Observations on Health Care

In a previous column (The Failure of Soviet-Style Healthcare), I stated that, “Obamacare, arguably the worst piece of Soviet-style top-down legislation ever authored by a single political party, is in its death spiral.” Since then, Obamacare’s death spiral has increased dramatically.

The Cruz Provision

Because of the illegal, congressionally unauthorized payments to health plans to offset losses built into Obamacare benefit designs, health insurance carriers became greedy. Health insurance associations like Blue Cross and Blue Shield and America’s Health Insurance Plans (both lobbying groups) are adamantly against the Ted Cruz provision.

The Ted Cruz provision allows providers to offer health benefit designs that are less comprehensive and cheaper than Obamacare plans as long as the providers also offer at least one Obamacare plan. This seems to be a fair compromise.

But that means health plan providers might earn less revenue due to cheaper plans. The Blue Cross Blue Shield Associations and America’s Health Plans argue that the Cruz provision “ . . . is simply unworkable in any form and would undermine protections for those with pre-existing medical conditions, increase premiums and lead to widespread terminations of coverage for people currently enrolled in the individual market.”

Questions: with pre-existing condition protections built into the legislation, how would the Cruz provision undermine those protections? High-risk pools have addressed the scare mongering about increased premiums for people with pre-existing conditions, so why would health insurers raise premiums? Greed. They have been at the government trough far too long.

Political Horse-Trading

Remember that only Democrats created Obamacare in secret. Republicans were not involved. Now the Republicans in the Senate have created their own health care bill, in secret, to repeal Obamacare and put a better plan in place. Remember the crooked Democrat deals like the Nebraska corn-husker kickback, the Louisiana purchase, and gator aid?

Well, the Republicans are engaging in the same corrupt system. The Republican legislation has two provisions to encourage Lisa Murkowski (R-AK) to vote favorably. The Better Care Reconciliation Act (BCRA) retains two Obamacare taxes (net investment tax and Medicare “high income” tax), meaning Republicans have bought into a higher tax, big government, socialist health care plans. Billions of dollars are being thrown at Medicaid and Opioid use in specific states. Republicans are no better than the crooked Democrats.

Individual Market

For those of you unfamiliar with the health care market, let me briefly outline the market. There are four sectors: individual, small group, large group and major/jumbo accounts. In health insurance, risk is spread over the numbers insured. Premiums decrease as the number of insured increase.

The best premiums (assuming equivalent benefit designs) go to major or jumbo accounts, which have the smallest profit margin as a percent but the largest profit margin in dollars.  Large group has the next best premium, followed by small group. Individual, because the risk is spread only against the individual, has the highest premium and the highest dollar profit margin.

So the question is how does one reduce premiums for individuals, as the Cruz provision provides through less comprehensive benefit designs? One idea is to make the individual market a “virtual group,” or more precisely, three groups. The model already exist in the form of TriCare, the Defense Department’s health plan for military dependents.

TriCare divides the United States into three sections. Health plans bid on the three sections but only one health plan per section is awarded the contract. Competition helps control pricing. The individual market could imitate the TriCare model, creating three “Virtual Individual Groups,” which health plans could bid for the business.

By creating “Virtual Individual Groups,” health plans would evaluate and bid on the individual market as a major or jumbo account. The up side is lower premiums for individuals, creating more affordable plans. The downside is health plans lose revenue because the individual market produces high profits. Some health plans may have to adapt their business models to a new reality but that is a small price compared to improved health care access and quality.

In the end, Americans want affordable, comprehensive healthcare. Republicans allege they want patient-centered, market driven health care. Democrats want big government, totalitarian, single payer health plans with the government as a middle-man between patient and doctor (I know doctors who left medicine due to Obamacare’s onerous regulations).

And health insurers don’t give a damn about health care as long as they get their profits. How do I know? Health plans are fleeing Obamacare exchanges because the government is no longer illegally making up for health plan losses.

Food for thought: The government entered the student loan program and tuition increased dramatically across the country.  The government entered health care, and premiums increased dramatically across the country.  Draw your own conclusion.

5 Comments on "Observations on Health Care"

  1. We only have one party in DC, the me party. What’s in it for me and how can I get rich? I think that it is really too late for us to recover from the 20 trillion dollar debt and all the damage that our elected liars have done to this country. Tax, tax, tax, tax is the name of the game. The idiots in DC can’t even multi task. They have been bickering over healthcare for 6 months and still don’t have a clue. SSDD in the swamp and the stupid voters are willing to pay the price. How utterly sad. Stupid legislators and ignorant voters are going to be the death of this country in the near future.

  2. As I have stated before this has never been about health care. It is and has been about the transfer of money, from our pockets to someone else, be it Insurance Companies, or members of Congress. Let Obamacare die on the vine. Get government out of the way.

  3. when the ’employer’ became the providers of healthcare, the spiral started. Health care was then no longer a benefit, it became a right and law – offer it to one, offer it to them all or else. This everyone was the end. Make it private, have a catastrophic plan for those unable. Those that can will, those that don’t care won’t, those that have will. The ones in the middle – offer them a check. Cause your illness, pay for your disease ? Responsible life choice assistance? That gets tough. Fact is the hospitals are there to mine you for your federal dollars, when they run out, ‘you are cured’ get out “NOW” – they don’t care how, just get out. Happens everyday right here and now… will happen to many today. That’s what medicine is right now. BTW Obamacare so changed Medicare as to make it a joke; and they changed the rules with “LAWS” which means you need to repeal it to change a bad, rule/LAW. For that reason the Obamacare system needs repeal, its simply a rationing system, don’t need death panels when you have death rule/laws. Example; get a pneumonia – no oxygen paid because you are not in a chronic stable state… even if your levels we very low. Look for yourself. Nothing short of criminal in my opinion,

  4. Regarding our current congress and the executives of all health insurance companies as well as their stockholders: Their throat is an open sepulcher; with their tongues they have used deceit; the poison of asps is under their lips: Whose mouth is full of cursing and bitterness: Their fee are swift to shed blood; There is no fear of God before their eyes. Neither Congress nor health insurance companies and their stockholders care if we live or die, just so they get their billions in profits or special interests pay offs. The longer they stall, the more of us die and they don’t care a wit because it’s all about them getting their money.

  5. Allen Pratt | July 18, 2017 at 9:56 am |

    Replace Congress, again. We need the government out of our personal health. They have broken so many other things. And now they have broken this.

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