Thursday, June 18, 2009

Not so fast on health care reform

This is an article by syndicated columnists Dick Morris and Eileen McGann.

To quote the esteemed Rev. Jeremiah Wright, the chickens that were hatched in the stimulus package are coming home to roost in the health care proposal. The budget deficit that Obama racked up paying for the massive federal spending passed in January is now having a real economic and political impact, which is forcing the president and his congressional allies into hard choices as they face his health care legislation.

Of course, the prudent thing to do is postpone health care changes until the economy generates some revenues and trims the deficit. But he's got to strike while his congressional majority is hot. So he is forcing his administration and his party to choose among unpalatable choices to finance his program.

First of all, the very fact of a focus on health care reform inevitably stirs discussion of the deficit. Americans are allergic to deficit spending and worry the more the deficit grows. As interest rates rise and the government finds it more difficult to borrow enough to cover Obama's massive spending, the economy is likely to show the negative effects.

It is a matter of a few months, certainly no more, before voters start to realize that it is the deficit, not the pre-existing conditions Obama inherited, that is prolonging the recession. Already the jump in mortgage rates has slowed home refinancing, which was the only aspect of the Obama economic program that was working well.

But the foreign and domestic focus on the deficit has a harsher political impact: It forces the Democrats to come up with money to fund health care reform.

In other words, it makes them raise taxes. The Democratic Party is good at fooling itself that tax increases don't matter and are politically palatable, but they do and they are not.

The massive spending health care will require goes beyond the capacity for the rich alone to pay the bill, no matter how confiscatory Obama chooses to become. Only broader taxes will do the job. Obama faces two practical choices: a value added tax or taxing health insurance benefits.

The political harm either way will be enormous. Not only will Obama be breaking his pledge not to tax the middle class, but he will be doing so in a particularly pernicious way.

If Obama opts for the value added tax (VAT), Democrats will hope to cloak the increase in the price of the product. They reason that the consumer won't know how much the tax is since it will be added on throughout the sale and resale of the product, rather than at the cash register at the end as the sales tax is.

Obama's only good option is not to move so quickly on health care reform to give himself some wiggle room.

But, as the song says, "We're knee deep in the big muddy, but the damn fool says to push on!"

John F. Pack
CA Insurance License 0D98889
949-400-4729 (cell)

Tuesday, June 16, 2009

A Broker's Ideas on Healthcare

I have been a health insurance broker in the state of California for the past five years and have experienced the good, the bad and the ugly regarding our healthcare system. As with many reform efforts, many times the powers that be cannot see the forest for the trees. It is my humble opinion that the healthcare system in this country can be fixed in a more simplistic fashion than implementing more spending and debt at a time when fiscal responsibility needs to be the order of the day.

I am not in favor of a government controlled healthcare system or increased governmental intervention in our lives. There is no question that our current healthcare system needs a major overhaul, but the $64K question is “how do we accomplish this.”

My own opinion of a workable healthcare system would include the following:

• Government funded and operated clinics geared to lower income individuals that focus on basic and preventive services.
• Government subsidies for those with declinable pre-existing conditions who would purchase a select pool of private health plans that are guaranteed issue.
• Federally legislated plans instead of state legislated. Full portability of coverage amongst states.
• Universal underwriting standards. There is far too much inconsistency in medical underwriting by insurance companies.
• Universal disclosure legislation which would eliminate certain insurance companies from misleading consumers and force the insurers to eliminate many of the asterisks in plan disclosures.
• Continuation of tax benefits for businesses that offer group health plans.

In short, I do not feel that this administration should be allowed to force a plan upon the American public that will not be financially feasible. It appears to me that many are more concerned with fulfilling a campaign promise than debating one of the most important issues of our lifetime. Only through debate and sharing of ideas and philosophies can a workable healthcare plan be achieved in these times of economic chaos.

John F. Pack
CA Insurance License 0D98889
949-400-4729 (cell)

Obama Plan Government Run Health

The Orange County Register
June 16, 2009 - 12:00AM
Here is a sampling of online reaction to the president's speech on health care to the American Medical Association on Monday:

Michael D. Tanner at In his speech, President Barack Obama repeatedly denied that he supports “socialized medicine” or “government-run” health care.

But what is important is not the terminology, but under the proposal supported by the president, government would control more and more of our health care decisions. Government would compel Americans to purchase health insurance, controlling its content, how much we pay, and the relationships among insurers, doctors, and patients. Government bureaucrats would determine whether Americans receive certain medical services.

There may be no better salesman than Barack Obama, but his product is deeply flawed. The so-called “Public Option,” or government-run plan, that Obama supports would slowly but inexorably lead to the destruction of the private insurance market and the imposition of a government-controlled single-payer system.

But the problems with Obamacare go well beyond the Public Option, which the AMA opposes. The mandates on businesses and individuals, taxpayer subsidies, insurance regulation, and government interference in private medical decisions pose serious threats to American businesses, taxpayers, and most importantly patients. That's bad medicine, no matter what you call it.

From Jim Geraghty at National Review Online: President Obama told the American Medical Association that he's “not advocating caps on malpractice awards, which I believe can be unfair to people who've been wrongfully harmed” but that he wants “a range of ideas.”

He's open to a range of ideas, as long as they do not impede the revenue streams of his political allies, like the trial lawyers.

From the Foundry blog at President Barack Obama, [Monday]: “What are not legitimate concerns are those being put forward claiming a public option is somehow a Trojan horse for a single-payer system. … So, when you hear the naysayers claim that I'm trying to bring about government-run health care, know this – they are not telling the truth.”

Now [here is a transcript of a video montage of] then-candidate Barack Obama, UC Berkeley professor Jacob Hacker and Rep. Jan Schakowsky. D-Ill., talking about the virtues of the pubic plan:

Obama explicitly said [in 2003]: “I happen to be a proponent of a single-payer, universal health care plan.”

Hacker explicitly said [in July 2008]: “Someone once said to me this is a Trojan horse for single-payer, and I said, well, it's not a Trojan horse, right? It's just right there.”

Schakowsky explicitly said [in April 2009]: “And next to me was a guy from the insurance company who argued against the public health insurance option, saying it wouldn't let private insurance compete … that a public option will put the private insurance industry out of business and lead to single payer. My single-payer friends, he was right. The man was right.”

From Tevi Troy at National Review Online: Doctors won't like a “public plan,” because they, too, often lose money on current “public plan” patients – those in Medicare. A broad-range public plan for nonretirees over time will shrink the number of Americans in private coverage because some employers will stop offering plans, and more and more individuals will migrate towards the government plan. This is why not only doctors, but also some key Blue Dog Democrats, are opposed to the government plan.

Obama's Reality Challenged Plan

Steve Chapman Chicago Tribune Columnist
June 16, 2009 - 12:00AM

It's been 15 years since President Bill Clinton's health care reform plan went down to defeat, and the problems it was supposed to fix have only gotten worse. Costs have soared, the number of uninsured has risen, and public dissatisfaction has mounted.

But now, at last, we are all ready to do what must be done. As President Barack Obama puts it, “I really think that the stars may be aligned here.”

Don't bet on it. The Clinton plan lost partly because Americans were not willing to accept that you can't have it all. From everything that has occurred since then, it's apparent they are still unwilling.

The Obama administration understands this crucial point, which is why it has undertaken to assure us that everything we like about the current health insurance system will stay the same, while everything we don't like will be replaced. And, we are led to believe, it won't cost you and me anything.

Estimates of the cost of Obama care start at $1.2 trillion over a decade.

There are only three ways to pay for this expansion of health insurance coverage: increased taxes, reduced benefits or shiny gold ingots falling out of the sky. Voters emphatically prefer the latter option, so that is the one most likely to be embraced by Congress and the administration.

A recent Kaiser Family Foundation/Harvard School of Public Health poll found that 49 percent of Americans aren't willing to pay more in insurance premiums or taxes.

Even among the uninsured, the enthusiasm for insurance is muted. When another Kaiser poll asked uninsured adults how much they would be willing to pay to get coverage, only 64 percent would fork out $100 a month, and just 29 percent would pay $200. Given that most are not poor, why is it so important to provide the uninsured with something they don't value highly?

One way to bring down the cost of health insurance is to limit access to certain doctors, treatments, and medicines. But the Kaiser/Harvard poll found most people are averse not only to paying more but also to anything that would “involve government limiting or dictating their choices.”

Most people have forgotten that in the 1980s, the private sector devised an ingenious way to reduce medical outlays.

Known as managed care, it put modest restrictions on the freedom of patients to get care from specialists, limited hospital stays and gave doctors incentives to choose less-costly therapies. It was a perfect remedy, except for one thing: Patients and doctors hated it. Why? Because it kept them from behaving as though cost is no object.

So managed care is history. But the dilemmas it addressed are not.

One of these days, we'll have to address them, but not now.

The administration would rather pretend we can get generous government-sponsored coverage for everyone without higher taxes, higher insurance premiums or rationing of health care.

In short, it refuses to treat us like grownups. I wonder why.

High Cost of Obamacare

High cost of Obamacare
Robert J. Samuelson Newsweek And Washington Post Columnist
June 16, 2009 - 12:00AM

WASHINGTON It's hard to know whether President Obama's health care “reform” is naive, hypocritical or simply dishonest. Probably all three. The president keeps saying it's imperative to control runaway health spending. He's right. The trouble is that what's being promoted as health care “reform” almost certainly won't suppress spending and, quite probably, will do the opposite.

A new report from Obama's own Council of Economic Advisers shows why controlling health costs is so important. Since 1975, annual health spending per person, adjusted for inflation, has grown 2.1 percentage points faster than overall economic growth per person. Should this trend continue, the CEA projects that:

Health spending, which was 5 percent of the economy (gross domestic product, GDP) in 1960 and is reckoned at almost 18 percent today, would grow to 34 percent of GDP by 2040 – a third of the economy.

Medicare and Medicaid, the government insurance programs for the elderly and poor, would increase from 6 percent of GDP now to 15 percent in 2040 – roughly equal to three-quarters of present federal spending.

Employer-paid insurance premiums for family coverage, which grew 85 percent in inflation-adjusted terms from 1996 to $11,941 in 2006, would increase to $25,200 by 2025 and $45,000 in 2040 (all figures in “constant 2008 dollars”). The huge costs would force employers to reduce take-home pay.

The message in these dismal figures is that uncontrolled health spending is almost single-handedly determining national priorities. It's reducing discretionary income, raising taxes, widening budget deficits and squeezing other government programs. The Obama administration's response is to talk endlessly about restraining health spending – “bending the curve'' is the buzz – as if talk would suffice. The president summoned the heads of major health care trade groups representing doctors, hospitals, drug companies and medical device firms to the White House. All pledged to bend the curve. This is mostly public relations. Does anyone believe that the American Medical Association can control the nation's 800,000 doctors or that the American Hospital Association can command the 5,700 hospitals?

The central cause of runaway health spending is clear. Hospitals and doctors are paid mostly on a fee-for-service basis and reimbursed by insurance, either private or governmental. The open-ended payment system encourages doctors and hospitals to provide more services – and patients to expect them. It also favors new medical technologies, which are made profitable by heavy use. Unfortunately, what pleases providers and patients individually hurts the nation.

That's the crux of the health care dilemma, and Obama hasn't confronted it. His emphasis on controlling costs is cosmetic. The main aim of health care “reform” now being fashioned in Congress is to provide insurance to most of the 46 million uncovered Americans. This is popular and seems the moral thing to do. But the extra coverage might actually worsen the spending problem.

What's needed is a fundamental remaking of the health care sector – a sweeping “restructuring”– that would overhaul fee-for-service payment and reduce the fragmentation of care.

It's easier to pretend to be curbing health spending while expanding coverage and spending. Presidents have done that for decades, and it's why most health industries see “reform” as a good deal.

Obama Blares Health Care Siren

From an Orange County Register Editorial by Star Parker dated 6/15/2009

Obama blares health care siren
The Orange County Register
June 15, 2009 - 12:00AM
President Obama wants health care reform this year.

He said at a town hall meeting the other day that he won't tolerate “endless delay” and that we probably won't reform health care if we don't do it this year.

Now why is that Mr. President? Will Congress be on vacation for the remaining three years of your term?

Consider that it's not unusual to take a full session of Congress – two years – to pass legislation a fraction of the size and consequence of health care reform. Yet our president is demanding that a bill to overhaul a $2.5 trillion sector of our economy – one sixth of it – be considered and passed in a few short weeks.

It ought to be clear that this is not about taking an honest and sincere look at how to make this a better country and how to do a better job at delivering health care to Americans. It's impossible to look at something this massive and deal with it in such a short time frame.

This is about raw politics. When Mr. Obama says that if we don't get “it” done this year we probably won't get “it” done, he doesn't mean reforming health care. He means reforming it the way he and Ted Kennedy want to do it: government-run, nanny state health care.

To pull it off, they have to move fast.

First, the White House knows that Mr. Obama's honeymoon won't last forever. While his personal approval ratings remain high at 60 percent, his disapproval rating now at 33 percent is almost twice where is stood last February. And, in latest Gallup polling, the majority now disapprove of how Obama is handling government spending. So the White House wants action now on health care while their man is still popular.

Second, the White House knows that next year is an election year. It will be far more difficult to get senators and congressmen to play ball.

Third, they know that the big reason that Hillary Care failed in 1993 was that the American people were given an opportunity to look at it and consider it. They don't want to make the same mistake of giving voters a chance to actually understand what is about to happen to them.

They know that the more Americans have an opportunity to take a look at the bureaucrat run, nanny state health care freight train, the more likely they will jump off the track.

Breathlessness is a great political technique. Telling voters that the world will end if we don't get X passed now.

This is how the $800 billion dollar “stimulus” bill got passed earlier this year. We were flashed images of the Great Depression of the 1930s and told our only hope is the stimulus bill.

Now, three months later, it's clear that our current economy bears no resemblance to the 1930s, that signs of recovery are emerging, and thus far only 6 percent of the $800 billion “stimulus” pot of political lard has been spent.

The trillions in new debt have been piled up at such a dizzying pace in the last few months Americans are numb. The federal government take from our economy has jumped from one fifth of it to one fourth.

Now, Mr. Obama and his Democratic colleagues want to layer on a new government health care plan to “compete” with private plans. “Compete” means raising taxes a few trillion dollars to provide subsidized insurance, and in some cases, free insurance, through a government plan in which all Americans will eventually wind up. And putting federal bureaucrats in charge of approving what health care procedures we are permitted.

The health care nanny state freight train is moving. Will we wake up before it's too late?

John F. Pack
CA Insurance License 0D98889
949-400-4729 (cell)