Posted on 08/12/2009 8:04:33 AM PDT by johncocktoasten
What insurance company would be allowed to sell a Life Only Annuity and at the same time, run the HMO that the Annuitant depends on for life sustaining care? The answer is none. Because the insurable risk, the risk of outliving income, is borne by the insurance company. Insurers would be in the position of reducing the level of their own risk by reducing the level of care given to Annuitants thru their HMO. This doesn’t happen in the United States, except in the circumstance of Veterans. Veterans receive their Annuity/Pension from the government, and receive their medical care from the same entity throught the Veterans Administration.
The care given Veterans is abysmal by any objective measure. Care is rationed, Veterans wait in lines regularly, whether it be for surgery or for simple checkups. Is this intentional and directly correlated to the fact that Veterans are usually also Pensioners of the same entity? I doubt it. But we don’t need a definitive answer to the question to realize that a conflict of interest exists. The vested economic interest of the government and taxpayers is for the cost of both pensions and care to be lower, thus requiring less taxes to be collected to cover the expense.
Americans love their Veterans. We don’t think of them in terms of their relative costs, or the value received in return for the expense. They have made the sacrifice for us, and the majority of us love and respect them for that sacrifice. Their reward is a mere pittance of what they truly deserve. Unfortunately, the fallacy propogated by liberals, is that government, just like a person, can love and as a result, approach public policy questions from a perspective of empathy. No government can love or care, they can only make and enforce law and regulation.
Social Security’s insolvency has been a result of government taking on a conflict of interest, instead of establishing a mandate that is carried out thru the private sector and the states. Government has taken on the pension risk, and accepted pension premiums (taxes) in exchange. An insurance company writing an annuity contract would be required to place the “premiums” in a separate account, only deducting the Mortality and Risk Expense to fund its obligation. At the time of annuitization, the Annuitant would choose their payment options based upon the amount they had saved, and the lump sum would be turned over to the Insurer in exchange. The government instead, has commingled the premiums with its other funds and obligations. An insurance company doing the same thing would have its license revoked immediately and would be wound down.
At the same time they have accepted the pension risk, the Government has also taken responsibility for extending the lives of the elderly, thru curative and palliative health care funding (Medicare). We know what Medicare does and doesn’t cover thru parts A and B, but what we don’t know is how high life expectancies would be today if Medicare was a mandate executed by the private sector and states.
Medicare Part D has been an example that a government mandate, carried out thru the private sector competition can succeed. Seniors get the drugs they need, at a reasonable premium, and their premium dollar is competed for by numerous insurance providers, reducing costs and improving efficiency. As a result, more seniors get their drugs and to eat people food at the same time. In the long term, this will extend life expectancies.
Extension of life expectancy also creates an additional mandate upon the government for Social Security pension payments, contributing to its insolvency. But if Social Security were run as an actual insurance program, like Medicare Part D, expenses would be lowered, payments would be based on real actuarial tables, and competition would result in greater benefits to the pensioners. In addition, removing the government from administration of the Social Security program would be one step in taking away the conflict of interests that exists under the current proposals.
Much like car insurance, health insurance could be mandated with loosening of restrictions such as purchasing policies across state lines, and expansion of H.S.A.’s aiding younger insureds to utilize high deductible plans for more of their lifetimes. Much of the squawking about “pre-existing conditions” comes from people who chose not to carry health insurance and then got sick. If you were covered by group health insurance and had pre-existing conditions, as long as you remain covered under COBRA, or obtain other group coverage within 60 days, you cannot be denied payment for pre-existing conditions. Imagine the person who has a car accident while uninsured, and calls GEICO right after the accident to get coverage retroactive to prior to the accident. Wouldn’t happen. You must own the insurance in advance, that is why it is called insurance.
If every individual in this country owned medical insurance, thus ensuring 95%-97% of billed medical services were paid, do you think costs would necessarily drop? Of course they would. If medical costs fell, and insurance companies made big profits writing health insurance, do you think more of them would do it? Of course they would. Do you think in the name of big profits, insurance companies would offer better features to lure more customers from the competition? Of course they would. If the hospitals and drug companies made better profits because more customers paid their bills, do you think they would invest more money into improving services to draw more customers and become more profitable? Of course they would. If there was a competitor in the marketplace who could lose $200 billion dollars a year and offer benefits they could never dream of offering profitable, do you think they would leave the business? Of course they would. If that one competitor was the only place left to get medical coverage, do you think everyone would end up with coverage there? Of course they would. If that competitor was the same place responsible for paying you your pension until death, and their pension plan was already insolvent, do you think the temptation would exist to deny you care so you were less of a liability? Of course it would.
A very interesting question at the beginning, but you ruin it at the end.
A free country does not require its citizens to buy insurance for anything.
The analogy to car insurance isn’t valid. It’s required IF I CHOOSE TO HAVE A CAR. If I don’t want to pay the insurance cost, I can walk or get a bicycle.
There are huge systemic problems with our medical system. The problem is that nobody wants to bother fixing them and wants to come up to solutions that keep those problems in place and place the burden on the taxpayer.
Politicians need to grow some guts and start to SOLVE those underlying problems. Then if (and it’s a BIG IF) there are still issues that might necessitate requiring insurance, we can DISCUSS it then.
In the meantime, a real plan for REAL reform should look something like this: (hat tip to Karl Denninger for some of the pricing ideas)
1) Tort reform — Malpractice insurance is choking doctors and bringing prices up across the board for everyone. This must be done in a way that still allows a truly wronged party to be compensated for negligence, but keep frivolous lawsuits to a minimum. I personally favor a ‘loser pays’ rule, but I’d be open to other ideas as well.
2) Uniform Pricing — Prices for medical procedures should be the same across the board for EVERYONE regardless of who is insuring them. Currently, Medicare and Medicaid haggle their prices down so low that doctors and hospitals make up for the loss by increasing prices for others. In other words, the days of additional subsidies for Medicare and Medicaid coming from bilking private insurers and individuals would be over and we would be forced to deal with the true cost of these programs and reform them from there.
3) Stop Price Obfuscation — Prices for health procedures must be published and known before hand by the patient. (Of course, this doesn’t apply for emergency visits) If they’re going to charge us $50 for an asprin, we should know about it before we go into the hospital. They shouldn’t be able to just bill us whatever they want after the fact. This includes eliminating billing for things that are caused by hospital negligence.
4) Stop The State Line Games — Laws prohibiting plans from crossing state lines should be abolished. Insurance should be available to anyone who wants to sign up and should not be tied to any employer. The asshat Republicans seem to think it’s a good idea to tax people to change the employer behavior. I do NOT agree that we should increase taxes on health plans. Merely make them available to consumers who want them and leave everyone else who likes what they have now alone.
5) Reform Medicare — We should offer private doctors the ability to write off the cost of doctor visits for Medicare/Medicaid on their taxes instead of taking direct payment. Doing this, combined with the above pricing reform, would encourage more doctors to take medicare and drastically decrease payouts from the government for that care.
6) Make True Health INSURANCE available — We should all have access to private plans that are for catastrophic coverage only. Currently, our health ‘insurance’ is more about paying in advance for care than insuring anything. What most of us fear is getting ourselves in an accident or diagnosed with cancer and not having insurance to cover it. We should be able to have that coverage. Since it’s not covering prescription drugs or regular doctor visits, it should be a lot cheaper. (Think how much your car insurance would be if you expected them to pay for tires and oil changes for an idea of how much costs would come down for this.)
7) Cover People With Pre-Existing Conditions — People with pre-existing conditions who want insurance plans aren’t looking for insurance. They’re basically looking for someone to pay for their medical costs. We should be honest about that when discussing it. As a compassionate people, Americans do not wish to leave people out in the cold or bankrupt because of such a problem, nor it it acceptable to say “HA! You should have had catestrophic!!” This can be addressed in a number of ways, but one possible way is that it can be required by law that insurance companies admit anyone, regardless of pre-existing conditions, to their national insurance plans. If this were done in combination with offering the insurance companies a tax break on every pre-existing patient they covered, we could probably get this done with a minimal cost increase, if any at all, for other policy holders. So, in a round-about sort of way the government is ‘paying for it’, but not by seizing money and doling it out as they see fit.
8) Secure The Borders — We’ve got to secure the borders. The elephant in the room is that half of Mexico is coming over the border to use our emergency rooms for free clinic care. We’ve GOT to stop this. Let’s get the security in place at the border to at least stop more people from burdening our system. Do that and enforce existing laws against aliens and employers hiring them and presto changeo, no more problem. And YES, it IS that easy.
Sure. 0bama kills off all the old folks, so they can't collect.
By the way, in response to the obvious question “Why would anyone buy the catastrophic plan when they’ll get full insurance later by the pre-existing condition fix?”, they would be responsible for emergency room visits. The government should also give a tax break to people who do cover themselves with catastrophic coverage. NOT a penalty for those who don’t. A reward for those who do.
These are the kinds of reforms that happen in a FREE country. I sometimes wonder if there are any people left who truly believe in such a thing.
I agree with many of your points. In many states, drivers are required to get insurance, or show proof of self insurance. Unless you are going to allow hospitals to deny life saving care without proof of payment, you must require insurance or proof of self insurance.
Otherwise, hospitals will remain in the exact circumstance they are today, illegals and other idiots treating and ER like its a minute clinic, and never paying their bills.
You’re going to deny life-saving care if they can’t produce that proof? I don’t think that’ll fly either.
A lot of people misunderstand the way emergency rooms work now. Either that or they’re intentionally being obtuse and/or want a stealth way to cover illegal aliens.
What happens now is that if you go in there and don’t have insurance, they treat you and give you a bill. When you get the bill, if you can’t pay it, they work out a payment plan with you. I think that’s a fine system and I’ve used it myself.
The rub with the emergency room visits is the people who can’t produce identification or give a fake SS number. Karl Denninger actually came up with a fantastic way around this: the government pays the bill for those cases to the hospital and takes responsibility for collecting it from the deadbeat. This places the burden of the illegal alien where it belongs, on the government whose job it is to secure the borders. It hits them where it hurts, too: in the pocket book. Yes, in the end, it’s our money, but using its thugs to collect money is one of the only things the government is actually adept at.
BTW...you’re right about auto insurance being required, but a citizen doesn’t HAVE to have a car. There are alternatives, no matter how inconvenient they may be. However, with health care, everyone needs it sometime. That’s why the comparison doesn’t work. There’s no way for someone who wants to be free of the regulation to avoid it. And being able to prove that they have $10k in a bank account doesn’t count either, because the credit situation they can work out with the hospital at the current time doesn’t require that. A federal requirement to carry health insurance is tyranny, plain and simple.
“It hits them where it hurts, too: in the pocket book. Yes, in the end, it’s our money, but using its thugs to collect money is one of the only things the government is actually adept at.”
How are you going to collect money from someone you can’t find? And if you can find them, why are they still here?
Maybe you won’t get that exact bill paid, but you can make damn sure that the government that is bleeding money because of the problem will be a LOT more likely to make sure there are less deadbeats entering the country.
Cases should be investigated like any other theft. Criminals don’t leave their id at the scene of the crime either, yet we manage to track them down somehow.
“The money goes into and comes out of the General Treasury account, just the way FDR wanted it to be.”
Precisely. The government refuses to function under the same conditions they impose on private sector insurers. This is why they could never be trusted to run a “public option” for health insurance. Social Security should be made to establish separate accounts and deduct appropriate M&E expenses to fund benefits.
“Cases should be investigated like any other theft. Criminals don’t leave their id at the scene of the crime either, yet we manage to track them down somehow.”
Default on a credit contract is not considered a crime. It is a tort resolved in civil courts.
That’s a debt between two private entities. When the government picks up the tab, that changes. Tax evasion, for instance, is a crime. You’d be dealing with the IRS here collecting this in a similar manner.
When they find the person, they can work out a payment plan if the person isn’t able to pay the bill. If applicable, they can garnish wages or hold tax refunds. They’d likely never throw anyone in jail for this, but the threat of it would certainly make people either pay or get their butts back to their own country and not come back.
This could actually work. All of these things could. That we’ve heard nobody in a position of power mention such things really does show us that nobody, in either political party, is interested in actually solving this problem.
Think what happens with student loans and if you don’t pay, the government takes over and starts collecting.
Social Security started out by paying paying recipients more than it was taking in. I don't think it ever caught up with it's spending. David Stockman was drunk when he said "None of us really understands what's going on with all these numbers" is one of the most honest answers ever given on the situation.
Auto insurance is required, but a host of people drive with out it...that is why we have un insured motorist payments on our insurance policies...
True, but the point is that there is a perfectly legal remedy for people who don’t wish to take on the mandated burden of auto insurance. There can be no such remedy for health insurance mandates.
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