Tag Archives: Medical Insurance

If government can’t fix health care, then who can?

Story from the New York Post. (H/T Right Klik via Neil Simpson)

Excerpt:

The state is trying to shut down a New York City doctor’s ambitious plan to treat uninsured patients for around $1,000 a year.

Dr. John Muney offers his patients everything from mammograms to mole removal at his AMG Medical Group clinics, which operate in all five boroughs.

“I’m trying to help uninsured people here,” he said.

His patients agree to pay $79 a month for a year in return for unlimited office visits with a $10 co-pay.

[His] plan landed him in the crosshairs of the state Insurance Department, which ordered him to drop his fixed-rate plan – which it claims is equivalent to an insurance policy.

He says he can afford to charge such a small amount because he doesn’t have to process mountains of paperwork and spend hours on billing.

“If they leave me alone, I can serve thousands of patients,” he said.

Government doesn’t like it when private businesses solve problems. Government only wants solutions they can control and regulate. After all, if there is no (government-caused) health care crisis, then these commies would be out of a job. They have to cause the crisis and then market themselves as the only solution.

Right Klik also has a handy list of the problems caused by government.

* “Community Rating” laws, which limit insurers’ ability to charge different prices to different customers, raise prices by 20.3% for individual policies and 27.3% for family policies

* Mandated benefits raise the expected price of an individual policy by approximately 0.4% per mandate. For family policies the increase is approximately 0.5% per mandate. The typical state has about 20 mandates (with a range from 6 to 48) so a reduction from 20 to 10 mandates would imply a 4% decrease in price for individual policies, and a 5% decrease for family policies.

* “Any-Willing-Provider” laws, which limit insurers’ ability to exclude hospitals and doctors from their networks, raise prices by 1.5% for individual policies and 5.3% for family policies.

* Federal law places limits on the discounts employers and insurance companies can provide for healthy, cost-saving behaviors.

* Twelve million Americans go without health insurance because the Federal Government does not allow people to purchase insurance across state lines.

The way insurance works is that people need to pay premiums that take into account the likelihood that they will make claims. The people who make a lot of claims need to pay more. This is what encourages people to take fewer risks and keep costs down. When government gets involved to equalize outcomes regardless of risks, then there is no incentive to live responsibly. The result is a shortage caused by high demand for medical care, and low supply.

How about we just let the free market work instead?

Millions Will Lose Health Care from their Employer Under the Democrats’ Plan

House Republican Leader John Boehner
House Republican Leader John Boehner

I spotted this scary post over at John Boehner’s blog. The post, written by Kevin Lewis, links to this AP article that highlights a new study from the Lewin Group. I blogged before about the Democrats’ plan to equalize life outcomes and redistribute wealth by nationalizing health care. Now we get more details of how they’ll do it.

Here is a summary of the Democrats’ plan:

President Barack Obama and many Democrats want to create a government insurance plan to compete with private plans that now cover about 170 million Americans. The issue is major sticking point for Republicans and the insurance industry.

And the predicted results of that plan:

The Lewin study found that if such a plan were open to all employers and individuals, and if it paid doctors and hospitals the same as Medicare, the government plan would quickly grow to 131 million members, while enrollment in private insurance plans would plummet.

“The private insurance industry might just fizzle out altogether,” said John Sheils, a Lewin vice president and leading author of the study.

By paying Medicare rates the government plan would be able to set premiums well below what private plans charge. Monthly premiums for family coverage would be $761 in the government plan, compared with an average of $970 in private plans, the study estimated. Employers and individuals would flock to the public plan to cut costs.

Lewis cites two of the study‘s key findings:

“If as the President proposed, eligibility is limited to only small employers, individuals and the self-employed … The number of people with private coverage would fall by 32.0 million people.”

“If the public plan is opened to all employers as proposed by former Senators Clinton and Edwards, at Medicare payment levels … The number of people with private health insurance would decline by 119.1 million people. This would be a two-thirds reduction in the number of people with private coverage (currently 170 million people).”

More here at the Heritage Foundation.

Further study

Here are some previous links that are relevant:

An analysis of the Democrats socialist health care policies

I would summarize the ideals of Democrats (socialists) as follows:

  1. There are unequal life outcomes in society
  2. Those who have little wealth are the victims of those who produce wealth
  3. We (democrats) must transfer wealth until everyone’s life outcomes are equal, regardless of their life choices
  4. We (democrats) must use government coercion to achieve this equality
  5. Since we (democrats) are so morally superior, we are not obligated to transfer our own wealth to anyone

Consider health care. Some risky lifestyle choices are more likely to require more health care services. The socialist’s goal is to make sure that no one is deterred from making these risky choices. Those who do not engage in these risks must be forced to pay for the health care of those who do choose to take on these risks. That way, everyone is equal in the end.

The way this is done is to make sure that people who don’t engage in risky behaviors cannot pay less for their health care than those who do engage in risky behaviors. Let me explain.

Suppose a safe person S knows that he only needs coverage for catastrophic care, since his lifestyle choices eliminate the need for elective treatments like abortions, birth control, STD medications, sex changes and drug addiction treatments. He can be covered for a very low premium.

Consider another irresponsible, risky person R who is engaged in all kinds of risky behavior. He can be covered for all of the medical services for a very high premium. His own choices expose him to risks that will require more medical services.

Democrats (socialists), solve this problem by forcing S to pay for mandatory health care with a very high premium that covers services he will never use. That way, he is really paying for his own health care, and R’s health care, too.

Take a look at this article I found on Health Care BS. In the article, they cite Michael Tanner of the Cato Institute, who analyzes the health care policies that may be included in the Democrats’ health care reform bill.

This is the one I want to draw your attention to, because this is what single-payer countries like Canada have that causes them so many problems:

An Individual Mandate. Every American will be required to buy an insurance policy that meets certain government requirements.  Even individuals who are currently insured — and happy with their insurance — will have to switch to insurance that meets the government’s definition of acceptable insurance, even if that insurance is more expensive or contains benefits that they do not want or need.

And here is another one that will force employers to lay off American workers because employers have to pay more for the same productivity.

An Employer Mandate. At a time of rising unemployment, the government will raise the cost of hiring workers by requiring all employers to provide health insurance to their workers or pay a fee (tax) to subsidize government coverage.

Yes, that’s right. Socialism attacks businesses. Attacking businesses causes unemployment.

And there’s more:

A Government-Run Plan, competing with private insurance.  Because such a plan is subsidized by taxpayers, it will have an unfair advantage, allowing it to squeeze out private insurance.  In addition, because government insurance plans traditionally under-reimburse providers, such costs are shifted to private insurance plans, driving up their premiums and making them even less competitive. The actuarial firm Lewin Associates estimates that, depending on how premiums, benefits, reimbursement rates, and subsidies were structured, as many as 118.5 million would shift from private to public coverage.   That would mean a nearly 60 percent reduction in the number of Americans with private insurance.  It is unlikely that any significant private insurance market could continue to exist under such circumstances, putting us on the road to a single-payer system.

When government controls your health care, you pay them at gunpoint and when you want care you get in line behind people who paid nothing into the system. That is socialized medicine, the dream of all Democratic socialists.

And there’s also redistribution of wealth:

Massive New Subsidies. This includes not just subsidies to help low-income people buy insurance, but expansions of government programs such as Medicaid and Medicare.

And remember what I said about the government needing to reducing costs when demand skyrockets for “free” care?

Government Playing Doctor.   Democrats agree that one goal of their reform plan is to push for “less use of aggressive treatments that raise costs but do not result in better outcomes.”  While no mechanism has yet been spelled out, it seems likely that the plan will use government-sponsored comparative effectiveness research to impose cost-effectiveness guidelines on medical care, initially in government programs, but eventually extending such restrictions to private insurance.

This is all caused by the good intentions of people who have no knowledge of economics, whatsoever. And it is important to note that it is this kind of naive, incompetent meddling in the free-market that leads to poverty and the loss of all of our liberties.

Further study

Here are some previous links that are relevant: