.

Just like drivers who get discounts for not having tickets.

3 posted on 11/03/2013 1:29:58 PM PST by who_would_fardels_bear
[ Post Reply | Private Reply | To 1 | View Replies]

To: Cincinatus' Wife

4 posted on 11/03/2013 1:32:37 PM PST by LyinLibs (If victims of islam were more "islamophobic," maybe they'd still be alive.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: plain talk
Yes! I've been saying this for ages......

I agree. We need to go back to paying for our medical expenses and getting insurance for big emergencies. Health "insurance" has driven up costs, complicated the process and become unnecessarily tied up in red-tape.

5 posted on 11/03/2013 1:37:00 PM PST by Cincinatus' Wife
[ Post Reply | Private Reply | To 2 | View Replies]

To: Cincinatus' Wife
I used to pay medical claims for a union company that self insured. One of the benefits the union negotiated for was 100% coverage for treatment of accidents.

Well, predictably, everyone who saw a particular chiropractor in the area had an "accident" every three months or so. They fell in holes, tripped on steps, bumped heads, and on and on and on. We knew that the members were abusing their benefits, but there was nothing we could do about it.

6 posted on 11/03/2013 1:43:08 PM PST by Mygirlsmom (You know something's really wrong when the salesman keeps selling long after the close.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: who_would_fardels_bear
I believe that we need to trust the American people to do the simple things like keep track of their blood pressure, have yearly check-ups, have their teeth cleaned twice a year, etc.

Yes. And if they don't, what business is it of anyone else?

New York's Medicaid costs are skyrocket-high and much of that is the bureaucracy which keeps tabs on your file and the extras like free rides to the doctor which the liberals put in place to make sure the irresponsible take care of themselves.

No study has ever shown that such preventatives result in better medical outcomes for the population or reduced medical costs to the government "society". But, just like pre-K, it sounds like it should work, so we do it.

7 posted on 11/03/2013 1:43:13 PM PST by BfloGuy (The final outcome of the credit expansion is general impoverishment. [Ludwig Von Mises])
[ Post Reply | Private Reply | To 3 | View Replies]

To: Cincinatus' Wife

Been sayin’ the same thing here every chance I get. And oh boy, doesn’t it make the creatures come out!
The same groups keep complaining “but my doctor visits cost too much. . .” or “what about my receipts for un-reimbursed expenses?” or some other nonsense. Yes that’s right NONSENSE.
Insure against catastrophic or unanticipated financial loss and PAY for your healthcare.
How about . . . if you don’t cost the insurance pool a lot of money, you get a discount or a refund off your premium?


8 posted on 11/03/2013 1:48:13 PM PST by Macoozie (1) Win the Senate 2) Repeal Obamacare 3) Impeach Roberts)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Mygirlsmom
..... We knew that the members were abusing their benefits, but there was nothing we could do about it.

Bump!

9 posted on 11/03/2013 1:48:27 PM PST by Cincinatus' Wife
[ Post Reply | Private Reply | To 6 | View Replies]

To: Macoozie

Prices WILL drop.


10 posted on 11/03/2013 1:49:20 PM PST by Cincinatus' Wife
[ Post Reply | Private Reply | To 8 | View Replies]

To: who_would_fardels_bear

That’s why God invented “consequences”. Do stupid sh!t and you get bad consequences. Most people will associate stupid sh!t with bad consequences and avoid repeating them. However, there is a certain percentage that will never learn .... the hammer to the head group (why are you hitting yourself in the head with a hammer ..... I like the way it feels when I stop).


11 posted on 11/03/2013 1:50:57 PM PST by RetiredTexasVet (An Administration of communists, incompetents, and the corrupt ...reminds one of FDR's brain trust.)
[ Post Reply | Private Reply | To 3 | View Replies]

To: Cincinatus' Wife

Good post - that has to be the most succinct explanation of how we got where we are and why this won’t work that I’ve read in this entire debacle. Unfortunately, the Dem numbskulls in Congress, like Pelosi, Can’t Understand Normal Thinking and this goes right over their heads.

Since I was born in 1955, I have no direct recollection of the UAW 1959 contract but I can remember the 1960s when my dad spoke of our family insurance as “hospitalization” as that was the event that would cause economic harm and merited true insurance. I didn’t experience anything more than that until I entered my civilian career in 1981 after military service. It’s been nowhere but downhill since then.


12 posted on 11/03/2013 1:51:37 PM PST by T-Bird45 (It feels like the seventies, and it shouldn't.)
[ Post Reply | Private Reply | To 1 | View Replies]



Bump the Thon and wish Jim a Happy Birthday.
Please donate today.

13 posted on 11/03/2013 1:53:49 PM PST by RedMDer (Happy with this, America? Make your voices heard. 2014 is just around the corner. ~ Sarah Palin)
[ Post Reply | Private Reply | View Replies]

To: Cincinatus' Wife; Liz

14 posted on 11/03/2013 2:04:43 PM PST by Libloather (The epitome of civility.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: who_would_fardels_bear; plain talk

I would not want discounts in a world of insurance that offered them for showing a dime, a health card and a note from my mother-that is still paying for nanny to tell you what to eat and do. What you do with your teeth or any other part of your person is your business and responsibility-and the same goes for me and everyone else.

Tickets are gotten for doing something dumb-that is why they cost money and raise your rates-they are not the same as oil changes. If I’m not ailing, I’m not going to go pay for someone to try to find a reason to charge me more money-don’t you want this newest little test for only a few hundred?-I’ll go if I need stitches, or am otherwise injured, etc-I don’t ask the mechanic to run a diagnostic on my truck when I get the oil changed-I’m sure he’d find something to test further and charge for just to pay him for his trouble, and that isn’t “maintenance”-the truck doesn’t go to the shop unless it needs a repair/part...

Just my two cents worth-I was a workers comp case manager until I was smart enough to go to work for myself...


15 posted on 11/03/2013 2:06:25 PM PST by Texan5 ("You've got to saddle up your boys, you've got to draw a hard line"...)
[ Post Reply | Private Reply | To 3 | View Replies]

To: Macoozie

How about . . . if you don’t cost the insurance pool a lot of money, you get a discount or a refund off your premium?

_________________________________________________________
The premium cost on an individual basis is not individually risk-based under group insurance which is definitely insane. We all pay the same amount for the same coverage regardless of age, even salary or other demographics. Only perhaps in the case of employee wellness programs would it be legal to charge differently to different employees for not meeting their health care goals.


16 posted on 11/03/2013 2:08:08 PM PST by erlayman
[ Post Reply | Private Reply | To 8 | View Replies]

To: Cincinatus' Wife

Log on in mass and let’s see what happens.


17 posted on 11/03/2013 2:10:17 PM PST by jetson
[ Post Reply | Private Reply | To 1 | View Replies]

To: Mygirlsmom

Bingo! Probably half my clients had engineered their work related “injuries” to get a little paid vacation time-once, a client’s co-worker called to drop the dime on him-seems he’d said he needed some money, so it was time for a comp claim, as he threw a half-full soda down some stairs then proceeded to “slip” in it and fall...


18 posted on 11/03/2013 2:13:51 PM PST by Texan5 ("You've got to saddle up your boys, you've got to draw a hard line"...)
[ Post Reply | Private Reply | To 6 | View Replies]

To: Cincinatus' Wife; MestaMachine; Rushmore Rocks; Oorang; sweetiepiezer; txnuke; Velveeta; aragorn; ..
Image and video hosting by TinyPic

.

19 posted on 11/03/2013 2:36:05 PM PST by LucyT (~ If you're NOT paranoid, you don't know what's going on. ~)
[ Post Reply | Private Reply | To 1 | View Replies]

To: who_would_fardels_bear
have their teeth cleaned twice a year, etc.

Since you seem to be the one making up the arbitrary compliance schedule how about you get a colonoscopy every 10 days and then we'll give you a discount on your proctology premiums.

BTW, medical coverage and dental coverage are entirely unrelated in my state except when dental injury occurs as a result of an accident or malignant disease or concerning a child on Medicaid.

20 posted on 11/03/2013 2:46:33 PM PST by steve86 (Some things aren't really true but you wouldn't be half surprised if they were.)
[ Post Reply | Private Reply | To 3 | View Replies]

To: steve86
If a private company that sells insurance decides to lower premium costs for those customers that choose not to smoke, get yearly check-ups, get regular teeth cleaning, etc. then what business of yours is it to tell them otherwise?

You might think such companies are being stupid or "socialist" for doing it, but they are already doing it.

I guess you'll have to shop somewhere else.

21 posted on 11/03/2013 3:34:38 PM PST by who_would_fardels_bear
[ Post Reply | Private Reply | To 20 | View Replies]

To: Texan5
"What you do with your teeth or any other part of your person is your business and responsibility-and the same goes for me and everyone else."

If you want to insure your car and you park it on the street you may pay more than someone that parks their car in a locked garage. This is your business, and it is also the business of the car insurance company that provides you with the insurance.

Unless you want to completely get rid of the individual health insurance market, then insurance companies should be able to know a heck of a lot about you in order to come up with a fair premium.

A lot of us are fortunate. We are part of large pools of insured. Our insurance companies don't have to know a lot about us in order to set the premiums correctly because everything averages out. We get the advantage of relatively lower premiums without a significant invasion of privacy.

Those who try and get individual insurance are either young and healthy and get to pay less, or old and sick and either get to pay a lot more or get denied.

When you get auto insurance you only need to "rat out" your car. When you get health insurance you need to "rat out" yourself.

22 posted on 11/03/2013 3:43:28 PM PST by who_would_fardels_bear
[ Post Reply | Private Reply | To 15 | View Replies]

To: LucyT

Indeed, which is 2014 will be the year of the pitchforks.


23 posted on 11/03/2013 4:00:42 PM PST by Hotlanta Mike ("Governing a great nation is like cooking a small fish - too much handling will spoil it." Lao Tzu)
[ Post Reply | Private Reply | To 19 | View Replies]

To: Cincinatus' Wife

This guy tells it correctly.
When we transitioned from “insurance” to “prepaid healthcare” it broke the connection between cost and user.


24 posted on 11/03/2013 4:05:57 PM PST by nascarnation (Frequently wrong but rarely in doubt....)
[ Post Reply | Private Reply | To 1 | View Replies]

To: plain talk
“The product we have had since 1959 has been a hybrid of a service maintenance contract plus insurance.

Heck, if I want to best this, go with an HSA high deductible for Catastrophic Coverage and a Concierge Service on the other end of the spectrum or pay the check ups, soar throat visits etc with Cash out of a Tax Free type pool within the HSA.

If it is the paperwork and lack of competitive price comparison ( GM found this out, they paid anywhere from $2,000 to $400 for a colonoscopy ), then pay cash and put the prices on line so we can shop!

We all know we don't need Fedzilla, we here could figure out how to fix all this craziness in almost no time flat if we could get Disney on the Potomac out of the way...

25 posted on 11/03/2013 4:13:18 PM PST by taildragger (The E-GOP won't know what hit them, The Party of Reagan is almost here, hang tight folks....)
[ Post Reply | Private Reply | To 2 | View Replies]

To: Cincinatus' Wife
Outstanding catch!

Excellent observations and statement of the truth by Dr. Nirschl:

“The facts of the matter are that the product we have had has, since the UAW (United Auto Workers) negotiated with General Motors in 1959 to do first dollar coverage, we destroyed the concept of insurance,” Nirschl said. “The product we have had since 1959 has been a hybrid of a service maintenance contract plus insurance. If you’re going to buy true insurance, you want to buy it for a catastrophic event, example, auto insurance. If I go to my auto insurer, I don’t want to be covered for oil changes and lube jobs. I want to be covered for a car crash and so when we went to first dollar coverage thats when it [health insurance] became a service maintenance contract.”

26 posted on 11/03/2013 4:49:43 PM PST by First_Salute (May God save our democratic-republican government, from a government by judiciary.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: plain talk

bttt


27 posted on 11/03/2013 4:50:36 PM PST by First_Salute (May God save our democratic-republican government, from a government by judiciary.)
[ Post Reply | Private Reply | To 2 | View Replies]

To: Cincinatus' Wife; All

28 posted on 11/03/2013 6:55:09 PM PST by LyinLibs (If victims of islam were more "islamophobic," maybe they'd still be alive.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Cincinatus' Wife
a hybrid of a service maintenance contract plus insurance

Bookmark

29 posted on 11/03/2013 8:45:56 PM PST by libertarian27 (FreeRepublic Cookbooks 2011 & 2012 - Click Profile)
[ Post Reply | Private Reply | To 1 | View Replies]

To: taildragger; First_Salute; All
Outsourcing of workplace coverage grows " Allison Martiny really didn't have many options when choosing health insurance for her family at annual open enrollment. Only one of the two plans her employer offered made any sense, and even that didn't include the dental coverage her kids need. Then her company, a small IT recruiting and staffing firm in Atlanta called eCommQuest, did something you'll see a lot more companies do in the next few years: Instead of sponsoring an insurance program that offered only a few choices, it is giving employees some money and sending them to shop for their coverage online in a marketplace operated by an outside firm.

Martiny and her colleagues can pick and choose, buffet-style, from a dozen or more plans offering insurance at different prices, with low to high deductibles and big or small co-payments, for medical, dental and vision coverage.

“I like it so far,” Martiny said. “It will take a little time to make sure we're choosing the best option for us financially, but I prefer having the ability to make my own decisions regarding my family's coverage.”

Private vs. public

he outsourcing of employer-provided insurance to what are known as “private exchanges” stands to radically transform the way health insurance is provided in the American workplace, experts say. They have been described as similar to a 401(k) plan, and they could someday become as common as the retirement program.

For employers and employees alike, health insurance problem forces tough decisions. But while they offer both employer and employee something desirable in the bargain, the private exchanges also shift responsibility and possibly additional cost to workers, some of whom may not be prepared to handle it all.

“This is part of a fast-evolving strategy in which employers transition from the “defined benefit” strategy they have employed for decades, in which the employer was responsible for providing for a set percentage of the coverage expense, to a “defined contribution” strategy, in which the employer provides a set-dollar amount, said David Bottoms, vice president of The Bottoms Group, an Atlanta employee benefits consulting firm.

“This closely mirrors the evolution in the retirement plan space from defined benefit plans — pensions — to defined contribution plans — 401(k)s,” he said.

The very idea makes some people nervous.

“You've got to do all the legwork,” said Steve Rossey, 42, of Moreland, Ga., who gets employer-provided coverage through his job working for a home restoration company. “I wouldn't be a big fan of it. The common employee doesn't know anything about picking the right insurance, and what they don't know can cost them thousands of dollars.”.......................................

30 posted on 11/03/2013 11:13:31 PM PST by Cincinatus' Wife
[ Post Reply | Private Reply | To 25 | View Replies]

To: Mygirlsmom
"...We knew that the members were abusing their benefits, but there was nothing we could do about it..."

Every week, our county agency would have a big Chiropractor's RV pull into the parking lot and therapeutic massage was given to county employees "free".

:-/

31 posted on 11/04/2013 1:11:27 AM PST by Does so (Soon, we'll be looking like Detroit.)
[ Post Reply | Private Reply | To 6 | View Replies]

To: who_would_fardels_bear

Aside from the fact that humans are not vehicles or other purchased items-

I live in the country and park my truck on the other side of my gate-vehicles are rarely stolen or vandalized here-it is remote and folks are armed. I choose to live in a remote place with few conveniences-people who choose to live in cities pay more because there are more people, more exposure and fewer deterrents to the theft and vandalism of vehicles.

It is entirely your choice whether to “rat out” your info, and that is how it should stay-some of us choose not to have our personal information, etc in the hands of any outsider, or out there in cyberspace to be misused or stolen.

The size and kind of monster risk pool that Obamacare insists on creating is unsustainable-even if people had to sign up and start paying at age 12, most would either pay a penalty and save their cash, or wait till they were in a near-fatal accident to sign up for just long enough to get fixed.

I like the old cafeteria plan insurance that Obamacare junkies hate-pick and pay for the coverage you want/need. When people pay for their own stuff, they are not as eager to run to the doctor and take five or six prescription meds every day for life-or to keep gobbling processed, chemically enhanced food and sitting around till they are fat and their knees-and a bunch of other stuff-needs replacing. The whole scam is going to operate in the red from the gitgo, and there will never be enough money to fund it-that is what government does.

If I were young and wanted to have another kid, or if I had some chronic condition that was not surgically correctible, then I would pay a higher premium, period. When it comes to paying for services relative to individual health-one size cannot fit all.


32 posted on 11/04/2013 8:18:35 AM PST by Texan5 ("You've got to saddle up your boys, you've got to draw a hard line"...)
[ Post Reply | Private Reply | To 22 | View Replies]

To: Does so

Now, that IS a perq-county employees here are lucky to get a working lunch paid for-there are only about 18,000 people in the whole county, and only one town with more than a few hundred people, so something like that would be noticed pretty fast...


33 posted on 11/04/2013 8:27:28 AM PST by Texan5 ("You've got to saddle up your boys, you've got to draw a hard line"...)
[ Post Reply | Private Reply | To 31 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson