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TXduckdog
10-09-2009, 11:24 AM
http://online.wsj.com/article/SB10001424052748703746604574461121881407350.html?m od=djemEditorialPage

A few samples:

The irony is that the CBO's guesstimate exposes the fraudulence and fiscal sleight-of-hand underlying this whole exercise. Anyone who reads beyond the top-line numbers will find that the bill creates massive new spending commitments that will inevitably explode over time, and that this is "paid for" with huge tax increases plus phantom spending cuts that will never happen in practice.

Washington spent the week waiting for the Congressional Budget Office to roll in with its new cost estimates of the Senate health-care bill, and what a carnival. Behold: a new $829 billion entitlement that will subsidize insurance for tens of millions of people—and reduce deficits by $81 billion at the same time. In the next tent, see the mermaid and a two-headed cow.

Then there are the many budget gimmicks. Take the "failsafe budgeting mechanism" that would require automatic cuts in exchange spending if it increases the deficit. CBO expects 15% reductions in exchange subsidies each year from 2015 to 2018, even though the exchanges don't open until 2014. That kind of re-gifting should have been laughed out of the committee room, but the ruse helps to move future spending off the current budget "score."

Meanwhile, the bill piles on new taxes, albeit on health-care businesses so the costs are hidden from customers. Insurance companies offering policies that cost more than $8,000 for individuals and $21,000 for families will pay $201 billion per a 40% excise tax, which will be passed down to all policy holders in higher premiums. Another $180 billion will hit the likes of drug and device makers, including $29 billion because companies won't be allowed to deduct these "fees" from their corporate income taxes. Then there's the $4 billion in penalty payments on those who don't buy insurance because all of ObamaCare's other new taxes and mandates have made it more expensive.

Gerry Clinchy
10-09-2009, 01:58 PM
Insurance companies offering policies that cost more than $8,000 for individuals and $21,000 for families will pay $201 billion per a 40% excise tax, which will be passed down to all policy holders in higher premiums.

I hope this doesn't sound like a dumb question. Will the excise tax be applied only to the amounts over $8000 and $21,000? Or will the tax be applied to the entire amount of the policies? That could be a large difference for the policy that costs $9000/year. Or, the worst scenario, will they have to pay the excise tax on ALL the policies they issue because they are "guilty" of providing high-end policies.

If I were an insurance company, the first thing I'd do is raise the prices on all those policies that will be subject to the excise tax to compensate for the excise tax that will have to be paid. Depending on the taxing scenario, the high-end policyholders will probably get hit the hardest (of course) ... but they should also be the most able and willing to pay the higher price. Costs may even be considerably higher if the insuror is required to accept pre-existing conclusions.

My guess is that these high-end policies go to an excusive few. My son had family coverage through his employer that cost about $9000/year. Not sure what the benefit package was like. The employer paid for him, and he had to pick up the cost for the rest of the family.

Depending on how this first reaction turned out, as an insuror, I might decide to just market the high-end "niche", and stop offering lower-cost policies altogether.

The end result is, that the wealthy will still get the health care they need, either through direct payment or high-end insurance coverage. Make no mistake, I have no problem with that. We are "entitled" to what we earn. Not "entitled" to what we do not earn. This is not a real change from the existing system.

The rest of the population will get varied care depending on what insurance coverage they can afford. The lowest on the totem pole will be able to purchase "basic" coverage. This could (and probably does) mean that an individual could still go broke paying for a major health incident. When their assets are fully depleted, they could then qualify for Medicaid :-)

If I were an insuror, I would think of picking up the "supplemental" insurance ... just like they do with Medicare. I have received mail from at least 10 different companies soliciting my "Medicare supplement" coverage! There are about 6 different "standard" options offered by all the companies. They pick up what Medicare doesn't pay, to varying degrees based on the supplemental plan you select. Some of them do not cross state lines.

Making it mandatory for each individual to have health insurance, or pay a penalty. Interesting concept, but I wonder how it will actually be enforced. The IRS or some other agency will have to cross-check with the policy records of every health insuror. Even with our computer technology, I doubt that will be a cost-free task. The penalty must exceed the cost of the health insurance that is the "minimum requirement." If I can pay a penalty of $1000, and the insurance costs $2500, a lot of young, healthy people might very well opt for the penalty ... just as they choose not to have health insurance now. If I were an insuror, I'd come up with plans that are equal or close to the likely penalty ranges, so the individual figures he might as well pay the insurance company & get something in return for the $.

Instead of govt getting involved in all this red tape, why not just allow the insurors to form a "co-op-like" corporation that can cross state lines, and do a payroll deduction to that entity? It would be portable. And all the insurors would be sharing the risk of what goes bad. Then there could be a requirement that there be "reserves" for those insureds, and any overage of reserves be allocated to premium reduction for the higher-risk portions of the insurors' business.

NO plan will ever work until someone comes up with a way to TRULY reduce costs of care. Tort reform, defensive medicine, state licensing improvements, fraud, abuse. probably close to a billion in uncompensated care for illegal aliens. Do any of the plans proposed actually do anything substantive in that regard? I haven't heard mention of that ... except "negotiating" lower prices from providers. Without fixing the other things, the providers eventually get to the break-even point or take losses. Then the govt HAS to take over so they can offset the costs with general tax increases.

Our Congress has SO dropped the ball on this mess. JMO, but if a Pres makes health care reform a priority, I think it also requires that he "lead" with actual workable ideas; not just leave it up to Congress to dream something up out of thin air. O may have a "vision", but had no detail in mind ... it would appear; no blueprint. Isn't this what a raft of advisors to the Pres are supposed to do for him? Those advisors have now had 9 months (and more prior to the inauguration) to formulate options to enormous govt expenditures. The insurance companies are also remiss. They have valuable data that could be used to structure a sensible reformatting. If the Rs really wanted to make a difference, they should have pursued that angle with the insurors.

TXduckdog
10-10-2009, 10:06 AM
Gerry.....you are so right on ......if you were an insurance company.

It ain't rocket science is it.

Even the Germans(the model most touted by the libs) are raising hell over the economics. From the WSJ.....

What if the Obama health-care proposal turned out to be the biggest public-policy mistake in 125 years?

Yesterday, these columns discussed the Congressional Budget Office's efforts to push the square peg of the Obama plan through the round hole of affordability. Meanwhile in Germany, often cited by American liberals as the "model" of a well-run health-care plan, the political debate is running in the opposite direction. Chancellor Angela Merkel's new coalition partner, the Free Democratic Party, is pressing her to claw back the state's participation in a system that now insures nine of 10 Germans.

Germany's health-care system was brought to life in 1883 by Otto von Bismarck and became the model for virtually every such state-directed national insurance plan since. Alas, the German system is starting to come apart at the financial seams. Germany's system relies on a handful of state-supported health insurers. This week they informed the government that the system was on the brink of a financial shortfall equal to nearly $11 billion.

Pointedly, the insurers made clear that cutbacks alone won't solve the problem. They said the government would have to consider raising premiums on the insured or, you guessed it, raise taxes. Currently, German workers pay a fixed-rate premium into the insurance scheme; that rate is now set at 14.9% of gross pay.

Chancellor Merkel, something of a political acrobat, was previously allied in coalition with leftist Social Democrats. She's now resisting calls from the Free Democrats to get off the state-pulled health-care train. The FDP's spokesman on health, Daniel Bahr, wants a "shift in direction away from state-run medicine." Why? Because "the current financial figures have showed us that the health-care fund doesn't work."

With Congress inching ever closer to passing a greater federal presence in providing health insurance under ObamaCare, let's hope it doesn't take the U.S. until the year 2134 to figure out it isn't working.

Gerry Clinchy
10-10-2009, 07:25 PM
let's hope it doesn't take the U.S. until the year 2134 to figure out it isn't working.

It took 40 years for it to become obvious that Medicare was going to run into a problem of more outgo than income. Great advances in medical care; the large baby boomer group moving into Medicare; not to mention the current economic disasters wreaking havoc with the income going into the Medicare fund.

Based on the scope of the proposals, the sheer numbers of people will be covered, it shouldn't take more than 20 years for the cost of "universal coverage" to begin to grow exponentially.

It should absolutely take a lot less time than it did for Germany. I doubt Germany has as large a problem with illegal aliens getting free care for which no taxes are paid. Germany has a smaller population than the US. And Germany very likely has a much smaller military budget than the US.

Interesting thought ... currently pay about 6% for SS, if we paid about 15% fo health care; and another 15% in income taxes ... 36% of earned income would never be seen by the earner of the income. 15% for health care would be $15,000 for someone earning $100K/yr.

I would anticipate that this would also feed inflation.

YardleyLabs
10-10-2009, 07:53 PM
It took 40 years for it to become obvious that Medicare was going to run into a problem of more outgo than income. Great advances in medical care; the large baby boomer group moving into Medicare; not to mention the current economic disasters wreaking havoc with the income going into the Medicare fund.

Based on the scope of the proposals, the sheer numbers of people will be covered, it shouldn't take more than 20 years for the cost of "universal coverage" to begin to grow exponentially.

It should absolutely take a lot less time than it did for Germany. I doubt Germany has as large a problem with illegal aliens getting free care for which no taxes are paid. Germany has a smaller population than the US. And Germany very likely has a much smaller military budget than the US.

Interesting thought ... currently pay about 6% for SS, if we paid about 15% fo health care; and another 15% in income taxes ... 36% of earned income would never be seen by the earner of the income. 15% for health care would be $15,000 for someone earning $100K/yr.

I would anticipate that this would also feed inflation.
Actually, what it took for Medicare was for the administration to pass a drug program designed for the pharmaceutical industry rather than the covered population, and no premium changes to cover the cost, which was deliberately and grossly underestimated. I personally believe we should have a drug benefit in Medicare, but not the one that was adopted. Obviously, however, if you introduce a new benefit you need to increase premiums to cover it.

EDIT:

Germany actually has a larger percentage of its population as foreign born immigrants than the US. Illegality is less of a problem since there are few restrictions on immigration. To understand the costs in Germany, you would need to compare the costs paid by individuals to the costs paid by individuals and employers since, outside of the US, employers do not provide or contribute to health insurance, making their cost structures and prices more competitive than ours.

Gerry Clinchy
10-11-2009, 01:51 AM
As I recall (open to correction), O made concessions to the pharma industry in the earlier discussions of the House proposal. So, things may not have changed much.

With the Medicare situation right now, I was told by SS that an individual selects their own insurance program for drug coverage. That premium, according to Highmark Blue Shield, currently run about $30/mo. That's not so bad.

I asked the SS people how come this coverage is proving such a back-breaker for Medicare. It is because so many of the Medicare participants get "assistance" in paying the extra premium for the drug benefit. The other issue being that if you don't start such coverage until you need it, the premiums are incrementally higher. I can see the temptation for an individual to forego the extra premium if they aren't taking any/many meds. However, to me it only makes sense, that it is pretty near inevitable that as we age we will be taking more meds that we can't foresee today. Not sure that is the whole story, but it is what SS told me.

I think this problem is the same as what any proposed "universal coverage" plan will face ... young & healthy don't think they need it. Thus, the penalty is supposed to offset this tendency. Again, the penalty must be at least equal to the cost of such insurance, in order to make the penalty effectively offset the income that is needed for the program from the young & healthy.

However, the info mentioned on Germany would indicate that even with universal coverage, eventually the premium income keeps falling short of the costs incurred. The higher the premium cost goes, the more people who need "assistance" in meeting the premium cost. Part of this problem then goes back to the fact that all of us seem to agree on: if people have access to medical care that does not require substantial monetary outlay on their own part, they will use the option more frequently than otherwise.

Using preventative medical care before reaching old-age should logically reduce medical costs until age begins to catch up with us. If such care then results in many more people living longer, then the medical costs of this older population are going to grow larger. If more people reach an older age as a result of universal care, there is no way to ultimately escape the aging process. One cannot stave off indefinitely the medical cost of aging. No amount of preventative care earlier in life can do that.

In the end, more wealth must be generated to pay for these costs. It can take a while before the average lifespan increases (through the availability of universal health care/coverage). We won't know until much later whether enough new wealth has been created to pay for it. I think that is what is at least partially responsible for what happening in Germany right now.

If the numbers then show that the elderly are consuming a disproportionate amount of the health care costs, one logically reaches the situation of the UK (and I believe Sweden is having the same problem with both health care & retirement benefits), where decisions have to be made about who gets dialysis, surgeries, or other expensive care.

I would think that 40 years might be long enough to see the gap developing between cost & wealth creation to cover the cost.


Germany actually has a larger percentage of its population as foreign born immigrants than the US. Illegality is less of a problem since there are few restrictions on immigration. To understand the costs in Germany, you would need to compare the costs paid by individuals to the costs paid by individuals and employers since, outside of the US, employers do not provide or contribute to health insurance,

The immigrant population proportions in Germany are interesting! One wonders why Germany would have such a high immigrant population, and no immigration restrictions. If Germany's native population "needs" these immigrants in its economy, then it is understandable that they do not make it difficult for immigrants to become German citizens.

Wouldn't this be akin to the early years of the US when many immigrants came to the US "for a better life"? Suppose the US removed all immigration restrictions? Would this be a good thing overall?

[QUOTE]making their cost structures and prices more competitive than ours.

And the more competitive cost structures & prices would then explain why it has taken much longer for their plan to fall apart? Perhaps it also demonstrates the inevitability of the necessity for generation of additional wealth to cover the increasing costs?

You may be entirely correct that health care/insurance should not involve the employers. That would take a tremendous change in mindset for unions. Since health benefits are usually a major union negotiating point, this might be difficult to change. Being self-employed, I don't have a problem with such a change :-) However, it is obvious that unions would have a big problem with such a change. It appears that unions are often of a Democrat persuasion, so I doubt that we are going to see a change as dramatic as this during a D administration.

Gerry Clinchy
10-12-2009, 09:52 AM
From the NY Times
http://www.nytimes.com/2009/10/12/health/policy/12insure.html?th&emc=th

A recurring mantra has been, "If you like your current plan you can keep it."

If insurance companies must accept all pre-existing conditions at the same premium as healthier insureds, I would strongly suspect that they will have to raise premiums across the board to make up for those "losses" (premium income v. expenses for care) on the pre-existing conditions. The plan you like so much probably won't be as attractive if you have to pay a whole lot more for it.

In fact, if the cost becomes prohibitive you may not be able to keep it because you simply cannot afford it anymore. Seems that is a lesson our govts have never understood: when income falls short of expenses, you ultimately "go bust" ... or you find ways to cut the expenses.

TXduckdog
10-12-2009, 10:09 AM
Gerry....they absolutely will raise premiums.

The politicians are blind and stupid......"but wait we'll pay for it with Medicaid cuts"....cuts mean loss of services....."we'll just tax the pharmas"......BAM...there goes the cost of subscriptions....."we'll just put restrictions on specialists".....the cardiac and oncology folks....thats just great....the 2 largest killers of people in the US.

Idiots, one and all.

YardleyLabs
10-12-2009, 10:16 AM
Premiums will rise dramatically unless penalties for failure to purchase insurance effectively eliminate financial incentives for not purchasing insurance. On this criterion, the Senate bill is wrong. In trying to make the bill more "affordable" to people without insurance, it reduced penalties for non-purchase to levels that are so low that they are meaningless. If the plan does not require virtually universal coverage, it is a mistake to eliminate restrictions based on medical condition.

TXduckdog
10-12-2009, 10:26 AM
As usual.....you cut right to the chase.

Now...what are the economic and service implications of universal coverage?

Gerry Clinchy
10-12-2009, 12:03 PM
Premiums will rise dramatically unless penalties for failure to purchase insurance effectively eliminate financial incentives for not purchasing insurance. On this criterion, the Senate bill is wrong. In trying to make the bill more "affordable" to people without insurance, it reduced penalties for non-purchase to levels that are so low that they are meaningless. If the plan does not require virtually universal coverage, it is a mistake to eliminate restrictions based on medical condition.

Ah ... now we have a start at cutting through the political gobbledigook, and getting down to discussing the brass tacks.

I doubt there is anyone on this forum who would believe that our delivery of health care is perfect. The question is really what can we do to improve what we've got without breaking the bank.

The USPS model tells us a lot. USPS is required to provide 44-cent letters to everyone. For those who can afford it, there is fax, email, USPS Overnight Service, Fed Ex, etc. Everyone gets the basic service, but not everyone can afford the "premium" services. Because of the basic requirement of affordable "basic" service, the USPS probably sustains a loss on that. (other factors enter into the loss, as well)

I think that it is also simply realistic to accept that we will never be able to totally equalize the same level of health care for everyone. As mentioned before, those with more wealth will always have a capability to purchase more & better care than those with more limited means. That applies to all the things we consume, from food to cars to homes.

The accessability to the very best health care follows that same pattern even in those countries which have attempted to provide equal care to everyone. Those that can afford better care can afford to go somewhere to purchase what their own country cannot provide for them, even if it means going outside of their own country.

It matters not whether the we favor R or D. Numbers don't "rationalize" the way the politicos do :-) I favor whoever will face the numbers, and get the best bang for the buck.

Steve Amrein
10-13-2009, 08:50 AM
Premiums will rise dramatically unless penalties for failure to purchase insurance effectively eliminate financial incentives for not purchasing insurance. On this criterion, the Senate bill is wrong. In trying to make the bill more "affordable" to people without insurance, it reduced penalties for non-purchase to levels that are so low that they are meaningless. If the plan does not require virtually universal coverage, it is a mistake to eliminate restrictions based on medical condition.


I am not sure of the numbers but the feds dont enforce much. Folks cheat on tax returns, some are undocumented aliens and some dont have car insurance. I doubt the success of federal mandated requirement to carry health insurance will reach the number of people that dont have it now. Who is going to enforce this ?

code3retrievers
10-13-2009, 08:57 AM
Premiums will rise dramatically unless penalties for failure to purchase insurance effectively eliminate financial incentives for not purchasing insurance. On this criterion, the Senate bill is wrong. In trying to make the bill more "affordable" to people without insurance, it reduced penalties for non-purchase to levels that are so low that they are meaningless. If the plan does not require virtually universal coverage, it is a mistake to eliminate restrictions based on medical condition.

Tell me how would this be constitutional?

road kill
10-13-2009, 09:14 AM
Tell me how would this be constitutional?


The current administration doesn't know what that is, other than a document that is in their way!!:D

YardleyLabs
10-13-2009, 10:06 AM
Tell me how would this be constitutional?
The approach used in HR3200 would be completely constitutional. Either you are covered by a qualified health plan or you pay a special tax which goes into a fund to pay for care provided to uninsured people.

Gerry Clinchy
10-13-2009, 10:41 AM
I am not sure of the numbers but the feds dont enforce much. Folks cheat on tax returns, some are undocumented aliens and some dont have car insurance. I doubt the success of federal mandated requirement to carry health insurance will reach the number of people that dont have it now. Who is going to enforce this ?


As I mentioned earlier, it would appear that the only way to enforce this is for the IRS to do a match-up with the policy records for all insurors. This would probably work much like the IRS gets employer information on W2 and 1099 forms for income. For employer-based coverage, it could probably get put on the W2 forms; not a big deal there. For 1099 recipients it would be more involved.

Remember, I also said that, even with computers, this won't be cost-free. computer space/time isn't free.

While I'm not in favor of the heavy govt involvement that the plans on the table, like Yardley, I don't think that constiutionality would be an issue on this "tax". I'm more concerned that most illegal residents will still get health care at no cost at all, with taxpayers picking up the tab ... no change at all from what is happening now.

Someone suggested a while back that EVERYone, no matter what their status, should pay SOMEthing for their medical care. Even $20/mo from every illegal (for 11,000,000) would come to 2.64 BILLION each year. It might not cover all the care administered, but it sure would help.

Each employer would remit that amount with their quarterly deposits now made for SS and other withholding (for all employees not covered by any health care insurance). The employer would NOT have to contribute, just the employee. The cost would not be enough of an incentive to make those employees get health insurance, but it sure would help pay the bill for the care they get.

Even if the employer did not individually identify the employees (as might be the case with illegals), it is logical that a vegetable grower (for example) could not harvest his entire crop with 20 workers v. 120. We might not "capture" all the people, but it should catch quite a few ... at least as far as getting some health care costs covered, if not for deportation. Recognizing that employers will try to cheat the system, they might report only 90 employees rather than 120, but that would still be a big help.

The $ could go into a State fund that could be distributed to doctors and hospitals that report their unreimbursed care (which they already keep track of for accounting purposes.) The amounts could be distributed based on the amount of unreimbursed care provided as a percentage of total care provided. Thus, those hospitals in poorer areas who provide more unreimbursed care might be able to stay afloat instead of going bankrupt. I would not just throw it into the Medicaid funds. Only the funds collected would be distributed. If kept in an interest-bearing account until distributed, that could mean a bit more as an end-result.

I'm absolutely sure that employers with illegal employees will NOT absorb the cost. They will, indeed, deduct it from the employees' compensation. I doubt that $20/mo is enough to make the illegals go home, but it will at least help the US solve part of the problem financially.

Steve Amrein
10-13-2009, 01:52 PM
My point is that they have computers now. If they would actually look Juan Smith shares the same name and SS as the 437 of the other Illegals with fake identity. Never mind all the criminals that live here that have no ID at all. Even Bank of America could figure out when 2 people share the same ID.

code3retrievers
10-14-2009, 02:43 PM
The approach used in HR3200 would be completely constitutional. Either you are covered by a qualified health plan or you pay a special tax which goes into a fund to pay for care provided to uninsured people.

How is making me buy an item that I may not want or need constitutional?

If I am millionaire and consider myself self-insured you are forcing me to buy something that I do not want or maybe don't need.

Can the government tell me that I have to buy a car that I don't want or need? NO!

This is heading down a very slippery slope with the idiotic left dragging everyone along with it.

Did you say tax? Is that another campaign promise the overlord is breaking?

TXduckdog
10-14-2009, 03:15 PM
The USPS model is interesting......the only problem is the price of stamps keeps going up on at least an annual basis!!!